Sargent and Sims Press Conference

Although I encourage you to watch the entire video, I want to draw attention to the following quote from Sargent:

So here's a phrase that you hear; it's partly about language. You hear that US fiscal policy is unsustainable. You hear that over and over again. You actually hear it from both parties. And that can't possibly be true because government budget constraints are going to make it sustainable. So what they mean is that certain promises that people have made about taxes, entitlements, medicare, medicaid---those are incredible. They are not going to fit together. So the US fiscal policy is sustainable. It's very uncertain. It's uncertain because it's not clear which of these incredible promises are going to be broken first.

UPDATE: Peter Schiff engages in some creative editing to make it appear as if Sargent and Sims are know-nothings. Schiff uses an awkward pause and disclaimer by Sims (wherein Sims cautions the audience not to take the views of the two newest Nobel Laureates in Economics as irrefutable) to suggest Sims avoids the question. Schiff then skips from 15:35 to 16:13 (during which Sims presents his view) where Sargent says "I don't have much to add to that ... I was hoping he was going to ask about Europe." As the above quote captures, Sargent goes on to discuss his view of recent fiscal policy.

Schiff then manipulates a humorous move by Sargent---requesting a question about Europe and then, when the question is asked, deferring to Sims---to appear as if Sargent knows nothing about Europe as well. The audience recognized the humor with laughter and applause.

Shame on you, Schiff.

Lucas on the Recovery

Robert Lucas gave a talk recently at University of Washington on Macroeconomic recovery in the US. His slides are available.

Lucas argues that, by imitating European policies on labor markets, welfare, and taxes, the U.S. has chosen a new, lower GDP trend. If this is correct, the weak recovery we have had so far may be all the recovery we will get. He uses these two slides to support his argument. The first shows the spread in growth rates which Lucas describes as the cost of the welfare state--note the lower trend for most of Europe. The second shows the US recovery in the recent recession.

What do you think?

[HT: PJB]

The Political Economy of Coin Images

This story is old news-- a combination of free shipping on U.S. Mint coins and credits cards giving frequent flyer miles for spending yields free flights-- but this bit was new to me:

Native American coins bear the likeness of Lewis and Clark guide Sacagewea. By law, Sacagewea must appear on one in every five dollar coins manufactured, the legacy of political dealings on Capitol Hill.

Round Two

Buchanan and Wagner (1977)

[HT: Josh Hall]

iPad = Job Killer

Sumner on Recessions and Policies to Combat Them

Scott Sumner at TMI hits the nail on the head:

We need to stop thinking about deep slumps as a sort of random “problem” that needs to be “fixed.”  They need to be prevented; if they aren’t, they probably won’t be fixed.

ATSRTWT

Q: Why Do We Need Pro Athletes?

A: Because politicians make poor role models. Consider Newt Gingrich, via the AP.

The twice-divorced former U.S. House speaker has said he had an affair with Callista, a former congressional aide, while married to his second wife. It happened at the same time he was attacking President Bill Clinton for his relationship with White House intern Monica Lewinsky.

Do as I say, not as I do.

Splitting the Bill? Impossible.

That is how I interpret this line from Paul Krugman's latest NYT article:

Think of it this way: Congress could, with a stroke of a pen, cut Social Security benefits in half. But it couldn’t do the same with health spending: Medicare can’t suddenly start paying to replace only half a heart valve or mandate that bypass operations stop halfway through.

Really? Because I am pretty sure they could. I've even drafted a short letter which they can use if they decide to make it happen (I'll waive my usual consulting fees).

___

Dear Medicare and Medicaid Recipients,

Henceforth, the government will only be paying for half of qualified medical expenditures.

Sincerely,

Congress
___

Peaceful protests and authoritarian regimes

Here's the best piece-- by a degree of magnitude-- that I've seen that gets after a question that's been nagging me during the Middle East upheaval: If dictators are capable of such atrocities to acquire power and to maintain their position, how can peaceful protests, of all things, bring all of this down?

What's Will's string of letters? ATSRTWT. That's five minutes of hunting those down that I won't get back.

Conservatives Ask Libertarians for Divorce

Kevin McCullough at Fox News is not happy about this year's CPAC. It seems Republicans were content with picking up a percent or so in the general polls. But now that these "disrespectful libertarians" are speaking up, they are probably more trouble than they are worth. McCullough explains:

Libertarians and Conservatives are as different as Libertarians and Liberals. The truth is libertarians are the worst form of political affiliation in the nation. Combining the desire of economic greed, with the amoral desire to promote any behavior regardless of its cost to our culture is a stark departure from the intent of the Founding Fathers.

I hope this means conservatives will drop the pro-market (read: economic greed) rhetoric. Good riddance, I say.

[HT: Steve]

Made in the USA

That is the title of a recent Boston Globe article. Here's the take-away:

There’s just one problem with all the gloom and doom about American manufacturing. It’s wrong.

Americans make more “stuff’’ than any other nation on earth, and by a wide margin. According to the United Nations’ comprehensive database of international economic data, America’s manufacturing output in 2009 (expressed in constant 2005 dollars) was $2.15 trillion. That surpassed China’s output of $1.48 trillion by nearly 46 percent. China’s industries may be booming, but the United States still accounted for 20 percent of the world’s manufacturing output in 2009 — only a hair below its 1990 share of 21 percent.

Stupid argument (They took err jeerrrbbbs!). Bunk stats. It's a double doozie!

Interesting Line of the Day

From Squire (1988) in LSQ:

According to Bell and Price's (1975) study of members of the California Assembly, most legislators take two years to understand the legislative process.

Blockquoting X

X = F. A. Hayek, Denationalization of Money (pp. 83-4):

But the present political necessity ought to be no concern of the economic scientist. His task ought to be, as I will not cease repeating, to make politically possible what today may be politically impossible. To decide what can be done at the moment is the task of the politician, not of the economist, who must continue to point out that to persist in this direction will lead to disaster.

Elected Property Assessors: A Denver Case Study

From the Denver Post (Hat Tip to Zach):

The Adams County assessor has slashed millions of dollars from the taxable value of properties owned by the largest contributors to his election campaigns, a Denver Post investigation found.

[...]

The review of assessments on properties owned by top contributors to Reyes' campaigns found that his leading donor, a California-based warehouse company, has won reductions in taxable value totaling $23 million on 11 buildings. Those reductions saved the company more than $800,000 in property taxes this year alone.

I share this, in part, for self-promotional purposes. Here is my paper on elected versus appointed property assessors.

Celebrating Tullock

It's always nice to hear from Gordon Tullock, especially on election day.



And here is my favorite clip of George Carlin (NSFW--Obviously!) dishing on democracy and explaining why, if you vote, you have no right to complain.

Declaration of Independence: "Too late to apologize"

In apparent envy of the Hayek-Keynes rap, political economists and political scientists rally behind equally-cheesy video.



Stick around until the end. It gets even cheesier.

Stewart Gets It!

The end of this clip is incredible. John Stewart (through Charlton Heston) makes it clear that neither the right nor left are principled defenders of the Constitution. Both sides use the Constitution like a drunk uses a lamp post: more for support than illumination.

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Extremist Makeover - Homeland Edition
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

[HT: Dan Smith]

Ben Powell on Farm Subsidies

Blockquoting X

X = Russ Roberts:

When your teenager drives drunk and wrecks the car, and you give him a do-over—repairing the car and handing him back the keys—he’s going to keep driving drunk. Washington keeps giving bad banks and Wall Street firms a do-over. Here are the keys. Keep driving. The story always ends with a crash.