New School Politics

A very significant piece of news from the ForeignPolicy passport blog.

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Turkey preparing for ground invasion of northern Iraq
Mon, 02/18/2008 - 2:00pm
Turkish newspaper Today’s Zaman reports:

The Turkish Armed Forces (TSK) is preparing for a comprehensive ground operation into northern Iraq against the terrorist Kurdistan Workers’ Party (PKK) organization, expected to take place in spring.

The TSK is currently developing its strategy for the operation, which will most likely be launched in the middle of March. The ground operation is planned to be the final strike against the terrorist organization.

Wow! The final strike! Cocky military they’ve got there in Turkey.

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The economic blogs have been buzzing about the recent column in the NYT by Dallas Reserve Bank economists Michael Cox and Richard Alm regarding economic inequality. They’re article argues that consumption is a better unit of measure for economic inequality, because it is a more accurate measure of living standards. As the tittle says, “you are what you spend.”

My reaction is that when we compare the economic conditions of people within an economy we should be looking at consumption figures, because they most accurately reflect a person’s quality of life at any given point. Given the marginal propensity to consume, it should not come as a surprise that inequality is less stark under this type of measurement (see first image below), and that savings/investment makes up the difference.

More importantly, however, is that consumption comes closer to taking into account innovative technologies which enhance standard of life across the board. These innovations are not reflected in monetary representations of income, or even consumption, which ultimately represent each individual’s “slice of the pie.” Improvement in technology does not only make everyone’s life better but it also makes living standards more equal as the changes are mass-produced and rapidly become social norm. Even Paul Krugman agrees with this point:

Yes, over the centuries economic progress has reduced some gross disparities — modern Americans are relatively unlikely to simply starve to death (though it can happen), so in that sense the gap between rich and poor has narrowed. But the question isn’t whether society is, in some sense, more equal than it was in 1900. It’s whether it is radically more unequal than it was in 1970.

Krugman, of course, holds that inequality has grown since that time. I would assume that is true, if one is to go by income distribution, or even consumption distribution since 1970. But once again, distribution is not always the best way to go about making these assessments. Keep in mind all of the advancements since 1970, and their speedy dissemination among consumers (bottom graph below). Goods like the microwave, VCR, cellphone, home computer, and internet all hit the market since that point in time, reaching between 60% and 95% of the population by the present. For instance, the microwave has made cooking food far more efficient for those who otherwise could not spare the labor and time, while internet access makes any type of information imaginable far more accessible, especially on the net, for those whose resources are otherwise more limited.

Ultimately, to answer Krugman’s question about equality since 1970, we need to weight the effects of technological advancements against the climbing inequality in monetary distribution. Such a task is difficult to exact, however, to to which Tyler Cowen proposes an alternative conclusion:

We do not know how inequality of welfare in America is faring over say the last thirty years. This is a point of overriding importance. Just in case you missed it, let me repeat: when it comes to the kind of intra-nation inequality that we should really care about (if we are going to worry about intra-nation inequality at all), we “do not know.” As in “know” and “not” put together.

Until and unless I know more, I am inclined to side with Cowen. Consequently, I think we are better off concentrating economic policy on how to raise productivity, rather than how to equal economic ends, because what we do know is that, as a former teacher of mine often cited, “a high tide does indeed raise all boats.”

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Now that Obama has decided to shed a fraction of his flowery rhetoric in favor of more specific ideas, especially on economic issues, he is beginning to paint a better self-portrait of himself as a policy man. But when listening to him talk substance, I cannot help but raise an eyebrow relatively often. Here was a absurd comment from his Chesapeake victory speech:

It’s a game where trade deals like NAFTA ship jobs overseas and force parents to compete with their teenagers to work for minimum wage at Wal-Mart.

This contention is just completely wrong and makes almost no economic sense. It is illogical and there is no data to support it. Not only is it sensationalism and Wal-Mart bashing, but seems that there is no reason to say it unless it were aimed at scaring people into supporting Obama and his economic plan. There is really no other explanation to why he said it other than it is pandering and, ironically, fear-mongering from the man who pontificates about hope all the time.

If he was economically literate he would take note of the fact that over half of those working minimum wage are under the age of 25 (and more than a quarter in their teens), while almost nine of every ten minimum wage workers do not have any dependents (BLS). Moreover, he would also recognize that freer trade allows for more capital mobility and for businesses and people to remain more productive, thus delivering more, cheaper, and better products to consumers. Bill Clinton was honest enough to embrace free trade even when it went against his party’s grain. Now even his wife isn’t brave enough to stand up against her party. Worse yet, Republicans like Huckabee, and to an extent Romney when he was still in the race, underhandedly went after free trade, using the unoriginal line, “I believe in free trade, but it has to be ‘fair’ trade.” Talk about a lepor’s bell. Among candidates on trade, however, McCain has demonstrated that he is most consistently in favor, even telling Iowans that he is in favor of eliminating all farm an ethanol subsidies.

One of America’s most prominent economists, Greg Mankiw, writes:

An open question in my mind is whether Barack Obama is going to align himself with the economic centrists in the Democratic party or with the populists on the far left of the party. A key litmus test is trade, and so far it does not look good.

And, for that matter, it doesn’t look so good for the other Democrat in the race as well.

From the Washington Post, here are the candidates records on earmarking which should serve as an indicator to how much fiscal restraint and responsibility they will practice on the whole:

Sen. Hillary Rodham Clinton helped secure more than $340 million worth of home-state projects in last year’s spending bills, placing her among the top 10 Senate recipients of what are commonly known as earmarks, according to a new study by a nonpartisan budget watchdog group.

Working with her New York colleagues in nearly every case, Clinton supported almost four times as much spending on earmarked projects as her rival for the Democratic presidential nomination, Sen. Barack Obama (Ill.), whose $91 million total placed him in the bottom quarter of senators who seek earmarks, the study showed.

Sen. John McCain (Ariz.), the likely GOP presidential nominee, was one of five senators to reject earmarks entirely, part of his long-standing view that such measures prompt needless spending.

On the issue of disparity in pay between men and women, the candidates positions serve as an indicator of their overall attitude towards free exchange and market forces, as well as their willingness to use government to stifle those forces. From the WSJ:

There are actually two versions of comparable worth legislation, the Fair Pay Act and the Paycheck Fairness Act. The former is co-sponsored by Sen. Barack Obama; the principal sponsor of the latter is Sen. Hillary Clinton (Mr. Obama is a co-sponsor). Both would push companies to set wages based not on supply and demand — that is the free market — but on some notion of social utility. The goal is to ensure that jobs performed mostly by men (say, truck drivers) are not paid more than those performed mostly by women (paralegals, perhaps).

President Ronald Reagan correctly called comparable worth “a cockamamie idea.” A great lesson of economic theory, not to mention historical experience, is that government-set wages and prices not only curtail freedom, but lead to shortages, surpluses and market disruptions.

The writer is right on the money with his conclusion, but I will add that the arrogance of the candidates who think that the millions upon millions of individual economic actors determining supply and demand, while working in their own self-interest, should be manipulated on a whim by government edicts is becoming increasingly ominous. While I have traditionally said that Obama would be slightly more rational on the economy than Clinton, it is clear that their platforms are very, very similar (Clinton even accused Obama of copying her ideas) on these issues and that neither are very desirable Presidents at least in terms of how they would handle the economy. And even though McCain has his fair share of economic setbacks, not to mention the fact that he claims to not know much about the economy, he appears to be a more consistent backer of limited government and the free market than either Democrat would wish to be accused of in their wildest nightmares.

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I thought this was a pretty funny article from CNN. In 1973 during Kissinger’s visit to China, Chairman Mao offered to give America up to 10 million Chinese women. Of course, back then Mao was already dealing with a population problem-but simply the idea of the proposition is so absurd, and according to Kissinger’s account, it was so blunt, that the whole exchange sounds like something from a political satire rather than history. I suppose it proves the old saying that truth can be stranger than fiction.

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“WASHINGTON (AP) — Amid a discussion of trade in 1973, Chinese leader Mao Zedong made what Secretary of State Henry Kissinger called a novel proposition: sending tens of thousands, even 10 million, Chinese women to the United States.”

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You can find the whole article here at CNN.com

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Perusing different websites over the course of the election season has made me aware of the fact that different outlets never have the same numbers for delegates. The reason is that delegates are not officially awarded yet, and each source is projecting based on their own numerical methods. Here is a good article showing the disparities. Here is a chart showing the current counts with a small insight into methodology.

As I see it the average, including superdelegates, has Obama around 1250-1270 and Clinton around 1200.

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This past summer I wrote about the great hope I had in Nicolas Sarkozy to restore capitalism to France and by doing so, save its lagging economy. I had read transcripts of his translated speeches, saw him on television multiple times and read enough articles about him to feel that he was somebody who could truly enact change in that once great nation which is slowly being marginalized in the global arena. I stand here today disappointed that this man who had such great rhetoric on the campaign trail failed to live up to his promises.

Sarkozy has proven to be a protectionist in his trade policies and just as socialist, in most other policies, as the machinery he claimed he would tear down. His popularity in France has dropped 13% and, instead of sticking to his convictions, he has simply given in. This past Monday he spoke to steelworkers and declared he would save their plant from being shutdown, on Wednesday he promised bonuses to low-income pensioners and, in response to a slow down by taxi drivers, the same day ended plans to deregulate that service. All of these are far cries from his campaign days where he gained widespread support for wanting to significantly reduce government regulation and handouts, and create a more privatized economy. Obviously this is not the man the French people thought they would be getting when they overwhelmingly voted for him and gave his party a considerable majority in the National Assembly.

The biggest disappointment, however, has been his handling of the Societe General (SocGen) situation. SocGen is a major French bank that has recently experienced tremendous losses. Sarkozy has been adamant that only another French company may bid for the bank. This ignorant protectionist view will do more harm than good for SocGen and the French economy as a whole. SocGen will not get the best price if foreign companies are not allowed to bid on it, so the shareholders will be injured. The French economy will take a blow as investors who may have believed in Sarkozy’s rhetoric about opening France to globalism will realize that he is no different than previous French protectionist politicians, and invest their money elsewhere.

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Today, President Bush signed the $168 billion stimulus package that has received much coverage in its bipartisan pursuit to address the economic slowdown with more spending. From the AFP:

Treasury officials say tax rebate checks of up to 600 dollars for individual taxpayers and 1,200 for couples, plus 300 dollars for dependent children, could boost consumer spending which has been pressured by sinking home prices and tight credit.
The White House said the package will provide tax rebates to 128 million American households and that the first checks should arrive in mailboxes in May.

Of course the signing is not much of a surprise, but I would also like to use this post to make a valuable addition to the Coalition Against Stimulus. John Stossel, who conveys free market ideas to a wide audience like no other member of the media, joins the club with an article, “Stimulating Nonsense,” released today.

He envokes Russ Roberts, as several have, who had perhaps the most the most memorable line of the anti-stimulus campaign:

It’s like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn’t get any deeper.

In other words this bill will (a) not augment gross product in any way and (b) all it does is redistribute money from one place to another–rich to lower/middle class; savings to consumption. If anything, from what we know about the effect of redistribution on economic incentives as well as the importance of savings to economic growth, “stimulus” will do anything but stimulate overall.

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I’ll give you a hint: it’s not “election”…

…the point is, Chris Matthews has a man crush on Obama.

Last night I almost fell out of my seat when I heard the “Hardball” anchor make the allusion that Barack Obama’s speach turned him on in, essentially. At least that’s how I interpreted, when he said “I felt this furrowing up my leg,” so tell me if I’m completely off the mark. Then again, Olberman and Brian Williams (who was on afterwards, just not on the YouTube video) seemed to pick up on it as well.

Here’s the video (you can also see it if you click “read more” at the bottom of the post). Matthews’ admission comes at 0:30.

In all seriousness, the point is the media in general, but specifically MSNBC, seems to be particularly kind to Barack Obama (and on a side note, particularly unfavorable to Hillary Clinton). I am a regular watcher of MSNBC–that is, I tend to watch them for my election coverage–but I had to switch the channel after hearing so much sycophantic babble from Matthews, Olberman, and even Williams, the NBC anchor. This was a particular circumstance, but I’ve noticed the trend before.

And, to be sure, my accusation could be disparaged as particular and unsubstantial, but it seems to be agreed upon by others as well as independent studies on election coverage. Here is a recently released study by the Center for Media and Public Affairs. The CMPA enumerates their methods:

These results are from CMPA’s 2008 ElectionNewsWatch Project. They are based on a scientific content analysis of 765 election news stories (22 hours 15 minutes of airtime) that aired on the flagship evening news shows on ABC, CBS, NBC and FOX (the first 30 minutes of “Special Report with Brit Hume”, which is most like the network news shows in content and presentation) from December 16, 2007 through January 27, 2008.

Here is the overarching finding:

Hillary Clinton is getting the worst press and Barack Obama the best press of any major presidential candidate, and Bill Clinton is also getting negative reviews, while the gap in good press between John McCain and Mitt Romney is narrowing, according to a new study of TV news election coverage by the Center for Media and Public Affairs. The study also finds that FOX’s evening news show had the most coverage of policy issues and the least coverage of the campaign horse race.

And finally, the most telling statistic:

Sen. Barack Obama has led the race for good press and Sen. Hillary Clinton has lagged the farthest behind. From Dec 16 through Jan 27 five out of six on-air evaluations of Obama (84%) have been favorable, compared to a bare majority (51%) of evaluations of Mrs. Clinton…NBC’s coverage has been the most critical of Clinton – nearly 2 to 1 negative (36% positive and to 64% negative)

No wonder I find it astounding that Matthews chose the adjective “objective” to describe his verdict on Obama.

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We had mentioned last week that we attended rallies for presidential candidates Barack Obama, Hillary Clinton, and John McCain. Video footage and our impressions will be along shortly, but we’ve just uploaded a batch of photos from the events. They’re embedded below.

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Here’s his reason:

 I have made repeated efforts to encourage the Chinese government to use its unique influence to bring safety and stability to the Darfur region of Sudan. Although some progress has been made along the way, most notably, the passage of United Nations Security Council Resolution 1769, the situation in Darfur continues to worsen and the violence continues to accelerate.

…And I’m sure China really cares…

When it comes to politics, entertainers consistently demonstrate that they aren’t very bright. Then again I guess we shouln’t expect much from Spielberg who didn’t graduate film school until 2002, and most certainly did not study international relations. Normally, it takes a little more than the cries of celebrities to register any leverage on world superpowers. The point adds to what I have already said about the naivete of the “save Darfur” movement. Here is my first post on why “I don’t care about Darfur.”

I have more recently written another newspaper article elaborating on the impracticality of interventionalist Darfur policy. If you press the “continue reading” link at the bottom of the post you will be able to see it.

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