The New York Times on Obama’s Economics (sorta)

The New York Times today has two opposing articles with views on what we can expect economically from Obama.

Is History Siding With Obama’s Economic Plan?

This article is based around two astounding facts comparing years under Democratic and Republican presidents. One is that the economy grows faster under Democrats. Surprisingly faster.

Data for the whole period from 1948 to 2007, during which Republicans occupied the White House for 34 years and Democrats for 26, show average annual growth of real gross national product of 1.64 percent per capita under Republican presidents versus 2.78 percent under Democrats.

That 1.14-point difference, if maintained for eight years, would yield 9.33 percent more income per person, which is a lot more than almost anyone can expect from a tax cut.

This is a fascinating fact. The biggest problem is that it doesn’t seem to make any sense. The president doesn’t have many ways to impact the economy. Why would this large difference exist? And yet it does.

Two is that income inequality grows under Republican regimes and lessens under Democratic ones. This seems fairly straightforward. Democrats tax the rich and raise the minimum rage, the Republicans do the opposite. Are the two connected? I believe so, but this is not established at all, and there is no reason to think that if the effect exists it would be immediate.

…if history is a guide, an Obama victory in November would lead to faster economic growth with less inequality, while a McCain victory would lead to slower economic growth with more inequality. Which part of the Obama menu don’t you like?

Because the first point (higher growth under Democrats) doesn’t have any mechanism behind it, you can’t assume it would hold true with an Obama presidency. In fact, it completely ignores Obama. It simply says that because Obama is a Democrat we will see the results we historically have seen with Democrats. This is tempting and suggestive, but in the end and unfounded conclusion. However, the second point (about income inequality) is a fair assumption to make, so on balance it does suggest that Obama will be better for the economy.

Obama’s Questionable Stimulus Plan

I lose respect for Ben Stein with every article of his I read.

But I am a bit worried that his knowledge of economics may not be as extensive as his legal background.

Ben Stein is an ex-law professor with no formal economic background. Glass houses and rocks, ya know? The article is a good explanation of why stimulus checks are a bad idea, economically speaking. After all they are simply borrowing from the future to try and goose todays economy. The net impact is to drive us deeper in debt. I fully agree.

But. Ben Stein is against Obama because Obama is borrowing against the future. That is the same thing as increasing the deficit. If you look at the announced spending plans of the candidates, McCain is borrowing much more. Something like $500 Billion to $350 Billion. (I am unable to find great cites, but this is universally regarded as true. Here’s a weak one. Here’s one that projects $5 Trillion to $3.5 Trillion over the next decade.)

In other words, Ben Stein is an idiot. If you don’t like deficit spending, you should vote for Obama, his bad stimulus plan ($50 Billion) is overwhelmed by his better deficit spending plan.

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Harley, R.I.P.

Our dog passed away during the night.


We rescued her from the pound in early 2005. She was scheduled to be euthanized the next day there. We’re glad we were able to give her a few extra years of happy family life. We don’t really know what happened, but it appears to have painless and easy.


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Links o’ Interest

Selections from HP Lovecraft’s brief tenure as Whitman’s sampler copywriter

Slowmotion bitchslap

I’ve been thinking… I’m the man of this house, so

Remember Danny Alamonte, the “12-year old” pitcher in Little League World Series? Here’s a sweet story of baseball karma.

Cheating (funny)

Can this be true? Grazing cattle align north-south.

Dial-A-Human: The codes to get a human in those automated phone systems.

10 Top Referee Attacks

What body parts are mentioned in music? (Interactive, by genre)

It’s the end of the world. Warning label on Peanut Butter that “Allergens: Contains peanuts.” (Detailed labeling.)

Who was the best athlete Phil Jackson ever coached?

If adults were subjected to the same indignities as children

Mythbusters draws a Mona Lisa in 80 milliseconds with paintballs.

Things to say during sex

Harrison Ford adlibs (ESB = Empire Strikes Back)

Worst help desk ticket

LBJ and civil rights (remeberances of Richard Caro)

A funny McCain ad.

It’s a political partay!

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Social Security Update

What’s new in Social Security in 2008?

In May, the trustees had their latest report come out. If you read my writeups (1 and 2) on understanding Social Security, you’ll recognize this as the key figure:
long term forecast

This is a model, under three different sets of assumptions, of when the SS surplus runs out. Not when the program doesn’t have any money, but when the surplus we’ve been squirreling away for 30-odd years is gone. You’ll notice that option II intersects at 2041. In other words, everything is perfect for the next 33 years. And after that it’s only mostly perfect. Find me another government program that can say that! You’ll also notice that if the assumptions underlying option I are true, we’re in perfect shape forever. There is good reason to think that the truth is closer to I than to II. The actuaries who do this work have certain biases, and of course it is more important to make sure that the program doesn’t go bankrupt than to hope it delivers a new income stream.

Another way to look at this is that it would take relatively little effort for us to shift the funding from path II to path I. To whatever degree you think 33 years isn’t enough, it takes very little sacrifice to make it permanent.

August 22, 2008: The CBO (Congressional Budget Office) releases it’s latest examination of Social Security: Government report shows that program is healthy for decades to come.

Here, the story is even better. The surplus is projected to last until 2049. That’s 41 years instead of 33. In fact, every time another years passes and we have more data, the date for the surplus running out is pushed further back. This is another reason to think that option I is closer to the truth.

And after 2049, there is still 81% of promised benefits. How much of a change would it take to cover that 19%? Not much.

Whoops, the CBO report is here. The key figure is below, showing what year the surplus will be depleted. The link has some more discussion about it.

CBO Forecast

Hilzoy said it well:

In 2006, the CBO projected (pdf) that the Social Security trust funds would be exhausted in 2046. Apparently, during the last two years, the date when the Social Security trust funds will be exhausted has been pushed three years further into the future. At this rate, if we keep on doing nothing, that date will never arrive at all.

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Olympics – The Unforgettable Moment

This is my favorite moment of the Olympics.

It’s women’s water polo. USA is ahead 12-11. China gets the ball with 8 seconds left. They do not score a point. They don’t even take a shot. They don’t even try take a shot. They do nothing.

Their coach mocks them. Openly mocks them. On international TV. This footage is priceless. We have watched it at least twice a day for laughs. Has there ever been another time where a coach has openly mocked his own team?

At any rate, here it is from YouTube — it doesn’t get the point across as well, but still. Never seen anything like it.

(Why the delay on this? I have been trying for a week to get the footage of my TiVo to my computer and make a video of it. I’ve been hamstrung because the raw footage is 17G, and I only have 8G free – so that took a little juggling. When I finally got it on my computer I found out that TiVo uses a propietary format that can’t be converted to a standardized format unless you upgrade to TiVo Desktop Plus for $25. Not likely.)

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Olympics IX – Closing Ceremonies

Eh. Three weeks ago I might have been impressed. It was a pale shadow of the opening ceremonies. You can make a good case that the opening ceremonies were the biggest and best spectacle in all of human history. I suppose it’s hard to top that.

London looked pathetic next to Beijing. Wow, a bus! That sure is exciting! Jeepers, I sure hope there’s a 20-minute tribute to double-entry bookkeeping! And umbrellas!

After the Beijing spectacle, bringing out your celebrities, no matter how famous, seems a bit common. I love Jimmy Page. And there’s something fitting about having the biggest rock band guitarist ever play at the Olympics. And yet, it’s also random. Yes, why not throw David Beckham in there? I wonder if David Brent is free? Can we get a big statue of King George III? A tribute to the protestant reformation?

I mean, seriously. Whole Lotta Love at the Olympics? That’s just wrong.

I like the part where the athletes run wild. Not sure why. Honest human emotion always works. I understand why so many of them have cameras, but it takes away from the experience for us to see them snapping away like mad.

I give it an A on it’s on merits, a B- compared to the opening.

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Olympics VIII

Marathon: I love the marathon. I’m not sure what it is about this sport that is so fascinating. There is nothing like the moment when the lead runner comes back into the stadium to soak in the adulation of the stadium crowd. There is something fitting about this sport coming at the end of the Olympics. Of random note, the tenth place american looks uncannily like my brother-in-law, who in no slouch of a runner himself. Not sure what to make of that.

Mens Basketball: I am not particularly impressed by winning the gold. It’s astonishing that we haven’t won it every time for the last twenty years. I am impressed by the number of players we have who have first names for last names.

Boozer, Carlos – No (but a great nickname)
Kidd, Jason – No (but a good nickname)
James, LeBron – Yes
Williams, Deron – No (but if you drop the “s”, William counts)
Redd, Michael – No (I don’t count Red Aurebach as legit)
Wade, Dwayne – Yes
Bryant, Kobe – Yes
Howard, Dwight – Yes
Bosh, Chris – No
Paul, Chris – Yes
Prince, Tayshaun – No
Anthony, Carmelo – Yes

That’s 6 out of 12, and a couple more borderline cases for bonus points. On the other hand, how many of them have normal first names?

Boozer, Carlos – Yes
Kidd, Jason – Yes
James, LeBron – No
Williams, Deron – No
Redd, Michael – Yes
Wade, Dwayne – Yes, but what’s with the spelling?
Bryant, Kobe – No
Howard, Dwight – Yes
Bosh, Chris – Yes
Paul, Chris – Yes
Prince, Tayshaun – No
Anthony, Carmelo – No

Only 7 out of 12! We almost have as many people with normal first names in their last name, than in the first name! (Got that?)

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An Activist Idiot

The NYT Business section today has an article about repaying student loans. It’s a good article. It points out how student loans are a special category of loans that come with a higher burden than others. Bankruptcy usually doesn’t get rid of them. The lender can garnish wages, and the government can hold back stimulus checks and social security payments.

On the other hand, they featured Alan Collinge as the face of those fighting to change this. It’s unfortunate he’s an incredibly narcissistic moron.

Mr. Collinge said he did not set out to be a student loan activist. But he backed himself into a corner in his research job at the California Institute of Technology in 2001 by asking for a raise. When he did not get one, he quit. He said he found himself underemployed and gradually overwhelmed by about $38,000 in federal student loans; his lender wouldn’t grant a forbearance, he said. He had borrowed to study toward his two degrees and a certification, all in aerospace engineering, at the University of Southern California. He went into default in 2001, and over the next three years his debt, with interest and fees, grew to $100,000.

He couldn’t get a raise, so he quit. With two degrees and a certification, he couldn’t find another job, and went into default that same year. Maybe he shouldn’t have quit in the first place?

Representatives of loan companies are not fond of Mr. Collinge’s tactics. He has called loan company executives at home to criticize their corporate policies, and sent the occasional profanity-laced e-mail message to lender advocates.

Mr. Collinge acknowledges that at least some of the e-mail messages and phone calls he has made were inappropriate, but he maintains that the sentiments expressed were genuine. His words may simply reflect the resentment of thousands of borrowers who are too embarrassed to talk about their debts publicly.

Calling them at home is just being a jackass. And this may be my favorite sentence ever, “Mr. Collinge acknowledges that at least some of the e-mail messages and phone calls he has made were inappropriate, but he maintains that the sentiments expressed were genuine.” Oh, they were genuine! Well that makes it okay then! As long as he thought the loan companies really were &*(#$(!!”:;!&%ers who should all be thrown in a blender, it’s allright. Maintains they were genuine indeed.

What did they do to get the phone calls?

The Education Department said in a statement Friday that it and others had tried to work with Mr. Collinge, and in February 2008 offered to waive accrued interest and fees.

Ah. That was certainly evil of them.

It’s good to see that he’s at least trying to pay off his loans. I’m sure he’s just working on the website in his spare time, and harassing executives in odd minutes here and there.

To raise awareness of student loans, he embarked last year on a trip that took him through 42 states in an effort to meet with staff members of every lawmaker on the Senate and House education committees. Money raised by his PAC has not yet covered his costs, and the R.V. he drove (and is now trying to sell) still bears scars of the trip.

Um, what? Instead of getting a job he travels the country, losing money the whole time? Is this for real?

Mr. Collinge has devoted himself full time to learning about student loans and has supported himself with various jobs; this year he spent a few months working for a landscaping business, for example, and received an $8,000 advance for a book on student loans.

Good to know he’s learning about student loans — seven years after defaulting on his. He doesn’t get credit for supporting himself with various jobs. That’s life. Congratulations on the advance… I wonder if he knows that advances have to paid back eventually? Oh, by the way, “He takes salsa and tango classes and goes bicycling in a park overlooking Puget Sound.” GET A JOB, YA BUM!

He’s had a lot of problems paying his loans back, and he’s spent an awful lot of time out there talking about his problems rather than trying to pay his loans back,” said Tom Joyce, a spokesman for Sallie Mae. Student loans raise serious issues, Mr. Joyce said, “but he’s just the wrong poster child.”

That’s the truth. What an idiot.

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