|
Media Infiltrations: Deadly Rescue  National Review November 17, 2008 Krugman’s Posthumous Nobel National Review Online October 14, 2008
"What has been your worst blogging experience? "That's a guy who actually stalks me on the Web and once stalked me personally." "I'm saying this...guy's a jerk."
 A Bound Man Shelby Steele What I'm listening to:  Langley Schools Music Project What I'm watching:  There Will Be Blood What I'm playing:  Speed Racer Order these from Amazon.com at Amazon's normal low prices... and a fraction of your order goes to help support this site. Thanks!
Thanks to Irwin Chusid, public editor. Some of the sites
|
 7:00 pm EDTTuesday, January 6 |
| Unindicted co-counterconspirator-in-chief Donald Luskin will appear on CNBC's Kudlow & Company. Don will be debating Peter Schiff -- yes, sigh, Peter Schiff -- about the future of the economy and the markets. |
Chronicle of the Conspiracy
Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!
Saturday, August 04, 2007
THIS IS JUST GETTING ABSOLUTELY ABSURD The focus on losses from investments in subprime loans is turning into a ridiculous obsession. Here's a Bloomberg story devoted to a mutual fund that held a microscopic position in securities linked to subprime loans, and as a consequence has had performance that just slightly lags its compeitors. No losses -- just a slight performance lag. Big frogging deal!Fidelity Investments' Inflation-Protected Bond Fund is lagging behind its biggest competitor, Vanguard Group, after losses in subprime mortgages, this year's worst-performing debt market..The $1.3 billion mutual fund...rose 3.3 percent this year, trailing the 4 percent gain of the Vanguard Inflation-Protected Securities Fund, which holds no mortgage bonds. The Fidelity fund advanced at an annual rate of 5.6 percent during the past five years, compared with the 6 percent return of the $10.2 billion Vanguard fund...
Fidelity's fund has disappointed investors...
The fund, which attempts to provide returns that exceed the rate of inflation by purchasing Treasury inflation-protected securities, or TIPS, had 0.5 percent of assets in derivatives linked to subprime loans, according to Morningstar.
Posted by Donald L. Luskin at 7:21 PM | link
Friday, August 03, 2007
DEM LEADERSHIP STAGES A COUP IN THE HOUSE From ABC News:House Republicans are fired up about action on the floor last night just after 11pm Eastern. The issue was a provision to ban any funds in the Agriculture Appropriations bill from being used for housing assistance for/the employment of illegal immigrants.Update [8/4/2007]... The Washington Post reports on the aftermath:As the vote came to a close last night, Republicans say the scoreboard read 215-213, meaning the measure passed. But when Rep. Michael McNulty, D-N.Y., gaveled it down he said the measure failed 214-214, and had lost.
There was all sorts of chaos, and House Democrats being pressured to change their votes, all of it visible on C-SPAN...
Then the vote disappeared from the record as if it never happened and Republicans are alleging all sorts of shenanigans.
The House last night unanimously agreed to create a special select committee, with subpoena powers, to investigate Republican allegations that Democratic leaders had stolen a victory from the House GOP on a parliamentary vote late Thursday night...Update 2... Reader Jameson Campaigne notes,The agreement to form a special committee was extraordinary. Such powerful investigative committees are usually reserved for issues such as the Watergate scandal and the funneling of profits from Iranian arms sales to the Nicaraguan contras in the 1980s...
House Majority Leader Steny H. Hoyer (D-Md.) accepted GOP calls for an investigation. "I do not believe there was any wrongdoing by any member of the House. I do believe a mistake was made," he said. "And I regret it."
Have a look at the New York Times, page one, today.Do you see any mention about the actual issue causing the fight, apart from a vague reference to the "agriculture bill" and "procedural fight" ? Not a word about free housing for illegals ... gosh, I wonder if they deleted this since even most of their readers (selfish liberals) would agree with the GOP on this one?
Golly-gee.
Posted by Donald L. Luskin at 11:11 PM | link
GET READY TO TURN OFF YOUR TV Or maybe just throw a brick through the screen and be done with it for good. From my DC-insider pal "Mick Danger":
The polls show the public likes Congress less than Bush. So, the Democrats spend their newly raised campaign funds on a big ad campaign. According to the AP, they claim three victories: raising the minimum wage, increasing subsidies for children's health care (the "SCHIP" program) and opposing the Iraq war.Update... our "public editor" Irwin Chusid wants to turn off the stock ticker, too.Hmm. Even these claims are disingenuous. The minimum wage increase only became law when the Democrats attached it to a bill providing more spending on the Iraq war. I'm guessing the ad will skip this detail. The SCHIP bill is not law; the House and Senate have both passed bills increasing the SCHIP program but there are big differences between them and a veto is likely. Lastly, despite their hot rhetoric and lame stunts (remember last month's cots & pizza party?) the Democrats have chosen to do everything BUT cut off spending for the Iraq War. They have done an excellent job cutting intelligence, though; it's down by two-thirds.
Checking today's early morning outlook for my stock portfolio via Yahoo! Finance, under RECENT NEWS for Altria (MO, i.e., Philip Morris), the following verbatim headline made me cringe:Thu 10:43pm - (MO) - U.S. Senate approves children's health bill (Reuters)The combination, in a brief word string, of Big Tobacco + U.S. Senate + children + approved health bill + reported by Reuters ... I could not muster courage to read the story. I'm all for healthy children -- who isn't? -- but this headline augurs ill: for children, for healthcare, for the economy, for Altria, for the nation. However, I'm sure it makes many senators (and a few Reuters editors) FEEL GOOD about THEMSELVES.Call me cynical.
Posted by Donald L. Luskin at 9:23 AM | link
Thursday, August 02, 2007
THE WHOLE WORLD MUST BE "MANIPULATING" Why are the protectionists bashing China over the supposed manipulation of its currency, as though that were responsible for our trade deficit with them (and as though a trade deficit were necessarily a bad thing)? We import more from Canada than we do from China, and we have a trade deficit there, too. Is that Canadian dollar "manipulated"? Same with Mexico. Germany. France. The United Kingdom. You have to go down the list of our trading partners all the way to the Netherlands, before you find a country with whom we have a trade surplus. Are they all "manipulating" their currencies? And doesn't the Netherlands have the same currency as Germany and France -- the Euro? So how come, if currency determines everything, we have a deficit in two cases and a surplus in the other?Could it just be that currency exchange rates in and of themselves have nothing to do with any of this?
Posted by Donald L. Luskin at 12:37 PM | link
DELONG FINALLY GOES TOO FAR The Federal Reserve has had to intervene to stop him. And not a moment too soon.
Posted by Donald L. Luskin at 10:37 AM | link
Wednesday, August 01, 2007
THE PETITION TO STOP PROTECTIONIST MADNESS Pat Toomey, president of the Club for Growth, writes in this morning's Wall Street Journal about the petition opposing anti-free trade policy signed by 1028 economists (see below). The Club, by the way, deserves the nation's gratitude for organizing the petition, with special thanks singled out for the Club's Andy Roth. Here's Toomey:While the signatories on this petition will certainly disagree on a host of other issues -- at least 20 signed a 2003 petition against the Bush tax cuts -- they all agree that, in the words of the petition, "there is no foundation in economics that supports punitive tariffs."Toomey also records the history of how the Smoot Hawley Tariff Act played into the stock market crash of 1929 and the onset of the Great Depression:Adam Smith long ago observed that "It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy." As members of Congress should know -- but unfortunately don't -- the maxim of the family applies equally to a nation. This simple truth explains the irresistible logic of free trade.
Free trade among and between people of various nations is the mechanism that allows producers to maximize their comparative advantage while consumers maximize the value they receive for their dollar. Free trade allows American producers to sell jets and software to the Chinese, while American consumers buy toys and apparel from China -- a win-win proposition for both buyer and seller.
Protectionists attempt to disrupt the market's natural tendency to seek efficiency by imposing tariffs in order to artificially increase the price of foreign goods relative to domestic competition. Thus, tariffs are simply a tax on American consumers, and it would be Americans, more than the Chinese, who pay the price. The very people Sens. Schumer and Graham claim to help will suffer from the higher prices, fewer jobs and potential trade war that will result from their legislation.
On May 4, 1930, 1,028 economists signed a petition urging Congress and President Herbert Hoover to reject the Smoot-Hawley Tariff Act, arguing that "increased restrictive duties would . . . operate, in general, to increase the prices which domestic consumers would have to pay." Neither Congress nor the president listened, but the stock market certainly did.Though many associate the Great Depression with the stock market crash on Oct. 29, 1929, the market actually rallied during the six months following Black Tuesday, while the defeat of Smoot-Hawley appeared likely. The market turned south again in April 1930 as those hopes of defeat gradually dimmed.
The Dow Jones Industrial Average sank a full 8%, from 250 to 230, over just two trading days in June 1930, in direct response to the Senate's passage of Smoot-Hawley and Hoover's announcement that he would sign it. Exacerbated by other flawed governmental policies, an international trade war continued to drive the market down until the Dow hit a low of 41 on July 8, 1932, having lost 89% of its value from its September, 1929 high. It would be 25 years before the market recovered its 1929 peak.
Posted by Donald L. Luskin at 7:43 AM | link
KUDLOW REPLAY Here's the YouTube video of my July 20 appearance -- sorry for the delay -- in which I have to tell another guest that free trade is far superior to digging up rocks and trading them for coconuts.
Posted by Donald L. Luskin at 7:34 AM | link
Tuesday, July 31, 2007
1028 OMINOUS PARALLELS In 1929, before the disastrous Smoot Hawley Tariff Act was signed into law, 1028 noted economists signed a petition protesting the law that ultimately triggered the stock market crash and the global Great Depression. Congress is gearing up to make the same tragic mistake again, with legislation aimed at destroying free trade with China. And today, just as then, 1028 noted economists have signed a petition begging them not to do it. images/20070731petition.pdf">Click here to download a PDF file of the petition, so you can see the role of honor of those who have stood up in opposition to this anti-jobs, anti-growth, anti-wealth and anti-freedom legislation. But where is Paul Samuelson's name? Or Paul Krugman's, or Brad DeLong's? Look for their names, and you won't find them.
Posted by Donald L. Luskin at 6:33 PM | link
KUDLOW REPLAY Here's the YouTube video of yesterday's appearance. Quite a strange experience, up against John Browne, who starts things off by claiming that GDP accounting is a "conjuring trick" because quarterly growth figures are annualized to make them look bigger. Has it ever occurred to him that the figures are reported the same way when they are negative? It goes downhill after that...
Posted by Donald L. Luskin at 2:57 PM | link
R.E.S.P.E.C.T. Paul Krugman, on Monday:
There are arguments you can make against programs, like Social Security, that provide a safety net for adults. I can respect those arguments, even though I disagree.Paul Krugman, on February 18, 2005:
On Wednesday Mr. Greenspan endorsed Social Security privatization. ...By repeatedly shilling for whatever the Bush administration wants, he has betrayed the trust placed in Fed chairmen, and deserves to be treated as just another partisan hack.Thanks to reader Josh White.
Posted by Donald L. Luskin at 8:36 AM | link
Sunday, July 29, 2007
THE SUBPRIME CRISIS IS REALLY SPREADING From Unconfirmed Sources:The problems in the U.S. subprime mortgage market are spiraling out of control and have caused a virtual financial crisis, said economist Mark Zandi. The Second Life financial markets are in peril from more than $1 trillion in risky virtual mortgages, we could be just one hedge-fund collapse away from a global online liquidity crisis, said Zandi, chief economist for Moody's Virtual Economy.com.
Posted by Donald L. Luskin at 3:34 PM | link