News of the arrest of Illinois Governor Rod Blagojevich and his chief of staff on corruption charges for trying to "sell" his appointment to fill Pres-elect Obama's vacated Senate seat should serve as a warning to politicians everywhere who see political office as a means of self-aggrandizement and self-enrichment. If the governor of a state can be hauled off in cuffs (literally), then what makes any politician think that he can disregard the law indefinitely? Allegations are that Blagojevich also used his office to attempt to get a Chicago Tribune columnist who was critical of him fired. It seems that once some people achieve high (or even not-so-high, in the case of some county council members I can think of) office, they think that they are above the law (apologies to Steven Segall). Power - sometimes it's only perceived power - seems to go to their heads. It's the Boss Hogg model: "I'm in charge around here, this is my {town/county/state/country}, and I'll do with it as I please!" This is still a democracy, however (a republic is a form of democracy, all you poli sci undergrads), so, when the people are sufficiently annoyed, they will act. This turn of events reassures me that we are also still - to some extent - a nation governed by the rule of law (see the relevant chapter in "Road to Serfdom" by Friedrich Hayek).
The FBI special agent-in-charge stated in the article that he hoped the governor's arrest "would send a clear single to elected officials in Illinois that business-as-usual will no longer be tolerated, that selling your office for personal gain is a... practice of the past." I hope that as well, for all levels of government and in every state. But given that Blagojevich is far from the first Illinois governor (let alone the first governor in the nation) to find himself in legal hot water while in office, his immediate predecessor being among them, I'm not holding my breath.
Tuesday, December 9, 2008
Saturday, December 6, 2008
Tuesday, December 2, 2008
NBER Redefines "Recession"
The National Bureau of Economic Research (NBER) - which is a private organization, not a governmental entity - has just declared that the US has "officially" been in a recession since December 2007. I don't want to minimize in any way that many families have been struggling for some time, but this pronouncement by NBER makes no sense from a technical standpoint. In addition to making me question NBER's motive for this pronouncement, I think it points out a larger problem.
What NBER has done here is nothing short of redefining the term "recession". Again, this technicality will seem moot to someone who has experienced a layoff (I will point out that some states have been experiencing recessions for some time, but NBER is declaring a year-old national recession here), but there are reasons that we define things. A recession is officially defined as two consecutive quarters (six months) of falling Gross Domestic Product (GDP), after compensating for inflation. GDP is the dollar value of all new, final (consumer-ready) goods and services produced in the US - when this number falls, it means that the economy is producing less, which means declining employment, which in turn means families' incomes go down.
However, according to official federal government statistics, Real GDP grew appreciably during the first two quarters of 2008, and only began declining in the third quarter of the year. Fourth quarter numbers of course will not be known for certain until the beginning of the year, but they are likely to show further decline, at which point the economy can officially (for real) be declared in a recession. NBER, by their own admission, have sidestepped this definition - note that their claim is not that we were going into a recession or in danger of doing so, but that we have been in one for the past year. Again, I wonder why they would find it necessary to do this.
The larger problem I see here is that, given the importance of certainty and confidence to the behavior of consumers and investors, the most important players in the national economy, it is possible to deepen and even prolong our current downturn by "talking down" the economy. I'm certainly not suggesting that we practice denial when the indicators tell us that trouble is looming, but the hyperbole framing the current economic downturn in terms of the Great Depression (as some politicians have been doing, by the way, since well before December 2007, and almost everyone in media and government is doing now), is counterproductive to any attempts to stabilize the economy. It seems to me that NBER's pronouncement is tantamount to this by making the recession that we are probably now experiencing appear deeper and more protracted than it actually so far is.
What NBER has done here is nothing short of redefining the term "recession". Again, this technicality will seem moot to someone who has experienced a layoff (I will point out that some states have been experiencing recessions for some time, but NBER is declaring a year-old national recession here), but there are reasons that we define things. A recession is officially defined as two consecutive quarters (six months) of falling Gross Domestic Product (GDP), after compensating for inflation. GDP is the dollar value of all new, final (consumer-ready) goods and services produced in the US - when this number falls, it means that the economy is producing less, which means declining employment, which in turn means families' incomes go down.
However, according to official federal government statistics, Real GDP grew appreciably during the first two quarters of 2008, and only began declining in the third quarter of the year. Fourth quarter numbers of course will not be known for certain until the beginning of the year, but they are likely to show further decline, at which point the economy can officially (for real) be declared in a recession. NBER, by their own admission, have sidestepped this definition - note that their claim is not that we were going into a recession or in danger of doing so, but that we have been in one for the past year. Again, I wonder why they would find it necessary to do this.
The larger problem I see here is that, given the importance of certainty and confidence to the behavior of consumers and investors, the most important players in the national economy, it is possible to deepen and even prolong our current downturn by "talking down" the economy. I'm certainly not suggesting that we practice denial when the indicators tell us that trouble is looming, but the hyperbole framing the current economic downturn in terms of the Great Depression (as some politicians have been doing, by the way, since well before December 2007, and almost everyone in media and government is doing now), is counterproductive to any attempts to stabilize the economy. It seems to me that NBER's pronouncement is tantamount to this by making the recession that we are probably now experiencing appear deeper and more protracted than it actually so far is.
Wednesday, November 26, 2008
Mark Sanford on the State of Conservatism
This is a couple of weeks old, but Governor Sanford (R-SC) wrote an excellent post-mortem on the election. I discussed some of these concepts in an earlier post, but I think the Governor does an great job of articulating them.
Happy Thanksgiving!
Happy Thanksgiving!
Thursday, November 20, 2008
Primetime Peltzman
Being the econ nerd that I am, I was thrilled to hear Sam Pelztman's 1975 Journal of Political Economy article referenced in tonight's episode of CSI. It was brought up in the context of a fatal accident where the intoxicated driver was found wearing his seat belt.
Peltzman found that as more safety devices are added to automobiles, drivers tend to engage in more reckless behavior because of a perceived decrease in the associated risk. For example, a driver will tend to drive less carefully in a car equipped with front and side airbags than he might in a car without these safety devices. A later (1984) American Economic Review article by Robert Crandall and John Graham demonstrated that this "Peltzman Effect" does not completely offset the benefits of including seat belts and other safety features on automobiles (so you should still buckle up!), but the effect is still there.
I always enjoy seeing good economic theory getting a little airtime.
Peltzman found that as more safety devices are added to automobiles, drivers tend to engage in more reckless behavior because of a perceived decrease in the associated risk. For example, a driver will tend to drive less carefully in a car equipped with front and side airbags than he might in a car without these safety devices. A later (1984) American Economic Review article by Robert Crandall and John Graham demonstrated that this "Peltzman Effect" does not completely offset the benefits of including seat belts and other safety features on automobiles (so you should still buckle up!), but the effect is still there.
I always enjoy seeing good economic theory getting a little airtime.
Friday, November 14, 2008
An Early Christmas Carol
An ad campaign by a humanist group in Washington, DC is spreading "Christmas cheer" with the slogan "Why believe in a god? Just be good for goodness' sake". This raises two questions in my mind.
First of all, how can a humanist group encourage people to be "good for goodness' sake" when humanists subscribe to a philosophy of moral relativism. These are the guys who are telling us that "goodness" is solely determined by context and what "seems" right at the time - in other words, there is no objective standard of right and wrong (except of course for the standard that it is wrong to claim that there is), or even absolute truth (except for the "truth" that there is no truth). Therefore, if we accept the relativist position that humanists espouse, how can we be good for the sake of "goodness" -- i.e. according to some standard of goodness? How exactly are we supposed to define being good when we aren't allowed to objectify anything as bad?
The second question that comes to mind is the following. If humanists are opposed to the advocacy of "religion" by government institutions, including public schools, we must assume that humanism is itself not a religion, because they do seek to have their own views espoused by government institutions, for example moral or cultural relativism and naturalism. Two features of religion most vociferously opposed by humanists are exclusivity (the claim that ones beliefs are true and others are not) and the practice of proselytization (the winning of converts, i.e. evangelism). However, humanists in fact make a claim of exclusivity -- clearly, the belief in God and the belief in no God cannot both be true. And this ad campaign, despite the claims made by the group that it is only meant to reassure fellow atheists and agnostics, smacks of proselytization. Therefore, the claim that humanism is not a religion in its own right is suspect. As such, according to their own standard of excluding even the appearance of advocacy of any religious position, what becomes of the teaching of evolution, insofar as it is taught as a naturalistic process, and relativism in public schools and universities? Or do they need to drop their objection to teaching Intelligent Design on principle?
First of all, how can a humanist group encourage people to be "good for goodness' sake" when humanists subscribe to a philosophy of moral relativism. These are the guys who are telling us that "goodness" is solely determined by context and what "seems" right at the time - in other words, there is no objective standard of right and wrong (except of course for the standard that it is wrong to claim that there is), or even absolute truth (except for the "truth" that there is no truth). Therefore, if we accept the relativist position that humanists espouse, how can we be good for the sake of "goodness" -- i.e. according to some standard of goodness? How exactly are we supposed to define being good when we aren't allowed to objectify anything as bad?
The second question that comes to mind is the following. If humanists are opposed to the advocacy of "religion" by government institutions, including public schools, we must assume that humanism is itself not a religion, because they do seek to have their own views espoused by government institutions, for example moral or cultural relativism and naturalism. Two features of religion most vociferously opposed by humanists are exclusivity (the claim that ones beliefs are true and others are not) and the practice of proselytization (the winning of converts, i.e. evangelism). However, humanists in fact make a claim of exclusivity -- clearly, the belief in God and the belief in no God cannot both be true. And this ad campaign, despite the claims made by the group that it is only meant to reassure fellow atheists and agnostics, smacks of proselytization. Therefore, the claim that humanism is not a religion in its own right is suspect. As such, according to their own standard of excluding even the appearance of advocacy of any religious position, what becomes of the teaching of evolution, insofar as it is taught as a naturalistic process, and relativism in public schools and universities? Or do they need to drop their objection to teaching Intelligent Design on principle?
Wednesday, November 5, 2008
Thoughts on the Election
Already, some in the McCain campaign are blaming Sarah Palin for McCain's loss. I don't know how much of these complaints about Palin might be true, but I don't believe that she was responsible for his loss. Furthermore, sour grapes aren't going to solve the underlying problems that led to McCain's loss and the seats lost in Congress.
In the final analysis, it was the economy that led to McCain's defeat: a downturn that hit at just the wrong time, leaving the Republican nominee with insufficient time to recover. Economic issues tend to poll in favor of Democrats. [Liberal economic policy, based primarily on Keynesian economic prescriptions for the use of government spending to inject money to stimulate a struggling economy, does often generate a short-term economic bump. Unfortunately, it has a downside as well: inflation, growing government debt that crowds out private investment, and increased dependence on government rather than individual accomplishment. However, voters tend to base their votes on these short-term gains rather than on long-term considerations. It usually takes some time -- often a few years -- for the downside of liberal fiscal policy to become evident; likewise, policies that encourage private sector investment (for example, cuts in capital gains and corporate income taxes) take time to come to fruition.]
Underlying this electoral loss, however, is the ideological failure of the Republican Party. For some reason, Republican leadership seems to think that they can somehow out-liberal the liberals, be it McCain's rather shocking idea for the government to buy up billions in failed mortgages (which amounts to an attempt to artificially inflate home prices, which would likely result in a housing surplus), to the outrageous spending being carried out by the Republican-led Congress and the Bush Administration that made the past eight years look more like the second and third terms of the Johnson Administration than a continuation of the Reagan legacy. The need for new leadership and a commitment to conservative principles (as well as the ability to articulate them effectively) has never been more evident than it is now.
I am encouraged, however, by a few new, strong conservative faces that are up-and-coming in the GOP, Sarah Palin being one clear example. Another individual who impressed me when I saw her in a debate on C-Span a few weeks ago is the newly-elected representative from Kansas' second district, Lynn Jenkins. I'm looking forward to seeing what new "talent" we can find out there, but perhaps, hopefully, now we can see the true rebirth of Reagan conservatism.
In the final analysis, it was the economy that led to McCain's defeat: a downturn that hit at just the wrong time, leaving the Republican nominee with insufficient time to recover. Economic issues tend to poll in favor of Democrats. [Liberal economic policy, based primarily on Keynesian economic prescriptions for the use of government spending to inject money to stimulate a struggling economy, does often generate a short-term economic bump. Unfortunately, it has a downside as well: inflation, growing government debt that crowds out private investment, and increased dependence on government rather than individual accomplishment. However, voters tend to base their votes on these short-term gains rather than on long-term considerations. It usually takes some time -- often a few years -- for the downside of liberal fiscal policy to become evident; likewise, policies that encourage private sector investment (for example, cuts in capital gains and corporate income taxes) take time to come to fruition.]
Underlying this electoral loss, however, is the ideological failure of the Republican Party. For some reason, Republican leadership seems to think that they can somehow out-liberal the liberals, be it McCain's rather shocking idea for the government to buy up billions in failed mortgages (which amounts to an attempt to artificially inflate home prices, which would likely result in a housing surplus), to the outrageous spending being carried out by the Republican-led Congress and the Bush Administration that made the past eight years look more like the second and third terms of the Johnson Administration than a continuation of the Reagan legacy. The need for new leadership and a commitment to conservative principles (as well as the ability to articulate them effectively) has never been more evident than it is now.
I am encouraged, however, by a few new, strong conservative faces that are up-and-coming in the GOP, Sarah Palin being one clear example. Another individual who impressed me when I saw her in a debate on C-Span a few weeks ago is the newly-elected representative from Kansas' second district, Lynn Jenkins. I'm looking forward to seeing what new "talent" we can find out there, but perhaps, hopefully, now we can see the true rebirth of Reagan conservatism.
Subscribe to:
Posts (Atom)