Jim Manzi on the Stimulus and Epistemic Humility
I take great pleasure in reading Jim Manzi engage with his critics. When you compare Jim’s writing to that of his interlocutors, you soon realize that he is taking part in a very different kind of intellectual exercise. My impression is that Jim is less interested in political combat than in getting the questions and, to the extent possible the answers, right. Read full post...
Not Out of The Woods Yet
Monday afternoon, Vice-President Joe Biden spoke in Toledo, Ohio at a Chrysler plant. The speech was designed to promote the successes of last year’s auto industry bailout, where $50 billion was given to GM and Chrysler to avoid the collapse of each firm. It also follows closely on the heels of President Obama’s own auto plant tour made earlier this month. Read full post...
Responding to Dr. Krugman's column on tax cuts for the rich
In his column yesterday, Dr. Paul Krugman argues for raising the top marginal income tax rates on January 1. His polemic is useful because it encapsulates most of the Left’s arguments. In this view of the world, revenues belong to the government and are allocated by policymakers as gifts to those who need or deserve them. When you hear that “we cannot afford to cut taxes” and “we should not give tax cuts to ______,” you are hearing this philosophy. Read full post...
Rhetoric Meets Reality on Health Law
Ben Smith at Politico has a great scoop on a recent strategy session hosted by the Herndon Alliance, a left-wing umbrella group that works to promote the new health care law. According to Smith, as the result of polling and focus groups, these health reform supporters are calling for a change in communications strategy. Apparently the American people are not being persuaded by the ongoing communications campaign designed to promote the idea that the new law will lower costs for families and the government. Read full post...
CBO Releases Grim Budget Update
Today CBO released its annual summer budget update and economic forecast. The projections are about as grim as we expected them to be. CBO estimates that this year, the deficit will exceed $1.3 trillion ($27 billion less than CBO projected earlier this spring). At $1.3 trillion, the deficit will be the second largest in 65 years as a share of GDP. At 9.1% of GDP, it is second only to last year’s deficit – 9.9% of GDP. Similar to last year, the deficit is due to a combination of weak revenues from the floundering economy and huge spending increases on stimulus measures. Read full post...
The Leaner Welfare State: New ‘citizen benefits’ could help restore American competitiveness
Should American workers fear the economic future? As recently as the early 1990s, many academic and political elites were convinced that the United States was doomed to become a backwater, an economic also-ran. From 1973 to 1995, average labor productivity increased by 1.4 percent a year, a marked decline from the 2.7 percent annual growth rate that drove post-war prosperity from 1948 to 1972. Read full post...
Chart of the Day, Times Two
In case you took a break from your morning browse of The Wall Street Journal, we wanted to flag two especially illustrative charts from today’s edition. The first comes from “China Output Tops Japan” and shows that China is now the world’s second largest economy, edging out Japan in a straight comparison (If you account for China’s low cost of living, it hasn’t been close for some time). Read full post...
Paul Krugman on the Ryan Roadmap
Paul Krugman has written a column centered on Rep. Paul Ryan’s “Roadmap for America’s Future.” It is a peculiar column, and I’m sorry to say that it is somewhat misleading. Josh Barro and I wrote an article on the Roadmap for National Review, and we were careful to highlight its deficiencies as well as its strengths in order to give a balanced portrait. Krugman, for whatever reason, has chosen to take a different approach. Krugman highlights one important flaw in the original version of the Roadmap, namely its optimistic revenue projections. And he highlights an analysis from the Tax Policy Center, which Josh and I also referenced in our article. Read full post...
Unpacking Claims on the Auto Bailout
Recently, the President has been making a tour of the nation’s "Big 3" auto manufacturers, visiting a GM plant and a Chrysler plant at the end of July, and speaking at a Ford plant in Chicago today. As the President continues his visits, there seems to be greater support among many pundits for his decision to bail-out the auto industry. Yet, many are dubious about these claims that a bail out was the best way (or the only way) to address the crisis. Read full post...
Latest in Silly Stimulus Waste
While economists are debating the effectiveness of President Obama’s stimulus plan and whether a second stimulus is needed, a lot of macroeconomic models are being matched against each other to attempt to determine the effectiveness of the stimulus, and the potential effectiveness of certain spending going forward. Questions being asked attempt to determine things such as: Is the spending multiplier higher for road construction or a for a payroll tax cut? But a new report highlights the absurdity of some of these high-level academic discussions by asking questions like, “What’s the multiplier for an interpretive dance program?” Read full post...
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