The Deficit

Paul Krugman is arguing that the Democrats should not spend political capital on reducing the deficit right now. (Full text at Brad DeLong).

To me, this kind of argument misses the point. I have no problem with the government borrowing money for important spending initiatives. But when the government is borrowing money, we need to look very closely at what the money is being spent on, to see how important it is. This money all has to be re-paid with interest, so it is especially important to spend it on something useful (fighting a world war, for example).

Given current wasteful government spending, though, I would argue that any money borrowed simply can't be said to be going to anything useful. Is there any doubt that billions of dollars are being wasted right now? Farm subsidies are just one example. Since the borrowed money is just going to a general fund, and the money received by the government through taxes and borrowing is fungible, the deficit spending effectively is being used for the wasteful projects.

I assume Krugman would agree that most, if not all, of our farm subsidies are bad policy. So, it seems to me that, in effect, Krugman is saying that the government should borrow money to subsidize big agricultural corporations.

I suppose his point is that it makes sense politically for the Democrats to spend money and not worry about the deficit. That's a fair point. However, it is a little depressing to hear this from someone like Krugman. It's somewhat expected for politicians to act this way. But when prominent economists lose their idealism, and give up good policy for practical policy, I get a little discouraged.

Debbie Schlussel's "War against Islam"

In a post titled "Barack Hussein Obama: Once a Muslim, Always A Muslim," Debbie Schlussel writes the following about Obama:

So, even if he identifies strongly as a Christian, and even if he despised the behavior of his father (as Obama said on Oprah); is a man who Muslims think is a Muslim, who feels some sort of psychological need to prove himself to his absent Muslim father, and who is now moving in the direction of his father's heritage, a man we want as President when we are fighting the war of our lives against Islam? Where will his loyalties be?

This is appalling in two related ways. First, she doesn't want Obama to be President because of his ties to Islam? That is absurd. Disqualifying certain religions from political office? How many people would agree with this? I had hoped not too many, but perhaps I was wrong.

Second, we are fighting against Islam? Come on now. At some point, somewhere, she must have met a muslim that she liked. Does she really believe we are fighting all of Islam? Islamic terrorists, sure. But not the whole religion.

Condi on the Possibility of a Black President

Condoleezza Rice on the possibility of a black president:

"Yes, I think a black person can be elected president," Rice said in an Associated Press interview Thursday.

...

She said the first successful black candidate will be "judged by all the things that Americans ultimately end up making their decision on: Do I agree with this person? Do I share this person's basic values? Am I comfortable that this person is going to make decisions when I'm not in the room that are very consequential?"

At the same time, she said, "We should not be naive. Race is still an issue in America. When a person walks into a room, race is evident. It's something that I think is going to be with us for a very, very long time."

I think she gets it exactly right. It's too bad she doesn't have the personality to pull it off herself. She's too much of a bureaucrat, in my opinion. She might make a great VP choice, though.

On a similar topic, it is being suggested that Obama will have a hard time getting African-Americans to vote for him. Hopefully Obama is smart enough to realize that he can't do anything more than be himself. Once politicians start changing in order to appeal to particular groups, they lose a lot of credibility.

Money MLB

Two thoughts about money and Major League Baseball.

First, it is being reported that:

Among the teams with the 10 highest averages, only San Francisco ($3.8 million) had a losing record (76-85). Among clubs with the 12 lowest averages, the only one with a winning record was Toronto (87-75).

Based on this, can there really be any doubt that unequal payrolls among teams undermines the competitive balance of baseball? On average, money buys wins. It's that simple. So, as long as money is not balanced roughly equally among the teams, there will be some teams with a much better chance to win than some other teams.

The second thought is, how do we fix this? Revenue sharing helps. But I think what would also be good is to eliminate some of the inefficiences in the current system. For instance, the Yankees and Mets have a huge advantage because they are in the New York market. There are two teams sharing a market that is far more than twice as big as many other markets. I say add one or two more New York teams to the mix (not to mention Boston and other cities). If New York could sustain three teams long ago, they should certainly be able to do it now. And if MLB won't let this happen (which presumably they won't), then somebody should start a competing league. Perhaps the USLB?

Just Say No to Mormons?

Jacob Weisberg writes that he will not be voting for Mitt Romney because Romney is a Mormon, and then tries to explain why this position is not religious bigotry. In essence, he says that it's OK to oppose Mormons (and Scientologists) because these religions are recent and have not moderated themselves, as other religions have. He mentions Christianity and Judaism as examples of the latter. (It's not clear how he would classify Islam). He does make clear that he would not vote for Christian and Jewish fanatics, but his position appears to be that virtually all Mormons are fanatics. He leaves open the possibility that Romney might be acceptable if he would distance himself from church doctrine.

This position strikes me as one of ignorance. Specifically, ignorance of Mormons (and Scientologists). He doesn't know any, but from what he has read they are quite crazy and radical, and he wants no part of them unless they affirmatively refute the extreme positions he has heard about.

Furthermore, this distinction between older, moderate religions and modern, extreme ones strikes me as ridiculous. It could be argued that the older religions are more fanatical because they have been carrying out the same sorts of rituals and maintaining the same beliefs for thousands of years.

Brr, It's Getting Warmer

Reuters reports:

2006 is set to be the world's sixth-warmest year since records began 150 years ago, the World Meteorological Organization said on Thursday, offering more evidence of a trend most scientists blame on greenhouse gases.

Another way to put it would be the following:

right now it seems that 2006 will become the coldest year among the most recent five years, and it will belong to the colder half of the years in the last decade.

More Trans Fat Bans

Massachusetts is now talking about banning trans fats. As someone who's looking to eat healthy, I'm not very impressed by this approach. Yes, it's nice to know that trans fats are being limited. But what I'd really like to see is a general labeling requirement so that I could tell what was in the food restaurants serve more generally. Trans fat isn't the only unhealthy component of food.

What I'd really, really like to see, though, is restaurants doing this on their own, to cater to health conscious customers. Whole Foods should open a restaurant chain.

Oh, Baby

From Greg Mankiw, the NY Times report that:

about 5,000 babies, of the 70,000 or so who would otherwise be born during the first week in January, may have their arrival dates accelerated partly for tax reasons.

When your tax regime influences people to induce labor, perhaps it's time re-think things.

Brownback for President?

The NY Times notes that Sam Brownback:

blocked the confirmation of a woman to the federal bench because she attended a same-sex commitment ceremony for the daughter of her long-time neighbors

Ugh. I can understand his general concern about an activist judiciary in the area of gay marriage, but this seems to go too far. The underlying problem is the undemocratic nature of the judiciary. I think we need to address that issue head on, rather than trying to deal with it in the context of specific issues like gay rights.

AEI on the Minimum Wage

A couple of AEI folks are critical of a proposed minimum wage increase:

Perhaps the proposed legislation for the upcoming 110th Congress should be called the "2007 Minority Youth Unemployment Act," or the "2007 Bonus for Middle-Class Suburban Teenagers Act." If the 110th Congress wishes to lend a hand to struggling single mothers, minorities and the poor, it should do something other than increasing the minimum wage.

I agree with their conclusions, although I think their rhetoric is a bit too much. It's a delicate and sensitive subject, and as an opponent of a minimum wage increase I worry about coming across as arrogant and out of touch.

More on Alcohol and Health

The latest in the moderate alcohol is good for you reporting:

Researchers examined data on 1,158 patients treated at a Toronto hospital for severe brain injury due to blunt trauma from 1988 and 2003.

Those with blood-alcohol levels up to 0.23 percent -- nearly three times the common legal limit of 0.08 percent -- were 24 percent more likely to survive their injuries than patients entering the hospital with no alcohol in their bloodstream, the study found.

...

The researchers suggested that alcohol at low or moderate levels in the bloodstream may protect against secondary brain injury that happens when traumatized brain cells remain starved of oxygen, exacerbating the damage inflicted by the original trauma.

I don't doubt their statistics showing a correlation. But with regard to whether causation exists, I'm skeptical. A big reason people don't drink alcohol is because of other ailments they may have. It wouldn't surprise me if the other ailments had increased the death risk in those with no alcohol in their system. Did the researchers take this into account? They should have -- but I don't know if they did.

The Trans-Fat Ban: Lesser of Two Evils?

Weighing in a bit late on New York's trans fat ban, I wonder if the restaurant industry was secretly happy with the outcome. It's very possible that what they really feared was a broad health labelling requirement for all restaurant food. Compared to such a requirement, a ban on trans fat is not that bad as it keeps hidden the relative unhealthiness of restaurant food. Actually, it makes them look good -- they can now proclaim they are trans fat free and thus healthy!

Frankly, I Don't Think Gingrich Has Much of a Chance

Newt Gingrich is thinking about running for Pres. in 2008, although he doesn't sound very certain about it. Here are my thoughts.

First off, his overuse of "frankly" drives me crazy. I swear he says it at least once every time I see him speak.

Second, he doesn't have a great personality for a Presidential run. He talks like a policy wonk. This is good for talking with other policy wonks and politicians, but not for appealing to the masses.

Third, he doesn't strike me as particularly smart. Not that he's dumb. Just that in comparison to his competition, I don't think he stands out in terms of his intelligence. This wouldn't be a big deal except that he seems to think he's an intellectual.

All that said, he's not that bad. I'd like to hear what he has to say about various social and economics issues. I don't feel like I have a good sense of where he stands.

The Future of Television

The FCC is apparently thinking about taking steps to promote competition in the cable TV industry:

FCC Chairman Kevin Martin, in speeches over the past few weeks, has said local franchise authorities at times "obstruct and in some cases completely derail" new attempts to bring video competition to an area.

His proposal is backed by Verizon Communications Inc. and AT&T Inc., which have poured billions of dollars into rewiring their old telecommunications networks so they can deliver television programming and other services.

I think there's definitely something to his concerns. But this has the feel of a debate that will be completely changed in 10 years or so. It's not hard to picture a time in the near future when people get all their video entertainment over the internet, either for free or through subscriptions. Thus, trying to promote competition by allowing additional companies to offer traditional cable TV may only matter in the very short term.

Searching Students

I don't understand the ACLU sometimes (OK, much of the time). Their ability to balance out different interests in society seems out of whack. In a case that happened the other day, during a fire drill at a middle school, an eighth-grade teacher had his MP3 player stolen. The obvious conclusion was that one of the students in the class going on at the time was the culprit, so they searched the students. Specifically, the search was carried out as follows:

Students stood by their desks and exposed their pockets and ankles. No one was touched during the search. Provenzano and Cooper also searched the backpacks.

To me, that seems like an approriate response. But the ACLU is up in arms, with a spokesman saying:

"If someone came forward and said, 'I saw an iPod in Jimmy's bag,' that would be reasonable suspicion. They could search that one student," Hensler said.

But a mass search is not legal unless an administrator can prove reasonable suspicion that each student broke a school rule or violated the law, he said.

It's ultimately up to a judge as to what is "reasonable" in these circumstances, but the school's actions seem reasonable to me.

Tom Friedman Goes Overboard

In a recent column, Tom Friedman praises the Chinese government's push for innovation, and notes that part of him said:

"Gosh, wouldn't it be nice to have a government that was so focused on innovation -- instead of one that is basically anti-science."

Come on, now. Isn't that a little much? Sure, there are a handful of issues on which the Bush administration wants to limit scientists, based on the view that certain scientific activities create ethical problems. But to say that they are "anti-science"? That's just silly. Bush talks about science all the time: fuel cells, cellulosic ethanol, space exploration, etc.

Krugman Goes After Some Straw Men

In his latest column, Paul Krugman criticizes the outsourcing of various government programs to private companies by the Bush administration, and complains:

And maybe, just maybe, the abject failure of this administration’s efforts to outsource essential functions to the private sector will diminish the antigovernment prejudice created by decades of right-wing propaganda.

That’s important, because the presumption that the private sector can do no wrong and the government can do nothing right prevents us from coming to grips with some of America’s biggest problems — in particular, our wildly dysfunctional health care system. More on that in future columns.

Wait a minute, there's a presumption that "the private sector can do no wrong and the government can do nothing right"? Has anyone ever said that? Where? Now, it is true that many people, myself included, would argue that on balance the private sector can do a better job of most things than can the government. But that's a very different proposition.

Alcohol and Health

Many studies in recent years purport to show that moderate alcohol consumption is beneficial to your health. Here's the latest:

Moderate drinking may lengthen your life, while too much may shorten it, researchers from Italy report. Their conclusion is based on pooled data from 34 large studies involving more than one million people and 94,000 deaths.

According to the data, drinking a moderate amount of alcohol -- up to four drinks per day in men and two drinks per day in women -- reduces the risk of death from any cause by roughly 18 percent, the team reports in the Archives of Internal Medicine.

No offense to the scientists involved, who I'm sure spent a great deal of time on this, but I'm not convinced. I have no doubt they found a correlation between moderate alcohol consumption and longer lives. But correlation is not causation, and causation is much more complicated. If people who don't drink alcohol are drinking soda instead, then sure, the results make sense. Wine is better than Coke. But I have a hard time believing that beer is better than water and juice.

It may be that the press has mis-reported the findings a bit. According to the abstract of the article:

Low levels of alcohol intake (1-2 drinks per day for women and 2-4 drinks per day for men) are inversely associated with total mortality in both men and women. Our findings, while confirming the hazards of excess drinking, indicate potential windows of alcohol intake that may confer a net beneficial effect of moderate drinking, at least in terms of survival.

They refer there to an association rather than causation.

Paring Back the Pork

According to the Washington Post:

Democratic leaders declared a temporary moratorium on special-interest provisions known as earmarks as they attempt to cope with a budget crisis left by the outgoing Republican-led 109th Congress.

That is certainly a welcome development. It's hard to believe this is going to be a long-term policy change, of course. It is also mentioned that:

The new chairmen, Rep. David R. Obey (Wis.) and Sen. Robert C. Byrd (W.Va.), said in a statement: "While the results will be far from ideal, this path provides the best way to dispose of the unfinished business quickly, and allow governors, state and local officials, and families to inally plan for the coming year with some knowledge of what the federal government is funding."

They also said they would place a moratorium on all earmarks until lobbying changes are enacted. Those special spending provisions included in the unfinished fiscal 2007 bills will be eligible for consideration next year, the chairmen said, subject to new standards.

So, pork will be back as soon as they fiddle with lobbying rules. But it does seem like the Democrats recognize the importance of this issue, and are trying to use it to their advantage, which is to everyone's benefit if they follow through.

Holocaust Deniers

Reuters reports on one of the participants in Iran's holocaust conference:

Among the participants was U.S. academic David Duke, a former Louisiana Republican Representative.

He's an "academic"??!! I can only assume that the Reuters reporter did not know who he was and simply used the information provided by the conference organizers.

When Bad People Do Good Things

The Washington Post has a surprising editorial regarding General Pinochet's death. They note that despite his horrible human rights record, he left the Chilean economy and political structure in great shape (Chile is currently among the best in Latin America in both categories). This is in stark contrast with Cuba, where Castro has been just as bad on human rights, but has left the economy in shambles and the government is still a dictatorship. They conclude:

The contrast between Cuba and Chile more than 30 years after Mr. Pinochet's coup is a reminder of a famous essay written by Jeane J. Kirkpatrick, the provocative and energetic scholar and U.S. ambassador to the United Nations who died Thursday. In "Dictatorships and Double Standards," a work that caught the eye of President Ronald Reagan, Ms. Kirkpatrick argued that right-wing dictators such as Mr. Pinochet were ultimately less malign than communist rulers, in part because their regimes were more likely to pave the way for liberal democracies. She, too, was vilified by the left. Yet by now it should be obvious: She was right.

I would have been surprised to see a publication like the Economist be so bold in praising Pinochet's impact. I never expected it from the Post!

Is Government Debt Good?

Greg Mankiw says he doesn't understand the following point made by a fellow economist:

Myth No. 5: Government debt is a burden on our grandchildren. There's no better way to get people worked up about something than to call on their sympathies for their beloved grandkids. The last thing that I want to do is to burden my own grandchildren with the sins of profligacy. But we should stop feeling guilty -- at least about government debt -- because we are in better shape than conventional wisdom suggests.

Theory and practice tell us that the optimal amount of public debt that maximizes the welfare of new generations of entrants into the workforce is two times gross national income, or GDP. ...

What's going on here? There are not enough productive assets -- tangible and intangible assets alike -- to meet the investment needs of our forthcoming retirees. The problem is that the rate of return on investment -- creating more productive assets -- decreases as the stock of these assets increases. An excessive stock of these productive assets leads to inefficiencies.

See the link for the full context -- that's the key part, though.

So, as I understand it, his point is that there will not be enough places for all the new retirees (i.e. baby boomers) to invest, and thus the rate of return will fall, creating "inefficiencies."

But as one of Greg's commenters notes, "Can't retirees dump savings abroad?"

More generally, it's not clear to me why he believes that we will be at a level where there is an excessive stock of productive assets. Perhaps he has, or plans to, demonstrate this empircally somewhere, which would be interesting to see.

ADDED: I see now that his main point seems to be that the debt is not actually a burden on our grandchildren. That may be the case -- but that doesn't necessarily mean it's good policy to have deficit spending.

Why Do People Love Obama?

The Christian Science Monitor explains:

So what's driving Obama-mania?

It isn't a single set of issues such as the war or the economy. Rather, the attraction seems to be a mix of Obama's own compelling personal narrative and many voters' desire for a less caustic brand of politics.

"It's the sense that you're in the presence of someone who is touched with the gift of grace," says Ross Baker, a political scientist at Rutgers University in New Brunswick, N.J. Obama, Illinois' junior senator, exemplifies the hope that there's some way to triumph over the intense polarization of American politics, he adds

That sounds right to me. I would just add that he seems smart, likeable, even-tempered and articulate. In short, in terms of personality, he's my favorite (possible) Presidential candidate so far. Now, whether that overcomes a variety of policy disagreements I'm sure I'll have with him is going to be interesting.

Holocaust Denial

Iran is holding a conference on holocaust denial. Sounds odious, obviously, but it raises a question I've often wondered about: What exactly are holocaust deniers denying? Do they deny that there were any concentration camps at all? Are they quibbling about the numbers who were killed? I suppose there is probably some variation. But I would like to pin it down a bit more, so I could better understand the people involved.

Resistance is Futile

A school in Scotland is making students use fountain pens:

In this age of cell phones, text messages and computer keyboards, one Scottish school has returned to basics. It's teaching youngsters the neglected art of writing with a fountain pen.

There is no clacking of keyboards in most classrooms at the Mary Erskine and Stewart's Melville Junior School, although there is a full range of facilities for computer lessons and technology isn't being ignored.

But the private school's principal believes the old-fashioned pens have helped boost the academic performance and self-esteem of his 1,200 pupils.

"The pens improve the quality of work because they force the children to take care, and better work improves self-esteem," principal Bryan Lewis said. "Proper handwriting is as relevant today as it ever has been."

I love the last bit: "Proper handwriting is as relevant today as it ever has been." How can anyone possibly believe that? It's very possible that in a couple generations, there will be very little handwriting at all. Everything will be by keyboard and voice recognition. Is this a bad thing? On balance, I don't see why it is. Unless, of course, we lose our technology somehow, and can no longer communicate! So, perhaps it's best not to forget hand-writing altogether. But foutain pens seem a bit much.

A Gallon of Overpriced Milk, Please

The Washington Post has an excellent piece on an Arizona milk producer treated unfairly by the federal government's regulatory regime for milk. Briefly, he was initally able to avoid the regime entirely by bottling milk from his own cows, thus allowing him to sell much more cheaply than his competitors who participated in the regime. Not surprisingly, his competitors didn't like this, and eventually succeeded in lobbying Congress to enact legislation forcing him to be part of the regime. It's a great illustration of how government can be used work on behalf of the powerful against the weak: Big producers win, while smaller producers and consumers lose.

He has has now brought suit to have the legislation declared unconstitutional as a bill of attainder. More background here and here.

How Can Politicians Be So Clueless?

It was painful reading about Joe Biden trying to ingratiate himself to some South Carolina Republicans by saying:

Delaware ... was a “slave state that fought beside the North. That’s only because we couldn’t figure out how to get to the South. There were a couple of states in the way.”

So, Biden was joking about how Delaware was just as pro-slavery as the South, and would have liked to fight with them during the Civil War. This is getting close to Trent Lott territory, here. Not quite there, but close

Tax Sniping

It's tax day at this blog today, with yet another post on taxes. Wesley Snipes is now being prosecuted for tax fraud. His defense is that he got bad advice from some tax professionals who have made absurd arguments as to why Americans don't owe any taxes for income earned domestically. It will be interesting to see what the evidence shows in terms of how much he knew.

Greg Mankiw on Taxes

Greg Mankiw is quickly becoming one of my favorite bloggers. In addition to the general support for a gas tax I noted earlier, he also writes in the same post:

The Pigou Club wants to move beyond the rhetorical syllogism, all too common in Republican circles, that

1. Taxes are bad.
2. Pigovian taxes are taxes.
3. Pigovian taxes are bad.

Such a simplistic mindset makes it impossible for people to discuss in a responsible way the relative merits of different tax systems. Instead, we Pigovians acknowledge:

1. There will be some government spending.
2. This spending will be funded with taxes.
3. Government should use the least bad taxes it has available.

It's kind of a shame that this even needs to be said, but unfortunately I think it does.

More Meddling

Italy's government and fashion industry are going to work on rules to prohibit the use of models that are too thin. So now governments are cracking down on fatness and thinness. Where is this all going? Is this trend going to be limited to extreme behavior, or are we going to see a "no jumping on the bed" rule some day?