Sunday Sunday Sunday

An addendum to the unintended consequences post I wrote about Cash for Clunkers. Turns out, in addition to incentivizing low mpg cars, it also tanked home and durable goods sales!

I am firing up the job search process. I hope for a job in an exciting engineering firm. I'm prepared to be waiting tables in 6 months. Apparently the unemployment rate for young people hit 50% after the minimum wage was upped... unintended consequences, ahem. "'There is no assistance provided for the development of job growth through small businesses, which create 70 percent of the jobs in the country," Angrisani said in an interview last week. "All those [unemployed young people] should be getting hired by small businesses.'" Young people voted for Obama by a landslide... but unions and rich guys bankrolled the campaign that roped them in. The kicker is that the same young people whose lifetime earnings are being destroyed are on the hook for the trillions that weren't handed out to them. Fool me twice, no doubt.

NFL season is on, and I'm watching the Pats hang on in the second half against Atlanta. Tom Brady is... well, he's stinking the place up. Just like week 2 against the Jets. But you can tell a good TEAM by whether it collapses in tough situations or not. And they are not. The defense has only allowed 10 points in the first 53 minutes, despite missing middle linebacker Jerod Mayo. And Randy Moss... well, thank god for Randy Moss. Wes Welker is out of the game, and Moss is making some outstanding plays to keep the ball in the offense's hands (even if it can't punch it into the endzone). And, the Ghost is kicking them through the uprights.

Chris Baker just scored on a long bomb thanks to ridiculous pass protection. Niiice.

The ACORN files

Well, I finally got around to watching the ACORN prostitution vids... okay, it was the Daily show version of them. I've got to say, until they went into the Salvadorean child prostitutes, I was totally with ACORN on this one. Prostitution should not be a crime in the first place, and bureaucracy is reprehensible in the second place; using one against the other strikes me a enormously satisfying.

Of course, everyone's getting all weewee'd up here because ACORN is 40% funded with government money. Congress de-authorized them, but why was a group that is overtly political, and accused multiple times of voter fraud getting federal funding in the first place? And why is prostitution the breaking point? Do we really think, as a society, that a woman selling her body for money is worse than voter fraud? Really? As long as government is allowed and encouraged to fund nebulous things like "community organizations," this is inevitable. And now everyone who was "organizing" is off in the background instead of right where we know they're a bunch of partisan hacks. And it's happening on both sides. De-funding ACORN without getting rid of all federal funding for community organizers is like curing smallpox by popping a pustule.

Young people & health care reform

I am a 20-something with several 20-something friends. Most of them want universal health care. So I asked them a question: do you expect to get more when you retire out of Social Security and Medicare than you put in in the 50 years until then? No, they said. Even if you are for the *concept* of universal coverage, if you don't see it realistically being solvent when you're over 50 and likely to need it; then you're an idiot for supporting it. I just lived for a year in the Netherlands, which recently reformed its health coverage from a universal single-payer model to a mandated coverage model because the single-payer model went bankrupt in about half the span of a normal career. All those people who paid 65% taxes for the first 20 of their productive years, and barely used the service, are now being forced to buy insurance at market rates.

Some good 912 Tea Party reports

Shadow's World has the best one I've seen so far, with a "Forrest Gump" shot off towards the monument and over a dozen great photos.

Here is a video that shows the march in time-lapse from the centerline on PA Ave, and also gives a clear shot from the Capitol steps showing crowds pretty much as far as you can see clearly (there was a section of the mid-Mall roped off for another function), and spread out to either side of the reflecting pool.

Transterrestrial Musings has a comment string up with some BoE crowd estimates, and there is a Google Doc to the same effect - ironic, since Google News didn't cover the event. But I guess that's the whole point about waking up from the corporate media dream and finding it was a nightmare. Suffice to say that "tens of thousands" in the AP article is foolishness... estimates range from 240,000 to 450,000 (the latter is from an actual "people counter" whatever that is) for the march, and 350,000 to a cool million on the Mall.

Why capitalism fails...

I bit on this article in the Globe today expecting it to be a statist diatribe to go with its headline. But it was actually a well-written article from the standpoint of economic history. It tells the story of the work of Hyman Minsky, who blamed capitalism for "instability" - which is like blaming the population of San Quentin prison for "breathing." You can probably check in on the alternatives to find out how stable they turn out over the course of decades. Say Soviet Union 1991 or Rwanda 1994.

This instability is caused by the ever-loosening concept of risk in the economy during good times, which leads to a "euphoric economy." When the crash comes, as it always does, investors pucker up and we get the death spiral we have all heard about. This is all true, of course, but the alternative is worse. The idea Minsky advocated was to have a Central Bank as lender of last resort, or the government as employer of last resort, in a financial crisis. The problem is, "crisis" is a highly subjective and politicized term. Was the 2002 recession a crisis? Whether it was or not, Minsky's "solution" was imposed to level out the stock market's fall. The Fed became the lender who pumped money into the economy. And it worked! The stock market recovered. It also blew up the dollar bubble, which led to the housing bubble, which led to the credit bubble.

Both Minsky and Keynes, and now people like Krugman and Tom Friedman, found fault with laissez-faire capitalism. Both devoted their career to understanding it, and offering solutions. Laudable by any standard. Unfortunately, both also commited the fatal flaw of socialism: in the absence of any rational solution, they made one up and called it government. It is there in Minsky's work just as it is in Keynes'. Keynes said government can bolster employment, and Minsky said government can bolster lending, but what they really meant was "some fairy tale figment of my imagination can bolster _______." They just went with "government" because you can fool more of the readers into believing it is real.

Problem #1: government is not above the rules. The Fed making loans to prop up bad bank debt on the expectation that the economy will keep growing and bail the country out is exactly the same thing, writ large, as the bankers taking on bad loans in the first place on the expectation that the price of housing (or stocks or a currency etc.) will keep going up. Same with the government of Keynes, as the provider of emergincy jobs. It is the same as a business going out and hiring for no good reason out of the kindness of its heart. It leads inevitably to deficits and massive debt, and there is nothing special about government debt. It's a transfer from the profit/loss account to the balance sheet, and it eats away future growth just as surely as interest payments from the bad times eat away at profit in the good times for a business.

Problem #2: government is below the rules. Keynesian stimulus works, if you can pump lots of jobs up almost immediately - say, with a program that is always around where people can just show up and work for a minimum wage if they don't have a job (makes a good case for replacing unionized government employees, at least) - then you can ease the lows (and the highs) somewhat. But as we've seen with this stimulus, that never happens. The money is fought over for months until after it is needed, then it gets passed into the hands of cronies and usually recycled into the election coffers of the people who voted for it. But this is not due to some imperfection in his math or some bad apples in government - this is the fatal flaw of every statist who imbues the government with a higher economic nobility than the market. In real life it turns out to be quite the opposite. Same thing with the Fed bowing to congressional or presidential pressures to ease the money supply during election years. The government is made up of people, and the are no better than the people who make up the market, but they have the power to make unilateral decisions, unlike the people in the market. And the only reason they have that power is because they have the guns.

Million Man March... crickets

Today, somewhere between 350,000 and 2 million (DC police: 1.2M) marched on Washington DC to protest out of control government spending, corruption, and infringement of Constitutional restrictions on federal power. Libertarian and right wing blogs have videos of Pennsylvania Avenue and the Mall packed with people.

Here is a list of what I could find for mainstream coverage (19.30 Pacific):

ABCnews.com: 2nd headline. Runs a version of AP article which claims a crowd of "thousands."

msnbc.com: Top story. Same AP article, 10's of thousands. Includes an excellent video that lets the people tell their story.

cnn.com: Top story. CNN actually wrote its own article to go with the AP one, asking who will be the leader after this? The same question was asked after April 15, then after July 4th. They don't get it.

Google News: Nothing. Very surprised about this. 5th story on the "US" tab, with the first being coverage of Obama's Minneapolis speech... attended by 15,000.

Yahoo!: Nothing. nada.

Foxnews: 3rd story. Adapted the AP article.

lemonde.fr: 4th headline

aljazeera.com: 2nd headline, runs AP article

telegraph.co.uk: nothing

nytimes.com: Sidebar near top. They even wrote their own article.

I have been hearing about mainstream media bias. I remember the Million Man March, which may have been smaller than this, was trumped up for weeks before hand and reported live by most major cable news outlets. I can't say if that was the case today, and I'm not sure if any difference is due to news organizations just not being nearly as well-capitalized and relevant as they used to be, or some form of bias. From just these front pages though, it would seem they are reporting the Tea Party movement, or at least begrudgingly channeling AP sources on the matter.