January 31, 2007

4th Quarter ‘Advance’ GDP Growth (3.5%) Beats Original Expectations, Then Beats Upwardly Revised Expectations

Filed under: Economy,Taxes & Government — Tom @ 2:03 pm

Funny how that keeps happening.

Geez, do I really need to comment on presumptively negative this report by the Associated Press on 4th quarter GDP is (BEA announcement here)?

I’m guessing that the unbylined report is from my AP “buddy” Martin “Crummy Economy” Crutsinger (previous discussions of his handiwork are here, here, and here), and that he had this negative adjective-laced report already drafted last night (Update — It’s by a new name to me, Jeannine Aversa):

The economy snapped out of a sluggish spell and grew at a faster-than-expected 3.5 percent pace in the final quarter of last year as consumers ratcheted up spending despite a painful housing slump.

The fresh snapshot of business activity, released by the Commerce Department Wednesday, underscored the resilience of the economy; it has managed to keep on moving despite the ill effects of the residential real-estate bust and an ailing automotive sector.

The economy’s performance in the October-to-December quarter, which followed two quarters of rather listless activity, exceeded analysts’ forecasts for a 3 percent growth rate.

The economy opened 2006 on a strong note, growing at a 5.6 percent pace, the fastest spurt in 2 1/2 years. But it lost steam during the spring and late summer. It grew at a 2.6 percent pace in the second quarter and then a weaker 2 percent pace in the third quarter. The fourth-quarter’s rebound ended the year on a positive note.

For all of 2006, the gross domestic product (GDP) increased by 3.4 percent. That was an improvement from a 3.2 percent showing in 2005 and the strongest showing in two years.

Just a few weeks ago, the “experts” were predicting GDP would come in at about 2.0%. Then they looked at the Christmas retail and the December ISM manufacturing and non-manufacturing reports and scrambled to up their estimates to 3.0% or so. Today’s announcement even beats the revisions, and I believe (crossing fingers) that February and March adjustments to GDP (technically known as “preliminary” and “final” — the first release is referred to as “advance”) will end up moving it closer to 4.0%.

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UPDATE: Here are the last 30 years of GDP growth for context (years better than 2006 are in bold), and which party, based on which president’s budget was in effect during most of the year involved, is “responsible” for that year’s result (you can see these results by going to this BEA link and selecting the appropriate date range and the “annual” option):

GDP1977to2006withResp

GDP1977to2005BWvs2006

To be clear on the party ID, it has to do with whose budget was in effect during most of the year involved. So Ford’s last budget was in effect during most of Carter’s first year (1977; actually through Sept. 30 of that year), Carter’s last budget during Reagan’s first year (1981), Bush 41′s last budget during Clinton’s first year (1993), and Clinton’s last budget during Bush 43′s first year (2001).

To explain in words what the Better/Worse comparison means — 15 years of the 29 years leading up to 2006 had GDP growth greater than 2006′s preliminary 3.4%; Republican administration-passed budgets were in effect during 8 of those 15 years. 13 of the past 29 years had lower GDP growth; GOP admin-passed budgets were in place during 8 of those 13 years.

Carnival Barking (013107)

Filed under: News from Other Sites — Tom @ 1:45 pm

Newshound’s 59th on Ohio Politics is here (this was done in advance; so I sure hope it’s there! it’s still pending as of 2 PM 8 PM 9PM — now it’s up!!).

Boring Made Dull’s 31st on Econ and Social Policy is here.

Five Suburbia Myths on the Environment and Transportation

Filed under: Economy,Environment,Taxes & Government — Tom @ 9:48 am

Read ‘em and reap (link may require registration; HT Instapundit):

1. Americans are addicted to driving.

Actually, Americans aren’t addicted to their cars any more than office workers are addicted to their computers.

….. Some claim that Europeans have developed an enlightened alternative. Americans return from London and Paris and tell their friends that everyone gets around by transit. But tourists tend to confine themselves to the central cities. Europeans may enjoy top-notch transit and endure gasoline that costs $5 per gallon, but in fact they don’t drive much less than we do. In the United States, automobiles account for about 88 percent of travel. In Europe, the figure is about 78 percent. And Europeans are gaining on us.

2. Public transit can reduce traffic congestion.

….. We have to be realistic about what transit can accomplish. Suppose we could not only reverse transit’s long slide but also triple the size of the nation’s transit system and fill it with riders. Transportation guru Anthony Downs of the Brookings Institution notes that this enormous feat would be “extremely costly” and, even if it could be done, would not “notably reduce” rush-hour congestion, primarily because transit would continue to account for only a small percentage of commuting trips.

3. We can cut air pollution only if we stop driving.

Polls often show that Americans think that air quality is deteriorating. Yet air is getting much cleaner.

4. We’re paving over America.

How much of the United States is developed? Twenty-five percent? Fifty? Seventy-five? How about 5.4 percent? That’s the Census Bureau’s figure. And even much of that is not exactly crowded: The bureau says that an area is “developed” when it has 30 or more people per square mile.

5. We can’t deal with global warming unless we stop driving.

What should be done about global warming? The Kyoto Protocol seeks to get the world to agree to burn less fossil fuel and emit less carbon dioxide, and much of that involves driving less. But even disregarding the treaty’s economic costs, Kyoto’s environmental impact would be slight. Tom M.L. Wigley, chief scientist at the U.S. Center for Atmospheric Research, calculates that even if every nation met its obligation to reduce greenhouse gas, the Earth would be only .07 degrees centigrade cooler by 2050.

* * * * *

.07 degrees centrigrade (.13 Fahrenheit) after decades of the draconian measures envisioned by Kyoto? Please — Certain politicians stifling themselves for a few years would accomplish THAT.

He’s Tired, and Has a Right to Be

Filed under: Taxes & Government,US & Allied Military — Tom @ 6:18 am

God help us if he and those like him ever decide they’re too tired, or that it’s not worth it, to continue.

Line of the Day: WSJ on Why Supply-Side Econ Works

Filed under: Economy,Taxes & Government — Tom @ 6:13 am

In a subscription-only editorial smackdown of Virginia Senator James Webb:

Class warriors like Mr. Webb often forget that the capital gains tax is voluntary. Investors can defer paying the tax for years by holding on to their stock. This creates what is called the “lock-in effect” that deters an efficient allocation of investment capital.

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Previous Post:
- Jan. 13, 2006 — Voodoo Schmoodoo

Great News, But I Doubt That It’s the Last Word

Filed under: Business Moves,Taxes & Government — Tom @ 6:08 am

From All Headline News (HT The Liberty Papers):

Santa Clara, CA (AHN)-In a landmark ruling in favor of bloggers and cyber journalists, a Santa Clara County Court defended the First Amendment rights of online journalists to protect their confidential sources, effectively giving web journalists the same protections afforded to traditional print journalists.

Apple Inc., had issued subpoenas to online tech journalists, including the publisher of AppleInsider.com and PowerPage.org, over reports the company claimed “violated California state trade secret law” which divulged so-called confidential information about not-yet released Apple products. Apple claimed the journalists were not entitled to First Amendment protections similar to those afforded to their print counterparts.

However, a California court disagreed, ruling against Apple and in favor of the defendants, who were represented by legal counsel from The Electronic Frontier Foundation (EFF). Apple was ordered to pay all legal costs associated with the defense, including a 2.2 times multiplier of the actual fees, bringing the total to about $700,000.

The ruling was hailed by web journalists and EFF staff members as a legal victory in the battle to defend and protect the rights of online journalists.

Great news, but this was a county court, so hold the end zone dance. I will be very surprised if Apple doesn’t appeal.

British GDP Growth, In Context

Filed under: Economy,Taxes & Government — Tom @ 6:03 am

BBC reported last week that the UK’s economic growth for the fourth quarter of 2006 was 0.8%. That is a very good quarter, as European countries don’t annualize each quarterly result — so the 0.8% would be the equivalent of the US reporting 3.2% (annualized) quarterly GDP growth.

That the best quarter the Brits have had in 2-1/2 years. The US has had several quarters better than 3% during that time, and an overall growth rate of well over 3%.

Compared to much of old Europe, though, the UK is a star, routinely beating out France and Germany in economic growth. Each has struggled in recent years to get above the 2% annual growth threshold, though it appears that 2006 will be somewhat better than that in both countries.

Today’s GDP report for the 4th quarter in the US will be released this morning. While the UK is gushing over 3%, we’ll be only mildly impressed at our number, which is expected to be about the same or slightly better.

Positivity: Dog Reunites with Family after Six Years

Filed under: Positivity — Tom @ 5:58 am

From St. Louis:

1/28/07-ST. LOUIS

Cujo was a frisky 7-year-old when he sneaked out of his owners’ south St. Louis yard in July 2000. Now, thinner and grayer and with a tale that would be fascinating if only he could tell it, the golden retriever is back with the Barczewski family.

“It’s a miracle,” Noreen Barczewski, 41, said at Friday’s reunion. “We found him!”

Six years and a side trip to Columbia can do a lot to a dog, but it was unmistakably Cujo. There was the heart-shaped patch of white on his forehead, the white fur on his toes, his manner of greeting people by rubbing against them cat-style.

Cujo’s homecoming was orchestrated by Dirk’s Fund, a golden retriever rescue group that has found homes for more than 900 dogs in the past decade.

After slipping away from home, Cujo somehow ended up 120 miles in Columbia in the home of an elderly woman. When the woman entered a nursing home, the dog was sent to the Central Missouri Humane Society in Columbia.

Bob Tillay, president of Dirk’s Fund, spotted the dog by then renamed Willy on an adoption Web site and arranged to have him brought to St. Louis.

“Sweet old man! He knows how to sit and shake,” the Web site cooed.

The dog’s ears were so infected he couldn’t hear. His coat was so matted he had to be shaved. And Dirk’s Fund paid to have some cysts removed.

The group eventually took Cujo/Willy to a nursing home in Clayton, to serve as a pet for residents. But things didn’t work out the dog needed a yard where he could run off the leash and his picture went up on the Dirk’s Fund Web site.

A week ago, Noreen Barczewski’s brother-in-law, Michael Barczewski, went to the Web site on a fluke. He’d been looking for a dog to adopt and saw the picture of the old dog with the white heart mark and white feet. Michael and his wife, Gail, had been the original breeders of Cujo. He recognized the dog immediately, and the reunion followed within days.

Now 13, Cujo had never been forgotten by the his original family especially Kayla, who was just 4 when the dog disappeared. Kayla insisted on hanging the retriever’s red felt Christmas stocking each year, confident he’d someday come home.

“I had something in my heart,” the fourth-grader said Friday, patting her pet’s soft golden coat, “and I knew he wasn’t gone.”

January 30, 2007

Some ‘Benchmarks’ for John Boehner (UPDATE: Boehner’s Office Responds)

Welcome Instapundit readers! Be sure to catch the Update below with reax to the e-mail I received from Boehner’s Deputy Communications Director.
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NOTE: This post will stay at or near the top for the rest of the day because of the topic involved.

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What in the world is John Boehner thinking (or is he even thinking)?

From Dean Barnett on Hugh Hewitt’s interview of John Boehner yesterday (painful audio here; Boehner interview is in first half):

Hugh asked Boehner what effect he thought his resolution (proposing a “benchmark measuring device” — Ed.) would have on the enemy. By way of an answer of sorts, Boehner spoke for a while but didn’t address the question.

If Boehner thought Hugh wouldn’t notice that he didn’t answer the question, he had another thing coming. You don’t get those degrees from Michigan Law School at the bottom of a Cracker Jack Box. Hugh asked his question a second time – what effect will the resolution have on the enemy? Again, Boehner spoke for a while without answering the question. Hugh asked a third time. Yet again, Boehner declined to directly answer the question.

SO WHAT ARE WE TO MAKE OF THIS? Two possible scenarios – one is that Boehner knows damn well what this will do for the enemy and yet he still wants to pass the resolution for political reasons. The other scenario, and frankly I find this one both more likely and more chilling, is that Boehner has never even considered, not for one second, the effect his resolution will have on the enemy. Hugh’s question caught him off guard and without an answer because to him, it seemed like a non-sequitur.

Such is the nature of the political vacuum that our politicians dwell in.

In the political vacuum, it’s sad to report that the normally reliable John Boehner is choosing to be the GOP’s Head Hoover, wanting a “bipartisan panel” requiring reports every 30 days and other such blather — even though General Petraeus and Defense Secretary Gates have said that EVERY resolution being considered is helping the enemy and undermining the war effort.

Ya want “benchmarks,” John? Here are a few — Forget the bleeping resolutions, panels, and 30-day reports, and take your pick of the following:

Rocky2win

WinningOnlyThing

Are we clear?

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UPDATE: “We win, they lose.” –

Reagan

UPDATE 2, 10:30 a.m: Don Seymour, Boehner’s Deputy Communications Director, sent me an e-mail (thanks to Don for doing so) that led, and then ended, with the following (in between was text of much of Petraeus’s Senate testimony) –

Hugh repeatedly said on the show, and you mention in the post, that “General Petraeus and Defense Secretary Gates have said that EVERY resolution being considered is helping the enemy and undermining the war effort.” Can you point me to their comments that specifically lump Boehner’s proposal in with the Biden and Warner resolutions that oppose the troop increase? We believe both have been clear that resolutions which oppose the additional troops that embody the President’s new strategy could embolden our enemies – neither has offered any similar comment aimed at the House Republican plan, which is an effort to help the President succeed.

….. The General has expressed his willingness to provide periodic updates to Congress – which is what we outlined in our proposal – and the President himself has said he is supportive of our effort. Unfortunately, Boehner did not communicate this on the show. Wish he would have. The House Republican proposal in no way suggests “disapproval of this new strategy” – it is nothing like the resolutions being offered by the Democrats and others who don’t believe our mission can succeed. Boehner believes the mission can and must succeed; he says – pretty much every time he speaks – that victory in Iraq is our only option. No one in Congress has been a bigger supporter of the President – on Iraq in general or his new strategy – than Mr. Boehner, and he has reiterated that time and time again.

Hugh’s point (and I agree) is not to have ANY resolution, but simply to support the president and preach that we WIN, period. Hugh rejected the idea near the end of his show yesterday that there is basis for distinguishing between “good” resolutions and “bad” resolutions, that Petraeus attempted to make any such distinction, or that Petraeus’s testimony about resolutions only related to those that might come out of the Senate.

I’m going to side with Hugh on this one, and do so by consciously deciding NOT to dig further, so I can explain why I believe Hugh is right — If I, among the 85% – 90% of electorate that is NOT going to dig into the details of each resolution, hear on the top-of-hour radio or quick-update TV news that the House GOP leadership wants to pass one that calls for benchmarks and 30-day updates (which is how it will be reported; calls for victory will be ignored by the press), what I would hear is that even the GOP side of Congress wants to micro-manage the war effort. Instinctively, we “the disengaged” are smart enough to know that simply by getting involved in such micromanagement, we inhibit full prosecution of the war effort. Our enemies know that too; this gives them comfort. Game, set, match.

Petraeus said he’ll report periodically anyway; let him do so in his own time, at his own discretion, and when any distraction from war prosecution is minimal to non-existent. There is no need for any House resolution.

UPDATE 3, 9:30 PM: Hewitt — “Benchmarks are the new ‘lockbox.’”

UPDATE 4, 11:30 PM: I agree with AMCGLTD (HT Instapundit) — The improvement in the news coming out of Iraq (or is it the reduction of lying reports coming out of Iraq from phoney-baloney unnamed or falsely-named sources [see italicized section at the end of this post]?) is very interesting. Could it be that the presence of the likes of Roggio, Ardolino, Yon, and Malkin are helping to keep the world’s press reports from Iraq honest, or less dishonest (for a while at least)?

If I’m Right, File This Under ‘Deserves Special Place in Hades’

I wanted to comment on this a week ago, but other events intervened.

Eason Jordan, in a NY Observer article by Michael Calderone, said that Michelle Malkin “writes obsessively on Iraq, and how wonderful things are over there.”

Besides being eminently patent nonsense, as any regular reader would agree, the irony of Jordan’s statement is too much to handle. You see, Eason Jordan runs Iraqslogger, an apparently non-obsessed web site that is nevertheless entirely devoted to events in, uh, Iraq.

You’ll note that the site’s banner tells us that it is about “Insights, Scoops & Blunders”:

IraqsloggerBanner

Apparently there’s no room in Iraqslogger (or desire) for “successes,” making Jordan appear to be one of the legion covering the war who is “obsessed” with our defeat.

Bryan at Hot Air takes it from there, which leads to my “Special Place in Hades” nomination: Eason Jordan invited Michelle Malkin to come to Iraq but was going to arrange for private security instead of embedding her with US troops. The relative danger of being with private security is exponentially greater than that involved with US embedding. IF (emphasis if) Eason Jordan was trying to convince Malkin to accept substandard security arrangements in full knowledge that she (and Bryan, who accompanied her) would be in much greater danger (having spent a great deal of time in Iraq, the chance that he knew of the greater danger is more than small), he is fully deserving of that Special Place in Hades.

‘Dog Bites Man’ Story of the Day

Filed under: Economy,Taxes & Government — Tom @ 1:50 pm

Democrats Unveil Massive Spending Bill

Non-Profits Fund For-Profit Drug Research: Why Is It Happening?

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 9:58 am

This subscription-only story in Friday’s Wall Street Journal on Friday is an eyebrow-raiser:

Why Nonprofits Fund For-Profit Companies Doing Drug Research
January 26, 2007; Page B1
Science has made paralyzed rats walk, cured mice of cancer and eliminated Alzheimer’s in more lab rodents than you can count. Human patients? Not so much.

“There’s frustration that developments from academic labs don’t get picked up by [drug and biotech] companies,” says Dayton Coles. As a board member of the Juvenile Diabetes Research Foundation, he has seen promising discovery after promising discovery emerge from the university labs that JDRF has funded, but none has turned into a cure for type-1 diabetes, which his daughter has.

Fed up with breakthroughs that fill journals rather than medicine chests, private foundations and charities that have traditionally funded academic scientists have started doing the once-unthinkable: writing checks for millions of dollars to for-profit companies.

It’s a sign of desperation. One reason there have been so few drug breakthroughs lately is that the profit motive actually works against the development of new pharmaceuticals. Drug companies suffer from blockbuster-itis, the belief that only billion-dollar almost-sure things need apply for development. As a result, even the most brilliant discovery may not be translated into a drug unless it has 10-figure sales potential. Also, short time horizons on the part of venture capitalists, who generally want to see their biotech bets pay off in three years, don’t mesh well with the lengthy drug-development process.

But wait a minute: Why does Big Pharma insist on blockbusters only? And why do VCs have short biotech/pharma time horizon? Answer: The Food and Drug Administration, whose approval process has long since become too unwieldy, too time-consuming, and too lacking in compassion.

Lacking compassion? Heck yes. The safe answer at FDA, even there is a 1 in a million chance of problems, is to say no — never mind that thousands of lives may be saved or the quality of life of thousands or millions of others immeasurably improved. Some kind of fundamental reform is needed — badly.

The CBO BS Meter Is Officially Off the Charts

Filed under: Economy,Taxes & Government — Tom @ 6:12 am

This item reported by AP last Wednesday was a rollicking knee-slapper (fifth paragraph):

The latest CBO figures, released Wednesday, also predict the budget could come back into surplus by 2012, although that would require Bush’s tax cuts to expire at the end of 2010 as under current law. The surplus for 2012 would reach $170 billion.

CBO, you guys are killing me. Taxes were CUT in 2001 and 2003. In 2004, 2005, and 2006, tax receipts skyrocketed because of increased economic activity and the free flow of capital (5.5%, 14.5%, and 11.7%, respectively).

So “obviously” you guys at the CBO think that the very tax cuts that have led to the last 3-1/2 years of strong economic growth and brought about the explosive revenue growth noted above just have to be allowed to expire — to bring the budget into balance. No one will keep their capital locked in once taxes on dividends and capital gains go way up again. No, of course not.

CBO, you need to take this act on the road. You’ll have ‘em laughing in the aisles. The only problem is, your audience won’t be laughing with you — they’ll be laughing AT you.

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UPDATE: The New York Times’ Edmund Andrews (probably requires registration) wants to be part of the act too (bold is mine) — “The nonpartisan Congressional Budget Office predicted on Wednesday that the federal budget deficit would shrink again this year and could actually swing into a surplus in 2012 — but only if President Bush’s tax cuts expire in 2010.”

This Is Not a Gag

Filed under: Taxes & Government — Tom @ 6:07 am

They told you Democrats would try to bring back the draft. But did you listen? Nooooo.

Yep — Ohio’s new Secretary of State Jennifer Brunner is serious about making the Buckeye State the first to draft poll workers.

Given that the pool of workers would almost certainly be registered voters, Ms. Brunner appears to have hit on the perfect idea for reducing the voter-registration rolls and reducing participation in the democratic process. Because of that, she’ll probably be able, in a few short years, to get by with drafting fewer poll workers.

Brilliant. (/sarcasm)

A Sad, Uninformed, Spiteful Rant

Filed under: MSM Biz/Other Ignorance,Taxes & Government — Tom @ 6:02 am

Memo to Toledo Blade:

If you’re working on becoming a free alternative newspaper, and abandoning your claim to being one of Toledo’s great assets (yes, folks, they said this about themselves at least once in pre-Internet times), keep on publishing poorly argued, America-bashing, white-stereotyping, racist rants like this.

Oh, and to op-ed writer Lafe Tolliver:

If you’re going to accuse whites of singlehandedly attempting to overturn Brown v. Board of Education this summer, could you at least give your readers the courtesy of telling them which case is being brought before the Supreme Court that will supposedly do that?