John Tamny remains as confused as a thinker and as obtuse as a writer as he has ever been

John Tamny has made some progress, however.

He now admits that some of his views are "fringe".

Which is amusing, since we've known that since Russell Kirk demonstrated long ago how the libertarians have always been "chirping sectarians".

A case in point of the continuing confusion:

Tamny expresses fawning admiration for George Will's latest collection of his columns, which opens asserting the priority of the study of history.

But Tamny later avers without the slightest awareness of self-contradiction that "The talented people, the unequal people, have a tendency to run from the present and past."

Nostalgia is "dangerous".

Do make up your mind for once, John.

The seemingly interminable review is here.

It's the libertarian crazies among us who are clueless and spoiled, not the cooks, servers and dishwashers

"In other words, if they’re farming or working in a mine, they’re doing so by choice. This should be remembered the next time some spoiled or clueless American politician, economic thinker or worker yearns for a return of the jobs of the past. ... Increased devastation in the U.S. born of lockdowns will be cruel, and if not arrested through a cessation of lockdowns, will reduce Americans to work they previously wouldn’t have been caught dead doing".

-- John Tamny

LOL: Donald Trump's crackpot 35% unemployment in February 2016 is 37% today

Jeffrey Snider:

In February of 2016, then-candidate Trump deployed his typical grandiose, exaggerated style after his win in the New Hampshire primary.

“Don't believe those phony numbers when you hear 4.9 and 5 percent unemployment. The number's probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.

[T]he once fake unemployment rate has become his primary campaign symbol.

Big Fat Idiot Rush Limbaugh 2/5/2016:

We have an audio sound bite here from Obama ... He was heralding first-time unemployment rate as being under 5% for the first time in seven years ... Well, there’s a reason he said it. It’s because it’s the only way you can ignore the 94 million Americans not working, not in the labor force ... This is an abject joke. It’s a total joke.

Libertarian kook John Tamny of Real Clear Markets twists himself into a pretzel about Katie Hill, writes a convoluted mess about it, as usual

Rep. Katie Hill recently resigned her congressional seat after, among other things, a romantic relationship with a junior male staffer was revealed. ... [C]onservatives should stand their ground by defending Hill.

See here.

Never mentions the throuple. Never mentions the abuse of power by one in authority over younger subordinates, both male and female. Never mentions she broke her marriage vows to her husband in the process. Never mentions she and her husband used Congressional staff as a hunting field for their personal kinky sexual predation. Never mentions some of it must have occurred at taxpayer expense, etc., etc., etc.

LOL Larry Kudlow: 22,000 new payrolls in February 2019 "fluky", but 54,000 in May 2011 "meager", economy "sputtering", possibly a sign of recession

Obama Owns This Unemployment Report:

In recent weeks, a whole bunch of new economic stats have been pointing to a sputtering economy -- maybe even an inflation-prone, less-than-2-percent-growth recession. Stocks have dropped five straight weeks, as they look toward slower growth, jobs, and profits out to year end. And Friday's jobs report didn't buck these trends.

"Anemic" is the adjective being tossed around the media. According to the Labor Department, nonfarm payrolls increased a meager 54,000 in May, while private payrolls gained only 83,000. A week or two ago, Wall Street expected 200,000-plus new jobs. Didn't happen.

Jeffrey Snider: The last 11 years of real GDP worse overall than the Great Depression

 Told ya.

Are the Great Depression and the Last 11 Years Comparable?

In terms of modern calculation of real Gross Domestic Product, the last eleven years in the United States have been worse overall than the Great Depression. 

 

The Tobin Q ratios for Germany and America tell us Elizabeth Warren and David Dayen are wrong

Louis Woodhill, here:

Put simply, a Tobin Q ratio higher than 100% means that a company is creating economic value, and a Tobin Q below 100% means that a company is destroying value.  The most fundamental social responsibility of a company is to add value to the capital it employs, so the most fundamental job responsibility of a corporate CEO is to keep the Tobin Q ratio of the company he or she leads above 100%. 

Writing for The New Republic, progressive David Dayen argues:

“There’s proven evidence that this model of corporate governance [Warren's] can work. “Co- determination,” the term for worker representation on corporate boards, has created a form of capitalism in Germany where workers are far more equitably compensated and decisions are made with an eye toward long-term goals.”

The problem with this argument is that Piketty’s data shows that, since 1995, America’s Tobin Q ratio has averaged more than 100%, while Germany’s Tobin Q ratio has averaged about 55%.  In other words, America’s evil, rapacious corporations are creating economic value, while Germany’s enlightened companies are doing the equivalent of burning 45% of the euros entrusted to them.

Jeffrey Snider: Fix the suffering in the labor force or next time you might actually get socialism

Here:

The American labor force is suffering like it hasn’t since the 1930’s, but nobody seems willing to challenge Economists’ easily disproved claims.

Into that vacuum had swept Mr. Trump himself, but also Mr. Sanders. The mere election of the former didn’t immediately fix the problem; rather, things have gotten worse since the campaign ended (to be clear, it had nothing to do with Trump . . .). May Day is still only trending toward becoming an official holiday.

State capitalist cronyism in Wisconsin smells to high heaven: The state will pay $3 billion for Foxconn jobs

The cost of reelection for Scott Walker, Paul Ryan and Donald Trump.

From the story here:

What will the State of Wisconsin be paying to lure Foxconn? A steep price. It adds up to $3 billion, including tax credits, training grants and infrastructure improvements. That comes to almost a quarter-million per job, which will pay an average of $54,000 per year. In other words, the people of Wisconsin will in effect be paying the plant’s entire workforce for about five years. And the construction jobs – which make up more than three-quarters of the total – will only last about four. ...

No one knows how long the Foxconn jobs in Kenosha will last. But we do know the company has publicly committed to automating away the vast majority of its current 1.2 million jobs, most of which are located in Asia. At one plant alone in China’s Guangdong province they have eliminated about 60,000 jobs. And they certainly aren’t stopping there. They have targeted to reach 30 percent automation by 2020, and their stated goal is to eliminate almost their entire human workforce, retaining only a minimal number of workers in production, logistics, and inspection.

Complete and utter rubbish from Real Clear Markets on "free market" Martin Luther King Jr. who said "capitalism has outlived its usefulness"

Here in "Martin Luther King's Free-Market Legacy":

Martin Luther King proclaimed that he had a dream that “…my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”  His dream was far more powerful than it is given credit for.  It is a general call for freedom and free-market prosperity.

The real Martin Luther King Jr. was a self-confessed socialist as early as July 1952:

By the way (to turn to something more intellectual) I have just completed Bellamy’s Looking Backward. It was both stimulating and fascinating. There can be no doubt about it. Bellamy had the insight of a social prophet as well as the fact finding mind of the social scientist. I welcomed the book because much of its content is in line with my basic ideas. I imagine you already know that I am much more socialistic in my economic theory than capitalistic. And yet I am not so opposed to capitalism that I have failed to see its relative merits. It started out with a noble and high motive, viz, to block the trade monopolies of nobles, but like most human system it fail victim to the very thing it was revolting against. So today capitalism has outlived its usefulness. It has brought about a system that takes necessities from the masses to give luxuries to the classes. So I think Bellamy is right in seeing the gradual decline of capitalism.

Despicable Paul Ryan, Congress and Obama stiff-arm Puerto Rico bondholders who will end up fronting the inevitable taxpayer bailout

Paul Ryan is the establishment all the way. And he hasn't changed since 2008. He is not Tea Party, he is not Freedom Caucus, he is not for the taxpayer, period.

From the story here:

In essence, the bondholders will front the money for the bailout while taxpayers would have to pay them back for this cash advance.

This is something that Speaker Ryan and his allies, including the Obama Administration, don't want you to know. 

Larry Kudlow does a 180, calls for sealing the borders

From "War Breeds Unfairness. Seal the Borders" here:

"But I say seal the borders. People hoping to relocate to the U.S. from Syria, Iraq, and anywhere in the Middle East, and people coming here from France, England, Sweden, and wherever will be upset, at least for a while. There may be some unfairness to this. But I don't care. Wars breed unfairness, just as they breed collateral damage."

Spoken like someone who really is running for US Senate in Connecticut.

Update:

The article also appears here and here as "I've Changed. This Is War. Seal the Borders. Stop the Visas".

God, I've changed, honest I have. Please give me another chance.

Thirty-five years ago the economy mattered more than actual power

"[Economists] never offer anything but the same command approach to the obvious exception of everything else that used to be easily and conventionally embraced. The willingness of political figures across the spectrum to allow it and even strengthen it defies democracy. Thus Donald Trump".

Jeffrey Snider here.

The housing bubble was mainly a middle class and higher phenomenon, not of the poor

From Robert Samuelson, here:

". . . in poorer neighborhoods . . . the actual borrowers . . . were much richer than average residents. In 2002, home buyers in these poor neighborhoods had average incomes of $63,000, double the neighborhoods' average of $31,000. ...

"In 2002, the mortgage-debt-to-income ratio of the poorest borrowers was 2; in 2006, it was still 2. ... 

"[T]he bulk of mortgage lending and losses [during the housing bubble] - measured by dollar volume - occurred among middle-class and high-income borrowers. In 2006, the wealthiest 40 percent of borrowers represented 55 percent of new loans and nearly 60 percent of delinquencies (defined as payments at least 90 days overdue) in the next three years."

Republican enthusiasm for the Line Item Veto began under Reagan and was their version of the imperial presidency

No different than Reagan's enthusiasm for federal mandates like EMTALA, which is the proximate cause of ObamaCare. But J. T. Young doesn't remember it that way, or that far back, here:

'Unmentioned in Obama's legacy is that he killed the line-item veto. While not having done so directly, Obama's presidency has ended this long-time Republican goal just as assuredly as if he had. The political and fiscal role reversals between the Congress and presidency - and between Republicans and Democrats - transpiring for twenty years, have culminated with this administration.

'Twenty years ago, Republicans, armed the Contract with America, dramatically rode to Congressional majorities for the first time in decades. Prominent within that important document was a call for a line-item veto for the president.

'The intent was to give a president power to eliminate wasteful federal spending with pinpoint accuracy. Instead of having to veto an entire bill, and risk shutting down all, or part of the government, a president would be able to stop particular provisions but leave a larger spending bill intact. This authority would reverse the "Hobson's Choice" that prevailed between Congress and a president.'

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'Ronald Reagan said to Congress in his 1986 State of the Union address, "Tonight I ask you to give me what forty-three governors have: Give me a line-item veto this year. Give me the authority to veto waste, and I'll take the responsibility, I'll make the cuts, I'll take the heat."'

WHATEVER CONSERVATISM IS, IT MOST CERTAINLY IS NOT ABOUT SEEKING TO ACQUIRE MORE POWER BUT RATHER ABOUT SEEKING TO DIFFUSE AND DISTRIBUTE IT, SOMETHING THE CONGRESS DELIBERATELY BETRAYED IN THE 1920s WHEN IT DECIDED TO STOP THE NATURAL EXPANSION OF REPRESENTATION. NO BRANCH OF THE GOVERNMENT MAY BE SAID SINCE THAT TIME TO BE IN ANY WAY CONSERVATIVE IN SPIRIT, EXCEPT IN THE OCCASIONAL IRRITABLE MENTAL GESTURE IN THAT DIRECTION WHICH IS USED AS A CLOAK FOR MORE SELF-AGGRANDIZEMENT. NO ONE ANYWHERE RETAINS "SELF-RESTRAINT" IN THEIR LEXICON.

Minus 2.9% GDP has never occurred outside of a recession: They're ignoring it like 2008

Jeffrey Snider, here:

The most recent example of this, in a larger scale setting, was the first quarter's GDP estimate. Rather than embrace the information that might be relevant to what is actually taking place, the entire orthodox economics profession is busy trying to convince everyone that there was nothing useful in that result. It was, as has been repeated over and over, an aberration of no significant value; an error term to be denied a full place in the analysis of where the economy might actually be headed.

A GDP figure of nearly minus three percent is decidedly rare, however, so unusual that it has never taken place outside of a recession. But that is precisely what we are supposed to ignore when being counselled to take no notice of it. Actually, counsel is too slight and too soft of a word, as what is really occurring is nothing short of a demand. The surety at which the orthodox profession, especially those of monetary disposition, exercises such confidence about forecasting is very much descriptive of ideology rather than science.

Total nonfarm is up 288,000 in June: Why I'm yawning

Unemployment in June falls to 6.1% and total non farm employment is up 288,000, seasonally adjusted, to finish the second quarter. Not seasonally adjusted, the figure is an impressive sounding 582,000 newly employed.

So Q1 GDP at -2.9% is meaningless, right? We're really doing much much better than that number indicates, yes?

That's what fellow traveler Rex Nutting thinks over at MarketWatch in "The payrolls report is right, and GDP isn't". He goes so far as to say that even 2008 negative GDP was meaningless:

"Take, for instance, the first quarter of 2008, just as the Great Recession began. The first estimate of quarterly GDP was 0.6% growth. In mid-2008, that was revised to 0.9%. A year later, however, GDP was revised to a 0.7% decline. The most recent estimate is that the economy shrank 2.7%. It’s madness to think this number means anything."

Spoken like a true believer in the success rate of Soviet 5-year plans. At least "shrank" shows he's educated.

And even John Silvia of Wells Fargo says the jobs report shows "economic growth is far better than the Q1 GDP report indicates".

Oh really? I don't think so. The employment gains aren't telling us anything indicative of a break out to the upside either for jobs or for the economy. To see this you have to stop comparing apples to oranges by comparing monthly change in jobs to GDP which is measured on a quarterly basis.

When you look at the jobs figures on a quarterly basis, you see that total nonfarm always takes a dive in Q1, good economy or bad economy, and it always rebounds in Q2, good economy or bad economy. It tells you almost nothing about the economic trend that in Q2 you always get an increase. So we should expect the jobs numbers to go up in the spring, and they always do. Go all the way back in the not seasonally adjusted data to 1981 and you will see that this is true, in the awful year 1982 when the gain was a lousy 1.0%, and even in the dreadful year of 2009. When 2009 was over there were nearly 30 million first time claims for unemployment, yet between Q1 and Q2 that year total nonfarm went up 138,000, a paltry 0.1% but still completely counter trend. The worst was over. Not.

In 2014 we have just witnessed total nonfarm go up 2.805 million jobs between the end of Q1 and the end of Q2, the most since Obama has been president. But guess what? That's an increase of barely 2.06%. Obama's actually done better, for example in 2011 when the increase was 2.09%, his best Q1 to Q2 gain on record. But we don't point to that number today as a sign of the economy turning around at that time, especially since the measure has been weaker since, and GDP has actually gone negative since.

It's instructive to compare Obama's recent 2.06% quarter on quarter gain with past presidents' records for the same period from winter to spring.

How high was the best record Q1 to Q2 since 1980, for example? You would be surprised that it's barely 29% higher than Obama's best to date. Reagan, of boom fame, holds top spot at just 2.69% in 1984. Clinton comes in second with 2.56% in 1994. George W. Bush comes in third with 2.14% in 2005. Obama comes in fourth in 2011 at 2.09%. And George Herbert Walker Bush brings up the rear in 1989 at 1.92%.

But the best record isn't a very good predictor of economic growth ranking. Best GDP to worst was Clinton, Reagan, Bush I, Bush II, and then Obama (so far), not Reagan, Clinton, Bush II, Obama, Bush I.

The overall jobs record between Q1 and Q2 seems like a better predictor of likely economic growth ranking. Clinton, first for GDP, averaged 2.22% over eight years while Reagan, second, averaged 2.07% for the increase in total nonfarm between the winter and the spring. In third is George Herbert Walker Bush at 1.69% (third also for GDP), followed closely by Obama at 1.68% (last for GDP so far) and George W. Bush bringing up the rear at 1.3% (fourth for GDP).

It's entirely possible that Obama already peaked for jobs increases from winter to spring in 2011. Each of the other four presidents peaked early or mid-term. It would be unusual for Obama to do better this late in his term. And so far he hasn't, and has just two more opportunities to prove me wrong.

Overall Obama has lost his momentum, his aura and his credibility, and his lately shrill tone sounds more like a dying bunny the cat got in the backyard than a statesman presiding over the final years of a successful term. I think that means it's likely Obama's overall jobs performance is going to remain weak, as will his GDP.

Larry Kudlow must be kidding: "if the 11 million illegals who live here obey the law . . ."

Here:

And if the 11 million illegals who live here obey the law, pay taxes, learn English, and understand the Constitution, they deserve legal status. Citizenship is an issue way down the road. And yes, we must include border security, where unfortunately Obama's lax policies have contributed to the calamitous surge in illegal-immigrant children. But temporary visas or work permits should be part of a sensible reform package. The E-Verify system can work.

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Ahem . . . illegals have already broken the law, Larry. So sorry to see the amnesty fanatics have abandoned the first conservative instinct, the love for law and order. There will be no free-market without it.

It's time to treat the rich like equals: Dean Kalahar speaks up for proportional taxation

Here, although the ahistorical reading of Scripture by liberals on behalf of progressive taxation is hardly new:

Proportional taxes actually meet the equity and ability to pay principles of effective, efficient, and "fair" taxes. With a proportional tax everyone pays the same percentage but those who earn or spend more pay more. For example: if you buy a $50,000 car and the Fair/proportional tax is 10%, then you pay $5,000 in tax. If, on the other hand, you buy a $5,000 car, your tax is $500. By paying the same percentage, everyone is offered the dignity of being treated equally, and those who afford more pay more. Isn't that what liberals are always demanding?

"We have to raise the progressive tax rate so the "rich" pay their "fair share."

In reality, progressive tax rates, like the federal income tax, might meet the ability to pay principle but not the equity principle. Progressive taxes have varied tax rate percentages depending on income so taxpayers are not treated equally. Currently the top 20% of income earners pay more than 90% of the income taxes, while the bottom 50% pays less than 3% of the income taxes. Who's actually "paying their fair share?"

And you thought I was kidding when I called Thomas Piketty's new book a novel

Diana Furchtgott-Roth for Real Clear Markets, here, eviscerates Thomas Piketty's presentation on the minimum wage:

One might overlook one isolated error as sloppiness to which we are all susceptible. But Professor Piketty's supposed history of changes in the minimum wage is not tarnished by a single error, but by a vast array of systematic errors.

His history is pure revisionist fiction, and revisionist fiction with a political purpose: making Democratic presidents look magnanimous and Republican presidents look uncaring. Yet, over the past quarter century, the period Piketty describes as showing a dramatic increase in inequality, Republican presidents signed into law larger percentage increases in the minimum wage than did Democratic presidents.