#Arkhaven INFOGALACTIC #Castalia House
Former Titans quarterback Steve McNair has been killed. Police said McNair suffered a fatal gunshot wound to the head in downtown Nashville.
A real shame. I didn’t follow McNair’s career closely, but he struck me as the positive ideal on whom more ballyhooed but lesser quarterbacks like Michael Vick and Vince Young should have patterned themselves.
In case you could use a break from scarfing hamburgers while you wait for the evening fireworks, I’m looking for quotes from 2006 – 2009 about the prospects for recession and depression from every mainstream or contrarian figure of note. I’ve collected a fair number already, but the more, the merrier. I intend on grading them on the following curve:
Grade: A-
Another major problem is that the housing bubble has finally burst. Thus far it has only produced a slow leak, but by next year the air will be rushing out with gale force winds…. If Bernanke tries to borrow from Greenspan’s playbook and attempts to prevent or mitigate the severity of the coming recession, the excess liquidity will not simply move into another asset class, as it did from stocks to real estate, but into real stuff, such as commodities and consumer goods.
Peter Schiff, June 29, 2006
Grade: F
“As I’ve discussed on CNBC’s Kudlow & Co., the strong, across-the-board, five-month rally in stocks cannot possibly be predicting a recession. While the stock market can sometimes emit false positives on recessions, rarely does it give off false negatives. In fact, I think it is predicting a “Goldilocks” soft-landing for the economy.”
Larry Kudlow, Debunking Krugman’s Recession, December 2, 2006
The more direct the quote, the better. I don’t care if it’s positive or negative, as it’s just as useful to have someone declaring there is no recession or there will not a depression as the contrary. I don’t have much use for the mealy-mouthed attempts to have it both ways, though. Please include the date, the name of the economist or financial figure, and a link to the source along with the quote.
Jonah Goldberg upsets fans of the Alaskan governor:
Dear Governor Palin,
You’re blowing it.
We haven’t met, but you might remember I was one of the first columnists to tout you for John McCain’s running mate. I cheered you mightily when Senator McCain selected you, and I still believe that you were the smartest choice he could have made given the obstacles before him. I’m also assuming you want to run for president some day.
I really don’t see what Palin’s more hysterical fans are so upset about. Goldberg is correct. Palin has great natural political gifts, but her performance as a vice-presidential candidate in 2008 was sub-par. If she makes the mistake of relying upon her natural talent rather than improving her game, she will likely lose the nomination since the GOP squish faction is gunning hard for her.
Although I correctly predicted Palin would be McCain’s running mate, I’m not favorably impressed by her. Like Obama, she’s just bright enough to think that she can coast through the big leagues, but that’s only true when the powers-that-be are laying down the palm leaves for you. The fact that she let McCain’s advisors tell her what to do told us all we needed to know about her capacity for judging some of the more complicated factors of national politics. If she’s learned her lesson and is now playing for keeps, she’ll listen to Republicans who wish her well, like Goldberg, while paying no attention to the likes of Brooks and Frum, who do not.
UPDATE: It seems Mrs. Palin may have taken Mr. Goldberg’s advice too much to heart, seeing as how she immediately announced her resignation from the governorship.
Washington Post publisher Katharine Weymouth said today she was canceling plans for an exclusive “salon” at her home where for as much as $250,000, the Post offered lobbyists and association executives off-the-record access to “those powerful few” — Obama administration officials, members of Congress, and even the paper’s own reporters and editors…. Weymouth said the paper had planned a series of dinners with participation from the newsroom “but with parameters such that we did not in any way compromise our integrity.
I don’t see what the problem was. It’s not as if they had any integrity to start with. Nor is it any secret as to why the media is dying so quickly, not with complete cretins like these in charge.
I believe most regular readers are familiar with my opinion that taking out student loans in order to obtain pieces of paper from paper-selling institutions is usually a remarkably stupid idea. However, even those who think equate spending on education with investment must admit that the utility of the concept has its limits:
Robert Bowman was refused entry to the New York bar because of $400,000 in student debt…. “The size of this account is extremely unusual, but not surprising given that the customer took out 32 loans to pursue undergraduate, law and masters of law studies and has not made a single monthly payment over his 26-year student loan history,” Ms. Holler said.
Doesn’t the New York bar know that that studies show people with graduate degrees make loads more money over their lifetime? With an investment of $400,000 in Mr. Bowman’s education, surely he’ll be worth hundreds of millions soon!
As if this story wasn’t amusing enough, one can only wonder what Mr. Bowman would have to do in order to sufficiently establish: “the character and general fitness requisite for an attorney and counselor-at-law”. Murder his mother with an axe? Rape a baby seal? Run an underage gay prostitution ring?
UPDATE: Krugman keeps piling on the verifiable historical falsehoods. It may interest you to note that I prepared a version of this chart the day before his most recent column, that’s how predictably wrong he is:
All of this is depressingly familiar to anyone who has studied economic policy in the 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.
Where, one wonders, is this “budget retrenchment” of which he speaks. It was only Federal spending that declined in 1937 and 1938, as Krugman even notes in describing 1937 as “the year that F.D.R. gave in to the deficit and inflation hawks”,so to point the finger at the state and local governments who were doing precisely the opposite of that Democratic president is bizarre. Krugman is playing a dishonest game, implicitly referencing the two-year decline in local spending with regards to events three years later. And state spending never declined, so Krugman’s 50 Hoovers theme is not only demonstrably wrong on two levels, as can be seen in the three charts below.
Now, it must be admitted that Krugman could, theoretically, have made a case by utilizing spending as a percent of GDP. However, he doesn’t dare because that would show Herbert Hoover to have been significantly more aggressive in his use of expansionary fiscal policy than FDR and that would explode far more than Krugman’s argument for a third fiscal stimulus package in three years.
Our favorite Nobel prizewinner wrote the following back in December:
But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers — state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation’s economic future.
Very well, let’s look at the action of Herbert Hoover and compare his four years in office to the previous four years using constant 2000 dollars in order to correct for inflation/deflation. I don’t know about you, but I sure don’t see any spending being slashed.
While the deflation of what Milton Friedman called The Great Contraction often confuses the economic analysis of those who fail to account for it, Krugman doesn’t even have that excuse as a potential fall-back position. Federal spending not only increased in real terms and as a percentage of GDP, but increased in nominal terms as well.
Now, Krugman may well be right in that the state governments will be forced to slash spending as the economy continues to contract. However, this does not change the fact that this was not the historical behavior of either Herbert Hoover or the state governments, and likely has nothing to do with economic ideology. It is nothing more than the deficit-spending of the recent past limiting their range of options.
JB wonders what to do next:
I’ve been reading your blog ever since I finished The Irrational Atheist and I am currently participating in your Voxiversity III study. I have a question for you concerning college education.
I earned my B.S. degree in Molecular biology and worked some at a local community college teaching some basic math courses. I then applied to a PhD program in Biomedical Science and was accepted. I’ve been in this graduate program for a year now, but I have realized that I am not cut out for research and the whole degree just seems like a waste of 5-6 years (the official time for completion). I have read your statements in the past concerning the “paper-selling institutions” and the problems with college educations, and I am inclined to agree with you at this point. My problem is that I am now about to be leaving a program (which is essentially my job) and beginning a job search during a rather poor economic state (I have three weeks to find full-time work) and having very few marketable skills. Since you have investigated this more than I have, what can a guy like me do to find work? It has become clear that my B.S. degree is really quite meaningless, so I feel as though my job options are very limited. I am married and I need to maintain a certain level of income, so my situation needs resolution quickly. At this point, I’ve asked everybody I know for advice and all that they have come up with is simply “stay in the PhD program”, even though I would like to hear some alternatives.
First, I should like to commend JB on at least attempting to think for himself in the face of what is likely significant social pressure. Second, I would urge him to keep in mind that a pursuing an education is not “essentially a job”, it is not a job of any kind except to the extent that one is financially compensated for pursuing it. Given the many complaints I’ve read about the sweatshop income provided to graudate students, it seems hard to imagine that one could not do better working in consumer retail, if nothing else.
The three-week time frame complicates things, of course, but the first thing that I would do is find some sort of income-producing job no matter what it is. I have seen lawyers take jobs selling computers at big box retail outlets and MBAs take jobs at department stores; at least in the case of the former it worked out extraordinarily well, so JB should not be too proud to work low-status labor. That’s just to generate a positive income flow and send a signal to the next employer that one is willing to do whatever it takes to get the job done.
The second step is to identify the employment areas that are undermanned in JB’s area. I would look at technical service areas like plumbing and automotive mechanics that see constant demand regardless of the economic situation. Talk to people, find out where the shortages are, then go speak with the owners of those firms. Employers like smart worker with personal initiative, so that fact that he doesn’t know anything but is willing to learn will be a bonus. He might consider looking to see if he can combine work as a trainee and office assistant; every business needs someone to handle the paperwork and that’s something that even a molecular biologist should be able to handle.
The most important thing to understand is that “staying in the PhD program” is not working. Unless he’s got an unusually sweet deal, it’s cost compounded by debt, not income. Nor is it an “investment”, investments have expected ROI which there’s virtually no chance that anyone has actually bothered to compute in this case. And, because of the oversupply of PhDs, JB doesn’t have any guarantee of a job at the end of the process anyhow. It’s a gamble, and an expensive one with low odds at that.
I don’t know if JB’s wife is likely to pose an additional complication or not. Is social status more important than financial stability to her? On the one hand, it might be a perceived come-down to be married to an assistant pig-keeper rather than Dr. Molecular Biologist. On the other, she might prefer not to live her life trying to claw her way out of debt during a major debt-deflation cycle. So, that may be a consideration too, since divorce imposes more financial costs than a sub-optimal career.
After what in retrospect looks like a ludicrously short period of time, the first draft of the new book is now in to the publisher. I’ll be sending out chapters to proofreaders tomorrow, in case you volunteered and were wondering why I hadn’t sent you anything yet. There’s still the whole editing process to go through yet, to say nothing of the various appendices, but it’s still nice to feel as if one of the major milestones is in the rear view mirror.
UPDATE – of course, this exchange of emails may not bode so well for its mass appeal:
At the cajoling of DC, I’m writing to you about the post “laughing at myself.” We were talking about it last night, and DC said that it went well above his understanding of economics. I said, “Oh yeah. I read the first sentence and looked at the chart and tried again… looked at the chart, decided math was hard and went to look at kittens.” When DC started breathing again after laughing himself silly, he told me to email that you and that it was a new level of economic geekdom that we just didn’t get.
I have no idea who this broad is or what she’s talking about. I’m assuming she’s some crazy woman with a bunch of cats. I can tell you for certain that I often encourage people to do things. Sometimes I even persuade. But I have never, ever cajoled anyone. (I’m not even sure what that means but it sounds dirty.) Also, I find your boring, laborious, snooze-fest posts on economics down-right inspiring. As a good sycophant, when I start to nod off while trying to finish one, I assume it must be because I’m stupid and my priorities are wrong. It’s just a reminder that I’m not yet perfect and I need to work harder at being like you.
Clearly I need some better sycophants. Or at least some smarter ones. And contra the notion that the new book will be a complete snoozefest, I think I can probably guarantee it will be the only one of its kind containing a quote about collecting morning dew in human skulls during the post-apocalypse.
Paleontologists Discover Skeleton Of Nature’s First Sexual Predator
Darwin be praised! It’s truly astonishing what detailed information scientists can derive from a few fossilized remains.
A professor from Columbia and others warn of the financial danger of pursuing degrees:
The next bubble to burst will be the education bubble. Make no mistake about it, education is big business and, like other big businesses, it is in big trouble. What people outside the education bubble don’t realize and people inside won’t admit is that many colleges and universities are in the same position that major banks and financial institutions are: their assets (endowments down 30-40 percent this year) are plummeting, their liabilities (debts) are growing, most of their costs are fixed and rising, and their income (return on investments, support from government and private donations, etc.) is falling. This is hardly a prescription for financial success…. And now the economy makes matters worse. Only 19 percent of the class of 2009 had jobs at graduation.
The problem with most analysis of the value of a college or graduate degree is that the aggregate figures include the sharks graduating from the elite schools – many of whom would have been just as successful without their degrees – and then attempt to apply it to Jane Average who is planning to attend Podunk State. Many years ago, I read a book called Class. It was a pretty funny book, but one point that I remembered was the citation of a study which showed that unless you obtained it from a university that had been established prior to some date in the nineteenth century, your degree wouldn’t add anything to your expected lifetime income. Perhaps the figures have changed in the intervening 25 years or so, but if more than 80 percent of the 2009 graduates are still unemployed, it’s pretty obvious that a degree is not the obvious choice it was once considered to be.
Which makes sense. The supply of college graduates has nearly quadrupled since 1950 and the limits of the demand for them has been exceeded. Therefore their price is bound to decline.
