Almost Classical

I have several broader topics on the "to-do" list for this blog, but this week a colleague's observation reminded me that too many people see issues from stark, all-or-nothing, positions. Since joining the faculty at a private, non-profit, university, I've been publicly stating that the union isn't starting its negotiations for a new three-year contract from a position of power and authority. That bothers me. "How can you be in a union? You've detailed union corruption, negative effects on employment, and complained about public employee unions. I thought you hated unions?" I do not "hate" all unions. I dislike many unions, definitely, primarily because of their leadership. But that does not mean that I am opposed to all unions. If anything, I want to reform unions and help guide change to make them relevant. Unions, as they are, represent the past — a romanticized past that often overlooks the problems of unions. I am opposed to th...

This week, a CNN/Opinion Research poll found only 43 percent of potential voters favor Obama's jobs plan. That means 57 percent aren't convinced this plan will do much. In another poll, 51 percent of likely voters said the plan was likely to have no effect on unemployment. "But… but… but…" the President's people stammer. "Economists like Moody's Analytics Chief Economist Mark Zandi says it will create 1.9 million jobs!" That's the problem. The public is starting to realize that economists are "unexpectedly" useless when it comes to forecasting the economy. If you want evidence, do a search on the word "unexpectedly" and any combination of "unemployment," "housing," "prices," "wages," or "inflation." Today's top story on CNBC: The weekly jobless claims number, which is closely watched as an indicator for employment trends, unexpectedly rose 11,000 to 428,000, well ahe...

I have written in the past that I doubt the "multiplier" effect some economists and politicians cite when promoting federal spending. I believe this column makes several good points: The Myth of the Multiplier - Reason Magazine There are "indirect" multipliers, which I do believe are real — though not perfect. Money spent on roads and highways, for example, enables transportation of goods. The problem is, even spending on transit systems is seldom wisely managed. Government is not efficient. Even what it should do, such as providing for the national defense, it does inefficiently. I admire the military, but it isn't efficient. Any "multiplier" effect from military spending is long, long term and often hard to quantify versus the waste. NASA has created technologies that do provide economic benefits, certainly, but the NASA of today cannot even replace the space shuttle program in a timely fashion. The private contractors linked to NASA ...

Paul Krugman Is Still Wrong about Texas - By Kevin D. Williamson - Exchequer - National Review Online Kevin D. Williamson, deputy managing editor of National Review, makes several points I have been making to individuals when they suggest that the Texas economy is either "dumb luck" or simply an illusion. Left-leaning commentators, and I include Paul Krugman in that category (he long ago surrendered his economics qualifications, as I've explained in previous posts), are avoiding serious comparisons of economic models across various states. The right is no better, but I used to expect better statistical analyses from Krugman. What, indeed, does population growth have to do with job growth? Professor Krugman is half correct here — but intentionally only half correct: A booming population leads to growth in jobs. But there is another half to that equation: A booming economy, and the jobs that go with it, leads to population growth. Texas has added millions of people and ...

My blogs have been inactive for a few weeks while I have been in the process of moving from the Midwest to one of the Original Thirteen. I apologize, but Internet access has been unpredictable at best and blogging on the road proved too difficult to maintain. Thank you for understanding. It is interesting how reliant we are on Internet connections. I will have new posts in the first week of August 2011.

History is constantly rewritten and reinterpreted. Democrats and Republicans are both gifted at such rewrites. However, this isn't my rhetoric blog, this is an economics site. Let's take a look at the historical realities of claims by Democrats that the "Clinton Tax Rates" were responsible for boom times and a reduced annual deficit. A quick note: We did not have a surplus under Pres. Clinton. We had a projected surplus over a decade, but no actual surplus. Budget gimmickry likely overstated the ten year total, too, since that assumes no disasters, wars, or recessions. Good luck living in that fantasy land. For actual Clinton debt numbers, consider the following: Yes, the deficit was almost eliminated in FY2000 (ending in September 2000 with a deficit of "only" $17.9 billion), but it never reached zero--let alone a positive surplus number. And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion de...

Today, June 29, 2011, President Obama had a press conference to address the U.S. budget mess. During his opening statements and throughout the questioning, the president kept saying that "millionaires and billionaires" needed to pay their fair share. It's a favorite phrase of the president and one Andrew Ross Sorkin addressed earlier this year. Pres. Obama might talk about the "wealthy" but he really means those with annual incomes over $250,000. Problem one with "wealthy" is that many wealthy, especially billionaires, don't have incomes. They earn capital gains and have investments, but they don't get weekly paychecks like the rest of us. Since we have an income tax, those can't be the men and women the president wants to tax. Problem two? The wealthy, at $250,000 a year, aren't all that wealthy in the cities where they are most likely to live. Rich and Sort of Rich May 14, 2011 By ANDREW ROSS SORKIN How did $250,000 become the magic n...