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Friday, March 31, 2006

HONEY, I TOLD YOU NOT TO LET HER PLAY WITH THE CHICKEN CORPSES   But would you listen? Nooooo! The latest avian flu news:
Indonesia reported its 23rd human death from H5N1. The victim was a one-year-old girl who had come in contact with dead poultry.
Update... Further proof that the mainstream media can't be trusted:
Israel suspects journalists, particularly press photographers, of being behind the spread of deadly bird flu in the Jewish state.

"It's one of our working hypotheses," an agriculture ministry official [said]... "Bird flu can be transmitted on clothing, footwear, the wheels of cars and even on cameras," the official added Friday.

"The journalists who came to cover the outbreak then went back to homes and offices across the country.

"Even if the required protective measures were taken, it is impossible to disinfect photographic equipment without damaging it."

Update [4/2/2006]...Okay. Now it's happening in Egypt too. Can't someone just get these kids a Barbie to play with or something?
Two more Egyptians have been infected with the bird flu virus, Egyptian Health Minister Hatem el-Gabali said on Sunday, taking to eight the number of reported human cases in the country.

The two were sisters, one aged 18 months and the other six years, from Kafr el-Sheikh province north of Cairo. The pair, who had handled dead birds, were in a stable condition.


Posted by Donald L. Luskin at 11:39 PM | link  

JOKE OF THE DAY  

Posted by Donald L. Luskin at 11:58 AM | link  

LOW UNEMPLOYMENT REALLY IS LOW   Paul Krugman and all the other leftist economists are fond of arguing that the present low unemployment rate belies the true devastation in the job market, because of the large number of "discouraged workers" who have dropped out of the labor force. Now a paper by four Federal Reserve economists refutes that claim. As the investment manager who blogs as "Donny Baseball" puts it,
I've got to slog through the report to see if the methodology is sound, but the conclusions of a new Fed report seem entirely logical and refute one of Paul Krugman's famous threads on which he hangs the assertion that the current economy is a disaster, namely that unemployment is understated because so many people are discouraged at the lack of opportunities and thus are not counted as unemployed. With this already dubious argument now gone, I guess he can still hang economic catastrophe on the fact that the government doesn't offer unlimited, fully-paid hip replacements.
Here's a link to the report itself.

Posted by Donald L. Luskin at 11:52 AM | link  

EVERYONE HAS TO MAKE SACRIFICES   Hasn't Viet Nam suffered enough?
The poor communist nation says it accomplished this feat by vaccinating millions of chickens and ducks, slaughtering millions more, by being honest with international health officials, and by educating its citizens.

There were even crackdowns on local delicacies, like duck blood pudding, believed to be the source of at least one death.


Posted by Donald L. Luskin at 9:18 AM | link  

IT'S LIKE Y2K ALL OVER AGAIN   A billion here and a billion there, and pretty soon you're talking about real money:
near New York's Times Square...The national debt clock, as it is known, is a big clock. A spot-check last week showed a readout of 8.3 trillion -- or more precisely 8,310,200,545,702 -- dollars ... and counting.

But it's not big enough.

Sometime in the next two years, the total amount of US government borrowing is going to break through the 10-trillion-dollar mark and, lacking space for the extra digit such a figure would require, the clock is in danger of running itself into obsolescence.


Posted by Donald L. Luskin at 1:45 AM | link  

KNOW WE KNOW WHOSE FAULT AVIAN FLU IS...   Amazingly, it's not George Bush. From Reuters:
Headlining a new Chinese and English language Web site (www.avianflu.cn) "Avian flu: it's your fault", the Asia Pacific branch of People for the Ethical Treatment of Animals (PETA) says it is drawing attention to unsavory factory farming practices.

Posted by Donald L. Luskin at 1:45 AM | link  


Thursday, March 30, 2006

LUSKIN ON CNBC TODAY   I'll be on CNBC's "Closing Bell" show today -- airtime approximately 3:10 pm EST. The subject? What else -- avian flu. Seems like no one wants me to talk about anything else anymore. The trick to getting booked on these shows is to be able to talk about the end of the world (oh -- and having picked a list of stocks up over 100% in the last 7 months doesn't hurt, either).


Posted by Donald L. Luskin at 12:14 PM | link  


Wednesday, March 29, 2006

I SHOULD HAVE DONE THE END OF THE WORLD THING LONG AGO   More quotes on avian influenza. From MarketWatch:
A flu index

Trend Macroanalytics, a research firm serving institutional investors, has taken its analysis a step further and created an "avian-flu index" comprising 17 stocks in the health-care sector that can be expected to see a surge in demand for their products should the flu become a threat to humans.

The index includes stocks like Embrex, a leader in "in ovo" technology for the poultry industry; Hemispherx, whose interferon inducer Ampligen is considered a strong candidate as a flu treatment; BioCryst, which is producing an antiviral, and Generex, which is working on a vaccine.

Donald Luskin, chief investment officer at Trend Macro, said the index has gained 105% since its inception last Aug. 31 and is up 40.5% so far in 2006. Luskin said he considers the chance of mutation and a pandemic small. "The reason why investors should buy these stocks, though, is because it is the vaccines, therapeutics and diagnostics of the companies in this sector that are making sure the pandemic doesn't happen," he said.

"Lots of money will be spent by governments -- spent with these companies -- to be sure to prevent the worst case."

He likened the bird-flu situation to Y2K, when companies spent billions of dollars upgrading technology to ensure computers could cope with the switch to the new millennium. "The worst case didn't happen because people were warned," he recalled.


Posted by Donald L. Luskin at 8:19 PM | link  

JOKE OF THE DAY  

Posted by Donald L. Luskin at 4:43 PM | link  

CAN WE LAY THIS TO REST NOW, FINALLY?   From Econopundit:
Phantasies of the upcoming Iranian Oil Exchange -- trading as it is slated to in euros rather than dollars -- have generated many fevered visions of perpetual drainage of dollars into Euros as the world competes to purchase Iranian oil. And now it is Milton Ezrati at the Christian Science Monitor who gets the prize for finally explaining (1) exactly why the Bourse will fail and (2) exactly how the Bourse at its worst (Hey! Yo! It almost rhymes!) can induce nothing than a one-time trade of a certain stock of dollars for Euros, not a perpetual drain...

Posted by Donald L. Luskin at 11:05 AM | link  

RELATIVELY COWARDLY   How quickly the New York Times makes corrections when the Angry Left lodges an objection. It seems that describing the number of anti-war protestors as "relatively small" was objectionable -- so the Times has clarified that while some protests drew the "relatively small" number of 7,000, others drew 10,000 (and, therefore, were not "relatively small," but rather were "relatively large," at least relative to 7,000). You with me?
Because of an editing error, a front-page article on March 20 about the Bush administration's defense of its Iraq strategy misstated the magnitude of antiwar protests held in cities around the country on the weekend of March 18-19, the third anniversary of the American-led invasion. They were not all relatively small: while some 7,000 people demonstrated in Chicago on March 18 and smaller protests were held in other cities, a larger demonstration took place in Portland, Ore., on March 19, and organizers estimated that at least 10,000 people took part. (Go to Article)
How can such mistakes happen in the first place? An "editing error," of course -- which is to say, inappropriate political supervision.

Posted by Donald L. Luskin at 1:39 AM | link  


Tuesday, March 28, 2006

SOME PEOPLE WON'T ACKNOWLEDGE THE MOOSE IN THE ROOM   ... while others refuse to acknowledge different animals. From Reuters:
In a home nearby, in the village of Nawa some 30 km (19 miles) north of Cairo where Egypt's first bird flu fatality was recorded, a father refused to acknowledge a large duck in the front room of his hovel, where several infants were playing.
Still others see things that aren't there. According to the World Health Organization, there have been no human infections or deaths in Egypt. Ducks? We couldn't say.

Update [3/29/2006]... As of today the WHO acknowledges that the Egyptian government believes there have been human infections and deaths, but they have not been confirmed.

Posted by Donald L. Luskin at 2:57 PM | link  

JOKE OF THE DAY   

Posted by Donald L. Luskin at 1:39 PM | link  

SO LET ME GET THIS STRAIGHT...   Senator Lindsey Graham, whose bill with Chuck Schumer threatens China with a 27.5% tariff if they don't revalue their currency, says that revaluation won't make any difference anyway:
"The currency issue will not wipe out the [US/China trade] deficit," Graham told reporters following an announcement that he and Schumer were delaying a vote on the proposed legislation.

"It is not the magic bullet to solve all the trade deficit problems but if the currency issue is resolved in a win-win fashion ... it would give us confidence to engage the Chinese in the future," he added.

Translation: China disrupting its own economy and letting the US dictate its monetary policy won't help the US -- but it will give the US confidence to shake down China again over something else, later. Now that's salesmanship. No wonder they delayed their bill again.

Posted by Donald L. Luskin at 1:29 PM | link  

THEY JUST CAN'T HELP THEMSELVES   The liberal media takes every opportunity to advance the agenda of the welfare state. Consider this article on combating avian flu in today's New York Times:
Dr. David Nabarro, chief avian flu coordinator for the United Nations...knows the value of a yard chicken because he has worked in Nepal, northern Iraq and East Africa fighting malaria and malnutrition...

Culling ruins third world farmers the same way canceling Social Security would devastate the American working class.

Emphasis added. Thanks to reader Will Slaughter for the link.

Update... Elsewhere in the same story, Dr. Nabarro complains that his estimates for potential deaths from an avian flu pandemic have been exaggerated by the media:

On avian flu, he notes, he predicted 5 million to 150 million deaths — the same range the World Bank was using — but headline writers quoted only the higher figure.
The Times, well beyond irony, says in another story in today's paper:
"...it could be something like 200 million," closer to an estimate once made by Dr. David Nabarro, chief avian flu coordinator for the United Nations.

Posted by Donald L. Luskin at 11:33 AM | link  

GORENOMICS IN THE WSJ   Al Gore dresses up his environmentalism fetish with the jargon of economics on the editorial page of today's Journal. Econopundit comments:
[Gore:]"Capitalism and sustainability are deeply and increasingly interrelated. After all, our economic activity is based on the use of natural and human resources. Not until we more broadly 'price in' the external costs of investment decisions across all sectors will we have a sustainable economy and society."

The crux of the argument is right here. Capitalism can't bring you "sustainability" but heroic social engineers like Al Gore can. The problem is in that word "sustainability." It's religion.


Posted by Donald L. Luskin at 10:27 AM | link  

SOME ERRORS ARE SO GOOD THEY HAVE TO BE REPEATED   Need a credible source? Make the source you've got more credible by lying about his credentials. The Free Market Project
:“Starting off a week’s worth of “in-depth” reporting on global warming, “World News Tonight” falsely presented a liberal journalist and author as a Pulitzer Prize winner.

“Pulitzer Prize-winning journalist Ross Gelbspan blames a 15-year misinformation campaign by the oil and coal industry” for the public’s lack of alarm over climate change, ABC’s Geoff Morrell told viewers of his network’s March 26 evening newscast.

It turns out that Gelbspan and his associates are complicit in this lie. Can you imagine the firestorm if Gelbspan were a conservative, or if he opposed fear of global warming?
...While Gelbspan’s publisher and the group he founded, Climate Crisis Coalition, claim the journalist won a Pulitzer Prize, a search for Gelbspan on the Pulitzer Prize’s official Web site yields no results for the former Boston Globe editor.

Both the Free Market Project and JunkScience.com have previously documented the false claim.

“In 1984, Gelbspan's newspaper The Boston Globe and seven staff writers were awarded Pulitzer Prizes for a series of articles. But not Gelbspan. He was simply an editor who had some (non-award-winning) involvement in the series of articles,” JunkScience.com noted.


Posted by Donald L. Luskin at 8:52 AM | link  

ANDY CARD RESIGNS   Well deserved. And it's about time. Now if only he'd been replaced by Dick Cheney, 2008 could start looking really interesting.

Posted by Donald L. Luskin at 8:40 AM | link  

IS MOLLY IVINS GUNNING FOR PAUL KRUGMAN?   One blogger thinks so.

Posted by Donald L. Luskin at 12:05 AM | link  

THANK GOD FOR McCAIN FEINGOLD   Reader Norman Berger points us to the sobering truth about campaign contributions for presidential elections. Wasn't "campaign finance reform" supposed to reduce the role of big money in politics? Seems to me the money just keeps getting bigger and bigger -- exponentially.


Posted by Donald L. Luskin at 12:00 AM | link  


Monday, March 27, 2006

THE TIMES ON TRIAL   The Supremes have spoken. The New York Times can't evade due process any longer.
The Supreme Court refused Monday to block a defamation lawsuit against The New York Times over columns that linked a former Army scientist to the 2001 anthrax killings...A federal judge had thrown out Hatfill's lawsuit against The New York Times over 2002 columns by writer Nicholas Kristof that faulted the FBI for failing to thoroughly investigate Hatfill. The 4th U.S. Circuit Court of Appeals reinstated the suit, and the Supreme Court declined without comment to take up the case.
Thanks to reader Jill Olson for the link.

Posted by Donald L. Luskin at 10:21 PM | link  


Sunday, March 26, 2006

PENSION REFORM: SOME GOOD STUFF IN THERE   Our Washington "lawyer/lobbyist" friend (who, as always, insists on anonymity) has some thoughts about pending pension reform legislation:
One of the reoccurring ironies of Washington is that bad things are often hidden in good bills and vice versa. Such is the case with pension reform, now in a House-Senate conference. Among the good things inside this massive bill (which may end up bailing out bad-acting industries) is a reform to allow investment advice to be given to employees by those firms actually involved (via their management of 401(k) and other retirement funds) and therefore able to give advice. Studies show that even employees who set aside money for their retirement do not seek education about investing on their own. The theory here is to increase the supply of basic information by those incented to provide it. The naysayers see this as a "conflict" Yeah, like a good waiter recommending a better dish on the menu? Is ignorance acceptable if it's free of conflict? Can we grow up?

New House majority leader John Boehner has passed this bill three times out of the House but the Senate has ignored it three times. Another reform in the House bill will allow better managers to be hired by more pension funds which ought to result in higher returns. The bill will allow hedge funds to comprise up to 50% of their total assets - double the current limit - from pension plans without being treated as fiduciaries under ERISA. What this really means is that pension funds will win the right to diversify more, to pick from the top shelf of investment managers and, as a result, to be held more accountable to their beneficiaries for performance.

Pension fund managers are among the most experienced and sophisticated investors in the world. They already invest in hedge funds, but the best hedge fund managers don't want anything to do with the hassles of ERISA so they reject investments by pension funds to keep clear of wacky rules by the Department of Labor. Love or hate them, but all will admit that Calpers doesn't need government employees at a backwater branch of DOL imposing limits on their investment strategies. Today, with no change in law, managers of pension funds can invest in venture capital or real estate without ERISA sanctions, so why not enlarge the list of hedge fund investments as a way to diversify risk? (The House bill also would redefine the ERISA threshold so it applies only to those regulated by federal pension law; the current law also counts public and foreign plans in the definition.)

Not any easy topic to follow perhaps, but one that anyone running a multi-billion corporation should be able to understand -- and ought to because it has the potential to boost the retirement security of their own employees. Here is an example (rare indeed) that at least some in Congress do unappreciated but important work.

Of course, if you're an ignoramus or a cowaring anti-business sort, you see this as "weakening" consumer protection.

How then does the New York Times see this issue? No need to guess: here's the predictable editorial, written in their usually smug, misinformed, misleading, psuedo-populist style. Good thing their influence is marginal and declining.

There is still time to rescue this critical legislation — if key lawmakers give up political horse-trading and put public good above corporate interests.

Let's start with Representative John Boehner, Republican of Ohio and the new House majority leader....

You get the idea.

Posted by Donald L. Luskin at 10:11 PM | link  

JOKE OF THE DAY  

Posted by Donald L. Luskin at 1:08 PM | link  

CENTRAL BANKS BEGIN TO ENTERTAIN NON-CENTRAL IDEAS   Could it be that the world's central banks are beginning to intellectually diversify? One version of it has already happened at the Fed. And now another at the Bank of England. From Bloomberg:
It's not often the words ``sex'' and ``Bank of England'' inhabit the same sentence. David Blanchflower's appointment to the central bank may change that.

Blanchflower is an economics professor at Dartmouth College in the U.S. The U.K. government announced this week that he will replace Stephen Nickell from June 1 on the bank's Monetary Policy Committee, which meets monthly to set interest rates.

It turns out that Blanchflower is interested in sex... Specifically, though, the economist has investigated the relationship between how often people get laid, how much money they have, and how happy they say they are.

Okay... bully for empiricism, and for understanding the inextricable links between human action and economic outcomes. But there's a dark side. Blanchflower's empiricism could lead to new and even more horrific forms of central bank micromanagement of the human experience, beyond the economy:
In a May 2005 paper called ``Happiness and the Human Development Index,'' Blanchflower and Oswald say that rich nations overemphasize economic growth. ``The industrialized countries should, in our judgment, use a broader conception of well-being than the height of a pile of dollars,'' they write. Maybe we should ``substitute the goal of Gross National Happiness for the more traditional economist's objective of Gross National Product.''

At the past four central bank meetings, Nickell has been the sole advocate of lower borrowing costs. Wouldn't it be nice if Blanchflower found a way to combine calling for interest rate cuts with an exhortation for more lovemaking?

Thanks to our pseudonymous correspondent "Irrational Exuberance" for the link.

Posted by Donald L. Luskin at 1:08 PM | link  

AVIAN FLU? DON'T WORRY ABOUT IT!   After running dozens of scare stories, this week the New York Times has decided that avian flu is nothing to worry about. In today's "Week in Review" section, it's being relegated in advance to the dustbin of history along with Mad Cow disease, SARS, and small pox. Yeah, that's right. Don't worry one bit:
"...once the threat arrives, even if there's an undercurrent of terror in the whole society, people see the consequences and they get accustomed to it, just as they got accustomed to plague in the Middle Ages."
See? It's just like the plague. Nothing to worry about. You'll get used to it.

Posted by Donald L. Luskin at 12:02 PM | link  

"THE SAD FACT, OF COURSE"...   Gretchen Morgenson, the New York Times reporter whose sensationalist true-crime stories appear in the anti-business business section, just doesn't understand how the world works (so she makes stuff up). Today she writes another among hundreds of repetitive anti-corporate greed screeds:
It has been beyond exasperating to watch money managers, who are fiduciaries, vote their clients' shares in support of compliant or incompetent boards in recent years. With the exception of some public pension funds, institutional shareholders have uttered nary a peep about directors on the scene during significant accounting blowups or those who dispensed overly generous pay packages and perquisites to underperforming executives.

The sad fact, of course, is that investment advisers don't want to irk the companies they are doing business with elsewhere in their firms, or trying to.

Does it ever occur to Morgenson that shareholders wouldn't even hold the stock in the first place if they didn't like company management? It's simply Morgenson's personal judgment that management is bad -- so any "exasperation" is really just with the reality that she and some fund manager happen to have differing judgments. And never trust any "fact" followed by the phrase "of course." She's just making this up. To justify complaining about a crime that's not a crime, she's inventing a motive out of whole cloth. How does she know what's going on in the minds of thousands of institutional shareholders, some of whom may have affiliates doing business with company managements and many more that do not?

Posted by Donald L. Luskin at 11:55 AM | link