Monday, November 26, 2012

Cruising the Web

I hope all my readers had a happy and healthy Thanksgiving with your friends and family. Now it's back to the grind...

Wow! This is an amazing story about mass cheating by teachers taking the Praxis test, the test teachers need to take to get certified to teach. The Praxis isn't all that hard of a test. How lame does a teaching candidate have to be to be so sure not to pass the test that they were willing to pay someone to take the test for them?

We can learn a lot from France's experience in what happens when a nation relies on stimulus spending. The results have not been good.
In 1981, when the Socialist government of Francois Mitterrand took office, France's national debt amounted to 22% of GDP. In the intervening years France's economy has grown by an inflation-adjusted 73%, while the national debt—now at 90% of GDP—grew by 609% in real terms. In raw numbers, that comes to about €1.7 trillion in additional debt. At no time in those 31 years did any French government balance a budget, much less run a surplus.

All this amounts to one of the free world's longest-running experiments in the real-world effects of stimulus spending. If the fabled Keynesian multiplier really existed, all that spending should have translated into robust economic growth for France. Instead, the only thing that's been multiplied is France's debt.

President Francois Hollande is now bemoaning the supposed growth-killing effects of the spending cuts being demanded of him by the European Union. Yet if deficit spending could stimulate an economy, France would not be looking over the border with envy at Germany's growth, debt and unemployment figures. Nor would it again be trying to explain away another debt downgrade.
Sadly, this is a lesson from Europe that liberals are loath to learn.

Steve Forbes suggests that, if the Democrats are so eager to emulate the Clinton economic policies by restoring the top rates that we had in the 1990s, we need to also emulate other economic policies of that time such as not having Obamacare and having a similar level of federal spending as a proportion of the economy. That would mean cutting about $500 billion out of the annual budget.

I basically agree with this recommendation for the Republicans in the negotiations over how to avoid the fiscal cliff as will as how to avoid blame if a deal collapses. The GOP should adopt the Simpson-Bowles plan and try to find some Democrats who would support that.

British social care agents now take a couple's political beliefs into consideration when taking foster children away from them because they aren't multicultural enough.

We're finally going to find out what is in the Obamacare bill. And it is even uglier than critics alleged.

Get ready for an onslaught of federal regulations now that the Obama administration is launching major new rules that they held in hiatus until after the election. There's another example of how we're not living in the same environment as Clinton's economy.

Israel is having more success testing its defense system to intercept enemy ballistic missiles and long-range rockets.

Mickey Kaus also takes a whack at Paul Krugman's stupid Twinkie nostalgia piece. Just about everyone is laughing at Krugman's lack of historical awareness.

Daniel Patrick Moynihan had a worthwhile idea about how to address the situation whereby some states send more money to Washington than they receive back. Moynihan's New Federalism would be one way to avoid the fiscal cliff and free up our state laboratories of democracy.

Kimberley Strassel reports that it is a myth that Mitt Romney got fewer votes than John McCain did in 2008. He did better in all the swing states except for Ohio. Obama's turnout was down in almost all the swing states except for North Carolina. The reason Romney lost was because the Obama campaign was able to turn out new minority voters who outweighed Romney's greater turnout and increased percentage of independent voters.


Rick Caird said...

France is not an outlier. Besides Greece and Spain, and the other PIIGS in Europe, we have the poorest example of all: Japan. John Mauldin describes Japan as a "bug in search of a windshield" Twenty years of Keynesian economics (al la Richard Koo) has done nothing except let the demographics outrun the economy.

Expect Japan to find that windshield in the next year or two.

Rick Caird said...

Passing Simpson Bowles as written would be a bold plan. If that were done, there would be two outspoken proponents: Simpson and Bowles. Ryan could be persuaded to come along, too.

It might be amusing to watch Pelosi, Reid, and Obama rail against the Simpson Bowles plan that came from their own commission. The only question would be if the MSM would be willing to trash their own credibility even further by support the Democrats in their objections. But, that might be a bridge too far even for a partisan media.

Rick Caird said...

The combination of ObamaCare and the resolution of the impending fiscal cliff are likely to cause. not another recession, but a depression. The Fed has no arrows left in its quiver. The combination of frantic money printing facing the lack of investment due to regime uncertainty, no long produces any effect except, maybe, to drive up asset prices and bankrupt those who rely on interest income. Five years of no interest has harmed the economy as much as the money printing has been designed to help.

Obama has won, but now he will reap what he has sown.