As a related aside, let me ask this: would you think the New York Times has a default position which favors electric cars, disfavors electric cars, or is neutral?
While the media offers huge hosannas regarding Musk, let’s get real. His business model for space launch depends on one customer, the U.S. government, while his business model for electric cars depends on massive market intervention from state, local, and federal governments.
Without the government as the customer or as an interventionist, all of Musk’s work falls into the can’t work/won’t work/fail bin. I’m not saying Musk isn’t a smart, hardworking, capable man; I’m just saying he doesn’t walk on monomethylhydrazine and nitrogen tetroxide.
I’m sure Mr. Musk’s lobbyists have Congress and the White House on speed-dial as
bailouts stimulus investments in the electric car industry are starting to look more and more likely.
Although it’s too early to say—and it’s impossible to underestimate the stupidity of many voters (witness the results of the 2012 presidential elections)—it would seem Hillary Clinton’s failed testimony performance regarding the Benghazi security debacle could only have hurt her 2016 election chances.
Bluster and emotions are a poor substitute for a leader’s preparation, competence, and professionalism. (President Obama is thought to have waivers for these useful leadership traits.)
One can’t help but notice the incongruity between Clinton’s words (‘I am responsible and in charge’) and her body language, tone, and… other words (‘This isn’t my fault. Can’t we just move on?’)
And is the fix in? Consider the fact Clinton wasn’t interviewed for the Benghazi after-action reports. It’s telling both politically and professionally. (As is the fact this testimony is being given four-plus months after the event and two-plus months after the elections.)
This video explains why Germany lost all those world wars and might alleviate some of those concerns (that is, riots) in Southern Europe. Advance it to the 25 second mark or so to avoid the German-tinged, but still recognizable, profanities.
The President is busy, busy, busy jetting around in Air Force One, doing all those fundraisers and re-election events and whatnot. So did his fatigue cause him to reveal more to the American people than is appropriate for his own good (emphasis added)?
…There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
Yes, success is now attributable to—and limited to—the idea that it takes a (government) village.
Mr. President, have your handlers finally driven your modest intellect and learning over the economic cliff? If you’ve got a business — you didn’t build that. Somebody else made that happen. Really?
No business can succeed with with unending and unsupportable deficit spending. So what does the President do? He calls for more ruinous spending, advocates for class warfare (more taxes for the most successful; more bills for the young), and props up failure and rigs the game with government-driven market interference: bailouts, takeovers, public-sector spending, and crony capitalism.
The President made himself the face of the U.S. economy but as it turned out, his mouth was writing checks that neither his economic ideas nor his government authority could deliver. If voters don’t make him pay for the failures of Obamanomics in November, we’ll be getting the government we deserve.
Although it’s common knowledge to the traditional media that Barack Obama is our most intelligent president ever, he too often seems to possess a certain panache or savoir faire for looking like an idiot.
It might help if the President would preview his scripts in advance and ask a few questions as opposed to reading them cold off the teleprompter. (Yes, we know that fundraising keeps him hopping, but…)
Consider this howler offered by Barry Oh! with a straight face and plucked from a recent presidential speech:
The last thing we need right now is more top-down economics.
Barry, Barry, Barry. You’ve given us a command and control economy (legislation via regulation, policy directive, and Executive Order; Obamacare; automotive takeovers; bank and Wall Street bail outs; green “jobs”; the EPA; stimulus; crony capitalism; 40-plus months of above 8% unemployment; a massive growth in the federal debt; etc.) that’s proven to be an epic fail for America.
You, Mr. President, are the very face of top-down economics. Don’t you even have a clue?
And by the way, it isn’t the taxes. It’s the spending.
Barack Obama, smartest President evah (according to the media lapdogs).
Or maybe not, because it seems Barry Oh! is in trouble again.
The root cause of his trouble?
Opening his mouth.
No, it wasn’t about our 57-states or speaking Austrian.
This time it was a bit different; that whole “Polish death camp” thing the President referred to:
“The president misspoke — he was referring to Nazi death camps in German occupied Poland,” Tommy Vietor, a spokesman for the White House National Security Council, said in a statement. “We regret this misstatement.”
Other than that (so far as we know), the President did fine.
In addition to the White House regretting the event, the Poles aren’t too happy either:
“The White House will apologize for this outrageous mistake,” Foreign Minister Radoslaw Sikorski wrote on his Twitter Inc. account. “It’s a shame that such a momentous ceremony has been overshadowed by ignorance and incompetence.”
Poland and the Czech Republic have already been shorted by the President on missile defense, so what’s a bit of momentous ignorance and incompetence between friends?
Is there any western nation out there—Canada, Germany, and Australia excluded—who doesn’t need a bailout?
And can those funding national-level bailouts (using ever-increasing amounts of newly created and self-borrowed money) continue this game forever? Despite the attractiveness of denial (“this time it’s different”), the evidence suggests things that can’t continue forever won’t.
So a question of growing significance is “Who shall bailout the bailers?”
Yet isn’t the answer obvious? Our “global leaders,” of course.
However, these are the same political, social, financial, and economic rocket scientists whose actions suggest they believe debt can be deferred indefinitely, inflated away, borrowed at costs approaching zero, or written down without serious impact. The same global leaders who can’t or won’t make the decisions that normal households do under similar circumstances every day (like choosing to live within one’s means).
These are the same global leaders who manage to equate “austerity” with government growth and “growth” with more government growth. It follows the admonition to never let a good crisis go to waste and the outcome is a continued erosion of freedom of choice and conscious, surrendered to those insiders who are wiser (market interference of all sorts, green jobs, national debt, tax policy, invented “rights,” regulation, etc.) about our own good than we are ourselves.
Debt-wise, as the U.S. is not much better off than those in crisis and since the Fed/U.S. government has long been the bailer of choice, who shall bail the Fed/U.S. government out?
Or alternatively, who will have to bear the results of their failures?
What do you learn from this week’s political headlines?
- Dick Lugar is totally out of touch with Indiana voters.
- Barry Oh! favors homosexual marriage.
- Mitt Romney may or may not have participated in high school activities as a high schooler.
- Mitt Romney has a likeability problem.
- The homosexual marriage issue may hurt Mitt Romney.
- California’s budget deficit is about 170% of what it was projected at the start of this year.
- European economies—with a couple exceptions—are in the septic tank.
What is ignored in this week’s political headlines?
- The U.S. economy is on the same glide slope as California and Europe.
- Increased homosexual marriage discussion means reduced Obamanomics discussion.
- The labor force is as small as its been in 30 years.
- The federal debt and deficit are not self-healing.
- Obamacare will greatly add to the federal debt and deficit problems.
- Joe Biden is the “thought leader” in this Administration.
- Iran is closer than ever to being a nuclear weapons state.
- Human rights is not a priority for the Administration.
The lesson for the 2012 campaign? It’s more than the stupid economy. It’s a failed Administration.
Peter Suderman at Reason gives a world-class review of The Escape Artists: How Obama’s Team Fumbled the Recovery.
Despite the quasi-provocative title—designed, no doubt to help the book sell—Suderman characterizes the effort (from Noam Scheiber, a writing worker from The New Republic) as a hagiography and an apology for the Administration writ large.
The major players are all professional Democrats and liberals of one stripe or another. Scheiber’s detailed, thoroughly reported account describes their efforts at responding to the faltering economy while pursuing the rest of Obama’s ambitious agenda. In the process, Scheiber takes as a given his protagonists’ centrality to the success or failure of the economy.
It is an assumption that his subjects share. Their endless infighting and many personal differences are what drive the book and furnish its occasional bursts of dramatic urgency. But they are united in a conviction that the system is broken—and that only they know how to fix it.
Of course, they didn’t fix it, based in large part to the oversized and totally unwarranted hubris of the President. Meanwhile, the President continues to blame George W. Bush.
The older I get, the more I see humility as an essential characteristic, something that’s missing from the I, me, my of this Administration.
Read the whole thing. It’s a great review.
Remember the tremendous foreign policy victory the Administration claimed in the form of the Russian reset?
Those were heady days indeed: the reset; smart power; leading from behind. These, like spiking the football, played well in the mainstream press. After all, this sort of excitement was a reflection of the bold re-emergence of… what? The bipolarity of the Cold War?
Well, it’s all gotten worse; gone kind of nyet, it has.
Russia’s most senior military officer said Thursday that Moscow would pre-emptively strike and destroy U.S.-led NATO missile defense sites in Eastern Europe if talks with Washington about the developing system continue to stall.
“A decision to use destructive force pre-emptively will be taken if the situation worsens,” Russian Chief of General Staff Nikolai Makarov said at an international missile defense conference in Moscow attended by senior U.S. and NATO officials.
Of course this is simply vacuous saber rattling by the Russians but it shows their level of fear regarding missile defense. Still, the idea that we could get cooperation from them when it’s contrary to being completely in their interests is both amateurish and shortsighted.
Can we finally admit the Russians are all about the Russians and just aren’t that into us?
Black thought of the day: our elites are epic failures. How epic? So epic we don’t even know how epic.
Maybe we’ve already driven off the fiscal cliff and we’re really just waiting for the sudden impact. That is, circumstances as we now know them are terminal, we’re just asleep at the switch.
If so, let us look to the leadership of our elites as we start re-arranging the deck chairs.
On the other hand, there is the if you love something, set it free ideal. Is it possible our elites love us—our country—enough to abandon their power and the notion the world revolves around them?
The good news: God is in control.
Are economists corrupt, nostalgic, irrational, group-thinkers, and more? Maybe. They are, after all, human beings.
But here is a simpler offering for their inability to explain the past (let alone to accurately predict the future): 1) they aren’t nearly so smart as they thought and 2) the world is more complex than they imagined.
A generally worthwhile intellectual shortcut: don’t attribute to conspiracy that which can be more easily attributed to ineptness and/or ignorance.
The predictive powers of my magic 8-ball are terrible, but it could be worse: I could be a global warmer or an economist.
And I could be worst still: I could be a global warmer or an economist and it could be raining.
The warmers deserve their own post (many, actually), but the economists have missed the boat so badly and for so long that they no longer seem to know whether they’re coming or going, and none more so than Brad DeLong.
In fact, DeLong’s latest column is to clarity as the Unabomber’s Manifesto was to coherency. Where to start? How about from the beginning?
Across the Euro-Atlantic world, recovery from the recession of 2008-2009 remains sluggish and halting, turning what was readily curable cyclical unemployment into structural unemployment. And what was a brief hiccup in the process of capital accumulation has turned into a prolonged investment shortfall, which means a lower capital stock and a lower level of real GDP not just today, while the recovery is incomplete, but possibly for decades.
“A brief hiccup”?! Is that what that was? With that kick off, DeLong has attempted to set the stage for his solution to the “sluggish and halting” recovery from the recession. And by golly, we’d better deal with it right now or else this might last… decades.
I’m sure you’re way ahead of me if you’ve guessed DeLong thinks this crisis can be cured if (wait for it)… if only governments will
add more spending and more debt reverse declining investment.
One legacy of Western Europe’s experience in the 1980’s is a rule of thumb: each year that lower labor-force attachment and reduced capital stock as a result of declining investment depresses production $100 billion below normal implies that productive potential at full employment in future years will be $10 billion below what would otherwise have been forecast.
Jargon and gibberish lack explanatory power. This means there are definitional questions about what DeLong means by “lower” labor-force attachment, “reduced” capital stock, which “depresses” production at $100 billion below “normal.” What I can take from the above is that depressed production equals normal minus $100B (as a result of lower labor force attachment and reduced capital stock). That DeLong offering is not really an epiphany of mathematical precision.
The fiscal implications of this are striking. Suppose that the United States or the Western European core economies boost their government purchases for next year by $100 billion. Suppose further that their central banks, while unwilling to extend themselves further in unconventional monetary policy, are also unwilling to stymie elected governments’ policies by offsetting their efforts to stimulate their economies. In that case, a simple constant-monetary-conditions multiplier indicates that we can expect roughly $150 billion of extra GDP. That boost, in turn, generates $50 billion of extra tax revenue, implying a net addition to the national debt of only $50 billion.
So Brad, how does a “core economy” purchase anything from the government? Are you trying to say they (and not the Fed) purchase the government’s debt?
If so, your offering is still lacking the beautiful lucidness of a Terrence Malick flick, but I think what you’re trying to say this: just increase government spending (that is, borrowing) by $100B and reap the benefit of $150B of GDP; since $50B of it comes back to the government in taxes, only $50B of debt has “really” been added.
Yes, we all know and appreciate the legacy “rule of thumb” from Econ 101 and its associated property, “assume government borrowing creates a GDP multiplier effect.”
However, a skeptic might say “Come on Brad, does the borrowed money ever have do get repaid? If so, is there then a ‘de-multiplier’ effect?”
Is it any wonder no one pays any attention to economists, except perhaps to mock them? As the Black Swan guy has said, get rid of the Nobel Prize for economics for one simple reason: having such a prize implies there is some science to the field.
Do our profound economists ever ponder what happens when the music (better, Ponzi scheme) stops? Traditionally, those holding government notes (nation-states, citizens, businesses, corporations) expect to be repaid and without the value of that note being destroyed by inflation. In this case, just be sure you can find a seat (or better, buy a seat) when the music stops, otherwise you might end up like a Chrysler bondholder.
And it would seem by DeLong’s implied definition that the US and Western “core economies” are in fact their governments, which is said more clearly towards the end:
Today the global economy is, as Ricardo Cabellero of MIT stresses, still desperately short of safe assets. Investors worldwide are willing to pay extraordinarily high prices for, and accept extraordinarily low interest rates on, core-economy debt…
Let’s back DeLong’s sophisticated example into the President’s stimulus package. Using the DeLong rule of thumb, the stimulus has generated an extra $1.2T in GDP. And of that extra $1.2T, $600B came back to Uncle Sugar via taxes. This is, of course, laughable.
The real lesson of DeLong and his ilk is that government borrowing is really a form of alchemy: it can turn two dollars into three by the simple power of the economic
Finally, DeLong needs something to get off the stage with:
Given the need to mobilize idle resources in the short run in order to maintain productive potential in the long run, a larger national debt would be, as Alexander Hamilton, the first US treasury secretary, put it, a national blessing.
Mobilize idle resources to do… what? Make things people aren’t interested in buying or provide services that add little or no value? Maybe build a shovel-ready government building, a venture socialist solar panel plant, or a rent-seeking e-car factory? Start a college (after all, knowledge is good), as long as it isn’t for-profit?
So DeLong closes by trying to assign a ridiculous position to a long-dead guy who would likely find our current circumstance inconceivable: that the fair-share of the federal debt for a child born today will be over $1.5 million.
The economists of the left are making Ted Kaczynski, Terrence Malick, and even the Soviet Central Planners of old look brilliant by comparison.
Electric-type cars (consider the Government Motors Chevy
Dolt Volt and its Elon Musk equivalent, the Tesla), both fall under the broad umbrella alternatively known as crony capitalism, rent seeking. and/or legislative capture.
In other words, these vehicles are market failures. There is no broad interest for these vehicles and they can’t compete on cost, utility, value, performance, or anything else.
Evidence? Chevy sold just over 1500 Volts in December while the Ford F-series truck sold over 68,000. Also, GM has a 120-day inventory of Volts waiting to be sold. Just-in-time manufacturing? Please: that’s like GE paying taxes, something for little people and those politically unconnected.
With it’s $7500 per vehicle taxpayer provided subsidy, each Volt sold adds about $3000 to the national debt (assuming the government borrows 40% of its spending), so maybe selling so few units has an actual upside.
As for the Nissan Leaf with its idiotic ads featuring little two-stroke motors on toothbrushes, alarm clocks, and toasters, consider that Wikipedia tells us
The USA consumes about 14% of the world [coal] total, using 90% of it for generation of electricity.
I’m all down with coal (and electricity in general. Way to go early Greeks, William Gilbert, Ben Franklin, Alessandro Volta, and Michael Farraday!), but I’m not sure Nissan would want this fact broadly discussed.
Oh, one other thing. Other Chevy Volt total-cost estimates are even worse. Much worse.
Except for the manmade global warming scam (which made Bernie Madoff look like a two-bit con man), Al Gore’s hire of Keith Olbermann is perhaps his most epic fail.
In the long run (like the face you have when you’re 50-plus years old), you generally get what you deserve. And those two deserve each other.