Sunday, July 31, 2005

If you can't do the time... 

... don't go on magazine covers bragging that you are #1 at doing the crime.
Cops have busted a $2,000-an-hour hooker dubbed "New York's No. 1 Escort" after she blabbed to the media about her prurient profession.

Natalia McLennan — who was splashed across the cover of New York magazine three weeks ago, has been interviewed on TV talk shows [and is the subject of a BBC documentary] — was charged Wednesday with money laundering, prostitution and promoting prostitution, her lawyer, Barry Zone, told The Post...

"It's outrageous," he said... "It's basically that they saw her on the Donny Deutsch show and the Paula Zahn show and they read the article in New York magazine... They've arrested her because of some newspaper articles and some sensationalism."

But McLennan, who claims she made $1.5 million a year servicing her high-roller clients, made no secret of her work at NY Confidential, a swanky, Moroccan- themed brothel on Worth Street.

She became infamous overnight when she struck a provocative pose for the cover of New York under the headline, "N.Y.'s No. 1 Escort."...

The BBC is rumored to be interested in airing its footage as a reality series... [NY Post]
Our smart hooker of the week!

Update: This little post has gotten thousands of hits. OK, if you're really that interested, here's the whole NY Magazine story.

Update: Natalia shows up in court dressed for business!

"We French are pathetic losers."

So says a leading citizen of France on the front page of Le Monde, providing another point of view on the French Choice. (But how can he not even consider "family values"?)

[Hat tip: Tim Worstall]

Saturday, July 30, 2005

Well, now we know.

Col. Simon West, 39, was "embarrassed beyond comprehension" and denied that the cheeky grin on his face proved he knew exactly what he was doing.

One of his soldiers said: "We all think it's hilarious. The newspapers are selling like hot cakes."

One thing was brought out into the open yesterday — the colonel definitely had not got anything on under his kilt.

Army spokesman Lieutenant Colonel Ed Brown confirmed that Lt Col West was not wearing underpants.

He added: "The accusation he did this on purpose is utterly ridiculous."...
[The Mirror, quoted by Snopes.]

Meanwhile, on this side of the pond, we have yearbook pictures of animated celebrities ...

The yearbook photo is a genuine but, alas, the name under it has been changed.

But hey, the real fellow is an actor. If they ever do a live-action movie version of the cartoon, like they do of so many comic books, he's their Guy!

Wednesday, July 27, 2005

Misleading with numbers. Or: Is today's labor market really as weak as many claim? Let's compare...

The current unemployment rate at 5.0% is significantly better than the average for the last 30 years. But the bad news bears out there aren't having any of that. They say that the job market really is in bad shape, and since it is that unemployment number must be hiding something.

Their explanation #1 is that things are so bad that millions of people have totally given up even looking work, and thus aren't counted in the unemployment rate. That's it ... in fact, that must be it as a matter of arithmetic if we are to have a better than average unemployment rate in a bad job market.

But that's not all they cite. Paul Krugman writes...
... adjusted for inflation, average weekly earnings have been flat for the past five years ... As Berkeley's J. Bradford DeLong writes on his influential economics blog, "We have four of five indicators telling us that the state of the job market is not that good and only one - the unemployment rate - reading green."
... quoting Brad DeLong's ....
Four Out of Five Indicators Say the Job Market Really Is Weak

It's not just employment-to-population ratios. It's real wage growth. It's the relative amount of long-term unemployment. It's payroll employment. We have four of five indicators telling us that the state of the job market is not that good and only one -- the unemployment rate -- reading green.
Such claims can be found today all over the left-liberal side of the econo-blogosphere. But are they true?

[To find out, by comparing the numbers for those five indicators today to the numbers for them at the same point in the last business cycle which lead to the "miracle economy", read more.]

Monday, July 25, 2005

Short stuff.

For hot summer days, cool music from the long sub-Antarctic night webcast via Antarctica's 'A' Net Station.

"God, send me a one-handed neuroeconomist", says Arnold Kling.

Smart bank robber of the week meets smart bank teller of the month. At a drive up window sends a hold-up note through a pneumatic tube, expecting to get money back through the tube -- and does.

Mug shot of the week.

Fire brigade animal rescue of the week.
Firemen raced to the home of a young woman who called up in tears because her pet mouse had got its head stuck between the bars of its cage.

How much is that chimera in the window?
Scientists have been warned that their latest experiments may accidently produce monkeys with brains more human than animal.

In cutting-edge experiments, scientists have injected human brain cells into monkey fetuses to study the effects.

Critics argue that if these fetuses are allowed to develop into self-aware subjects, science will be thrown into an ethical nightmare...

The genetic similarities between humans and chimpanzees make the temptation to create such a human-chimp chimera almost irresistible... [PFM]
This may be why I'm not scientist, my lack of any trouble at all resisting such things.

With bombs going off in and being left about the London Underground, it's reassuring to know that those running the subways, bridges and tunnels here in NYC have in the four years since 9/11 figured out how to productively spend all of a good 5% of the anti-terrorism money that's been allocated to them ... and why .... (and Slate's take on why).

The "long arm of the law" looks like it's going to have to grow some to keep up with the groping examining hand of medicine.

Never, ever, believe politicians who promise that a "temporary" tax will be temporary. Especially if it's a tax on something you enjoy, like, say, alcohol. Pennsylvanians today are still paying a 10% temporary tax on it that was enacted to cover the cost of the Johnstown flood ...
The property damage total from the 1936 Johnstown flood was $41 million. The flood tax had generated that much revenue by the end of 1942.
... only today the tax rate is 18%.

Entrepreneurial capitalism continues to bring us new consumer goods unimagined by prior generations. Just remember not to mix up this one with the standard old one you give the spouse...
One morning at breakfast, Cathy Gallagher told her husband she wanted to start a line of greeting cards for adulterers. There was a pregnant pause. And then he said, "I think it's a great idea." any good capitalist, when she saw a market opening, she went for it.... She has already printed 100,000 of her cards and is filling orders for retailers across North America, including boutique stores and hotel gift shops ... the cards can be bought from her
website ... [LA Times]

And it's not too late to remember that July is American Beer Month! Though it also won't be too late to remember it in August, September, October...

Friday, July 22, 2005

Embarrassment ahead for AFL-CIO chief John Sweeney? The union head without a union to belong to.

It looks like Mr. Sweeney could find himself is in the awkward position next week of having to find a union to ask to admit him as a member...

Jolting organized labor, the Teamsters and a massive service employees' union decided Sunday to bolt the AFL-CIO, paving way for two other labor groups to sever ties in the movement's biggest schism since the 1930s.

The four dissident unions, representing nearly one-third of the AFL-CIO's 13 million members, announced they were boycotting the federation's convention that begins Monday...

The Service Employees International Union, the largest AFL-CIO affiliate with 1.8 million members, has spearheaded the exodus and will announce Monday that it is leaving the AFL-CIO
... The AFL-CIO's constitution requires all of its officers to belong to an affiliated union. And at next week's AFL-CIO convention, where his re-election is already assured, there is a real chance that a number of dissident unions will bolt the group due to dissatisfaction with Sweeney's leadership.

Leading the dissidents who are threatening to break away is the Service Employees International Union -- the union Sweeney is a member of.

"Sunday, America's top labor leader could be a man without a union." [NY Daily News]

And so he now is ...

Why urban public schools fail, part ... oh, you number it.

Struggling public-school students [in NYC] are facing a new threat to their education - math teachers are using a summer-school manual riddled with laughable errors...

Take this sample test problem: Students are shown drawings of two clocks. The first is set at 3 o'clock. In the second diagram, the clock reads 3:30. "How much time has elapsed?"

Possible answers are, F: 15 minutes; G: 20 minutes; H: 30 minutes; and J: 25 minutes ... According to the book, the answer is J: 25 minutes.

Before you start probing the intricacies of time-telling on distant planets, get a load of another question: "Which fraction is less than 1/2?"

Possible answers are: F: 7/10; G: 4/10; H: 4/5; and J: 1/4.

The book gives the answer as G: 4/10, which is correct — 4/10 is less than 1/2. But what about J: 1/4? ...

The book, called "Exploring Math: An Intervention & Reinforcement Resource," is a "teacher resource guide," featuring lesson plans and sample tests that are designed to be photocopied and distributed...

The book was published by Teacher Created Materials of Huntington Beach, Calif...

Sharon Coan, editor-in-chief of Teacher Created Materials, told me that math "is a fairly new program" for the 25-year-old company, which specializes in English and social-studies books. While normally the texts go through "proofreading and proofreading," Coan said the error-riddled volume "was kind of rushed."

"Sometimes a wrong version gets sent to the printer — this has happened on occasion."
[NY Post]
Yes, on occasion, like every four months.

What Supreme Court nomination fights are really about: $$$

I'm not usually a big fan of Dick Morris, Bill Clinton's former polling and campaign consultant. But when he sticks to talking about what he knows, he knows what he talks about.

And as to what drives the bitter, if not rabid, fights over Supreme Court appointments...

Advocacy groups have been waiting for a fight over the Supreme Court for a decade now and are determined to cash in on the opportunity it affords them to fatten their lists, add to their supporters and pad their revenues

... now that the fat is in the fire, they are eager to mobilize not necessarily out of conviction or principle, but because that's what they do.

Advocacy groups make their money by advocacy. Without a fight, they have no future...

They are in a battle with one another to gather donors, members, names, supporters and signatures.

This dynamic, on both sides of the fight, explains the passion of the groups even as Bush seems to have nominated a candidate moderate enough to be confirmed without a Democratic filibuster.

But you won't hear that from any advocacy groups. Their mission is to polarize and to make money and derive power from the hot coals they rake to life and the conflagration they kindle...

Can the advocacy groups of the left, in their own interest, foment a fight where none exists? Can they induce their proxies who sit in the Senate to see in Roberts a threat to civilization, and seduce them into a battle and a filibuster?

It will be fun to watch them try
. [NY Post]
The point isn't to win, the point is to fight, because the fight draws the money and enhances the political influence.

No political advocate ever increased his/her income or influence by saying "Well, the other side seems quite reasonable about all this, so I'll pass."

Thursday, July 21, 2005

Is it time to short oil?

Let's stretch our memories back -- way, way, far back -- all the way back to 1999, when oil was under $10 per barrel...
OPEC met November 25-26, 1998 in an attempt to reverse the decline in oil prices. This meeting was a total failure...

The battle that OPEC faces is market share vs. price. The problem is that you cannot have both. To increase market share you must increase production sufficiently to drive prices down to the point that it is not economical for non-OPEC producers to maintain current production rates.

Unfortunately for OPEC the full realization of the impact of lower prices on non-OPEC producers takes several years.
My emphasis. Of course, the effect of higher prices also takes several years. In the next paragraph substitute "higher" for "lower" and it is just as true.
The effect of lower prices is greatest in countries and areas with the highest finding and production costs. Onshore production in areas with high lifting cost are usually the first to show reduction in activity. Because of long term decisions involved, offshore producers often take longer to react to lower prices...

Perhaps the best chance for OPEC is a cold winter in the short term and a rapid Asian recovery in the longer term.
Prescient! But also showing the oil market cycle is not entirely unpredictable.
To better understand the producers dilemma let's look at a year end snapshot. ... A crude oil producer on the low end is receiving $4.65 per barrel or 11¢ per U.S. gallon. On the high end they received $9.00 per barrel or 21.4¢ per gallon. Milk producers do much better than that and they don't have to pump their product thousands of feet to get it out of the reservoir.

The impact of low prices on the industry is significant. By October, employment in oil and gas extraction was down 7.2 percent from 1997. Over the same period overall U.S. employment was up 2.3 percent. That is a rate gap of almost 10 percent. When the data comes in for the rest of the year the rate gap will widen...

Companies have been laying off less experienced lower paid workers, but the cuts are now moving up the experience ladder. If prices do not recover soon the industry will lose valuable human capital. Thus the producers dilemma: lose talent, lose reservoirs or lose the business? In many cases, it will be all three...
Ah, those were the days to be SUVing!

Here's the fundamental thing about the oil market: the supply of oil is relatively inelastic -- it reacts to a substantial change in demand only with a lag of years.

In contrast, with the typical manufactured good a change in demand will cause supply to change pretty quickly in response. If demand for green widgets shoots up, increasing their price, the production runs for green widgets will be quickly increased by Amalgamated Widget Corp. and all its competitors about as quickly, and the resulting prompt increase in supply will act to mitigate and contain the price increase.

With oil, however, the short-term level of supply is pretty well fixed. To bring significant new production on line, or take it off, takes a few years. In the meantime the quantity demanded is brought into line with the amount supplied entirely by price -- as it either plunges down or rockets up.

Thus, after more than a decade of strong economic growth and high oil prices that spurred increasing production, a world financial crisis hit in 1997 that sapped demand, especially in Asia -- and the price of oil, which had gone over $90 (inflation adjusted) fell more than 85% from its peak.

In response, producers slashed both production and their work forces, losing "talent, reservoirs and business", over a period of years.

After which the world recovered from recession and demand boomed again, especially in China and among the resurgent Asian tigers -- and here we are now with oil around $60.

OK ... So what would an individual whose memory stretched back far enough to recall an entire pricing cycle for oil expect from here?

Perhaps today's high prices leading to planned major production increases [more detail] over the next few years?

While at the same time high prices do the job of capping and even reducing previously surging demand in China, the world's critical "swing" demand market ...
A sudden and mysterious drop in China's oil consumption helped to push down the International Energy Agency's estimate on Wednesday of global demand for this year.

After growing 11 percent in 2003 and 15.4 percent last year, China's overall oil use declined 1 percent in the second quarter from the comparable quarter a year earlier, the agency said....

The IEA report said net oil-product imports appeared to have fallen to just 150,000 barrels per day, well below the 730,000-barrel rate for May, 2004. [BW]

... and elswhere?

If so, where would such a person think the price of oil will likely be in, say, 2008?

Place your bets now!

Hitler's drawings and personal greeting cards auctioned off.
A collection of sketches and two greeting cards signed by Adolf Hitler sold at a Montreal auction for more than $30,000 Tuesday evening.

Four architectural sketches – done in charcoal, pencil and watercolour – were sold for between $6,500 and $7,500 each. One includes the Nazi leader's corrections in red pencil on sketches of the opera house in his hometown of Linz, Austria, designed by his architecture minister Albert Speer.

[Take a look at them.]

The two cards, which date from New Year's Day 1935 and Christmas 1938, sold for $2,100 and $2,300.

Anonymous buyers purchased all six pieces, via telephone bidding, for a total of $32,400 (US $26,800)

Montreal auctioneer Iégor de Saint Hippolyte has said that the six pieces were owned by a collector who wished to remain anonymous.
That opera house is going to look great in my den.

James Doohan, Star Trek's Scotty, is dead.

My #1 favorite on the show, he went out well -- I should go out so well.

Last year he was honored by Neil Armstrong, the first man to walk on the moon, at a "Farewell weekend" final public appearance.

Before that he was class too.
The Canadian-born Doohan fought in World War II and was wounded during the D-Day invasion... he was machine-gunned, taking six hits: one that took off his middle right finger (he managed to hide the missing finger on screen), four in his leg and one in the chest. The chest bullet was stopped by his silver cigarette case. [AP]
So you can't say cigarettes were never good for anybody.

And if that's not being a manly enough man, he was married to a woman 37 years younger than him and had his last child at the age of 80.

Thursday, July 14, 2005

Hard times predicted for Europe.
OECD calls for eurozone to reform

Economic growth in the eurozone will halve in the next two decades unless it implements reform, the Organisation for Economic Co-operation and Development warned yesterday.... Without reform, "population ageing implies that the euro area's potential output growth is set to decelerate and the income gap with the US to widen considerably", the OECD said in its biennial study of the region.

On current trends, sustainable economic output growth would drop from 2 per cent currently to 0.9 per cent in 2020-2030 ... In comparison, the OECD estimates that the US economy can sustain a growth rate of 3.25 per cent a year....
Sub-1% growth ... that'll sure make it fun for them to pay for the world's most generous unfunded taxpayer-financed retiree welfare benefits.

These numbers imply that the size of the European economy will decline by about one-third relative to the US's over the next 25 years.

But not to worry, the French say they have the answer, and with none of that "reform" unpleasantness...

The French government yesterday identified six industrial clusters it believes will help to reinvigorate its economy and pitch the country to the forefront of innovation in new technologies.

However, in an attempt to forestall regional political opposition to the selection of just six globally competitive clusters, Dominique de Villepin, the prime minister, also identified 61 further "poles of competitiveness" across the country. He also doubled the incentives available to these "poles" from €750m to €1.5bn ($1.8bn, £1bn).

"With the poles of competitiveness we will liberate all the potential of our economy," he said... "They will create new products . . . to boost growth." [FT]

Ah, so in French "to liberate" an economy means for the government to direct it by picking its six biggest industrial winners in advance and doling out the subsidies to them -- and to grease the political skids for that by picking 61 more winners and doling out the subsidies to them too, to make everyone happy at taxpayers' expense.

It reminds one of the The Economist's observation that "apparently the French have no word for laissez-faire". Well, Viva la liberté!

Monday, July 11, 2005

Suspected terrorists should be protected from the dangerous powers of the Medicaid examiner, says the New York Times.

Today's Times opines...

The Patriot Act already gives government too much power to spy on ordinary Americans, but things could get far worse. Congress is considering adding a broad new investigative power, known as the administrative subpoena, that would allow the Federal Bureau of Investigation to gain access to anyone's financial, medical, employment and even library records without approval from a judge and even without the target knowing about it. Members of Congress should block this disturbing provision from becoming law...

The bill's defenders note that administrative subpoenas are already allowed in other kinds of investigations. But these are generally in highly regulated areas, like Medicaid billing....
Well, heck, if that's what it'll take to be able to investigate terrorists while preserving our civil liberties, let's highly regulate terrorism!

The political economics of fat

[Blogging will continue to be scarce here for some time -- but some subjects are too plump and juicy not to indulge.]

Paul Krugman now embraces the cost of fat people as justification for growing a fatter bigger government. (He's unable to maintain a consistent line all the way from Monday through Thursday as to whether this is "for the children" or not, but let's skip that.)

First I'll note that this subject has already been covered here and, from an economic point of view, if fat is a societal problem to be rid of then the best solution is a no-brainer: Just tax fat people and be done with it. Taxing the fat on people, compared to taxing or regulating it in food, is both a heck of a lot more economically efficient and more socially just too. So when Krugman considers a real "fat tax" is when I'll begin taking him seriously on this subject.

Secondly, reading Krugman's columns on this one wonders if his motive isn't just to find some subject (any subject?) regarding which most people still feel good about government -- and, hey, we can start expanding it again from there.
Above all, we need to put aside our anti-government prejudices and realize that the history of government interventions on behalf of public health ... is one of consistent, life-enhancing success.
Quite a claim! Of course, there are some folk around who might disagree with it -- from participants in the Tuskegee Experiment to the members of the Canadian Supreme Court who just recently struck down key provisions of the Canadian national healthcare system as an unconstitutional danger to the citizenry's health. But we won't dwell on this either....
Obesity is America's fastest-growing health problem; let's do something about it.
... except to note that maybe Paul should put aside his pro-government prejudices for a moment, start reading the newspaper he writes for, and remember the government already has done something about the obesity epidemic -- like, help create it!

This was all written about at great length in the NY Times Magazine some while back by Gary Taubes in his now famous (infamous in some circles) story What if It's All Been a Big Fat Lie?, a few words from which...

... Over the next two decades, however, the scientific evidence supporting [the low-fat diet is healthier] theory remained stubbornly ambiguous.

The case was eventually settled not by new science but by politics. It began in January 1977, when a Senate committee led by George McGovern published its ''Dietary Goals for the United States,'' advising that Americans significantly curb their fat intake to abate an epidemic of ''killer diseases'' supposedly sweeping the country.

It peaked in late 1984, when the National Institutes of Health officially recommended that all Americans over the age of 2 eat less fat. By that time, fat had become ''this greasy killer'' in the memorable words of the Center for Science in the Public Interest, and the model American breakfast of eggs and bacon was well on its way to becoming a bowl of Special K with low-fat milk, a glass of orange juice and toast, hold the butter -- a dubious feast of refined carbohydrates.

In the intervening years, the N.I.H. spent several hundred million dollars trying to demonstrate a connection between eating fat and getting heart disease and, despite what we might think, it failed. Five major studies revealed no such link. A sixth, however, costing well over $100 million alone, concluded that reducing cholesterol by drug therapy could prevent heart disease.

The N.I.H. administrators then made a leap of faith. Basil Rifkind, who oversaw the relevant trials for the N.I.H., described their logic this way: they had failed to demonstrate at great expense that eating less fat had any health benefits. But if a cholesterol-lowering drug could prevent heart attacks, then a low-fat, cholesterol-lowering diet should do the same. "It's an imperfect world," Rifkind told me. "The data that would be definitive is ungettable, so you do your best with what is available."

Nonetheless, once the N.I.H. signed off on the low-fat doctrine, societal forces took over. The food industry quickly began producing thousands of reduced-fat food products to meet the new recommendations.

Fat was removed from foods like cookies, chips and yogurt. The problem was, it had to be replaced with something as tasty and pleasurable to the palate, which meant some form of sugar, often high-fructose corn syrup....

Helping the cause was what Walter Willett calls the ''huge forces'' of dietitians, health organizations, consumer groups, health reporters and even cookbook writers, all well-intended missionaries of healthful eating....

As a result, the major trends in American diets since the late 70's, according to the U.S.D.A. agricultural economist Judith Putnam, have been a decrease in the percentage of fat calories and a ''greatly increased consumption of carbohydrates.'' To be precise, annual grain consumption has increased almost 60 pounds per person, and caloric sweeteners (primarily high-fructose corn syrup) by 30 pounds. At the same time, we suddenly began consuming more total calories: now up to 400 more each day since the government started recommending low-fat diets.

If these trends are correct, then the obesity epidemic can certainly be explained by Americans' eating more calories than ever -- excess calories, after all, are what causes us to gain weight -- and, specifically, more carbohydrates. The question is why?...

You don't have to agree with Taube's own suggested scientific answer to that question to realize that the US government has already been up to its neck in shaping our current food market, and thus the shape of the nation's bellies, for a generation -- acting in its own usual politically motivated, fully ascientific way.

Krugman fans take note.

The food industry -- far from being run by modern robber barons who extract fat profits from innocent children leaving fat deposits in their stead while invoking laissez-faire against all enlightened liberal objection, as Krugman would have it -- is in fact following exactly the course that Congressional Democrats and the N.I.H. laid out for it 30 years ago. Who was more liberally enlightened than George McGovern?

Yet contrary to the government's emphatic claims of the late 1970s and on, eggs are now touted as a healthy food, various kinds of fat are good for you, you want to get your "good cholesterol" count up ... and even what was being fat itself is now a condition of life-extending good health! While all that sugar that's been injected into diets to replace eggs and beneficial fat and good cholesterol ... yeech!

Bill Clinton apologized for the Tuskegee Experiment. Maybe Krugman should note and apologize for the past actions of Congress's McGovern Committee and the N.I.H. before recommending more (and doubtless better!) of the same?

Take my word for it -- if you want the government to do go down the road of doing something to reduce the fat on people's bodies, then the "fat people tax" is the way to go! Most efficient and most fair, with Congress and all its regulators and bureaucracies kept out of it, averting all the unintended consequences of "food fat regulation" that Krugman inexplicably says aren't given in this article he cited on this very subject, even though you can read them there yourself.

"First do no harm" may be an alien thought in politics, but let's at least try to do as little as possible.

Sunday, July 03, 2005

Short takes for a long weekend, and maybe then some.

This blog may be offline until about the 10th or later, due to an office relocation and backed-up work and family obligations (no summer respite for the self-employed). Until then....

A Milton Friedman interview is always worth reading.

A Mark Steyn interview can't avoid being interesting and entertaining too.

"Vengeance is always important", says a Swede who's hired bounty hunters to track down those who kidnapped him and held him captive for 67 days in Iraq.

How badly has German economic policy been mismanaged? Schröder leads a vote of no confidence against his own government.

Speaking of which, Tino from the U. of Chicago econ department details the modes of denial the Europeans use to avoid dealing with their economic malaise.

Novel thought of the week year within the journalistic community...

Norman Pearlstine, Time Inc.'s editor in chief, said that he concluded after much reflection that, "We are not above the law." [NY Times]
Married life isn't all joy and sunshine, but going back to dating in today's world might have its drawbacks too.

Movie review snippet of the week:

...The only other noteworthy piece of acting comes from Tim Robbins as a possibly deranged survivor hiding from the invaders in an abandoned barn. After a few minutes in his company, you can only wish that the Martians - or maybe the bloodthirsty puppets from "Team America" - would hurry up and do their job... [NY Times]
Great moments in online advertising.

Democrats scare themselves.

On the New York Times Op-Ed pages, Tom Friedman writes on international economic issues as we once supposed Paul Krugman might. While Krugman writes ... what the heck is this?

Diane Ravitch on how even math is being politicized in the public schools.

What a difference a channel makes. On the British side they're reporting...
...research that shows that men and women are being increasingly turned off by media images of well-groomed, feminine-looking men.

More than three-quarters of men questioned as part of the Leo Burnett Man Study believed that images of men in advertising are out of touch with reality...

Sixty per cent ... said that their masculinity was defined by their status within the home and workplace, not by the way they looked.

The Maxim campaign, which began as a light-hearted swipe at so-called "metrosexuality", has received huge support from men. It has become so popular that there are even souvenir T-shirts and screensavers carrying slogans such as "don't manicure the man" and "walk like a man"...
... while on the French side the news is...

PARIS (AFP) - Macho man is an endangered species, with today's male more likely to opt for a pink flowered shirt and swingers' clubs than the traditional role as family super-hero, fashion industry insiders say.

A study along these lines led by French marketing and style consultants Nelly Rodi was unveiled to Fashion Group International during a seminar Tuesday on future strategy for the fashion industry in Europe.

"The masculine ideal is being completely modified. All the traditional male values of authority, infallibility, virility and strength are being completely overturned," said Pierre Francois Le Louet, the agency's managing director...

"We are watching the birth of a hybrid man ... Why not put on a pink-flowered shirt and try out a partner-swapping club?" asked Le Louet
OK, who do you want as your ally in the 21st Century?

Thomas Sowell notes his 75th birthday and the perspective it brings...

I have lived through nearly one-third of the entire history of the United States... Most Americans did not own a telephone or a refrigerator when I was born ... Franklin D. Roosevelt was Governor of New York .... Winston Churchill was just an ignored backbencher in the British Parliament. In the German elections of 1930, a fringe group called National Socialists received more votes than ever before ... No black man had ever played major league baseball ... and none was allowed to enlist in the U.S. Navy ... our family had no such frills as electricity, central heating, or hot running water ... I can remember at the age of nine seeing a public library for the first time and having to have a young friend explain to me patiently what a public library was...
... maybe things aren't so bad in our time after all.

It's Gumby's 50th Anniversary. And the museum retrospectives have started.

My own Senator, Chuck Schumer, while introducing trade sanctions against China, informs us...

Remember, a major tenet of free trade is that currencies need to be free to float in value against other currencies.
That's right Chuck, there was no free trade among nations during the gold standard era, and there's none between New York and New Jersey today. (How do people who are too dim to be allowed to vote get elected like this?)

Tim Worstall puts his finger on a fallacy that has caused humans incalculable grief over the last couple centuries, but which gets repeated in the press and politics all the time.

Finally, the German army apparently isn't what it used to be. Considering what it used to be, that might be a good thing, admittedly. But still...

German soldiers will be allowed to sport mullets and ponytails after a court ruled army hair regulations were unconstitutional.

The ruling came after an 18-year-old soldier was locked up in a cell and fined £100 when he refused to chop off his 10-inch ponytail...

The military court in Munich ruled in favour of the soldier and argued the varying rules for male and female recruits were "unconstitutional" and "incomprehensible".

It said forcing male soldiers to cut their long hair went against their rights as individuals.
... do we really want these guys as our military allies in the 21st Century? Hey, maybe we should encourage them to go off and join up with the French Rambettes to form the countervailing power to the U.S. that Chirac dreams of, and make Jacques happy.

If all this isn't enough to last you for a week, check out the new (to me at least) blogs Knowing Humans and The Chief Brief.

And don't forget the current issue of the New Libertarian...

... for a slant on health care we can all endorse!

Catch y'all later. Happy Fourth!

Saturday, July 02, 2005

Why, oh why, can't we have a more reality-based class of lovers of big government? Or: the Joy of Ireland goes unappreciated.

One of the world's greatest (and underpublicized) economic turnaround success stories of the past 20 years has been Ireland.

In the mid-1980s Ireland had 17% unemployment, GDP per capita only about 65% of the EU average, a past generation of average economic growth under 2%, and national debt at 113% of GDP and rising in spite of a national tax burden of 45% of GDP, as government spending was almost 55% of GDP. And the population was fleeing the country.

The nation was going up against the wall of insolvency when all the major players in the economy (businesses, labor, government) got together to implement a dramatic turnaround program. This immediately slashed government spending, taxes, and regulations on business -- and kept slashing for years to come.

Since then, government spending as a share of GDP has been cut virtually in half, to 27%. Taxes have been cut by a third, to 30% of GDP, the lowest in the EU (with the corporate rate cut from 40% to 12.5%, the capital gain rate cut from 40% to 20%, the top personal rate from 80% to 44% and standard personal rate from 35% to 22%). The fiscal surpluses produced from reducing government spending by more (about half) than taxes (about a third) have reduced the national debt to 30% of GDP.

The result has been the creation of the Celtic Tiger. Average GDP growth has tripled since 1987 -- with an average 7% for the last 10 years -- reducing unemployment to as low as 4% and making Ireland one of the five richest countries in the world -- and #1 in the EU (disregarding Luxembourg) with per capita GDP 39% above the EU average. And the population flow has reversed, the expatriots are returning home.

All since 1986!

Thomas Friedman in his New York Times opinion column on Friday noted this success, compared it to endless economic slumps in France (10% unemployment) and Germany (12% unemployment) and dared to opine...
There is a huge debate roiling in Europe today over which economic model to follow: the Franco-German shorter-workweek-six-weeks'-vacation-never-fire-anyone-but-high-unemployment social model or the less protected but more innovative, high-employment Anglo-Saxon model preferred by Britain, Ireland and Eastern Europe.

It is obvious to me that the Irish-British model is the way of the future, and the only question is when Germany and France will face reality: either they become Ireland or they become museums...
.... which apparently was just too much for many of the big government types out there!

Over at Crooked Timber we see Friedman damned for...
"dodgy generalizations constructed around trite metaphors ... employed by someone who clearly doesn’t know what he’s talking about."
... as they go on to inform us...
Ireland is an especially poor fit with the Anglo-Saxon model in the area of labour market policy .... it is exactly the non-Anglo-Saxon features of the Irish economy -- and in particular the systematized concertation between trade unions, management, government and other social actors -- that was at the heart of Ireland's economic success in the 1990's. This system, unbeloved of free market economists, set the broad parameters for wage and income tax policy...
... which we find quoted and lauded by Brad DeLong -- who adds that in his own mind the Irish example reminds him of ... Sweden?
I confess I too had a "Huh?" moment here. Ireland in the past decade and a half looks, I think, more like a Scandinavian economy...
Hey, I'll see that "Huh?" and raise it with a "What??"

Sure, Ireland reminds us of any of those Scandinavian economies that over the last 20 years have cut their size of government by half, and their tax burden by a third (to 20 points of GDP, or a good 40%, below that of the Scandinavian economies), to fuel accelerated economic growth that has taken them from per capita GDP of only about 50% of the Scandinavian economies a generation ago to 20% more than the Scandinavian economies today.

The name of one of those Scandinavian economies will come to me in a moment... hmmm...

As for Crooked Timber's...
" ...the systematized concertation between trade unions, management, government and other social actors ... was at the heart of Ireland's economic success in the 1990's. This system, unbeloved of free market economists, set the broad parameters for wage and income tax policy ..."
...well, let's just ask them to name a few "free market economists" who are "unbeloved" of broad policy parameters such as cutting government spending from 53% of GDP to 27%, taxes from 45% of GDP to 30%, deregulating the nation's major industries, and so on.

Of course, what is unique about the Irish example is that it was the labor unions who embraced old-fashioned, Anglo Saxon-style capitalist economic policy in strong form by embracing these parameters, as a part of the "systematized concertation" of reform.

By just referring to a "systematized concertation" of reform that labor took a partnership role in -- without mentioning what the reforms actually were -- the folks at Crooked Timber seem to be trying to fool somebody (themselves?) into thinking that, to the contrary, it was business and government that swung around to the traditional labor point of view. Like in Scandinavia, no doubt.

Well ... so much for criticizing "dodgy generalizations constructed around trite metaphors... by someone who clearly doesn't know what he's talking about".

By the way, the good folks at Cato hold Ireland up as a favorite model for the type of reform governments should undertake. Imagine ... Cato, Crooked Timber and Brad DeLong all on the same page, apparently without the latter two knowing it. Somebody's sure gotta be wrong there!

You know, it's one thing to be a fan of big government, root for it, and even do your own best to try and make it work.

But it's something else to look at success somewhere in the world, fantasize that it must have resulted from your favorite policy prescriptions, of course -- and thus eagerly conclude that anyone who reports differently, in say a newspaper, must be some sort of foolish incompetent at his job.

It's enough to make one wonder...

Why, oh why can't we have a more reality-based class of lovers of big government?

Friday, July 01, 2005

New York Times shocker revelation about the "non-taxpaying affluent"!

People who invest in tax-exempt bonds don't pay taxes on them! This we learn from the Times' latest effort in its relentless campaign to expose all who, in its opinion, don't pay enough tax...

The Nontaxpaying Affluent Grew by 15% in One Year

The number of affluent individuals and married couples who paid no federal income taxes jumped more than 15 percent in 2002, to 5,650, new government data showed yesterday.

The chances of having a large income but not paying taxes on any of it are growing, according to the data...

The I.R.S. report said that "the most important item in eliminating tax" was taking income in the form of tax-exempt interest on state and municipal bonds....
Alas for the point of the story, people who invest in tax-exempt bonds effectively do pay tax on them -- because they receive a lower yield than they would from comparable taxable bonds. And this cost to them is part-and-parcel of their providing financing to the government in the form of the bond principal. They are in fact paying an implicit tax to finance government.

As of this writing the yield on 10-year AAA-rated fully taxable bonds is 4.66%, and that on 10-year AAA-rated tax-exempt bonds 3.71% [Bloomberg].

Since 3.71% is 20% less than the 4.66% that investors could get on same-risk, same-maturity bonds elsewhere, they are paying an implicit 20% income tax to the state issuer of the 3.71% state bonds. (Which they do voluntarily, since the 20% is less than the combined federal and state tax rate that they'd pay on fully taxable bonds.)

The net cash position to the parties on a 3.71% state "tax exempt" bond is identical to what it would be if the state paid 4.66% to a bond owner but imposed 20% income tax through withholding, paying only the 3.71% after-tax net.

To understand the great value of "tax exempt" bond financing to states, note that this 20% implicit income tax rate on them is more than double the highest income tax rate imposed by any state (9.5% by Vermont). So the states collect much more implicit income tax from "tax exempt" bond financing than they do overt income tax on any kind of "taxable" income. (Of course, they can do this thanks to the federal government's waiving its claim for income tax on the interest paid by state bonds, which leaves the 20% implicit rate paid on state bonds still lower than the combined federal-and-state rate owed by higher-income individuals on taxable bonds).

And as a 20% implicit tax rate is a good deal more than 0% ... so much for the Times' latest alert about ever-growing numbers of the rich going "tax free".