December 26, 2008

Latest Pajamas Media Column (‘Obama’s Race Against the Economy’) Is Up (UPDATES: Other Favorable Signs; Thoughts on NBER’s Recession Call)

It went up here yesterday.

The sub-headline is:

If a recovery begins too soon, a massive “stimulus” package might not be needed. Democrats consider that a bad thing.

It will go up tomorrow morning at BizzyBlog (link won’t work until then) when the blackout expires. Thanks to Instapundit for linking to it at PJM.

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UPDATE: Since I submitted the column on Monday morning, other favorable signs have appeared.

First, the barrel price of oil has dropped below $36. Around here in Greater Cincinnati gas prices are already in the $1.40s at many stations, may drop into the high-$1.20s; the current average around here is $1.59 (go to cincygasprices.com for the latest info).

Second, mortgage applications are way up, per the Mortgage Bankers Association:

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 19, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 1245.4, an increase of 48.0 percent on a seasonally adjusted basis from 841.4 one week earlier. On an unadjusted basis, the Index increased 50.2 percent compared with the previous week and was up 124.6 percent compared with the same week one year earlier.

The Refinance Index increased 62.6 percent to 6758.6 from the previous week and the seasonally adjusted Purchase Index increased 10.6 percent to 316.5 from one week earlier.  The Conventional Purchase Index increased 17.7 percent while the Government Purchase Index (largely FHA) decreased 3.4 percent.

The four week moving average for the seasonally adjusted Market Index is up 28.8 percent. The four week moving average is up 4.5 percent for the seasonally adjusted Purchase Index, while this average is up 42.0 percent for the Refinance Index.

The refinance share of mortgage activity increased to 83.2 percent of total applications from 76.9 percent the previous week.

Tempering the enthusiasm, it could be that the year-over-year “ups” are from crater-like lows last year.

Third and most important, consumers bought a lot more stuff in November. No kidding. The news, almost universally headlined as bad, was really very good (Uncle Sam’s underlying news release is here):

The 0.6 percent drop in consumer spending followed an even larger 1 percent fall in October. However, the steep plunge in gasoline prices, which is actually good news for consumers, made the declines look worse. Excluding price changes, consumer spending would have dropped by 0.5 percent in October and actually risen by 0.6 percent in November. The November increase excluding inflation was the best showing in more than three years.

In sum, consumers spent less money on gas at the pump, and used some of their savings to buy other things, i.e., they bought a lot more stuff, the most they increased their buying of more stuff in three years!

That sort of escaped general notice, didn’t it? Geez people, all that matters is what the numbers look like in real (i.e., inflation-adjusted) terms.

“Ever-helpful” Martin Crutsinger of the Associated Press went on to say that:

Still, economists (unquoted, of course — Ed.) think the overall trend for consumer spending is down, given the problems facing the economy including the longest recession in a quarter century, a severe financial crisis that has cut off access to credit for millions of borrowers and a massive wave of job layoffs.

No Martin, what anyone would expect, based on November’s result, is that as long as gas prices keep dropping (as they are doing, down around here on a daily weighted-average basis of about 5%, and down about 10% in raw terms from Nov. 30), the data will probably show that consumers bought even more stuff in December, just in time for Christmas — as long as they objectively looked at their own situations and didn’t listen to you and other media mourners.

UPDATE 2: Y’know, I’m really tired of this “credit cutoff” mantra, which Crutsinger dutifully invoked. Where are the specific individual horror stories of people with good credit who have been out in the credit market lately who can say that they can’t get financing for a car or a home or retail credit? Until I see ‘em, I have no choice but to assume they don’t exist.

UPDATE 3: Oh, and one more thing — I’m not buying Crutsinger’s line that this is “the longest recession in a quarter century.” I still think that the NBER’s recession call earlier this month is “full of crap” — that is, premature and not supported by the evidence.

The evidence that the recession started in December 2007 is weak. Meanwhile, the evidence that a normal-people-defined recession (two consecutive negative quarters of GDP) started as the POR Economy really took hold in the third quarter, and continued into most of the fourth (to the point where the fourth will come in negative), borders on overwhelming.

Tentative but strong evidence that NBER is more than likely to be proven wrong, even by its own judgmental definition, is very simple: No “official” (cough, cough) recession since 1950 has ever entirely contained two consecutive individual quarters where economic growth was positive, as was the case in the first (+0.9%) and second quarters (+2.8%) of this year. Specifically:

  • July 1953 – May 1954 — Nope
  • August 1957 – April 1958 — Nope
  • April 1960 – Feb. 1961 — Nope
  • Dec. 1969 – Nov. 1970 — Nope
  • Nov. 1973 – March 1975 — Nope
  • Jan. 1980 – July 1980 — Nope
  • July 1981 – Nov. 1982 — Nope
  • July 1990 – March 1991 — Nope
  • March 2001 – Nov. 2001 — Nope (this is the recession that the NBER originally thought had started in the second half of 2000. Then they conveniently changed their minds).
  • But “somehow,” Dec. 2007 to present is “Yep.” (Update, as of July 5, 2013: After revisions, GDP now shows an annualized 1.8% decline in the first quarter followed by a 1.3% increase in the second quarter.)

Further according to Macroeconomic Advisers’ (MEA’s) Monthly GDP chart (saved at my host for future reference), after growing slightly in December 2007 and January 2008, followed by one month of significant contraction in February, the economy grew at an annualized rate of 2.1% from March through June of this year (at link — $11.825 trillion divided by $11.583 trillion, which is growth of 2.1%).

The NBER apparently has no doubt that a recession was in progress during that entire February-June period of 2.1%. What are these people smoking?

Unless Uncle Sam’s or MEA’s growth numbers get downwardly revised down the road (which NBER obviously doesn’t know; so why make the call?), their recession call is, as stated, “full of crap.” Even based on the data as it now exists, if the NBER wants to make the very shaky claim that a recession started in late 2007, it’s going to have to acknowledge that we got out of it in the Spring of 2008, and then went back in again.

Final proof will have to await other revised numbers that really shouldn’t be considered by anyone (because, for normal people, the absence or presence of a recession should entirely depend on the presence or absence of real economic growth), but that NBER nonetheless considers.

RIP, ‘Net Neutrality’?

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 7:27 am

Here’s an excerpt from a Dec. 19 Institute for Policy Innovation “Tech Bytes” e-mail that I expect will go up on its web site shortly (their directory of Tech Bytes commentaries is here):

The Issue Formerly Known as Net Neutrality

It has been comforting recently to be reminded that, while Google’s motto may be “Don’t be evil,” the company’s operational rule is actually “Don’t be stupid.”

It turns out that Google, like every other company, makes rational decisions as it seeks to deliver products and services to its customers and deliver value to its shareholders. And while activists have looked to Google to lead them in their quest for a magical virtual Utopia on the Net, it turns out that Google is bound by the same physical and economic laws as the rest of us.

This is progress.

….. we find in The Wall Street Journal that Google also realizes that Internet bandwidth, like everything else, is a finite resource, that it costs money to build out networks, and that Google has to partner with bandwidth providers and optimizers to ensure that Google’s users continue to have useful experiences.Google recognizes this despite the hopes of radical utopian socialists who thought Google would lead them as they railed against physical and economic laws to create a world of cost-free access to an infinite variety of incredibly creative content and services, produced at great investment of time and capital but available without anyone (especially the network providers) making any evil “profit.”

This campaign was waged under the banner of “net neutrality,” and the recognition by Google and others of the need to manage and maximize network efficiency has gotten us to the point where we can finally set aside the term “net neutrality” as obsolete.

We can, uh, “hope.”

Of course there needs to regulation (AND oversight) to prevent anticompetitive behavior, but the real goal of “net neutrality” came down to preventing companies from trying to gain competitive advantage through targeted investments in network capability. That would have been the surest way to prevent improvements in overall Internet efficiency and functionality, because no one would have invested anything.

It’s like telling a computer chip maker that they can’t market a faster chip, or one that handles graphics better, unless every other chip maker can have it. I hope readers see that as absurd.

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Selected previous related posts:
- Feb. 21, 2007 — To ‘Net Neutrality’ Advocates: Where Is the Enhanced Internet Going to Come From?
- Dec. 29, 2006 — Net Neutrality? How About Full Net Functionality?
- Nov. 21, 2006 — Excerpt of the Day: Don Luskin Updates the ‘Net Neutrality’ Non-Arguments
- Aug. 28, 2006 — Ebay, Homeschoolers, and “Net Neutrality”
- Aug. 12, 2006 — Doesn’t Sprint’s WiMax Announcement Blow Holes in the “Net Neutrality” Arguments?
- June 25, 2006 — When Will We Understand That Net Neutrality is Really Net Regulation?
- June 19, 2006 — More Arguments against “Net Neutrality”
- June 12, 2006 — Luskin on “Net Neutrality” — Bullseye! (Update: WaPo Agrees, with Caution)
- June 9, 2006 — This Is Pretty Much Where I Am on Net Neutrality
- June 7, 2006 — Internet Wall Of Shame Member Google Lobbies for ‘Net Neutrality’
- June 1, 2006 — Steve Forbes on Net Neutrality: “A net disaster”
- May 25, 2006 — Neutrality, Neuschmality: My Less-Than-Totally-Rational But Still Most Likely Correct Position

Things I’d Like To Post About Today ….. (122608, Morning)

Filed under: TILTpatBIDHAT — Tom @ 6:00 am

….. But I Don’t Have Any Time For:

  • National treasure Brit Hume signed off as anchor of Fox News’s Special Report for the final time Tuesday night. He defined fair and balanced as no one on any other network did. Fortunately, he’ll be around from time to time as an analyst. The more often the better. The video clip at the link demonstrates that his passion for fairness (“it’s a skill) will live on in those he clearly trained well.
  • Two stories from Tuesday make me wonder if some local and state governments have their priorities right on handling their highways. The priorities should be: Safety first, including necessary snow and ice clearance in bad weather; maintenance second; improving existing roads third; and building new ones fourth. Seattle is clearly not doing Number One. Further, on Tuesday evening, the highway department in Northern Kentucky didn’t do Number One either.
  • Here’s more on how the earth is cooling, and thus how globaloney (the belief that the earth is warming catastrophically, that humans are significantly contributing to it, and that radical changes in how society must occur if we are to save ourselves) is, well, baloney. Possibly related?Seals return to the Belgian coast.”
  • Now here’s something interesting (to me; your mileage may vary) — Gawker (HT Instapundit) has screen caps showing that the New York Times’s local City Room blog is deleting comments at posts about Senator-in-waiting Caroline Kennedy that ask whether or not she and Times Publisher “Pinch” Sulzberger are romantically involved. It so happens that the Times’s City Editor is one Wendell Jamieson, the very cretin who wrote the preposterously scathing critique of “It’s a Wonderful Life” in the Times last week. In it, he said that the mythical Pottersville with its gambling and moral rot was more fun than George Bailey’s boring Bedford Falls. Well if that’s so, Mr. Jamieson, what’s there to be ashamed of in discussing Caroline and Pinchy?
  • General Motors’ Moraine Plant near Dayton closed on Tuesday. Note one last time that this was an IUE union plant that was singled out for closure even though less productive UAW plants were spared — for now.
  • With NPR providing the microphone, Dan Rather is still insisting that that the Rathergate documents have legitimacy — “Nobody has ever proven the documents to be anything but what they purported to be,” Rather says. “What the documents stated has never been denied — by the president or anyone around him.” Even if that’s true, there was no need for an answer, because, as Charles Johnson at Little Green Footballs demonstrated for the umpteenth time, they were, and will always remain, bogus. And since the documents were, and will always remain, bogus, who cares “what they stated”?
  • Thomas Sowell’s column Tuesday about how the Great Depression came about and persisted makes an excellent overall point that I can summarize in a soundbite (my words): “Barack Obama’s stated intentions for 2009 are to take the worst of the 1930-1932 Herbert Hoover, combine it with the worst of the 1933-1941 FDR, and expect a different result.” Read the whole thing.

Positivity: Lightning survivor’s ordeal

Filed under: Positivity — Tom @ 5:59 am

From Idaho (video is at link; the CNN transcript referred to is here, where the related interview starts about 40% of the way through):

Updated 05:42 PM MST on Wednesday, December 19, 2007

We’ve followed her incredible progress month by month — the local lady struck by lightning.

Neither doctors nor family member thought this would be a story of survival.

It’s one so rare and remarkable it didn’t take long for the networks to see our exclusive local coverage and then focus the national spotlight on Boise’s Lara Eustermann.

Last night she and her mother, who saved her life, appeared on Larry King Live. His show was all about survivors.

In this case — the survivor of a direct lightning strike, cardiac arrest, burns and a coma.

“So what do you make of this as you now relive it afterward?” asked Larry King.

“It is so weird to see the videos and talk with my family and hear about what went on. It just amazes me and it’s so hard to believe, but when I can’t get out of bed in the morning it comes right back to me,” said Lara Eustermann. ……

Go here for the rest of the story.

For Zimbabweans, A Cow Dung Christmas; AP Still Partially Deflects Blame from Mugabe

Filed under: Economy,Health Care,MSM Biz/Other Bias,Taxes & Government — Tom @ 12:01 am

MugabeHands1208I held this item for a couple of days after I found it because I didn’t want to spoil Christmas. Readers can fairly criticize me for waiting.

It is truly astonishing how little attention this two week-old story has received (Warning: Very disturbing content; the underlying news at caritas.org is here; bolds are mine)

Out of food, Zimbabweans eating cow dung

Harare, Dec 10, 2008 / 08:01 pm — Caritas Internationalis is warning that the crisis in Zimbabwe is so grave that people facing crushing food shortages are mixing cow dung with their food.

With pressure continuing to mount on President Mugabe to relinquish his hold on power, Zimbabweans are suffering the consequences of his government’s policies.

Besides the lack of food, people are also suffering a cholera epidemic and crippling hyperinflation.

Caritas Internationalis Secretary General Lesley-Anne Knight reports that “people in Zimbabwe are dropping dead on the streets from Cholera. They’ve witnessed people mixing cow dung with what’s left of their food to make it go further. This is poverty at its most dehumanizing.”

….. A Caritas survey in October found 70 to 90 percent of households going hungry and the remainder on the brink of starvation. At least 5.1 million people are facing starvation out of a population of 13 million people. Additionally, nearly 14,000 cases of Cholera have been reported.

Knight also commented on the political crisis, saying, “Zimbabwe’s political impasse can continue no longer. An effective government that can rectify the policies that have put the country into this position must be established.

It’s obvious that the Catholic News Agency, the source of this story, is closer to the awful facts on the ground than the Associated Press. Two AP stories, one on December 23 by Angus Shaw and the other unbylined report on December 25, won’t even clearly state why this is happening. Though what the stories do tell us is still awful, it waters down the impact, especially when compared to what CNA has (bolds are mine; links are dynamic and/or short-lived):

December 23 (“Mugabe rejects US, British calls to step down”; saved here for future reference)

Zimbabwean President Robert Mugabe said Tuesday the U.S. and Britain are “stupid” to think he shouldn’t be part of a unity government.

The top U.S. diplomat for Africa said over the weekend that Washington can no longer support a power-sharing proposal that leaves Mugabe president, and Britain’s Africa minister backed the U.S. stance on Monday.

….. (Mugabe) has faced renewed criticism because of a humanitarian crisis that has pushed millions of Zimbabweans to the point of starvation and spawned a cholera epidemic that has killed more than 1,000 people since August. Food, medicine, fuel and cash are scarce.

Critics blame Mugabe’s policies for the ruin of what had been the region’s breadbasket. Mugabe blames Western sanctions, though the European Union and U.S. sanctions are targeted only at Mugabe and dozens of his clique with frozen bank accounts and travel bans.

++++++++++++++++++++++++

December 25 (“Lawyer: Zimbabwe activist’s location unknown”; saved here for future reference)

A Zimbabwean peace activist held in an alleged plot to overthrow President Robert Mugabe has gone missing again, a leading human rights lawyer said Thursday. Human Rights Watch called for the immediate release of Jestina Mukoko saying the charges she faces “seem politically motivated.”

….. Mugabe has faced growing pressure to step down. Charging Mukoko, the respected head of a group known as the Zimbabwe Peace Project, is a sign he is not prepared to yield after nearly three decades in power.

….. Mugabe, 84, has ruled the country since its 1980 independence from Britain and refused to leave office following disputed elections in March.

Food, medicine, fuel and cash are scarce in Zimbabwe, and critics blame Mugabe’s policies for the ruin of what had been the region’s breadbasket. Mugabe blames Western sanctions, though the European Union and U.S. sanctions are targeted only at Mugabe and dozens of his clique with frozen bank accounts and travel bans.

….. Millions of Zimbabweans are in need of food aid and a cholera epidemic has killed more than 1,100 people.

You see that CNA unequivocally pointed to “the consequences of (the Mugabe) government’s policies.” But AP gave him undeserved wiggle room two separate times. CNA reported that cow dung has become part of many Zimbabweans’ diets two weeks ago; though it should know of this situation, it appeared nowhere in either of AP’s reports. CNA cited “at least 5.1 million” facing starvation two weeks ago; AP only told us of “millions ….. in need of food aid,” which I believe most people tend to think of as “two or three.”

To its credit, AP does have a month-old video on how many Zimbabweans have resorted to eating crickets, rodents, and termites to stay alive. But the video can only be found at AP’s home site; readers at other sites carrying AP reports will have no idea of what Zimbabweans have to do to keep from starving.

Coverage of the true extent of the crisis in the rest of the press has been scant.

A late Thursday evening December 9 through December 25 Google News search on [Zimbabwe "cow dung'] (typed as indicated within brackets) returned only 22 items, with all duplicates included:

  • Seven of them go to a December 12 Bloomberg News story where Mugabe denied the existence of cholera.
  • Two go to WorldNetDaily on December 21, where commentator Barbara Simpson quotes a doctor-priest who says that “the situation has reached ‘Auschwitz proportions.’”
  • There’s a Fort Worth Star-Telegram editorial that is also introduced at at McClatchy’s home site. That editorial ends with mind-number stats about the country’s plight: Life expectancy – 44.3 years; Fertility rate – 3.72 children per woman; Adults with HIV/AIDS – 24.6 percent; Unemployment rate – 80 percent (2005 estimate)
  • All other search results are from foreign or relatively unknown sources.

All other search results are from foreign or relatively unknown sources.

The same search at the New York Times came up empty. The Washington Post? Nothing. LA Times? Nada.

Maybe the Catholic News Agency should become the real “Essential Global News Network” that the Associated Press only pretends to be. It’s obvious if you compare CNA’s two-week-old story from Zimbabwe with the two recent ones from AP that the wire service isn’t up to the challenge of telling us what’s really happening, and will, even as people die by the thousands, sanitize what it tells us based on what appear to be inexplicable sympathies.

(Image was found at Alamo City Pundit.)

Cross-posted at NewsBusters.org.