Wednesday, August 24, 2011

A New York Times Columnist Fesses Up: Democrats Cost Jobs

Joe Nociera, a New York Times, columnist has had enough. He cannot really believe that Obama’s National Labor Relations Board shut down Boeing’s new South Carolina plant, with its 5,000 jobs on charges that Boeing retaliated unfairly against labor.

Let me give some quotes from his “Democrats Cost Jobs, August 22, 2100:

“As companies have moved manufacturing offshore, Boeing has remained steadfast in maintaining a large manufacturing presence in America. It is America’s biggest exporter of manufactured products.”

“The N.L.R.B.’s proposed solution, believe it or not,(my emphasis) is to move all the Dreamliner production back to Puget Sound, leaving those 5,000 workers in South Carolina twiddling their thumbs.”

“Seriously, when has a government agency ever tried to dictate where a company makes its products? I can’t ever remember it happening.”

“Boeing’s general counsel …has also said that it was a disservice to a country that is ‘in desperate need of economic growth and the concomitant job creation.’ He’s right. That’s also why I’ve become mildly obsessed with the Boeing affair. Nothing matters more right now than job creation.”

“The word “retaliation” suggests direct payback….. Boeing did nothing like that. It not only hasn’t laid off a single worker in Washington State, it has added around 3,000 new ones. Seven out of every 10 Dreamliners will be assembled in Puget Sound.”

“That is what is so jarring about this case — and not just for Boeing. Without any warning, the rules have changed. Uncertainty has replaced certainty. Other companies have to start wondering what other rules could soon change. It becomes a reason to hold back on hiring.”

“When he was asked about the Boeing case earlier this summer, President Obama said that the N.L.R.B. is an independent agency and that his hands were tied. That may be true, though it’s worth pointing out that most of its top executives are his appointees.
But when he gets back from vacation, he might do well looking at his own administration, instead of simply blaming the lack of jobs on the Republicans.”

I agree with columnist Nociera. I imagine his bosses do not.

Tuesday, August 23, 2011

More Fuzzy-Headed Economics from the New York Times

“Congress and the White House have yet to figure out that the economy will not recover until housing recovers.” “Homeowners Need Help,” NYT Editorial, August 22, 2011

To use NYT-like claims of consensus, I would say that “everyone” knows that the recession and financial crisis began with the dramatic overexpansion of housing. We built more houses than people could afford to buy. The housing bubble was made possible by federally-guaranteed loans and federal government pressure to sell to low-income home buyers. The financial sector then kicked in by creating a murky market in toxic mortgages.

The contraction began when we recognized that we had a housing bubble. Housing sales and prices collapsed and so did the financial system.

Now the NYT tells us that we will not have an economic recovery until housing recovers! We do not need a recovery of the overbuilt housing sector. If we build more planes, cars, or TV sets than the market is prepared to buy, we cut back on their production. We should not conduct policy to keep resources in a sector that has become artificially too large.

Only when resources are transferred out of housing into more productive activities will we have a real recovery. There is no reason why construction workers cannot build oil and gas pipelines or work in offshore drilling rigs, if only government restrictions on these industries could be eased. To keep resources frozen in housing by artificial means (such as curbing foreclosures and forcing banks to modify mortgages) does nothing but delay the recovery. (By the way, what bank would lend to new customers after being forced to renegotiate loans in borrowers’ favor?)

I wish the editorial writers of the NYT would rely on some basic economics, not emotion, when they take pen in hand.

Monday, August 22, 2011

Will the NYT Publish These Results?

"NEW YORK -- The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts.
The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases."

Where is the Keynesian consensus the mainstream press writes about?

On the day this survey was released, the New York Times published two interviews with fund managers (I guess they represent everyone) saying we need to spend more now and save later.

Sunday, August 21, 2011

Obama’s Broken Record: Spend Now, Cut Later and Only Fools Disagree

The BEA’s downward revision of GDP revealed that we have yet to recover back to pre-recession levels. Rather than taking this bad news as evidence we need to cut government spending and deficits, the Obama administration sees an opportunity to spend more now and cut later. Maybe we won’t even need the cuts if business activity picks up, he says.

Obama’s liberal mouthpiece, the New York Times, reveals Obama’s new political strategy without apology:

“The President spent this week combining his pitch for deficit reduction with a renewed emphasis on the need for further temporary spending and tax cuts to encourage businesses to hire and consumers to spend.”

Note the “bait and switch:” We spend now temporarily and cut in the distant future, if at all. We have heard this “Let’s spend more now and save later” too often. The elder Bush actually fell for it, and it cost him his reelection.

The NYT’s second drumbeat is that all “reasonable” economists agree that we should spend now and save later. After all, we all know the first Obama stimulus worked:

“Contrary to Republicans’ claims, economists generally judged his 2009-10 stimulus program to have helped, but to have been insufficient to overcome the deep downturn.”

The NYT has at least the decency to say instead of “all” economists that:

“many economists argue that while temporary spending and tax cuts [e.g., a second stimulus] add to deficits initially, such measures can increase tax collections, reduce costs for safety-net programs and ultimately keep deficits smaller than otherwise by spurring business activity and lowering unemployment.”

What is this? Lower taxes raise revenue by promoting economic activity? Is this not “voodoo economics”? I guess as long as the tax cuts are not for the rich, the NYT can embrace voodoo economics.

President Obama reminds me of an inept magician who attempts to misdirect his audience from the rabbit up his sleeve (more spending and deficits) to a beautiful bikini –clad female assistant (spending cuts and deficit reduction). No matter, how often he is caught, he tries it again.

I am becoming like a broken record too. This is at least the third post I have written on the lack of consensus on Keynesian economics and stimulus spending.

Sunday, August 7, 2011

The NYT Says What Obama Cannot Say: Raise Everyone’s Taxes

The New York Times Sunday editorial reveals point blank the liberal agenda. According its the editorial writers, we cannot cut spending in any significant way without curtailing core liberal programs. Hence, “there is no economically sensible or politically honest way to address the deficit without also increasing revenues and reforming the tax code.”

Even more remarkable is their candor with respect to taxes. Contrary to Obama’s promise not to raise taxes on the middle class, the NYT calls for raising taxes on just about everyone.

I supply their blueprint for taxation during the second Obama administration without comments:

1). Let the Bush tax cuts expire at the end of 2012 for those making $250,000 and above. The other tax cuts could expire at the end of 2013. The middle class should keep their tax cuts for a year to prop up consumer demand. The expiration of all the tax cuts would “save” $3.8 trillion over the next decade.

2) Tax reform should not touch breaks for home ownership and retirement saving, but they should be targeted only to help low and middle-income tax payers. Capital gains should be taxed at 35 percent. Tax breaks that subsidize profitable industries like oil must be ended. If the ending of tax breaks permits, tax rates could be lowered generally.

3) We should use a value-added tax or carbon taxes to raise “needed revenue for deficit reduction, and for what government provides” so that all additional tax revenue need not be squeezed from income taxes.

The NYT ends with its reading of public sentiment: “The public is open to new taxes, and the economic facts are clear. Until tax increases are considered in equal measure to spending cuts, there will be no budget fix.”

I imagine this editorial is not being greeted with enthusiasm in the White House. It lays bare the fact that Obama’s core supporters do not want to cut spending. Instead, they propose massive tax increases on middle- and low-income families.

If Obama were to publicly embrace these proposals in his upcoming campaign, his chances of reelection would shrink virtually to zero. Republican candidates should keep this editorial ready for use.

Saturday, July 23, 2011

Media Slant: Guess Which Newspaper Ran Which Story: Wall Street Journal or New York Times?

1. "Grand Bargain Talks Collapse"

WASHINGTON—A high-stakes effort by President Barack Obama and House Speaker John Boehner to hatch a landmark deficit reduction deal collapsed in anger Friday, sending Washington into a weekend of negotiations over how the world's top financial power can make good on its debt obligations.
In a letter to his colleagues, Mr. Boehner said he called off talks with the president. He informed Mr. Obama Friday night he planned to start negotiations with the Senate to seek what would likely be a smaller deal.
"In the end we couldn't connect. Not because of different personalities, but because of different visions for our country,

2. "Debt Ceiling Talks Collapse as Boehner Walks Out"

WASHINGTON — Negotiations over a broad deficit reduction plan collapsed in acrimony on Friday after Speaker John A. Boehner suddenly broke off talks with President Obama, raising the risk of an economy-shaking default.
A visibly angry President Obama, in a hastily scheduled White House news conference, demanded that Congressional leaders come to the White House on Saturday morning. “I want them here at 11 a.m. tomorrow,” he said. “They are going to have to explain to me how it is that we are going to avoid default.”

Answer (if you need an answer: WSJ =1, NYT =2)

Saturday, July 2, 2011

Has the New York Times Aided and Abetted A Crime? Environmentalists, Goat Farmers, and Market Manipulators

When I posted my June 30 article: “Why the NYT-Liberal Assault on Shale Gas? How About the Volt?”, I interpreted the NYT’s attack on natural gas fracking as a political diversion. It was time to hit “Big energy” again, only this time, it was “Big Gas.” I wondered why the NYT was so worried about investors in oil shale projects, in low energy prices, and black churches that had been duped by promoters. I took the series of NYT articles seriously, read the e-mails quoted, and wrote about the natural uncertainty associated with new technologies.

I was shocked, to say the least, to read Jon Entine’s article, “Natural Gas ‘Bubble’ Report: Market Tinkering or Shoddy Reporting?”

In a real example of investigative journalism, Entine discovered that, of the two “named” NYT sources, one is an investment advisor (and long-time critic of gas fracking), listed as a “geologist,” whose firm and clients possibly stood to gain from speculation against shale oil stocks.

The other quoted sources, who the NYT lists as an “Advisor” to the Dallas Fed, is a goat dairy farmer (on some citizen advisory board of the Dallas Fed) who has tangled with a natural gas company, accusing it of causing environmental damage to her farm. The NYT failed to report this as well as her membership on the steering committee of the Oil and Gas Accountability Project at Earthworks, an anti-shale-gas advocacy group. It appears she lectures against gas fracking around the country.

The NYT’s sources are unnamed, but judging from their excerpted e-mails, they are simply stating the obvious, that this is a new technology and we do not know what the future will bring. I address in my post the e-mails that speak to the difficulty of estimating reserves in the presence of a new technology. We cannot know economically-recoverable reserves without knowing future prices, which we do not. Anti-gas fracking democrat members of Congress have called for hearings. With the disclosures in Entine’s article, it now appears that hearings are necessary. The New York Times should be one of the first witnesses to testify given the possibility of market manipulation.

For Entine’s article, see:

For my earlier post, see: