November 30, 2007

CBS is hiring!

Are you looking for a job as an environmental reporter? Great news. CBS is hiring. Here is the job description:


CBS is expanding its coverage of the environment. We seek a talented reporter/host for Internet video broadcast. We are looking for smart, creative, hard working up and comers, who can bring great energy, creativity and a dash of humor to our coverage. A deep interest in the environment and sustainability issues will serve you well.

You are wicked smart, funny, irreverent and hip, oozing enthusiasm and creative energy. This position requires strong people, reporting, story telling and writing skills. Managing tight deadlines should be second nature. Knowledge of the enviro beat is a big plus, but not a requirement.

Responsibilities include reporting and hosting two to three news packages per week plus daily writing for our blog. You should be comfortable using a video camera and the Internet. Be prepared to see America. Heavy domestic travel.


I think that speaks for itself.

Environment Posted by Harrison Bergeron at 7:19 PM | What do you think? [0]

Colorado Politics Prediction Market

A good friend has started a prediction market for all Colorado House races and Allard's Senate seat.



You can sign up at inklingmarkets.com to play on existing markets or to create a new (say, Pennsylvania) market.

But jk thinks:

Overconfident? I bought Bob Schaffer big as my first trade; the +16% you see is mine. This is a trade, I fear Udall will win, but this should tighten up. I'm guessing I could get out at Schaffer 40 before the election.

Posted by: jk at November 30, 2007 4:27 PM
But AlexC thinks:

I'll have to check that out for Pa... thanks.

Posted by: AlexC at November 30, 2007 5:05 PM

Leopard Is Vista

We haven't had an OS war for a while.

I have been very disturbed by the Mac commercials slamming Vista. Macs are verboten where I work, but enforcement is rare. As a result, I have seen a steady stream of emails detailing serious security flaws and have heard a lot of internal complaints about Leopard.

Mostly, the commercials just make me nervous because I believe that all software is going to break, and it seems in poor taste to imply in a commercial that yours won't. If Toyota claimed their cars never broke down, people would say "yeah, right" even though Toyotas are known for reliability.

PC Magazine's Oliver Rist seems less than convinced that the new MacOS is perfect:

I'm not sure what ticks me off more about Leoptard (I can't take credit for that nickname—some Brit coined it): the fact that so many of the semi-important changes don't work, the fact that Apple turned a stable OS into a crash-happy glitz fest, or that the annoying, scruffy Live Free or Die Hard actor infecting my TV (and our Web site, by the way) is pretending that Leopard is better than Vista. It's not better than Vista. Leopard is Vista. And Tiger is better than both of them!

I've had decent results with my new Vista box, but have to admit that a few drivers aren't available. If I bought a new box tomorrow, I'd ask for XP. I assume Apple will fix Leopard (even though iTunes still sucks) but the company ought to have a little more superstition than to run that commercial.

But AlexC thinks:

I've seen that Vista commercial... in my month long (from scratch install) experience with Leopard has been (with one exception) very good.

Safari (the web browser) hasn't crashed on the Evening Bulletin's website (something it would do almost everytime).

Spotlight, the "find" feature, has never run as fast as it does now.

I finally got a serial ata external HD enclosure for my old HD, and am looking forward to doing backups in a simpler, simpler way.

I could do without "stacks" and "quick look" doesn't really amaze me.

I haven't used Spaces, though I have had trouble with their *brand new* implementation of X11. They've moved from Xfree86 to an X.org foundation, which makes it "different."

Posted by: AlexC at November 30, 2007 5:11 PM

All ThreeSourcers Will Ace This

A Quick Quiz with some interesting facts at the end.



Hat-tip: Gregory Mankiw


The End of Hurricane Hugo?

The American Magazine is a bastion of optimism (its Editor infamously wrote the book "Dow 36,000.") I'm fine with optimism; as Larry Kudlow would say, I've been optimistic for 25 years and it has served me well. Roger Noriega writes today of The End of Hurricane Hugo

In recent days, more and more Venezuelans have come to realize that the sweeping constitutional reforms championed by President Hugo Chávez represent a mortal threat to democracy. As the December 2nd referendum approaches, Venezuelans are contemplating the downside of dozens of radical changes that were approved by Chávez’s rubberstamp national assembly.

I'm not clear that the election will be fair enough or that his Hugoness will honor the result. But optimism is great.

I'll plug the magazine once more. Even if you don't subscribe, they have just started a daily e-mail -- I'd recommend signing up.


What Ails Fred, What Alis the GOP

Kim Strassel has a smart column today (not unusual). She further develops the questions about Fred Thompson's campaign. I linked to a Mark Steyn Corner post yesterday asking why the man with the ideas has no campaign. Ms. Strassel relates it to his plan for a "new campaign" which ignores the old rules.

While it isn't clear who set the "rules" for this manic election, they're set. Voters may only pay attention at the end, but having an infrastructure to make sure those voters hear you in the final months is the work of years. By sitting back, Mr. Thompson allowed his rivals to scoop up the well-connected policy wonks, committed state activists and aggressive fund-raisers that oil a campaign. His own refusal to "do" the media and public-event circus has muzzled his message, as the failure of his tax-plan announcement shows.

Think back to 1999, when Gov. George W. Bush -- who knew something about campaigns -- unveiled his own tax outline. His people had a dozen brainy conservative economists at the ready to blitz the media. Outside business groups stood by with glowing press releases. Average families were found to serve as real-life examples of how the tax cut would help. The campaign staff fanned out and joined local activists to manage the grass roots. The candidate himself devoted endless time to flogging his idea in public appearances and to every press person and editorial board around.

None of this happened in the wake of Mr. Thompson's Fox announcement. The campaign simply didn't have the stuff to pull it off. Worse, its own leader refused to do what is expected. A look at Mr. Thompson's schedule revealed not a single public appearance for three days after the release, right up to Wednesday's highly uninformative CNN debate.


Strassel takes it one more step to show that the loss is not only Thompson's, but it has shut ideas out of the GOP Primary campaign:
The GOP went into this race thinking itself the likely loser, and that fear has defined the primary. The candidates aren't vying to lead a wayward party out of malaise, or energize voters with new ideas. They're instead trying to be the answer to a question: Who can beat her?

That's made the race about biography, in particular on issues like national security and immigration, where Republicans hope a Hillary Clinton will be weak. Mr. Giuliani's campaign is about his past as a New York tough guy who can face down terrorists. Mr. Romney's, his past as an MBA who can manage our border. Mr. McCain's, his past as a Vietnam vet who recognized the problems in Iraq. There's no future in this present, and Mr. Thompson's lackluster delivery of his own agenda has allowed the front-runners to continue avoiding the big debates.


That's some harsh medicine, but she is 100% right. I love debates, I love politics, but the GOP debates have been the biggest yawn fests. There are no ideas. Gov. Huckabee has his Fair Tax, Senator Thompson says "I have a plan" (shades of another Tennessee Senator who ran?) but Strassel is right that there is no discussion of ideas.


November 29, 2007

The Broncos Will Win the Super Bowl

The other AFC teams. The Patriots and the Colts. Are losers. They don't have talent and their coaches don't understand the game. Coach Michael Shanahan is a winner.

The Broncos will win the AFC. The NFC Teams that you hear so much talk about: the Cowboys, and the Packers, even the Philadelphia Eagles -- they don't have what it takes to win the Championship. The Broncos do. The Broncos will be the next NFL Champions.

In other news, Lileks brings us this dedicated Ron Paul Supporter:




Sorry, Rep. Paul fans. One more debate and this guy just does not do it for me. I am intrigued by Insty's suggestion that if he can get traction perhaps libertarian ideas are more popular than expected.

RON PAUL: He's just terrible, even when -- which is often, once he's off the subject of the war -- I agree with him. His voice is too high, he can't remember who the Kurds are, and he often comes off like a crazy old man in a bus station.

But that's good news, in a way. Paul's doing better than anyone expected. It's abundantly clear that he's not doing it on charisma and rhetorical skill. Which means that libertarian ideas are actually appealing, since Ron Paul isn't. Paul's flaws as a vessel for those ideas prove the ideas' appeal. If they sell with him as the pitchman, they must be really resonating. I suspect Paul himself would agree with this analysis. Er, except maybe the bus station part.

Posted by jk at 4:02 PM | What do you think? [0]

Fred's Sails In The Sunset

Mark Steyn not only crafts that superb headline, he also succinctly captures my views on Fred!

I wrote about the Republican and Democrat presidential candidates last weekend, and got a lot of mail from Fredheads and others demanding to know why I hadn't mentioned Senator Thompson. The reason is I've no handle on what it is he thinks he's doing. Every time I see a Fred policy plan, he seems to have by far the best ideas, and the necessary zeal for reform, on taxes, Social Security and much else. But every time you see him in these TV debates he has the listless air of a bored grandparent at a dreary school play.

And seeing him live in person isn't that easy to do. I get campaign e-mails about New Hampshire appearances by John McCain and Mrs Clinton and lots of others. Mitt's guys clogged up my in-box with so many urgent releases in the hours after last night's debate that it's seriously impacting my ability to order generic Viagra and e-mail my bank details to Nigerian dictators' wives. But nary a word from Fred.

What's the strategy here? Why does he have great ideas but no campaign?


Senator Thompson had a superb interview on Kudlow & Co. Where were the YouTube clips? I get fund raising mail from his campaign, but where's the Fred! who responded to Michael Moore? Steyn is right about the plans. Thompson's Social Security and tax proposals are good polity models, but as I told my Fredhead Brother-in-law, I don't see the intensity that will be required to beat the Clinton machine.

Posted by jk at 12:14 PM | What do you think? [0]

Huckabee Wins Debate

I have not seen or read any punditry on last night's GOP debate. I have a superstition that requires I post my thoughts first, lest my pliant and malleable intentions are swayed.


  • I liked the YouTube format. It did provide tougher questions and it did give the evil folks at CNN opportunities to dive into areas where pro journalists might not. But hard is good.

  • My candidate, Mayor Giuliani, did not have a great night. I was disappointed that he agreed with Gov. Romney that farm subsidies were important "for the food supply" and "to level the field with more-heavily-subsidized Europeans." Ouch. He was okay on the other answers but I'm tired of NYC crime stats.

  • I'm also tired of the childish sniping. Romney struck a low blow with a reference to Bernard Kerik, and while the "Sanctuary Mansion" was a good laugh line, Romney has the high ground on that. Reagan’s 11th, gentlemen, Reagan's 11th...

  • Immigration will ruin this party -- did I mention that? The immigration questions seethed with hostility, the answers were not much better.

  • Lastly, yeah, Gov. Huckabee was affable, humorous, and statesmanlike. I quickly joined Harrison Bergeron yesterday in saying that if the GOP goes Huckabee's direction, I won't follow. (I would not abandon the party if he is a running mate). But, you have to appreciate those who can play this game, and the Governor was good. Scary good.


UPDATE: Always post first: planted questions? No!

UPDATE II: American Spectator wonders why Giuliani bothered to pander to the Farm Lobby if he's written off Iowa:

Romney's response was at least consistent with what we know about him, and has an electoral logic to it. He has a history of saying whatever is most politically convenient at the time, and winning Iowa is a central part of his strategy.

For Giuliani, however, it doesn't add up. One of his greatest appeals is that he is a blunt, no-nonsense guy who has the guts to say and do what others don't. When it was suggested that New York City raise taxes after 9/11, Giuliani responded that it would be "a dumb, stupid, idiotic and moronic thing to do." Had he said the same thing about farm subsidies last night, he would have become an instant hero among fiscal conservatives. But aside from that, it would have made political sense. Unlike Romney, winning Iowa is not central to Giuliani's strategy, so he doesn't need to pander for votes there. Much more important for him is winning New Hampshire. Had he come out firmly against farm subsidies last night, he would have had a great issue to use against Romney in the more libertarian Granite State.


But Perry Eidelbus thinks:

The reason is simple, and I would have thought quite obvious to anyone writing for the AS. Giuliani cares because Iowans' votes can be very important in the general election. If he had come out against subsidies, how will he look when Hillary starts running commercials to exploit that? "Giuliani opposes farm subsidies that will keep America agriculturally strong. Vote Hillary for a food-strong America!"

There are also plenty of Americans outside the Great Plains who are dumb, stupid, idiotic and moronic enough to believe that farm subsidies are necessary. I blogged a long time ago about running into some goddamn idiot Laroucher who claimed that the U.S. imports "most of our food." I flatly told him it's not true, but he's so willfully blind that he would only say, "Goodbye, sir."

I didn't watch the debate. I haven't watched any of them yet. My fiancee is far more worthy of my time than any of those lying panderers.

Posted by: Perry Eidelbus at November 30, 2007 11:27 AM
But hb thinks:

I thought McCain won -- but I generally do. McCain always seems genuine, which cannot be said with all the candidates.

Rudy appears desperate. Say what you want about Mitt Romney and cheap shots, but he won the exchange and looked much more comfortable during their opening exchange.

Full disclosure: I must admit that when Huckabee said he would get rid of the IRS, it did bring a smile to my face.

If I had to guess today, I would say that Romney will get the nomination.

Posted by: hb at November 30, 2007 3:17 PM
But jk thinks:

Valid points all. But I would expect a Republican to at least express some concern about the abuses of farm subsidies. Either could have said "we want to protect our food supply and our farmers, but we need to make sure that we're not giving millions to big corporations and Manhattan land barons." Not as good as "let's abolish all subsidies and closed the USDA" but I'd have taken it.

Posted by: jk at November 30, 2007 3:56 PM
But jk thinks:

hb is perhaps right on Romney, I am still going for the social conservative split between Govs. Romney and Huckabee launching Hizonner to the nomination.

Posted by: jk at November 30, 2007 4:43 PM

November 28, 2007

Kind Words for a Bush Appointee

Gregory Mankiw says choosing Keith Hennessey to replace Al Hubbard as the head of the National Economic Council is "an excellent choice."


Thought Jocks

Super Guest Editorial in the Wall Street Journal today (Rupert, tear down this wall!)

Monday: After a long day at his New York City private school, Ben, 16, heads to my creative writing lab to work on his heartfelt memoir about his parents' bitter divorce. Tuesday: Alison, 15, rushes from her elite private school in the Bronx to work on her short screenplay about a gifted, mean and eccentric boy. Lily, 13, pops in whenever she can to polish her hilarious short story narrated by an insomniac owl.

Ben, Alison and Lily, along with another few dozen who attend my afterschool writing program, also attend top-notch New York private schools that cost upwards of $25,000 a year.


Sadly, their expensive private schools are so enamored with the self-esteem culture, there is no academic competition. These gifted students go to tutors for a chance to compete.
But some, and ironically those who attend some of the most desirable schools in the region, feel the reverberations in deeper, more painful ways. "Two years after my son left a school that prohibited him from entering a national math competition," says one mother, "he still writes angry essays about why the jocks in his former school were allowed to compete throughout the city while he wasn't allowed to win the same honors for his gifts." Sam, her son, felt uncool in the eyes of his peers, and undervalued (and sometimes even resented) by the administration.

I have pretty happy memories of being the first to solve a math problem (regular readers know I never won a spelling bee) -- and I have no doubt that this offset my inferior kickball skills. I value competition in all things. I think Ms. Wallace-Segall is right that we devalue thought by not supporting the opportunity to celebrate it.



Mike Taxabee

Just a quick rant:

According the latest Rasmussen poll, Mike Huckabee now leads the field in Iowa.

For better or for worse, I am a registered Republican and as I see it, this election is a watershed moment in the history of the party. Mike Huckabee represents a direction I will not follow and the support that he has received from not only prospective voters, but also so-called conservative pundits is a great source of frustration. The Republican party has always been a source of frustration (as is any given party), but increasingly conservatives are becoming a source of frustration.

Huckabee will not win the presidential nomination, but should he receive the vice presidential nomination, I will not vote for the Republican candidate. Period.

The party needs to return to its days of limited government and lower taxes, not kowtow to social conservatives...

2008 Race Posted by Harrison Bergeron at 1:23 PM | What do you think? [3]
But AlexC thinks:

Dick Morris disagrees.

Most impressively, when he had to pass an income tax surcharge amid the drop in revenues after Sept. 11, 2001, he repealed it three years later when he didn't need it any longer.

He raised the sales tax one cent in 11 years and did that only after the courts ordered him to do so. (He also got voter approval for a one-eighth-of-one-cent hike for parks and recreation.)
He wants to repeal the income tax, abolish the IRS and institute a "fair tax" based on consumption, and opposes any tax increase for Social Security.
Of course Morris is a Democrat, so maybe he's trying to tank the GOP. Posted by: AlexC at November 28, 2007 2:10 PM
But jk thinks:

Amen, hb. I was asked early on if I could imagine a pairing where I would vote Democratic. I thought of Gov. Richardson vs. Rep. Tancredo or Rep. Hunter. Then Richardson went so far to the left, I couldn't see that. Now my pair is Sen. Obama vs. Gov. Huckabee; I think I might pull the D lever if that's the choice.

However, I am still optimistic. Huckabee has done an impressive job in Iowa, I will not take that away. But I do not think he has the money or organization to play in the bigger states.

Being a Giuliani supporter, I look for Huckabee to take some support away from Gov. Romney who is far down my list and is far more of a threat to win. Huckabee's numbers come out of Romney's.

Posted by: jk at November 28, 2007 2:10 PM
But jk thinks:

AC, I have heard both sides on a lot of the taxes, but when a Republican makes enemies of both the Club for Growth and the Cato Institute, something is wrong.

Governor Huckabee, whatever his record, talks too much of using government to help the middle class. I'd probably prefer his plans to Senator Clinton's but worry that they share the same belief in government.

Posted by: jk at November 28, 2007 2:14 PM

Cyber Monday Sets Record

WSJ:

Consumers responded eagerly to online retailers' promotions for "Cyber Monday," setting a record for single-day online retail sales.

Online sales for the Monday after Thanksgiving rose 21% to $733 million, according to comScore Inc., a Reston, Va., market research company that tracks Internet sales and traffic.

Cyber Monday, a phrase coined by the National Retail Federation's Shop.org online-retail unit in 2005, is the day consumers return to their high-speed computer connections after the Thanksgiving holiday and start shopping on the Web, often from work. The day brings the first jump in online holiday spending, and merchants offer promotions around it.


Or, as the AP would say:
Per-person Spending Plunges 12%

Saddled with ballooning subprime mortgage concerns, with spirits dampened by the ongoing war in Iraq (see related story on Abu Ghraib), consumers seemed to find temporary respite in online shopping...

But Perry Eidelbus thinks:

Or according to the article we both saw, retailers are so desperate that they were slashing prices to lure any customers they could.

Posted by: Perry Eidelbus at November 28, 2007 2:23 PM

November 27, 2007

Pharma Sector Bad, Journalists Good.

"If you can't get a drug on the market with that kind of data, we should stop developing drugs."
So says a Duke University Cardiologist about Eli Lilly's TRITON trial. He is quoted in a guest editorial in the WSJ from Eli Lilly CEO Sidney Taurel. I have suggested that people who choose to invest in or directly try to the improve human life through technology face opposition from politicians, trial lawyers, luddites, and a burdensome government approvals process.

Taurel adds journalists to that list. When Lilly stopped a trial to ensure patient safety, the press smelled blood in the water:

When it comes to describing the benefits and risks of prescription drugs, the hyper-competitive, around-the-clock media is rarely at its best. Call the following a case study in the challenge of doing right by doctors and patients -- in spite of the need to feed the media beast with copy.

It's a sad story that follows. Six billion in market capitalization (That equals six million little plastic bracelets, folks).and loss of investor confidence in a promising new compound.

But TrekMedic251 thinks:

My friend's wife is a doctor who works for a big Pharma. As we watch the Eagles flail helplessly across the field, she spends time reading the reports that come back from clinical trials (she's involved in patient safety). For people with MDs and PhDs, they can sometimes be as dumb as dirt when it comes to writing a detailed report.

It amazes me how much time and energy is wasted having to ask over and again for clarification about one paragraph in a 10-page report!

Posted by: TrekMedic251 at November 27, 2007 10:37 PM

Don't Click

If you read this Instapundit Post, quantum theory dictates that the dark energy stabilization clock is reset, threatening the stability of space and time.

You're on your own recognizance...

Posted by jk at 6:40 PM | What do you think? [0]

A Really Inconvenient Truth

You would think the inventor of the internet would keep on up security.

A blog set up to promote former U.S. Vice President Al Gore's film, "An Inconvenient Truth," has been hacked and is hosting links to Web sites hawking online pharmaceuticals.

The links appear to have been created as part of a scheme to boost the Web traffic for sites that promote the drugs, security experts said Monday. They contain titles such as "Xanax On Line," "Viagra," and "Buy Valium Online."

Cyber scammers have been using this technique for months now, packing hacked Web sites with links to their products in hopes of bumping up their rankings on search engines such as Google and Ask.com. Another similar tactic, known as "comment spam," involves flooding the comment sections of Web sites with these types of links.

But jk thinks:

Cursed Comment Spammers! Even VP Gore does not deserve those slime!

People often ask why they have to type in the stupid password to post comments, it is to beat those execrable cretins. "Months," PCWorld? It has sadly been around a lot longer that that.

Posted by: jk at November 27, 2007 6:50 PM
But TrekMedic251 thinks:

It would REALLY be funny if they ran the old "Bob Dole knows about ED" ads for Viagra on the site!

Posted by: TrekMedic251 at November 27, 2007 10:43 PM

Mississippi Christmas

Brendan Minter in the Political Diary says "Christmas Comes Early in Mississippi"

The scuttlebutt is that Trent Lott's departure will make it even more difficult for Republicans to pick up seats in next year's elections. Mr. Lott is the sixth Senate Republican to announce his retirement, meaning the GOP now will have to defend a total of 23 Senate seats next year, while Democrats will have to defend just 12. Not only is his departure a sign of insider skepticism that Republicans will be able to recapture control of the Senate anytime soon. When it comes to legislating, Republicans will also be without one of their more effective politicians in rounding up votes.

But there's ample reason for conservatives to view Mr. Lott's retirement as an early Christmas present. Though a strong supporter of tax cuts and the military, he also frequently behaved as a typical Congressional pork barreler during his the 34-year career. Just this month, he voted with 78 other senators to override a presidential veto of a $23 billion water-projects bill loaded up with 900 pork barrel projects. Mr. Lott, who presumably knew he didn't have to worry about reelection, still couldn't resist the urge to shovel money back home to make his contributors and lobbyist friends grateful.

Mr. Lott has also been a serious hindrance to conservatives in the crucial battle for tort reform. He's the brother-in-law of tort lawyer extraordinaire Dickie Scruggs, whom he joined after Hurricane Katrina in suing insurance companies for not paying off claims that were explicitly not covered in the insurance policies that Mr. Lott and other homeowners bought. Nor did he serve the conservative cause well with his careless remarks five years ago in praise of Strom Thurmond's 1948 presidential run, on a segregationist platform.

True to custom, President Bush nonetheless lauded the retiring senator for his services to Mississippi, while House Minority Whip Roy Blunt (another wishy-washy conservative) praised his friend for teaching him the tricks of the trade. Even insurance lobbyists wished the senator happy years ahead. In truth, though Mr. Lott is only 66, his departure means one fewer Republican remnant hanging in the way of building the party's future. Principled conservatives will have one fewer incumbent to apologize for. There's also little chance Democrats will capture Mr. Lott's seat in 2008, so, on the whole, his departure is a reason for conservative satisfaction.


One less incumbent to apologize for. Amen, Brother Brendan! Now when they put Senator Ted Stevens in jail, I will again be a proud Republican.

Posted by jk at 1:45 PM | What do you think? [0]

One Star for Mister Krugman

Gregory Mankiw links to an excellent Amazon Review of Paul Krugman's "The Conscience of a Liberal."

Krugman's vision for the future has three key premises, all wrong.

First, he believes progressives can win on a platform of redistributing from the rich. However, no one cares about inequality. People care about injustice, unfairness, poverty, sexual predators, family values, gay marriage, terrorism, and many other problems of everyday life. People don't care about Gini distributions and other abstractions. Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A "soak the rich" policy simply cannot work to the advantage of the middle classes.

Second, Krugman would strengthen the labor unions, which he credits for their egalitarian effects. However, unions were strong only when industry was highly non-competitive in such areas as automobiles and steel. The oligopolistic character of mid-twentieth century industry, with a few countries in the lead, made fighting over the excess profits highly rewarding. With globalization, there are no excess profits to be fought over. Thus, it is not surprising that most successful unions in the USA are public service, not private (e.g., teachers, government employees). There is no future in unionism, period.

Third, Krugman believes that liberalism can be restored to its 1950's health without the need for any new policies. However, 1950's liberalism was based on southern white racism and solid support from the unions, neither of which exists any more. There is no future in pure redistributional policies in the USA for this reason.


There are quite a few things in the review I disagree with, but "The Enemy of Krugman is my Friend." And the separation of injustice and inequality is brilliant.

Posted by jk at 1:10 PM | What do you think? [3]
But Perry Eidelbus thinks:

His second and third points are good. His first is somewhat off. It sounds almost Eidelbusian when he talks about the futility of soaking the rich, but Mankiw doesn't understand the old Bastiat lesson: "To save is to spend." Ultimately *everything* is spent. If you save money by buying stock or land, the recipient of the money will spend it, or he'll save it and transmit it to someone who will spend it. The last one may take many steps, but it will eventually happen. Thus in the end, what matters isn't the ratio between saving and investment, but total economic output.

"Soaking the rich" doesn't work because it means *government* will spend the money that "the rich" would have either saved or spent. They'd have saved it and eventually provided money that the rest of us borrowed for mortgages and auto loans, or they'd have spent it on goods and services that the rest of us provide. Either way, it means jobs for the rest of us. Most importantly, supply-siders have been vindicated by major tax cuts that spurred revenues, because when "the rich" don't have to pay as much in taxes, they want to produce more.

Besides, a free market will determine, all by itself with no need for government, the proper ratio between savings and investment. The key is to let interest rates adjust on their own. If there isn't enough being saved, then investors will offer higher returns, unless there's a central bank willing to undercut them. If there's too much being saved, the returns will be too low to compete with the satisfaction of consumption spending.

Posted by: Perry Eidelbus at November 28, 2007 3:02 PM
But jk thinks:

First, I should clarify that this not Perfesser Mankiw, just a hat-tip to his blog. Mankiw liked the differentiation between injustice and inequality as I did.

Sadly, the whole review includes an insult of "Robber Barons" and this:

Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment.

Posted by: jk at November 28, 2007 4:54 PM
But Perry Eidelbus thinks:

Ah, I didn't follow the link. That paragraph you quoted is the old liberal fallacy: if you don't want government to do it, you must not want it at all.

Posted by: Perry Eidelbus at November 29, 2007 10:43 AM

The Twelfth Imam

Osama Bin-Laden had it all wrong. Why convert the Infidel with the sword?

The 7th Century is over and the Great Satan is now for sale:

NEW YORK - Wall Street rebounded sharply Tuesday after the Abu Dhabi Investment Authority said it will invest $7.5 billion in Citigroup Inc. — a vote of confidence for the nation's largest bank, which has suffered severe losses amid the ongoing crisis in the mortgage market. The Dow Jones industrials rose 150 points.

Don't think I have lost my free-trader instincts. I do not seriously mean to compare Bin-Laden religious hooliganism with a legitimate business trade (especially one that sent the DJIA up 150 points!) At the same time, I'd suggest that the Muslims of the world embrace modernity (as all of my Muslim friends have) and engage people with ideas and trade.

UPDATE: I removed a line with which I was not comfortable, celebrating Persian and Arab successes in innovation and trade. It was complimentary but I don't want to get into ethnic stereotyping.

But Perry Eidelbus thinks:

Well, if the turban fits, right? :)

Arabs were among the greatest traders, which is one of their great lost legacies. Sinbad the Sailor wasn't an adventurer first; his seven voyages weren't pleasure cruises.

As I pointed out to someone yesterday, the dollars come home to roost. Arabs gain nothing by sitting on the cash they receive by selling us oil. And how wonderful the U.S. economy might be that even a troubled company like Citi (if you believe the news hype) can draw that kind of investment.

Posted by: Perry Eidelbus at November 28, 2007 3:41 PM

November 26, 2007

Obama Does It Again

Another classic comment from Obama regarding Hillary's "experience":


"I think the fact of the matter is that Sen. Clinton is claiming basically the entire eight years of the Clinton presidency as her own, except for the stuff that didn't work out, in which case she says she has nothing to do with it," Obama said, and added, referring to his relationship with his wife, Michelle, "There is no doubt that Bill Clinton had faith in her and consulted with her on issues, in the same way that I would consult with Michelle, if there were issues," Obama said. "On the other hand, I don't think Michelle would claim that she is the best qualified person to be a United States Senator by virtue of me talking to her on occasion about the work I've done."

2008 Race Posted by Harrison Bergeron at 1:55 PM | What do you think? [0]

With Republican's Like These...

That should probably be a category -- or a whole new blog: with Republicans like these, who needs Democrats?

I wrote about Michael Powell in May of 2003:

Chairman Powell is Colin Powell’s son. As much as I respect Dad, Michael’s policy and beliefs comport better with mine, and he clearly is the better for spending fewer years with the striped-pants crowd at the State Department. He is pushing to bring FCC Regulations into the 21st Century. Regulations on ownership that were crafted when America got its news from Eric Sevareid can be relaxed now that many get news from Andrew Sullivan. Chairman Powell understands the effect of cable TV and Internet information sources and he believes in the free market enough to fight for a more modern approach.

Come home, Michael, we need you. Today, the WSJ Ed Page takes a few whacks at his successor, Kevin Martin (paid link until Rupert gets the keys...):
At a meeting scheduled for tomorrow, Chairman Martin plans to push a slew of new regulations on cable operators. Among other things, he wants to force cable companies to reduce, by as much as 75%, the already regulated rates they charge to lease channels to programmers. He also wants to require cable operators to settle carriage disputes, like the current one involving the NFL Network, through an arbitration system set up by the FCC. Apparently Mr. Martin, a Republican appointee to the agency no less, has lost faith in the free market's ability to handle commercial disputes. Either that, or he has some personal animus against cable.

Mr. Martin says more regulation is needed because monopolistic players are dominating the cable industry. But his premise doesn't remotely square with reality. Comcast, the nation's largest cable provider, recently reported a drop in subscriptions. Cable share prices generally are getting hammered, trading near 52-week lows. According to a report last week in Broadcasting & Cable, since Comcast's last earnings report its stock is down 17%; Time Warner is down 21%; Cablevision is down 16.5%; and Charter Communication is off 47%.
[...]
To justify his meddling, Mr. Martin describes a marketplace that doesn't exist. He pretends there's no DirecTV and EchoStar option. He pretends that Verizon and AT&T's video offerings pose no threat to Comcast and Time Warner. But if the FCC chairman is most concerned about costs, the goal should be more competition via different platforms. In other words, he should want current trends to continue. His odd and untimely proposals are more likely to retard them.

Some people still wonder why so many businesses donate to Democrats. Some of it is explained by rent-seeking and staying close to power -- but how can you ask business to donate to the GOP when their Cabinet Chairs think like Mr. Martin?

UPDATE: Never give up hope. The vote may be in trouble:

WSJ
WASHINGTON -- A vote Tuesday on a proposal that could lead to stricter regulation of the cable industry was in jeopardy Monday, as internal squabbling at the Federal Communications Commission and outside pressure from Congress and the White House threatened to delay, if not completely derail, the plan.

But Perry Eidelbus thinks:

Should the federal government have prevented Apple from releasing the iPod until there were enough competitors to make a "market"?

Actually, only one seller is required to make a market. It's unadulterated bullshit that, as the interventionists claim, "markets require competition." Even if there is only one seller of a good or service, consumers always have a choice: they can choose not to buy.

The only reason cable companies are "monopolistic" is because local governments give them the monopolies. Cablevision is the only cable company that Westchester County permits to operate, even though RCN would be more than happy to get my business (and I'd be more than happy to give it to them). Cablevision's service is atrocious enough, but I can't imagine how much worse it would be without satellite competitors.

I stick with Cablevision for its cable modem service, but even then it's recently given me so many problems that I'm about to get Verizon's FIOS. And there would be many, many more people offering high-speed connections of all types, if only government would stop sodomizing the market.

Posted by: Perry Eidelbus at November 27, 2007 2:44 PM
But jk thinks:

That's the best thing about government intervention: when you ruin the market with regulation, you can claim the market doesn't work and regulate further.

It's one thing when Rep Barney Franks tries to over regulate the mortgage industry at the start of a housing slump, his constituents expect that. Seeing a Bush appointee go this far is disheartening.

After I wrote that essay that lauded Michael Powell, he showed a regulatory streak on language and "wardrobe malfunctions" that I didn't cheer, but it was at least in character.

Posted by: jk at November 27, 2007 3:12 PM

November 25, 2007

MIT

The good folks at MIT dreamed up this voice activated blender. Sadly, there are no plans to release a commercial version.


Hat-tip: Pillage Idiot

But Perry Eidelbus thinks:

Voice-activated blender? Bill Clinton already has one: Shrillary.

Posted by: Perry Eidelbus at November 28, 2007 3:44 PM

The Fed is Defended

Mirabile dictu -- by Milton Friedman.


Clinton Would Boost Funding

HOLD THE PRESSES! The Junior Senator from New York has finally found something she thinks the government should spend money on: Autism.

"Driven by their love and devotion, mothers and fathers across the country have raised awareness, demanded funding, and opened our eyes to the needs of so many children," she told a crowd of hundreds gathered at the Jesse E. Marshall Boys Club of Sioux City. "It's up to us to reclaim the future for our children, and ensure that every child can live up to his or her God-given potential."

Seven hundred million does not sound like that much. I'd rather she smoothed the way for private funding, but this is possibly good policy -- and without question good politics. I just laughed when I saw the headline: "Clinton would boost autism funding." To call that a Dog-bites-man story is unfair to dog bite victims. It's more of a dog-licks-himself story.

Senator Clinton will surely seek more "Funding" (the AP did not call it spending) for every one of these soft, supraconstitutional endeavors. It's going to be a long campaign and, quite likely, a long four years.

But Perry Eidelbus thinks:

Or the more accurate news:

"Hillary Clinton announced another plan today to help the majority of Americans elect her, by enticing them with a proposal to take $700 million from the American minority that pays the bulk of taxes."

Posted by: Perry Eidelbus at November 27, 2007 3:15 PM
But jk thinks:

Here's where I have to nod to your (and JohnGalt) millenarian views. Put $700 million for autistic kids on the ballot in any state in the Union and it will pass 80-20. Add to that a steeply progressive tax rate -- most of those 80 aren’t really paying anyway -- and it is hard to see how classical liberalism ever wins,

Posted by: jk at November 27, 2007 4:37 PM

November 24, 2007

The Patriarchy is Alive and Well

Gregory Mankiw links to the Crimson:

How long does it take to grab a cup of coffee? If you happen to be a woman, plan on adding 20 seconds to your morning ritual. That’s how much longer women wait to get their coffee compared to men, according to a study by Middlebury College economics professor Caitlin Knowles Myers, Myers and five of her students timed 295 transactions at eight Boston-area coffee shops. Her study controlled for complicating factors, including the complexity of the drink order (skinny? soy? 3 percent milk?), the appearance of the customer, and the length of the line. But even after accounting for these factors, women waited about 20 seconds longer.

What do we want? Skinny, half-caf soy Frappuccino® with no whip!

When do we want 'em? NOW!

Posted by jk at 6:51 PM | What do you think? [2]
But mdmhvonpa thinks:

Odd, I just was at a Seattle's Best Coffee shop in Ithaca NY yesterday and ordered a REGULAR CUP OF JOE. Took roughly 45 seconds to complete the transaction and attractive baristas got all all the change as a tip. A buck plus. Now if I were a woman, would I tip them as much? Do you think this might influence the service? Of course, this is Ithaca and it is a veritable cornucopia of attractive women with ... differing tastes in partners.

Posted by: mdmhvonpa at November 24, 2007 8:39 PM
But jk thinks:

Awesome point, mdmh. I don't know how your Harvard connections are but you should write the good professor. I think it's safe to say -- perhaps anywhere but Harvard -- that women are a little more stingy with the tips.

Posted by: jk at November 25, 2007 11:10 AM

November 23, 2007

Reagan, Thatcher, Sarkozy!

Air traffic controllers, mine workers, rail workers. The NY Sun says Collapse of Rail, Subway Strike Is a First Success for Sarkozy

"We think a dynamic of return to work has begun," Julie Vion, a spokeswoman for France's state-owned railroad network, SNCF, said.

Union leaders began to concede defeat yesterday. "We have to face reality. Since yesterday's negotiations, things have changed. The strike is no longer the solution. The strike strategy is no longer winning," a leader of the Sud union representing Paris underground railway workers, Philippe Touzet, said in an interview with Bloomberg News.


A few days ago, it was called a daring move that would make him a five year lame duck if he failed. Audaces fortuna juvat, Monsieur Presidente! Fortune favors the brave.

Hat-tip: Insty.

But Perry Eidelbus thinks:

In "Paradise Lost," Satan says, "To reign is worth ambition though in Hell: Better to reign in Hell, then serve in Heav'n." Or put another way, it might be Hell, but at least he's the boss.

Sarkozy knows better. One can be captain of a sinking ship, but it's still a sinking ship. Sarkozy knows that despite the modern Gallic proclivity for laziness, something has to be done to revive France's economy. Right now it's in heavy competition with Germany for that dubious title of "the sick man of Europe," as Ireland once was. Ireland grew itself out of economic woes by, surprise surprise, cutting taxes to attract businesses.

Posted by: Perry Eidelbus at November 27, 2007 3:36 PM
But jk thinks:

One hundred bonus points for quoting Milton.

Posted by: jk at November 27, 2007 4:31 PM

What About Teal Tuesday?

Is Black Friday really the busiest shopping day of the year?

Between 1993 and 2002, it cracked the top five just three times, never rising higher than the fourth-busiest day of the year, according to snopes.com, a Web site that debunks urban myths.

I almost [spot the operative word in this sentence] wanted to get up and see how many people were at Kohl's for their 4AM opening today. I made a schedule while watching football: Kohl's at four, BestBuy at five, Target at six and Macy's at seven. I think Dante described something similar.

The early word seems to be pretty positive, though the AP reporter Anne D'innocenzio can't bear to type it.

NEW YORK - Shoppers — shrugging off a spate of lead-tainted toy recalls and higher prices for food and gas — jammed stores before dawn Friday to grab discounted TVs, toys and the hard-to-find Nintendo Wii, for the official start of the holiday season, expected to be the weakest retail showing in five years.

Stores, including Toys "R" Us and Macy's Inc. said more people were showing up this year for pre-dawn specials but merchants need them to keep coming throughout the holiday season to make their sales goals.

Hat-tip: Everyday Economist

Posted by jk at 2:01 PM | What do you think? [2]
But Charlie on the PA Turnpike thinks:

I was driving past Sam's Club and Wal*Mart at 5AM. Unlike you, it wasn't because I was specifically curious, but it was because I was on my way to work. Regardless, those lots were as full as you would expect them to be after sunrise on such a day.

Don't forget, also, the so-called CyberMonday, when people go back to the office and shop from work (unbeknownst, allegedly, to their bosses - who are also probably shopping!).

Black Friday will always ebb and flow, not unlike the climate. And since many of the retails chains offered online sales almost as good as those in the stores at 4AM, its very likely those sales took away from the elbowing this morning!

Oh well.. time to go home!

Posted by: Charlie on the PA Turnpike at November 23, 2007 3:46 PM
But Perry Eidelbus thinks:

I had noticed the same pessimistic article. I've been meaning to blog about that -- and the Strange Case of the Changing AP Headline. Or maybe not so strange?

Apparently Martin Crutsinger and Jeanne Aversa were on vacation. The AP had to have another bear journalist fill in.

Posted by: Perry Eidelbus at November 27, 2007 4:46 PM

November 21, 2007

Happy Thanksgiving, John Stossel

When I am President, I will hand out medals to Jimmy Pethokoukis and John Stossel. Today, Stossel shares the lost lesson of Thanksgiving.

When the Pilgrims first settled the Plymouth Colony, they organized their farm economy along communal lines. The goal was to share everything equally, work and produce.

They nearly all starved.


It's the Tragedy of the Commons, served with Pumpkin Pie.
What private property does -- as the Pilgrims discovered -- is connect effort to reward, creating an incentive for people to produce far more. Then, if there's a free market, people will trade their surpluses to others for the things they lack. Mutual exchange for mutual benefit makes the community richer.

Secure property rights are the key. When producers know that their future products are safe from confiscation, they will take risks and invest. But when they fear they will be deprived of the fruits of their labor, they will do as little as possible.


And they still let this guy be on ABC.

Hat-tip: Prof Mankiw who also brings us the Milton Friedman Choir


But mdmhvonpa thinks:

They have him as their designated 'cod piece'. Of course, since he is a libertarian, he has no problem ripping into whatever he fancies. I LOVE it when he takes a crack at Public Education and No Child Left Behind.

Posted by: mdmhvonpa at November 21, 2007 6:11 PM

Tomorrow's Inflation Basket

We've been having a fascinating [we do know how to have a good time!] discussion of monetary policy and inflation around here.

The American Magazine links to an American Farm Bureau report that details the cost of a traditional Thanksgiving dinner for ten. It's up to 42 bucks this year, but it's growing at a rate lower than inflation:

The AFBF survey was first conducted in 1986. This year’s average cost of $42.26 is equivalent to $20.46 in inflation-adjusted dollars. The real dollar cost of the Thanksgiving dinner has declined 9 percent in the last 20 years, according to Sartwelle. While Farm Bureau does not make any statistical claims about the data, it is a gauge of price trends around the nation.

I'm constantly told that the CPI and PCE are underestimating inflation and that core CPI is meaningless because food, energy, education and health care costs are making real inflation worse.

I think this study puts a fork in the food commodities claim [little holiday humor there -- put a fork in it...]. The health care claim is specious because a richer society chooses to spend more on health care, that is not inflationary. Education is over-regulated and subsidized by Government, surely the price data is suspect as best. Energy is over-regulated, cartelized, and subject to demand pressures in an unprecedented global boom.

Give thanks, inflation is under control! Pass the yams, please.

But Perry Eidelbus thinks:

I've never referred to either calculation of CPI to justify my belief about inflation, since either one is still a basket.

The prices of basic flash memory MP3 players keeps dropping. The 8-gig Sandisk e280 costs as much as what I paid 15 months ago for a 2-gig version. The 2-gig version now costs half of what it did. Does that mean inflation is dropping, that the money supply has been deflated to half? Hardly. So why do we think the price of a Thanksgiving dinner necessarily indicates inflation, when it's too small a subset of goods and services to be a good measure? It also doesn't take into account that grocery stores are willing to make very small profit margins, if not go loss-leader, on major Thanksgiving items. The thinking is, and it often works out to a profit, is that customers will buy lots more things than Thanksgiving stuff while we're already there.

Also, I don't know what everyone else serves, but in a few hours my aunt will be hosting her usual Thanksgiving dinner of turkey, filet mignon, salmon, lobster and shrimp. Now what percentage of Americans do that, and how are the generally higher prices of Westchester County weighted against the rest of the population? Oh, and she probably bought a lot of the things in the Danbury-Bethel area of northwest Connecticut. How is that factored into her purchase, let alone the estimate of the whole U.S.?

Prices are generally higher in Westchester than the national average. Most gas stations in neighboring Putnam County are 20 to 30 cents per gallon cheaper. It isn't because we have higher inflation, it's because the population is generally much wealthier than the national average and will bid higher prices for goods and services. This includes the higher prices for land that people offer, which eventually translates into higher prices at the stores built upon the land.

Baskets are simply a silly way to calculate inflation.

Posted by: Perry Eidelbus at November 22, 2007 2:41 PM

Only In Boulder

Boulderites love the phrase "Only In Boulder." It is used as a compliment. I saw a guy at the dog park in a tux and high tops last night -- OIB...

The city has much to recommend it. I am not impervious to its charms, but I am deeply suspicious of its politics. David Harsanyl, a Denver Post reporter who has written a book about the Nanny State, has a frightening story about its capital:

The story is so absurd, so unfair, so ludicrous, I had a difficult time believing that it could actually happen - even in Boulder.

You have to read the whole thing. The short version is that a couple bought a piece of property in the 80s and did not develop it. When they tried to build a house in 2006, they found that a Boulder bigwig now owned a significant piece of it:
Former Boulder District Judge, Boulder Mayor, RTD board member - among other elected positions - Richard McLean and his wife, attorney Edith Stevens, used an arcane common law called "adverse possession" to claim the land for their own.

All McLean needed was to develop an

"attachment" to it.

Undoubtedly, his city connections couldn't have hurt, either.


I certainly think Kelo v. New London was poorly decided, but it pales against this. Because this guy frequently trespassed, it is now his. And he will get away with it,

Only in Freaking Boulder.

Hat-tip: Insty (oddly, the place I learn about something that happened ten miles from my home...)

But mdmhvonpa thinks:

Not an uncommon law unfortunately. I've heard of this before in a lot of places. This is why when children trespass on your land as a 'short cut', all them old farts yelling at them know the real deal. If it gets used enough, it can be seized!

Posted by: mdmhvonpa at November 21, 2007 6:54 PM
But jk thinks:

That's a drag for property rights. However, I will really enjoy owning the Starbucks drive-thru...

Posted by: jk at November 21, 2007 7:37 PM
But jk thinks:

Amazon just let me know that Harsanyl's book has shipped. I had to buy it after reading the whole title: "Nanny State: How Food Fascists, Teetotaling Do-Gooders, Priggish Moralists, and other Boneheaded Bureaucrats are Turning America into a Nation of Children"

Posted by: jk at November 22, 2007 12:22 PM

What Experience?

Quite possibly the most annoying thing about Hillary Clinton is the claim that she has some type of experience in the White House. She has repeated said things like, and I am paraphrasing, "the President of the United States is not a position where you want to see on the job training." This would ultimately limit our options for president in 2008 to Jimmy Carter, George H.W. Bush, Bill Clinton, and George W. Bush. Of course, according to her logic, this includes her as well.

Thus when she asserted her experience in dealing with economic issues, it was nice to see Obama respond to Hillary's baseless claims with this:


My understanding was that she wasn't Treasury Secretary during the Clinton administration. I'm not sure what experience she is claiming . . .

Here is the complete audio.

2008 Race Posted by Harrison Bergeron at 8:57 AM | What do you think? [1]
But jk thinks:

I love this! Pitting her eight years of hosting dinners and hectoring her husband against Senator Edwards's time suing Doctors and Senator Obama's weighty years on the city council. I cannot imagine that it holds a lot of sway with Democratic primary voters and it will certainly backfire in a general election, when she faces a Republican with actual experience.

Of course, she can always ask President Clinton to release records from the archive to show how much she contributed. And where the Rose Law Records were. And a few other juicy details, no doubt.

Posted by: jk at November 21, 2007 10:57 AM

November 20, 2007

Don't Tell the "High Life' Man

Even the NYTimes is reporting good news from Baghdad today, Breitbart finds
Baghdad by night -- juice bars, neon lights, bustling streets

And then, suddenly, you've arrived and the mirage has become an oasis of generator-driven light; a colourful jumble of trendy juice bars, cosy restaurants, fruit shops, roadside eateries and fish vendors, where children play, families dine and lovers meet.

"Even two or three months ago we would have been afraid to come here at night," said 20-year-old Hussein Salah, an off-duty soldier, slurping a milkshake with his wife, Shihad, at the Mishmesha (apricot) juice bar in Baghdad's relatively safe Karrada suburb.

"Now we sometimes sit outside here till one or two in the morning. It is quite safe. The security situation is vastly improved," said Salah, the orange light from a nearby flashing palm alternatively brightening and dimming his clean-shaven face.

Declines in Iraqi civilian casualties and a sharp reduction in bomb and mortar attacks have sparked optimism that the capital is at last starting to revive.


It's a short step from juice bars to Appletinis, however, and soon I fear the Miller High Life Man will pull up in an armored Humvee and revoke some poor Iraqi's Miller license...

Hat-tip: Hugh

But Perry Eidelbus thinks:

Strange, I can't post a reply to this one.

Posted by: Perry Eidelbus at November 22, 2007 3:04 PM

Fred! on Larry

In fairness, I have to post that Senator Fred Thompson was superb in his interview with Larry Kudlow on CNBC last week. I should have captured some YouTube clips. I only keep two episodes and now it has been deleted. I was surprised to find nobody else posted any clips.

Fred! looked great, answering questions with conviction on tax cutting and regulation limiting. At the same time, he passed some opportunities to pander. When Lowes CEO John Tisch suggested lowering the corporate capital gains rate, Senator Thompson considered it without a knee-jerk acceptance that his interviewer and the other guest clearly wanted.

It was the best interview I have seen Senator Thompson give and it firmly cemented Fred's #2 spot on my GOP list.

Governor Romney was on the next night and I found him a lot less impressive. Both Hizzoner and Fred! spoke from deep conviction on pro-growth policies. Governor Romney seems much more political. I hate to use this adjective against a good Republican, but he seems almost Clintonian at times. In fairness, I should note that Romney's interview captivated Kudlow guest James Awad, who declared him "the best President for the stock market."

I also wonder if I need to subtract points from Mayor Giuliani -- I did not know that Larry was a key advisor during his tenure as mayor. I read this in the cover story of this month's Reason magazine. The campaign chose not to participate in the interview (wha?) but the author claims Kudlow was the architect of Giuliani's tax cutting. Assuming that's true, it's no wonder Rudy! would have so many of the right answers at the ready.

I'm still with Hizzoner, but I had to post this in fairness to the Fredheads around here. He was in top form last Thursday.


November 19, 2007

Me Work?

I have to be onsite all day today and most of tomorrow. I'll sneak in some reading but no posting.

I didn't want you to think I stopped caring...

UPDATE: Don't miss ThreeSources friend Everyday Economist's superb column on TCSDaily.

Posted by jk at 12:00 AM | What do you think? [0]

November 17, 2007

Before it scrolls away

Interesting comments brewing against my suggestion in Au Shucks.

All of it negative, sigh.

But johngalt thinks:

Not ALL negative. Thanks for the re-post. I hadn't read beyond Perry's initial comment before your reminder.

Posted by: johngalt at November 18, 2007 12:32 PM
But johngalt thinks:

Since comments are disabled there now, and since I don't want to be accused of sniping for the last word, here is my final comment from 'Au Shucks' in a commentable forum to allow further criticism (or support) of JK's ideas. :)

This is great stuff and I'm learning much from you guys clearly more versed in economic theory than I am. From the sidelines it is apparent the arguments are not "pro-" one side or the other but "anti-" the other side. It's that old "representative democracy isn't the ideal form of government, it's just better than all the others" refrain.

While I fully appreciate all of JK's objections to a fixed money supply I'm more opposed to the US fiat Dollar in its present realization. Perry wrote, "If productivity (which includes technology advancement) offsets inflation, how much better off would we be if we had the same productivity gains *without* a central bank to devalue our wealth? [This is complementary to the point I often make about our potential prosperity in the absence of punitive taxation.] I'll also add that it's a myth that we need inflation for growth. Economies can grow just fine without central planners/bankers. Even 1% per annum inflation is harmful to Scrooge (...) The only beneficiary is the pure spender, chief of which is government."

But there is another beneficiary of constant, carefully cultivated inflation: The central bankers, for whom inflation amounts to their ROI for the "service" of printing, distributing, and retiring all of those fiat Dollars.

When the government and the central bank both benefit from inflation, what do you suppose we'll have?

And this leaves us with Perry's lament: "In theory, if you have men of good character and intentions, they can come close enough with central banking. In theory. However, reality has shown otherwise."

Posted by: johngalt at November 19, 2007 1:38 PM
But jk thinks:

I don't think comments are closed on the other post jg, but I appreciate your setting me up for a few more days of disapprobation...

The discussion has ranged far and wide. I remain at the ready to defend the concept of "finite but unbounded," but I think the base level disagreement is likely my claim that efficiencies in trade and technology are deflationary -- as contrasted to Perry and EE's belief in a rigid, corporeal, and quantifiable money supply.

Let's solve this with a time machine: Beam up 1982 man, all his money and a couple of those really narrow ties. Let's take him shopping:

-- if he smokes, he will surely faint when he sees $4/pack cigarettes, but hey, smoking's bad for you;

-- milk and bread prices are higher, gas prices are astronomical: "Aha jk, see we have proven inflation!" And you're right;

-- At the same time, I am going to take him to Wal*Mart to look at the TVs and portable music devices. Never mind the iPod and plasma, the things that are familiar to him are going to appear amazingly cheap. Let's go to Kohl's next and shop for leather jackets and a basic Men's suit.

The stuff I showed him is all ridiculously cheap, yet folks around here will look me in the eye and say that that does not in any way mitigate the higher prices he sees.

He’ll see that the $500 computer has replaced the $40,000 typesetting machine, obviated the photostat camera, and is pretty close to replacing audio recording equipment worth tens of thousands. (I have 16 digital tracks in my house -- I used to pay a lot to rent a lot less).

None of this is not going to show up in your measures of money. Because it does not fit your equations, you pretend it is not there. Art Laffer, and Larry Kudlow and I see it and realize that it offsets inflation.

Lastly, Perry considers constant inflation worse that deflationary shocks and is surprised I disagree. I take this right out of Chairman Bernanke's book and think it is borne out by history. Deflation is harder to recover from and more likely to cascade into full blown recessions.

And yes, she sounds awesome. Congrats again.

Posted by: jk at November 19, 2007 7:31 PM
But Perry Eidelbus thinks:

Well, you're again confusing prices from supply and demand with prices from true inflation.

That $4 per pack of cigarettes doesn't accurately show what happens with the money supply, since it's not the product of inflation, but rather government intervention both ways. The federal government subsidizes tobacco farmers, while the states and cities tax the end products. Somehow I don't think federalism was supposed to work that way.

Coffee in the early 1990s experienced a huge price surge that some people improperly called "inflation." Similarly, world corn and sugar prices are extraordinarily high compared to the years before the ethanol craze.

Even excluding examples of government intervention, sudden surges in prices are still not inflation. South Korea, for example, has experienced continual "inflation" as its people earned more money from exports. But the same thing would have happened with a commodity-backed money supply as easily as with fiat: it's a normal market adjustment as people acquire greater wealth and thus bid up the prices of both domestic and imported goods.

Oh, I meant to blog a long time ago that Venezuela is experiencing a rise in prices, because of its increasing wealth thanks to oil. Instead of letting prices adjust, instead of letting money flow to the people, Chavez would rather blame "evil imperialistic capitalists," nationalize everything profitable, tax everything else so other industries and their workers don't have money, nationalize schools to indoctrinate people, and now shoot those who still dissent.

Real economists have looked at the prices of gold, oil, copper, etc., and realized that increased global demand just doesn't explain the surge in prices. Bernanke and his cronies decide on a rate cut; oil subsequently surges. Why? Because traders know there will be more dollars out there. Not more wealth, just more dollars. So the first trader figures he'll have that many more dollars to bid on a million barrels of light sweet crude, and other traders must follow suit.

You're sort of putting words into my mouth when you say I pretend technological advances aren't there and, I suppose you're saying, offset inflation. I separate technology and monetary phenomenon because they're not inextricably linked. The former does not need the latter, and the latter often inhibits the former by skewing market forces. Again, if it's so good that cheap imported goods offset our domestic inflation, how much better off would we be if we didn't have the inflation at all?

http://eidelblog.blogspot.com/2005/11/how-government-invisibly-confiscates.html

Going back to my old post there, I point out that when a central bank is so concerned about price stability, and when it calculates "basket" prices, it either encourages the production of something beyond what the free market would dictate (because it causes the price of something to rise), or it discourages production by keeping the price stable. Entrepreneurs who we need doing the latter will forsake the opportunities for the former. We *don't* want government and its agencies to stabilize the prices of corn, sugar, oil, etc. -- we want government to leave the prices alone, so entrepreneurs can judge what commodities we need more of, and discover new and better ways to supply them.

"Deflation is harder to recover from and more likely to cascade into full blown recessions."

Actually, this is a myth several decades old that the Keynesians introduced. The U.S. had several "panics" before the institution of the Federal Reserve, but nothing on the order of the Great Depression. The key is to leave people free to adjust interest rates on their own: when money becomes more valuable, interest rates will adjust themselves automatically, with no need for a central bank, so that borrowers and lenders will always find a balance. Under our centrally planned lending system, borrowers and lenders are told what the bottom rate is, which either sets their expectations too high (easy credit) or too low (unnecessary panics of a credit crunch).

Inflation is an untameable monster, though, and the tragedy is that it doesn't need to be. Central bankers are unavoidably Keynesians at heart, so they all believe inflation is necessary. Then there's the problem of their inability to stop producing more and more money, not just in line with population (like Milton Friedman proposed), but continually more than what's necessary. Like Don Boudreaux said a while back, government acts like inflation is so hard to stop, while universal health care is so easy to give.

Japan needlessly suffered deflation for years, when its central bank could have merely inflated the supply, rather than digging themselves into a liquidity trap (now in this Krugman was right) by tinkering with interest rates.

Greenspan & Co. were directly responsible for the 2001 recession by tightening credit too much, too fast, and Greenspan himself was an irresponsible twit for telling markets (not just the stock exchanges) that they were overheated. Is he God, that he knows better than the millions upon millions of people directly involved in the markets? He's a prime example of the arrogance of central bankers. Like I said, a central bank could theoretically work but only if it had men of good character and intentions. Yet Hayek would remind us that they still wouldn't have all the information and couldn't possibly know enough.

Anyway, I think I addressed everything.

Posted by: Perry Eidelbus at November 21, 2007 3:27 PM
But jk thinks:
Real economists have looked at the prices of gold, oil, copper, etc., and realized that increased global demand just doesn't explain the surge in prices.
Risking an argument with "Real Economists," I suggest that this points to the basic question: how much of price inflation is demand and how much is inflation? That these REs need to perform penetrating analyses supports my belief that it is not as clear cut as you posit.
I separate technology and monetary phenomenon because they're not inextricably linked.
I pointed to trade, productivity, and technology: three strong anti-inflationary forces. Designing a plane, one needs consider lift and weight, balancing the forces in both directions for stable flight. You (and EE I believe) refuse to believe in or account for these forces because they are not in your model. The fact is that productivity, trade and technology are three strong counter-inflationary (I'm comfortable calling them deflationary) forces.

Because the Great Depression happened under a hapless Fed doesn't really argue for the gold standard. I'd suggest a Bernanke-style inflation target without the dual mandate. That would lean us toward harder money which might make us both happy. I suggested that I'd accept a Friedmanite "computer Fed" as well. But a gold peg? No thanks.

Posted by: jk at November 21, 2007 6:24 PM
But Perry Eidelbus thinks:

"Risking an argument with "Real Economists," I suggest that this points to the basic question: how much of price inflation is demand and how much is inflation? That these REs need to perform penetrating analyses supports my belief that it is not as clear cut as you posit."

My use of "real economists" isn't meant to be disparaging, but only to separate economists who consider all factors objectively from economists and pundits who ignore inflation's role in driving prices.

The point is that, absent government intervention, prices are driven purely by supply and demand. However, government intervention (including when it uses central banking) has been skewing the prices of gold, oil, etc., by far more than supply and demand alone. So there's another factor at play, and it's inflation. True inflation, caused by a central bank. Do you understand why crude prices were going up the morning the Fed was expected to announce the half-point cut? I myself was betting on no change, going by Bernanke's old reputation as an inflation targetter. I was wrong.

"I pointed to trade, productivity, and technology: three strong anti-inflationary forces."

Those aren't counter to inflation, though. They will tend to push prices down, yes, but we must be precise in our terminology: remember that inflation is purely a monetary phenomenon. Trade, productivity and technology affect the forces of supply and demand. Those are separate from the influence of currencies' value.

"Because the Great Depression happened under a hapless Fed doesn't really argue for the gold standard."

It didn't merely happen "under a hapless Fed." The Fed *caused* it all. Coolidge and Congress cut taxes massively in the 1920s, which helped spur the great economic growth, but the Fed was also inflating the money supply and lending far too much to monetary institutions. Much is said in economic history classes about people buying stocks on low margins, on the hope they could flip soon soon and make a profit. It's rarely pointed out that people could do that only because the Fed made so much money available at low interest rates. It's almost as rarely pointed out that the Fed cut the money supply by a *third*.

Deflation doesn't necessarily cause recessions, and even so, an economy can still grow its way out of it. But it can't if the central bank forcibly perpetuates the deflation via its monetary policies. And as I said, the answer is easy: the central bank need only inflate the economy out of the deflation it caused. Notice my frequent use of "caused," because that's precisely what happens with central banking: it *causes* the artificial ups and downs.

"I'd suggest a Bernanke-style inflation target without the dual mandate."

Even Bernanke couldn't follow that, because he bended to politics and the limelight. As Don Luskin blogged some time back, Greenspan did pretty well when he directly or indirectly used the price of gold as a barometer. It might not make sense at first, but I explain it thus: effectively it was traders who were reminding the Fed of how much money it was producing. But then Greenspan grew to love the limelight, and as a self-anointed economic superstar, he became a politician and speechmaker.

Power corrupts. Effective central banking requires three things: good character, good intentions, and perfect knowledge. Any two out of the three are insufficient, and I'm not sure there's a single Fed member who has even one.

The problem with computer modeling is the question of who gets to write the algorithm. Remember that economists use all sorts of computer models today to analyze past economic performance, forecast future economic indicators, and justify why they must muck things up even more.

Posted by: Perry Eidelbus at November 22, 2007 2:18 PM

November 15, 2007

VDH

Professor Hanson points out that the gains in Iraq are not getting the press that Abu Ghraib did. Ever cautious, he wonders if we have indeed passed a turning point:

Nevertheless, we may be witnessing one of those radical, unforeseen reversals in America's wars that have often changed our history.

The White House was burned by British forces in late August 1814; a little more than four months later, the British were routed at New Orleans. During the Civil War, the Union army was on the ropes in July 1864 yet outside Atlanta by September. The Germans were driving through France in March 1918, but fleeing toward the Rhine by August. The communists took Seoul in early January 1951, yet were pushed back across the Demilitarized Zone a little more than three months later.

Of course, we don't know the final outcome in Iraq, given the remaining problems of Shiite militias and diehard al-Qaidists - and the question of our own remaining resolve.


Hat-tip: Hugh


I'm Doing My Part

The amount of traffic flowing through Starbucks Corp.'s U.S. stores fell during the fourth quarter for the first time since the company began disclosing the figure three years ago – a sign that the Seattle coffee giant is having a more difficult time attracting customers as it moves into the holiday season. The company also reduced its earnings estimates for the coming year.

Starbucks also plans to launch its first national television advertising campaign ever starting tomorrow. In an interview, Starbucks CEO Jim Donald called the campaign "a very culturally sensitive, product driven" marketing effort. He says Starbucks is getting into television advertising because "as we grow our stores, we're trying to reach out to this broader audience that maybe [has] not had a chance to experience Starbucks."

Mr. Donald said that the dip in average transactions per store in the U.S., which fell by 1%, was not a sign that the company had built stores too quickly in the U.S. or that the market was showing signs of saturation. "The saturation comment's overblown," he said.

He said Starbucks now plans to open 1,600 stores in the U.S. next year, or 100 less than it had projected earlier in the fall, because the company is "taking a little more deliberate approach."


This from the soon to be free WSJ News pages. Before earnings were announced, the Journal ran another article on the saturation question.
Jokes about the ubiquity of Starbucks have become almost as common as the coffeeshops themselves. There are so many, a comic once cracked, that one had just opened in his living room.

Starbucks has about 10,500 locations in the U.S., or about 3,000 more than it did just two years ago. In its hometown of Seattle, there is one Starbucks for every 10,000 residents. That doesn't mean there isn't room for more Starbucks in the U.S. For example, Vermont, the state with the fewest Starbucks locations, has just four. The company plans to almost double its presence in the U.S. by one day having 20,000 locations.


One cannot help but wonder about saturation. The number in a six mile radius from me has skyrocketed, yet I still find lines at unusual times in each one.

I hold these lines up as proof that times are not as bad as the Krugmanites say. When there's a long line at the Lafayette Starbucks at 4PM, I don't see that the consumer is tapped out.

UPDATE: I just went (poor guys, I felt bad). Four cars lined up at 4:24 -- I'm not shorting just yet.

Posted by jk at 5:42 PM | What do you think? [0]

November 14, 2007

Fortunes

Two good cookie inserts in as many weeks. The first may be my new all time favorite:
shininess.jpg



And the second is the archetypal advice to bloggers:
listening.jpg

Posted by jk at 6:57 PM | What do you think? [2]
But AlexC thinks:

Confucious say, "Eat More Chinese Food"

Posted by: AlexC at November 14, 2007 10:27 PM
But TrekMedic251 thinks:

Ah, but don't eat Chinese food while blogging. You'll be posting again in an hour! ;-)

Posted by: TrekMedic251 at November 16, 2007 12:02 AM

Clarkson Vs. Monbiot

Samizdata picked this up as a "Quote of the Day," but the post must be read in full.

Climate Resistance asks "Why Monbiot is So miserable?" George Monbiot is a writer for the Guardian who makes Paul Krugman look balanced, and Dennis Kucinich moderate. I, like many, assumed Perry DeHavilland coined the phrase "Moonbat" in his honor -- Perry denies this.

The post discusses the relentless negativity of the European Left chattering classes, and compares it to the spirit and spunk of Top Gear:

George's problem is that the culture he wants us to be part of is entirely negative. In contrast to this cultural pessimism, Jeremy Clarkson, Richard Hammond, and James May celebrate human achievements - however shallowly, and appear to risk their lives for their passions, while Monbiot considers us to be a destructive plague on the planet. Clarkson is a hero, and Monbiot is a chicken. Clarkson bumbles his own way into making history by doing dangerous things like driving to the North Pole, while Monbiot twitches behind his curtains, tutting about what other people are getting up to. Clarkson, for all his faults, is full of spirit, letting bad things bounce off of him. Monbiot dwells on the fantasy dystopia he's read about. The irony here is that while the things that Top Gear represents are somewhat coarse, it is Monbiot's dark dark narrative which creates apathy. The only reason he can think of for organising our collective efforts is that if we don't, we will all drown. What George needs to realise is that people don't drive cars because they watch Top Gear, they watch top Gear because they love cars and the positive things that cars represent. Environmentalism offers us nothing positive.

If things were better, Top Gear would be just another program. But they aren't, and it's not. If we want to know why Clarkson is the last bastion of resistance to dull orthodoxies such as environmentalism and political correctness, don't watch Top Gear, read Monbiot - but don't take his word for it. It is relentlessly bleak, shrill and hollow. The cultural norms that environmentalism wants to establish have been established within the political and cultural elite, yet he continues to whine that the masses will not march to his command. Monbiot will tell you that people don't want it because they are influenced by the cultural dominance of Top Gear, but the truth is that people have a much better understanding of their own interests, and a better nose for bullshit than he gives them credit for. They are not blindly following the doctrine of Clarksonism, and shame on Monbiot that he thinks they are. People are resistant to Monbiotism precisely because they are not blindly obedient.


Top Gear is probably the funniest TV program in the world. Though I think it was better before they discovered it was funny and started trying, it is one show I will not miss.

Clarkson is a British conservative. He has no love for anything American unless it has four wheels and was made before Nixon was President, but he has a zest for life that the left has completely abandoned.


The Unitary Executive

"I'm John Edwards and I approve this message." It's clearly unconstitutional, but it beats the heck out of a Musharref-like promise to disband Congress and institute Socialized medicine by Executive Fiat (we know, we tested each on focus groups).




Besides, my hair looks really good in the light, and that syrupy background music is just perfect.

Hat-tip: RedState

Posted by jk at 1:48 PM | What do you think? [0]

Layers

This is an effect of the layers upon layers of editorial oversight in the mainstream media.

In a Nov. 13 story, The Associated Press incorrectly reported that Paris Hilton was praised by conservationists for highlighting the problem of binge-drinking elephants in northeastern India. Lori Berk, a publicist for Hilton, said she never made any comments about helping drunken elephants in India.

I'm going to go out on a limb and say there isn't a binge-drinking elephant problem in India.

Just a hunch.

But jk thinks:

Don Luskin tells about the New York Times reporting that VP Al Gore will be donating his salary to charity, but not mentioning that it is his charity. Layers and layers.

Posted by: jk at November 14, 2007 1:38 PM

Au Shucks

Picking a fight with my economic betters again, I commented on Everyday Economist blog (backstory here). The EE sent me a couple of thoughtful emails.

I'm willing to concede on all his economic points, but I'm not abandoning my defense of David Frum's main point: it is a mistake (Frum calls it "crank monetary policy") for Rep. Ron Paul to expound on the gold standard. Considering all of the abuses to our freedom that our government practices, it seems to me that he is dwelling on a fringe issue. Even if I agreed with the good Doctor, I wouldn't advise a candidate to highlight it as Rep. Paul has.

Feel free to disagree. Last night, however, I thought of a philosophical objection to the Gold Standard. Since I have a blog login, I thought I would share my own "crank monetary policy" with you good people.

Why Gold Is Inferior to Paper Money
Money is virtual. Wealth is created, ex nihilo and it makes no sense to have currency tied to a limited, real asset. Just as man learned to count higher than ten by using numbers instead of fingers, we must grow into a post-metallist economy that allows wealth to exceed the planet's physical assets. We make microchips out of sand and software out of thought; we should not be limited to Earth's resources.

By being limited, gold backed wealth is zero-sum. Imagine if Bill Gates wants to have all his wealth in money, so he can roll around in it a la Scrooge McDuck. Hey, it's his money. Without reserve banking, will there be enough money for him? What if he wants to double it? If the world's money is all tied to Gold, every dollar that Mr. Gates earns is a dollar somebody else does not have. That is not the way wealth works.

"Aha, jk, you are conflating wealth and money," you say. "You bastard," you might add. I'll ignore the name calling, but address the point. Wealth and money are separate precisely because we have separated them. I know it is extreme to call this wealth limiting, but it strikes me as a step away from the creation of virtually-denominated wealth that I celebrate.

But jk thinks:

You're absolutely right about Ebenezer. And your point about infinite wealth is well taken. I want to spotlight the lack of limits on wealth. Let me leave economics and borrow from physics: wealth is finite but unbounded.

As silly as an inflation basket is, I reject the idea that you can turn to MZM -- or Gold -- and capture a true measure of money, prices, or inflation. You cannot capture the gains from productivity and trade. Inflation is indeed a monetary phenomenon, but you cannot accurately measure money.

Trade is deflationary because of efficiencies, just like productivity. Increased demand may raise the prices of commodities, but comparative advantage will lower the cost of manufactured goods and relocatable services. That sounds pretty familiar to me. Gold is up, laptops are down. You newly affianced guys (congrats, by the way) have to buy Gold, but I can get my wife a new iPod or laptop for our 25th Anniversary next year, and she'll be happy.

I don't think you "need" inflation for prosperity, but I do think you need to avoid deflationary shocks. You see what could have been as the gains we made without inflation, I would question whether there would have been enough liquidity to make the productivity gains we made. Keep in mind I'm a bubble lover. It's not liquidity I love, it's excess liquidity.

Posted by: jk at November 15, 2007 5:34 PM
But Everyday Economist thinks:

Okay, there are several things that need to be discussed here:

1.) The gold standard is not zero sum.

Suppose, for example, that every country used the same fiat currency (for simplicity, the US dollar). At any given time there are a fixed amount of dollars. According to jk, when central banks print more money this leads to greater wealth. While individuals certainly may have money, each dollar is worth less. If the money supply doubles, prices double.

2.) Wealth is not to be confused with money.

Prosperity comes as a result of economic growth and innovation, not by printing more money.

3.) Contrary to the Kudlow-school, innovation, economies of scale, and specialization are not deflationary in the long-run.

In the long-run, inflation = money growth. As long as the money stock is growing, the overall price level is rising regardless of whether computers and iPods are getting cheaper.

4.) There are accurate measures of money.

Recall, for example, the quantity theory of money:

MV = PY

Money*Velocity = Nominal GDP growth

(this is why Perry is correct to bring up velocity in regards to the gold standard)

this can also be written as the sum of the growth rates:

Money growth + velocity growth = inflation + real GDP growth

Since velocity is relatively constant, one easy way to get an accurate level of inflation is to compute the following:

M2 growth - real GDP growth = inflation

Posted by: Everyday Economist at November 15, 2007 8:00 PM
But jk thinks:

On Kudlow & Co. the other night several guests were arguing about your first equation. It was pretty funny. I should defer to you on all matters of technical economics. I appreciate your additional training and knowledge and don't mean to downplay it.

However...

I still have to hang with my buddies, Larry K and Art Laffer, on the effective deflation created by the Wal*Mart effect, technology, and productivity gains. I can buy better things for less -- which is tautologically deflationary. It offsets the rising commodity prices that the same global growth causes.

None of those offsets shows up in your equations. Therefore, even though I recognize inflation as a monetary phenomenon (I am a Friedmanite at heart), I reject the ability of your equations to accurately measure the "buying power" of money.

The zero sum gold argument is about perception and not economics. I prefer the idea of virtual currency because it correlates to my idea of virtual, unbounded wealth. Sorry if you and Perry don't like it. I cannot prove its superiority on a chart, and I recognize its susceptibility to political manipulation ("fiat money" as Perry says).

Yet at heart, I believe in birthright liberty and ex nihilo wealth creation. The former reinforces my dedication to self-directed government, with all its attendant problems. The latter reinforces my objections to metallism, with all its attended benefits.

Posted by: jk at November 17, 2007 10:57 AM
But Everyday Economist thinks:

Inflation is always and everywhere a monetary phenomenon.

If I can buy something better for less, the is a productivity gain and increases my prosperity (I just wrote about this here), but it does not create deflationary pressure.

Inflation, by definition, is the rise in the overall price level. Just because computers and iPods are getting better and cheaper does not mean that these phenomena are deflationary. The price level is still rising in spite of these gains (whether measured by any variation of the CPI, the PCE, or the GDP deflator).

Imagine you have the only Corvette in the entire world. This Corvette could be worth quite a bit. However, then suppose that a new Corvette is introduced into the market. How does this effect the value of your Corvette? (It goes down, for those in Rio Linda.) Money is the same. The more dollars that are in circulation, the less each dollar is worth. The less each dollar is worth, more dollars are required to purchase the same goods.<