October 6, 2006

The Anchoress Is on Fire Tonight

Filed under: Economy,News from Other Sites,Taxes & Government — Tom @ 10:58 pm

Anchoress is on fire with economic and, ahem, other revelations (R-Rated material at this link, but worth every minute; one supposes that Mr. Anchoress is in store for an enjoyable Friday evening and weekend).

I’ll stick to what she posted on the economic front, if y’all don’t mind:

  • Showing my non-predictive powers (I thought that a $260 billion deficit would be a very difficult achievement, and guess that it would be $270 billlion or so), the deficit for the fiscal year ended September 30 apparently came in at $250 billion. That supply-side econ that supposedly never works has done its magic yet again. I would think that the September tax-receipt tidal wave bodes well for an upside “surprise” in 2nd quarter GDP growth.
  • Anchoress also picked up a report of a big “oops” in the employment numbers, and a golden opportunity to say “I told you so”:

    Oct. 6 (Bloomberg) — The U.S. Labor Department found employers hired almost a million more workers in the year to March than previously estimated, bringing job gains more in line with what households had been saying all along.

    About 810,000 more jobs will be added to the payroll count when the figures are officially revised next February, the department estimated today. The proposed revision, the biggest since Labor started adjusting the numbers in 1991, would mean the economy created 2.8 million jobs from April 2005 through March instead of the 2 million now on the books.

    The revision will go a long way toward solving the mystery of why households, in a separate Labor survey, were saying job gains during that period were much larger. Confirmation that employment was stronger may help explain why consumers haven’t buckled when faced with record fuel prices and a decline in the housing market.

    I TOLD YOU that the Household Survey numbers for total employment, which, including today’s report, shows 9 million jobs added since January 2002, were cause to believe that the Establishment Survey (the one that had to be corrected), which even after the correction only shows about 5.7 million jobs added in that same time period, had something wrong with it. Nyah, Nyah.

There were a lot of other pretty decent economic signals this week: unemployment claims were down, mortgage rates stayed down, mortgage apps picked up. The only “downers” really weren’t: The ISM Manufacturing and non-Manufacturing Surveys weren’t as strong, but they were both still in expansion mode.

That “economy stinks” meme is getting ever more difficult for the 527 Media to sustain.

European News They Say You Can’t Use

Filed under: Immigration,MSM Biz/Other Bias,Taxes & Government — Tom @ 2:20 pm

Imagine if what is being reported in the UK Telegraph were happening in Metro New York and the US instead of Paris and France:

Radical Muslims in France’s housing estates are waging an undeclared “intifada” against the police, with violent clashes injuring an average of 14 officers each day.

As the interior ministry said that nearly 2,500 officers had been wounded this year, a police union declared that its members were “in a state of civil war” with Muslims in the most depressed “banlieue” estates which are heavily populated by unemployed youths of north African origin.

It said the situation was so grave that it had asked the government to provide police with armoured cars to protect officers in the estates, which are becoming no-go zones.

The number of attacks has risen by a third in two years. Police representatives told the newspaper Le Figaro that the “taboo” of attacking officers on patrol has been broken.

Once again, the men in blue pay the price when politicians won’t carry out their most important duties.

It is a complete disgrace that this isn’t being reported in the 527 Media. Or are they afraid that readers might decide that “being just like Europe with its (insert social program or evidence of ‘tolerance’ here) ________” wouldn’t be such a good idea after all?

Sherrod Brown: Stirring the, uh, Pot (and More)

Filed under: Taxes & Government — Tom @ 12:39 pm

Matt at WoMD has a lengthy catalog of newspaper stories from the mid-1980s through 1990 about possible, potential, probable, and actual illegal drug use by employees of then-Secretary of State Sherrod Brown’s office.

Additionally, there are claims made in those articles that Brown applied pressure to curb or end ongoing investigations into these matters, and hired at least one person with known drug associations.

So what IS Sherrod Brown’s current position on illegal drugs? His “Issues Page” is silent. If he’s a libertarian and favors legalization of recreational drugs, he should come out and say so. If he thinks that putting recreational users of drugs that are currently illegal on the US Senate payroll wouldn’t pose any kind of problem, he should tell us. If he has any known drug users on his congressional staff now, he should admit to that too, and tell us why his constituents shouldn’t be bothered by that. It’s quite possible that a sizable portion of the voting population won’t be concerned; after all, recreational drug use by members of the Clinton Administration was widely known, and apparently tolerated, by the American electorate in 1996. Regardless, I would suggest that Ohio voters need to know these things before November 7.

I doubt that we need to worry about where former Greene County Prosecutor Mike DeWine stands on illegal drug use.

Quote of the Day: Milton Friedman on Hong Kong

Filed under: Economy,Quotes, Etc. of the Day,Taxes & Government — Tom @ 11:48 am

From OpinionJournal.com (e-mail registration may be required; bolds are mine):

The ultimate fate of China depends, I believe, on whether it continues to move in Hong Kong’s direction faster than Hong Kong moves in China’s.

(Hong Kong’s current leader, Donald) Tsang insists that he only wants the government to act “when there are obvious imperfections in the operation of the market mechanism.” That ignores the reality that if there are any “obvious imperfections,” the market will eliminate them long before Mr. Tsang gets around to it. Much more important are the “imperfections”–obvious and not so obvious–that will be introduced by overactive government.

A half-century of “positive noninterventionism” has made Hong Kong wealthy enough to absorb much abuse from ill-advised government intervention. Inertia alone should ensure that intervention remains limited. Despite the policy change, Hong Kong is likely to remain wealthy and prosperous for many years to come. But, although the territory may continue to grow, it will no longer be such a shining symbol of economic freedom.

Yet that doesn’t detract from the scale of (1961-1971 British civil servant John) Cowperthwaite’s achievement. Whatever happens to Hong Kong in the future, the experience of this past 50 years will continue to instruct and encourage friends of economic freedom. And it provides a lasting model of good economic policy for others who wish to bring similar prosperity to their people.

Mainlaind China’s cheerleaders are hoping that the Communist country will do something no other Communist country has voluntarily done without government capitulation or overthrow — convert to a dominant ethic of free-market capitalism. Excuse me if I’m skeptical of it happening, especially as the BizzyBlog Internet Wall of Shame members continue to help the mainland’s leaders perfect its police state.

____________________________________

UPDATE: Here’s a BIG reason to be skeptical — execution buses (video here, Dvorak pic and commentary here, Atlas Shrugs post here). Someone ought to ask the people who run Wal-Mart, Target, Home Depot, and Lowe’s what they thinks of these.

Should One Columbiana Co. BOE Member Disqualify Himself in the Strickland Complaint?

Filed under: News from Other Sites,Taxes & Government — Tom @ 10:10 am

Yesterday evening, Lincoln Logs reported something about the complaint filed at the Columbiana County Board of Elections that the Lisbon Morning Journal (LMJ) did not.

Here’s what the LMJ said about one of the Elections Board members:

One of the elections board members is county Democrat Party Chairman Dennis Johnson, who laughed about the complaint when contacted by the Morning Journal and characterized it as a desperate attempt to deflect from Republican problems in the polls.

“We’ve been through this before. Why would anyone do this except to throw off all the other stuff,” he said.

Dennis Johnson said the elections board will give the complaint a fair hearing, but he said anyone who lives in Lisbon can tell you that Strickland stays at his apartment when in this part of the district, especially the employees at the Steel Trolley Diner, which he frequents.

The LMJ did NOT note, as Lincoln Logs did, the following:

Denny, by the way, became a superstar during petition gate (earlier this year, when 6th District congressional candidate Charlie Wilson failed to submit 50 valid signatures of district residents, and was forced to run a write-in campaign, which he won — Ed.) when he was caught sneaking in and out of the board of elections when it became clear Green Card Charlie (Wilson) didn’t have the signatures. You can see him doing his sneaking below.

FlickerJohnsonBOE

Perhaps it’s time Denny recused himself based on his comments and past partisan practices.

Matt’s post at the time described secretive behavior and alluded to possible violations of open-meetings laws that were ultimately never addressed:

What are the County Democratic Chair and the Board of Elections Director doing? The Board of Elections is a public office, and it is a bit strange to be holding after hours ….. meetings on deadline night.

I think it’s pretty clear, despite the lip service, that Denny Johnson has his mind made up. He appears incapable of reviewing the evidence in the current Strickland residency/voting complaint and rendering an objective decision. If that is indeed the case, he should recuse himself.

The Best-Kept Secret in Washington The USA

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 9:10 am

The Wall Street Journal, in a subscription-only editorial I hope they are smart enough to put out for free this weekend, tells the tale:

Congress keeps breaking the Beltway Book of World Records for spending money, but the government will soon report that the federal budget deficit for the just-completed 2006 fiscal year fell to about $260 billion.

What’s the secret of this deficit success that you aren’t reading much about this election year? It isn’t spending restraint. The federal budget expanded to $2.7 trillion last year, a 9% increase, or three times the inflation rate. Over the past six years the federal budget has increased by 49.2%.

The main cause of the deficit decline — 90% of it, says White House budget director Rob Portman — is a tidal wave of tax revenue. Tax collections have increased by $521 billion in the last two fiscal years, the largest two-year revenue increase — even after adjusting for inflation — in American history. If you’re surprised to hear that, it’s probably because inside Washington this is treated as the only secret no one wants to print.

….. One place it has come from are corporations, whose tax collections have climbed by 76% over the past two years thanks to greater profitability. Personal income tax payments are up by 30.3% since 2004 too, despite the fact that the highest tax rate is down to 35% from 39.6%. The IRS tax-return data just released last month indicates that a near-record 37% of those income tax payments are received from the top 1% of earners — “the rich,” who are derided regularly in Washington for not paying their “fair share.”

More good news is that dividend-tax payments appear to be up as well, even though the tax rate was lowered to 15% from as high as 39.6%. A National Bureau of Economic Research study found that “after a continuous decline in dividend payments over more than two decades, total regular dividends have grown by nearly 20%” and that this reversal happened at “precisely the point at which the lower tax rate was proposed and subsequently applied retroactively.” There hasn’t been a purer validation of the Laffer Curve since Ronald Reagan rode off into the sunset.

Just imagine where we’d be if Congress had exercised even modest control over wasteful spending during the past few years.

But don’t forget that I’m not in an entirely celebratory mood about this. Don’t get me wrong; it IS very nice to see the “tax cuts increase revenues” scenario work for the 4th time (Kennedy 1963, Reagan 1982, cap-gains 1997, and Bush 2003). But I can’t forget that the national debt is increasing every year by more than the reported deficit (discussed here over a year ago), or that there are those trillions of dollars (over $60 trillion according to this actuary’s post) in future Social Security, Medicare, and other government-funded obligations the Washington ruling class refuses to deal with (because we won’t force them to).

The Employment Report Run-up

Filed under: Economy,Taxes & Government — Tom @ 8:10 am

It’s the second last employment report before the election. Bloomberg’s survey of economists and analysts predicts a decent 115,000-plus pickup during September in total employment. ADP’s National Employment report earlier in the week claimed that there were only 78,000 new jobs in “nonfarm private employment” (an important distinction, because the government reports on ALL employment).

I think any six-figure number will be politically unassailable, especially if the unemployment rate either falls or doesn’t rise. It will also be worth noting if the new-jobs divergence between the Household Survey (used as the basis for reporting the unemployment rate) and the Establishment Survey (used as the basis for reporting the number of new jobs) continues. As noted previously, the former shows that almost 8.9 million net new jobs have been created since January of 2002, while the latter only shows just under 4.9 million net new jobs. After over 4-1/2 years, the idea that one report shows 80% more new jobs created than the other is ridiculous.

________________________________

UPDATE: Call it 3/4 of a loaf

  • Unemployment dropped 0.1% to 4.6%. (that’s a BIG plus, 1/2 loaf)
  • 51,000 net new nonfarm payroll jobs were created per the Establishment Survey. (not impressive). But August’s net new jobs number was revised upward by 60,000, and July’s by 2,000, meaning that the number of people reported as working at the end of September was up by 113,000. But September itself still disappointed a bit.
  • 101,000 net new jobs were created per the Household Survey. (just over the threshold set before the release, or 1/4 loaf)

Once again, the Household Survey shows more impressive job growth than the Establishment Survey.

Anyone who whines about “unimpressive job-growth numbers” without mentioning the fact that the unemployment rate went down or ignoring the prior-month revisions just mentioned is deliberately not telling the whole story. And the inevitable political arguments that will be made about “marginally attached workers” and “discouraged workers” won’t fly either, as those respective numbers have gone down and stayed the same, respectively (from Page 2 of today’s release):

About 1.3 million persons (not seasonally adjusted) were marginally attached to the labor force in September, down from 1.4 million a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 325,000 discouraged workers in September, about unchanged from a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 975,000 marginally attached had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Partial Competition Restored in Dallas-Fort Worth Aviation Market

Filed under: Business Moves,Taxes & Government — Tom @ 8:05 am

It should have gone further than it did, and the cited headline is misleading.
From the not very humbly named Meetings Industry Megasite:

Congress Ends Domestic Flight Restrictions at Dallas Love Field

October 04, 2006

Washington, DC — Congress on Friday approved legislation that eliminates restrictions on long-haul domestic flights at Dallas Love Field, the home airport of Southwest Airlines.

The new legislation will increase competition in northern Texas, thus putting downward pressure on air fares, according to Southwest, the nation’s leading low-fare airline. President George Bush is widely expected to sign the bill.

The legislation reflects an agreement in June between Southwest, American Airlines, and the mayors of Dallas and Fort Worth to support changes to the federal Wright Amendment, which had restricted flights at Love Field to a nine-state region in the South and Southwest. The Wright Amendment benefited carriers at nearby Dallas-Fort Worth International Airport, where American is the dominant carrier.

The agreement lifts restrictions on non-stop domestic service from Love Field — but after eight years, a concession to American Airlines.

However, Southwest can issue so-called through tickets when the new law is enacted.

….. In another concession to American Airlines, the agreement downsizes Love Field to 20 gates from the current 32 gates, thereby restricting Southwest’s growth at its home airport.

The eight-year wait for national non-stop service is an outrage, but at least in the meantime national direct service is in place at Love. I’m assuming the gate restrictions are based on valid needs for boarding and departure space and do not represent an artificial competitive restriction; if I’m wrong, that’s an outrage too. If Love carriers are smart, they’ll schedule direct long-haul flights with stopovers at small airports to minimize total flight times to final destinations.

There was never any justification for restricting flights out of Love in the first place. The Dallas-Fort Worth airport could have grown just fine without that restricting. In a more competitive environment, DFW might might not have poured so much money into seemingly endless construction projects and a level of sprawl like no other airport I can think of other than Denver (which, not coincidentally, is another airport built to replace a very convenient closer-in facility). DFW today is a horribly inconvenient place where you stand a fair chance of missing your flight if you don’t drop your rental car off a full two hours before your flight’s departure time. That’s ridiculous. Let there be Love.

Issue 2: I’m Against It, But One Opposing Argument Does Not Seem Convincing

Filed under: Business Moves,Taxes & Government — Tom @ 8:00 am

To be clear, I’m against Issue 2, the Ohio Minimum Wage Increase Amendment, regardless of the answer to the item I’m wondering about here, for reasons that are so grounded in Econ 101 that they aren’t even worth bothering with.

The text of the amendment that is the basis of Issue 2 is here (imperfect HTML format on my site; PDF at the RaiseTheWage.org site)

Issue 2′s opposition claims that the language of the amendment will open up corporate payroll records to potential access by snoops, harassers, potential identity thieves, and others without direct involvement in enforcing the minimum-wage law should it take effect.

I don’t see it in the language.

The closest I can get is this language from the amendment:

An employee, person acting on behalf of one or more employees and/or any other interested party may file a complaint with the state for a violation of any provision of this section or any law or regulation implementing its provisions. Such complaint shall be promptly investigated and resolved by the state.

If “interested party” is construed as I would expect (i.e., a person’s attorney or other representative acting on an employee’s behalf or with their permission), I don’t see a problem. If I’m wrong, and an “interested party” could be anyone who doesn’t like a particular company, any of its officers, or just businesses in general, I would definitely have a problem if, thanks to Issue 2, they gained the ability to get their hands on payroll records without actually acting with the express permission of employees supposedly not being paid the minimum wage.

I would think that an “interested party” would fit the former description, and not the latter. For example, the group that sued to try to stop the tax breaks for the Jeep-Chrysler facility in Toledo were determined by the courts (incorrectly, in my opinion [third item at link]) not to have standing (i.e., they weren’t “interested parties”), even though they were taxpayers of the area affected by all the tax breaks. If taxpayers can’t even sue to stop a tax-giveaway deal, why could anyone sue a company on behalf of the minimum-wage amendment if they aren’t representing a supposedly affected employee?

As I said, it’s not a dealbreaker for me, because I’m against Issue 2 anyway. But I suspect that some who might otherwise be supporters of the initiative would turn against it if it appeared to authorized unlimited fishing expeditions against employers by people who have nothing better to do. I welcome any clarification.

UMass Student Jeopardizes His Future Employability

I suppose Michael J. Toomey might try to claim he’s kidding about this swaggering tripe (HT Best of the Web), but there are way too many clues that he isn’t, both in the piece he wrote and in his previous body of work.

Companies considering employing him for a position involving responsibility over people probably won’t bother asking him if what he wrote is genuine or some kind of strange parody. They’ll just take the following self-evaluation as a given, move on to the next person, and avoid taking any chances:

See, the thing is, as virtue goes, I can be pretty lax on the whole issue. In fact, I might go so far as to say, sometimes the white immunity I’ve been blessed with allows me to subterfuge, cheat and manipulate with ease. What I’m getting at here is, don’t trust me, I’m far from an upstanding citizen.

There is hope for Mr. Toomey: It would appear that he has great potential as a 527 Media journalist.

The Inevitable Head-Rolling Begins at the LA Times

Filed under: Business Moves,MSM Biz/Other Bias — Tom @ 7:50 am

Anyone who thought this wasn’t going to happen, or that, as I noted a few weeks ago, it needed to happen, was kidding themselves:

Tribune Co. ousted Jeffrey M. Johnson, the publisher of its largest newspaper, the Los Angeles Times, on Thursday after Johnson had refused to make what he considered potentially damaging staff cuts ordered by the media conglomerate.

The parent company named David D. Hiller, who has been publisher of the Chicago Tribune, to succeed Johnson.

The move follows a highly publicized show of defiance last month by Johnson and Times Editor Dean Baquet against the latest proposed Tribune cuts, which drew the ire of not only Times staffers but those at some of Tribune’s 10 other daily newspapers.

Johnson had to go first, as he had no right to expect to hang onto his job after siding with his employee instead of the people who pay him. Now it’s up to Baquet to decide if he’ll follow orders or go away.

The big question, regardless of Baquet’s fate, is whether Hiller or his successor can do anything to stop the Times’ hemorrhaging subscriber base. If the Times can’t figure out that their years of disgracefully biased and all too often simply erroneous reporting are taking a brutal toll and do something about it, the decline will continue.

Positivity: A Lesson in Forgivness and Compassion

Filed under: Positivity — Tom @ 6:01 am

From coverage of Thursday’s funerals for the Amish girls killed earlier this week:

At the behest of Amish leaders, a fund has also been set up for the killer’s widow and three children.

UPDATE: Newshound has more — “Mysterious Ways” indeed.