America needs to be a place where all of us can feel a part of the American dream. But it will not happen by dividing us into racial groups. It will not happen by trying to turn the poor against the rich. It will not happen by asking Americans to accept what is immoral and wrong in the name of tolerance. - J.C. Watts
A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both. - Milton Friedman
This week, aside from Sheriff Joe Biden telling us that the stimulus worked, we get this garbage in, garbage out from economists Mark Zandi and Fed apologist Alan Blinder, titled "How We Ended the Great Recession".
http://www.scribd.com/doc/35002562/How-We-Ended-the-Great-Recession
So this is what we get from our government, two economists who predicted the stimulus would be hugely beneficial, conduct a study that concludes that the stimulus was hugely beneficial.
HOW STUNNINGLY INEPT.
DEFINITION OF CONFIRMATION BIAS:
Confirmation bias (or myside bias) is a tendency for people to prefer information that confirms their preconceptions or hypotheses, independently of whether they are true.
Buried in the minutiae of the study is the admission that what the Federal Reserve did actually had more impact than our tax dollars.
Also, the authors compare the "success" against a set of alternatives that suggest that the administration and the Federal Reserve just "do nothing" in response to the collapse of the financial system and the economy.
SERIOUSLY?!? Is that the standard we are looking for? Is that where the bar is set? IT WAS BETTER THAN DOING NOTHING?? That's even worse than, "close enough for government work".
The larger problem the "useful tools" in the administration have is that the facts (economic data) keep flying in their faces. My Dad used to say "don't let the facts get in the way of a good story". This is often described as "anchoring" instead of the term confirmation bias. I just hope that they don't pull the whole economy down again by remaining "anchored" to what appear to be failed policy choices.
This is a pretty accurate synopsis of the situation from back in January 2010. Zandi was a goofball then, he's more of one now.
http://michaelscomments.wordpress.com/2010/01/08/an-accurate-unemployment-projection/
The Obama administration has explained the dire employment situation thusly:
The economy was way worse than anybody thought
Their predictions were in line with other economists
Things would have been worse without the stimulus
All in all, a nice deflection of blame from themselves (and usually on to the preceding administration). But history isn’t so kind.
You see, back around the time that the Obama team put forth their errant predictions, a fellow named Mark Zandi (Moody’s Economy) made a similar set of predictions using an actual economic model. And here’s how he did:
Yes, your eyes do not deceive you – the unemployment rate is closely tracking Zandi’s predictions for the non-stimulus case. This leads me to the following conclusions (which are somewhat at odds with the administration’s spin):
The economy was exactly as bad as some economists thought
The Obama team’s predictions were much more optimistic than other economists’
The stimulus has had no effect
You can believe the spin or the facts you see/feel for yourself.
My conclusions would echo those of one of the commentators to the story and flow from the wisdom of Milton Fridman:
“I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.”
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
The discrepancy may be explained by either the economy being in worse shape than economists thought at the outset (the Obama excuse, even though we were told this was the worst thing since the Great Depression). In this case the model of the economy without stimulus is wrong.
Alternatively, the discrepancy can be explained by the fact that the model generating the effects of stimulus is wrong. The GIGO argument. Either argument can be made and supported by facts and figures, ultimately we have elections that decide who is right and who is wrong.
We heard the mantra that these stimulus funds would go to "shovel-ready" projects that would have a near immediate effect on jobs and the economy. That has proven to be false at worst or understated at best.
The problem IMO was that the anticipated stimulus multiplier effect was muted or strangled by the harsh anti-business rhetoric and punitive regulatory euphoria that has created a climate where in effect CAPITAL IS ON STRIKE.
Why would a businessman hire, invest and strive for climate in an environment where the costs to hire are increasing, the incentive to invest is disappearing and the profits, if any, generated from investing and hiring are going to be demonized as ill-gotten gains or confiscated by an angry, greedy business partner by the name of Uncle Sam, who is motivated to "level the playing field" and will take your profits to aid those of your less competent competitor. (See GM, Chrysler, Ford)
Put that in your model and smoke it, Zandi!!
It is interesting to see that the political contributions of businessmen and women appear to be heading in a different pocket lately. And Team Obama has taken notice. Also, interesting now that the Obama team, which benefited greatly from contributions from these same businesses to get elected, now criticizes these same businesses for appearing to have buyers remorse. Isn't that their right, sir? To change their mind?
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MORE GARBAGE IN, GARBAGE OUT THAT EMENATES FROM THOSE ENTRUSTED WITH YOUR TAX DOLLARS:
CBO Admits It Ignored the Economy’s Actual Performance
Published on March 23, 2010 by Brian Riedl
http://www.heritage.org/Research/Reports/2010/03/Stimulus-Jobs-Count-CBO-Admits-It-Ignored-the-Economys-Actual-Performance
1) RESULTS PRE-DETERMINED? THAT'S NOT TOO FRAUDULENT OR SELF-SERVING - NICE PR JOB
CBO Confirms Its Methodology
In a recent speech to the National Association of Business Economics, CBO Director Doug Elmendorf confirmed this by stating:
[W]e don't think one can learn much from watching the evolution of particular components of GDP [gross domestic product] over the last few quarters about the effects of the stimulus … so we fall back on repeating the sort of analysis we did before. And we tried to be very explicit about it that it is essentially repeating the same exercise we did rather than an independent check on it.[1]
When asked if this means that any actual underperformance of the stimulus would fail to show up in the CBO's stimulus jobs count, Elmendorf replied "That's right." This means the 1.5 million jobs saved estimate was pre-determined.
Of course, the stimulus was originally promised to create (not just save) more than 3 million jobs.[2] Instead, the economy has since lost more than 3 million additional net jobs. The abject failure of the stimulus policies recommended by Keynesian economic models should induce some fundamental re-analysis of these models' assumptions. Instead, the CBO is re-releasing the same jobs analysis--with the same economic assumptions--that they had used a year ago.
2. GIGO - GARBAGE IN, GARBAGE OUT - WHAT IF THE UNDERLYING ASSUMPTIONS ARE WRONG?
The "Begging the Question" Fallacy
The CBO's conclusion that the stimulus created jobs is based on an economic model that began with the premise that all stimulus bills create jobs. In other words, the conclusion is already assumed as a premise. Logicians call this the fallacy of begging the question. Mathematicians call it assuming what you are trying to prove.
More specifically, the CBO's model started by automatically assuming that government spending increases GDP by pre-set multipliers, such as:
Every $1 of government spending that directly purchases goods and services ultimately raises the
GDP by $1.75;
Every $1 of government spending sent to state and local governments for infrastructure ultimately raises GDP by $1.75;
Every $1 of government spending sent to state and local governments for non-infrastructure spending ultimately raises GDP by $1.25; and
Every $1 of government spending sent to an individual as a transfer payment ultimately raises GDP by $1.45.[3]
(Note that all CBO figures in this paper represent the midpoint between their high and low estimates.)
Then the CBO plugged the stimulus provisions into the multipliers above, came up with a total increase in GDP of 2.6 percent, and then converted that additional GDP into 1.5 million jobs.
The problem here is obvious. Once the CBO decided to assume that every dollar of government spending increased GDP by the multipliers above, its conclusion that the stimulus saved jobs was pre-ordained.
The economy could have lost 30 million jobs, and the model would have said that the economy would otherwise have lost 31.5 million jobs without the stimulus. An asteroid could have hit the United States, wiping out everyone outside of Washington, D.C., and (as long as Washington still spent the stimulus money) the CBO's economic model would have produced the same stimulus jobs data. There is no adjustment made to reflect what actually happened in the economy after the stimulus was enacted.
3. CONFIRMATION BIAS, ANCHORING - CALL IT WHAT YOU WILL - MOST PEOPLE FEEL LIKE IT'S JUST PLAIN OLD FASHIONED B.S.
Test the Multipliers
The debate over the efficacy of Keynesian stimulus is essentially a debate over the correct multipliers. Some believe the multipliers are high[4]; others believe they are as low as zero[5] (or even negative). Testing the stimulus requires testing the multipliers. Yet by simply assuming large multipliers, the CBO effectively pre-ordained its conclusion that the stimulus worked regardless of what actually happened in the economy.
Elmendorf has confirmed that the CBO's stimulus analysis consists of little more than re-releasing its pre-stimulus projections. Policymakers and analysts should not mistake this analysis for an actual examination of the stimulus's impact.
And this is why the people they call the Tea Party are gaining in numbers, not because they are racists, not because they do not want top see our President and therefore our country succeed. But because they see and feel these things that are going horribly wrong and they have had enough.
This hit my e-mail last week from James Quinn who publishes the blog The Burning Platform
http://theburningplatform.com/
The Burning Platform has posted a new item, 'NAACP - MOST RACIST ORGANIZATION IN AMERICA'
Again, I would like to reiterate that the NAACP, backed up by the hate spewing liberal media pundits on MSNBC and CNN, are just mouthpieces for the Obama agenda. Obama despises white people. Whenever his policies fail and the country is clearly headed downward, he will pull the race card. It is the liberal gameplan. They expect us white people to back down like we have for decades. No more. The Tea Party is about fiscal responsibility. The racists are in the NAACP and the Obama White House. Funny that black men like Thomas Sowell and Deroy Murdock aren’t invited on MSNBC to put Olbermann, Madow, and Matthews in their place. The liberal agenda is hate, racism and division.
Liberals fear the Tea Party. They should. We’re coming to get them.
He defends the Tea Party by noting that
"Consider the Tea Party’s Contract from America, a pledge to which it holds its endorsed candidates. (TheContract.org.)
Among 10 planks, it advocates a single-rate tax, a two-thirds-vote requirement for tax hikes,
ObamaCare’s repeal, and the defeat of cap-and-trade legislation.
Nothing is even remotely related to race, ethnicity or identity. Wouldn’t bigots devote at least one of 10 reforms to something racial?
The Tea Party movement avoids racial issues and instead advances lower taxes and spending and greater fiscal discipline. These issues are neither black nor white. They are green."
This is what I've been saying about the Tea Party all along.
If you really want to get a gander at a wholly racist organization, look no further than the Black Congressional Caucus, whose members basically started this "Tea Party is racist" nonsense.
http://en.wikipedia.org/wiki/Congressional_Black_Caucus
The Congressional Black Caucus is an organization representing the black members of the United States Congress. Membership is exclusive to blacks,[1]
I have to agree with J.C. Watts here as well.
Watts said of his refusal to join the caucus, "...they said that I had sold out and Uncle Tom. And I said well, they deserve to have that view. But I have my thoughts. And I think they're race-hustling poverty pimps."
White members of Congress have never been welcomed into the caucus, although CBC by-laws specifically prohibit any discrimination.
And then there was the infamous Ralph Nader incident.
Sorry, in terms of level of overt racism compare and contrast the overly trumped up version of the congressman walking the gauntlet of Tea Partiers, up the Capitol steps to sign the Health Care bill with this incident.
Oh, you never heard about this incident, or the Sharpton / Brawley smear of NYPD officers. No surprise there.
Ralph Nader incident
In 2004, independent presidential candidate and consumer activist Ralph Nader attended a meeting with the Caucus which turned into a shouting exchange. The caucus urged Nader to give up his presidential run, fearing that it could hurt John Kerry, the Democratic Party's nominee. Representative Sheila Jackson Lee (D-TX) called the upcoming election "a life or death matter" for the Caucus members' constituents. Nader accused Congressman Mel Watt of twice uttering an "obscene racial epithet" towards Nader; he alleged that Watt said: "You're just another arrogant white man – telling us what we can do – it's all about your ego – another f—king arrogant white
man." Watt never offered an apology.[9]
Nader wrote to the Caucus afterwards:
"Instead, exclamations at the meeting... end[ed] with the obscene racist epithet repeated twice by Yale Law School alumnus Congressman Melvin Watt of North Carolina. One member of your Caucus called to apologize for the crudity of some of the members. I had expected an expression of regret or apology from Congressman Watt in the subsequent days after he had cooled down. After all there was absolutely no vocal or verbal provocation from me or from my associates, including Peter Miguel Camejo, to warrant such an outburst. In all my years of struggling for justice, especially for the deprived and downtrodden, has any legislator—white or black—used such language? I do not like double standards, especially since our premise for interactions must be equality of respect that has no room, as I responded to Mr. Watt, for playing the race card. Therefore, just as African-Americans demanded an apology from Agriculture Secretary Earl Butz and Senator Trent Lott—prior to their resignation and demotion respectively—for their racist remarks, I expect that you and others in the Caucus will exert your moral persuasion and request an apology from Congressman Watt. Please consider this also my request for such an expression—a copy of which is being forwarded directly to Mr. Watt's office."[10]
So all these factors contribute to the rise of the Tea Party movement. Not racism. Not black /white issues, green issues ($$$). These folks have sat back were not involved as much in politics as they maybe should have been. They allowed the discontented to drive the agenda. Well, good job losers, you've pushed the economic and political climate to the point where now successful and otherwise happy, contented people are pissed off. GOOD JOB, ASS-HATS.
They have put up with the entitlement culture, the ever increasing social safety net and the social justice programs grow way out of control. When times were good they really didn't pay too much attention to what was going on. Politics is always about "greasing the squeaky wheel" and these are folks that didn't have much to complain about. Now they do.
These are people that when times are good are the epitome of good, decent, caring, charitable people. But their patience and kindness and generosity does have it's limits -- it's breaking point -- and we are rapidly reaching that point in this environment.
SEE YOU IN NOVEMBER!!!
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The other success that was touted this past week was the so-called Financial Regulatory Reform bill that was passed. Another gift form out leaders. I'll leave it to a well-respected bank analyst, Rochdale Securites Dick Bove, to give his take on the bill. It's right on the money.
How Wall Street Will Beat the New Financial Regulations - Yahoo! Finance
http://finance.yahoo.com/news/How-Wall-Street-Will-Beat-the-cnbc-2430801725.html?x=0
"What the law did was force the banks to rethink their business lines, their pricing strategies, their methodology for maintaining their balance sheet," banking analyst Dick Bove of Rochdale Securities said in an interview. "When they rethink it all, they will be able to offset all of the costs of this bill."
But crafty financial veterans already are finding loopholes in the law and banks likely will profit both in spite of and because of the reforms.
"If you had anyone who knew anything about the financial industry writing this law, that's one thing," said Bove, who has called the law one of the worst in US history. "But if you have a bunch of hysterics who were looking for political gain, you get something that was an abortion. All it did was increase the cost of banking in the United States relative to the cost of banking in other countries."
The banks' course of action likely will break down into four strategies:
1. Outfox the foxes
A harsh critic of the law, Bove is among the analysts who nevertheless believe banks will thrive. One big reason is because he thinks industry executives will show that they're smarter than the legislators who crafted financial reform, also known as FinReg.
Once again, thanks for nothing guys.
GARBAGE IN, GARBAGE OUT.
Speaking of garbage, this is the prevailing opinion of the current administration, that the people of this country are too stupid to understand that all the data that confirms what people are feeling everyday is wrong and they are right. That is the problem, people are too stupid.
I really hope that we remember to add ALL incumbents to the unemployment lines this November. There isn't one of them that deserves to be re-elected.
They need to be defeated and I use that term in lieu of they need to be beaten, Mussolini-style.
The Italians didn't mess around when a politician preached false hope and fanciful dreams and then failed miserably to deliver (the trains did run on time, though). Maybe a little history repeating around here would do some of our congressmen and women, well. HAHAHAHHA.
FROM ANDREWCOSSACK.COM - MUSSOLINI'S FALL FROM GRACE:
http://www.andrewcusack.com/2007/11/18/mussolini-in-his-own-words/
After a summary execution, Mussolini’s corpse, along with those of his mistress and others, were dragged through the streets of Milan before being strung up at a gas station. Il Duce had previously expounded upon the idea:
“Every man dies the death which befits his character.”
KEEP THAT IN MIND, MY D.C. HOMIES AND REMEMBER WE'VE GOT OUR EYE ON YOU.
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