Monday, January 08, 2018

Cruising the Web

David Harsanyi reminds us how often the conventional wisdom on economics that the media cite has been wrong. And part of the problem is that the experts that the media go to on economics are the ones who agree with a liberal agenda.
There is also plenty of evidence that econ reporters at major publications have spent the past decade propping up economists who tell them what they want to hear. That is to say, propping up economists who obsess over “inequality” rather than economic growth, who worry about the future of labor unions or climate change or whatever policy liberals happen to be plying at the moment. There are plenty of economists out there making good, free-market arguments who will never be member of the “economists say” clique.
There are plenty of examples of these experts getting their predictions wrong.
For eight years we were persistently hearing about how “economists say” everything Democrats were doing was great (even when hundreds disagreed). Unsurprisingly, “economists” were wrong about a lot. The rosy predictions set by President Obama’s Council of Economic Advisers regarding the “stimulus” weren’t even close to what happened, nor were any other of their forecasts, for that matter.

In 2009, when Democrats ran everything, the administration predicted 4.6 percent growth by 2012. It turned out to be half that. The Congressional Budget Office’s predictions about Obamacare were even less accurate. Once these prophecies were no longer politically valuable — suddenly more art than science– we were offered counterfactuals: Without Obama’s bailouts, everything would have been much worse....

But after decades of using data to help us think about goods and services, jobs and consumption, and our choices, “economists say” is now used to coat liberal policy positions with a veneer of scientific certitude. And since Democrats began successfully aligning economics with social engineering, we’ve stopped seriously talking about the tradeoffs regulations bring.

A good example of this trend is the push for a $15 minimum wage — an emotionally satisfying, popular, and destructive policy idea Democrats are pushing now. Most cities that have passed the hike have experienced job losses. When researchers at the University of Washington studied Seattle’s $15 minimum wage hike, one of the largest in the nation, they found thousands of fewer jobs created and thousands of people lost hours of work, making them poorer.

A lot of people were, no doubt, surprised. That’s because for years ideologically motivated reporters and politicos have pushed the idea that the consensus view of “economists” was that the minimum wage “would have little to no impact on employment.”
Claims that raising the minimum wage affects jobs is regarded by some in the media as "controversial."
You might wonder why incessantly quoted studies from liberal “nonpartisan” groups that falsely predicted minimum wages wouldn’t hurt the economy aren’t “controversial?” Because if you want raise the minimum wage you will raise the price of labor and often reduce the amount of labor that’s going to be hired. That’s the tradeoff. For decades, most economists agreed that was the tradeoff.

Yet wishful thinking bleeds into all kinds of policy (including cultural debates.) If you want to push environmental regulatory schemes, then the United States will no longer be on the cusp of enjoying “energy superpower” status. Perhaps you think the price is worth it. But it is insincere to argue, as Democrats always seem to do, that layering the economy with thousands of new regulations won’t inhibit economic growth.
That's not to say that the predictions from the Republicans on the benefits of their tax reform will come to pass, but similar skepticism should be shown to both side's projections.
Neither deregulation nor tax cuts are a panacea. We can’t know what’s going to happen to the economy over the next few years. But businesses have already acted on deregulation and corporate tax cuts. Dozens of companies were handing out bonus checks to hundreds of thousands of workers before the corporate tax cut was even enacted.

Perhaps these corporations only did it all to gain favor with the administration. Hey, some people suck up to government by cutting bonus checks for their workers and some people make electric cars no one wants. The fact is that deregulation and tax cuts matter. We already have evidence. We just don’t give voice to the economists who would tell us so.(see original for links)
Economists might have trouble predicting future economic conditions, but the mainstream media don't seem to have much doubt about which predictions they prefer to listen to. Just another reason that people have lost trust in the media.

Trump is enjoying taking credit for the robust increases in the stock market since his election. The White House is giving a lot of the credit to his pro-growth policies, especially de-regulation and corporate tax reform. But, as the WSJ warns, taking credit for the stock market can be a risky business because often, what goes up can go down. And a president can be as easily blamed for crashes as he takes credit for climbs in stock prices. Investors do seem happy with their experiences so far in the Trump presidency and are anticipating more economic growth.
Yet it still makes no sense for a President, especially one in his first year, to tee up stocks as a measure of economic success. As Wall Street legend Ace Greenberg famously put it amid the 1987 market crash, “stocks fluctuate, next question.” The current lengthy period without a major correction is highly unusual—and it won’t last. When prices fall after Mr. Trump’s many boasts about their rise, the press corps will ask him to explain the correction at every opportunity. Presidents do not want to become stock-market analysts.

All the more so because no one knows how the unwinding of the Federal Reserve’s unprecedented balance sheet will affect stock and other asset prices. The Fed’s bond-buying was explicitly intended to buoy asset prices including stocks, and it did. But will asset prices be under greater pressure as the Fed begins to move in reverse with more dispatch this year? Somehow we don’t see Mr. Trump offering an extended financial analysis of the asset-price impact of quantitative easing.

Mr. Trump can certainly tout the benefits of faster economic growth. Those will be manifest in ways that affect all Americans—more jobs and job mobility, higher wages—not only those who own stocks or have 401(k)s. Stock prices will take care of themselves.
Yes, it would be prudential to not connect his own presidency so closely with the fate of the stock market, but prudence is not a quality one associates with Donald Trump

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Jonah Goldberg explores the fallacies behind Steve Bannon.
Bannon is a common character in Washington: a megalomaniac who made the mistake of believing his own bullshit. Bannon believed he was the intellectual leader of a real grassroots movement, and all that was needed to midwife it into reality was to Astroturf as much rage and unthinking paranoia as the Mercer family’s money could buy. As I’ve said many times, Bannon’s self-proclaimed Leninism was mostly the kind of b.s. one spouts to rally the twentysomethings in their cubicles to churn out more ethically bankrupt clickbait fodder. There was, however, a grain of truth to it. Lenin was a real radical who wanted to tear everything down. But his motto wasn’t “Honey badger don’t give a sh*t” — it was “The worse the better.” Both men share a theory that by exacerbating social tensions — heightening the contradictions in Marxobabble — they would emerge victorious. The biggest difference between the two men is that Lenin knew what he was doing.

There is a Nietzschean quality to both Bannon and the host organism he fed off. Rhetorically, Trump extols strength and power and denigrates rules and norms. But Trump’s Nietzscheanism is almost entirely in service to his own glory. He simply wants praise for its own sake. Bannon’s fetishization of strength and power and his denigration of rules and norms stems from a potted theory about how to burn it all down so he can rule the ashes. He’s like Colonel Kurtz in Apocalypse Now, ensorcelled by the sheer will of the Viet Cong who cut off the inoculated arms of village children...

But instead of actual evil men of action, Bannon was infatuated with the will of Pepe the Frog and the minions of the alt-right. He marveled at the performance art of Milo not because of any intellectual merit, but because it was transgressive, which is its own reward to the radical mind.

People spend too much time trying to figure out if Bannon is a bigot. Who cares? Isn’t it even more damning that he was perfectly comfortable to enlist bigots to his cause simply to leach off their passion and intensity? Maybe on some obscure moral calculus being a neo-Nazi is worse than lending aid and comfort to neo-Nazis because they’re useful hordes to unleash on your enemies. But I cannot see how that is an exoneration.

Because Bannon consistently confuses means and ends, he was fine with forming an alliance of convenience with the alt-right when he thought it could help him. It was a stupid gamble, providing yet more proof that he has a thumbless grasp on how politics actually works. But his denunciations of the alt-right, including, most recently, Paul Nehlen, only came after the bets didn’t pay off. If the motley army of neo-Nazis, Russian bot accounts, Gamergate veterans, and comment-section trolls proved to be as powerful as Bannon foolishly believed, he would never have denounced them.
It is just one more sign of the strange times we're living through that such a man was the head of a major party's presidential campaign and then got a job in the White House. Trump might scorch Sloppy Steve these days, but he did give the man those jobs. And that's on him.

The humbling Steve Bannon has come full circle. For everyone, on both sides of the aisle, who despises Bannon, this is a moment of delicious schadenfreude. Yesterday, he issued a statement abasing himself. He had to start off by sucking up to Junior.
Donald Trump Jr. is both a patriot and a good man. He has been relentless in his advocacy for his father and the agenda that has helped turn our country around.
Gosh, that must gall him to have to say. He tries to spin his characterization of Don Trump Jr.'s meeting with the Russians to just be aimed at Manafort. No one has any problem dissing Manafort these days, so that's a safe dodge. Then he throws in some chest-thumping about his service in the Navy. It really is a groveling sort of statement that probably won't fool anyone. Everyone recognizes that Bannon was the main source of Wolff's book. In fact, we now know that Bannon was one of the main leakers from the White House when he was there. Groveling to Junior won't negate the resentment that the Trump people must have for the rest of the book.

Rich Lowry comments
on Bannon's bowing and scraping.
My sense of the Michael Wolff book is that probably about half of the quotes and details are completely nailed-down and reliable, and I don’t know which half. It’s clear, though, that Bannon spent an inordinate amount of time talking with Wolff, just as he spent an inordinate amount of time talking to every other reporter. Indeed, one of the under-appreciated media fails of 2017 was the press’s pretty uncritical acceptance of the Myth of Bannon, as spun by none other than Steve Bannon. This is why resentment was building up against him in the White House among people who knew how he really operated and what he really did. It may be that these Trump loyalists on the inside consider Bannon even more of a liar and a charlatan than Trump skeptics on the outside.

Armageddon keeps expanding
The number of companies offering employee bonuses, pay hikes, and increases in benefits in reaction to President Trump’s December tax reform victory is now over 100, with thousands of workers impacted and charities too.

Less than a day after Americans for Tax Reform put out an initial list of 40, it jumped to 52 as more company plans poured in.

And by the end of today, ATR’s John Kartch told Secrets that the list will hit over 100. "Small businesses from across the country are sending me news of their tax-cut bonuses, wage hikes, and charitable donations. Many of these were only announced internally. There is a broad and deep tsunami building," added Kartch, ATR's vice president of communications.

Jazz Shaw links to an article by Alison Griswold at Quartz that refutes the idea that Amazon is getting some sort of extraordinary dea from the U.S. Post Office on the delivery of its packages. The fact is that the USPS isn't losing money on its package delivery. That isn't where the losses are coming.
Trump loves to attack Amazon and its founder and CEO, Jeff Bezos, who also owns the Washington Post. Yet Amazon and the broader e-commerce sector aren’t what’s ailing the USPS. They just might be keeping it afloat.

Shipping and packages were a rare bright spot for USPS in 2017, one of two sub-categories of mail for which revenue increased, rather than declined. (The other was international mail.) The service shipped 11 billion pounds worth of packages, or 5.7 billion pieces, in the 2017 fiscal year, generating $19.5 billion in revenue.

That was 12% more revenue than packages made in the previous year, and $500 million more than even USPS expected, “due to e-commerce growth and the successful implementation of various marketing and sales campaigns,” it said in its annual report.

Revenue from shipping and packages is also on track to overtake sales from first-class mail (and it’s certainly not Amazon’s fault that no one sends letters anymore):
Shaw comments,
I’m not saying that this information precludes the Post Office from charging a little more, but there are two things to keep in mind here. First, the USPS requires the permission of Congress to raise their rates, so if they’re not charging enough you can take it up with your elected officials. But second, even if they did charge more for packages, that could open up the door for UPS or FedEx to swoop in, offer a slightly better deal and steal Amazon’s business. Believe me, either one of them would love to land an exclusive contract for all of the boxes that Bezos’ company sends all over the country.

So the real loser in terms of Post Office profitability is first class envelope delivery. But they can’t stop delivering letters (at least the few actual letters which are still mailed these days) and they can’t charge more for them either unless Congress chooses to raise the price of stamps again. So it seems that the real culprit here isn’t Amazon at all, and as the author speculates, Bezos may be one of the primary drivers keeping the USPS at least close to profitability these days.
So maybe Trump should pause before spouting off about Amazon when he actually doesn't understand what is going on.

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Iran's government might be able to squelch the current protests, but if Iran can't fix these economic problems, the mullahs are going to face continued disruptions. Tim Lister at CNN describes what ordinary Iranians are having to endure.
This is what Salehi-Isfahani describes as the "Rouhani effect," an austerity program that has cut subsidies (for fuel especially) and attempted to encourage business. The middle class of Tehran has fared better than lower-income Iranians in the provinces, who now face a triple whammy: Inflated prices for staple goods such as eggs (aggravated by an outbreak of avian flu); the prospect of a roughly 50% hike in the price of gasoline; and the gutting of a cash transfer program for poorer families introduced in 2010.

President Rouhani's decision to cut the cash transfers -- from 10% of total government spending to about 5% -- may also have contributed to the recent unrest. It has certainly been much discussed in social media.
I was just talking with my European history class, as we were discussing the revolutions of 1848, that the atmosphere leading to revolution is when rising expectations aren't met. And that is what has been happening in Iran.
They are victims of a crisis of expectations, one that Rouhani helped create by casting the nuclear deal and the relaxation of international sanctions as a motor for growth and jobs. At his swearing-in ceremony last August, the President promised an "economic revolution" to create jobs for unemployed youth.

The jobs crisis is more profound in Iran's provinces and rural areas than it is in the capital. Djavad Salehi-Isfahani at the Brookings Institution has crunched official Iranian data for the year to March 2017 (the first full year since international sanctions were lifted) showing residents of Tehran did markedly better than those in rural or provincial centers.
Gee, those were the expectations of the Obama administration also. Funny how no one's expectations were met from a tyrannical government hellbent on expanding its power in the Middle East by supporting terrorists and rogue regimes over helping its own citizens.

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My daughters, who both live in Washington, D.C., love to ridicule the habit many Washingtonians seem to have of standing in line to wait for whatever is the new "it" thing. There are pop-up bars that people will wait for a couple of hours to go try out. And there are some restaurants that people will pay others to wait in line for them to get the chance to eat there. So, it was just another eye-rolling story to learn that people were lining up at midnight to buy Michael Wolff's book, Fire and Fury. I mean, really? I mean, who goes to line up at midnight on one of the coldest nights of the year to buy any book that is not Harry Potter? Don't these people have Kindles? Well, it makes a little more sense to find out that a lot of the people in line were reporters.

Like millions of people, I did not watch the Golden Globes last night. I've long lost interest in such self-congratulatory festivals, especially when I end up seeing very few of the nominated films. But last night was supposed to be the night when Hollywood confronted its long decades of silence of predatory sexual behavior. Well, that or at least wearing symbolic colors and buttons while congratulating themselves. The New York Post summarizes the hypocrisy of the evening. Speech after speech talked about a new world for women and the downtrodden in Hollywood while not mentioning any specific member of that community who had been so honored by all of them up until a few months ago even though we're learning how many people knew of their behavior.
How about Meryl Streep showing up with Ai-Jen Poo, the little-known director of the National Domestic Worker’s Alliance? Streep has vocally denied knowing anything about Weinstein — who she famously called “God” at the 2012 Globes — but instead preferred to talk in vague platitudes.

“I think that people are aware now of a power imbalance . . . and it’s led to abuse . . . and we want to fix that,” she told Ryan Seacrest.

What a profile in courage.

Meanwhile, not one presenting or accepting actress mentioned Rose McGowan, who kickstarted this entire movement and who says she was raped by Harvey Weinstein. Sitting together up front were Ashley Judd and Salma Hayek, who both went public with the abuse and torment Weinstein visited upon them; in the New York Times, Hayek wrote that Weinstein threatened to have her killed.

These women are heroes. Not one of their colleagues called them out, thanked them, or acknowledged their bravery.

In perhaps the night’s most twisted hosanna, 101-year-old Kirk Douglas was honored with a standing ovation and special award. It didn’t take long for Twitter to light up over Douglas’s long-rumored rape of Natalie Wood when she was just 16.

If the average viewer at home knows about this, how could a room of insiders not? Just what are they trying to say?

Towards the end of the night, supporting actress winner Allison Janney — who won for playing Tonya Harding’s mother in “I, Tonya” — thanked the actual Harding, an invited guest, for “sharing her story . . . a story about truth and the perception of truth in the media.”

Harding, of course, was a real-life perpetrator of female-on-female crime, having her Olympic rival Nancy Kerrigan kneecapped — and though the movie exonerates her, Harding has admitted to at least having knowledge of a plot. Kerrigan later said the FBI told her they believed Harding was the mastermind and showed her transcripts detailing a plot to have her killed.

“That was one of the options,” Kerrigan said. “To kill me over a sporting event. That’s crazy.”

But in Hollywood’s version, Tonya’s a feminist hero. What a metaphor.
But hey, they wore black, so it's all good now.