Posted 7:37 PM by Robert Musil
A Lawyer's Christmas

E-mailed from a friend:

Whereas, on or about the night prior to Christmas,
there did occur at a certain improved piece of real property
(hereinafter "the House") a general lack of stirring by all creatures
therein, including, but not limited to a mouse.

A variety of foot apparel, e.g. stocking, socks, etc.,
had been affixed by and around the chimney in said House
in the hope and/or belief that St. Nick a/k/a/ St. Nicholas
a/k/a/ Santa Claus (hereinafter "Claus") would arrive at sometime thereafter.

The minor residents, i.e. the children, of the aforementioned House were
located in their individual beds and were engaged in nocturnal
hallucinations, i.e. dreams, wherein visions of confectionery treats,
including, but not limited to, candies, nuts and/or sugar plums and/or other
caries causing items, did dance, cavort and otherwise appear in said dreams.

Whereupon the party of the first part (sometimes hereinafter referred to as
"I"), being the joint-owner in fee simple of the House with the party of the
second part (hereinafter "Mamma" or "She Who Must Be Obeyed;" collectively,
the "Parties"), and said Mamma had retired for a sustained period of sleep.
(At such time, the Parties were clad in various forms of headgear, e.g.kerchief, cap, sleepstocking, etc.)

Suddenly, and without prior notice or warning, there did occur upon the
unimproved real property adjacent and appurtenant to said House, i.e. the
lawn, a certain disruption of unknown nature, cause and/or circumstance.
The party of the first part did immediately rush to a window in the House to
investigate the cause of such disturbance.

At that time, the party of the first part did observe, with some degree of
wonder and/or disbelief, a miniature sleigh (hereinafter "the Vehicle")
being pulled and/or drawn very rapidly through the air by approximately
eight (8) reindeer. The driver of the Vehicle appeared to be and in fact
was, the previously referenced Claus.

Said Claus was providing specific direction, instruction and guidance to
the approximately eight (8) reindeer, and specifically identified the
animal co-trespassers by name: Dasher, Dancer, Prancer, Vixen, Comet, Cupid,
Donner and Blitzen (hereinafter "the Deer"). (Upon information and belief, it is
further asserted that an additional co-conspirator named "Rudolph" may have been involved.)

The party of the first part witnessed Claus, the Vehicle and the Deer
intentionally and did willfully trespass upon the roofs of several
residences located adjacent to and in the vicinity of the House, and noted
that the Vehicle was heavily laden with packages, toys and other items of
unknown origin or nature. Suddenly, without prior invitation or permission,
either expressed or implied, the Vehicle arrived at the House, and Claus
entered said House via the chimney.

Said Claus was clad in a red fur suit, which was partially covered with
residue from the chimney, and he carried a large sack containing a portion
of the aforementioned packages, toys, and other unknown items. He was
smoking what appeared to be but may not have been tobacco in a small pipe
in blatant violation of local ordinances and health regulations.

Claus did not speak, but immediately began to fill the foot apparel of the
minor children hanging adjacent to the chimney with toys and other small
gifts. (Said items did not, however, constitute "gifts" to said minors
pursuant to the applicable provisions of the 26 USC 1, et seq, to-wit: the U.S. Tax Code.)

Posted 1:11 PM by Robert Musil
Isn't This The Same James Carville ...

... who said: "I used to think if there was reincarnation, I wanted to come back as the President or the Pope...But now I want to come back as the bond market. You can intimidate everyone."

Corporal Cueball said that after Bob Rubin shot down some of the zanier Clinton/Carville proposals by reference to the bond market. Considering the even zanier proposals Cueball is making now, he may want to call his old friend Bob to learn that the bond market still does intimidate everyone who pays attention and isn't a flakey professional opportunist.

Posted 12:51 PM by Robert Musil
For The Holidays, Send A Gift With A Wish Attached III: The New York Times Continues It's Long Journey Through Denial

Today's lead editorial in the New York Times is an interesting early example of the concession/uberdenialism combo to which the liberal media and many Democrats are likely to be driven increasingly if the economy and foreign affairs continue to improve.

First, the concession: the Administration effort to obtain debt relief for Iraq is admitted to be correct, and an appropriate exception to America's general resistance to national debt foregiveness pleas.

Then, the many and egregious denials. The Times tells us that The leaders of France and Germany were already looking for politically feasible ways to work with Washington on Iraq. Is that right? Was the German Chancellor, who obtained his office by running on a platform of opposition to American efforts in Iraq, really looking for politically feasible ways to work with Washington on Iraq? And was France signaling that it was looking for politically feasible ways to work with Washington when French representatives recently mocked an American request that NATO supply more helicopters in Afghanistan? The French and German leaders didn't let on that their real motivation was looking for politically feasible ways to work with Washington when (as reported by CNN) only a few weeks ago they responded to British Prime Minister Tony Blair saying: "whatever the differences there have been about the conflict, we all want to see a stable Iraq," by highlighting their differences. Chirac even corrected Blair when Blair suggested there might be some movement on agreeing to the transfer of power from the U.S. occupying force to Iraqi officials. The whole affair was such a fiasco that Professor Richard Whitman, of the University of Westminster in London, told CNN the talks were a "major disappointment." Professor Whitman observed: "(We) hoped for a real push towards some firm agreement at least among European states. It is very difficult to see where we are going to see some common ground."

Ah, those inscrutable Parisians and Berliners! The Times appears to perceive that in correcting and rebuffing Washington's great ally that Messrs. Chirac and Schroeder were only looking for politically feasible ways to work with Washington on Iraq! Nor does it appear that the French and Germans were already looking for politically feasible ways to work with Washington on Iraq when they refused to contribute more than a token amount to Iraq's reconstruction. Perhaps Professor Whitman feels chastened and corrected - but I wouldn't bet on it.

The Times begins its editorial with the witless pronouncement: James Baker III is quickly showing how old-fashioned diplomacy can advance Washington's policy objectives. Old-fashioned diplomacy? Old-fashioned diplomacy is the job of the Secretary of State - to whom Mr. Baker does not even report. Colin Powell's hospitalization doesn't explain this substitution - the trip was hardly of such an urgency that it could not have been postponed for a few weeks, and Mr. powell could have sent his first in command. That's the way old fashioned diplomacy works.

By the rules of old-fashioned diplomacy there was plenty of time for Mr. Powell to recover, since Mr. Baker's entire trip should have been (under those rules) at least postponed following what the Times calls a Pentagon memo excluding France, Germany, Russia and other opponents of the war from Iraqi reconstruction contracts financed by American tax dollars whose release on the eve of Mr. Baker's European trip was inept. Interestingly, the Times does not join with the naive crowd arguing that the memo's release or text was not fully approved by the White House or Mr. Baker (even, to paranoids, such as Herr Doktorprofessor Paul Von Krugman, a deliberate attempt to undermine Mr. Baker's efforts). Nor does the Times tarry to explain why the memo's release did not prevent French and German cooperation on debt relief for Iraq. Not only did it not prevent it, the memo's release almost certainly enormously aided in securing that cooperation, which is nothing more or less than agreement to contribute through debt relief value economically identical to the very reconstruction funds that the Europeans had earlier refused to provide. The memo drew a clear line indicating that further European outrages such as their refusal to contribute to reconstruction would be met with dramatic and effective and very expensive retorts from the United States. Almost certainly, that's what drew the cooperation and that's why the trip was not postponed and that's why neither Mr. Powell nor anyone reporting to him made the trip.

That's anything but old fashioned diplomacy. That's hard-scrabble, Texas-style, cram-down workout maneuvering. Mr. Powell can pick up on the old fashioned diplomacy when Mr. Baker - the Texan - finishes his work.

Posted 11:04 PM by Robert Musil
Never Let the Facts Get in the Way of a Good Rant III

The really bad news is that it now seems likely the insurgency has been operating free of Hussein and his money. --- Richard Cohen, Washington Post, December 16, 2003

BAGHDAD - Saddam Hussein was personally directing the postwar insurgency inside Iraq that has claimed the lives of more than 200 coalition troops, playing a far more active role than previously thought, American intelligence officers have concluded since his capture. Despite the bewildered appearance of the deposed dictator when he was hauled from his hiding hole last weekend, he is believed to have been issuing regular instructions on targets and tactics through five trusted lieutenants....[S]ince the arrest and interrogation of guerrilla leaders identified in the paperwork, U.S. investigators now believe that Saddam was at the head of an elaborate network of rebel cells. ... This network enabled him to issue commands without the use of satellite phones that monitoring devices could pick up.

The Sunday Telegraph also has learned that millions of dollars to support the insurgency were recovered in raids on other suspected Saddam safe houses. ....

By capturing Saddam and several leaders of his Fedayeen fighters, the Americans believe that they have dealt a serious blow to the Ba'athist insurgency.

-- Washington Times/LONDON SUNDAY TELEGRAPH news article December 21, 2003.

Posted 6:30 PM by Robert Musil
Just Keep Chanting ...

... that the war in Iraq has not made America safer. Nope. No safer at all - just like Howard Dean and the angriest of the left keep saying.

And Libya's agreeing to let in weapons inspectors has nothing whatsoever to do with what happened in Iraq. And Moammar Gadhafi having secret negotiations with the United States and Britain and then agreeing to halt his nation's drive to develop nuclear and chemical weapons and the long-range missiles to deliver them has nothing to do with Saddam Hussein's capture.

And it must all be a big mistake, anyway, because Gadhafi negotiated with the United States and Britain who scoff at international law - and ignored the sacred United Nations, the French and even the Germans! Mr. Gadhafi must have been on some kind of bender and is simply not responsible for his own acts.

And, in any even, it doesn't mean anything because Libya never threatened to attack the US. It just blew up commercial airliners. So it doesn't matter what happens there or what Mr. Gadhafi agrees to. The Democrats and the left can just keep chanting that - and win the election! Right?

Right?

Right?

UPDATE: The revisionism and attempt to distract from the Bush and Blair Administrations' accomplishments with respect to Libya of course begin immediately. The Washington Post provides an early and rather desperate signal of the left's future arguments that Libya's concessions had little to do with the Iraq or Afghanistan invasions:

Libya's stunning decision yesterday to surrender its weapons of mass destruction followed two decades of international isolation and some of the world's most punishing economic sanctions. ... The turning point in Gaddafi's undoing may have been the U.S. intelligence investigation that eventually tracked a tiny piece of the bomb that blew up Pan Am Flight 103 over Lockerbie, Scotland, killing 270 people, back to two Libyan intelligence agents, U.S. and British officials say. The evidence mobilized the world and produced an international effort that may now peacefully disarm Libya.

"What forced Gaddafi to act was a combination of things -- U.N. sanctions after the Lockerbie bombing, his international isolation after the Soviet Union's collapse . . . and internal economic problems that led to domestic unrest by Islamists and forces within the military," said Ray Takeyh, a Libya expert at the National Defense University.


So twenty years of ineffective "international efforts" are what did the trick - even though American boots were heading for Iraqi ground at the time Libya acted:

Whether by coincidence or fear that Libya might be targeted, Gaddafi's envoys approached Britain on the eve of the Iraq war to discuss a deal, U.S. officials said.

And then there's this pearl:

For all the Bush administration's focus on deadly arms, however, the United States may have missed an opportunity to act earlier because of its preoccupation with Afghanistan and then Iraq, said U.S. officials familiar with earlier overtures.

"Within months after September 11th, we had the Libyans, the Syrians and the Iranians all coming to us saying, 'What can we do [to better relations]?' We didn't really engage any of them, because we decided to do Iraq. We really squandered two years of capital that will make it harder to apply this model to the hard cases like Iran and Syria," said Flynt Leverett, a former Bush administration National Security Council staff member now at the Brookings Institution.

I don't know who Flynt Leverett is, or what his agenda might be, or why he resigned or was removed from the National Security Council. But the Brookings Institution is generally a Democratic redoubt. Mr. Leverett is not only at the Brookings Institution. He was at least until recently Visiting Fellow at the Saban Center for Middle East Policy at the The Brookings Institution. That would be "Saban" as in Haim Saban, arguably the Democratic Party's biggest financial supporter ever. From just February 2002 to March 2003 Dr. Leverett was Senior Director for Middle East Affairs at the National Security Council - that is, he departed after one year. It looks as if Ms. Rice was pleased to see him leave. Not that the Post bothers to mention any of that.

Anyone - including Dr. Leverett - who seriously argues that Libya's sudden decision wasn't overwhelmingly predicated on what had happened in Afghanistan and then Iraq, or that Libya's sudden cooperation was mostly the result of "international sanctions," is a poor student of history. Moreover, the United States didn't seem distracted from, say, possible Syrian overtures as Mr. Leverett reported things when he testified before Congress in last October, when he said:

Unfortunately, the Bush Administration has had little success to date in getting Syria to modify its problematic behaviors or in cultivating a more constructive relationship with the Assad regime, despite letters and phone calls to Dr. Bashar from President Bush, personal meetings with Secretary Powell, and visits by other senior officials such as Ambassador Burns.

Really? All those calls and attention from the Administration? But Dr. Leverett told the Post that we didn't really engage Syria because we decided to do Iraq.

From his statements as they are reported in the Post, the nation is a safer and better place for Dr. Leverett's departure from the Council. Contrary to Dr. Leverett, the Post and other organs of the left, it is extremely unlikely that Libya, Syria or Iran were moved to more than lip service by September 11, and few sensible voters are going to buy such an argument. All of these countries were opponents of the US in UN votes and every other effort to stem terrorism since September 11. It's absurd to think they have been more resolved against the US since then because of US steadfastness.

I would be surprised if top Administration strategists were not right now hoping and praying that the Democrats will take up the message conveyed by this absurd Washington Post article. It is hard to imagine a approach that would undermine the Democrats more than their chanting with the Post and the Leveretts of the world:

It doesn't matter. And invading Afghanistan and then Iraq didn't make it happen. Afghanistan and Iraq were just distractions.

UPDATE: Even the New York Times senses how absurd the chant sounds:

Mr. Bush and Mr. Blair are entitled to claim a large share of the credit for Libya's surprising announcement. To an extent that cannot be precisely measured, the fate of Saddam Hussein, who was ousted from power by the American military with British backing after endless prevaricating about Iraqi weapons programs, must have been an important consideration in Libya's decision.

There were other factors as well. ...

Over the past five years, by turning over two suspects for trial, acknowledging its complicity in the Lockerbie bombing and paying compensation to victims' families, Libya finally managed to persuade the United Nations Security Council to lift the international sanctions that had shadowed its economy and its international reputation for more than a decade. Those sanctions were lifted in September. This page recommended lifting American sanctions as well, but President Bush left them in place pending further steps, most notably Libya's decision to end its unconventional weapons programs. It is now clear that he was right to do so.

In other words, the "international sanctions" that the Post article credits with persuading Libya had already been lifted when Libya even approached Britain and the US.

It's superficially nice of the Times to credit Bush with maintaining American sanctions. But without the cooperation of the rest of the world, those sanctions would alone have been easily avoidable - and their economic impact could not have made much difference to Libya.

No, what made the difference here was a clear indication that the United States was willing to take direct military action that was not easily avoidable - or avoidable at all.

UPDATE: The Wall Street Journal has its say.

A correction to the above post: The Libyans made their approach in march - which means that the international sanctions were in effect at that time, although they had been lifted by the time the most intensive negotiations were held and when the actual concessions were made.

Posted 10:56 AM by Robert Musil
If There Were Ever An Argument For Charging "Freeway" Users For The Road Use ...

... this is it.

Posted 9:32 AM by Robert Musil
Especially If You Love Saint Petersburg ...

.... these are way cool.

And even if you're not in love with that particular burg, they're pretty interesting.

Posted 7:52 PM by Robert Musil
Politically Polymorphously Perverse

In the eyes of Herr Doktorprofessor Paul Von Krugman, the Bush-led Republican Party is truly a remarkable political organism. Just days ago Herr Doktorprofessor wrote franticly that the Bush Administration - even at the very top - was so riven by uncoordinated, disobedient, self-interested faction that Paul Wolfowitz was actually the leader of a neo-conservative pack deliberately undermining James Baker:

If the contracts don't provide useful leverage, however, why torpedo a potential reconciliation between America and its allies? Perhaps because Mr. Wolfowitz's faction doesn't want such a reconciliation. .... [M]any insiders see Mr. Baker's mission as part of an effort by veterans of the first Bush administration to extricate George W. Bush from the hard-liners' clutches. If the mission collapses amid acrimony over contracts, that's a good thing from the hard-liners' point of view.

Yes, Herr Doktorprofessor convinces us that President is unable to control the "policy freebooting" even within the highest ranks of his own administration. Bush incoherence. Bush incompetence. So it always goes with Herr Doktorprofessor.

But what a difference a few days make! In his most recent column, Herr Doktorprofessor urgently reports that the real threat from the Bush led Republicans comes not from incoherent policy freebooting and refusal to cooperate, but from their monolithic, obedient group-mind:

[I]t's hard to think of a time when U.S. government dealings have been less subject to scrutiny. First of all, we have one-party rule - and it's a highly disciplined, follow-your-orders party. There are members of Congress eager and willing to take on the profiteers, but they don't have the power to issue subpoenas.

So there you have it. A few days ago, the Administration was so undisciplined that feuding factions were undermining and tearing apart each other and the President's policies, but now the entire Republican expanse has become a a highly disciplined, follow-your-orders party - a discipline that extends not just to the White House, the Pentagon and throughout the Executive Branch, but even subsumes Congress! Does, for example, Senator John McCain, know about this? The John McCain who is Ranking Member of the Senate Committee on Commerce, Science, and Transportation, member of the Senate Committee on Armed Services, a member and former Chairman of the Committee on Indian Affairs, and a self-proclaimed high-profile opponent of "pork barrel" spending? Does that John McCain know that he is unable or unwilling to obtain subpoenas to investigate what Herr Doktorprofessor finds to be obvious signs of fraud against the government?

John McCain will not be the only surprised Senator. And that's nothing compared to the surprise that will hit all the divisions of the various intelligence services devoted to detecting and prosecuting federal government contractor fraud (every branch of the armed services has one, for example) - divisions that have been relatively recently expanded and think themselves to be fully and effectively employed. I was speaking to a relatively senior member of one such division just the other day, and I know that they'll really be surprised to find out that they are without the will and power to investigate fraud against the federal government. It's amazing what you can find out by reading the Times.

Herr Doktorprofessor is alarmed that what he sees as a tide of fraud against the government is not just bad - but rising:

Brown & Root, which later became the Halliburton subsidiary doing those dubious deals in Iraq, profited handsomely from its early support of a young politician named Lyndon Johnson. So is there any reason to think that things are worse now? Yes. The biggest curb on profiteering in government contracts is the threat of exposure: sunshine is the best disinfectant.

Since Herr Doktorprofessor has raised the subject of whether there is reason to think that fraud against the federal government is worse now than it was in the 1960's, it's indeed odd that he fails to mention qui tam. What is qui tam? It's a kind of law suit that can be brought under a federal law greatly strengthened and enhanced by Congress in 1986 - well after a young politician named Lyndon Johnson walked the earth - that allows a whistleblowiing individual plaintiff to recover up to 30% of amounts recovered from those who commit fraud against the federal government and grants the whistleblower extensive protection against any retaliation for bringing the suit. As described in one site:

The Civil False Claims Act, also known as Lincoln's Law, the Informer's Act, or the Qui Tam Statute, 31 U.S.C. Section 3729 et seq., allows a private person to sue a person or company who is knowingly submitting false bills to the federal government. The Act also protects qui tam plaintiffs who are demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment for acts done in furtherance of filing a claim under the Act. This provision allows reinstatement, double back pay, interest on the back pay, plus special damages including litigation costs and reasonable attorneys fees.

More than 2,400 qui tam suits have been filed since 1986, when the statute was strengthened to make it easier and more rewarding for private citizens to sue. The government has recovered over $2 billion as a result of the suits, of which almost $340 million has been paid to relators/whistleblowers.

If the qui tam suit alleging false billings is successful, the whistleblower (known as a "relator") will also be entitled to 15-30% of the government's total recovery, which includes damages for the false bills, tripled, plus civil penalties of from $5,000 to $10,000 per false claim. To recover this bounty, the relator must have complied with the complex and unusual statutory requirements, however. Merely providing information to a hotline will not entitle the relator to a recovery under the False Claims Act.

To state a cause of action under the False Claims Act, a qui tam plaintiff may allege that defendant either:

(1) knowingly present[ed] or caus[ed] to be presented, to an officer or employee of the United States government . . . a false or fraudulent claim for payment or approval;
(2) knowingly, ma[de], use[d], or cause[d] to be made or used, a false record or statement to get a false or fraudulent claim paid by the government;
(3) conspir[ed] to defraud the government by getting a false or fraudulent claim allowed or paid.

To put this in perspective, a Halliburton employee who filed and documented a qui tam suit regarding what that company's more heated critics have said is about $60 million in overcharging for gasoline in Iraq could receive roughly SIXTY MILLION DOLLARS under federal law for blowing that particular whistle. That kind of money buys a lot of disinfectant. Since he's chosen to wring his hands over the issue, one might have thought that Herr Doktorprofessor would mention the economic incentives created by the qui tam statute in favor of employees and contractors for businesses doing work for the government to expose fraud. Herr Doktoprofessor is, after all, supposed to be an economist. But is he a serious economist - has he ever been?

The Man Without Qualities has expressed (here and here and here, for example) serious skepticism over whether Herr Doktorprofessor has ever been a really serious and good economist - instead of another gifted academic self-promoter who exploited weaknesses in the structure of his profession to hype the significance of his own rather modest accomplishments to the point of securing a John Bates Clark Medal and a Princeton appointment. His customary arrogant disrespect for much of his profession is also evident in this recent column, where Herr Doktorprofessor tosses off this nugget:

Let's be clear: worries about profiteering aren't a left-right issue. Conservatives have long warned that regulatory agencies tend to be "captured" by the industries they regulate; the same must be true of agencies that hand out contracts. Halliburton, Bechtel and other major contractors in Iraq have invested heavily in political influence, not just through campaign contributions, but by enriching people they believe might be helpful. Dick Cheney is part of a long if not exactly proud tradition.

Passing over the gratuitous, scurrilous and unsupported lible against the Vice President at the end of the passage, one might ask: Does Herr Doktorprofessor believe the theory of "regulatory capture" to be robustly valid? At first it appears not, since he writes that only conservatives have long warned that regulatory agencies tend to be "captured" by the industries they regulate - and he does not seem to count himself as a "conservative." But then he goes right ahead and argues in support of the very point he is making that the same must be true of agencies that hand out contracts. Further, much "regulatory capture" theory turns on the observation that once widespread public interest in a regulatory matter abates, the regulated parties are free to have their way with the regulators. But public interest in the circumstances of American involvement in Iraq - and especially in Iraq's reconstruction - has certainly not abated. So much "regulatory capture" theory would not apply very well here at all - although that may change once Iraq has been pacified and ceases to appear as front page news every single day. Could that be why Herr Doktorprofessor is so elliptical and tentative in citing "regulatory capture" theory? I leave it to the reader to determine for herself whether a man who passionately - or even seriously - cares about economics would abuse his field to the point of not even disclosing whether he approves of this application of a theory he is in fact using to support his argument and without disclosing that the facts under consideration differ seriously from those generally addressed by the theory in the first place.

I do not.

I have previously noted the casual, even contemptuous, manner in which Herr Doktorprofessor treats broad areas of economics - a treatment that suggests more than anything else that he does not really understand the significance of those areas:

But, even worse than that from a professional standpoint: Herr Doktorprofessor is entirely oblivious to the fact that he is writing a column about a topic which is informed by a fairly well-developed economic theory: regulatory capture. A lot of economic research has gone into analyzing what symptoms one should look for to determine whether a regulated business controls its regulators. But Herr Doktorprofessor ignores all that learning ... But it can't be ignored. ... Further, federal regulation and regulatory capture works mostly through the Congress - not the Administration. But Herr Doktorprofessor just entirely cancels Congress out of both sides of his equation.

Introducing Congress into the equation would expose that Herr Doktorprofessor is also ignoring a second branch of modern economics: public choice theory - the branch of economic that concerns economic choices made by democratic societies. As so often the case with this columnist, resort to silly conspiracy charges substitutes for the hard work of applying difficult economics. He can leave that to real geniuses like Dr. James M. Buchanan, who won the 1986 Nobel Prize in economics for his contributions to public choice theory. A man has to know his limitations.



Others also express skepticism over Herr Doktorprofessor's bona fides.

Don Luskin quotes an e-mail from Reuven Brenner of McGill University, a prolific author of economics:

[I]t is still beyond me why Krugman was ever considered to be a decent economist: I never found anything in his writings. Am still waiting to hear someone identify one insight (have you found it?). I looked into it when Washington-based Institute for International Economics (on whose board Krugman was sitting at the time), asked me to review his book, The Return of Depression Economics. I called it 'Depressing Krugnorance,' and it was reprinted around the world. Parts of it are included in my Force of Finance book. Others appeared long ago in my "Making Sense out of Nonsense" in my Educating Economists book, some 12 years ago."

Posted 9:45 PM by Robert Musil
Never Let the Facts Get in the Way of a Good Rant II

The really bad news is that it now seems likely the insurgency has been operating free of Hussein and his money. --- Richard Cohen, Washington Post, December 16, 2003


BAGHDAD, Dec. 16 -- A document discovered during the capture of former Iraqi president Saddam Hussein has enabled U.S. military authorities to assemble detailed knowledge of a key network behind as many as 14 clandestine insurgent cells, a senior U.S. military officer said Tuesday. "I think this network that sits over the cells was clearly responsible for financing of the cells, and we think we're into that network," said Army Brig. Gen. Martin E. Dempsey, commander of the 1st Armored Division. .... "As I've always stated, repeatedly, our expectation was that Saddam was probably involved in intent and in financing, and so far that is still my belief," Sanchez told reporters Tuesday at a news conference at the Baghdad airport. --- news story, Washington Post

Posted 3:12 PM by Robert Musil
Bye, Bye. And Get Enough Rest To Clear Your Mind.

I confess to a certain meanspirited motive in checking in on Eschaton today, a site I don't consistently visit.

I was "curious" what the word around Bedlam would be following Saddam Hussein's capture. But I never expected that the site would be dark, with the following message hung in the gritty cyber window:

Atrios will be away from 12/16-12/19.

Somewhere in there, he took time off for a birthday breakfast, saying: With that I turn the asylum over to the inmates. But just for a few hours. At least he knows his audience - even if any differences between them and the management are, shall we say, a bit blurred.

He announced his planned absence shortly after Saddam was captured, and there is a fair amount of confused, mostly dispirited gibberish on the site following the capture: A pathetic But, it really doesn't change much post. A confused group message to Senator Kerry about linking Dean to Al-Qaeda - it's really come to that on the left. Hope is expressed that the Telegraph story isn't true. A bizarre complaint that George Bush focuses our attention on the negative aspects of Saddam's capture. Tasteless joke about CNN fails to inform us that Powell's virility is unmatched in its report about the Secretary's cancer operation. Some other odds and ends, including something about vibrators (260 comments on that one).

But nobody's heart seems to be in the lunacy now. It's like they're just going through the motions. It's sad, really. So sad.

As Atrios would say:

HAH, HAH, HAH, HAH, HAH, HAH, HAH, HAH, HAH, HAH.

Posted 11:15 AM by Robert Musil
For The Holidays, Send A Gift With A Wish Attached II: Germany And France Aren't Naughty, This Time

I don't generally read Michael Elliott's column in TIME because I don't generally read TIME. But I was traveling over the weekend (Wilmington, Delaware, bankruptcy court, for the curious - but neither I nor any affiliate of mine is either a creditor or the bankrupt debtor) and TIME managed to put it's cover issue with the captured Saddam Hussein in the airport shops even before the dailies, so I made an exception. Mr. Elliott's column on the interaction of Paul Wolfowitz's memo of Dec. 5 that fleshed out for the public who is eligible to win prime contracts, funded by $18.6 billion of U.S. tax money, to rebuild Iraq's infrastructure and supply its new army with James Baker's debt relief efforts was a fascinating tour de force of current crippled, liberal thinking:

Even if you accept the memo's argument that "limiting competition for prime contracts will encourage the expansion of international cooperation in Iraq" (in other words, war naysayers have to join the occupation if they hope to fully cash in) "and in future efforts" (what future efforts, by the way?), its timing was idiotic. Wolfowitz's findings were posted on a Pentagon website just as President Bush was phoning other heads of state to ask them to give a fair hearing to former Secretary of State James Baker III, whom Bush has just deputed to help renegotiate Iraq's hefty debt. Of the $21 billion (excluding interest) that Baghdad owes to non-Arab states, more than $9.3 billion is due to Germany, Russia, Canada and France. (The U.S. is owed an additional $2.2 billion.) Political leaders in debtor countries left off the list yelped at the bizarre conjunction of events, while U.S. allies like the British sighed at the plan's unhelpful diplomacy. In the best case, Baker will have to spend time on his travels smoothing ruffled feathers ?— one reason the White House, which had initially signed off on the Pentagon policy, later suggested that it was less than thrilled by the way and time it was announced.

As I have explained in my prior post on this topic, Mr. Elliott's image of James Baker traveling hat-in-hand to European creditors smoothing ruffled feathers and begging for debt relief is risible. Even without the Wolfowitz memo, Mr. Baker held most of the cards: Iraq could just repudiate the debt. Mr. Baker was benefited substantially by Paul Wolfowitz's memo because the main issue Mr. Baker has to confront in his negotiations is European skepticism that the US really had the temerity to cause and support Iraq's repudiating the portion of its debt that constitutes credit extended by those countries to Saddam's regime. The US is very careful about endorsing debt repudiation - as has been clearly displayed in the endless rounds of third-world debt workouts that have clogged the international finance system since the early 1980's (Brazil Argentina, etc.). Mr. Wolfowitz's memo made credible the point that the US was perfectly prepared to make an exception for Iraq - while the White House "protests" that they really, really wished that the timing and tone of the memo had been better (even after Mr. Bush approved the policy and then frankly backed up the contents of the memo) just provided the appropriate diplomatic fig leaf. In other words, every aspect of the Wolfowitz/Baker approach is fully consistent with it having been worked out down to the last detail - which, in turn, is fully consistent with the reputations of Messrs. Wolfowitz and, especially, Baker, for working out everything they do down to the last detail. Mr. Elliott's silly political agenda seems to leave him little room for acknowledging such merits in Messrs. Wolfowitz and Baker - but those merits are there for all to see.

For a bungled and "idiotic" handling of the matter, the Wolfowitz/Baker approach certainly seems to have produced rapid, positive results:

"Germany and the United States, like France, are ready not only for debt restructuring but also for substantial debt forgiveness toward Iraq (news - web sites)," German Chancellor Gerhard Schroeder's spokesman Bela Anda said in a statement. ... Despite responding to Washington's call for debt relief, Schroeder expressed misgivings about the Pentagon (news - web sites)'s exclusion of German companies from Iraqi reconstruction contracts.

Would it have been possible for Mr. Baker to have achieved his results more promptly? How much time does this allow for "smoothing feathers."

The large portion of the Iraq debt that is "involuntary" debt (essentially, war reparations) from Iraq's assaults on other countries is in a different category. But it would be morally difficult (although practically straightforward) for the US to ask Kuwait, say, to waive a slug of its war reparations if France and Germany are not made to waive a good portion of the debt owed to them. The European debt was extended to Saddam Hussein's government to finance the very infrastructure that enabled him to invade Kuwait in the first place and neither of these countries has agreed to extend substantial reconstruction funds. It's preposterous that the Europeans do not contribute more if Kuwait is asked to contribute. That, in turn, gives Mr. Baker yet another argument against the Europeans: You Europeans must forgive so that Kuwait will forgive. That's another reason you Europeans should take seriously the threat of naked Iraqi debt repudiation and US support for such repudiation.

It all seems to be working nicely so far. But, then, that's true of most things to which James Baker turns his hand.

MORE

UPDATE:

Astute reader Avinash Singh asks by e-mail: "I wonder why James Baker is doing Colin Powell's job."

I think one reason is that Baker's not on a true diplomatic mission - it's fundamentally a cramdown negotiation, and Mr. Baker's positioned to play the "bad cop."

Maybe Powell will resurface as the "good cop" after Mr. Baker does his shorter-term, harsher work. That's pretty standard debt negotiation strategy: First the nasty debt negotiations are handled by hard nosed work-out counsel who aren't afraid to be dislaiked or to deliver the harsh realities, then the corporate types come in for the longer haul.

There's another possibility. It's still early - but I wonder if Mr. Powell is setting himself up for a graceful exit? He hasn't messed his position up, at least not in a big way, and he's done some very good - even brilliant - work (his UN talk, for example).

It is my opinion that the Baker/Powell dyad should be - and may be - the institutionalization of an approach to Old Europe that clearly denies them the ability to obtain their larger ends through essentially costless manipulation of "international law" and international institutions ("free riding") unless and until they start doing the things needed to be taken as fully serious players in the international theater (real economic reform, real military committment).

FURTHER UPDATE:

Unlike most of the American media, some German media get the Baker/Wolfowitz connection right:

The Berlin newspaper Der Tagesspiegel said Germany must decide whether it wants to play a constructive role.

"Amid the warranted irritation, the government must decide what is more important: continuing skirmishes with hard-liners in the Pentagon like Paul Wolfowitz or making progress with the reconstruction of Iraq," the paper commented today.

"If the talks with the United States about debt relief bring German firms a few contracts, so much the better. The French and Russians won't do otherwise."

Posted 12:21 PM by Robert Musil
Saddam, From The Spider Hole ...

... and into the bag.

The improbable conditions of Saddam Hussein's capture bring home - among other things - why it may be so difficult to locate any weapons of mass destruction in Iraq.

Greg Scobe thinks Saddam will likely have lots of embarrassing things to report on German and French complicity with his regime.

The giant sucking-up sounds now coming from the better furnished European weasel pens is consistent with that kind of conclusion.

UPDATE: Doesn't seem as though a lot of love is being lost on Saddam in Araby.

FURTHER UPDATE: This is still preliminary. But if reports of Atta/Saddam/Nidal/Niger/Uranium/al-Qaeda connections hold up, it looks like they'll be singing "It's Beginning To Look A Lot Like Christmas" early, often and with extra brio this year at the White House.

Posted 10:49 PM by Robert Musil
For The Holidays, Send A Gift With A Wish Attached

The purchase of debt issued by a sovereign nation is correctly known in banking circles as "a gift with a wish attached."

It appears that many people - a lot of those people being Continental Europeans - made gifts to Iraq while Saddam Hussein was in charge. Some $120 Billion worth of gifts. That's a lot of wishing on a deranged dictatorial star of Arabia.

Now the President has dispatched James Baker to bring Saddam's gifters back down to earth. Although a sovereign nation is not obligated to repay its debts under international law, most do when they can because they don't want to obtain the reputation of not paying, since that would deter people from lending to the sovereign in the future.

Of course, that consideration has little force in obligating Iraq to repay Saddam's $120 Billion. There is a clear break between the incoming government and the old Saddam government. A repudiation by Iraq of its old debt will have effects similar to those of a bankruptcy reorganization that wipes out the old creditors so new financing can be obtained on a going-forward basis. Did the Federal Republic assume the debts of the old Nazi regime? Of course not - and the German economic miracle flourished!

In exchange for their repudiated debt, the existing Iraq gifters/lenders can be given some kind of equity interest in Iraq's future appreciation - what is sometimes called a "carried interest." That is, if Iraq prospers from its reconstruction, the lenders/gifters-cum-equity-participants will be entitled to a share of the appreciation. Investment bankers are really very clever at crafting such instruments. It should be sophisticated fun for all the individual professionals involved in the work-out - real Bang-On-A-Can stuff!

Although it will not be so much fun for the institutional gifters/lenders, at least not at first.

Mr. Baker is surely the right man for the job. And despite the ridiculous posturing of the New York Times the Pentagon has done him a huge favor by barring obstructionist European nations from reconstruction contracts. That act - and the President's endorsement of it - credibly evidences United States willingness to have Iraq unilaterally repudiate every last dime of that $120 Billion.

Citing out-of-the-loop senior diplomats telling tales out of school, the Times and other opportunist hand-wringers, such as Herr Doktorprofessor Paul Von Krugman, argue that the Pentagon decision and its "highly offensive language" about national security needs constitute a gaff that has made Mr. Baker's job harder, even though the White House signed off on the Pentagon decision ahead of time.

Maybe. But, personally, I don't believe a word of it.

The Iraq gifters/lenders are the same bunch who refused to contribute more than a pittance to the construction effort. Having refused voluntarily to contribute funds directly, these same players are not going to agree to do the same thing indirectly by voluntarily agreeing to debt foregiveness. THIS IS GOING TO BE A CRAMDOWN.

What Mr. Baker needed was a club and a lot of bad-cop credibility. And he got it from that Pentagon decision - especially its nasty tone and "highly offensive language." I'll bet he's a very happy debt negotiator right now.

Heck, even Herr Doktorprofessor could have figured that one out ... if he spent any time now-a-days thinking about economics. Instead we get another one of his silly hunts for "deeper meanings" and implied, paranoid conspiracy riffs - this one about Mr. Baker supposedly being some kind of emissary from the first Bush Administration and some neo-cons at the Pentagon undermining our reconciliation with Europe. But more and better of the same kind of fantasy thinking hits the silver screen on December 17.

It's impossible to take any part of Herr Doktorprofessor's December 12 column seriously, but I can't resist reproducing an exquisite Taranto catch on this one:

"Yes, Halliburton is profiteering in Iraq--will apologists finally concede the point, now that a Pentagon audit finds overcharging?"--former Enron adviser Paul Krugman, New York Times, Dec. 12

"The officials said Halliburton did not appear to have profited from overcharging for fuel, but had instead paid a subcontractor too much for the gasoline in the first place."--news story, New York Times, Dec. 12

As I said, even Herr Doktorprofessor could have figured that one out ... if he spent any time now-a-days thinking about economics ... or reading the Times.

UPDATE: Astute reader Dennis Culkin writes:

Dear Man Without Qualities:

Kudos on the commentary re Halliburton and Iraq.

As a one-time USAID program manager with some experience in overseeing federal contracts with profit/non-profit entities for work overseas, I've found the illiterate, demagogic, at times absurd "coverage" of the whole Halliburton thing among the most annoying and outrageous examples of poor current journalism (which is saying A LOT).

The only timid counter-punch based on reality so far has been a thin op-ed in the WashPost by a former senior federal contracting type (a Clinton appointee). He at least took on the notion that contracts are handed out to friends of VP Cheney, or anything remotely like that. The op-ed grossly understated its case, and most importantly failed to heap deserved vituperation on the lazy and biased journalists who continue to keep this paticularly baseless myth alive.

It's a deadly dull topic, but not one that's impossible to explain to the public.

As on several other issues, however, the passivity or incompetence of the administration in explaining the realities of the Halliburton case are perhaps of equal importance. It's a self-inflicted wound for the administration, but more importantly it's a disservice to the taxpayers, to the mostly honest and hard-working federal employees overseeing contracting, and to the mostly honest and hard-working Halliburton/KBR employees (some of whom literally are risking their lives).

On the related topic of the widespread inability (NYT, major media, Dem. candidates, even some GOP office-holders) to understand how this is a marginal positive contribution to Baker's mission, you also nail it.

Dennis is right. The leftish mainstream media's fixation on Halliburton has become nothing short of obsessive. That Halliburton is providing incredibly valuable, competent services in Iraq - services that would otherwise have to be performed by overstretched American military units - is almost a grudging footnote in much of the coverage.

Watching CNN, for example, while working and not paying too much attention, one could easily get the impression from the tone of much of the coverage that Halliburton is actually in the employ of Saddam Hussein. There is a sickness festering in some of the American liberal mind that is manifesting itself here. And it isn't pretty.

Posted 11:05 AM by Robert Musil
Gored Again VI: Hillary Clinton Has Already Won The Most Important Democratic Primary

John Ellis again cogently replies by e-mail:

Again, recent (Nixon '72, Reagan '84, Bush '88) crack-ups did not produce huge down-ballot shifts (Reagan '80 did, but the "incumbent" was being tossed, not retained). I suspect the GOP will make significant gains in the Southern Senate races that will outnumber their defeats elsewhere for a net Senate gain of 2-3 seats. The House has now been through three software-perfect re-districtings and thus is all but impervious to up-ballot wind shifts. The governors are, mostly, elected in presidential off-year and mid-term elections. So I don't think there were will something as spectacular as airliner-meets-Mt. Fuji down ballot.

There are to my mind three key indicators of the President's political health (any president's health) going into a re-election campaign. They are: rising right track/wrong direction numbers, rising consumer confidence and improving "re-elect" numbers. If he (or she, someday) has those three at his (her) back, then re-election is all but assured. If those numbers are going South, time to call United Van Lines.

These indicators are far more reliable than, say, an ARG poll of New Hampshire. Presently, the President has rising right track/wrong direction, improving consumer confidence and indifferent re-elect numbers. As the re-elect number generally lags the other two, I would agree that President Bush should be favored to win re-election. But predictions of a Reagan '84 blow-out seem premature, at best.

Frankly, just because the Dems were heading south in the South before the Rise of the Deanies doesn't mean the Rise hasn't made things worse for them in the South and almost everywhere else. That is: I agree with John's point, but it doesn't move the main issue: Will a Dean nomination substantially increase the risk of a big Congressional Democratic loss?

I think the answer is clearly "yes."

For one thing, a big Dean loss will seriously erode the ability of Democrats to win OPEN SEATS in Congress - especially the Senate. In a big Dean loss Illinois could move from "likely-Dem" to "likely-Rep" all at once - that's not the South. Here in California a REALLY BIG Dean loss could be real trouble for Senator Boxer. This is a state in which OVER SIXTY PERCENT of voters voted Republican in the recent recall election, including very substantial blocs of Hispanics and African-Americans. If that can happen here in Lotus Land, focusing on the absence of coat tails effects in '72 and '88 isn't that much comfort for the Dems.

And I think they know that.

What can the Dems do? Some people suggest Hillary! is their salvation, but Maguire thinks not.

I agree with Maguire. Hillary! is poison in the South - and for her to snatch the nomination from Dean at this point would risk a fissure in the Democratic Party that might create a disaster even bigger than the coming likely Deanerdammerung.

But she still might be able to work the snatch - because she would be snatching from within the Democratic Party, whose mechanisms and institutions she for the moment largely controls (read "superdelegates" and "proportional representation").

The Democratic delegates that are chosen in primaries and caucuses are awarded to candidates proportionally to the total number of votes each receives in state primaries and caucuses. As long as a candidate earns more votes than a threshold level, the candidate receives a certain number of delegates. If no clear front-runner emerges, several candidates could go into the Boston convention with relatively equal numbers of delegates. Even with the ominous Rise of the Deanies - now abetted by the Gorebot - polls suggest that multiple candidates are a real possibility.

What happens then? Well, the proportional representation system does not apply to "superdelegates," who are obligated to no candidate and who include Democratic members of Congress, governors and state party chairmen. Superdelegates will account for nearly 40 percent of the votes needed to clinch the nomination.

And Hillary! leads the Democratic establishment that provides those superdelegates. So tell me again who's leading in the primaries?

Yes, for Hillary! it's just Fun, Fun, Fun until Deanies takes the T-Bird away!!!!

If she's going to let that happen, that is. I'd say look for her to limber up her sock puppet, Wesley Clark, as an early warning sign of her intent to move in 2004.

Posted 8:38 AM by Robert Musil
Gored Again V

If I understand John Ellis' answer correctly, he's discounting the possibility of a one-way Mount Fuji trip for the Democratic airliner with Howard Dean at the helm in 2004. But I'll stick to my belief that such a crack-up is a distinct possibility - perhaps the most likely probability. And I'm all the more cheeky in sticking to my position given this recent report from New Hampshire:

A stunning new poll shows President Bush would clobber Democratic front-runner Howard Dean by nearly 2-1 in politically potent New Hampshire - even though Dean has a giant lead over Democratic rivals in the state.
Bush gets 57 percent to Dean's 30 percent among registered voters in the American Research Group poll. In fact, Dean, from neighboring Vermont, does worse in the Granite State than a generic "Democratic Party nominee" who loses to Bush by 51 to 34 percent. Another ARG poll this month showed Dean with a 30-point lead over Sen. John Kerry (Mass.) for the Jan. 27 New Hampshire primary, the second test after the Jan. 19 Iowa caucuses.

New Hampshire is a swing state. So by John's calculations that 2-to-1 lead can't be happening - nothing like it can be happening. I admit that the 2-to-1 lead is very unlikely to hold in the general election. But if Dr. Dean loses to Mr. Bush by margins in the 10% range - a distinct possibility - there will be huge coat tails effects. If that were to happen, Congressional Democrats won't be able to hold their caucuses in a hall closet in 2005, but it would be close. And if that were to happen, I don't think they'd be chattering about how eager they are to have Al Gore or anyone else who got them there pick up the pieces.

Posted 8:03 PM by Robert Musil
There Was A Time When The French Knew About Personal and Political Rights

But it's hard to imagine a worse way to address expressions of religious differences in public schools than this:

A report delivered to President Jacques Chirac on Thursday called for a new law banning the wearing of "conspicuous" religious symbols in French public schools - large crosses for Christians, head scarves for Muslim girls, or skullcaps for Jewish boys.

The recommendation was the most striking in an official reassessment of how to preserve the principle of the separation of religion and state in France in light of such developments as the rise of a large Muslim population and a new wave of anti-Semitism.

In other words, to preserve the principle of the separation of religion and state in France the state is to take a highly intrusive official position against expressions of traditional religion. And to think that it is a true insult in France to call a person "stupid" - especially someone in public service.

The policy will apply to only "large" and "conspicuous" religious symbols. The adjudications required should be exquisite. For example, will the special undergarments worn by some Mormons be considered "conspicuous" under the law because they show up big time in the locker room? (Hey, for a while, the disrobing kid is wearing nothing else!) Just how long can an Orthodox Jewish boy let his hair grow before the state intervenes with the clippers? What if a student adds a blob of red paint to that small crucifix - or a glow-in-the-dark coating? Better have a judge on hand to decide! There will be many sensitive issues and refined distinctions to be made!

So why stop with a ban on "large" and "conspicuous" symbols. It's just not workable - and selective squelching of other people's religious expressions can be so tiring on a unionized teacher! A "zero tolerance" position is the way to go. Clear and crisp and mindless. That would really root out the "problem" - although there will be difficult issues remaining, like what to do when some sneaky little Catholic brings a bottle of Svyatoi Istochnik filled with Holy Water! There are precedents to follow in such cases.

What next? A government decision to destroy Paris in order to save it?

Posted 9:55 AM by Robert Musil
Gored Again IV

As usual, John Ellis does not disappoint, but exhibits both political acumen and good breeding in his e-mailed reply:

Robert --

#1> "Obvious reasons Gore didn't run:" 1. popular incumbents generally win re-election. President Bush is a popular incumbent. 2. Gore needed distance from the 2000 defeat, 3. Money. He wasn't raising any money. And he didn't have any money (by upper elite measurement) of his own.

#2> Of course the Dean network is not a piece of software that can be inserted, like a CD, into the Gore computer or the Clinton computer or whatever. It's a peer network and not a client-server model. But it is, stand alone, a powerful force (ask John Kerry, Dick Gephardt, et alia) and because it is a network, based upon shared values, I would argue that Howard Dean's charisma (such as it is) is not the connective tissue. The Dean network is about community and force multiplication (in political terms). Dean may lose or win, but the community his campaign has created will endure regardless of the outcome and how that community feels about 2008 will be significant/important.

Successful presidential campaigns are successful because large (or significant) constituencies compel them forward. The largest, most significant constituency in the Democratic Party is the Dean-o network. If the majority of them coalesce around someone in 2008, that someone will have a solid base from which to run a campaign for the 2008 Demo Prexy nomination. Combine it with Gore's other strengths as a candidate (labor support and the like) and you have the makings of a possibly winning operation.

Obviously, no one knows what will happen (Gore or Dean or Hillary or me, for that matter). But if you were looking to begin to engage the Dean network as allies in the 2008 campaign, you could not have done a better job of it than Gore did this week.

#3> Airliners and Mt. Fuji.....Nixon won landslide in 1972, minimal GOP gains in Congressional races (and this was when, pre-redistricting software, there were Congressional races!), Reagan won landslide in 1984, virtually no GOP gains at all, Bush wins half-landslide in 1988, Connie Mack elected to the US Senate in FL (the only coat-tail).

On paper, it seems unlikely that the Democratic candidate (unless it's Sharpton) will win less than 44% of the vote and the various modeling that has been done suggests a 53-47% outcome (Bush wins) and a 60-100 point spread in the electoral college. It ain't Mt. Fuji, it's just a routine case of a popular incumbent winning re-election by a comfortable margin.

I will grant you that the Dems are likely to lose Senate seats in the South, but that was expected long before it was expected that Howard Dean would be the nominee.

UPDATE: Maguire's confused, too.

FURTHER

Posted 9:42 AM by Robert Musil
One Of The Greatest

Robert Bartley

Surely no journalist of any political stripe has had an impact comparable to Bob Bartley's since Walter Bagehot wrote the unwritten British constitution in The English Constitution.

Robert Bartley was far more than an advocate or a polemicist or a popularizer - and he was never an opportunist. With apologies to James Joyce, Robert Bartley forged in the smithy of his soul and his opinion pages the uncreated conscience of modern conservativism.

Posted 11:07 PM by Robert Musil
Herr Doktorprofessor Loots Trade Theory II: Hillary Clinton Says It's The Other Way Around

As noted in the post linked above, Herr Doktorprofessor Paul Von Krugman thinks that the big problems with President Bush flow from his unchecked desire to be re-elected to a second term.

But Hillary Clinton is worried about what happens when President Bush is unchecked in his second term by any need to be re-elected:

"I worry about four years of a second term of the Bush administration with no accountability — no election waiting at the end," Clinton said, adding that "extreme legislation (is) waiting in the wings if the president gets re-elected. There will be a move to turn the courts into an adjunct of the Republican Party and their extreme ideology and agenda."

There you have it. The only thing worse than George Bush's need to be re-elected is his having no need to be re-elected. Some Democrats seem to be living out (or living in) some version of a joke popular in Communist Poland:

"Capitalism is the exploitation of man by man! ... Communism is the other way around!"

And, by the way, is Senator Clinton speaking from her own experience in the White House - when Bill Clinton is widely believed to have thrown away his entire second term?

Posted 7:59 PM by Robert Musil
Pending Revision

One of the more curious aspects of reports of the recent "weak job numbers" is the widespread failure of the media to note that such numbers are subject to revision - and have in fact been recently subject to substantial revision upwards.

The nifty new Senate Joint Economic Committee website goes into it more here and here and here.

At a minimum, before spinning any significant thoughts on why jobs growth has been "weak" it would be wise to wait for the revision.

Posted 7:06 PM by Robert Musil
If Further Proof Were Needed That Sandra Day O'Connor Is A Victim Of Senile Legal Dementia

Without question, one of the most shameful Supreme Court fundamental rights decisions since Korematsu.

Be afraid. Be very afraid.

UPDATE: John Fund describes how Justice O'Connor has grown into her dementia.

Posted 6:04 PM by Robert Musil
Gored Again III

I think pretty highly of John Ellis. So maybe he can help me out on this one. I understand that now that Al Gore has endorsed Howard Dean, that if Dr. Dean wins the White House in 2004 then Mr. Gore will be in a good position to claim various goodies. Check.

But I'm having a little trouble with what happens if Dr. Dean steers the Democratic Party into the political equivalent of an airliner collision with Mount Fuji in 2004, losing the White House and more seats in Congress - thereby weakening or eliminating the ability of Senate Democrats to block Republican judicial nominees. John explains:

[A]ssume that former Vermont Governor Howard Dean is defeated by President George W. Bush in the 2004 presidential election. Who picks up the pieces? .... There is one man ... who thinks that he will pick up the pieces after the 2004 Democratic debacle. His name is Al Gore, the former vice president and winner (in the popular vote) of the 2000 election. He chose not to run this time around, for obvious reasons, but left the door wide open for a Nixon-like return to the '08 campaign. And this week he all but announced his candidacy for the 2008 Democratic Presidential nomination by endorsing Gov. Dean for president.

John, explain to me again how by endorsing Dr. Dean and helping cause such a gigantic, historic wreck, Al Gore puts himself in a better position to pick up the pieces and claim the Democratic nomination in 2008. I think I must have missed the explanation the first time.

The argument seems to be bottomed on this claim: If Dean loses, Gore will be the rightful heir to the Dean apparatus; the single most impressive fund-raising and organizing operation in Democratic Party politics. But doesn't most of that "apparatus" depend on Dr. Dean's personality? Is that really transferable to Al Gore? And won't a big loss likely leave the "apparatus" more than a bit damaged? And couldn't all of Dr. Dean's technical devices - internet gimmicks, etc. - be copied functionally without actually endorsing Dr. Dean himself. I mean, isn't an endorsement rather a stiff price to pay for a campaign mailing list?

Another question: Exactly what were the "obvious reasons" Mr. Gore didn't run this time around?

I also didn't quite see how it was that Mr. Gore all but announced his candidacy for the 2008 Democratic Presidential nomination by endorsing Gov. Dean for president. If Dr. Dean actually wins in 2004, then Al Gore probably won't be able to run at all in 2008.

Is this whole Al Gore strategy supposed to be based on an assumption that Dr. Dean will lose the general election in 2004 - but not so badly that those closely associated with him are rendered radioactive?

If that's the case, Al Gore really is a refined thinker.

Help me out here, John. I'm in pain.

MORE: Good thoughts from Bill Quick.

STILL MORE

John Ellis replies.

Posted 11:52 AM by Robert Musil
Gored Again II

More people seem to be coming to the understanding expressed here that Al Gore's endorsement of Howard Dean is mostly a Gore uppercut to the Clintons.
But it's hard to know what to make of this bizarre observation rom the Daily News:

Behind the scenes, observers said the frosty response had more to do with 2008 - when both Gore and Hillary Clinton are projected as potential presidential contenders - than current affairs.

There are "observers" who think that there is a serious chance that Al Gore plans to be a contender in 2008? After completely passing up 2004? One is tempted to think that those must be the "observers" who stay behind the scenes because smoking dope in public is still illegal. But stranger things have happened - especially where Mr. Gore is involved.

Mr. Gore's endorsement does create a curious additional incentive for Senator Clinton. If Howard Dean is the nominee, then even if he is not elected he will have plenty of opportunity to rid the Democratic Party of lingering Clintonian influence - especially the egregious Terry McAuliffe and his flock. Mr, Gore's enthusiastic endorsement will make it all the easier for Dr. Dean to sweep out the Clintonian detritus.

Further, absent a complete Dean disaster in the general election (which is possible, even likely - but far from assured), Dean's influence in the Democratic Party establishment could long linger - just as the Clintons' influence has lingered. Worse, if Dean is nominated, Senator Clinton will have the unpleasant choice of (1) vigorously supporting Dr. Dean, thereby undermining her own institutional position and simultaneously associating herself more closely with a Dean disaster instead of positioning herself as the post-election-disaster savior, or (2) distancing herself from her party's candidate, thereby positioning herself as the post-election-disaster savior, but also undermining the candidate, giving herself a further reputation as a divisive figure in the party and making more and more intense enemies within the Party. Even if she evades all those rocks, Senator Clinton - who already controls much of the Democratic Party machinery - will be no better off than she is now following a Dean loss. And if he wins, she's finished forever as a Presidential possibility.

The conventional wisdom - and my opinion - has been that Senator Clinton is unlikely to run in 2004 because the conditions for a Democrat win are not good (especially on the economic front). But if she sees a Dean nomination - especially one coupled with the Clinton-hostile Gore endorsement - as reducing her chances in 2008 enough, she might well reconsider.

Does any of that help explain why her sock-puppet, Wesley Clark, is suggesting that Senator Clinton may be his running mate?

Or maybe it will just turn out to be the other way around.

Posted 9:31 PM by Robert Musil
The Bad Economist? III: Of Hype And Hyperbole

As noted in a prior post, the most striking result of Herr Doktorprofessor Paul Von Krugman's entire academic career - his theory of the so-called "home market effect" - was dealt a severe but not fatal blow by Donald Davis, now the Chair of the Columbia economics department. Worse, the blow depended on Prof. Davis pointing out a serious problem that should and would have been disclosed by standard "sensitivity analysis" testing how much Herr Doktorprofessor's results would be affected by a failure of one or more of the "simplifying hypotheses" on which they were based. Herr Doktorprofessor appears to have conducted no such sensitivity analysis - or at least he does not disclose any prior to Prof. Davis' paper.

But Herr Doktorprofessor's status as a world class self promoter was cemented by his and his supporters (dependents?) recharacterization of this development as a great vindication of his work. Indeed, he went on to write a book with two co-authors: The Spatial Economy by Fujita, Krugman and Venables ("FKV"), a book that was, in turn, reviewed in a paper OF HYPE AND HYPERBOLAS: INTRODUCING THE NEW ECONOMIC GEOGRAPHY by J. Peter Neary of University College Dublin and CEPR. Some of the paper is rather technical - but many of his comments constitute interesting commentary on Herr Doktorprofessor's self-promotion and hyperbolic claims of his own importance:

[A]t times the authors risk getting carried away by their heady prose style. They find the predictions of one model so plausible that they call it "History of the World, Part I" (p. 253); they describe the pattern of world industrialisation implied by another as "a story of breathtaking scope" (p. 277); and on his website Krugman expresses the hope that economic geography will one day become as important a field as international trade. This sort of hype, even if tongue-in-cheek, is not to everyone?’s taste, especially when the results rely on special functional forms and all too often can only be derived by numerical methods. What next, the unconvinced reader may be tempted to ask? the tee-shirt? the movie?

Donald Davis (1998) criticize[d] [Krugman's original results] on two counts. He makes the empirical point that real-world transport costs appear to be at least as high for the latter, and he shows theoretically that this neutralises the home-market effect. Chapter 7 of the book derives similar results (without referring to Davis) but gives them a totally different spin. Whereas Davis concludes that there is "no compelling argument [...] that market size will matter for industrial structure", FKV note that a reduction of agricultural transport costs may trigger agglomeration. So, relatively low agricultural transport costs are either a necessary and implausible condition for agglomeration, or a source of yet more "stories of breathtaking scope": take your pick.

I have taken the appearance of FKV as an opportunity to review the "new" economic geography. It is not the only approach to location and agglomeration which economists have taken. Many authors such as Brian Arthur (1986) and Robert Lucas (1988) have theorised about the role of regions and cities in economic development. But no other body of work does quite the same thing as the new economic geography: explain agglomeration in a theoretical framework which is tractable, has solid micro foundations, and makes testable empirical predictions. So, to paraphrase Robert Solow (1962), everyone should read this book, or at least encourage their students to do so! Remember though that Solow?’s remark was made about the two-sector growth model, as emblematic of the 1960s as mini-skirts or the Beatles, though not as long-lasting. Will the new economic geography prove more durable? I suspect that it will, though maybe not as a distinct field. Instead, I am tempted to suggest that it will survive as "merely" another simple general equilibrium model, supplementing the trade theorist's tool-kit, to quote Solow 27 again, another "general equilibrium model of matchbox size" (since even a continuum of identical matchboxes arranged symmetrically around a circle is, well, just a matchbox). Saying this risks sounding disparaging (and falls short of the authors' ambitions). But it is high praise in my view. ... ([A]s Krugman (1999) notes, Ohlin himself gave an important role to increasing returns as a determinant of trade patterns.) In stressing the relevance to regional issues of models derived from trade theory, Krugman has not so much created a new sub-field as extended the applicability of an old one. So, hold on the tee-shirt, skip the movie, but do read this book, possibly the best on interregional and international trade and location since Ohlin.

So, Herr Doktorprofessor Paul Von Krugman's work will survive as "merely" another simple general equilibrium model, supplementing the trade theorist's tool-kit, and constitutes another "general equilibrium model of matchbox size" (since even a continuum of identical matchboxes arranged symmetrically around a circle is, well, just a matchbox) and Herr Doktorprofessor not so much creates a new sub-field as extended the applicability of an old one!

Does that read like the kind of summary of the work of an economist that might be found, for example, in the press release attendant to his winning the Nobel Prize?

Or the John Bates Clark Medal?

Ah! Immortality!

Posted 1:18 PM by Robert Musil
Medicare Structure

President Bush has just signed a bill adding prescription drug benefits with an estimated 10-year cost of $400 Billion and other features to Medicare.

Many conservatives are lamenting this huge expansion of a government entitlement, and both conservatives and liberals are concerned at the effect on the federal budget and the "solvency" of Medicare.

Suppose one assumes that even before the new bill, the "solvency" of Medicare is already impossible to maintain without benefit cuts or tax rises (maybe even with some of both) and that Medicare's "solvency" will be adversely and substantially affected by the new bill. Could one still make an good argument in the bill's favor?

I think the answer is "yes." The reason is "structure." In fact, the new bill's threat to the "solvency" of Medicare may be exactly what may justify the new drug benefit.

One can attempt to justify Medicare on either economic principles (the program increases overall utility) or political principles (some such program is inevitable in any democracy, since the relevant interest groups will eventually come together and make it happen - even if the result decreases overall utility). It is hard to see how excluding prescription drugs across the board from plan coverage makes sense in either an economic or political analysis.

Consider the economic justification. Assume that Medicare has a maximum sustainable size (whatever that means) and that the program is already structured to go well beyond that size (in other words, its already heading towards "solvency"). If Medicare (or some program like it) can increase overall utility, then including some prescription drugs under the plan probably makes sense because some prescription drugs give a huge amount of value to the beneficiaries compared to services and products already covered. Adding a prescription drug benefit means defunding those lesser-value services and products once the "solvency" wall is actually hit, in favor of covered prescription drugs - then adding the prescription benefit should increase overall utility compared to what Medicare would have yielded in overall utility had the benefits not been added. Yes, the political pain of reducing overall Medicare from a higher

Consider the political justification. If adding the prescription drug benefit increases the aggregate utility of Medicare, then that alone is a big boost to justifying the new bill politically. But even if the economic justification for Medicare and/or the new bill is wholly incorrect, it still seems unlikely that a full exclusion of prescription drugs is the most defensible line politically. Wouldn't it be better as a matter of pure politics to define the structure of Medicare to include some prescription drug coverage for some people and then try to hold the line on the aggregate size of the restructured program?

Posted 3:39 PM by Robert Musil
Gored Again

Word is out that Al Gore is about to endorse Howard Dean, which the New York Times reports would be a move that Democrats said would provide a huge boost to Dr. Dean's candidacy.

I'm not sure that the Times has that one right.

Howard Dean has indicated that he intends to purge the Democratic National Committee of Clintonian residues. Also, Wesley Clark has essentially been inserted into and maintained in the campaign by the Clintons as the "anti-Dean."

Mr. Gore's endorsement of the former Vermont governor may or may not be a big boost to his chances to obtain the Democratic nomination, but Mr. Gore's move is certainly a strong indication that Al Gore hates the Clintons ...

... and doesn't care all that much for his former runnning mate, Senator Lieberman, either.

UPDATE: An astute reader hits the mark with this e-mailed observation:

Also note that, according to the account I read, Gore is making the announcement in Harlem. Harlem, of course, is where Clinton located his office. There may be other reasons behind this choice, but it sure looks as if at least part of the motivation may be to snub Clinton on his own front steps.

That's it - rub it in, Al. Rub it in real deep.

Posted 10:55 AM by Robert Musil
The Bad Man's Theory of International Trade Law

The great and hugely influential Justice Oliver Wendell Holmes, Jr. maintained that law should be viewed from the perspective of a self-interested "bad man." That is, someone who cares only about economic consequences of his actions. Holmes saw law as simply a system of pricing - and this was especially true of commercial contract law. Although some people have always lamented Holmes' contribution as pernicious (he intended it to be shocking) it is now understood even by the best such lamenters that for better or for worse Holmes' views and views directly derived from them are today commonplace - and actually dominant.

It is also a practical, real-world fact that commercial contracts are generally treated by their parties in exactly the way Holmes described. A company that enters into a contract to buy a certain amount of, say, coal from a coal producer does not see itself as morally obligated to buy that much coal. Rather, the decision to buy the coal will generally be treated as an economic matter along these lines:

If we buy the coal our net cost will be X, and if we don't buy the coal (and therefore breach the contract and obligate ourselves to pay the damages resulting from the breach) our net cost will be Y. Therefore, if X > Y, we will not buy the coal.

Nobody in the coal business will be shocked or surprised. In fact, to do otherwise would make other commercial actors wonder about one's intelligence. And the law (generally the Uniform Commerical Code) reflects these realities by assuming that monetary damages are normally sufficient remedy, and denying "specific enforcement" of the contract except in highly unusual cases. Ordinary people make such decisions every day - as when a homeowner walks from a non-recourse mortgage on a home that has depreciated or been destroyed by an earthquake. Indeed, for many months following the Northridge Earthquake the majority of home sales in the San Fernando Valley were forclosure sales. Many of those homeowners were perfectly capable of keeping up their home payments - it just wasn't worth while for them to do it on a house that had experienced, say, $100,000 in earthquake damage after already being hit with serious real-property deflation. Those home owners were "bad men."

Holmes' "bad man" approach to the law is even more accepted as usually (there are exceptions) being both the proper ("normative") structure of law and actual ("positive") practice, in the arena of international law. Nation states are generally thought to look out for their own interests - with the main question being how "enlightened" or "correct" their view of their own self-interest really is.

There is perhaps no arena in which the "bad man" theory is more dominant and casually accepted than the arena in which all of these factors favoring the approach align in a kind of grand, legal and commercial syzygy: international commercial trade agreements.

That is all by way of background.

The Man Without Qualities is no fan of the United States' just-rescinded steel tariffs. Those steel tariffs exhibit a law-abiding, "bad man" approach to the WTO. The US did not walk away from the law - it accepted the right of other parties to the WTO to impose countervailing duties, which is the remedy allowed to them. In exactly the same way a Holmesian "bad man" accepts the law's right to compel the payment of monetary damages for breach of a contract. That's the price of breaching the contract.

But its simply preposterous for EU trade commissioner Pascal Lamy to write today in the Wall Street Journal - with emotion whose genuineness is most comparable to that of the Walrus and the Carpenter expressed over the oysters they have just devoured:

But abuse comes at a price, and that price is systemic. The U.S. action may have already let the genie out of the bottle. Every protectionist move by others can now be justified with reference to U.S. measures. Many former arch-enemies of trade defense instruments, including major developing countries, are now among the heaviest users of anti-dumping rules. And there are plenty of steel-producing countries getting ready to cite the U.S. example to keep out imports. Unsurprisingly, there are also calls for fundamental reform of the trade defense sector in the context of the Doha Round.

Please. To insist that a country or other commerical contract party must actually perform under a trade agreement is all but equivalent to insisting that parties to such contracts are generally entitled to specific performance, not monetary damages - a position thoroughly rejected by commercial practice, legal theory and common sense. [Any argument that civil law establishes specific performance as the usual remedy for breach, unlike the common law preference for monetary damages, would reflect nothing but a naivete on the part of the one making the argument, since the civil law "preference" is so gutted with exceptions that in practice the result is essentially the same as the common law.]

Just by way of example: The EU has supposedly eliminated restrictions on imports of Japanese cars. But no Japanese car manufacturer thinks it can export unlimited numbers of cars to Europe - where consumers would love to buy them. Instead, the Japanese know that they must open plants in Europe and restrain their market share expansion. The actual EU stance towards Japanese car sales is like that of the United States - but much, much worse.

To pick another example: No sensible person believes that Japan does not practice the extensive non-tariff trade restraints that Japan (and it's more foolish-sounding apologists in the West) so violently deny, or that other Asian countries have not picked up many of these tricks.

One could go on and on. So what? Nobody is surprised by any of that that. Nobody is weeping on the pages of the Wall Street Journal that genies have emerged from bottles when Japan trumps up yet another "health and safety" regulation that stifles some import to the benefit of its Japanese equivalent.

Did the Bush Administration's steel tariffs mark a shift in US trade policy? Yes. It made them a little more those of the rest of the world. That's not necessarily a good thing - although it's humorous to see "internationalists" who argue so passionately in other spheres that the US should act more like the rest of the world fulminating over this Administration gambit.

It really asks a lot of even a hard boiled "bad man" to stomach the sanctimonious, disingenuous pretenses of Mr. Lamy and the carefully worded evasions of Herr Doktorprofessor Paul Von Krugman. [I have already noted in prior posts that Herr Doktorprofessor rarely argues from economic principles for free trade - he prefers to cite international law.]

The Administration's gambit may even have a strategic benefit for the American trade negotiation position. Mr. Lamy suggests that the gambit has resulted in calls for the fundamental reform of the trade defense sector in the context of the Doha Round.

Amazingly, Mr. Lamy writes as if such calls for fundamental reform were a bad thing.

UPDATE:

Messrs. Krugman and Lamy ask uo to believe that Europe is appalled over the supposedly illegal US tariffs, where the EU itself is constantly faced with this kind of report concerning its member states' flouting EU regulations:

The latest Eurobarometer to be released this week found that just 48 per cent of EU citizens viewed membership as a "good thing", down from 54 per cent last spring.

[E]ven the French were below half for the first time after months of battles with Brussels over tax cuts and illegal aid to ailing firms.

Posted 9:41 AM by Robert Musil
Corporate Governance In Disneyland: A Sad Chapter IV

The New York Times reports its version of the current state of Disney/Eisner affairs:

[Michael Eisner's] position as the chief executive of the Walt Disney Company appears secure... Yet former board executives, crucial employees and other people in Hollywood now feel emboldened to criticize Mr. Eisner in a manner more vociferous than at any other time in his nearly 20 years as chief executive. ....

But scathing on-the-record comments - at least those not part of legal proceedings, like Mr. Katzenberg's against Disney - are a rarity in a business where the knives truly come out when someone is considered finished.

It seems that the Times is rather coyly suggesting that what appears to be Mr. Eisner's security is not actually the case at all.

Posted 5:46 PM by Robert Musil
Global Manufacturing Jobs Shrinkage II

In the post linked above, the Man Without Qualities expressed extensive skepticism over some aspects of reports that manufacturing jobs have declined recently in China:

With respect to China, for example, there are also reports that manufacturing in China often tends to substitute human labor for the technology employed in the country from which the jobs "come."

China also has some peculiar labor laws that one can imagine creating some very strong incentives for employers to report the "loss" of manufacturing jobs. ... This is just one peculiarity of Chinese employment law that might distort employment statistics.

There is also generally and worldwide a rather strong relationship between the number of employees an employer claims and the employer's tax obligations. The reader may wish to take a private moment to contemplate the traditional relationship between a Chinese business owner and the tax authorities.

I would be very skeptical of the reliability of Chinese employment statistics generally. This is a country that for decades officially denied that it suffered any unemployment at all!

Indeed, it is difficult in the extreme to ... accept easily the proposition that China saw a 15 percent drop in factory jobs...

Another report in the New York Times details yet more legal incentives for some Chinese manufacturers to suppress the number of employees reported to the government:

A more recent memo, issued to prepare for an inspection that took place on Nov. 26, urged workers to memorize false numbers for wages and working hours to reflect Shenzhen's regulations. The memo promised bonuses to workers who responded as directed when approached by inspectors.

Workers said the elaborate ruse had one happy result. Because few of the employees have legal work contracts on file, the factory must pretend that its work force is smaller than it is when inspectors visit. On such days most of the factory's 850 workers get a rare treat: a day off.

On Nov. 26, with an inspection under way inside the plant, workers congregated in their rented homes or food stalls to eat, chat, smoke and gossip.

"I thank the inspectors for one thing," said a Kin Ki worker from rural Sichuan. She was crouching over a bucket of cold water in the warm afternoon sun, washing her hair. "I needed a rest," she said.

Posted 12:02 PM by Robert Musil
Approval Rating

FOX News/Opinion Dynamics Poll. Dec. 3-4, 2003. N=900 registered voters nationwide. MoE ± 3.

"Do you approve or disapprove of the job George W. Bush is doing as president?"

......................................Approve...................Disapprove...........................Don't Know
...........................................%................................%............................................%
12/3-4/03...........................52..............................34............................................14
11/18-19/03.......................52..............................41.............................................7

It's curious that the "approve" number remains unchanged while the "disapprove" number declines by 7% in about two weeks.

Maybe that's what MoE's are for.

The FOX News/Opinion Dynamics Poll for General Election results shows a similar curious pattern.

Posted 10:01 AM by Robert Musil
Another Gray Lady Waddle

The New York Times, in the form of a Floyd Norris article, waddles in, falls down and can't get up, in its very-late-breaking report on the divergence between the payroll survey and the household survey of the nation's employment. The significance of this divergence has been emphasized repeatedly by various bloggers (including the Man Without Qualities) for many months. The trajectory of the Gray Lady waddle is predictable, as Don Luskin points out quite effectively. At his nadir, Mr. Norris comes close to dismissing the self-employed as at-home spammers.

Specifically, the Times reports:

The self-employed are a group that statisticians have a hard time dealing with, and the apparent growth in that group may or may not be a good sign for the economy. Some people who say they are self-employed may really be out of work and trying to bring in money as consultants or freelance workers. Others may be doing very well, living a dream of boss-free success. In any case, the government reported that the number of self-employed workers rose by 156,000 last month, to 9.2 million. That gain was a primary reason that the unemployment rate dropped to 5.9 percent.

But there are other government statistics that squarely address - although not fully resolve - the supposed gap in understanding of the typical self employed, as Mr. Norris could have read in an excellent Wall Street Journal article by Jon E. Hilsenrath about a week ago:

Self-employment has increased by 400,000 in the past year alone, according to a monthly survey of American households conducted by the Labor Department. But it has been hard to tell whether these new self-employed workers were really profiting from their ventures, or whether they were just biding their time during a period of painful unemployment.

Now, investment strategist Kenneth Safian says he has found evidence that small enterprises really are playing an important role in the recovery. The evidence is buried in the government's monthly personal-income report, which was released last week. Proprietors' income, which is the income earned by individuals from running their own businesses and from partnerships, is surging. The Commerce Department reported Wednesday that proprietor's income, excluding the farm sector, was up 8.6% from a year earlier. By contrast, the wages and salaries of individuals on corporate payrolls were up just 2.3%.

Proprietor's income covers a broad swath of the economy -- everything from larger law firms to one-person construction companies or tech consultants operating out of a home office. Mr. Safian, who is president of Safian Investment Research Inc., based in White Plains, N.Y., says the upshot of the latest trend is that more workers are striking out on their own and earning money doing it. The economy, he says, "is becoming more entrepreneurial."

If that is the case, it would say a lot about the dynamism of an economy that has been through series of shocks in the past three years. It might also help explain why official payroll employment levels have been so depressed in recent months. If more people are striking out on their own, then their job status in some cases wouldn't show up in the government's measure of employment levels at established businesses, which is down 2.4 million since the recession started in March 2001.

Unfortunately, there are no official statistics for business formations across the $10 trillion economy. And there are other explanations for the recent pop in proprietor's income. .... Today, proprietor's income is taking on a rising share of total national income. ...It is possible that the latest burst of income will be revised Dec. 10, when the government updates its estimates of national income and output using fuller data sets from the IRS.

That release in early December might also provide a glimpse of which industries account for the apparent rise in business formations. Right now, the government's data break down proprietor's income into only two sets -- farms and everything else.

Who knows, maybe the December 10 data will confirm Mr. Norris suggestion that most of those proprietorships are just at-home spammer, not dignified wage-slaves like Mr. Norris.

It could happen. But I wouldn't bet on it.

MORE: Interesting alternative universes from Steve Antler.

Posted 2:51 PM by Robert Musil
And, Of Course, These Polls Are Taken Before A Lot Of People Figure Out That The Economy Is Recovering ...

... the polls eleven months from now will likely reflect a much larger dose of prosperity:

People are increasingly comfortable about job security for themselves and for those they know - 44 percent now, compared with 35 percent in early October.

And more approve of the way Bush is handling the economy - 50 percent compared with 45 percent earlier, according to the poll conducted for the AP by Ipsos-Public Affairs. Support for his handling of other domestic issues like education, health care and the economy, at 47 percent, has not shifted significantly.

The president's re-election numbers have slightly improved, with 41 percent saying they will definitely vote for him and 36 percent definitely against him. One in five is considering voting for someone else. In mid-November, people were evenly split, 37 percent for and against.

Posted 2:23 PM by Robert Musil
The Third Tweedle

During the 1968 presidential campaign, Walt Kelly portrayed Richard Nixon and Hubert Humphrey as Tweedle-Dee and Tweedle-Dum, each with a "secret plan" to end the Vietnam War. Kelly had his two Tweedles sing in unison - or at least close harmony - this song or one like it (if memory serves):

I have a very seec-er-et plan,
For ending the war like a pol-i-ty sham.
I'd say "no, no" once,
And "hey-watch-it" twice!
After appeasing the hearts of bi-partisan moms,
I'd launch a chain letter of monogrammed BOMBS!

Wesley Clark seems to be vying for position as the Third Tweedle:

Gen. Wesley K. Clark assured a crowd at a college campus here on Thursday that he had a strategy to secure Iraq and bring American soldiers home, criticizing the Bush administration for not producing a timeline to withdraw troops. But General Clark later refused to specify when he would bring troops home or how many more soldiers might be needed to stabilize Iraq.

MORE: From Maguire.

Posted 10:41 AM by Robert Musil
Herr Doktorprofessor Loots Trade Theory

Herr Doktorprofessor Paul Von Krugman's column today is a rich compost pile of leftovers from many of his Bush-bashings past, including - just un peu, mind you - from what is supposedly his specialty dish, international trade:

Then there's international trade policy. Here's how the steel story looks from Europe: the administration imposed an illegal tariff for domestic political reasons, then changed its mind when threatened with retaliatory tariffs focused on likely swing states. So the U.S. has squandered its credibility: it is now seen as a nation that honors promises only when it's politically convenient.

Surely Herr Doktorprofessor is right on this one. Such White House behavior has got to go! And the new Democratic administration that begins its term in 2005 will see to it, right? Indeed, the Los Angeles Times reports that the Democratic contenders are speaking out:

Gephardt and former Vermont Gov. Howard Dean, who have won the most endorsements from organized labor, voiced the strongest support for keeping the tariffs. Connecticut Sen. Joe Lieberman is opposed to the tariffs, but argues that Bush could have done more to help the domestic steel industry. Retired Gen. Wesley K. Clark, who has not run for office before, avoided taking a specific stance on the tariffs. .... Clark said in a statement. "We need a real strategy to help our manufacturing communities."

But a spokesman would not say whether Clark supported or opposed steel tariffs.

Lieberman suggested that Bush should have done more to push foreign steel competitors into fairer trade practices, among other measures. .... Gephardt, who has been endorsed by United Steelworkers of America, argued that Bush should have asked the International Trade Commission to review whether the tariffs could be restructured in a way that would address objections raised by the World Trade Organization.

"The president's decision to prematurely lift the tariffs on steel imports severely undermines the recovery of the U.S. steel industry from decades of unfair trade practices that have jeopardized the viability of a vital domestic industry," he said in a statement.

Dean joined him in criticizing Bush's trade policies.

"Despite what President Bush may claim, the steel industry needs additional breathing room to get back on its feet," Dean said. "But the tariffs are a short-term solution to a larger problem: this administration's broken trade policy. Our trade agreements need to benefit workers, not just big multinational corporations." ....

Earlier this week, Kerry voiced support for maintaining the steel tariffs, saying, "Bush is cutting and running from his commitments to help working Americans."

Edwards did not specify his position on the steel tariffs, but took Bush to task for not protecting jobs.

"This president has done virtually nothing to protect American manufacturing jobs ?— not steel manufacturing jobs in Pennsylvania, not steel consuming jobs in Michigan, not textile jobs in North and South Carolina," he said.

A recap:

Gephardt, Dean and Kerry are squarely for extending the tariffs. Gephardt even suggests that they could be "restructured" to make them legal - although Herr Doktorprofessor elsewhere has implied that they are illegal in principle. His column does not address the point.

Clark and Edwards offer incoherent waffles, while arguing that jobs in the steel industry should be "protected" without any suggestion of how that might be done absent protectionism.

And while Lieberman at first seems to advocate ending the tariffs, he makes the weird, unsupported suggestion that American the steel industry has been the victim of "unfair trade practices" by foreign steel competitors - practices the foreigners should have been "pushed" more to end. That Senator Lieberman is bloviating (at best) here is clear from his failure to identify what those "unfair trade practices" might be, or why he hasn't exposed and crusaded against them expressly, or how the President is supposed to "push" for their end other than by imposing trade sanctions like the tariffs.

Much later in the column, Herr Doktorprofessor does allow that some of the general "looting" he ascribes to the Administration is "bipartisan" - but he does not mention trade policy.

It of course goes without saying that the Administration's intentions are sinister in Herr Doktorprofessor's mind, as where he notes: The prevailing theory among grown-up Republicans - yes, they still exist - seems to be that Mr. Bush is simply doing whatever it takes to win the next election.

But if the Administration's unprincipled craving to win the next election is what is driving trade policy, why does the Los Angeles Times report:

The Democratic candidates vying to unseat President Bush next year quickly seized on his decision Thursday to lift tariffs on steel imports, seeing it as an issue that will give them a political edge in key steel-producing states.

Party strategists said rescinding the tariffs had jeopardized Bush's standing in Pennsylvania, Ohio and West Virginia ?— the country's top steel-producing states and likely battlegrounds in the 2004 presidential election. Combined, the states account for 46 electoral votes.

In the 2000 election, Bush carried Ohio by about 4 percentage points and West Virginia by about 6 percentage points. He lost Pennsylvania by about 4 percentage points. His decision to end the 30% tariffs on some foreign steel products that he imposed in March 2002 is sure to rankle steelworkers in each of the states, Democrats say.

"The president, unfortunately for him, made a major blunder," said Bill Carrick, a strategist for Missouri Rep. Richard A. Gephardt's presidential campaign. "He didn't have the guts to stick with his original position. I think it's going to leave an awful bitter taste in people's mouths."

UPDATE: Don Evans, the Commerce Secretary, writes in today's Wall Street Journal:

Prior to March 2002, the U.S. steel industry was faced with surging imports of foreign made steel, high costs, inefficient excess steelmaking capacity at home and abroad, and the lack of demand for steel in foreign markets. Decades of government ownership and subsidization of foreign steel mills had greatly distorted this market, leading to an unlevel playing field that cost American jobs. After years of neglect, President Bush responded forcefully by announcing a three part plan that, in addition to launching negotiations to establish disciplines on government subsidies and working to reduce inefficient excess global steel capacity, included a temporary safeguard on steel imports, as authorized under U.S. trade law, to address these problems.

The president's plan has worked.

Are the "unfair trade practices" referred to by Senator Lieberman - the only Democratic contender for the presidency who seems remotely on Herr Doktorprofessor's page - the same ones Mr. Evans cites in this passage? Does the Senator disagree that the president's plan has worked? Why so coy? In any event, the WTO rejected the practices described by Mr. Evans as inadequate justification for the tariffs. Are there other practices and countermeasures that the Senator has in mind? What the heck is he talking about?

MORE: On Maguire. Don't overlook the comments - especially the hilariously disingenuous squib lobbed in by Brad DeLong!

Posted 8:45 PM by Robert Musil
Paying For Prescription Drugs

The new prescription drug benefit is to cost $400 Billion over ten years. There has been much hand wringing over how to pay for it.

At the same time, the Financial Times reports: Overall support to US agriculture is estimated by the OECD at $50bn, or about one fifth of the value of output. Exports such as wheat, maize and cotton are transferred to world markets at prices far below production costs.

Nowhere are the double standards applied to Chinese agriculture more evident than in relation to agricultural export dumping. Under its WTO accession treaty, China agreed to a prohibition on the use of export subsidies. Two months ago, the refusal of the US and the European Union to contemplate such a prohibition was one of the factors contributing to the collapse of the Cancun ministerial meeting of the Doha development round.

Fifty billion a year for ten years is Five Hundred Billion Dollars. That's a lot of prescription drugs. And, as a bonus, if it stopped subsidising agriculture, the United States would get to stop acting like a foolish hypocrite in international trade talks.

Gee, isn't international trade economics supposed to be the specialty of Herr Doktorprofessor Paul Von Krugman? And isn't he very concerned about that Medicare bill?

Does he ever suggest moving money out of anything in the federal budget other than the military? There must be an example of that.

UPDATE: In today's column Herr Doktorprofessor comes tanatlizing close to advocating a cut in agricultural subsidy spending:

Nothing in our national experience prepared us for the spectacle of a government launching a war, increasing farm subsidies and establishing an expensive new Medicare entitlement —

But he pulls back from the brink just in time to explain that his real criticism of the Administration is its not only failing to come up with a plan to pay for all this spending in the face of budget deficits, but cutting taxes at the same time.

I know it's reading a bit between the lines, but it seems that the increasing farm subsidies and establishing an expensive new Medicare entitlement would have been much more acceptable to Herr Doktorprofessor if taxes had been raised to pay for all this spending.

Posted 4:11 PM by Robert Musil
Corporate Governance In Disneyland: A Sad Chapter III

More rumors - these from the New York Post - that Michael Eisner will try to lure Steve Jobs onto the Disney board.

It certainly makes sense for Mr. Eisner to try to do that - for exactly the same reasons that make such a move so completely senseless for Mr. Jobs.

To begin, as the Post article notes: "For one thing, Eisner apparently doesn't much like Jobs, either."

From what I read, that is a massive understatement. Steven Paul Jobs heads both Apple Computer and Pixar - and the endlessly hostile Disney/Pixar negotiation of an extension to their distribution contract have come to resemble the talks to end the Vietnam War.

Jobs would be crazy to take the Disney seat. He would have no real influence on the Disney board beyond what he already has from Pixar, and would pick up a whole network of conflicting fiduciary duties to the public shareholders of three companies. Michael Eisner has already accused him of facilitating piracy of Disney's products - how would Mr. Jobs like to be on the receiving end of conflicting fiduciary obligations arising from his Disney, Apple and Pixar board seats on that account?

Life is too short. And Mr. Jobs is smart enough to know that.

Maybe this will happen, but I'll believe it when I see it.

On the other hand, I have heard that Jobs and other Pixar officials are pretty good buddies with Roy Disney - who seems to be pretty easy to like. Could Roy persuade Jobs to head Roy's alternative-director proxy-contest list? Or even a hostile takeover plan? Of course, Mr. Jobs can't do any of that if Mr. Eisner puts him on the Disney board.

If the Pixar/Disney talks go badly enough, maybe Jobs and Roy could set up a merger proposal between Disney and Pixar, with Pixar management taking over the combined entity and a business plan to get rid of Eisner and his lapdogs on the Disney board and ABC - or at least Peter Jennings?

Any sensible Disney shareholder should take that deal if it were reasonably structured. There's huge unexploited and misapplied value at Disney. Steve Jobs has made quite a respectable turn-around at Apple and he's got a long track record of brilliant, multi-faceted thinking in many areas. Pixar is hugely profitable.

Why not get rid of the superfluous Eisner and let Jobs have a turn running a combined Pixar/Disney? Why, the huge investment banking fees alone should be making scads of those young New York investment bankers and analysts toil through the night structuring proposed deals right now! Hey, boys, it's better than true - it's a GOOD STORY!

Go for it!

UPDATE: Jim Hill Media has lots more.

Posted 10:13 AM by Robert Musil
Corporate Governance In Disneyland: A Sad Chapter II

Some of the odder comments that have emerged from the recent and ongoing Eisner/Disney kerfluffle are those suggesting that Roy Disney is off base because Disney stock and results have improved. Of course they've improved - the whole stock market and economy have improved. Disney's improvement proves very little.

Without getting into the specifics of the internal dispute, it is worth noting that Disney has slightly underperformed the NASDAQ and modestly outperformed the S&P.;

Whether such performance is acceptable to a given institutional investor is a matter of investing style. But Disney's recent stock performance would be considered exceptional by very few fund managers.

But Disney is not the only large media company with serious stock performance issues. Viacom has been such a dud over the past twelve months that it makes Disney look positively inspired, although Viacom's performance over the past five years (a better indication of management's abiity to create value) has been much better than Disney's. Even the dreadful Time Warner has done far better than Viacom over the past twelve months. Disney has done just about as well as News Corp on a twelve month basis, although News Corp has also done far better than Disney on a five year basis. News Corp has also outperformed the major indicies on a five year basis.

Disney's problems seem an awful lot like big media's problems generally. A concentrated, too-regulated industry. Management more entrenched than WWI battlelines. Strategic patterns of monopolistic competition - but long term sluggish results.

MORE

Posted 10:58 PM by Robert Musil
Priceless Kounter-Krugmania

At Luskin.

Posted 9:12 PM by Robert Musil
Zogby: John Kerry Shrinks To Almost Nothing In New Hampshire

The Zogby poll results released today:

Former Vermont Governor Dr. Howard Dean, who enjoyed a 40% - 17% lead in October polling of New Hampshire Democratic primary likely voters over Massachusetts Senator John Kerry, has stretched that lead in December polling to 42% - 12%. Retired general Wesley Clark is third at 9%, followed by Connecticut Senator Joseph Lieberman with 7%.

Dr. Dean is also back on top in Iowa:

With less than seven weeks remaining until Iowa’s January 19 caucus vote, Former Vermont Governor Dr. Howard Dean has re-taken a slight lead in his quest for the Democratic presidential nomination. In December 1- 2 polling of 500 likely Iowa caucus voters by Zogby International, Dean jumped back ahead of Missouri Congressman Richard Gephardt, the earlier Iowa front-runner, 26% - 22%, yet within the poll’s margin of statistical error.

MORE

Posted 5:00 PM by Robert Musil
Corporate Governance In Disneyland: A Sad Chapter

In addition to tendering his letter of resignation to the Walt Disney Company, Roy Disney is circulating the following letter addressed to Disney employees ("cast members"):

ROY EDWARD DISNEY


December 3, 2003


Dear Disney Cast Members,

It was nearly 20 years ago that a small group of us recognized that dramatic changes were necessary to reinvigorate and reenergize the Disney Company. We changed the composition of the Board and assembled a new leadership team headed by Frank Wells and Michael Eisner. I returned to the Disney cast and, working as a team, we planted the seeds that rekindled the spirit and creativity that is synonymous with Disney. Those efforts paid off handsomely in the late ‘80s and early ‘90s. Once again, Disney was admired for the wholesome family entertainment it brought to millions of people of all ages. Together we created the dreams and excitement that made Disney respected and beloved throughout the world. We succeeded in recapturing the dream born of Walt and my father and the heritage they left to us.

Sadly, times have changed. Michael Eisner has lost sight of the vision upon which this Company was founded. The focus has shifted to the chase for the quick buck instead of a dedication to new and high quality ideas, the development of enduring value. This has led to division within the Disney workforce, a revolving door of managers, and the exodus of too many of our most creative and inspired employees.

For the last several years, Michael Eisner has done his utmost to isolate me from the members of Disney’s Animation Department and exclude me from participation in decision making regarding the Department. Most recently, I was prevented from even attending the Animation Department screening of three pending feature animation projects. The collegiality and openness that once typified the Disney workplace has been destroyed.

It is against this backdrop that I had no choice but to resign as Chairman of Disney’s Animation Department and as a member of Disney’s Board of Directors. This has been a very painful decision. I am torn between my duties and loyalties to all of you who have made my journey so memorable and special, and the
need to preserve the Disney heritage for future generations. However, I cannot stand idle as the heart and soul of this Company is being systematically eliminated by senior management protected by an ineffective Board of Directors. This is a Board that seeks to avoid the constructive tension necessary to guide management through difficult times. Instead, it is a Board that seeks to stifle dissent and, to that end, has asked me to leave the Board of Directors.

Although this is not how and when I would have liked to leave the Disney Company, I assure you that I view it not as an isolated and sad event, but as part of a process. I hope it is not too late for the Disney Board of Directors to finally recognize that fundamental change is needed to restore the Disney luster, nurture and protect the wonderful characters that together we have developed and, most importantly, to create the environment within the workplace necessary to give life to new Disney icons for the generations to come.

As I now set off on a different course, I cannot fail to publicly and openly once again express to all of you my most heartfelt thanks. I am grateful that we have shared this journey. Without you, your contributions and camaraderie we would not have been able to make the magic and wonder that is Disney. I hope that one day soon the Disney Board gets the message.

Yours faithfully,


Roy E. Disney



UPDATE: The Los Angeles Times has its say.

MORE and STILL MORE

Posted 3:19 PM by Robert Musil
Patently Absurd

Writing in the New York Times, Stephen S. Roach, chief economist for Morgan Stanley, says all that you've been reading about US workers becoming more productive is probably poppycock. According to Mr. Roach, people are just working longer hours and the government isn't keeping track of it:

The denominator of the productivity equation - units of work time - is even more spurious. Government data on work schedules are woefully out of touch with reality - especially in America's largest occupational group, the professional and managerial segments, which together account for 35 percent of the total work force.

For example, in financial services, the Labor Department tells us that the average workweek has been unchanged, at 35.5 hours, since 1988. That's patently absurd. Courtesy of a profusion of portable information appliances (laptops, cell phones, personal digital assistants, etc.), along with near ubiquitous connectivity (hard-wired and now increasingly wireless), most information workers can toil around the clock. The official data don't come close to capturing this cultural shift.

It would be nicer if Mr. Roach could have presented even one tiny bit of evidence for his claim that the government statistics he knocks here are "patently absurd." That's especially true because the workers themselves don't seem to be reporting increased hours worked on a long term basis when they are polled (although they do report a modest rise in hours worked in the past year).

And while it is true that most information workers can toil around the clock courtesy of the new technology, many of those workers sell their labor by the hour, such as attorneys and accountants. It's therefore not likely that their hours are growing but going unreported. Also, it's not really that easy for many people to find quiet time and space to toil around the clock if they are parents of young children or expect to remain or become married. Is the image supposed to be of an office manager phoning in instructions from the freeway? If so, then how does one distinguish such a manager who leaves early because he or she can phone in from one who is actually working longer hours? And are hours spent phoning in from the freeway as effective as hours in the office? Mine never seem to be. Anecdotally, most employers I know who have allowed employees to work from home do not feel that those employees toil around the clock. Far from it. Young investment bankers sometimes toil around the clock. Is it possible that Mr. Roach, who works for an investment bank, has come to view investment bankers at Morgan Stanley as representative American workers? Why is it that thought is so terrifying?

In any event, it's impossible that Mr. Roach could have come to think that way. That would be patently absurd. In fact, it would be as patently absurd as a senior economist with a major investment bank asserting on the pages of the newspaper of record that the official data on a major economic variable is "patently absurd" even though it seems consistent with professional private polls - all without offering any evidence for his assertion whatsoever.

Now that's really patently absurd.

Posted 9:33 AM by Robert Musil
The Bad Economist? II: Some Problems With Predictions

The sorrows are not new. That is, the sorrows of aging enfant terrible Herr Doktorprofessor Paul Von Krugman with economic forecasting that recently brought him to the absurd and humiliating position of writing in late July, almost one full month into the third quarter for which the GDP growth rate is now known to have been 8.2% and non-farm business productivity rose at 9.4% annual rate, that There is very little evidence in the data for a strong recovery ready to break out.

Richard Posner, one of the countries best federal judges and a leading light in the application of economics to law - wrote of Krugman in Posner's book Public Intellectuals: A Portrait of Decline:

He was not hired by the Times for his record as a prophet. In a book published in 1990 [The Age of Diminished Expectations: U.S. Economic Policy in the 1990s] he had offered as 'the most likely forecast for the U.S. domestic economy in the 1990s...fairly slow growth, modestly rising incomes for most Americans, generally good employment performance, [and] a gradual acceleration of inflation' to 7 percent. He predicted that by 2000 the United States would "have sunk to the number three economic power in the world," after Europe and Japan, and that the world economy would be less unified than it had been in the 1980s. He published a "revised and updated" edition four years later, but retained these predictions.

These dud predictions lie at or near the heart of Paul Krugman's main academic interests: international trade and growth and comparative economic performance. In other words, these duds are not just the rantings of Paul Krugman qua journalist - these are the rantings of Paul Krugman qua academic economist.

Another of Herr Doktorprofessor's central academic interests has been currency. So it's appropriate to take at least a preliminary review of his his prediction about the fate of the US dollar:

The crisis won't come immediately. For a few years, America will still be able to borrow freely, simply because lenders assume that things will somehow work out. But at a certain point we'll have a Wile E. Coyote moment. For those not familiar with the Road Runner cartoons, Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge. What will that plunge look like? It will certainly involve a sharp fall in the dollar and a sharp rise in interest rates. In the worst-case scenario, the government's access to borrowing will be cut off, creating a cash crisis that throws the nation into chaos.

Keeping in mind that Herr Doktorprofessor was careful to locate this prediction several years in the future, it is still valuable to observe the recent movement of the dollar to see he is correct when he writes that during that period of years America will still be able to borrow freely, simply because lenders assume that things will somehow work out. After all, his prediction of a plunge at the end of that period depends on his prediction that lenders will make their adjustments more or less massively after ignoring the warnings in the mean time. Is that right? Failure of the market to absorb and reflect information - such as currency warnings - is something one more easily associates with small, illiquid instruments - like an under-covered stock or the currency of some minor trading nation. The US dollar is anything but that. So if what Herr Doktorprofessor is predicting is right - and he is essentially extrapolating from his third-world currency experience to say that the US dollar will act a lot like, say, Thai currency did in the Asian financial crisis - that could be another breathtaking, revolutionary revision of classical thinking!

But the US dollar has been in a long-term, gradual decline against the Euro and the Yen. That indicates that foreign lenders are doing anything but assuming that things will somehow work out. In fact, lenders and the world currency markets are digesting the very trade and budget deficit information that Herr Doktorprofessor predicted they would ignore - and those same lenders are imposing gradually rising costs on the ability of the United States to borrow and issue its own currency. That may or may not signal a long-term decline of the United States or its dollar (for example, the dollar declined by about 30% at one point under Reagan), but it certainly doesn't seem very consistent with some future Wile E. Coyote moment that Herr Doktorprofessor so confidently predicted in which the markets' long-overdue understanding of issues long understood by Herr Doktorprofessor comes rushing in.

The Economist reports: Mr Krugman's work on currency crises and international trade is widely admired by other economists. If that's true, perhaps it says more about the current state of the economics profession than about the sterling quality of Paul Krugman's central academic work.

Posted 11:25 PM by Robert Musil
The Bad Economist?

A version of one fairly common - if not exactly standard - refrain concerning Herr Doktorprofessor Paul Von Krugman is found in the recent, curious Economist article that suggested that he is a gifted writer and economist, but ... these days his relentless partisanship is getting in the way of his argument.

It's a curious dichotomy. Herr Doktorprofessor qua journalist is widely admitted routinely to distort and even misrepresent the sources on which he relies for his columns. It is also almost universally acknowledged that a sensible reader of Herr Doktorprofessor's columns will not assume that representations of statistics, facts, figures or economic arguments one sees there are as Herr Doktorprofessor presents them to be without independent checking - and that the more difficult the checking and confident the assertion, the more a sensible reader with politely reserve belief until the fact checkers have had their say. The New York Times, of course, has no fact checkers for its columns. [UPDATE: Just by way of amusing example, in light of the recent uproar on the left over President Bush's successful drive to obtain adequate funding for reconstructing Iraq and Afghanistan, this column by Herr Doktorprofessor is worth re-reading to see just how justified his claims to understanding the "real" minds and hearts of the current Administration really are.]

Herr Doktorprofessor's most questionable columns often include what he says he considers to be harmless assumptions - or omit a complex, technical analysis that he asks the reader to trust him he has performed (it's his job and his expertise, isn't it?). The assumption or omission is just to render the column straightforward, you understand. “For simplicity.” In these columns he is, after all, engaged in the controversial and difficult art of popularizing economics. Today's near-paranoid rant (pinned wriggling to the wall by Don Luskin) accusing someone of fixing the new voting machines, for example, includes a typical "trust me, I have done the hard, scientific work" line: "The details are technical, but they add up to a picture of ..." In other columns, he assures us, he is making the kinds of simplifying assumption that theorists make all the time, abstracting somewhat from the real world in order to increase explanatory power—sacrificing some realism to gain tractability, he might say. Such assumptions, he comforts the reader, if slightly less than realistic, are basically innocuous: he has done the hard work, nothing vital hinges on it, anyway - and to relax the assumption would make for a messier argument that leads to the same place.

Of course, all of that isn't true in Herr Doktorprofessor's important academic writing - right?

Well, maybe that's not so clear. Herr Doktorprofessor's most shining credential is his John Bates Clark Medal, which he was awarded in 1991. The official American Economic Association summary of the work for which he was given that award makes clear that the so-called "new trade theory" was what caught the AEA's attention and admiration, beginning with his paper “Increasing Returns, Monopolistic Competition, and International Trade.” Journal of International Economics, 1979 9(4): 469-479.

What is the "new trade theory?" A Federal Reserve Bank paper on the topic dated late last year explains it this way:

Since the early 19th century, economists have used the theory of comparative advantage ... According to this classic theory, nations are made better off through trade by capitalizing on their inherent differences in natural resource or capital endowments. ...

But over the last 20 years, international trade economics has undergone what some have termed a “revolution” because of a new theory that gives very different answers to the same kinds of questions. This new trade theory is often summed up in the simple words “increasing returns”—shorthand for “increasing returns to scale,” a term synonymous with “economies of scale.”

The new theory, then, is the idea that trade arises to take advantage of economies of scale: Industries in each country can achieve lower unit costs by producing in large volume and spreading the high start-up expenses (for example, research and development, machinery purchases) over many, many units. If confined to the domestic market, an industry might not be able to achieve the highest level of scale economies, but by producing for both domestic and foreign markets, sufficient volumes can be produced to reap greater economies of scale.

According to this theory, two countries could both get cheaper cars and lamps, for instance, if one specialized in automobile manufacturing and the other devoted its resources to making lighting equipment, regardless of the inherent resource endowments of those countries. By taking advantage of increasing returns to scale, each country could produce its specialty at low unit costs and then trade with the other—both countries will gain through trade, but not because of comparative advantage.

What is the "new trade theory" good for? A key result of the theory is supposed to be the so-called "home market effect:" Countries will specialize in products for which there is large domestic demand. For example, the Introduction to Krugman’s (1990, p. 5) selected papers says: “The main additional insight from [my article “Scale Economies, Product Differentiation, and the Pattern of Trade,” American Economic Review, 70, 950-959] is the ‘home market effect,’ the tendency of countries to export goods for which they have a relatively large domestic market.” Krugman first considered questions asked by Staffan Burenstam Linder in 1961 in An Essay on Trade and Transformation. Krugman showed that in a world with increasing returns to scale and costs of trade, high demand for a locally produced product would result in a more than one-to-one response from local production, leading exports of the demanded product to rise. Such “home market effects” from demand to production structure, in the presence of trade costs and scale economies, are seen by some as defining characteristics of the "economic geography" later pursued by Krugman as one of his major interests.

But along the way something rather curious happened to the "new trade theory." As the Fed Bank article rather diplomatically puts it:

Harvard economist Donald Davis dealt this flourishing movement what seemed a damaging blow. Krugman had developed his increasing-returns trade theory by looking at a model with two sectors, one, alpha, with increasing returns to scale and the other, beta, with constant returns. To render the mathematics straightforward, he adopted what he considered a harmless assumption. “For simplicity,” Krugman wrote in his seminal 1980 paper, “also assume that beta goods can be transported costlessly.”

It was the kind of simplifying assumption that theorists make all the time, abstracting somewhat from the real world in order to increase explanatory power—“sacrificing some realism to gain tractability,” Krugman wrote. And he believed this assumption, if slightly less than realistic, was basically innocuous—nothing vital seemed to hinge on it. ...

Davis, now chair of Columbia University's economics department, examined the assumption more carefully. Reviewing data on trade costs (including costs of transportation, nontariff barriers, “border effects” and other costs inherent to trade), Davis concluded that Krugman's simplification was unrealistic: “There is little suggestion that total trade costs are higher” for increasing-returns goods, he wrote. If anything, the cost of trading constant-returns goods is likely to be higher than that for increasing-returns goods.

Even more crucially, Davis found that the simplification was far from innocuous; something crucial does hinge on it. In fact, if Krugman's model is duplicated with just one small change: Assume that both sectors—not just the increasing-returns sector—have positive transportation costs, then Krugman's striking finding about trade and industry location evaporates. When “the industries have identical trade costs, the home market effect disappears,” Davis concluded. “Industrial structure then does not depend on market size.”

Professor Davis has not had the last word, as the Fed Bank points out. A still more recent paper by other authors may salvage some of the "home market effect" under some assumptions - although not so much in the area of international trade as the rather curious zone of inter-regional trade.

A brief review of Professor Davis's paper reveals that it is not really all that much more complex than Herr Doktorprofessor's original effort. It does require that one do the work - but it's hard to imagine that someone of Paul Krugman's intensity of involvement in this field would not have at least seriously suspected that what he said he considered a basically innocuous assumption might completely undermine his most eye-catching results in many circumstances.

Of course, if Herr Doktorprofessor had explained all that, it would have made his work seem a lot more like a technical advance, quite possibly a mere curiosity, and less like the breathtaking, revolutionary revision of classical thinking he and his admirers have held it out to be. But would the John Bates Clark committee that evaluated the "new trade theory" in 1991 have the same high opinion of it after reading Professor Davis' article? [Note: Professor Davis is by no means dismissive or hostile towards Paul Krugman, as evidenced here and here.]

Somehow, in certain ways the more one looks at the trajectory of Herr Doktorprofessor's breathtaking, revolutionary academic accomplishments the more that trajectory resembles the trajectory of his breathtaking, revolutionary assessments of the Bush administration and its economic program - assessments that started out pretty hi-falutin, but so far have turned out to be just ludicrous.

No doubt all will be revealed and settled in the fullness of time.

POSTSCRIPT: Don Luskin and others have wondered why Herr Doktorprofessor doesn't really go after President Bush on trade restrictions. After all, he was on the right side with Bill Clinton aginst the rest of the Democratic Party, and otherwise Herr Doktorprofessor seems to get at least some trade matters right.

But maybe Herr Doktorprofessor doesn't think trade restrictions for a country like the US are any big deal, after all:

Yet there is a dirty little secret in international trade analysis. The measurable costs of protectionist policies--the reductions in real income that can be attributed to tariffs and import quotas--are not all that large. The costs of protection, according to the textbook models, come from the misallocation of resources: protectionist economies deploy their capital and labor in industries in which they are relatively inefficient, instead of concentrating on those industries in which they are relatively efficient, exporting those products in exchange for the rest. These costs are very real, but when you try to add them up, they are usually smaller than the rhetoric of free trade would suggest.

MORE

Posted 3:33 PM by Robert Musil
Even Angrier

A growing public chorus laments the increasingly "incivil" American political discourse. At least some of that lament may be appropriate.

But political discourse in the United States has a long way to go to approach to the "incivility" common in the political discourse of countries such as Canada, Australia and Britain.

Just by way of example:

Australia's newly elected Labor Party leader, Mark Latham .... has called US President George W Bush the "most incompetent and dangerous president in living memory". .... Mr. Latham, who has broken a taxi driver's arm in a brawl, has also aimed his sharp tongue at [incumbent Australian Prime Minister John] Howard's government, calling it a "conga line of suckholes".

Posted 11:23 PM by Robert Musil
Unk, Unk...

Who's there?

Well, when its an acknowledged good but rather conservatively anglophillic stylist such as George F. Will, the usage seems reasonably transparent and meaningful.

But when it's Donald Rumsfeld, the British Plain English Campaign and the BBC seem to have all kinds of patronizing criticisms.

The criticisms seem at bottom more political than linguistic.

I wonder if someone is going to gently reveal to these people that the terms "known unknowns" and "unknown unknowns" are common scientific and engineering argot, which has long been used in much defense thinking and almost everywhere serious consideration is given to the need to deal analytically with uncertainty, as in this Rand study:

At any point, there are "knowns" - things people know they know; "known unknowns" - things people know they do not know; and "unknown unknowns" - things people do not know they do not know. The deeper the reach into the future, the more the unknown unknowns dominate.

There. That should be easy and clear enough even for the rigid nitpickers at the British Plain English Campaign and the BBC, who seem a lot more interested in their posited dead linguistic past than any reach into the future.

Posted 5:13 PM by Robert Musil
The Parrot

A friend e-mails this Thanksgiving story:

A young man named John received a parrot as a gift. The parrot had a bad attitude and an even worse vocabulary. Every word out of the bird's mouth was rude, obnoxious and laced with profanity.

John tried and tried to change the bird's attitude by consistently saying only polite words, playing soft music and anything else he could think of to "clean up" the bird's vocabulary.

Finally, John was fed up and he yelled at the parrot. The parrot yelled back. John shook the parrot and the parrot got angrier and even ruder.

John, in desperation, threw up his hand, grabbed the bird and put him in the freezer. For a few minutes the parrot squawked and kicked and screamed.

Then suddenly there was total quiet.

Not a peep was heard for over a minute. Fearing that he'd hurt the parrot, John quickly opened the door to the freezer. The parrot calmly stepped out onto John's outstretched arms and said "I believe I may have offended you with my rude language and actions. I'm sincerely remorseful for my inappropriate transgressions and I fully intend to do everything I can to correct my rude and unforgivable behavior."

John was stunned at the change in the bird's attitude. As he was about to ask the parrot what had made such a dramatic change in his behavior, the bird continued, "May I ask what the turkey did?"

HAPPY THANKSGIVING!

Posted 9:50 AM by Robert Musil
Trumped Again

Hillary Clinton and Senator Reed go to Iraq and Afghanistan for Thanksgiving!

The former first lady and Sen. Jack Reed, D-R.I., have both been critical of the administration's handling of post-combat problems in the war on terrorism, particularly after major military operations ended in Iraq.

Surprise!

Posted 5:08 PM by Robert Musil
Employment Survey Disparity Grows

The Man Without Qualities has in the past noted the curious divergence of the two main forms of employment measurement: payroll survey employment and household survey employment. Each is tracked by the Bureau of Labor Statistics - and recently they have increasingly and substantially diverged. The reasons for the divergence are not well understood.

The Senate Joint Economic Committee has issued some very interesting releases on the topic. The latest SJEC release includes the following, among other interesting things:

The Bureau of Labor Statistics’ household survey continues to show greater job gains than the payroll survey. In October, for example, the household survey estimated that the number of employed people increased by 441,000; with that increase, employment now exceeds its level at the start of the recession. The disparity between the household and payroll surveys began as the economy emerged from the recession at the end of 2001; it has now grown to be the largest such disparity in the history of the two surveys. Growing self-employment, which is captured in the household survey but not the payroll, explains some of the disparity, but the bulk of the disparity remains as yet unexplained.

Posted 10:25 AM by Robert Musil
They’re Not Fighting Over Religion, Are They?

Some interesting thoughts on the long term course of Ulster politics.

I pass these along, without endorsement or condemnation.

MORE

Posted 1:51 PM by Robert Musil
A Form of Looting

"What we have here is a form of looting." So Herr Doktorprofessor Paul Von Krugman quotes George Akerlof, a Nobel laureate in economics, as saying about the Bush administration's budget.

But it could more accurately be said of Herr Doktorprofessor's own column because he's busy looting the reputations and accumulated good will of Princeton University, the John Bates Clark Medal and even the New York Times itself. Kaiser Herr Doktorprofessor Paul Von Krugman's new clothes all belong to somebody else. But that doesn't stop him from willfully wearing them out.

Writing erratically in the Boston Globe, Alex Beam argues:

A columnist has two solemn duties, to make provocative arguments and to get read. New York Times scribbler Krugman scores in the top percentile on both counts. He may be the best in the business right now -- he also has a day job, as a distinguished economics professor at Princeton -- and I think a visit from Mr. P., as in Pulitzer, is only a matter of time.

But what Mr. Beam fails to note is that for most columnists being a columnist is the day job. That means that their arguments have to stand on their own and not rely on the crutch of the columnist's academic credentials. For example, unlike so many Paul Krugman efforts, David Brooks' charming column today on all that Americans have to be thankful for this Thanksgiving does not leave the reader with this kind of Krugmaniacal dare:

Sure what I'm writing and you've just read is tendentious, unsupported, obviously incomplete and completely crackers. But I'm a professor at Princeton and a holder of a fancy economics prize. SO WHAT I SAY GOES!

Paul Krugman can - and often does - satisfy his two solemn duties, to make provocative arguments and to get read simply by making statements so bizarre, tendentious and unsupported that an aware reader simply cannot believe a Princeton professor and John Bates Clark Medal holder would do it - such as the howler Herr Doktorprofessor committed at the end of July when he asserted, one month into the third quarter for which the GDP growth rate is now known to have been 8.2%, that There is very little evidence in the data for a strong recovery ready to break out. Herr Doktorprofessor made his assertion while other economists - including Steve Antler - were quietly showing that the evidence existed in abundance.

Mr. Beam should give it a try. Let him write a column with some typically crackers Krugmaniacal viewpoint. Maybe something circulating around a bold assertion such as:

Notwithstanding the Bush Administration's fraudulently positive economic data now regularly released by the completely corrupted Treasury Department, there has been no true economic recovery in this country - and those evanescent positive developments that have been manipulated into existence by the Administration are all timed by the incompetent-but-omnipotent George Bush (or, rather, by the handlers of this empty sock puppet) to blow the country completely apart shortly after the November 2004 election.

That's certainly a provocative argument and Mr. Beam's column would probably get read if it got past his editors. But he would probably not be allowed to write any more columns for the Globe because the Globe and its readers would know right away that he's completely crackers. They would know that because Mr. Beam isn't trafficking in Princeton's reputation - or any other entity's reputation.

So if Mr. P. does think about visiting Herr Doktorprofessor, I hope Mr. P will keep in mind that other columnists who might be given that Pulitzer don't have the benefit of cashing checks drawn on the bank accounts of Princeton University, the John Bates Clark Medal and the New York Times itself to satisfy those two solemn duties, to make provocative arguments and to get read.

Posted 9:05 AM by Robert Musil
The Real News

Much of the financial media is a-twitter with this story:

Gross domestic product, a measure of all the goods and services produced in the U.S., was revised to an 8.2% annual rate for the third quarter, the Commerce Department reported Tuesday. That was a full percentage point higher than an earlier 7.2% estimate and even higher than the strong 8% growth economists had forecast for the latest reading, according to a survey by CNBC and Dow Jones.

Well, people have different ideas about what the real story in today's news is:

"Forget about GDP, the story is profits," said John Silvia, chief economist at Wachovia Securities. After-tax profits increased at a 10.6% annual rate in the third quarter, after falling 5% in the second quarter. Corporate profits with inventory valuation and depreciation -- the concept closest to company-reported profits -- rose 30% from a year earlier. Nonfinancial corporate profits surged an annualized 70%. That helped propel business spending to its strongest showing in three years.

Of course, to the Brad Delongs, Paul Krugmans and others of that fungible mass, a quarter of GDP growth is hardly a story at all. The real story is employment - and by that (with pining nostalgia) they mean payroll employment, not household employment.

For example, Brad Delong linked to this article, but his emphasis is not that the economy has finally been launched on a sustainable recovery that will help make this holiday season the best retailers have seen in years. No, no, no... Professor Delong cuts most of that out. His emphasis is on the article's report that the ... forecasting panel predicting the jobless rate will average 5.8 percent in 2004, down from 6 percent currently. The forecasting panel saw payroll employment rising by 1.1 percent, or about 1.3 million workers, not enough to replace the 2.3 million jobs that have been lost since Bush took office in January 2001. That the 2.3 million jobs were "lost" only in comparision to an employment bubble created at the end of the Clintonian era is not worth a mention by the Good Professor.

Consumer confidence and spending numbers are also in:

"Consumer confidence is now at its highest level since the fall of 2002," said Lynn Franco, director of the Conference Board's Consumer Research Center. "The improvement in the present-situation index, especially in the jobs component, suggests that consumers believe a slow but sure labor market turnaround is underway." ... Consumer spending rose at a 6.4% annual rate, driven by federal government tax cuts and low interest rates. It was the strongest quarterly spending since 1997. The figure was initially estimated at 6.6%.

Previous softness of such things had caused the Good Professor to quiver: That's a big enough piece of bad news to cause me to take a full percentage point off my personal estimate of the fourth quarter GDP growth rate...

But as of 10:45 am, the time of this posting, the Good Professor had not a word of revision or comment. But Perhaps he's in some kind of shock. [And, on a lighter note, the substanceless rantings at Eschaton again pay no heed to the new economic numbers. Herr Doktorprofessor Paul Von Krugman is busy with confabulatory word games concerning his political hate speech that amount to nothing more or less than an implication of bias in the New York Times coverage of him (including its patently obvious observation that the little mustache Herr Doktotprofessor's British publisher placed on Vice President Cheney with no objection from Herr Doktorprofessor was Hitleresque) and an infantile "mommy, the Republicans did it first" defense of his own excesses. The KCI Index was also revised strongly upwards. Poor kitty. Note: The [KCI] index is, in keeping with Krugman's methodology, measured in vague, fluid units that don't necessarily correspond with specific real-world methods of measurement. ]

The growth in profits is very important to employment expectations, and not just because employers are more willing to hire when profits turn up strongly. Strong profit growth tends to produce employment effects which are not squarely accounted for in many standard economic models, and that is especially true given the economy's current trend towards non-standard "employment" relationships (an obvious trend with a significance willfully ignored by bad economists such as Krugman and Delong, perhaps because of political bias and perhaps because they are intellectual dinosaurs). My guess is that near-term employment numbers will be much stronger than the published consensus - and that the economy is well on its way to an unemployment rate much lower than 5.8%.

UPDATE:

A weird Boston Globe column by Alex Beam makes the additional patently obvious observations that Paul Krugman is completely crackers, that Herr Doktorprofessor's personal web site (http://www.wws.princeton.edu/~pkrugman) is a nutty, score-settling tote board where he fires his rhetorical blunderbuss, and that Herr Doktorprofessor considers his critics to be nonentities, including Taranto (Who bravely clings to his "entity" status. We are with you, James!) at Opinion Journal (hazily identified by the Globe as the Wall Street Journal Online), Andrew Sullivan, Mickey Kaus, and others.

Yes, yes. That's all completely true as far as it goes. And the Globe's ownership by the Times is yet more indication that somebody at the Times is getting impatient with Herr Doktorprofessor's rantings - although, as Don Luskin correctly points out, the tenor of the Globe's criticism seems more along the lines of trying to get Herr Doktorprofessor to stop all the extracurricular activities that make it so obvious that he's completely crackers.

And here, at least, the Globe is right to that extent. Imagine if Maureen Dowd had such a personal website? She wisely keeps her rantings confined to the Times' Op-Ed pages, where her trainers/handlers/editors can intervene if the need arises.

But Paul Krugman has increasingly put the Times in a position too much like that of Roy Horn - who is at this very moment left to ponder whether his nearly-fatal injuries were the results of his exotic pet's deliberate attack or mere confusion. And so it is with the Times and its exotic pet.

FURTHER UPDATE: Mr. Beam at the Globe thinks that a visit from Mr. P., as in Pulitzer, is only a matter of time for Herr Doktorprofessor. Mickey Kaus agrees! Of course, that doesn't matter, because he's a non-entity. But Mr. P isn't likely to call unless the Times management lobbies hard for the visit. Is Mr. Beam making that point, too, for Herr Doktorprofessor's benefit?

ANOTHER UPDATE: By 10:30 pm, various things - including the recently released Two Towers DVD and an Economist excerpt suggesting that investors sense a chill beneath the warm glow of the numbers - had warranted posts from Good Professor Delong. But not the revised 8.2% GDP growth rate - the number that's currently giving off the warmest glow.

Delong's desire to call attention to the chill beneath the warm glow of the numbers while seeking to avoid discussion or admission of some of the most important numbers looks rather like Prince Charles' spokesman's attempt to quash reports of "the incident" without actually saying what the alleged "incident" was supposed to be. But it may be deduced from Brad Delong's vigorous attempt to not mention those numbers giving off that misleading glow that the supposed numbers involved the economy and that they were not, say, boating race results.

MORE

Posted 10:25 AM by Robert Musil
Games

Today, Illinois law provides that George W. Bush's name will not be on that state's general election ballot next November. because the Republican convention in New York City occurs after the deadline to get on the Illinois ballot. An attempt to fix the situation was voted down in the Illinois Senate when Democrats added provisions to the bill that would have wiped out campaign fines that may be levied against state politicians.

In 2000 John McCain went before U.S. District Court Judge Edward Korman, who ruled New York's ballot access laws were too restrictive and violated McCain’s constitutional right to run in the primaries. All parties agreed that not only McCain but also Alan Keyes were to be on the ballot in all 31 congressional districts in the state.

That decision had lots of political support.

Is it time for a trip to federal court in Illinois?

Posted 8:17 AM by Robert Musil
The Astroturf Never Looks As Tasty On The Other Side Of The Fence

Baseball Crank says that Josh Marshall finds no problem with liberals grazing on their own flavor of political astroturf.

Posted 10:54 AM by Robert Musil
The Times on That Mustache

The New York Times admits it:

Unlike the relatively staid cover of the American edition published by W. W. Norton, the British book jacket bears caricatures of President Bush as Frankenstein-like and Vice President Dick Cheney with a Hitler mustache. A dark scrawl on the vice president's forehead reads, "Got Oil?"

Does this mean the Man Without Qualities convinced the Times that the "Got Milk?" dodge was just that - and failed to mask the British publisher's rather obvious actual intent and objective meaning?

Herr Doktorprofessor himself is delightfully evasive:

Mr. Krugman, for his part, said he did not remember seeing the cover until prepublication copies were sent to reviewers. "I think it was intended to be ironic."

Herr Doktorprofessor's response seems crafted to meet an expected revelation that he was, in fact, sent a copy of the cover long before he received a "prepublication copy" - hardly itself a well-defined term. It is common for publication contracts of writers like Paul Krugman to include at least limited reasonable approval rights on book covers - together with a clause providing that failure to object in a set period (two weeks? three days?) after receiving approval copy constitutes deemed approval. If his contract is of this sort, then his failure to object was deemed approval of the cover.

And Herr Doktorprofessor's other comments suggest that he actually did have such rights and opportunity to object:

"It is a marketing thing, not a statement," he said. "I should have taken a look at that and said, `What are you doing marketing me as if I am Michael Moore? This is silly.' " Incivility is one thing, he said, but the book cover "may be undignified, which would be a reason to object."

But how could Herr Doktorprofessor have "taken a look at the book cover" and said anything if he didn't receive and review a copy of the book cover in advance? And how could he have said "What are you doing marketing me as if I am Michael Moore? This is silly," unless he has some right to disapprove it? He sure makes it sound as though he did receive an advance copy of the cover, didn't object to it and was therefore deemed to have approved it under his contract, but had a reason to object to the cover under his contract because the cover is "undignified."

Depicting the Vice President of the United States as Hitler is no laughing matter. But Herr Doktorprofessor's I do not remember seeing the cover defense is just hilarious baloney. The man's a natural - a comic genius!

UPDATE: Don Luskin has more.

FURTHER UPDATE: "Bobby," who runs the Unofficial Paul Krugman Archive is in a sad but frantic dither:

Also, contrary to what David Kirkpatrick (whose NYT story looks like a cut-and-paste job from an RNC press release) and Gollum Luskin say (I'm going to ween myself off of linking to his vile site), that picture of Cheney on the U.K. cover (below) is *NOT* comparing Cheney to Hitler. ... This is a picture of Cheney with an oil mustache, like in the "Got Milk" commercials (it says, "Got Oil?" on his forehead and the oil is dribbling out of his mouth) -- so the Cheney picture is political satire regarding Cheney's very very close ties to Halliburton and big oil. ... The oil mustache is far too wide and covers far too much of Cheney's upper lip to be a Hitler mustache, which would cover only the middle of the upper lip.

But Bobby should please calm down. The Times is fully aware of that "Got Oil?" - Got Milk?" dodge - it was fully vetted. The Times reporter has heard the argument and rejected it, maybe because the "Got Milk?" campaign never ran in Britain - as suggested here. The mustache is seen as being like Hitler's by most people - and it's pretty obvious that the British pubilsher intended that. That there is a "Got Milk?" allusion in the image is completely consistent with it also being a Hitleresque mustache.

Perhaps if Bobby asked nicely, Herr Doktorprofessor would tell Bobby whether Herr Doktorprofessor's book contract gives him approval rights on the cover and whether the British publisher actually sent Herr Doktorprofessor a preview of the cover for approval - regardless of whether Herr Doktorprofessor "remembers" seeing it.

Bobby also shouldn't worry about the Times taking its articles from the RNC by cut and paste. Paul Krugman is a Times columnist. The Times is not out to "get" its own columnist. The Times acknowledged the Hitler allusion because it's obviously correct, and to deny it would have made the Times look naive and tendentious past the point where even the Times is willing to go.

There is one factor I can think of that might suggest that the Times was a bit miffed with Herr Doktorprofessor here. Reports are that the Times had no veto right over the cover. If that is so, then the Gray Lady was trusting Herr Doktorprofessor not to embarrass her - and he let her down pretty badly. Perhaps the Times article reflects some sense of betrayal on the Gray Lady's part. After all, sometimes it's just not worth it to the Gray Lady to deny or ignore warts on those in her favor - such as her erratic columnists - especially when they fail to look out for her. Herr Doktorprofessor's betrayal of his employer's trust is something entirely within his control - so any retribution on the Times part (if there is any in this article) is nothing for Bobby to worry about.

But Bobby should be concerned about whether he's contracting some of Herr Doktorprofessor's trademark paranoia.

Posted 10:48 AM by Robert Musil
Gallup Poll - Greatest President

"Who do you regard as the greatest United States president?"

...........................................................11/03................................2/99
...............................................................%.....................................%
John Kennedy.........................................17....................................12
Abraham Lincoln.....................................17....................................18
Ronald Reagan........................................13....................................12
Franklin Roosevelt...................................11.....................................9
Bill Clinton.................................................9.....................................12
George Washington..................................7.....................................12

How important is it that the first three presidents on this list were the victims of successful or unsuccessful assassination attempts? ("Victims" in the sense of serious physical harm. An astute reader e-mails that all of these presidents were targets of assassination attempts - in Washington's case, during the Revolutionary War, before he became president. )

Posted 2:27 PM by Robert Musil
Kudos And Congrats

To David Hogberg, cornfield blogger extraordinaire.

Posted 2:09 PM by Robert Musil
Carnage In Istanbul

The photos tell a lot.

Posted 3:00 PM by Robert Musil
Such Setbacks III

The recent controversial ruling of the Supreme Judicial Court of Massachusetts dealing a setback to traditional marriage appears to conflict directly with the federal Defense of Marriage Act.

In 1996 Congress enacted the Defense of Marriage Act, which provides, "No state shall be required to give effect" to a marriage "between persons of the same sex."

In 1999, the Vermont Supreme Court said it was unconstitutional to deny homosexual couples the "benefits and protections that flow from marriage" but did not say gays must be allowed to marry. The Vermont Legislature created "civil unions" to give similar rights and responsibilities to gay couples, an idea that has been adopted in California and elsewhere.

But in its recent controversial ruling, the Supreme Judicial Court of Massachusetts said nothing about civil unions. Instead, that court declared that Massachusetts may not exclude "qualified same-sex couples from access to civil marriage." "[B]arring an individual from the protections, benefits and obligations of civil marriage solely because that person would marry a person of the same sex violates the Massachusetts Constitution," the state court said in its 4-3 ruling. It gave the state 180 days to comply.

That holding seems to directly conflict with the federal law.

But is the Defense of Marriage Act Constitutional? And, if not, could it be made Constitutional? Recent United States Supreme Court decisions limiting the sweep of the Commerce Clause prevent an easy answer in the form of an appeal to that particular Congressional power.

The very features of this Massachusetts holding that could give it a national impact could also validate the Defense of Marriage Act and therefore overturn the holding. Specifically, couples who wed in Boston are married just the same in every other state - immediately while the couple lives in Boston and later if they move to Los Angeles. Arguably, that's because under the "full faith and credit" principle of the U.S. Constitution, judicial decisions - and therefore valid contracts - made in one state are automatically honored in another. The Defense of Marriage Act is intended to head off the possibility of a "full faith and credit" extension of decisions such as the one in Massachusetts by declaring as a matter of federal law that same-sex marriage is an invalid contract that would not be honored even in Massachusetts. If the "full faith and credit" argument is right, then the Massachusetts decision would automatically have a huge effect on "interstate commerce" - which allows Congress to legislate on the matter, and validates the Defense of Marriage Act and overturns the Massachusetts holding. Got that? But none of this reasoning has been accepted or tried - the issue has never before come up.

Interestingly, if the Supreme Court had not overturned its own decision in National League of Cities v. Usery, that case might have prohibited Congress from legislating on marriage through the Commerce Clause because marriage is traditionally a state exclusive. But that's so much history.

Congress also has the right to enforce 14th Amendment rights - but recent United States Supreme Court cases have held that Congress can't create or define rights under the 14th Amendent, as the Court held the Congress had tried to do with its statute "restoring" putative First Amendment religious liberties the Court had held were not, in fact, included in the First Amendment.

Some people say they think that the Defense of Marriage Act is Constitutional as written: "I disagree with the [Massachusetts] decision," said Senate Minority Leader Tom Daschle (D-S.D.). "I believe that the Defense of Marriage Act we passed in the Congress is constitutional, and I think that will be borne out."

Why is Tom Daschle saying such things? Aren't the members of the Massachusetts Supreme Judicial Court who voted for this decision just the kind of people he's demanding that the President put on the federal courts? Of course they are! Isn't this the kind of activist, fashion-forward decision most Democratic Senators want courts to make? Of course it is! Tom Daschle has spent years working to move the federal courts in just the same direction as this Massachusetts court. His statement is completely inconsistent with his career of actions. The image of Senator Daschle repudiating a state court decision in which the overwhelming majority of the people he desires to put on the federal courts would heartily concur is exquisite.

But Tom Daschle wants to extend that career - and he is up for re-election next year in South Dakota, a pretty conservative state on such matters. He relies on presenting himself as quite a different person to his South Dakota suckers (er, I mean constituents) than the person who flashes by under the Capitol Dome in those expensive suits. [How many suits does Senator Daschle own that could never be worn in South Dakota, in any circumstances or on any occassion, without his being hopelessly overdressed? More than a few, from his Washington television appearances.] And he's already got lots of other problems - including from his suggesting that President Bush knew a lot about the planned 9-11 attacks (an accusation the Senator later retracted and denied having made).

All of which - and so much more - makes the suggestion in this Adam Nagourney article from the New York Times a real hoot to the extent it suggests that the Massachusetts decision is also a 2004 problem for Republicans. Coccooning? Mr. Nagourney has sealed himself in a huge granite pyramid.

Posted 12:16 PM by Robert Musil
If Leading Indicators Go Up And Jobless Claims Dip, But The Media Pay Little Attention...

... does it all have a political impact anyway?

Yes. But the ever-more-willfully coccooning mainstream media will be the last to know. A few weeks ago, when the economic news was bad - or, rather, when the mainstream media thought the news was was bad - it appeared in the front page headlines many days. Not now. Now we're lucky if the news shows up on the front of the business section.

In today's under-reported news from the Associated Press (news for which the New York Times, for example, has no space - even on its Business Page - because it's busy running articles on currency trading fraud and a $13 million mutual fund irregularity - yes, that is million, not billion):

The Conference Board reported that its closely watched Composite Index of Leading Economic Indicators rose 0.4 percent in October, suggesting stronger economic activity in the coming year.

The Labor Department said that for the week ending Nov. 15, new claims for jobless benefits declined by a seasonally adjusted 15,000 to 355,000. For seven straight weeks claims have been below the 400,000 mark, suggesting that the job market is turning a corner. Fewer than 400,000 new claims is generally thought to lead to a lower unemployment rate, and 355,000 is for these purposes well below 400,000. Also, the 355,000 number was stronger than the forecast fall to 366,000 - a fact that the AP itself does not even bother to report (but you can find in the Financial Times, or the Wall Street Journal, for example).

The October rise in the Conference Board index was twice the 0.2 percent increase most analysts had been forecasting. The upticks in the employment news and the Conference Board index continue a recent string of forecasts that have proved to be less optimistic than the economy's actual results. The U.S. economy is estimated to have grown at a 7.2 % annual rate in the third quarter of this year, and most economists believe growth will be a respectable 4 percent in the October-December period. But in the third quarter unexpectedly depleted and unrestored inventories knocked quite a bit off that 7.2% growth rate. If inventories had been restored, the estimated rate of third quarter growth would have about 8.1%. I wouldn't take that 4% fourth quarter forecast too seriously just yet.

"There's been a steady stream — rather than a trickle — of good news," said Tim O'Neill, chief economist for the Bank of Montreal and Harris Bank in Chicago. "We're probably headed toward a torrent over the next few months."

In which case perhaps the mainstream media can choose to ignore the torrent on the theory that it's not "news" because its become just more of the same.

Posted 6:14 PM by Robert Musil
About That Mustache

With respect to the bizarrely anti-American cover of the UK edition of Paul Krugman's book, Mickey Kaus notes this about the little mustache painted on Dick Cheney's face:

Alert kf readers have pointed out it's almost certainly not a Hitler mustache, but rather a parody of the "Got Milk?" mustache. [Duh!-ed]

Really? If it is a parody of the "Got Milk?" mustache, then it seems to be one of the stranger publishing decisions recently made anywhere in the world.

The National Milk Mustache "got milk?"® Campaign is jointly funded by America's milk processors and dairy farmers: the Milk Processor Education Program (MilkPEP) in Washington, D.C., and Dairy Management Inc., Chicago. The tagline "got milk?"® was created for the California Milk Processor Board (CMPB) by Goodby Silverstein & Partners and is licensed by the national milk processor and dairy producer groups.

There is no mention on the International Dairy Foods Association (IDFA) site of any use of the "Got Milk?" campaign in Europe, nor is there such a mention on the IDFA International page. Nor is there mention on the CMPB news site of any use of the "Got Milk?" campaign outside the United States. The UK Dairy Council site doesn't mention a "got milk?" campaign - and using its "keyword search" button to search for "got milk?" or "got milk" comes up dry. It is possible that there has been European use of this campaign, but it is not mentioned by these organizations - but that seems odd.

So why use a "Got Milk mustache" on Cheney in the UK - but not the US - edition of a book? How are Europeans supposed to understand that image if they've never been exposed to the ads? Won't they assume it's a Hitler mustache anyway - since that they've seen?

Or, just maybe, the mustache featured on the Krugman book jacket is supposed to be the kind of mustache germanic professors used to wear around the university? The kind the students respectfully called Herr Doktorprofessor - at least to their faces?

UPDATE: One clever e-mailing wag points out that in this case it's really Hair Doktorprofessor. And, if I'm right in this hirsuit encounter, could that [Duh!-ed] Mickey got count as The Case Against Editors, Part III ...? Just asking.

FURTHER UPDATE: An astute e-mailer points out that Cheney's image comes from a "Got Oil?" poster by adbusters.org. But the Man Without Qualities has neither received nor discovered evidence that the "Got Milk?" campaign was used anywhere in Europe - including Britain. My e-mailers suggestion that the image may be familiar to British people anyway, since it's so famous in the US, I pass along.

That the adbusters.org image is part of a "Got Oil?" parody of the "Got Milk?" campaign doesn't settle the issue of whether the Cheney mustache is even intended by adbusters.org (never mind the British publishers of Krugman's book) to be Hitleresque. The point of the adbusters.org copy accompanying its "Got Oil?" picture seems to be that Mr. Cheney is led to fascistic activities by his supposed obsession with oil - although Hitler is not mentioned. The "double meaning" of the mustache seems intentional - and, as adbuster.org's "defacement" of President Bush indicates here, the organization is perfectly prepared to visually suggest the Hitler connection.

All that being said, some of the adbuster.org efforts are pretty damn funny.

ANOTHER UPDATE: Verities argues vigorously that the British audience will understand the "Got Milk?" reference, even if the campaign has not been used there. The reader is invited to evaluate the Verities arguments and make her own decisions.

One detail: When I noted above that: The UK Dairy Council site doesn't mention a "got milk?" campaign, I was refering to use of a "got milk?" campaign in the UK. That the Dairy Council has a press release that mentions the campaign in the US, but makes no mention of its use in the UK, suggests that the campaign has not been used in the UK.

Do famous, long-lived ad campaigns in the US necessarilly percolate into minds of many Europeans - or at least the British? Sometimes that happens to some extent. But enough to sell books and displace images of Hitler?

The UK apparently has its own milk campaign that uses people with white mustaches - but not the "Got Milk?" tag line. Would that campaign cause the British to see the mustached image of Cheney as an oil drinker, but not Hitleresque? That seems unlikely to the Man Without Qualities - but others may differ.

The reader should make up her own mind.

MORE: The Times waddles in!

Posted 1:37 PM by Robert Musil
Paying For Howard Dean II: Feeding The Beast

Howard Dean's recent midnight confidence that he would like to re-regulate vast portions of the American economy even as he sweepingly repudiates his prior support for its free trade agreements should be juxaposed with what is, and probably will remain for some time, a major feature of the federal government: it's large deficits - or at least its large debt.

One now-standard explanation for Republican/Conservative acceptance of the large federal deficits that lead to large federal debt is the "starve the beast" theory. A reasonable explanation is provided by Holman Jenkins, for example:

What Republicans have understood ... is that the only effective long-term form of fiscal discipline is tax cuts.

Republicans have become the Party of Tax Cuts: that is, the party that lets you keep your own money, the party that protects the private sector from being smothered by big government. In a more sophisticated audience's eyes, it means a second thing: the party that restrains the growth of government by keeping it on the only fiscal leash that works--a k a the deficit, which maintains a constant tension between forgoing new spending or borrowing to pay for it.

Admittedly, this involves Republicans in a certain amount of self-duplicity (We don't mean this in a bad way; every party has to keep its big tent together.) Not only do Republicans take as given that Congress will spend every dime it can tax and then every dime it can borrow, until it runs up against its effective credit limit. Republicans also accept that they will behave exactly like Democrats in this matter.

The deficit has become the Repubocrat/Demolican equivalent of using adhesive tape as a diet aid. It's not subtle. It doesn't demonstrate a high degree of willpower or self-control. But it works, sort of.

But even if this theory is correct, the deficit restrains only federal spending and the public's loathing of taxes only restrains tax revenues. So suppose the theory is correct, and big deficits leading to big debt combined with tax-animus effectively restrain both federal spending and federal tax revenues. Whay happens then?

Well, the appetite of the "beast" - the desire of various constituencies to shift wealth their way through the federal government - doesn't abate. If it can't be slaked through direct federal taxes and spending, then it will seek satisfaction through indirect federal tax and spending equivalents. Nothing in the existence of a large deficit, large debt or tax animus directly stops the federal government from shifting real wealth through regulation. Put another way: if the federal government can't tax you and spend your tax money on its favored constituencies, then it might instead be able to instruct you to spend your own money on its favored constituencies through regulation. Indeed, to the extent any strategy (including "starve-the-beast") effectively blocks the direct tax-and-spend route of wealth shifting, one would expect pressure to exploit the indirect shift-wealth-through-regulation approach to build.

And that's just what Dr. Dean is proposing to do. With his re-regulation program he is suggesting another means to feed the beast.

But increased regulation is not the only way the federal government - or any sovereign - can disguise a tax-and-spend wealth shifting ploy.

There is also inflation. Inflation has not been an issue much in the United States recently - to some extent because some time ago the Fed demonstrated its willingness to squeeze the economy into a recession rather than allow much inflation. [The trade deficit and increased productivity have a lot to do with that, too, for example.] Some canny analysts suggest that the Fed's current easy money, low interest rate policies have created a monetary bubble waiting to explode into serious inflation. If that were to happen, the Fed would again be called upon to take recessionary actions.

But would the same President Dean who proposes to re-regulate the economy as an indirect tax-and-spend ploy be likely to appoint Fed board members willing to take recessionary action to snuff out yet another indirect tax-and-spend ploy? Would a Democratic Party now chanting that President Bush should be cast out for failing to maintain employment at the level of the last bubble be willing to accept recessionary actions necessary to constrain the next bubble? Dr. Dean represents an attempt to return to an older model of regulatory state - but last time that model crashed in an inflationary cloud, which is largely what occassioned Ronald Reagan's ascent.

And let's not forget a third indirect tax-and-spend ploy: tort judgments. Given Dr, Dean's recent musings on re-regulation, it would not be surprising if he is also contemplating some major expansions in federal tort liability law.

[An aside: Herr Doktorprofessor Paul Von Krugman often complains about tax cuts, and argues that they will lead to Argentina-like inflationary results in this country. But Argentina actually had very high tax rates. Illegal tax evasion was a prominant result of a confiscatory tax system. So the Argentine government, unable to raise money through direct taxes, imposed the indirect tax of inflation. For some reason Herr Doktorprofessor doesn't mention that much in his anti-tax-cut rants.]

Posted 12:16 PM by Robert Musil
Paying For Howard Dean

In an interview around midnight Monday on his campaign plane with a small group of reporters, Dean listed likely targets for what he dubbed as his "re-regulation" campaign: utilities, large media companies and any business that offers stock options. Dean did not rule out "re-regulating" the telecommunications industry, too.

He also said a Dean administration would require new workers' standards, a much broader right to unionize and new "transparency" requirements for corporations that go beyond the recently enacted Sarbanes-Oxley law. ....

Dean said in the interview that "re-regulation" is a key tool for restoring trust. In doing so, he drew a sharp distinction with Bush, an outspoken advocate of free markets who wants to further deregulate media companies and other key sectors of the economy.

Dean also continued his clear break from Clinton's "New Democrat" philosophy of trying to appease both business and workers with centrist policies. Earlier in the campaign, Dean reversed his prior support for Clinton's free-trade agreements with Mexico, Canada and China. ....

Voters are clearly hungry for government efforts to force better corporate behavior, especially with scandals hitting such industries as mutual funds and accounting, pollsters say. At the same time, they are unlikely to accept the price spikes that Republicans and some Democrats warn could accompany some new regulations.

Yes, yes, there is that little imperfection in this quasi-socialist image from Dr. Dean's fever dream. But it is interesting that even the Washington Post reporter - one of that small group of reporters who got to snuggle with Dr. Dean on his campaign plane as he spoke his fantasies - at least dimly sensed that perhaps running a hugely enlarged part of the process of allocating real resources in the United States through the discretion of politicians and unelected government regulators might actually cost something.

I suppose we will have to wait to see if the Post and its reporter ever catch on to the fact that regulation not only costs a lot, but also often - even usually - doesn't accomplish what the regulators say they are trying to do, and, in fact, often exacerbates the very problems the regulators say they are trying to solve. It isn't necessary to read analyses of the recently enacted Sarbanes-Oxley law that mostly show it is accomplishing nothing of its supposed intents while boosting costs quite a bit. One might have thought that Dr. Dean himself - who has just opted out of the federal public campaign finance system on the grounds that remaining in it would have exacerbated the very campaign fairness problems that the federal election regulators say they are trying to solve - might have had a clue on this. No such luck.

"If the regulations we've got are useless, expensive and counterproductive, then the answer must be more regulation - and lots of it!" Dr. Dean seems to say as he waves around that stethoscope he almost never used in his practice as a specialist in internal medicine.

Posted 11:35 AM by Robert Musil
Tim Noah Has His Finger On The Pulse Of America! II

How could I have missed this juxaposition from within comments collected by Howard Fineman from one of Senator Clinton's closest friends and advisers, a hard-boiled insider:

Then Hillary could come in, well in advance of the convention, and say, ‘Look, somebody has to save the party’.”... Party and elected officials—the so-called superdelegates—are free to shift allegiance, and could form an instant core of Clinton support. Should she make a dramatic entrance next summer ...

The Democratic convention starts July 26, 2004. The summer solstice marks the first day of the season of summer (near June 22) when the Sun is farthest north.

So this closest friend, adviser and hard-boiled insider thinks that Hillary Clinton could come in and make a dramatic entrance next summer (after June 22) but still well in advance of the July 26 convention.

I guess that all depands on what your meaning of well in advance is. The management of Yosemite's Ahwahnee Hotel would probably have to struggle to suppress a laugh at someone who thought a few weeks constituted an attempt to reserve a room there well in advance. But if what you're after is just the Democratic nomination for the Presidency of the United States and not a room at a swank hotel in a national park - making your dramatic entrance three weeks ahead of time might be considered by some people to be well in advance of the convention. At least that might be the way the words are defined by those hard boiled insiders who are the so-called superdelegates you largely helped to appoint, the ones who are free to shift allegiance and could form an instant core of your support.

It's all so ... so ... so ... Clintonian!

Posted 5:00 AM by Robert Musil
Surfing On History?

Since the presidential primary system became influential in 1952, an incumbent president has never lost a reelection bid if he did not face significant opposition in the primaries.

Posted 10:14 PM by Robert Musil
All Books Not Fit to Review

It turns out that the New York Times Book Review doesn't read many conservative books - but lots of thin, ultra-liberal screeds (think Michael Moore) do get reviewed.

This is a surprise to someone?

One suggestion in the Fox New item is that the Times thinks that much conservatism is comparatively transient in terms of political whims and currents of the moment.

UPDATE: Here's a nice chart illustrating the results of the Times' reviewing policy that Tom McMahon created from the FoxNews material. It's useful to be able to see at a glance that the Times took a pass on Laura Ingraham's Shut Up and Sing: How Elites from Hollywood, Politics, and the UN are Subverting America, where Michael Moore's Dude, Where's My Country? warranted a review.

That - and lots more on this chart - is worth keeping in mind the next time one hears a Times representative defend the paper's editorial policies.

FURTHER UPDATE: Some things may be in flux at the Times Book Review - although there is no word that its political bias is to change. The New York Observor reports:

When Charles (Chip) McGrath steps down this winter as editor of The New York Times Book Review in order to write for the paper full-time, whoever takes over will inherit not just a storied piece of literary real estate but a set of problems that may just be unsolvable. .... But for now, it sounds like status quo is the goal. "We’re big fans of the Book Review we publish now. We’re just looking for an exciting editor," [Adam Moss, The Times’ newly appointed "culture czar,"] said. The Times is looking for "a person who can do as good a job with the Review as Chip did and who will bring his or her own ideas. We’re not looking for a person to execute a plan we already have," he continued. "The important thing is, we’re not looking for radical change."

Posted 9:03 PM by Robert Musil
Consumer Comfort Index

The Consumer Comfort Index uses a scale of +100 to -100 and is based on a rolling four-week sample of approximately 1,000 adults nationwide.

End Date.................................. Consumer Comfort Index

11/16/03................................................-17
11/9/03..................................................-18
11/2/03..................................................-18
10/26/03................................................-18
10/19/03................................................-19
10/12/03................................................-19
10/5/03...................................................-20

Apparently, gradually improving comfort.

Posted 8:52 PM by Robert Musil
Krugmania Deranged

Don Luskin appropriately asks whether Paul Krugman approved the UK jacket art for his new book - as featured on Amazon (UK).

Posted 2:56 PM by Robert Musil
X(3872) Is Trouble For The Standard Model

Made in Japan:

Scientists have found a sub-atomic particle they cannot explain using current theories of energy and matter.
The discovery was made by researchers based at the High Energy Accelerator Research Organisation in Tsukuba.

Classified as X(3872), the particle was seen fleetingly in an atom smasher and has been dubbed the "mystery meson".

The Japanese team says understanding its existence may require a change to the Standard Model, the accepted theory of the way the Universe is constructed.

Posted 11:50 AM by Robert Musil
Copyright Erosion

Could any sensible person look at these kitchen cutting boards incorporating Monet's Water Lilies (Price: $16.95), Van Gogh's Irises (Price: $16.95) and New! Cezanne's Oranges (Price: $16.95) and not realize that each of of these artists would have preferred, say, pulling out all of his fingernails with a pair of plyers to licensing his painting to appear in this form and on this product?

Could any sensible person not understand that a main reason these artists would not have permitted such licensing is that it degrades the value of the original - and all copies - in favor of the marginal benefit to the product vendor?

Could any sensible person look at these products and fail to understand that copyright is not a "public good?"
No. No sensible person could.

Order yours now. It's not too late!

May we also suggest Art Soap Sets - 3 Artists.

Posted 9:41 AM by Robert Musil
Who's Worrying?

To look at the polls, Howard Dean doesn't seem to do all that badly against George Bush:

"If [see below] were the Democratic Party's candidate and George W. Bush were the Republican Party's candidate, who would you be more likely to vote for: [see below], the Democrat or George W. Bush, the Republican?" If undecided: "As of today, do you lean more toward [see below], the Democrat, or Bush, the Republican?" Names rotated

........................................................George W. Bush...........................Howard Dean
....................................................................%................................................%
11/03..........................................................53..............................................44
9/03............................................................49..............................................46

Indeed, Dr. Dean does just slightly worse than the "electable" General Clark in the same polling question - and General Clark is widely perceived as now losing a lot of steam:

.......................................................George W. Bush............................Wesley Clark
...................................................................%...............................................%
11/03..........................................................50..............................................47
9/03............................................................46..............................................49

So, since Dr. Dean is doing so well with Democrats and not really materially worse than General Clark among the general electorate, why the heck does the media keep running all those "the Democratic Party is so worried about Dr. Dean" stories:

In the wider Democratic universe, however, the prospect of a Dean nomination has sent some party members into paroxysms of private hand-wringing. Not only do they see him losing badly to Bush, they also see Dean hurting Democratic candidates further down on the ticket - rippling into congressional races, and possibly even boosting Republican control of the 100-seat Senate close to the crucial threshold of 60 seats, which would make it filibuster-proof.

"We could come perilously close to a one-party state," says a longtime Democratic activist with no formal ties to any campaign. "We could wind up with two more Antonin Scalias [on the Supreme Court]," he adds, referring to one of the most conservative justices.

Some big-name Democrats have begun to speak openly about Dean's vulnerabilities as a potential nominee. In a Washington Post interview published Monday, Iowa Gov. Tom Vilsack (D), who has not endorsed any candidate, says if Dean is nominated, he will have to work hard to show that he's as tough as Bush in handling the war on terrorism. Of the leading Democratic candidates, Dean is the only one to oppose the war with Iraq - the issue that energized his candidacy in the first place. He also has less experience in defense and foreign policy.

Setting aside the issue of whether Iowa Governor Tom Vilsack is a "big name Democrat," perhaps this passage from the same Monitor article offers some insight into the apparent Democratic results/anxiety disconnect:

Stuart Rothenberg, a nonpartisan political analyst ... adds that this sense of unease probably mirrors some concern in the Democratic establishment that Dean is too much of an outsider, that he's too angry and can be painted as too far left. .... [O]ne discouraged outpost of the Democratic Party is the Democratic Leadership Council (DLC), the breeding ground for many of the centrist ideas that President Clinton and Vice President Gore espoused and which appear, in this cycle, to be out of sync with what Democratic base voters are looking for - a clear contrast with a president they cannot abide. Will Marshall, the DLC president, speaks of the "myth of inevitability" that the "Dean propaganda machine" has skillfully cultivated.

So big sources of this anti-Dean anxiety seem to be the Democratic establishment and the Democratic Leadership Council. That Democratic establishment presumably includes a nice big serving of the Clinton-appointed and dominated Democratic National Committee - which Dr. Dean says he wants to sweep clean of Clintonian influence. The Democratic Leadership Council has been the traditional source of Clinton influence - which Deanmania is said to show is now "out of sync." And, of course, the more-electable-but-only-on-paper Wesley Clark is the Clintons' darling.

Clintons, Clintons, Clintons. Those names and connections just keep coming up when its time to start putting Dr. Dean down.

But the Clintons surely wouldn't be encouraging these Dean-anxiety messages by using their influence with a Democratic establishment they largely installed, and with the wide portion of the media that willingly caters to them. Would they? No. No. No. Unthinkable. No doubt that famously selfless couple just wants to be sure that there is someone there to save the Democratic party if Dr. Dean "fades."

[And what the heck is "a longtime Democratic activist with no formal ties to any campaign" supposed to tell us? Couldn't, say, Senator Lieberman's best friend since childhood and current weekly poker partner satisfy this description? Are we to assume that this "longtime Democratic activist" who for some reason won't speak on the record has some informal ties to one of the campaigns? Wouldn't an informal tie bias the opinion in just the way the Monitor reporter is attempting to reassure the reader isn't occurring? Are there no Democratic insiders who are willing to say such things and also be named? If not, why not?]

UPDATE: An astute and knowledgeable reader e-mails a note explaining why these polls are frightening Democrats more than the results might seem to warrant:

These CNN polls showing the Dem candidates close to or even ahead of Bush are bogus media hypes, and the real, electoral numbers show a much wider distance between Bush and the Dems. And the politicians know that.

There are a few reasons for the disparity. One, all the CNN/Gallup polls have a sample of around 1000 adults (not registered or likely voters), which does not give a true picture of electoral strength. Second, if you look at the details behind the headlines, you will find that these samples contain an inordinate proportion of Democrats (in a poll about a month ago, CNN-Gallup had 480 Democrats in a total sample of 1004 adults. I have not checked the make up of the current poll. This is unrepresentative of the general population, where Republicans, Democrats and Independents are about evenly divided.) This oversampling obviously skews the results against Bush.

Another great example of the skewed results was the LA Times poll before the California recall election, which showed Bustamante leading Arnold by about 6 points.

That all sounds about right to me.

Posted 4:26 PM by Robert Musil
Herr Doktorprofessor, Heal Thyself II

It seems that the "deal" cut in Congress does include some kind of premium support (that is, vouchers) - and AARP is supporting the deal:

WILLIAM NOVELLI, CEO of the AARP, said his group would “pull out all the stops” to pass the legislation, including a three-day television advertising campaign this week. The bill is not perfect, he conceded, “but the country can’t afford to wait for perfect. On balance, it’s the right thing for seniors in America and their families.” ....

The legislation creates a $12 billion fund to help managed-care plans take hold among the Medicare population.

So Mr. Novelli seems to be interested in whether the bill would generally improve medical care for seniors - exactly the question that Herr Doktorprofessor Paul Von Krugman is inclined to leave aside. Herr Doktorprofessor seems to be standing together with the senior Congressional Democrats, who are focusing on the political aspects of the bill - not whether it improves medical care.

Is Herr Doktorprofessor going to argue that AARP has developed a bad case of "false consciousness?" Doesn't AARP realize that Herr Doktorprofessor has been sounding the clarion call that this legislation is intended to "undermine" Medicare?

Dear me. Dear me. Why aren't people listening to Herr Doktorprofessor?

Posted 2:35 PM by Robert Musil
Gallup Poll and CNN/USA Today/Gallup Poll


Reason for Hillary Clinton to jump in ...?

"Do you approve or disapprove of the way George W. Bush is handling his job as president?"

..............................................Approve....................Disapprove
..................................................%..................................%

11/14-16/03..............................50.................................47
11/10-12/03..............................51.................................45
11/3-5/03..................................54.................................43
10/24-26/03..............................53.................................42
10/10-12/03..............................56.................................40
10/6-8/03..................................55.................................42

Maybe not.

Posted 11:01 AM by Robert Musil
Not Disneyland

Last night the Man Without Qualities and spouse attended the first concert and gala dinner of the Los Angeles Master Chorale at the new Disney Hall. (Mr. Five Per Cent had to be left at home, to his great disappointment. School night.)

It would be hard to imagine a more exceptional evening. The Master Chorale is moving a bit more into modern music under the guidance of Grant Gershon, who took over from Paul Salamunovich a couple of years ago, and last night's program reflected that shift. After a cocktail party peopled by appealingly gowned ladies and their penguin squires in an architecturally interesting backstage indoor-outdoor niche, the concert began with the plainchant hymn Veni creator spiritus (Come, creative spirit) and Johann Sebastian Bach's Singet dem Herrn ein neues Lied (Sing to the Lord a New Song).

Then there were some new songs.

Specifically, there were world premiers of two works composed jointly by Bobby McFerrin and Roger Treece: Brief Eternity and Messages Yes, he's the Bobby McFerrin of "Don't Worry, Be Happy." I have heard Mr. McFerrin conduct the Los Angeles philharmonic previously, and I was impressed by him then, although he did not then conduct his own music. Mr. McFerrin bridges the Classical/Popular divide very well - to my ears, a lot better than Leonard Bernstein did. I don't know anything about Mr. Teech except that he was there last night in the role of an engaging and talented and apparently very young man. The scores were just wonderful. Balanced, unintimidated, good humored, unpretentious, approachable, subtle and very well crafted. Very good music that wants very much to be liked.

The concert ended with the shimmering efflorescence of John Adams' "Harmonium" - first presented at the opening of Davies Hall in San Francisco twenty years ago. Well worth the detour.

Of course the Hall itself was also very much on the premiere program. Everyone seemed to love it. Just confusing enough to make you respect its personality without being maddening. Most importantly, the acoustics are really superb and the auditorium space is amazingly intimate. Spectacular. In its entire 1,000 years of life, Veni creator spiritus surely never had a better performance or hearing. The smell of douglas fir - of which virtually every interior surface in the auditorium is faced - was strong and remarkably comforting and appropriate.

The Man Without Qualities cannot wait to hear the Master Chorale perform Spem in Allium at Disney Hall - Thomas Tallis' forty part choral harmony from religiously confused Tudor England. Not scheduled, but inevitable.

That so little West Los Angeles money is in this Hall - Eli Broad being a wonderful exception, as he is in so many things - is just a disgrace. Nobody wants to say that out loud and spoil the festivities. But it's true. On the other hand, you West Siders: IT'S NOT TOO LATE TO OPEN THOSE CHECKBOOKS!!! A musician is waiting!

[Note to Disney Hall management: Check with industrial perfumeries to replicate that douglas fir scent for injection through the ventilation system once the real thing fades. Warning: Don't try this at home - severe risk of entire house smelling like kitchen floor cleaner.]

If one were to have gone by the publicity attending the Hall's opening, one could have been forgiven for concluding that Disney Hall was entirely created by its genius architect on his computer (what he termed his "magic pen"), then passed to the genius acoustic designer for refinement (construction of the building was actually finished six months early to permit the acoustics to be worked out before the opening), and then - with the stroke of a well-finance and expensive Star Ship Enterprise transporter just materialized on its site. That is, there was almost no mention in that opening publicity literature of Mortensen Construction, the company that actually built the Hall.

But during the period of those opening festivities (none of which was attended by the Man Without Qualities) I was able to break bread at an excellent Silverlake Indian restaurant with a senior representative of Mortensen Construction - and I can assure you it is no accident that even with all the fur, accusations and charges flying during the Hall's construction nobody pointed a finger at Mortensen Construction. Keep this in mind: If you build a controversial Quarter-Billion Dollar public building and nobody thinks to talk about you in public before or when it opens you've done a superb job.

Among other amazing, poetic and unreported aspects of the Disney Hall construction process, Mortensen Construction used "4-D" construction sequencing software that was developed with a good amount of help from the animators at Walt Disney Company.

One imagines that notwithstanding the lack of publicity people who in the future need to build huge, high-style public spaces using tricky engineering and technology will somehow find out about Mortensen Construction - and that the Disney Hall administration will amply express it's gratitude and admiration at that time.

Posted 5:09 PM by Robert Musil
A Note To Conrad Black, Richard Rodgers & Oscar Hammerstein

From Jim Powell.

Mr. Powell has some very interesting things to say. But he doesn't really focus on Mr. Black's assignment of only a "passing" grade to the economics of the New Deal.

Mr. Black is much more enthusiastic about the New Deal and FDR as political phenomenons.

Economic success is already very hard to pin down and quantify. But capturing notions of political success objectively - within a commonly accpted framework? Sometimes it can be done.

But often: How do you catch a cloud and pin it down? How do you catch a moon beam in your hand? How do you hold a wave upon the sand?

How do you find a word that means FDR? A flibbertijibbet! A will-o'-the wisp! A clown! A chameleon on plaid!

UPDATE: Of course, Conrad Black has more on his mind now than old musicals and even older presidents.

In fact, Conrad Black may now feel that he's all too close to meeting Joe Black.

Posted 3:54 PM by Robert Musil
Tim Noah Has His Finger On The Pulse Of America!

... or something.

In response to a lot of thoroughly irresponsible chatter, Mr. Noah instructed us all:

There's a powerful political movement afoot to draft Sen. Hillary Clinton, D-N.Y., for president in 2004. Its partisans are committed almost to the point of fanaticism, and their number is growing by the hour. This thing is an absolute juggernaut. Even so, the Draft Hillary '04 forces probably won't secure their candidate's Democratic nomination. Why not? Because they're all Republicans!

Yep. They're all Republicans.

So maybe Mr. Noah can explain to Howard Fineman that it just cannot be true that one of Senator Clinton's closest friends and advisers, someone who is no less than a hard-boiled insider, actually let fly with some thoroughly irresponsible chattering interview that justifies - even remotely - Mr. Fineman's preposterous statement:

Some dreams never die, including one clung to by loyal Clintonistas: that Sen. Hillary Rodham Clinton will be the Democrats’ presidential nominee next year. Is there a chance she would get into the race? “That depends on what you mean by ‘get into the race’,” one of her closest friends and advisers explained to NEWSWEEK. ... “You’d have to have Howard Dean not wrapping it up, and being an angry, wounded front runner,” this adviser said. “You’d have to have two of the other challengers tearing each other apart in primary after primary. Then Hillary could come in, well in advance of the convention, and say, ‘Look, somebody has to save the party’.”...

Party and elected officials—the so-called superdelegates—are free to shift allegiance, and could form an instant core of Clinton support. Should she make a dramatic entrance next summer, the senator might be able to draw on the help of some savvy campaign veterans (and Clinton loyalists) now in the employ of other candidates. If Sen. Joe Lieberman’s campaign fades, for example, she might recruit his top pros, media handler Mandy Grunwald and pollster Mark Penn.


Gee, aren't those "party officials" included in the so-called superdelegates mostly people who have their jobs because of the Clintons? You know, the same people that Howard Dean says he wants to get rid of?

And, let's see if I understand this reasoning. We know that if Sen. Joe Lieberman’s campaign fades, for example, she might recruit his top pros, media handler Mandy Grunwald and pollster Mark Penn.

So if General Clark's campaign "fades," for example? What happens then?

UPDATE: More people who must all be Republicans, even though they're cooling their buns in the Iowa. That zany Adam Nagourney writes: Parts of her speech directly echoed what President Clinton said in a speech to Iowa Democrats here over the summer.

"Directly echoed?" The Times is boldly going where no English speaker has ever gone before! "Directly echoed?"

Posted 10:02 AM by Robert Musil
Herr Doktorprofessor, Heal Thyself

Herr Doktorprofessor Paul Von Krugman has been cherry picked.

He says that he has enough money to count himself as very comfortable. So he can probably afford to purchase private medical insurance. He also works for Princeton University, and the faculties of most such universities are amply provided with medical insurance and are notoriously long-lived.

In short, like most people with sufficient incomes and good statistical health profiles, he will never have to rely on Medicare. He has been cherry picked.

But Herr Doktorprofessor Paul Von Krugman thinks that it would be an absolutely terrible idea - indeed, the dreaded "cherry picking" - if the government were to provide subsidies allowing people with less money than he has to purchase private medical insurance. He's in quite a huff over it - even to the point of referring to the idea as a "Trojan horse" and a "bait-and-switch," an illegal retail practice:

Meanwhile, another proposal - to force Medicare to compete with private insurers - seems intended to undermine the whole system.

This proposal goes under the name of "premium support." Medicare would no longer cover whatever medical costs an individual faced; instead, retirees would receive a lump sum to buy private insurance. (Those who opted to remain with the traditional system would have to pay extra premiums.) The ostensible rationale for this change is the claim that private insurers can provide better, cheaper medical care.

But many studies predict that private insurers would cherry-pick the best (healthiest) prospects, leaving traditional Medicare with retirees who are likely to have high medical costs. These higher costs would then be reflected in the extra payments required to stay in traditional fee-for-service coverage. The effect would be to put health care out of reach for many older Americans. As a 2002 study by the Kaiser Family Foundation judiciously put it, "Difficulties in adjusting for beneficiary health status . . . could make the traditional Medicare FFS program unaffordable to a large portion of beneficiaries."

These objections, together with Herr Doktorprofessor's willingness to accept his own privileged position accompanied by his outrage, alarm and quasi-paranoid suggestion that the proposal seems intended to undermine the whole system should be familiar to the reader. Indeed, the passage could have been created with a rapid cut-and-paste from Herr Doktorprofessor's objections to school vouchers. That makes sense, because the "premium support" idea is simply a kind of medical insurance voucher. Indeed, he had directly and expressly linked the two areas, as when he complained that the administration continues to believe that "financialization" is the way to go on just about everything, from school vouchers to Social Security. Here are some representative Krugmaniacal passages on school vouchers:

[P]roposals for school vouchers should be critiqued not only on educational or cost-efficiency grounds but also because they raise the risk of a collapse in the political support for public education. (If upper-middle-class families are allowed to "top up" their vouchers with their own money, they will soon realize that it is in their interest to cut the size of the vouchers as much as possible). And-dare we say it?-we should in general oppose privatization plans if they are likely to destroy public sector unions. After all, people on the right tend to favor privatization for exactly the same reason.

Many conservatives and even a few liberals are in favor of issuing educational vouchers and allowing parents to choose among competing schools. Let's leave aside the question of what this might do to education and ask what its political implications might be. Initially, we might imagine, the government would prohibit parents from "topping up" vouchers to buy higher-priced education. But once the program was established, conservatives would insist such a restriction is unfair, maybe even unconstitutional, arguing that parents should have the freedom to spend their money as they wish. Thus, a voucher would become a ticket you could supplement freely. Upper-income families would realize that a reduction in the voucher is to their benefit: They will save more in lowered taxes than they will lose in a decreased education subsidy. So they will press to reduce public spending on education, leading to ever- deteriorating quality for those who cannot afford to spend extra. In the end, the quintessential American tradition of public education for all could collapse.

These two Krugmaniacal samples appear to date from the mid-1990's - before publicly financed school vouchers programs had got started. Such publicly financed school voucher programs have now existed for a while in several places - and the evidence so far is that those programs have benefited education generally in the places where they have been tried. But then, didn't Herr Doktorprofessor build himself an escape hatch for this objection? Why, yes, he does build an escape hatch. He comforts us: Let's leave aside the question of what this might do to education and ask what its political implications might be.

Isn't it nice of Herr Doktorprofessor to spend all that intellectual energy on a putative analysis of an education proposal that "leaves aside" the most overwhelmingly important question - in fact, the only really important question: what this might do to education? I leave it to the reader to determine for herself whether this is a little intellectual "bait-and-switch" on Herr Doktorprofessor's part.

In his most recent column, Herr Doktorprofessor also seems inclined to leave aside the question of what vouchers (or "premium support") might do to medical care and instead asks what its political implications might be. (Answer: Medicare, "undermined.")

As is so often the case with Herr Doktorprofessor's rants, he buries most of his sources even as he purports to rely on their august credentials:

But many studies predict that private insurers would cherry-pick the best (healthiest) prospects, leaving traditional Medicare with retirees who are likely to have high medical costs.

Yes, and many studies predict that private schools would cherry-pick the best (smartest, best behaved) prospects, leaving traditional public schools with less talented, emotionally impaired children who are likely to have high educational costs and low performance. So far, those educational studies appear to have been wildly wrong. That is not too surprising, since many of those many studies were prepared by people with seriously vested interests in maintaining the status quo and there were also many studies saying the opposite and even arguing that "cherry picking" is a cost worth paying. Do we order Stanford University to close because it's "cherry picking" from the University of California or "undermining" public support for the public university system? Of course not - because what we care about is the general quality of education. The competition between the public and private sectors benefits the public - it is not important that a particular competitor is benefited either in education or medical care.

Similarly, that "traditional Medicare" might be "undermined" by some reform is completely irrelevant if the net effect is an increase in the quality of medical care. And it appears to be no problem for Herr Doktorprofessor that the government already provides huge subsidies through the tax system to employers to offer medical insurance to their employees.

But Herr Doktorprofessor spends not a word on those topics. He would prefer to - and does - leave aside the question. He's once again too eager to get down to the ephemera of Bush-and-Republican bashing to actually address any really important questions. In fact, his political biases are so urgent for him that they again seem to preclude him from even asking or thinking of the right questions.

Steve Antler has a word on the bias evident in the work of Kaiser Family Foundation, the outfit that produced the one study Herr Doktorprofessor almost (but not quite) actually identifies - and from which he quotes (Incompletely? Out of context? How could anyone tell?). And even that lonely quote from that suspect source does not really support the position that Herr Doktorprofessor says it supports. The quote is: "Difficulties in adjusting for beneficiary health status . . . could make the traditional Medicare FFS program unaffordable to a large portion of beneficiaries." Yes, they could ... and, then again, they might not ... and "traditional Medicare" could become unsustainable if it is not reformed, harming everyone who depends on it ... - and the earth could be struck by a meteor next week! If that KFF quote represents the strongest position his "many studies" have taken against "premium support," then Herr Doktorprofessor has proved that Congress would be well advised to enact such a program right away.

UPDATE: Herr Doktorprofessor's objection to the bill he discusses (I do not know if this proposed bill is included in or consistent with the deal Congress has reportedly just reached on Medicare), that Congress in 2003 is somehow "ruling out" possible responses by the Congress in 2010 or 2011, frankly just seemed too ridiculous (and too obviously column inch-filler), to even warrant an answer. But I was wrong. Kausfiles provides a good answer - one really worth reading.

MORE

Posted 8:41 PM by Robert Musil
Democrat Blanco Wins La. Governor's Race

Democratic Lt. Gov. Kathleen Blanco became the first woman ever elected governor of Louisiana on Saturday, defeating a conservative Indian-American and scoring a rare gain for Democrats in an election season that has seen a string of Republican victories.

Posted 3:38 PM by Robert Musil
Louisiana Election

Real time tracking.

Posted 2:07 PM by Robert Musil
Medical Insurance As A Non-Priority Item

Consider this passage from a New York Times report on middle class people losing their health care insurance:

Ms. Pardo, a 29-year-old from Houston, said that having no insurance meant choosing between buying an inhaler for her 9-year-old asthmatic daughter or buying her a birthday present. The girl, Morgan, lost her state-subsidized insurance last month, and now her mother must pay $80 instead of $5 for the inhaler. Rent, car payments and insurance, day care and utilities cost Ms. Pardo more than $1,200 a month, leaving less than $200 for food, gas and other expenses. So even though her employer, the Harris County government, provides her with low-cost insurance, she cannot afford the $275 a month she would have to pay to add her daughter to her plan.

Isn't there something more than a little bit odd about an article that presents medical insurance as an essential, whose loss forces people into the most dreadful choices, casually explaining that the $240 cost for a child's medical insurance must come from what is left over after rent, car payments and insurance, day care and utilities?

And what is one to make of this passage:

Mr. Thornton, 41, left a stable job with good health coverage in 1998 for a higher salary at a dot-com company that went bust a few months later. Since then, he has worked on contract for various companies, including one that provided insurance until the project ended in 2000. "I failed to keep up the payments that would have been required to maintain my coverage," he said. "It was just too much money."

These people are not poor, and they are not unaware of the costs and risks connected with the decision of whether to purchase or not purchase health insurance. They are making consumption choices - and they quite clearly view health insurance as of a type with other ordinary goods. Indeed, in the case of Ms. Pardo, health insurance seems to be an ordinary good that is of less signifiance than economizing on rent, car payments and insurance, day care and utilities.

Of course, the middle class is not alone in expressing a sometimes low value assignment to medical insurance. Recent reports of state-subsidized health insurance simply going unclaimed by eligible low-income people are also striking.

Many economists treat the decision not to purchase health insurance as somehow "irrational" - or evidence that people who don't purchase such insurance are simply incapable of evaluating the risks and benefits. But the growing population of middle class people choosing to forego health insurance even though they could afford it if they chose to economize on other ordinary expenditures is strong evidence to the contrary. The inclination of economists to second-guess such decisions may have more to do with the relative risk aversion of economists compared to the population as a whole than it has to do with the ability of middle class people to evaluate these costs and risks for themselves.

Of course, if one takes this risk and actually develops a serious medical problem, one is normally perfectly well inclined to make use of whatever argument one can lay hold of to pay for the costs of one's own decision. But that doesn't mean one didn't understand the risk or make the choice.

Posted 10:09 AM by Robert Musil
Global Manufacturing Jobs Shrinkage

References to this report claiming that manufacturing jobs have declined worldwide - with China, for example, losing a huge number - have popped up all over. But the article itself has not been all that easy to find on the internet.

So here it is.

I am, to say the least, skeptical of some of the details. With respect to China, for example, there are also reports that manufacturing in China often tends to substitute human labor for the technology employed in the country from which the jobs "come."

China also has some peculiar labor laws that one can imagine creating some very strong incentives for employers to report the "loss" of manufacturing jobs. For example, China is experiencing a huge migration of workers from the countryside to cities - where they take a lot of manufacturing jobs. But Chinese law requires that such migrating workers hold and comply with internal passports and visas - and those visas are good for only a few years. That means that, in principle, the workers must leave their new job and city and return to their old village at the end of their visa period.

Him? He left! Went back to his village and took some other position paying, say, 10% of what we paid him here. Sure. Big problem for us, too, we had to train him and now we have to train his replacement. That happens all the time. After all, it's the law. Gotta follow the law.

Is that the Chinese way? Is the Pope a Zoroastrian?

In the alternative, one imagines, the worker could stay and the employer deny the job exists or that the employer is employing the worker. This is just one peculiarity of Chinese employment law that might distort employment statistics.

There is also generally and worldwide a rather strong relationship between the number of employees an employer claims and the employer's tax obligations. The reader may wish to take a private moment to contemplate the traditional relationship between a Chinese business owner and the tax authorities.

I would be very skeptical of the reliability of Chinese employment statistics generally. This is a country that for decades officially denied that it suffered any unemployment at all!

Indeed, it is difficult in the extreme to suppress the sense that to accept easily the proposition that China saw a 15 percent drop in factory jobs one would have to have an intellect on the order of Robert Reich's (if Glenn Hubbard has really been saying such things about China - as distinguished from worldwide - he should know better). A Wall Street Journal article describes the Chinese situation this way:

Perhaps the most surprising result of these latest studies is the manufacturing employment trends in China. Since 2000, manufacturing payrolls in China are up about 2.5 million, even as the rest of the world has suffered. But looked at over a longer time horizon, employment in China's manufacturing sector is down sharply. From 1995 to 2002, manufacturing employment has fallen to 83 million from 98 million, a 15% drop that outpaces many of the declines elsewhere in the world.

It isn't difficult to figure out why. China remains burdened with a massive and unproductive state sector that will take years to restructure. Even as foreign direct investment pours into the country's newer plants, millions of workers at inefficient state plants have to find new work, a source of potentially destabilizing unrest in the country and massive internal migrations.

But, of course, for the "loss of jobs" argument to hold in China it is not just necessary that these millions of workers at inefficient state plants have to find new work - but that they have, in fact, not found factory work. Is the idea supposed to be that these former factory workers have gone on to rice picking or the like? Even in China the sudden creation and long-term persistence of fifteen million unemployed manufactring workers would cause more than a political ripple.

Odd that the argument just omits a little detail like that, along with any mention that those "newer plants" in China tend to use more human workers and less technology - and are often less productive per worker - than comparable plants in the developed world.

So maybe there's more to the story that just the two words cited by Mr. Reich: higher productivity.

Posted 4:45 PM by Robert Musil
The Economist And Herr Doktorprofessor

This curious Economist item on Paul Krugman and his critics is not exactly a win for either side.

The main effect of this item is to raise the question of whether the Economist has really closely read all those Paul Krugman columns. One gets the impression that whoever wrote this unattributed Economist item dearly values her own low blood pressure more than the dissonance of intellectually honest appraisal - and it's difficult to imagine such a person spending a long period closeted in close reading with a pile of Paul Krugman's screeds. The item doesn't seem to engage the issues Herr Doktorprofessor's style raises.

For example, Herr Doktorprofessor's recurring, unsubstantiated suggestions of conspiracies - usually conspiracies involving George Bush - is entirely unmentioned. But by itself that propensity should cause one's eyebrows to be raised by the Economist's reference to Mr Krugman's perfectly respectable personal political beliefs. It is not just that Paul Krugman has a growing tendency to attribute all the world's ills to George Bush - Herr Doktorprofessor repeatedly presents Mr. Bush in a far more sinister light than that - conjuring the trappings, wheels and spokes of full blown evil enterprises with Mr. Bush at the helm. Many of Mr Krugman's personal political beliefs he expresses in his columns are anything but perfectly respectable - some of them border on the paranoid. Perhaps the author of this article needs more than what she terms a glance through his past columns to understand what Herr Doktorprofessor has been about. But even his Times colleague David Brooks has expressed his concern about Herr Doktorprofessor's often angry, even hateful, and far from "perfectly respectable," opinions. And is it "perfectly respectable" to hurl against the President of the United States coded charges of anti-Semitism - as Herr Doktorprofessor has done, even while he attempts to "explain away" the anti-Semitism in the Mahathir Mohamad speech - as the ADL correctly points out? Is that what passes for "perfectly respectable" at the Economist today?

Herr Doktorprofessor's loathing for Mr. Bush has also led him to deny - up to the very eve of the recent massive acceleration in the economic recovery - the very existence of such a recovery (performance that has led Felix Rohatyn, no Republican partisan, to exclaim: "I rejoice in the spectacular performance of our economy at this time."). His venomous, absolutist and completely wrong-headed writing has provided hilarious fodder for a contest to identify Herr Doktorprofessor's most preposterously wrongheaded prediction. My favorite is perhaps his simple but heartfelt observation There is very little evidence in the data for a strong recovery ready to break out, which Herr Doktorprofessor published at the end of July. But there are so many others to choose from. A certain air of the unreal - even the surreal - is created by the Economist's failure to even mention Herr Doktorprofessor's recent spectacular and obvious failures in seeing the acceleration coming - failures brought on by his even more spectacular and obvious loathing of the President, which clearly blinds him to much of what is most important in his own profession. A certain hallucinatory atmosphere is also left by the Economist's omission of any mention of Herr Doktorprofessor's wildly intemperate criticisms of Alan Greenspan: It's probably wishful thinking, but some people hope that the old Alan Greenspan - the man we used to respect - will make a return appearance next week. .... Mr. Greenspan must know that many people, whatever they say in public, now regard him as a partisan hack. This is the kind of thing the Economist expects from a gifted writer and economist?

There is also a certain unpleasant flavor of the self serving and self-congratulatory in this Economist item. For example, the writer (whoever she may be) opines of Herr Doktorprofessor's critics: The more reasonable ones allow that he is a gifted writer and economist, but also argue that these days his relentless partisanship is getting in the way of his argument. And, sure enough, that is exactly the approach taken by the Economist writer! Who would have thought it?

The criticism of some of Herr Doktorprofessor's more peculiar economics arguments is also on the coy side:

Even his economics is sometimes stretched. A recent piece accused conservatives of embracing the "lump of labour fallacy", the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. In fact, the paper he cited did not commit the lump of labour fallacy. He used game theory to argue that, by criticising North Korea but not attacking it, and then going after Iraq instead, Mr Bush is "probably" encouraging North Korea to become a more dangerous nuclear power. This probably did not convince most game theorists.

Is it too much to ask why these criticisms are valid, but not others? Herr Doktorprofessor has been almost unhinged in the intensity of his criticisms of the Bush tax cuts - to the point of stating that anyone who supports them is a "liar" - but there is no mention in this Economist item that Gary S. Becker, Edward P. Lazear and Kevin M. Murphy beg to differ - although not by name. Professor Becker is, of course, a winner of a Nobel Prize in economics, and Professor Murphy is a winner of the John Bates Clark Medal of the American Economic Association, which is also Paul Krugman's greatest credential. Has Herr Doktorprofessor confessed that In fact, the paper he cited did not commit the lump of labour fallacy? If not, why and how did this opinion of the writer become a "fact" - where the opinions of Professors Becker, Murphy and Lazear don't warrant even a mention? Perhaps the author considers those three to be among those who spend an inordinate amount of time quibbling about minor semantic points, or trivial differences in statistics? The Economist's author might claim that space was limited, but the item rambles considerably (the unsupportable speculation about a possible Nobel at the end, for example, is almost a non sequitur), so room could have been made for a bit of substance. Is it that the author didn't want to expose herself by exposing her substantive economics and game theory considerations? It is also striking that these recognized errors are trivial compared to Herr Doktorprofessor's whopping errors in predicting the current recovery and in asserting that the destructiveness of the Bush tax cuts is clear and absolute economic fact.

And where ever did the Economist get the idea that politicians don't act to advance their policies and beliefs in the period after they expect to leave power, as in this guileless passage:

After Mahathir Mohamad, the prime minister of Malaysia, recently gave an anti-Semitic speech, Mr Krugman argued that the Bush administration's ham-fisted foreign policy had forced Dr Mahathir to make the remarks in order to shore up domestic political support—most unlikely, given that he was about to step down.

Contrary to the Economist's naive suggestion, politicans frequently act to advance their agendas and policies in the period after they step down - in exactly the manner the Economist describes here as "most unlikely." Does the Economist remember the raft of legislation and appointments just perpetrated by Gray Davis after his recall? How about Bill Clinton's infamous last-minute pardons? Is the Economist aware that Presidents value their right to appoint Supreme Court Justices exactly because they often remain on the bench for decades after the President is gone from office - or dead?

There is lots wrong with Herr Doktorprofessor's treatment of Mahathir Mohamad's speech, much of it identified by those he terms his “stalkers” - who the Economist seems eager to join him in largely dismissing. But placing this kind of emphasis on the mere fact that Mahathir Mohamad was about to step down when he made that dreadful speech - while ignoring other criticisms, including Herr Doktorprofessor's own prior, undisclosed involvement with Mahathir Mohamad - is so superficial as to make the term "superficial" seem a euphemism.

Strange, it is. All of it - this Economist item. Passing strange.

UPDATE: Insults Unpunished opines: "Musil seems to be offended that Krugman is still breathing."

No, no, no, no. no!

I would never wish harm upon Paul Krugman. Paul Krugman is one of the nation's greatest naturally occurring sources of pure hilarious baloney! The man is a national treasure! He is to be cherished in the manner we have long cherished Abbot & Costello, Bob Hope, Woody Allen and others of like stripe. They are truly his intellectual brothers.

Not a drop of anger or hate is to be poured upon his gnomishly handsome visage! May he live long and prosper!

Just keep him away from economic policy, for God's sake.

Steve Antler suggests that I'm jealous of Herr Doktorprofessor. And that is so true. I have always wanted to be an accomplished comedy writer. I feel like Salieri to Herr Doktorprofessor's Mozart! How does he accomplish his uproarious, unreal set pieces so naturally ... without apparent effort? Damn him!

Posted 12:47 PM by Robert Musil
Still More Polls

Bush moves ahead of Clark by three points (Bush-50% to Clark-47% - where Clark had led Bush by three points in the September Gallup Poll: Bush-46% to Clark-49%). Bush also widens his lead on all other Democratic hopefuls.

Posted 11:00 AM by Robert Musil
As Kentucky and Mississippi Go, So Goes Louisiana? III

Democrat picks up momentum from debate academics say she "lost" badly.

Isn't that often the case?

And the Democrat is said to benefit from some old-fashioned racism:

"I think some old boy state's rights anti-black types are switching over to Blanco because they don't want to see an Indian-American as governor."

Still, RealClear says the Republican takes it tomorrow,

Posted 10:49 AM by Robert Musil
Omygod!!!

It's happening already!

Posted 10:26 AM by Robert Musil
Good News, Bad News

The good news is that home values are soaring, especially in California: Riverside-San Bernardino, Calif., soared 26.5%, while the Los Angeles area climbed 25.4%.

The bad news is that housing prices in California are soaring by the same amounts - somebody, that is, everybody, has to pay those prices.

If one is a current homeowner who does not need a bigger home, then soaring home prices seem nice. But if one is a first-time home buyer - or one who needs to "trade up" - these soaring prices are a disaster.

California has seriously suppressed new residential construction. For example, throughout pricey Orange County high rise residential construction is not permitted - with very few exceptions, such as senior citizen housing. Los Angeles County - now one of the nation's fastest growing counties - has not permitted a large housing development in many years. The recently approved Newhall Ranch project would add 20,885 homes to the Santa Clarita Valley, and the Tejon Ranch Co. is planning to build 23,000 homes near the Grapevine along the Tehachapi Mountains. But those are small numbers compared to the demand. And even those projects are uncertain and have been long delayed by environmental and other challenges. Another large proposed project recently terminated in the purchase of the land as a conservancy by the state.

One effect of the housing shortage - it is really a crisis for those of modest means, but for some reason that term is not widely used - is that many marginal urban neighborhoods are being "revived" - although bizarre "historical preservation" restraints also restrict this kind of development. For example, is it really the case that almost every 1920's stucco apartment building in Hollywood is of "historical significance?"- Los Angeles says just about that.

Such "revivals" are all very nice, but those "revivals" further obscure the fact that more and more people are not able to afford the kind of housing that a market governed by rules directed at maximizing aggregate welfare (and wealth) would provide. Environmental and historical preservation regulations, especially, are being used by current homeowners to effect a kind of smash-and-grap raid on other people's properties and home ownership possibilities. Other limitations - such as height limitations - further restrict affordable development.

Not surprisingly, rents have also soared in Los Angeles, which recently became the second most expensive city for renters (after San Francisco) in California.

So where are those currently striking supermarket and MTA employees supposed to live? What happens to them if housing prices soar by 25% again next year? Supposedly, those strikes are both mostly occassioned by health care benefit considerations. The Los Angeles Times describes the supermarket stike this way:

The United Food and Commercial Workers union went on strike Oct. 11 after rejecting a contract presented by the management of the parent companies of Albertsons, Ralphs and Vons supermarkets. The union rejected the contract mainly because the various managements want employees to pay 50% of hospital stays, 50% of doctor's visits, 50% for prescriptions and to take a cut in vision and dental.

Those are not insubstantial issues - although one could question the spin in this passage. But I have to wonder whether medical benefit issues are being used as a surrogate for a much wider problem: California is becoming very expensive because of rent-seeking regulation. Housing prices are just one example of that price surge, although a tremendously significant example. Health benefit issues find easier resonance with the media and public than, say, demands for higher wages or a relaxation of construction regulation. So the unions - not surprisingly - are trumpeting health benefit issues. The supermarket companies talk about Walmart, but there is no Walmart at the MTA's door.

But a lot more is going on here.

And if health benefit issues are surrogate issues, it makes a lot more sense that the strikes just drag on and on. Most arguements do drag on if their real, motivating concerns are not being discussed.

Posted 9:04 AM by Robert Musil
An Abrogation Or Demeaning Of Democracy? II

The reasoning of this New York Times editorial seems to justify the removal through impeachment of any federal judge who follows conscience instead of clear meaning of the law. Judges are entitled to serve only during times of "good behavior" - and the stentorian rhetoric of the Times editorial purports to make the case that Judge Moore was not meeting that standard. And not a word from the Times about the millions of votes that were required to put Judge Moore in his office - undone by only nine. Is that "democracy?"

Does this mean that the Times will be urging the removal of, say, Judge Stephen Rheinhart of the Ninth Circuit? Or Harry Pregerson, who actually confessed to the Senate that he would follow his conscience if it conflictd with his understanding of controlling law? Is the Times reference to Mr. Moore's knack for demagoguery supposed to suggest that his acts were not, in fact, true products of his conscience? If so, what evidence has been adduced that Judge Moore has less of a conscience than the often grandstanding Judges Rheinhart and Pregerson? How about Justices Brennan and Marshall - who consistently and repeatedly attempted to hold the death penalty completely unconstitutional, even after the Court had repeatedly and clearly held otherwise? Was that "good behavior?"

Somehow, I foresee no such effort by the Times on the Rheinhart and Pregerson front. Today's ad hoc rhetoric is probably already back in the drawer.

But those like the Times naively celebrating the removal of Judge Moore today should keep in mind that his removal has likely very much weakened the judiciary throughout this country.

UPDATE: And it is quite irrelevant to the damage Judge Moore's removal has caused to the judiciary that he is not a guy you want on your side.

Posted 8:37 AM by Robert Musil
Bonds ...

... do not seem to be tanking despite the new signs of growth and persistently low short term rates. Jonathan Gewirtz mulls that over.

UPDATE: On the other hand, the gold market - a traditional refuge from inflation - has been heading up.

Posted 8:29 AM by Robert Musil
Global Hot Air

Sylvain Galineau nicely summarizes the current state of intellectual disrepair of global warming (or is it "cooling?") theories:

To summarize, global warming is causing a cooling, we can't predict much about the former and there is little proof of the latter.

But, but, but, ... Sylvain, we sure can sign up for treaties that impoverish billions of people all over the world, and demolish much of our own economy - and pretend we understand and are in control of what we are doing and observing. And it seems doing that kind of thing would make some of us feel better! Doesn't that count for something?

Posted 4:54 PM by Robert Musil
Polls As Lagging Indicators

This CBS story gives a remarkably negative spin to the most recent CBS poll.

Buried within the negative rhetoric is some fairly interesting material. For example, there's this:

Despite new economic data showing a lower unemployment rate and the recent stock market rebound, the economy and jobs continue to top the list of pressing concerns for the public. Although Americans?’ views of the state of the economy are more positive than they were a month ago, almost a quarter of Americans have had a personal experience with economic woes, and report that someone in their household has lost a job in the last year.

It is not surprising that people don't massively and all at once reverse their opinions of a president and the economy. But the inclusion of that reference to those who report that someone in their household has lost a job in the last year is interesting. Of course, the president isn't up for election now. He's up for election in just about a year. If one asks voters in November 2004 about the economy and the President's performance, many of them will likely look back about a year - to the time that 7.2% annual GDP growth rate was reported and unemployment fell to 6%. So that reference to a one-year look back doesn't bode well for the President's opponents and critics.

The story also almost obscures the facts that the number of people rating the economy's condition as "good" increased by 5% (from 45% to 50%) in just one month, while the number of people rating the economy's condition as "bad" declined 6% (from 54% to 48%) in that same month. Even more amazingly, these poll result occurred even though only about a third of Americans now view the economy as improving - even though the economy obviously is improving, generally and on the employment front. It seems highly likely that the objectively improving economy will touch the subjective understandings of more and more Americans within the next few months.

The reader is invited to peruse the most recent CBS poll results and associated stories for herself. I find them some of the more amusing recent examples of what Mickey Kaus calls "liberal cocooning."

But I'm fairly certain that any knowledgeable Democratic activist or consultant seeing these poll results is going to feel ill. Very, very ill.

I'm fairly certain of that because this and other polls show how the public is responding very well to the newer positive economic data, and that data is just beginning to flow in earnest and will almost certainly continue to flow at least until the November 2004 election. For example, the Wall Street Journal reports:

Economists are nudging higher their projections for economic growth early next year, suggesting they are becoming more confident the recovery is sustainable.

Among 53 economists who participated in The Wall Street Journal Online's November economic-forecasting survey, the average forecast for the inflation-adjusted, annualized growth rate of the nation's gross domestic product during the first quarter of 2004 was 4.1%. That was revised up from the 3.9% rate predicted when the group was last surveyed in October. .... The economists expect growth to remain steady throughout 2004. Offering second-half forecasts in the Online Journal survey for the first time, they forecast growth at a 3.9% rate for both the third and fourth quarters of 2004.

While a slowdown from the 7.2% growth rate the economy experienced during the summer, these 4% growth rates mark a notable acceleration from the pace of activity that prevailed during the first 19 months of the recovery, which started in November 2001.

Among the biggest reasons economists cited in ratcheting up forecasts was a rebound in business spending, which economists predicted would grow at a robust 10% rate for the next nine months. ... For weeks now, sustainability has been the buzzword hanging over the outlook for the economy. .... Economists noted that with business inventories low, companies now must turn to increased production to meet consumer demand. Robust productivity gains, they said, are expected to boost corporate profits and companies will need to replace aging equipment such as computers and software.

Moreover, they said the effect of tax cuts hasn't yet faded. Nearly two-thirds of economists surveyed said that the effects of the tax cuts will continue to have a significant impact on economic growth over the next 12 months, while 7.7% said tax cuts would be the primary driver of growth over that period. More than 17% said that tax cuts will have some effect, but not a meaningful one, in the next year, while only 1.9% said tax cuts would have no effect. ...

The nation's healthy pace of growth, in turn, is expected to create enough jobs to bring the unemployment rate down slightly in the months ahead. Economists nudged down their forecasts for the unemployment rate to 5.8% by next May, from previous estimates of 5.9%.

Of course, if the unemployment rate continues to decline in that way, it will be about where (maybe a bit less than) it was in October 2002 - just before the last national elections. And I'm sure the Democrats are thinking long and hard about how well they did then.

But all that economic and employment growth isn't expected to produce an interest rate crisis or draconian Fed action of the type the Times has been pining for recently. No. Instead, the Federal Reserve will likely begin tightening monetary policy sometime next year. Nearly half of those who responded said the Fed would lift interest rates by June 2004, and most pegged the increase at a quarter point, which would boost the central bank's target for the federal-funds rate, which banks charge each other for overnight loans, to 1.25%.

Yes. Ill. Very, very ill.

UPDATE: And this wouldn't make me feel any better, especially the lead GWB has already over every single Democratic hopeful.

Posted 11:28 AM by Robert Musil
Howard Dean's Confederate Flags

I like much of Shelby Steele's writing, but I don't agree with his argument that Howard Dean's statement that Democrats must seek to represent "guys with Confederate flags in their pick-up trucks," was Dr. Dean playing identity politics, the new "progressive" and "inclusive" politics of our age.

I do think that Dr. Dean's foray was doomed from the start by the Democratic posturing over the Confederate flag issue.

It is not hard for an open minded person to ascertain that many Southerners favor personal or official use of the Confederate flag who do not subjectively view that flag as a racist symbol. The strongest argument against official use, in my view, is that - notwithstanding the way that flag may be viewed subjectively by many, even a majority, of people - there are enough people who do view the Confederate flag as a racist symbol that it should not be used to represent a state or locality. In that limited sense, the fights over that flag are battles of subjective versus objective meaning. As a matter of policy, one can accept or reject the argument. But on the question of personal use of the flag (as on a pick-up truck) - as distinguished from official use of the flag (as on a state flag) - the objective policy argument against using the flag is much weaker.

But Democratic posturing has gone much further. It has not been enough for many Democrats to argue that everyone should see what these Democrats see as the racist content of the flag - these Democrats instead argue that everyone does see that content. Worse, such Democrats have made the argument that the Confederate flag vibrates with so much racist resonance that anyone who uses it personally - or favors using it officially - must be and actually is subjectively intending to make a racist statement. In my opinion, that argument is clearly false - judging by my experience with Southerners who use it personally (on their pick-up trucks or otherwise) or favor using it officially. The imputation by Democrats of subjective racist intent to those advocating any use of the Confederate flag has been an important device for them in impugning the political credentials of such advocates.

That's all come back to haunt Dr. Dean. Dr. Dean should be able to argue that he wants to represent the "guys with Confederate flags in their pick-up trucks" who do not view that flag as a racist symbol.

But Democratic posturing in the flag battles means that few Democrats can admit that such people exist.

UPDATE: Paul Krugman's strained effort to recast Dr. Dean's comment is absurd. It is not correct that What [Dean] meant by his flag remark was that Democrats must make the case to working Americans of all colors that the right's elitist agenda isn't in their interest.

Whatever else he may have meant, Dr. Dean meant to convey something about the Democrat's need to appeal to the interests of "guys with Confederate flags in their pick-up trucks" specifically - that is, interests in some way distinct from the interests of working Americans of all colors generally. The problem is, recent Democratic posturing makes it all but impossible for Democrats to acknowledge that "guys with Confederate flags in their pick-up trucks" can have good-faith, non-racists interests and beliefs that merit representation. Appealing to such interests is no more engaging in "identity politics" than appealing to the interests of, say, homeowners, is "identity politics." It's just "politics." But Herr Doktorprofessor's attempt to dissolve the interests of "guys with Confederate flags in their pick-up trucks" in some general "working Americans" soup is just dishonest.

Posted 10:03 AM by Robert Musil
An Abrogation Or Demeaning Of Democracy?

When Bill Clinton was impeached, some people argued that although he had done some things wrong, even criminally wrong, those things did not amount to an "impeachable offense."

When Gray Davis was recalled, some people argued that although he had done some things wrong, those things did not amount to an "impeachable offense" - and that removing an elected official from office was an abrogation of democracy if the official had not committed an "impeachable offense."

So, why don't we hear from such people that the removal of Alabama Chief Justice Roy Moore from office for his refusing to obey a federal court order to move his Ten Commandments monument from the rotunda of the state courthouse is an "abrogation" or "demeaning" of democracy.

Sure, what the Judge did was wrong - even a violation of the law. That was also true of some of the things Bill Clinton did - even some of the things he admits he did. But none of those things Mr. Clinton did amounted to an "impeachable offense" in the minds - or at least under the pens - of those former defenders of democracy. Surely refusing to move a silly monument is not "impeachable offense" if lying under oath, for example, is not. And Judge Moore has been removed by the votes of nine people - not the votes of the many millions it took to oust Governor Davis, votes that such defenders of democracy told us only weeks ago were still inadequate.

Why does it fall to people such as Greg Sealy, head of the Sitting at His Feet Fellowship in Montgomery, an inner-city mission to cry that it was the "darkest day" he has seen in America since he moved to the United States from Barbados 23 years ago? Only folks like Mr. Sealy seem to be pleading "They stole my vote. The judiciary stole my vote. I voted for Roy Moore."

Where are those clarion calls from the defenders of democracy who stood so bravely behind Gray Davis and Bill Clinton? Stood on principle! Where is the outrage of the New York Times? and the Los Angeles Times? And so many others!

Just asking.

UPDATE: Glenn Reynolds defends the removal, which is fine and does not exhibit an inconsistency in his positions. But Glenn's word of justification for the removal leaves a lot to be desired: If judges don't obey court orders, who will?

Professor Reynolds seems to have the constitutional priorities exactly backwards. The point of a judicial order is to make something, the ordered thing, happen. But it is members of the executive branch who are supposed to execute - that is, to make things happen. The refusal of a member of the executive branch to comply with a court order therefore seems to strike more at the heart of the constitutional government by laws than the willfullness of a judge.

For example, is it more significant that a state judge defied a federal judge's order to move a block of stone than it was for the federal president to defy a federal court's discovery order and lie in a federal court proceeding? I don't think so. [I especially don't think so where the order to remove the block is substantively dubious as a matter of Constitutional law.]

In addition, perhaps Professor Reynolds - or somebody else - can explain to me why it is so important that judges obey orders from other courts but not precedent, even controlling precedent of those courts or statutes of the legislature. The Ninth Circuit, for example, routinely disregards Supreme Court precedent and has even so willfully defied the Supreme Court's rulings that in one case the Supreme Court became so frustrated with the Ninth Circuit's repeated interference with the execution of a murderer in California in defiance of Supreme Court rulings that the Supreme Court found it necessary to issue an order providing: "The stay of the Ninth Circuit Court of Appeals is vacated. No lower federal court is empowered to issue a stay of execution without this [Supreme Court's] authority." Should Ninth Circuit judges who defy clear precedent or statutes be impeached?

Judge Moore is charged with following his conscience instead of a court order. In that regard, it is worth keeping this little interchange from the confirmation hearings of Ninth Circuit Judge Harry Pregerson on October 3, 1979, the day of his confirmation hearing when he, then sitting Federal District Judge Pregerson, was questioned by then Senator Alan Simpson. Here is the exchange:

Simpson: If a decision in a particular case was required by case law or statute, as interpreted according to the intent that you would perceive as legislative intent, and yet that offended your own conscience, what might you do in that situation?

Pregerson: Well, of course it's a hypothetical question and life does not present situations that are clear cut, but I think all of us, judges and lawyers, would be very pleased if congressional intent was clearly discernible. I have to be honest with you. If I was faced with a situation like that and it ran against my conscience, I would follow my conscience.

Simpson: I didn't hear, sir.

Pregerson: I said, if I were faced with a situation like that, that ran against my conscience, disturbed my conscience, I would try and find a way to follow my conscience and do what I perceived to be right and just. Not that, I would hope not, it would mean I would act arbitrarily. I was born and raised in this country, and I am steeped in its traditions, its mores, its beliefs, and its philosophies; and if I felt strongly in a situation like that, I feel it would be the product of my very being and upbringing. I would follow my conscience.

Perhaps Professor Reynolds - or someone else - can provide some reason why it's "fair" for nine panelists to remove Judge Moore - who received the votes of millions - for doing exactly the kind of thing Judge Pregerson told the Senate he would do the very day of his confirmation?

And to complete an exquisite irony, Judge Harry Pregerson eventually became a member of the three-judge panel that attempted to void the recent recall of Gray Davis. That decision was, of course, completely defiant, wrong and willfull - and was subsequently reversed without dissent by a Ninth Circuit en banc panel.

MORE

Posted 5:37 PM by Robert Musil
Such Setbacks II

Jim Taranto offers a characteristically insightful post showing that while Senate Democrats have a clear tactical advantage in their current filibuster of the President's judicial nominees, the Republicans have the strategic advantage.

The OpinionJournal item overlooks one person who will likely be especially damaged by all this grandstanding: Tom Daschle. Senator Daschle is, after all, the Senate minority leader (the capo da tutti Democratti) leading his fellow Democrats as they go to the mattresses in their high profile filibuster against the Republicans and all those conservative nominees - especially the nominees who do not support the abortion rights so sacred to the most liberal Democrats. But Senator Daschle is also in the process of trying to present himself to his rather conservative South Dakota constituency for re-election next year - a constituency 36% of whom disfavor him in recent polls - as "just Tom" who is "just like" them. As I noted previously, Senator Daschle is sufficiently conscious of his vulnerability to have voted for the recent partial birth abortion bill which is now being attacked by exactly the kind of federal judge he is demanding that the President appoint.

The Senate can bring the mattresses and cots onto the floor, but somehow I don't think Senator Daschle is going to get any sleep during this debate.

UPDATE: Senator Daschle's understanding of how currents pulling the national Democratic party leftward can backwash into South Dakota to his disadvantage is evident in passages from his new book, Like No Other Times, which describes the Paul Wellstone memorial that demolished the Democrats' chances of holding his Minnesota Senate seat. In the many words of Senator Daschle that urgently attempt to position him as a reasonable, centrist kind of just-a-guy South-Dakotans can like and vote for:

Not only did Walter Mondale slip overnight from eight points up to ten points down. . . . In South Dakota, where [incumbent Democratic senator] Tim Johnson's people were going door-to-door all over the state, reports were coming back that more than a few South Dakotans were saying, "I am so outraged at what happened in Minnesota that I was going to vote for Tim, but now I'm going to vote Republican."

Republicans brought the Charles Pickering matter to a vote on the eve of the Mississippi election, to their apparent distinct advantage. A repeat performance of this judicial filibuster close to next year's election therefore seems likely. It's not too hard to suspect that after seeing Senator Daschle lead the now-ongoing judicial nominee filibuster (live, this year, and as repeated campaign television spots next year, together with more coverage of next year's judicial filibuster - or equivalent spotlighting tactic), those same more than a few South Dakotans will be saying, "I am so outraged at what happened in the Senate judicial filibuster that I was going to vote for Tom, but now I'm going to vote Republican."

So far there's no word from South Dakota that Senator Daschle's poll negatives are moving one bit, despite all the money he's pouring into the effort. But a year is a very long time in politics.

FURTHER UPDATE: Looks like the overnight tracking polls must be registering positive for the Republicans.

Posted 9:45 AM by Robert Musil
As Kentucky and Mississippi Go, So Goes Louisiana? II

Going, going ...

RealClear has the skinny on Saturday's election.

UPDATE: Seemingly worse for the Democrat after the debate. But no call, yet.

Posted 9:02 PM by Robert Musil
Japan. Again, Japan. II

As has turned out to be the case repeatedly in Japan, even the limited but over-publicized "reforms" have much less to them than meets the eye. As noted previously, the biggest banking "reforms" supposedly relate to recognition and treatment of bad loans. But then there's this:

Japan's largest banks have granted some of the country's most troubled companies debt forgiveness packages worth over ¥4,000bn ($37bn) since the beginning of 2002, calling into question their public pledges to get tough with struggling borrowers.

Debt forgiveness has allowed the banks to make sizeable reductions in non-performing loans, which dropped 27 per cent in fiscal 2002, in response to orders from the Financial Services Agency, the regulator, to reduce bad loans by half by March 2005.

But critics say the packages have slowed structural reform by subsidising weak companies at the expense of stronger competitors and are a sign that relationship banking continues to thrive in Japan.

Most of the debt forgiveness has centred on the least efficient sectors of the economy, which include companies such as Daikyo and Fujita in real estate and construction, Seibu Department Stores in retailing and Orient Corp in consumer finance.

"Clearly, debt forgiveness has become easy and politically palatable. Traditional banking relationships have weakened, but even though they have weakened they are still very strong," said Jason Rogers, a director at Barclays.

The ¥4,000bn debt forgiveness - calculated from public announcements, media reports and from the banks themselves - is approximately double the ¥2,000bn in new capital raised by the banks over the past year to shore up their balance sheets. "The new capital has not been used for positive purposes but to write off bad loans or for debt forgiveness," said Naoko Nemoto, financial institutions analyst for Standard & Poor's, the credit rating agency. ....

[S]preads on speculative grade credit [have] shrunk, indicating that the market believed big corporate issuers would be bailed out via the banking system. "It amounts to the quasi-socialisation of credit risk." ...

The ¥4,000bn figure is likely to be much larger after considering loans to small and medium enterprises - which make up the bulk of bank lending.

What a mess.

Posted 4:16 PM by Robert Musil
Moon Over Rio

No, no, no, Mr. Thomas!

The moon dominates "Salome," not "Tristan und Isolde!"

And it comes out at the beginning of the opera, not after the curtain comes down!

Sheesh.

Posted 2:46 PM by Robert Musil
On The Other Hand, I Don't Think I Want Him Living Across The Hall

Durst, out.

Maybe Mr. Fastow can get the names of the people on this Texas jury so he can invite them all back for an encore!

Posted 2:40 PM by Robert Musil
Another "Never Mind"

With the economy not providing much in the way of likely campaign issues for the Democrats next year, what about the War on Terrorism?

For example, former Vice President Al Gore accused President Bush on Sunday of failing to make the country safer after the Sept. 11 attacks and using the war against terrorism as a pretext to consolidate power. Is any of that sticking? Well, there's a new poll out:

Newsweek Poll
conducted by Princeton Survey Research Associates.
Nov. 6-7, 2003. N=1,002 adults nationwide.
MoE ± 3.


". . . do you approve or disapprove of the way Bush is handling policies to prevent and minimize terrorism at home?"

...........................Approve...................Disapprove..........................No.Opinion
...............................%...............................%.........................................%

11/6-7/03.............64.................................27........................................9
10/9-10/03...........66.................................26........................................8
9/25-26/03...........70.................................24........................................6
9/18-19/03...........66.................................26........................................8
9/11-12/03...........65.................................27........................................8

Posted 2:28 PM by Robert Musil
Veterans' Day

Today is Veterans Day. I sometimes wonder if those of us who did not serve in the Armed Forces can ever understand what that involves - still less what is involved in combat.

We may not all be able to understand those things except in a disappointingly remote sense. But I believe that we all have an obligation to make the attempt - and to remember the people who have served and fought.

Posted 11:41 AM by Robert Musil
Men And Television

There has been a flurry of expression concerning why men seem to be deserting television - led by Kim du Toit's very interesting post. Jane Galt and Craig Henry and Glenn Reynolds have more to report. Some of these commenters have suggested that television's dominant manner of presenting the roles and characteristics of men and women may be involved. That may be part of the issue.

But there seems to be another force at work: American television increasingly presents a tolerant view of homosexuality, and increasingly presents images of gay interaction itself. I am not interested in condemning or condoning that development here. But it is simply a fact that the development has happened and is continuing to happen.

In my opinion, while tolerance of gay lifestyles may (or may not) be increasing in the United States, it is also a fact that the great majority of American men do not feel comfortable being directly or indirectly involved in or witnessing or having their attention drawn to any aspect of gay interaction. It is not just that straight men - and, especially, straight young men - do not want to be propositioned or sexually approached. The great majority of straight men do not want to see or be seen by gay men, or see or be reminded in any way or at any time of gay interactions.

Nor do the great majority of straight men care to be confrontational on this issue at any time. For the most part, straight men simply prefer to avoid locales where gay activities are present, or where one is reminded that gay activities are present or condoned, or where one might be reminded that gay activities are present or condoned. And straight men also prefer to avoid locales which are associated in the minds of other people, such as friends and relations and business associates, as locales where one might be presented with gay images or reminded that gay activities are presented or condoned. In short: One might ask whether some straight men do not want to hang around a television that may produce a gay image. Again, I take no position here as to whether any of the above patterns are right or wrong - but I do believe they exist as described.

Television is not the only locale to be abandoned recently by males where such issues may be involved. Highschool and college locker rooms - and especially locker room showers - are more and more unused. To some extent that is probably attributable to the ever-increasing risk that someone using a miniature electronic device is watching - and recording. But anecdotal evidence suggests that many (not all) men are increasingly uncomfortable in such locales - and increasingly avoid them - simply because there is more tolerance of gay activities. For example, for a lot of reasons, very few men want to be involved in a mess where one man shouts at another "Why are you looking at me!" - especially in an environment in which that looking is no longer much condemned. Deeming something "rude" is not the same as deeming it "sick" or "perverted."

I definitely do not affirmatively believe that the departure of men from television is partially caused by television becoming a more "gay" medium. But I do believe that avoidance of all things gay is a very strong feature of heterosexual male American culture, that it does not take much to activate this avoidance behavior pattern (a pattern which may be what is making the growth of tolerance of gay activities possible, anyway), and that it is worth looking into this feature in determining why the men are leaving.

Posted 10:12 AM by Robert Musil
George Soros: Absolutely Obscene ... Or Just Plain Nuts?

George Soros has found his calling! "[Defeating President Bush] is the central focus of my life," Soros said ... The 2004 presidential race, he said in an interview, is "a matter of life and death." .... "When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans." It conjures up memories, he said, of Nazi slogans on the walls, Der Feind Hort mit ("The enemy is listening"). "My experiences under Nazi and Soviet rule have sensitized me" ...

Soros's contributions are filling a gap in Democratic Party finances .... Asked whether he would trade his $7 billion fortune to unseat Bush, Soros opened his mouth. Then he closed it. The proposal hung in the air: Would he become poor to beat Bush?

He said, "If someone guaranteed it."

But defeating George Bush is not the only new goal that might lead Mr. Soros to extremes. There seem to be other political demons that have possessed his mind during its current sleep of reason. Just how far would the new George Soros go to serve these creatures? How about this:

"There is a resurgence of anti-Semitism in Europe. The policies of the Bush administration and the Sharon administration contribute to that," Soros said. ... "If we change that direction, then anti-Semitism also will diminish," he said. "I can't see how one could confront it directly."

That is a point made by Israel's most vociferous critics, whom some Jewish activists charge with using anti-Zionism as a guise for anti-Semitism. ... The billionaire financier said he, too, bears some responsibility for the new anti-Semitism, citing last month's speech by Malaysia's outgoing prime minister, Mahathir Mohammad, who said, "Jews rule the world by proxy."

"I'm also very concerned about my own role because the new anti-Semitism holds that the Jews rule the world," said Soros ... "As an unintended consequence of my actions," he said, "I also contribute to that image." ....

Abraham Foxman, national director of the Anti-Defamation League, called Soros' comments "absolutely obscene."

"He buys into the stereotype," Foxman said. "It's a simplistic, counterproductive, biased and bigoted perception of what's out there. It's blaming the victim for all of Israel's and the Jewish people's ills."

Furthermore, Foxman said, "If he sees that his position of being who he is may contribute to the perception of anti-Semitism, what's his solution to himself -- that he give up his money? That he close his mouth?"

Perhaps Mr. Soros doesn't have time or resources for any of those things suggested by Mr. Foxman, since they might distract him from the central focus of his life ... and from building his relationship with his new soulmate, Herr Doktorprofessor Paul Von Krugman!

Associates said Soros' appearance Nov. 5 was the first they could ever recall in which the billionaire, a Hungarian-born U.S. Jew who escaped the Holocaust by fleeing to London as a child, had spoken in front of a Jewish group or attended a Jewish function.

And his remarks show that there's a good reason for that.

The determination of what aspect of Mr. Soros' remarks is the most obscene is a bit refined. But it is worth mentioning that he seems especially drawn to ascribing significance to features that suggest the he is important ... even central. When he hears George Bush speak about the need to spread and protect democracy, Mr. Soros hears Hitler - but when he hears Mahathir Mohammad spit anti-Semitic garbage, Mr. Soros hears a cry for all of us in the West - even a big and important man such as himself - to look inward for our own flaws, for what we have done to create this terrible cry of pain from Mahathir Mohammad.

Yes, yes, Mr. Soros, we all recognize that you are such an important man, a big man, a colossus on the international stage ... a maker of kings and nations ... A VERITABLE GOD!

Now, will you just sit down, shut the heck up and stop embarrassing yourself?

UPDATE: An astute reader e-mails:

Hasn't Mr. Soros set himself up in a sort of catch-22 predicament? I mean, if he is successful at helping to "depose" President George W. Bush, wouldn't he be lending creedence to the Dr. Mahathir's idea that Jews really run the world?

Personally, I find Mr. Soros' funding of MoveOn.org to be sad and reprehensible. Buying more knitting needles for the Angry Left to blind themselves with is not helpful.

Yes, exactly. Soros loves the idea that he is powerful and important. Dr. Mahathir's idea that Jews (really, in Soros' mind, Soros) really run the world seems to very much appeal to Soros.