September 20, 2010

Breitbart 1, Astroturfers 0

Filed under: Taxes & Government — Tom @ 11:40 pm

Outnumbered at least 100-to-1, watch what happens:

Wow.

AP Headline on O’Donnell ‘Seeking’ Establishment GOP Help Doesn’t Match Content

http://i739.photobucket.com/albums/xx40/mmatters/ODonnellI suspect that headline writers at the Associated Press would be pleased as punch if readers stopped at their capsulization of Randall Chase’s story and didn’t read it.

The headline at the AP’s main site currently reads: “Surprise Del. primary winner seeks GOP support.”

Perhaps they’re hoping that Christine O’Donnell’s Tea Party base will be disappointed at the impression the headline gives, namely that O’Donnell is going to the Republican Party establishment for help, and in the process presumably compromising sensible conservative principles.

Well, that hope naively assumes that informed readers trust the factual basis of AP headlines. If they trust AP headlines as much as the rest of the press’s and Big Three TV networks’ output, that’s mostly not true (i.e., only 25% have a great deal of trust). In this case, Chase’s report makes it pretty clear that a lot of heavy hitters and strategists in the GOP are actually coming to her:

Some members of a GOP establishment that once shunned tea party favorite Christine O’Donnell are getting behind her now that she has won the Republican Senate primary, offering help in the form of cash and experienced staffers.

A young spokeswoman who has been thinking of going back to college is no longer handling media calls. Instead, reporters are referred to a public relations firm run by longtime GOP operative Craig Shirley, who has done communications work for the Republican National Committee and a political action committee that spent $14 million to help re-elect Ronald Reagan.

O’Donnell is also getting help from Tom Sullivan, a health care industry executive who worked for the Republican Congressional Campaign Committee in 1990 and later as a political consultant, with clients such as former Republican congressman Dick Armey.

… But some experienced hands with Washington ties are pitching in, and contributors have poured in more than $2 million to fund her November contest against Democratic county executive Chris Coons. Sullivan said Monday that the campaign recently brought some big guns on board to help with fundraising, though he declined to identify them.

If there’s any evidence that O’Donnell has been “seeking” establishment support, it’s not present in any of the excerpted paragraphs, and it’s at best only vaguely hinted at in the rest of Chase’s piece. Instead, it’s pretty clear for the most part she has people joining her.

Headline spinners at the AP can’t change that.

Cross-posted at NewsBusters.org.

NBER Agrees with Normal People on End of Recession, Remains Wrong About Its Beginning (with Additional Proof)

Filed under: Economy,Taxes & Government — Tom @ 3:34 pm

The recession as normal people define it began in July 2008 and ended in June 2009.

The recession as the National Bureau of Economic Research declared it began in December 2007 and, just announced today, ended in June 2009.

So NBER got it half right. It remains wrong about when the recession began, and unless there are either significant downward adjustments to the relevant data down the road, or a retraction on their part, their assessment will remain so for all time by at least four and more likely six or seven months.

To remind readers, here, largely in their own words using their own standard, is why the NBER got their declared beginning wrong.

Here is their standard:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

First, let’s look at “production,” the primary overall measurement of which in terms of goods AND services is Gross Domestic Product (GDP). During the seven additional months in which the NBER says we were in recession (December 2007 through June 2008), reported GDP growth was as follows:
- 4Q07, +2.7%
- 1Q08, -0.7%
- 2Q08, +0.6%

If there’s a “significant” decline in there, I don’t see it. Even during the first half of 2008 in isolation, there’s still a tiny increase.

Now, let’s look at employment:

SAemployment2000to0810 NSAemployment2000to0810

Again, one has to consider the word “significant” in NBER’s definition.

In December 2007, the first month of its alleged recession, seasonally adjusted employment as shown in the first chart increased. During the first quarter of 2008, the seasonally adjusted decrease was clearly small, amounting to a “whopping” 0.069% of the workforce. The seasonally adjusted numbers began getting significantly large in April.

The not seasonally adjusted (NSA) numbers in the second chart also tell an important tale. Though the NSA numbers clearly lagged previous years, during the first four months of 2008, there isn’t a true “code red” result until May (possibly) or June (definitely). So if you’re looking for “significant” decline in employment, it didn’t happen until one of those two months.

Here, in their own words, are NBER’s own internal contradictions relating to “real income” and other indicators:

The income-side estimates (of Gross Domestic Income) reached their peak in 2007Q3, fell slightly in 2007Q4 and 2008Q1, rose slightly in 2008Q2 to a level below its peak in 2007Q3, and fell again in 2008Q3.

Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June.

The Federal Reserve Board’s index of industrial production …. peaked in January 2008, fell through May 2008, rose slightly in June and July, and then fell substantially from July to September.

Sorry, guys. None of those impacts is “significant.”

What’s more, two key measurements relating to production directly and forcefully contradict NBER’s final excerpted assertion about production, and another data set contradicts NBER’s assertion about incomes.

First, production (Census Bureau source page; see “Historic Timeseries – NAICS” spreadsheets for “Shipments” and “New Orders”):

TotalMfgNewOrdersAndShipmts2007and2008

From November 2007, just before NBER’s alleged recession began, until June 2008, the last month before the recession as normal people define it began, both manufacturing new orders and the total value of shipments increased by what most people would consider pretty significant amounts and percentages (I confirmed with the Census Bureau that these are seasonally adjusted numbers – the “A” at the beginning of the abbreviation stands for “Adjusted”).

For NBER’s benefit, this is the kind of data one sees during an expansion. Yes, there was a decline in both numbers in early 2008, but they both recovered to a level that was higher than the previous November. In other words, June 2008 represents the true peak for these values. If you want to see when the REAL kick-in-the-pants recession began, look at the Census Bureau’s rock-like drops in August 2008 and subsequent months for shipments and orders. That of course happens to be shortly after the Era of Business Uncertainty yours truly has referred to as the POR (Pelosi-Obama-Reid) Economy for over two years began.

The NBER relies on production data from the Federal Reserve, which shows downward trends during the period indicated, instead of the Census Bureau. In the absence of someone making a convincing case why the Fed’s data is better, the worst anyone could say after seeing the two sets of results is that the economy was really, really flat until mid-2008 — but not in a recession.

Now, income:

BEAquarterlyIncomeStatsQ107toQ308

Inflation-adjusted disposable income kept going up until the third quarter of 2008. Inflation-adjusted personal income excluding transfer receipts didn’t drop until the second quarter of 2008. No case for a recession during the first quarter of 2008 emerges from this income data; perhaps one can be made for it beginning in the second quarter, but it would be pretty weak in any event.

So, let’s summarize (and add a little):

  • GDP — didn’t begin a long-term or significant decline until 3Q08.
  • Employment — became problematic at what would be considered a recessionary level in May or June 0f 2008.
  • Industrial order and sales — convincingly up according to the Census Bureau through June 2008, dropping steeply after that. Federal Reserve data largely contradicts this. At best, it’s a wash, but the burden of proof is on those who would say the Fed is somehow more right than the Census Bureau.
  • Institute for Supply Management’s (ISM’s) Non Manufacturing (i.e., “Services” index; data is at this link) — was in serious contraction in January 2008, went barely into expansion from February through May, went barely in contraction during the next two months, and dropped seriously after that. That’s not impressive, but it’s also not recessionary.
  • ISM’s assessment as to whether the economy was growing — stayed positive until roughly August 2008 (can’t find data right now, but I definitely recall that the assessment stayed positive until at least that month). This completely contradicts NBER.

Thus, the case that the economy was in recession from December 2007 through April 2007 hasn’t been made, and probably will never be, because there’s not enough support for the claim. The case that the economy might have been in recession during May and June is weak at best. The case that the economy was in recession from July 2008, shortly after the inception of the POR Economy, until June 2009 is of course overwhelming — which is why we should be relying on the “normal people” definition of a recession and not the arbitrary constructs of academics who possibly have agendas other than presenting the truth.

Marc Ambinder Fulfills Own Prediction, Provides Messaging Assistance to Dems: ‘Go After Palin!’

CBS2010CampaignSusidOfDNCI didn’t know about what follows when I posted last night (at NewsBusters; at BizzyBlog) on Atlantic politics editor and CBS Campaign 2010 “Chief Political Consultant” Marc Ambinder’s September 15 prediction that “The media is going to help the Democratic Party’s national messaging.” Though drop-dead obvious, I still found it interesting that someone in Ambinder’s position would admit it.

It turns out that only two days after Ambinder put forth his prediction, he proactively made it come true.

Despite the inquisitive title of his September 17 post (“Will the White House Play the Palin Card?”), Ambinder clearly believes that going after Sarah Palin should be part of the White House’s and Democrats’ strategy during the next seven weeks.

It’s enough to make you wonder if he has already written his CBS election post-mortems. Behold Ambinder’s cluelessness:

… when Tea Partiers are in “elect someone like Christine O’Donnell mode,” Democrats sense an opportunity. Simply put, the crazier the Tea Party seems, the more Democrats can link the Republican agenda to its source of energy, which in turn fires up rank-and-file Democrats.

There is, in fact … someone whose very name provokes disgust among Democrats, someone whose name identification is 100 percent and whose ubiquity is extremely useful.

That person is Sarah Palin. All that’s required is for the President to utter her name a couple of times. The Fox-Rush-Redstate nexus would explode. Palin would bask in the attention and respond. And respond. And respond.

… Elevate Sarah Palin? How much higher can she go? Everyone knows her. Some of Obama’s advisers have argued in the past that the attention paid to Palin by Americans in the last stages of the 2008 campaign is one reason why Obama was able to win so cleanly.

Palin and the Tea Party movement are not the same thing. The movement, evolving out of movement conservatism, is principally about government and the economy. Palin revels in the culture wars. But when that part of the Tea Party that does care about social issues becomes the story, linking the two in the public’s mind is easier.

Anyone who thinks that Palin hurt John McCain’s campaign wasn’t watching the same election as everyone else.

McCain was suffering from intense conservative disinterest until he picked Palin. When he did, she energized the sensible, conservative base of the party as no one ever has. The fact that McCain’s people then seemingly did all they could to water her down in the ensuing weeks is primarily McCain’s fault, not hers. Despite that, residual affection for Palin is what prevented McCain’s 7-point loss from going into double digits, and, for better or worse, arguably salvaged his ability to continue on as a U.S. Senator.

Despite well over a year of exposure to it, Ambinder betrays a total misunderstanding of the Tea Party movement. Fiscal issues are currently very important, but if he thinks there’s a big divide within the movement on social issues, he’s got another thing coming. The overriding issue is, to steal from Mark Levin, liberty versus tyranny. There is probably no better example of how all of the supposedly divide-creating issues (fiscal, social, constitutional) tie together under the liberty vs. tyranny banner than Palin’s completely accurate, totally courageous assertion that statist health care will inexorably lead to “death panels” — and that they are designed into legislation this Congress has already passed and this President has already signed.

So let me get this straight: During the next seven weeks, Marc Ambinder will be CBS’s “Chief Political Consultant” on Campaign 2010. He’s part of a team that will, in the network’s own words, provide “reports and political analysis (that) will be prominently featured across all CBS News broadcasts and platforms on the run-up to election night 2010 on Nov. 2.”

At the same time, Ambinder has not only clearly chosen sides, but is actively providing “messaging” advice to which he hopes Team Obama and the Democrats pay heed. Assuming he continues to do this, Ambinder’s contributions to CBS’s “reports and political analysis” will then necessarily involve evaluating first, whether the home team followed his advice, and second, whether following or not following his advice was successful.

Of course, you’ll never hear Ambinder tell his audience that “This is (or isnt’) what I suggested.” No-no-no. CBS will present its “Chief Political Consultant” as an impartial, disinterested observer.

What horse manure. And they wonder why their ratings continue to drop.

Cross-posted at NewsBusters.org.

How Cash for Clunkers Helped Conk the Economy

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 7:17 am

http://i739.photobucket.com/albums/xx40/mmatters/CashForClunkersFrom the abstract of “The Effects of Fiscal Stimulus: Evidence from the 2009 ‘Cash for Clunkers’ Program,” here is the conclusion from business profs Atif Mian and Amir Sufi that it accomplished virtually nothing (HT to a Friday Wall Street Journal editorial; bolds are mine throughout this post):

We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.

The Journal notes the clever methodology the profs used:

It’s impossible to test what would have happened without cash for clunkers because there’s no control group. But Messrs. Mian and Sufi do the next best thing by looking at how clunkers were distributed around the country. Comparing high-clunker areas to low-clunker areas—and thus the areas that were more “stimulated”—allowed them to measure relative economic outcomes.

Lo, Messrs. Mian and Sufi found in their paper for the National Bureau of Economic Research that there was “no noticeable difference” in economic outcomes among the 957 metropolitan areas they studied. They did detect an economic blip in cities where the auto industry is concentrated but note that the rebound can’t be disentangled from the Chrysler and GM bailouts.

Thus, the real clunker was the program itself.

I would argue that the evidence present demonstrates a high likelihood that “C4C” was a net detriment to the economy, specifically because the artificial boom and bust cycle it created interrupted the slower but much steadier progression a more typical recovery might take. C4C probably produced a nice chunk of overtime for UAW workers at the Big Three — though not as much as thought, at least at GM and Chrysler, as the Japanese transplant companies benefitted disproportionately. But that was followed by the slump Mian and Sufi documented. This letdown may well have had broader psychological effects, contributing to consumer-confidence numbers that have yet to rebound, and retail sales numbers that have generally been unimpressive.

My guess is that some of the automakers’ suppliers were especially hard-hit during the post-C4C period, possibly to the point of having to lay people off or reducing their work week.

Then there’s the impact on the used car market:

The Cash for Clunkers program – which was supposed to help boost new auto sales – is actually crushing sales at used car dealerships nationwide.

“That basically destroyed the used car industry,” said Alan Behzad, General Manager of Alan’s Auto Network in Reno. “It took probably a few million great used cars out of the market and crushed them. And that was the stuff that we were hungry for at the auctions and were fighting tooth and nail just to get, but they’re not there anymore.”

Used car dealers say they’re paying about 20-percent to 30-percent more for their inventory and many are passing a percentage of those higher prices on to customers. On the used car lots, you might see more vehicles with higher mileage, since dealers can’t afford to be as choosy.

Less well-off people — disproportionately the poor and minorities, to borrow a stock phrase from the Washington Post — who can only afford to buy used cars and get forced into the market because their current vehicles have given out are clearly among the hardest hit by this eminently foreseeable side effect. Thanks, Barry.

Oh, and here’s another added element (bolds are mine):

One of the provisions of “cash for clunkers’ was that if you wanted to lease a new vehicle and still get the incentive — $3,500 or $4,500 — you had to sign a lease that was a minimum of five years long. According to the Miami-based Leasetrader.com, which acts as an intermediary between consumers who want to get out of a lease and those who want to lease a vehicle, some “clunkers” customers are already looking for a way out of long leases. Many are finding that even with the rebate, they are stuck with a big monthly payment for at least 60 months.

John Sternal, Leasetrader.com vice-president, said that while fewer than 20 percent of the 700,000 “clunkers” transactions were leases, his company is seeing a surprising number of lease customers looking to get out of them early.

“Around April or May of this year, we started to get a couple of calls a week from people who were saying, ‘Hey, I did this clunkers deal, got a great rebate on it, and now that the dust has settled, I’m still left with a used car and 40-some-odd months left to go on the contract.’”

Although no figures are available, Sternal said the number of calls like that “have definitely increased” since May. Many people, Sternal said, have either lost their jobs, or are afraid they will. Others simply bit off more than they can chew, and need to reduce their bills.

So what can they do now? Unfortunately, not much.

In so many ways, a supposedly virtuous program has ended up viciously contributing to a “Recovery Summer” that never happened.

Positivity: Facing crash, Vancouver man sacrifices self to save pregnant wife

Filed under: Positivity — Tom @ 5:57 am

From Vancouver:

Sep 19, 2010 / 05:06 pm

Brian Wood, a 33-year-old resident of Vancouver, B.C., was killed in an auto collision on September 3, when the driver of an oncoming SUV lost control of the vehicle and crossed the road into his lane. His wife, Erin Wood, said that Brian acted just in time to save her, and their unborn child expected to be born in November, by sacrificing himself.

Evidence from the crash, which also killed two passengers in the other vehicle’s back seat, supported Ms. Wood’s description of her late husband’s final act: unable to avoid the errant SUV, Brian Wood slammed the brakes and swerved his side of the car toward the oncoming vehicle, ensuring his certain death but protecting his wife, pregnant with their first child.

“I think it’s pretty obvious … that if it would have been a head-on crash, we both would have been killed instantly, along with our baby,” Erin Wood told NBC’s Today Show on September 13. …

Go here for the rest of the story.