Seven Years Off

The first problem with Paul Krugman’s hypothesis is that 2010 is not 1938, it is 1931. This should be obvious because at no point in the last two years has anyone except me, Robert Prechter, Mike Shedlock, Karl Denninger and a few other economic heretics admitted that we have been in a depression for months now.

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938….

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The second problem here is that Krugman is making a standard post hoc ergo propter hoc mistake. While the US did engage in a massive burst of unrestrained federal spending, it was not the spending that produced the postwar prosperity except in that it paid for the munitions and manpower that was used to destroy every industrialized economy that was not already destroyed by the Germans or the Japanese.

And the third problem, of course, is that the Keynesian notion that government spending is economic growth, let alone is capable of creating growth that is a multiple of the spending, is both logically and empirically false. Remember, no one even began to recognize that the Great Depression was a great depression until the end of 1931.

That didn’t take long

“Post-occupation” Iraq gets down to business:

Days after the U.S. officially ended combat operations and touted Iraq’s ability to defend itself, American troops found themselves battling heavily armed militants assaulting an Iraqi military headquarters in the center of Baghdad on Sunday. The fighting killed 12 people and wounded dozens.

It was the first exchange of fire involving U.S. troops in Baghdad since the Aug. 31 deadline for formally ending the combat mission, and it showed that American troops remaining in the country are still being drawn into the fighting. The attack also made plain the kind of lapses in security that have left Iraqis wary of the U.S. drawdown and distrustful of the ability of Iraqi forces now taking up ultimate responsibility for protecting the country.

Sunday’s hour-long assault was the second in as many weeks on the facility, the headquarters for the Iraqi Army’s 11th Division, pointing to the failure of Iraqi forces to plug even the most obvious holes in their security.

If “heavily-armed militants” are already attacking a divisional Army HQ, I think it is reasonable conclude that there is a long and nasty period of civil war ahead. The problem with “the Surge” was never that American forces didn’t have the ability to impose a temporary reduction in the internecine violence, but that it was merely a short-term measure that would stop working when the necessary forces were withdrawn.

Don’t marry debt

Marriage is already a financially risky move under the present legal regime. But marrying a heavily indebted woman would be financially insane, especially in the current economy:

Nobody likes unpleasant surprises, but when Allison Brooke Eastman’s fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days. Ms. Eastman said she had told him early on in their relationship that she had over $100,000 of debt. But, she said, even she didn’t know what the true balance was; like a car buyer who focuses on only the monthly payment, she wrote 12 checks a year for about $1,100 each, the minimum possible. She didn’t focus on the bottom line, she said, because it was so profoundly depressing.

But as the couple got closer to their wedding day, she took out all the paperwork and it became clear that her total debt was actually about $170,000. “He accused me of lying,” said Ms. Eastman, 31, a San Francisco X-ray technician and part-time photographer who had run up much of the balance studying for a bachelor’s degree in photography. “But if I was lying, I was lying to myself, not to him. I didn’t really want to know the full amount.”

It sounds like the gentleman escaped just in the nick of time. In addition to the $170k in debt, Miss Eastman sounds exactly like the sort of woman who would not only rationalize lying to a man, but being unfaithful as well. In any case, how you manage your personal finances is a good indicator of how you will manage both a household and a marriage as well. The short-term oriented woman who can’t foresee the obvious consequences of credit is the same sort of woman who can’t foresee the obvious consequences of encouraging the harmless attentions of her male acquaintances and co-workers.

The truly dangerous thing about debt, where women are concerned, is that can lock them out of a career as a wife and mother. Unless you marry someone wealthy enough to pay off your debts without thinking about it, having children and staying home to take care of them simply isn’t an option. So, you’ll have sacrificed not only your own future but your children’s as well in order to spend five years studying 14th century Basque poetry and having sex with ten or twelve college guys whose names you’ll struggle to remember ten years hence.

The harsh reality is that a few years on the pole with a coke habit would still leave the average woman with a better long term prospect of happiness than the popular combination of student loans and a soft liberal arts degree from a reputable private university.

RAW on the New Atheists

This excerpt from Prometheus Rising is a surprisingly accurate portrayal of the Dawkinsian rational materialist, in light of how it was written by a non-theistic scientific mystic 27 years ago:

Rationalist robots, like the other robots, may be totally mechanized or may have some slight flexibility, or “freedom” built into their circuitry. The totally robotized make up the vast horde of the Fundamentalist wing of the Materialist church and the other True Believers in the scientific paradigm of 1968, 1958, 1948 or whenever their nervous systems stopped taking new imprints.

These are the people who are perpetually frightened and dismayed by the large portion of human behavior mediated through Circuit II mammalian politics. They think that because this territorial-emotional (“patriotic”) behavior is not Rational, it should not exist. They accept Darwin as dogma, but are nervous about “Darwinism” (because it accepts mammalian politics as an Evolutionary Strategy that has worked thus far) and are repulsed by the data of ethology, genetics, and sociobiology. They don’t like the rest of the human race much, because it is not guided by their favorite circuit, and they are uneasily aware that the rest of the human race does not like them much….

The totally robotized Rationalist, the one whose nervous system has stopped growing entirely, can be recognized by two signs: He or she is constantly trying to prove that much of the daily experience of the rest of humanity is “delusion”, “hallucination”, “group hallucination”, “mass hallucination”, “mere coincidence”, or “sloppy research”. And he or she never thinks that any of his or her own experience would fit into any of those categories.

Substitute “religious” for “patriotic” and “religions” for “politics” and he could have written that today.

Changing odds

It wasn’t all that long ago when I wrote of my assumption that the Republicans were going to take the House and might take the Senate as well, thus leading to Obama’s eventual implosion in the 2012 Democratic primary. More than a few critics said that I was crazy. Of course, once it happens, everyone will believe that it was practically inevitable.

Typically cautious Larry Sabato, head of the University of Virginia’s Center for Politics, is rocking the political world with a new “Crystal Ball” prediction: The GOP will win the House, making Ohio’s John Boehner speaker, might get a 50-50 split in the Senate, and will pick up some eight new governors.

The winds at Republican backs are more favorable than they were in 1994. If the idiot Republican establishment can merely avoid falling over their own feet and embrace the anti-government mood instead of attempting to tamp it down, they’ll clean up. But never underestimate Republican self-destruction.

It’s just about that time

Football Outsiders offers a refresher course in NFL statisticology:

You run when you win, not win when you run.

The first article ever written for Football Outsiders was devoted to debunking the myth of “establishing the run.” There is no correlation whatsoever between giving your running backs a lot of carries early in the game and winning the game. Just running the ball is not going to help a team score; it has to run successfully.

There are two reasons why nearly every beat writer and television analyst still repeats the tired oldschool mantra that “establishing the run” is the secret to winning football games. The first problem is confusing cause and effect. There are exceptions, usually when the opponent is strong in every area except run defense, like last year’s New Orleans Saints. However, in general, winning teams have a lot of carries because their running backs are running out the clock at the end of wins, not because they are running wild early in games.

The second problem is history. Most of the current crop of NFL analysts came of age or actually played the game during the 1970s. They believe that the run-heavy game of that decade is how football is meant to be, and today’s pass-first game is an aberration. As we addressed in an essay in Pro Football Prospectus 2007 about the history of NFL stats, it was actually the game of the 1970s that was the aberration. The seventies were far more slanted towards the run than any era since the arrival of Paul Brown, Otto Graham, and the Cleveland Browns in 1946. Optimal strategies from 1974 are not optimal strategies for today’s game.

And yes, I am very, very nervous about going into the 2010 NFL season with The Tavaris Jackson Experiment as the confirmed backup QB to a man who is on the verge of entering George Blanda territory. Come to think of it, I’d be more comfortable if it was George Blanda backing up Favre and he’s 83 years old.

VPFL UPDATE: It shouldn’t be necessary to worry about the exclusions in the VPFL draft tonight. Yahoo has added the ability to specify keepers and I have done so for everyone. Blackmouth is not keeping anyone, the Meerkats have only one keeper, and Winston is keeping two. The other seven teams are all keeping three.

Applying science to string theory

What a novel idea!

String theory was originally developed to describe the fundamental particles and forces that make up our universe. The new research, led by a team from Imperial College London, describes the unexpected discovery that string theory also seems to predict the behaviour of entangled quantum particles. As this prediction can be tested in the laboratory, researchers can now test string theory.

Of course it seems probable that if the prediction is incorrect, the string theoreticians will follow the example of the Darwinists and insist that string theory is still totally scientific and totally accurate even though every attempt to utilize it to make predictions keep showing it to be reliably incorrect. When even Richard Dawkins feels the need to start using qualifiers in his would-be magnum opus in defense of the theory of evolution by (probably) natural selection, henceforth TEpNS, only the most fanatic Darwinist could fail to recognize that there is a very real possibility that the theory’s future lies with space aether, phrenology, and phlogistons.

Double bubble trouble

A number of people have asked me what “the education bubble” means. While it’s not actually a true investment bubble since purchasing a college education is not a bona fide investment, the ever-rising cost of a college degree does have frothy and bubblicious aspects that can be seen very clearly in this chart from TaxProfBlog that compares CPI inflation vs the increase in US home prices vs the increase in college tuition.

In combination with the huge increase in students attending college, the value of a college degree is presently around one-third of what it was in 1990. I had previously estimated it was 28% of the value… but in either case, this assumes you are one of the 50% of college attendess who manages to successfully complete a college program and receive a degree within five years.

The real religious threat

James Delingpole explains that it comes from the radical Gaians brainwashed by years of public school propaganda:

It’s time we woke up to the threat posed by this mass brainwashing of the younger generation. We worry, rightly, about those Muslim children who are being indoctrinated with the extreme Wahaabist version of their faith. Yet we seem astonishingly complacent that every day, in schools of every kind throughout the Western world, our children are being taught by well-meaning teachers to view their world and culture through exactly the same anti-capitalist, anti-human, anti-growth eyes as James Lee and the Unabomber.

The modern environmental movement is not kind, caring or gentle. It is a series of ticking time bombs waiting to blow up in our face.

If it weren’t for the fact that Western economies are collapsing anyhow, one could make a serious argument that the Gaians are a greater threat to humanity than the most expansionist imperialists of the Dar al-Harb. The lunacy of James Lee is a clear warning sign.