|Man Without Qualities|
Monday, June 30, 2003(0) comments
The New York Times reports:
French wine sales to the United States, once French winemakers' most promising market and now one of their greatest competitors, are going down the drain. .... Overall French exports to the United States dropped by 21 percent in the first four months of the year, excluding the military category.
The tort bar is widely reported to be eager to sue companies like McDonald's that make people fat. It's wrong, but it is happening. The theory seems to be that the companies suppressed, failed to disclose or outright misrepresented the obese consequences of consumption of their products. There is also an undertone of fast- food "addiction," served up to gut the "personal responsibility" defense.
Maybe it will work. But, if it does, the entertainment industry should surely be next - and the focus should be on the commercial use of sex. The concept of "sexual addiction" has long been accepted. The entertainment companies certainly don't emphasize the darker consequences of the sexual behavior their products encourage. Evil entertainment executives have long lied about their knowledge of such consequences. Indeed, if there is one class of executives who can easily make tobaco executives look honest, it is entertainment industry executives. And, of course, there are plenty of people who will be able to testify quite truthfully that their AIDS, sterility, unwanted pregnancies, bad personal relationships and/or divorces are probably the direct results of a childhood spent consuming Hollywood fare.
And the best thing is that the First Amendment should be no effective defense to such claims - any more than the Amendment was a defense for the cigarette companies for liability arising from their advertising. And if the Amendment allows Nike to be held liable for making false and misleading statements when responding to critics of its overseas labor practices, how can the Amendment be an effective defense to a studio's obligation to support an infant parented by two teenagers sexed-up on some installment of the James Bond "franchise" - or much, much worse.
Often, such liability turns on whether the "speech" in question is "commercial speech" - which at one time was restricted to speech which did no more than propose a commerical transaction:
In its Kasky decision, the California Supreme Court reversed this ruling, introducing a new and extraordinarily broad definition of commercial speech. The court majority rejected the United States Supreme Court's "no more than" formula and instead devised a three-part test for determining whether particular statements constitute commercial speech. ... Under the test invented by the Kasky court, three elements must be considered: the speaker, the intended audience, and the content of the message. The three-part commercial speech test devised by the Kasky majority sweeps within its ambit almost any statements by any corporate or commercial speaker, or entity, involving any public controversy that touches upon the defendant's practices and policies.
First, ... the "speaker" element of the test will be met whenever the speaker is "someone engaged in commerce" ... The second element - the "intended audience" for the speech - is ... satisfied if the intended audience is "likely to be actual or potential buyers or customers of the speaker's goods or services, or persons acting for actual or potential buyers or customers, or persons (such as reporters or reviewers) likely to repeat the message to or otherwise influence actual or potential buyers or customers." ... The third Kasky element - the "content" of the speech - is satisfied ... if a lawyer can allege that a corporation's ultimate purpose is promoting sales....
James Bond movies and, indeed, most Hollywood movies and television shows, seem now to be "commercial speech" in the eyes of the California Supreme Court, entitled to only minimal First Amendment protection.
The Man Without Qualities has two small sons - ages 9 and 4 - who have an abundance of the most enjoyable qualities I can imagine. I try to do the best job possible being their parent. So it came as a shock that while Hillary Clinton says she was raised, among other things, "to protect and defend the democratic ideals that have inspired and guided free people for more than 200 years," I have not spent any time actually, consciously teaching my boys to do that.
In fact, the truth is that I have long considered phrases such as "to protect and defend" as more naturally occurring in the likes of federal or Presidential oaths or as mottos reproduced on black-and-white police cars. Admirable sentiments, to be sure - but it is indeed difficult for me to imagine myself sending the little tykes off with the paternal minder to be certain they take every opportunity at school to "to protect and defend the democratic ideals that have inspired and guided free people for more than 200 years."
Hillary has made me feel so remiss!
I can take but slight succor in today's report that speakers of Mandarin Chinese employ more of their brains than those trafficking solely in English. Yes, each of the little guys is fluent in Mandarin and English, despite the fact that neither of their parents speaks more than a couple of words of Mandarin. And each of the little ones possesses as well a passable, age-appropriate capability in Spanish. And, yes, it is true that the elder boy has spent more than a little while listening to his father prattle on about the wonder and structure of the zeta-function and the urgent need to locate its zeros - as well certain other, more heretical and probably rather ill-considered but emphatic, opinions about how misguided the current infatuation with string theory will likely turn out to be. And then there's all that finance theory and practice that their mother brings home, the older one's uncanny ability to crack an egg neatly with just one of his tiny hands and his even more uncanny knowledge of the use of eggs in cooking. And then there is the boys' more alarming shared proficiency in matters of cartwheels and kung-fu.
But how little all that means where a commitment to our democratic ideals is so woefully lacking?!
Sunday, June 29, 2003
The Man Without Qualities (here) believes that former Vermont Governor Howard Dean is likely to be a lot more formidable contestant for the Democratic Presidential nomination than the mainstream media has been allowing.
Now the Wall Street Journal reports:
One pleasure of every Presidential election season is that there is always a surprise. This year's biggest so far is Howard Dean, the former Vermont Governor who has become the most consequential Democrat challenging President Bush.
Also from the Journal's Jim Taranto:
The MoveOn results, which have been well covered in the press, may influence as well as predict the Democrat race. Dr. Dean's victory may boost his campaign, which has been riding high of late thanks to his unashamedly liberal, antiwar message, which resonates with the party's base.
And the Washington Post reports that Dr. Dean is showing new strength as a fund raiser while media favorite, boy-wonder Sen. John Edwards may be wilting:
Former Vermont governor Howard Dean (D) announced yesterday that he has raised more than $6 million in the second quarter of this year, an achievement many of his competitors privately conceded will add new credibility to his insurgent bid for the Democratic presidential nomination.
In an e-mail to supporters, Dean said that over the past eight days -- during which he formally announced his candidacy, appeared on "Meet the Press" and came in first in an online straw poll conducted by MoveOn.org -- his fundraising surged with $2.8 million in donations.
In the first quarter of 2003, Sen. John Edwards (D-N.C.) led the fundraising race with $7.4 million, but Edwards aides say he will raise substantially less when reports are filed on donations through the end of June. Those reports are due at the Federal Election Commission by July 15.
There is one eternal of government budget "crises": Governments make spending cuts as painful as possible with the old "close the Washington Monument" dodge, protecting non-essential employees and programs by shutting down the most visible services. Reporters take the bureaucratic maneuver hook, line, and sinker.
It happens every time, sometimes more literally than others:
Serious budget shortfalls have historic preservation programs across the country fighting for survival, according to the National Trust, an advocacy group for historic preservation. Historical societies are trying to absorb the cuts by reducing the number of days that sites are open, cutting tours and even contemplating the closing of some attractions.
But state budget crises are mostly the result of recent decisions to irrationally inflate state spending. States that did not recently bloat their spending the way California (for example) did, shouldn't have to "contemplate" closing basic state historical sites - reversing those recent, bad spending decisions shouldn't require defunding "Washington Monuments."
The media knows just what the profligate, manipulative state governments are doing. But the the old "close the Washington Monument" dodge continues anyway - as eternal as tomato soup.
Davis Descending VIII: Almost There
The Orange County Register reports:
Backers of the campaign to recall Democratic Gov. Gray Davis from office say they have collected nearly 900,000 signatures - the minimum needed to qualify for the ballot - and plan a victory celebration on July 4 in Orange County. Campaign workers will continue to collect signatures through the July 4th weekend, and will submit the documents to election officials as early as July 7, said David Gilliard, a consultant to the campaign, which is called Rescue California. "The bottom line is we're just about there."
Since the deadline for collecting the 900,000 signatures is September, it looks like Governor Davis is going to have to deal with a recall - either in November or March, but, with increasing likelihood, November.
Whether the recall vote is held in either March or November, there is a state initiative already on the ballot that will be placed before California voters at the same time as the Davis recall, an initiative which may bring out a lot of Davis opponents. The initiative is backed by Ward Connerly and would bar California governments from collecting racial and ethnic data to track students, vendors or workers in education, contracting or employment. Right now, the Connerly initiative is on the March ballot.
The California Secretary of State is thought to be trying to do the Governor a favor by delaying the Davis recall vote to March. But if the recall vote is set for March, it will coincide with the vote on Mr. Connerly's initiative. But it is also still possible that the Connerly initiative may find its way to the November ballot along with the question of Mr. Davis' recall, as the Register reports:
[The initiative] qualified last July, but not in time to appear on the November 2002 ballot. State law requires [the Connerly initiative] to appear before voters at the next statewide election. But if the [Davis] recall initiative qualifies soon enough, the next statewide election will be held this fall, not in March. Experts differ here, but this could be bad news for Davis.
That's because Connerly's initiative is favored 3-2 by all voters, according to the April Field Poll. Those voters are highly motivated to cast ballots, and political strategists believe most of them are not ardent supporters of the governor - to put it mildly. Even Davis' own Democrats only narrowly oppose the initiative. That means the recall election will excite the Republican base and attract not only those voters anxious to dump Davis, but those supporting Connerly's initiative - a double whammy for the governor when he is most vulnerable. Connerly himself has not taken a position on Davis' recall.
So, either way, the Connerly initiative will probably appear on the same ballot as the question of Davis' recall - in either March or November.
Saturday, June 28, 2003
The mainstream media is remembering Jaynard Jackson - but selectively. CNN, representatively, reports on the memorial service with the following:
President Bill Clinton [was] among those who spoke of Jackson's life. ... Clinton, in his characteristic folksy style, said Jackson had a "voice that could melt the meanness out of the hardest heart" and a "gift of gab that could talk an owl out of a tree."
"And he had certain convictions because he knew that politicians made choices that affect people's lives," he said. "He saw how much good affirmative action did for well-connected white folks and he thought it ought to be tried for other people as well."
"Sure enough," Clinton said, "it worked." ....
Jackson unsuccessfully sought the job of Democratic National Committee chairman in 2001, and served as the party's national development chairman.
Well "it" may have worked, as Clinton said, but the success of "it" didn't keep Bill and Hillary Clinton from using their influence to deny Mr. Jackson the chairmanship of the Democratic National Committee in favor of the incompetent hack, but Clinton stalward, Terry McAuliffe.
Mr. Jackson accomplished a lot during his life, and he was a force for significant good. He deserved better than he got from his party and from the Clintons, and he deserved better from the media, who in the coverage of his passing should have reminded the public of how ill used Mr. Jackson had been by those people.
In a particularly whingey article whose main purpose seems to be to complain about the success of George Bush's recent California fund-raising swing (Sample whinge: "Mr. Bush spent fewer than 10 hours in the state, meaning that he collected money at the rate of $500,000 an hour." This is "news that's fit to print?"), the New York Times allows this interesting tidbit:
[The President] appeared with the singer Johnny Mathis, the actor Kelsey Grammer and the comedian Dennis Miller at a dinner in Los Angeles, where Mr. Bush's campaign said the take was $3.5 million.
What's happening in Hollywood? Is it a coincidence that more Hollywood conservatives and Republicans seem to be "coming out of the closet" - or is the last, pure spring of Democratic support becoming tainted by common sense? Mr. Grammer is an interesting case. He is, of course, the star of the long-running television show Frasier - which is not known for particularly conservative views, as exemplified by a recent episode in which Martin, Nile’s and Frasier's father takes Niles to a gun range where they meet three other shooters, presented as negative stereotypes. Niles tries firing a gun, loves it, continues shooting and is invited to go to a gun show by these three (Martin, an ex-cop, "sanitizes" himself by saying he shoots only once or twice a year and that gun shows are no big thing). At the gun show, the three ask Niles to go to their “Idaho Compound” which they are preparing for the coming “New World Order”. Niles hurriedly leaves, realizing that his three new friends are right-wing nuts.
Fine. If it gets the rating, write and produce that show. But it interesting that Newsmax also recently reported:
When Kelsey Grammer guest-hosted the Letterman show, he let the cat out of the bag about the way conservatives are treated in left-leaning Hollywood. In his monologue, he shared with the audience:
“Some of you may or may not know this. I’ve recently come out of the closet, actually, in Hollywood. I’m a Republican, you see. It’s a dangerous thing to do in Hollywood because it means you are very isolated and lonely.”
The actor went on to describe what a small group of Hollywood Republicans that he hangs out with did recently for kicks. He quipped, “Last weekend, just for fun, we kidnapped Michael Moore and gave him a decent haircut and some clothing.”
Grammer also commented on the latest cynical ploy by Democrats to create a hubbub over not finding the actual WMDs in a country the size of California. “John Kerry’s been leveling some real shots at President Bush lately,” he said. “I want you to give them some time … don’t forget they’re still looking for O.J.’s weapons.” The “Frasier” star appeared recently on “Fox & Friends,” too, and revealed that he was a “pro-Bush guy.”
One obviously must be careful in assigning too much direct meaning to a comedian's monologue - and nothing Mr. Grammer says here should be naively construed as reflecting his serious political views, although the monologue appears to be a riff on those views and to present some serious observations in humorous form. But Mr. Grammer's involvement in the Bush fundraising event is a different matter - that is a pretty serious statement in a town widely felt within the entertainment industry itself to have been quite vindictive towards Bush supporters and Republicans in the past.
Something is changing in Hollywood. And it's not small.
Friday, June 27, 2003
Samatha Spivack writing in the San Francisco Examiner:
What the creators of the liberal radio network don't grasp, unbelievably, is that conservative radio grew organically because it provided a refuge from the daily deluge of gloom, doom and class warfare presented as news, and not as an alternative to existing political commentary.
The incipient market for conservative radio was an audience heartened to find information that had been consistently omitted from headline stories of environmental devastation and public policy crises. That it came packaged as commentary didn't matter, especially since it was often obvious that the daily news was derived from the press releases of special interest groups, with little effort to provide balance.
While Democrats view themselves now as outsiders in a GOP nation, that's the second and lesser condition necessary to draw a politically alienated audience to the radio. The primary necessity is a national press that excludes your views.
There is no perceptible clamor, for instance, for a radio program thrashing the Bush administration as environmentally unfriendly. We can see that story at 5, 6 and 11, or on the front page, and it will be presented in almost precisely that way. Nobody is frustrated for lack of stories spreading alarm about poverty, disease or homelessness, or some new and horrifying form of abuse against a victim group. Those stories dominate the news every day.
What additional perspective will liberal radio hosts offer after they've said that George W. Bush is an idiot, and Rush Limbaugh is a big fat idiot? All of the liberal political talk that's wanted already exists, and it's presented by professional broadcasters who have paid long, hard dues in the field, not by party operatives.
Not only is it true that all of the liberal political talk that's wanted already exists, but much more of that stuff than is wanted by the market already exists. That's why, for example, CBS, ABC and NBC news divisions lose money - buckets of it.
As I have pointed out before - what is needed in the liberal news market is consolidation and downsizing. Not more unwanted liberal product. Less, but better quality, product.
Davis Descending VII: Demons At The Shopping Mall(0) comments
The San Fransisco Chronicle reports:
Opponents of the move to recall Gov. Gray Davis are asking their supporters to intimidate signature gatherers and complain of harassment at stores where recall petitions are circulating, stepping up the political battle taking place in front of Wal-Marts and Home Depots across California.
In an e-mail message and Internet posting titled "How to Advocate Against the Recall," Davis supporters were told, "It is OK to stand in front of their table or approach potential signers before they do, or otherwise inhibit their activity." The memo instructs people to say they are "offended by being harassed" and file complaints with managers of stores. "Remember, the longer you engage them, the fewer signatures they can collect," said the memo distributed by Taxpayers Against the Governor's Recall, a union-funded group. The memo also includes a telephone hot line to report the location of recall petition circulators.
California election law makes it a crime to threaten petition gatherers with violence or damage their property. It's also illegal to bribe petition circulators to abandon their work. Recall petition workers across the state said intense feelings about the recall are prompting fights and verbal assaults. Some petition supervisors say they were threatened from the start -- with a boycott by the major signature- gathering companies if they handled the recall petition at all.
"I've been a coordinator for three years and collecting signatures for 11 years, and I've never seen anything like this," said Paula Wagner, 48, who supervises about 50 petition gatherers in Orange County. ....
Tom Bader, coordinating the signature-gathering effort for the Rescue California recall committee, said confrontations involving petition workers in San Francisco were so frequent that he scaled back and concentrated his efforts elsewhere, including San Diego, Riverside and Orange counties. Recent figures from the secretary of state show that only 7 percent of the recall signatures are coming from the Bay Area.
"These people are actually being told on the Internet to file false complaints," Bader said about the memo. "The circulators have been threatened all over the state that they are not going to work on any other petition. Then there is the physical aspect of it." ....
The memo to Davis supporters twice instructs them to engage recall circulators in conversation in order to distract them from their work. The memo was posted on the Web site www.stoptherecall.com. .... Petition manager John Burkett, who has 100 people collecting signatures in Riverside County, said his workers have been approached and offered more money to work on the plebiscite. ... "A few weeks ago," said petition circulator Gloria Anderson, 48, who was working at a Home Depot in Redlands (Riverside County), "I had some guy walk up and try to yank my sign down. He called me a Republican bitch. I'm not even a Republican."
There have been numerous complaints as well about circulators misleading people in order to get them to sign.
A MWQ prediction: It will all get worse. Much worse.
Davis Descending VI: Deference To A Partisan(0) comments
Both Kausfiles and Hasen link to Weintraub's scoop regarding the California secretary of state's apparent plan to delay the verification of signatures in the recall process, to push the process to the March date preferred by Democrats.
This scoop points out yet another problem with the just-read-the-statutory-language-and-accept-its-meaning approach to construing the California recall statue: in construing the meaning of statutes, most courts like to defer to executive officials in charge of enforcing that statute (the link is to an article describing the development of federal "deference" law, but the principles and tendencies are similar for state courts, too). In the case of the California recall statute, that executive officer is the California Secretary of State - and he happens to be a partisan Democrat. So what? Is it a surprise to anyone that a directly elected state official is partisan? Does anyone think that would come as a surprise to the drafters of the California constitution or its administrative statutes? The check on that tendency is through the ballot box - when voters again elect the Secretary of State. California was not intended to be a Platonic Republic - partisanship is just part of the normal mix.
If the California Secretary of State assigns a meaning to the statute, those who disagree with her will have to do far more than argue that her construction is wrong. One way or the other, such opponents will find themselves compelled to argue that the courts should not defer to the Secretary - and that generally means arguing that she is being "unreasonable." The California recall statute is not well drafted and courts construing election statutes - especially badly drafted ones - do not like to construe them to limit the voters’ choice.
So, if the California Secretary of State assigns a meaning to the recall statute that permits new names (that is, new Democratic names, such as Bustamante) to be added to the alternatives/replacement list in the event of an unexpected post-deadline resignation by Gray Davis, it is unlikely that the courts will disagree - even a mostly-Republican-appointed state supreme court.
However, the more unreasonable and obstructionist her actions become, such as adopting overly-burdensome counting procedures to deprive the voters of the choice to recall the Governor, the more the two principles of deference and voter choice will come into conflict. That's why a court challenge to her current counting scheme is a better bet than any challenge to a hypothetical more post-deadline alternative/replacement names construction.
Also, I believe the prospect of a challenge to the counting scheme bogging down in extensive court delay is exaggerated - unless the state supreme court wants it that way. The California supreme court has extensive power to remove and directly review cases - vastly more so than the United States Supreme Court. (For example, for those who value technical leglisms, California "mandamus" authority is far broader than federal "mandamus" authority.) If the California state supreme court views this as an important case, they can rapidly clear the way. If the state supreme court does not view the matter as important - then there's little point to a substantive challenge to the Secretary of State's construction of the statute in any event.
Misidentifying The Rich II
Don Luskin e-mails to remind me of the significance of "400" to old New York society, and he is right:
Caroline Astor had her heart set on presiding over New York Society, and so she saw to it that her home included an art gallery large enough that it could be turned into a ballroom. As the ballroom could comfortably accommodate 400 guests, the term “Four Hundred” became the sobriquet for New York Society -- with a capital “S”!
See also: “Gala and Glamour: Glittering Parties and Aristocratic Social Life of the Gilded Age...”
Yes, indeed. I think we have now located the central criterion employed by the New York Times to define what it considers a fundamental indicator of social equity: the size of Mrs. Astor's ball room, now demolished and decades ago thoroughly lampooned as irrelevant by Edith Warton.
And, as a bonus, we get a little additional insight into the Times' weird "aristocracy" dig.
Of course, the original IRS study on which the Times is reporting also dwells on this arbitrary "400" number. But since when does the Times simply accept government studies without questioning their significance? For example, would a Department of Agriculture study on the progress against hog cholera warrant a front page story at the Times? Worse, the Times reports that the IRS study was prepared at the urging of Joel Slemrod, a University of Michigan business school professor who serves on an I.R.S. advisory panel and is a leading authority on taxation of high-income Americans with no indication that the Times attempted to determine why Mr. Slemrod "urged" this number or what he believes it's significance to be. But that doesn't deter the Times from presenting the IRS study as evidence of the ongoing formation of a new "aristocracy" and as relevant to current social equity. The IRS study also carries a footnote stating: Prepared under the direction of Michael Parisi and Michael Strudler, economists in the Individual Statistics Branch. The Times article does not even mention the existence of Messrs. Parisi and Strudler, and records no effort to question them as to the significance of the study they prepared and the choice of its underlying paramenters (including the "400" number).
If the Times is to plead that it merely accepted the IRS number, what is to be made of other aspects of the IRS report that the Times chooses to modify? For example, the Times reports only that only a handful of taxpayers showed up in the top 400 every year, but the IRS report goes much further in stressing that there is little overlap among the 400 even between any two specific years: Of the taxpayers who appear in this group of 3,600 returns, less than 25 percent appear more than once, and less than 13 percent appear more than twice. Does that read like the formation of an "aristocracy"?
For all that, Don Luskin correctly points out that this article is still progress for the Times - especially the link to the underlying IRS report.
But it is surely some kind of high journalistic crime for the Times not to have at least attempted to question and quote any of Joel Slemrod, Michael Parisi or Michael Strudler.
UPDATE: Responding to my e-mailed enquiry, Joel Slemrod writes:
There is nothing magical about the 400 number. What I requested that the IRS do is update an earlier study they had done (in the spring of 2001) that presented data on the highest-income 400 taxpayers from 1992 to 1998. By the way, David Cay Johnston did attempt to contact me while he was writing the article, but I was out of town.
Thursday, June 26, 2003
Does the number "400" strike the reader as somehow "natural" or "significant" in an economic context? No?
Has the reader ever considered - say - the "Forbes 400" of richest or biggest this-or-that to be a number chosen on the basis of more than a magazine marketing or promotional program and, possibly, the number of lines of print that can fit on a magazine page? - that is, as something having real significance. No?
Well, then the reader has no prayer of writing New York Times front page headlines or articles - because to the New York Times it matters what the 400 top-earning Americans are paying in federal income taxes - even to the point of misidentifying them as the "400 wealthiest taxpayers."
The 400 wealthiest taxpayers accounted for more than 1 percent of all the income in the United States in the year 2000, more than double their share just eight years earlier, according to new data from the Internal Revenue Service. But their tax burden plummeted over the period. The data, in a report that the I.R.S. released last night, shows that the average income of the 400 wealthiest taxpayers was almost $174 million in 2000. That was nearly quadruple the $46.8 million average in 1992. The minimum income to qualify for the list was $86.8 million in 2000, more than triple the minimum income of $24.4 million of the 400 wealthiest taxpayers in 1992.
What the Times is misreferring to here is "income" not "wealth." Unlike Forbes, the IRS does not even systematically collect data on "wealth" - there is no "Federal Wealth Report Form." It is commonplace for some of the very wealthy - such as, for example, Pinch Sulzberger - to have rather low income in comparison to their wealth, especially low taxable income. For example, Bill Gates probably has rather low income in comparison to his huge wealth. Warren Buffett is continually insinuating that his income is low - but he owns much of Berkshire-Hathaway, and every time its stock price goes up his wealth increases. But such appreciation and wealth-accumulation alone is not "income." In fact, the "double taxation" of dividends discourages wealthy owners of public companies from converting their wealth into income through distribution of dividends. Of course, owners of private companies that are formed as limited liability companies and the like already do not face "double dividends" taxation.
Congress has just reduced the "double taxation" of dividends even for public companies. So, in the near future, it is likely that some of the wealthy will convert more of their wealth into income. So what? Does it matter much from the standpoint of social equity if a person holds wealth personally or indirectly in "corporate solution?"
The Times does show at least some post-Rainesian honesty by including some inconvenient if partial disclaimers. For example:
While the sharp growth in incomes over that period coincided with the stock market bubble, other factors appear to account for much of the increase.
But, then, the Times also says that "big increases in executive compensation thrust corporate chiefs into the ranks of the nation's aristocracy."
Aristocracy? Is Robin Williams, for example, made an "aristocrat" if he makes a largish set of movies in a given year for $20 Million a pop? And doesn't one use "aristocracy" to suggest a person who does not work for his or her income? If the Times is suggesting here that corporate managers are not providing full value in services for thier compensation, why doesn't the article say that instead of hiding behind a charged but ambiguous term like"aristocracy?"
And then there's this:
Those numbers can be read to show that the wealthiest, as a group, carried a disproportionate share of the overall tax burden — 1.6 percent of all taxes, versus just 1.1 percent of all income — evidence that all sides in the tax debate will be able to find ammunition in the data.
But the most important disclaimer is not included: There is no significance to the "top 400," certainly not enough to make it to the front page of a serious newspaper, however the "wealthy" are determined.
Davis Descending V: Construing The Recall Law
Mickey Kaus make a good point that I confess I haven't focused on enough - funny how often that kind of thing happens with Mickey.
I've been assuming that Bustamante would put his name on the ballot if Davis resigns. Mickey correctly point out that there is a cut-off date for that. I think he is likely right that if Davis resigned after the cut off date and Bustamante was not on the ballot, the Republicans (or someone else) could - even as a practical matter - become governor.
But I'm all but convinced that a Davis resignation after such a the cut-off date would be construed to open a new "window" for names to be added to the alternatives list - for the same reasons Mickey describes in his column: It would make no sense to have no window, after a recall petition with enough signatures is "filed," in which candidates to succeed Davis could jump in.
Regardless of the recall statute's technical wording, the policy considerations identified by Kausfiles would likely get translated into a Torricelli-style Supreme Court decision allowing new names (read Bustamante) to be added to the "alternatives/replacements" list even after the nominal cut-off date if the recall election moved forward at all. This result is all but assured exactly because the statute's technical wording is a dog's breakfast - and I don't see the California courts construing a dog's breakfast to deprive the voters of a choice in such unanticipated and weird circumstances.
I notice on Hasen's excellent web site - also now quoted by Daniel Weintraub at the link in Kausfiles):
"Meanwhile, a spokeswoman for the California secretary of state’s office told Roll Call this week that it is unclear whether a scheduled recall election would proceed if Davis resigns before it takes place."
I'm not sure whether as a legislative policy matter it is coherent for the recall to go forward if Davis resigns before the election. So the Sec'y of State may have a point. But Kausfiles points out that at least under this one reasonable construction of the recall law, Robert Novak is wrong to say that David could "derail" the process by resigning right up to election day - and I hadn't given much thought to that.
What Mr. Novak actually wrote was:
Oakland Mayor (and former California governor) Jerry Brown, in Washington this past week, speculated that Davis could instantly destroy the recall movement by resigning. ... [Davis] could derail the recall at any time prior to the actual balloting by just quitting.
What I think Novak (and also Jerry Brown, who is very unlikely to be quoting statute books) means is that once Davis resigned, the steam would go out of the recall movement as a practical political matter because it is powered by distaste for and suspicion of Davis (rightly or wrongly). That is, Novak is saying that the recall would be politically "destroyed" or "derailed" - not that it would be technically legally defeated by a Davis resignation. Mickey correctly points out that there is a serious limit to this line of reasoning.
I think that Novak and former Governor Brown are correct (politically/practically) to suggest that if Davis resigns, the steam goes out of the recall movement, and Bustamante will almost certainly be elected as an "alternative" if he is on the ballot. The public ire and recall publicity is probably just too much focused on Davis personally for it to transfer to Bustamante in such short order.
Of course, as Kausfiles (and Willie Brown!) point out, weird things could happen - such as another senior Democrat entering the race to split the vote with Bustamante. But if the "alternative/replace" race comes down to Bustamante v. [some Republican - even just one] - I think Novak and Brown are correctly implying that Bustamante would survive (that is, lead the votes on the alternative list).
And I think the Republican establishment is afraid of just that possibility - because Bustamante would be worse than Davis in their view.
Wednesday, June 25, 2003
Some have argued that the United States has an obligation to turn over to Hans Blix information the United States has concerning the location of weapons of mass destruction and other targets of the ongoing inspections. For example, Mickey Kaus has a thoughtful note on this point this morning in the form of a comment on a Washington Post article. Democrats in Congress - such as Senator Levin - have raised the same point, although in a manner less thoughtful and disinterested than Mickey's.
This is not an unreasonable approach - how else could it attract Mickey Kaus? But it is fatally flawed. The United States does not have an obligation to provide such intelligence to Mr. Blix, nor should it. There are a number of reasons:
1. Pointless. The inspection teams appear to be compromised, so that information given to them will reach the Iraqis before it can be acted upon by the inspectors. Colin Powell gave ample basis for this fear in his United Nations presentation. So much or most such disclosures cannot be expected to lead to inspector discoveries - but they will lead to removal of materials from the identified sites.
2. Dangerous to American Troops. Once the Iraqis move the materials which are the subject of an American disclosure to the inspectors, there is no guaranty that the United States will know where the materials are taken. Therefore, when American troops invade they will be more at risk than if the disclosures had not taken place. Even if such removal occurred in only a few cases, there is no way to justify endangering American troops. If the inspection "process" had a substantial chance of avoiding war, one might be able to do a cost-benefit calculation balancing the added risks from disclosure against the (discounted) benefits of not going to war at all. Even in that case such a calculation would be very tricky. But no such calculation is even needed, since the inspection "process" creates no substantial chance of avoiding war.
3. Compromise of Intelligence Sources and Methods. Most such intelligence signals its source, thereby endangering the Iraqi traitors (that is, those who will be, following the liberation of Iraq, "patriots") who provided the intelligence. Where intelligence is not obtained from Iraqis, matters as basic the secrecy of what American spy technology can accomplish may be threatened. (Even Senator Levin limits his position with this restriction: I hope that the U.S. intelligence community will provide all significant additional information in its possession on Iraqi suspect sites to the inspectors, without jeopardizing sources and methods.) But even the intelligence Mr. Powell has already disclosed has been described as "surprising and unprecendented" and worries some intelligence experts on this point - as with his disclosure that the United States had recorded communications between Iraqi officers, a disclosure that, at a minimum, probably caused Iraqi officers to be more careful.
4. No Legitimate Obligation. There is simply no such obligation in the first place. The United Nations resolutions require Iraq to disclose such information - not the United States.
And many, many more.
The Associated Press, reflecting a view widely expressed in American media, reports:
[Khalid Shaikh] Mohammed's information about impending terrorist operations and the location of al-Qaida leaders and cells grows more dated by the hour. Whether the CIA can learn anything useful from the alleged Sept. 11 mastermind depends on the skills and methods of the interrogators, Mohammed's willingness to talk and perhaps simply time.
But the Sydney Morning Herald reports:
The captured terrorist mastermind Khalid Shaikh Mohammed was carrying the names and phone numbers of members of al-Qaeda sleeper cells in North America when he was apprehended, according to intelligence officials.
If the Morning Herald is right, the US already obtained some pretty useful information even if the Sheik never says a word.
UPDATE: Newsweek notes: Investigators also seized a cache of computers, documents and other valuable intelligence when they arrested Mohammed.
The justifiable frustration of African-American Democrats - who obviously have vastly less power and influence in the Party than their huge importance, coherence and past loyalty to the Party warrant - is becoming more palpable and vocal.
The Clintons have no political loyalties to anyone but themselves, and are perfectly willing to "triangulate" against the interests of other Democrats if that serves the Clinton cause. African-Americans seem particularly annoyed that Terry McAuliffe has been retained as head of the DNC, reportedly through Clinton support, at the expense of a more qualified and competent African-American candidate. Mr. McAuliffe appears to be a fund raising idiot savant without wider competence but with a political tin ear and repeated acts of excruciatingly bad judgment.
Davis Descending IV: Let The Demonizations Begin!
The San Francisco Chronicle reports suspicions that Darrell Issa - one of the main financial backers of the recall effort against Gray Davis - may have been involved in car thefts (or a fake car theft) long ago, as well as other long-public but unpleasant things.
It is by no means clear that anyone in the Davis camp was involved in the Chron story - to the extent one does not consider almost everyone at the Chron to be in the Davis camp in the sense that they will do what they can (including running tendentious stories like this one) to ensure that Mr. Davis, or somebody very like him or to his left, will be governor of California.
This Chron story is tendentious because it is doing Mr. Davis' work by running a legitimate article about a public figure, Mr. Issa, but not acknowledging that the article is likely to create an unwarranted association: Issa = bad, therefore recall = bad. The Chron fails to include even a simple cautionary line in the screed such as: Of course, whether or not Mr. Issa has been tarnished by any of these allegations may have bearing on his suitability to serve as Mr. Davis' replacement, but they have no particular relevance as to whether Mr. Davis should be recalled. The Chron also stretches by describing Mr. Issa as the driving force behind the effort to recall Gov. Gray Davis. It is true that Mr. Issa has provided financial backing to the recall effort, but neither he nor the Republican establishment originated the effort, and his financial support for it materialized only after signature-gathering efforts had pretty well demonstrated that signatures would be pretty easy to gather if a moderate amount of cash were provided. Mr. Issa has given the recall effort only hundreds of thousand of dollars, a token in a state where the recall election itself will cost above $30 Million. But the Chron characterization does serve Mr. Davis' cause by misidentifying the demonizable Mr. Issa with the recall effort itself.
No campaign director hired by Mr. Davis could have done any better than the Chron.
MORE, UPDATED DEMONIZINGS But, for what it's worth, Issa's brother says Darrell was not involved.
And, for the record, this article notes that Darrell Issa has now spent more than $1 Million for the recall and $600,000 to advance himself as Davis' replacement.
Tuesday, June 24, 2003
Davis Descending III: War On The Phantoms(0) comments
In prior posts, the Man Without Qualities has pointed out that the current recall effort against California Governor Davis creates particular difficulties for him because he, more than most politicians, has always depended on the tactic of demonizing his opponent, where a recall election is not naturally framed as the run against an opponent. As one astute reader put it: Davis's opponent will run under only the name of "Anybody But Davis."
What's a threatened Governor to do?
Well, he must attempt to demonize almost everybody who wants him out of office! What else can he do? As the Los Angeles Times puts it:
With the drive to oust him scrambling the state's political landscape, Gov. Gray Davis is mounting a campaign to shift voters' focus from himself to the Republicans who want to kick him out of office. In a CNN interview on Monday, Davis denounced the recall campaign as "partisan mischief by the right wing."
The Times also reports that Mr. Davis and his aides are well aware of the unusual problems posed by the recall effort:
Davis aides concede privately that he could have a tough time surviving a recall if it is framed as a referendum on the unpopular governor. So, before the recall has even qualified for the ballot, the campaign is shaping up as a struggle between supporters and opponents to define it for voters. Recall sponsors want the battle to be a referendum on the governor; Davis wants it to be a referendum on them — by his telling, Republicans whose conservative politics are too far out of step with mainstream California to prevail in a regular election.
It may work. Mr. Davis' strong card is the broad reluctance to turn an elected official out before he has had a chance to do the full job to which he was elected. Simply put: voters elected Mr. Davis to serve a full term, and they know they did. The recall supporters have to overcome that - but it looks like they have done so, at least for the moment.
But for Mr. Davis to tilt so broadly at his opponents is not likely to have the same effect as demonizing a particular individual - the Davis specialty. Demonizing an individual opponent requires only convincing the voters than the particular opponent is worse than the incumbent. But demonizing an entire recall movement means convincing voters that a widely-held dissatisfaction with the incumbent is unfounded. Yes, Mr. Davis can try to isolate those such as Mr. Issa who have been particularly active in funding the movement, but all that will do is convince people not to vote for Mr. Issa as an alternative. What Mr. Davis must do amounts to convincing voters that he is better than he seems. Mr. Davis has never been good sending such a positive message about himself - that's why he has relied on demonizing his opponent. Moreover, voters have not formed their negative views of Mr. Davis on the basis of anything said or done by Mr. Issa or any other recall proponent. Those views have been formed by the voters individually on the basis of ordinary news reports over a period of years.
Yes, Dianne Feinstein survived a recall vote when she was mayor of San Francisco. But the parallel is flawed:
In that campaign, Feinstein questioned the use of the recall process to challenge an official who was not accused of corruption or incompetence. A fringe group, the White Panthers, had launched the recall drive in anger over her approval of a ban on handguns. Feinstein won more than 80% of the vote.
Here, Mr. Davis' basic problem is that he is widely seen as incompetent - that's a major reason for the recall's success to date. He is also widely seen as rather dishonest - which will make turning public sentiment around even harder for him. Moreover, it's absurd to think that the roots of California's dissatisfaction with Mr. Davis are as shallow as San Francisco's resistance to a ban on handguns.
And the recall effort poses another huge problem for California Democrats and Mr. Davis: If no senior Democrat runs as an alternative, then Mr. Davis' recall automatically makes for a Republican governor. But if any senior Democrat runs as an alternative, then Mr. Davis will have a much harder time demonizing the movement against him, which he probably must do to survive. One might write of this choice what Woody Allen did: "One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly."
UPDATE: Recall calculations are plenty complicated for Republicans, too, as noted in this Los Angeles Times article, which ends with the following pungent thought:
Some GOP strategists believe White House national security advisor Condoleezza Rice may want to run for governor in 2006. A run by Rice, an African American, would greatly advance Bush's goal of presenting a more diverse face for the GOP. But a Rice candidacy would likely be precluded if another Republican wins the governorship in a recall election.
Arnie or Condi? Arnie or Condi? Arnie or Condi? ....
What's Distracting II?(0) comments
The British Parliament is set to ban use of hand-held cell phones by car drivers - thereby completely ignoring most research on the topic.
AH! The nanny state in action!
Bubble Buddies II
My prior Bubble Buddies post should have pointed out one of the most curious aspects of the New York Times Krugman-Altman- Morgenson-Lohr series of articles described in the post: Each of those articles focuses on some aspects of the "fundamental strengths" of an economy which is sending decidedly mixed signals, but why is there a near-obsessive focus on broad "fundamentals" in each of these articles to the exclusion of important monetary considerations?
The relationship between "fundamental strengths" of the economy and proper Federal Reserve actions - which most directly affect the money supply - is subtle, complex and anything but naive.
Is it too much to suspect that the Grey Lady's nearly-exclusive focus on "fundamentals" is related to the Times other obsessive focus on the short-term (read 2004) political milage and implications of too many of the economic developments the paper is now covering? And, in the case of Herr Doktorprofessor Krugman, is this a case of his academic vanity, which causes him to foolishly dismiss monetarist considerations, further impeding his economic perception?
Because the Krugman-Altman- Morgenson-Lohr set fail to understand and address (and, at least in Herr Doktorprofesspr Krugman's case, even accept) the sophistication of modern monetarism, they are blind to a distinct and important question, related to economic "fundamentals" only through sophisticated monetarist considerations: Should the Fed cut rates at all and what are current low rates now doing to the economy?
Mr. Altman's article purports to directly address this question, but is woefully short on essential monetarist considerations, while the Krugman article casually dismisses the significance of low interest rate effects (although Herr Doktorprofessor claims to be a liquidity theory expert), and the other articles never even pause to consider them.
It will take a better mind than any available at the Times to answer, or even frame, the questions of what the Fed should do tomorrow properly and what effects interest rates are having on the economy now.
UPDATE: At least this Times article seems to be in the right ball park - although there is still no real exploration of monetary effects. They seem to be hidden in black-box assertions that the Fed "is concerned" or "has concluded" one thing or another.
Monday, June 23, 2003
Many people believe the next target of class action lawsuits will be food companies that make people fat.
Surely there can be no better example of such a company than Ben & Jerry's, the left-wing Vermont ice cream company that has recently announced its intent to honor Democratic Presidential contender Howard Dean while making some people obese.
For example, a 1/2 cup serving of Ben & Jerry's "original" ice cream equals 3-5 fat servings, where a 1/2 cup serving of Breyers, Edy's or Dreyer's is only 2 fat servings - and a 1/2 cup serving of "light" ice cream, such as Breyers Light, equals only 1/2-1 fat serving.
And Ben & Jerry's "low fat" products are no better. Most nonfat or fat-free ice creams, all of which contain virtually no fat, contain 90 to 100 calories per half cup. But Ben and Jerry's No Fat Vanilla Fudge weighs in at 150 calories per half cup due to its high sugar content. And Ben & Jerry's Chocolate Fudge Brownie Low-Fat Frozen Yogurt contains 190 calories, 2.5 grams of fat, and 36 grams of carbohydrates per serving, where plain old Breyers Chocolate Ice Cream has 160 calories, 9 grams of fat, and 18 grams of carbohydrates per serving.
Of course, the Man Without Qualities views such suits as meritless - just as the tobacco suits were and are meritless.
But if they have to happen to someone, why not the worst?
My initial reaction to the Supreme Court's "resolution" of the Michigan affirmative action cases (here and here, if you can stand it) is that, by comparison, these two decisions make what formerly seemed to be the hopelessly confused, inconsistent mess of Bakke actually seem to shine with the transparency of reason.
It appears that the Court mostly wants public institutions everywhere to spend even more time, money and effort construing the Court's opaque, embarrassing extrusions in the field of affirmative action.
Too bad that all the people who know how to run this country are busy driving taxis and cutting hair and writing blogs.
- apologies to George Burns
I don't want any yes-men or anonymous blogs - I want everybody to tell the truth up front, even if it costs them their jobs.
- apologies to Sam Goldwyn
Davis Descending II(0) comments
Willie Brown says that he doesn't believe that no senior Democrats will allow their names to be included on a recall ballot as alternatives to Grey Davis in case he is recalled.
When it comes to California politics, I listen to Willie Brown. I may not agree with many of his positions. But he is a clear political genius.
And I bet Grey Davis listens, too.
For the record: Davis will not resign pre-recall, despite all the silly rumors to the contrary.
More than isolated studies have indicated that the increase in car accidents associated with cellular telephones is attributable to the mental distraction of the call - and not the physical distraction of fumbling with the physical cell phone handset. Nevertheless, many intelligent people and many legislators insist that it is the physical fumbling that matters.
California, for example, is seriously considering legislation requiring the use of "hands free" cell phones in cars. Such legislation would be worthless, if the studies are correct. States must simply determine whether drivers should be allowed to talk on cell telephones at all.
But if cell telephone calls are to be banned because they are distracting, why should the driver be allowed to talk to anyone - including passengers? If cell phone conversations are distracting and cause accidents, surely in-person, in-car conversations are more so.
And if legislatures are determined to remain fixated on the physical fumbling of the hand set, why should consumption of cigarettes, coffee and food by drivers in cars not all be banned?
The assault on the dangerously mythologized feminine role in the family continues with a new study:
"We are not saying anybody is at fault," says psychologist Miriam Ehrensaft of Columbia University. "But new data is emerging that says women are also involved in aggression. If we do not tell women that, we put them at risk." .... The little-talked-about involvement of women in mutual aggression with men is "the third rail of the domestic violence field," says Richard Gelles, dean of the University of Pennsylvania School of Social Work. "Touch it and you get electrocuted." Both he and Straus have done studies that caused fiery controversies. Gelles says the lifetime risk of a woman being struck by a male intimate partner is about 28%. And "depending upon who is doing the survey and how you measure it, you could get numbers of up to 50%." But he says a man's lifetime risk of being struck by a woman is also about 28%.
The feminist cultivation of the "benevolent, non-aggressive female" role in the family in the midst of the broader feminist insistence on minimizing the significance of differences between the sexes is curious, dangerous and extremely volatile. But Dean Gelles is quite clearly in error to assert that involvement of women in mutual aggression with men is "the third rail of the domestic violence field."
No. The involvement of women in aggression against children is the third rail of the domestic violence field. As reluctant as this society is to acknowledge widespread violence of women against their mates, that reluctance is nothing compared to the reluctance of the society to acknowledge the likely widespread violence of women against the children placed in their charge. It may be true, as this study suggests, that She may slap him. But then he may hit her harder or more often. But unlike feminine violence against men, "her" aggression towards children - especially infants - can easily be serious or fatal.
If confirmed, the results of this study should be a wake-up call to anyone truly concerned about the welfare of children - a group which does not include much of the feminist establishment, most notably Hillary Clinton and the other opportunists constituting the Children's Defense Fund - who have not been particularly active in defending children against feminine violence. Such inactivity is, in my view, likely attributable to the political awkwardness the topic creates for the feminist establishment - an awkwardness even more acute that that caused by addressing the issue of women's violence against men:
[T]he newest findings challenge the feminist belief that "it is men only who cause violence," says psychologist Deborah Capaldi of the Oregon Social Learning Center. "That is a myth."
But it is not the worst or the most dangerous myth in this area.
Sunday, June 22, 2003
Who's Distracting II(0) comments
Senator John Kerry [December 3, 2002]: Democratic presidential hopeful John Kerry said Tuesday that President Bush has used the threat of war in Iraq to distract attention from the nation's economic problems, and he promised to make those issues the centerpiece of his campaign. "They sat down in August and made a conscious decision to bring that up and to dominate the discussion with Iraq."
Senator John Kerry [June 18, 2003]: Democratic presidential candidate John Kerry said Wednesday that President Bush broke his promise to build an international coalition against Iraq's Saddam Hussein and then waged a war based on questionable intelligence. ''He misled every one of us,'' Kerry said. ''That's one reason why I'm running to be president of the United States. ...''I will not let him off the hook throughout this campaign with respect to America's credibility and credibility to me because if he lied he lied to me personally.''
Senator John D. Rockefeller IV [June 23, 2003]: "[S]enator [Kerry] is running for president. ... And I think that [Republican Senator] Pat Roberts and I make a distinction between people who are running for president and therefore need to capture attention, and what we on the Intelligence Committee have to do, which is to get the facts and to get the intelligence, the counterintelligence and then try and decide."
Senate leaders from both parties heading an inquiry of intelligence information on Iraq yesterday repudiated Sen. John Kerry's accusation that the Bush administration misled the country into war, and accused him of political posturing.
UPDATE: To make time for his fatuous trashing of the intelligence services, Senator Kerry has apparently been missing a lot of votes in the Senate.
New York Times financial reporter Daniel Altman writes today that the United States economy's fundamentals are so strong that the Fed should forget about stimulation and concentrate on dishing out some parental discipline:
A cut of at least a quarter-point seems virtually certain in the target for the federal funds rate, and a half-point reduction is possible. But there's little reason for so much more easing of monetary policy. Several economists are convinced that the economy is at a turning point, and ready for a strong second half of the year. News from the corporate sector has ranged from static to positive, and surveys of executives are reporting greater optimism. Prices for goods and services are starting to rise. The only thing that can derail the recovery now, they all say, is a big shock: another terrorist attack, another spate of accounting scandals, or something else that the bearish gods haven't already tried. If that's true, why cut rates now? With the economy potentially on an upswing, cutting rates would only add unnecessary fuel to the fire. ... At this moment, however, the economy needs investors who are more concerned with the long term — the period during which the economy's fundamental strengths will have time to show through. A gentle chastising of the myopic investors, accompanied by an explanation, might help to shift the markets' focus. That way, unnecessary disappointments might be less likely in the future.
Unlike the Times, I don't remember seeing chastising of the myopic investors as among the tasks delegated by Congress to the Fed - and, frankly, I would not want to be a Fed board member explaining to Congress that this had been my motivation for any particular action I had taken with my federal governmental power. Indeed, it is seriously debatable whether a confession to such a motivation would constitute grounds for removal of a member of the Federal Reserve Board. But it is certainly not debatable that the above passage from Mr. Altman's article is utterly inconsistent with Paul Krugman's bizarre and essentially unsupported dismissal of the recent rise in stock prices as a mere "bubble:"
Bulls think it says the economy is about to take off. But I think it's a sign that America is still blowing bubbles ...[I]t's hard to find any real news to justify the market's leap. Instead, investors seem to be buying stocks because they are rising — which is pretty much the definition of a bubble. ... We're still waiting. Oil prices are off their prewar highs, but they're still higher than they were last fall. Consumers seem to be spending a bit more, but we're talking about fractions of a percent. And businesses are still more interested in cutting costs and laying off workers than buying new capital goods. There have been some pieces of good news — a not-too-bad manufacturing survey here, a pretty good housing-starts number there. But there has also been bad news, especially regarding employment. Payrolls are still contracting; since the U.S. economy has to create 80,000 jobs a month just to keep up with a growing working-age population, the already miserable job market continues to get worse.
So, which is it? Are the economy's fundamentals so strong that the Fed should be weirdly focusing on "chastising" investors while eschewing stimulus efforts? Or, as Herr Doktorprofessor so imperiously contends from the rarified, evidence-free air of Ostelfenbeinturm, is the national economic news essentially disastrous across the board with the recent rise in stock prices just another catastrophe for which compensation will need to be made after the inevitable bubble bursting?
Of course, neither of these Times views of the economy makes any sense at all. These views are cartoons, excerpts, perhaps, from a particularly daffy Sponge Bob Square Pants episode bubbling up on the pages of the Bikini Bottom Gazette, the newspaper of record for zany fish. Herr Doktorprofessor is ideally cast as the ever-sour, gloomy and intellectually dishonest Squidward - to whom Herr Doktorprofessor bears more than a passing resemblance - while the ridiculously optimistic Mr. Altman fills the Sponge Bob role. Contrary to Herr Doktorprofessor's rant, the stock markets' rise is supported by plenty of evidence. Contrary to Mr. Altman's nutty suggestion, that evidence of future prosperity is not so overwhelming that the Fed should set aside efforts to shore up the economy with another rate cut, essentially in favor of nothing more than playing with investors' minds.
The growing resemblance of the New York Times newsroom to Bikini Bottom is made all the more apparent from the evidence presented in the present case that neither Herr Doktorprofessor nor Gretchen Morgenson, writing in a third Times article on topics closely related to those of the Krugman and Altman screeds, seems to have the slightest idea of what to look for to ascertain whether a "bubble" has arisen. Consider this passage from the Nutty Herr Doktorprofessor:
Does the collective wisdom of the investor class perceive an imminent, vigorous recovery that is invisible in the data? The market isn't always right. ... What's clear, however, is that investors' big move back into the market has been driven not by careful comparison of returns, but by the fact that stocks are rising — and the fear that if you don't buy stocks, you'll miss out on a good thing. The new bull market isn't forecasting anything; it's just feeding on itself.
Even assuming his premises arguendo, does it follow that a market is being driven by the fact that stocks are rising if the market is not being driven by a careful comparison of returns? Of course not. Even if investors are misreading the future it simply does not follow that they are relying on a "greater fool" movement in the markets or the fact that markets are rising. Further, while Herr Doktorprofessor doesn't explain what he means by a market rise being "driven," if his point is that most investors participating in the recent rise in the market are individuals who are not researching their investments, then that state of affairs is completely consistent with efficient markets, best financial principles and current theory. Indeed, it is a fundamental conclusion of modern portfolio theory (no matter what version of the efficient market hypothesis is selected: strong, medium or weak) that ordinary, individual investors have no comparative advantage in themselves evaluating the value of investments relative to professionals - and therefore should not bother engaging in personal "research" of stocks, presumably "research" constituting whatever it is Herr Doktorprofessor means by a careful comparison of returns. But even if Herr Doktorprofessor is using the term careful comparison of returns to mean constructing a market-basket portfolio consistent with modern portfolio theory he is way off base - for the simple reason that mere failure to abide by modern portfolio theory does not mean an investor is counting on "greater fool" effects. Most professionally managed funds explicitly or implicitly reject the stronger forms of modern portfolio theory - but they are certainly not counting on "greater fools."
Perhaps Herr Doktorprofessor is suggesting that investors should be allocating their investments more into bonds - rather than stocks. But if that is what he means, the point would seem to be a special case of asserting that investors are not abiding by modern portfolio theory. And, in any event, he owes his readers an explanation as to why he believes that they should be tying up their money in debt instruments where many interest rates are at historic lows and default risk on many bonds are high (As one of Ms. Morgenson's sources says: [W]e know most states and local municipalities are bust; and there are lots of problems.)
Gretchen Morgenson seems at least as confused as Herr Doktorprofessor. As Don Luskin adroitly and correctly demonstrates, she is determined to suggest that the markets are bubbling, and she is not about to let the failure of her contacts and sources to support her predetermined position stand in her way. But what do her contacts and sources say?
Well, there's this:
[A]mateurs are not the only ones who are bullish. The most recent Investors Intelligence survey shows that 60.2 percent of investment newsletter writers are bullish, while 16.1 percent are negative. That is the lowest bearish reading since before the crash of Oct. 19, 1987.
"From an equity standpoint, we are seeing clients dip their toes into the water. They are not jumping in, not diving in," said Jamie Wanless, the director of retail operations at Strong Investments, a mutual fund company in Milwaukee with $45 billion under management.
But, most tellingly, there is this: Even as investors begin to embrace more risk in their portfolios, almost no one expects a return to the anything-goes mentality that ruled during the bubble.
So Ms. Morgenson has actually made some of those anecdotal evidence calls I pointed out in my prior post that Herr Doktorprofessor should have made and could have made. But her sources didn't tell her that investors seem to be buying stocks because they are rising — which is pretty much the definition of a bubble - as Herr Doktorprofessor asserted. Instead, her contacts tell her the opposite! They tell her that almost no one expects a return to the anything-goes mentality that ruled during the bubble!
Yet Ms. Morgenson does not just come out and conclude that there is in fact little evidence that the recent rise in stock prices corresponds to a bubble - any more than Mr. Altman does. Instead, she stretches and tries to bubble as much as she can. After citing to general rises in the major stock indices, she retreats: Portfolio managers point to several pockets in the market where stocks are behaving a lot as they did in 1999. Cute, but there are often "pockets" of the market that seem to be running strong - the existence of such "pockets" doesn't suggest the existence a bubble or that general appreciation is somehow ill-founded. Perhaps for Ms. Morgenson or Mr. Altman to expressly point out the inconsistency between their research and conclusions and Herr Doktorprofessor's silly rant would be too obvious a prick to Herr Doktorprofessor. "No, you can't pop him! He's not just a bubble!" they each seem to say, "He's a bubble buddy! He's my friend, and I love him!"
And the uproarious shenanigans at the Bikini Bottom Gazette - I mean the New York Times - just go on and on and on! The Times is running yet a fourth article on a variation of the same "there's really no recovery to rally about" meme, this one by Steve Lohr, who produces what is essentially a review of a Harvard Business Review article tricked up as a business news story. Yet again we are informed that various stock indices have risen a good bit recently, and again that there is no good reason for it:
And so it may be that Wall Street has gotten ahead of itself, acting as if an old-fashioned tech rebound were under way. Stock prices on the Nasdaq, where many technology companies are listed, are up roughly 30 percent since March 11. And the Standard & Poor's 500 Information Technology Index is up about 50 percent since hitting a recent low last October. Perhaps the most significant reason to expect only a measured, plodding recovery is the changed attitudes of, and new pressures on, the corporate buyers of information technology — computer hardware, software and services — whose purchasing habits largely control the industry's fate.
After the perfunctory warm up, it's time for the HBR article:
The Harvard Business Review has published an article provocatively titled, "IT Doesn't Matter" .... by Nicholas G. Carr ... argu[ing] that as computer technology becomes more standardized, businesses will have a harder time gaining a competitive edge over their rivals through technology investments. .... But even the essay's critics scarcely make a case for a new technology boom. Paul A. Strassmann, 74, is an elder statesman of the C.I.O. fraternity, having held that title at General Foods, Kraft, Xerox and the Department of Defense, and he remains an executive adviser to NASA. Mr. Strassmann dismisses the Business Review article as "absolute poppycock" because of the "enormous unrealized potential of information technology." The potential is unrealized, according to Mr. Strassmann, mainly because of two decades' worth of mindless technology spending through the 1980's and 1990's. The spending spree, combined with exponential improvements in processing speeds and data storage capacity, has meant companies are often overwhelmed by computing firepower they cannot use efficiently. .... The Business Review article [one critic of the article] added, tended to treat computer hardware and software as if mere transport vehicles for bits — short for binary digits — the lingua franca of information technology. "The competitive advantage you gain from using information technology is not based on storing or moving bits around," he said, "but based on what you do with them." .... Mr. Carr, the author of the Harvard Business Review article, acknowledged that technology, used cleverly, can still give companies an edge in the marketplace. "But my point is that the layer of technology that is customizable, and therefore can give a company a competitive advantage, is getting thinner and thinner," he said. "And technology-based competitive gains won't last as long in the future. I still think my conclusions are true."
What is again striking about this fourth Times article is the loopy insistency of its author on drawing stringent, pessimistic conclusions in the face of much conflicting evidence and many differing opinions. Who is Mr. Lohr to conclude that even the essay's critics scarcely make a case for a new technology boom? This addled conclusion serves as a bootstrap argument supporting Mr. Lohr's assertion that it may be that Wall Street has gotten ahead of itself, acting as if an old-fashioned tech rebound were under way. The arguments advanced by the HBR article's critics may or may not be correct, but they certainly seem adequate to allow a reasonable person to conclude that a case for a new technology boom can indeed be made.
Why does the Times feel the need to rant and second guess the market this way - even to the point of crying "bubble"? Sure, the recent market appreciation and its concomitant prospect of future prosperity is contrary to the Times political inclinations and agenda. But this line of articles is not merely ill-advised flooding the zone where it is far from apparent that a "good story" exists to be flooded. The Times is unleashing a virtual tsunami of presumptuous and tendentious financial reporting in an all-too-obvious area.
It's hard to imagine a less effective way for the sullied, post-Rainesian Grey Lady to reclaim her virginity.
UPDATE: More from Hogberg and Maguire.
Various liberal and Democratic organs and representatives have been shouting that the President was (and is) a "liar" with respect to his most recent tax cut and the question of weapons of mass destruction in Iraq. The New York Times addresses the matter today.
Queery: Would this conclusion ha ve been allowed to appear in an important New York Times news article while Howell Raines was in charge:
In fact, a review of the president's public statements found little that could lead to a conclusion that the president actually lied on either subject.
The Times article as a whole, of course, is still pretentious and tendentious. But can any aware person doubt that the Rainseian blue pencil would have struck out the above sentence?
Friday, June 20, 2003
It is widely believed that Hillary Clinton wants and expects to run for the Presidency in 2008.
If a Democrat is elected President in 2004, then Hillary probably will not be able to claim the nomination of her party in 2008 - it will probably belong to the incumbent.
It follows as the night the day that Hillary Clinton's ambitions are inconsistent with a Democrat being elected President in 2004 (unless she's it, but that's another story).
And if a Democrat is not elected to the Presidency in 2004, the effect of that failure on the Democratic Congressional efforts will be seriously negative. Which means that Hillary Clinton's ambitions are also inconsistent with Democratic Congressional aspirations in 2004 (again, unless she's the nominee, but again that's another story).
So why are so many of the Democrats and especially Democratic Presidential contenders seeking advice from Hillary and Bill Clinton - including with respect to the contenders' efforts to obtain the Presidency? As the Washington Post puts it:
Thirty months after leaving the White House draped in controversy, the Clintons are again dominating Democratic politics in Washington and beyond. Former president Bill Clinton and Sen. Hillary Rodham Clinton (N.Y.) are ... doling out political advice to all who will listen, which includes most of the leading candidates to challenge President Bush in 2004. ... At the same time, top officials from the Clinton administration are taking, or tightening, control over several of the party's most influential political groups.
One can almost understand the need of the Democratic Party to coddle the Clintons, since the Clintons can raise money, although history has clearly shown that money obtained through such Clinton involvement is way too expensive for the Democrats - other than the Clintons, of course.
But advice? Democrats are taking advice from two people whose personal agendas are completely inconsistent with Democratic success at either the Presidential or Congressional levels in 2004 - and who were personally responsible for the loss of both Congress and the Presidency?
Advice? Are such Democrats really that stupid?
It's The Economics, Stupid II(0) comments
While investment banker Al Gore is trying to obtain funding and support for yet another superfluous source of liberal news and commentary, Mel Karmazin, president of media conglomerate Viacom Inc., seems to realize that what the world needs is liberal news and talk downsizing - or at least consolidation. Karmazin reportedly approached AOL Time Warner Inc. last week and expressed interest in buying its very liberal news-and-talk CNN news channel.
Viacom, of course, already owns CBS, which routinely perpetrates Dan Rather and his gang to a steadily declining viewership.
Mr. Karmazin probably realizes that it would be in his and Viacom's economic interest if CBS and CNN could be consolidated or CNN just shut down. That's the kind of insight that justifies paying the likes of Mr. Karmazin the big bucks even if, like Viacom Chairman Sumner Redstone, you hate his guts.
And then, on the other hand, there are the likes of Al Gore.
Phantoms Are Winning
The recall petition directed at California Governor-for-the-Moment Gray Davis continues to gain momentum, at least in Contra Costa County:
CONTRA COSTA ELECTION officials have boosted the Gray Davis recall campaign's claim that the signature-gathering effort is being carefully conducted. Only registered voters' signatures count. So, recall backers said, they were at first slow to turn in signatures because they were checking names against voter rolls. They apparently did a good job. Contra Costa randomly checked 500 of 4,490 signatures turned in May 29 and found 90.6 percent were valid. "Ninety percent is stunning," said Steve Weir, county clerk-recorder since 1989. He cannot recall seeing such a high rate before.
But what should be even more troubling for Mr. Davis is the increasing likelihood of other Democrats putting their names up to become governor if he is indeed turned out. If that were to happen, Mr. Davis' job of demonizing his opponent would become much trickier. For example, if Lt. Gov. Cruz Bustamante were to put his name up as an alternative, Mr. Davis would find himself running against his own second-in-command. Yet such a state of affairs seems increasingly likely, and according to a March 3 article in the Fresno Bee the internet is apparently also playing a big role in what's happening:
Recall backers say Davis' lack of support, even within his own party, changes the political dynamics. The state also will have to make some difficult choices to reduce the $35 billion budget deficit, and that will continue to damage Davis' standing.
But what makes this recall drive different from others is technology. Citizens can download petitions from their home computers, sign them and mail them in.
"We've had five million hits on our Web site in the five weeks since we started this," said Sal Russo, the longtime Republican strategist. "One of the differences this time is the democratization of technology." .... This issue is a tricky one for Democrats, especially those who want to succeed Davis four years from now. If the measure qualifies for the ballot, they must decide whether to be one of the candidates - essentially challenging their party's sitting governor and making it more difficult for Davis to win the recall election. If they sit it out, a Republican could win and that would severely damage their chances of winning the governorship in 2006. Indications are, though, that Lt. Gov. Cruz Bustamante, Attorney General Bill Lockyer and Treasurer Phil Angelides would get into the recall campaign in self defense. All three have been criticizing Davis recently, increasing the speculation that they will have no allegiance to the governor if there's actually a recall election. Bustamante has little to lose.
The ever-more-terrified Los Angeles Times this week reported:
After months of refusing to say whether they might run to replace Gov. Gray Davis in a recall election, two leading Democratic contenders said Tuesday that they would not join the race if it occurs, offering Davis the first hint of party unity he has sought to save him from getting tossed out of office. Davis and his allies continue to hope they can keep the recall off the ballot. But the announcements by Atty. Gen. Bill Lockyer and state Treasurer Phil Angelides reflected a growing concern among Democrats that the recall is likely to qualify — and that the party must focus on how to respond to the threatened loss of power. .... In addition to Lockyer and Angelides, state Controller Steve Westly, who just won statewide office last year, said Tuesday that he would not run.
If the recall qualifies, the ballot would offer a yes or no vote on whether to bounce Davis, followed by a list of candidates to replace him. If Davis were recalled, the candidate with the most votes would become governor.
The chaotic nature of such a statewide race, which would be a first in California, has befuddled even the state's most seasoned political strategists as they try to understand how standard campaign calculations could apply under such extraordinary circumstances. ....
The Democrat most notably silent on Tuesday was Lt. Gov. Cruz Bustamante. He is widely seen as the Democratic officeholder most likely to gamble on putting his name on the recall ballot. Bustamante, who has had a number of clashes with Davis, has said he opposes the recall but dodged questions on whether he might run if it qualifies for the ballot.
Translation: "[S]easoned political strategists ... try to understand how standard campaign calculations could apply under such extraordinary circumstances" means "How the heck do you demonize an opponent when you don't really have one and the closest thing you do have to an opponent may end up being your own second-in-command?"