Tab Clearing 2

A really interesting look at state budget deficits.

History of deficits and surpluses in the USA.




A look at, among other things, the difference between the headline unemployment numbers and the true, revised, numbers quietly released later.




 The general thought by professionals is that the recent jobs reports have been a little screwy.
Here's the head economist for Gallup explaining why.
Essentially, the labor force continues to shrink.  Explains apparently falling unemployment numbers, not even close to good news.
And here's Jack Welch explaining how stratospherically rapidly the economy would have to grow for the numbers to actually be real and be good news.

The economy is not in a free-fall. Oil and gas are strong, automotive is doing well and we seem to be seeing the beginning of a housing comeback. But I doubt many of us know any businessperson who believes the economy is growing at breakneck speed, as it would have to be for unemployment to drop to 7.8% from 8.3% over the course of two months.
The reality is the economy is experiencing a weak recovery. Everything points to that, particularly the overall employment level, which is 143 million people today, compared with 146 million people in 2007.

And finally, it turns out that America expects its rich to pay a larger share of taxes than ANY OTHER industrialized nation.  

"The United States is actually more dependent on rich people to pay taxes than even many of the more socialized economies of Europe. According to the Tax Foundation, the United States gets 45 percent of its total taxes from the top 10 percent of tax filers, whereas the international average in industrialized nations is 32 percent. America’s rich carry a larger share of the tax burden than do the rich in Belgium (25 percent), Germany (31 percent), France (28 percent), and even Sweden (27 percent)."

NSF Waste

The National Science Foundation has the "luxury" of not having to worry about the future worth/usefulness of the research it funds.  After all they don't pay for it, the taxpayer does, nor are the grant-makers responsible to the taxpayers.  So I'm not really surprised to see an article like this one, detailing some of the waste and fecklessness at the NSF. 

Inflation? Deflation?

I have long believed that inflation is imminent, but here is a report from some financial advisors arguing that deflation is actually more likely.  

(green) Crony Capitalism

Few things annoy me, anger me, more than Crony Capitalism because not only does it pervert the true market, but it gives people who hate the freedom and prosperity of the market a handy tool to attack "capitalism".  The problem though, is that crony capitalism ISN'T actually capitalism.  Crony capitalism is the operation of businesses, where the profits and sometimes even the losses are assigned to private individuals, but instead of allowing market competition to occur, winners and losers are determined by government intervention.

Customer service is replaced with lobbying, ground-breaking research funding with campaign contributions, and well-deserved bankruptcy with government bailouts that the taxpayer funds but cannot stop.  Businesses that are out-competed, and should restructure or fail, don't because they are politically connected.  Less well-connected businesses that may provide better services or products are forced out by bureaucrats helping their friends.  

Crony capitalism is perversion, and the friends and enemies of the market alike are right to despise. 

But crony capitalism IS NOT a free market and DOES NOT allow the creation of benefits like the free market.  Many who believe they hate the free market actually hate cronyism.  They hate the political corruption, buying of privilege, taxpayer bailouts, and sweetheart deals that they have been told is the fault of the market but is actually cronyism.  

On the other hand, many who hate green technology/energy actually hate the cronyism that typically attends such efforts.  I have absolutely no problem with someone selling/buying "carbon credits", developing new energy storage solutions, researching battery technology -  - as long as no governmental/taxpayer money, encouragement, favors, or special deals are used to encourage the behavior.

At long last the title of this post makes sense.  THIS article discusses how the UN Rio conference on green something or other is densely packed with cronyism.  Every solution/program discussed at the UN conference is centered around using government to control and reward the efforts of private industry.

That is not freedom.  That is control.

Estonia and the Euro

Estonia is doing everything that the conventional "experts" say is wrong.  As a result of a massive decrease in GDP in 2008 (around 17%), Estonia decreased spending on public employees' salaries and benefits, reduced social safety net type spending, and generally tightened its belt. 

According to the experts, this course of action is exactly what struggling EU countries should avoid.

But Estonia is growing.  Faster than anyone else in the EU.  Funny that.  

Time and time again, when truly government-limiting and fiscally-austere measures are enacted, economies grow.  It is no real mystery, it is historical fact.  Somehow though people always manage to be surprised. 

Why do things always go wrong?!

So why do the economic policies and efforts of the political left just about always result in failure?  This article has some good, accessible, insights.

Very Interesting

Courtesy of the Economist, a Global Debt Clock.  Have fun. 

Protest Song

Listen to the words.  While the protesters have the right idea talking about the corruption in government (though I'm upset at the government for encouraging the corruption, while the protesters are mad that businesses try to make money), they are profoundly mistaken in asserting that 99% of Americans haven't benefited from businesses.

Listen to the words.

Warning: Video contains images of protest signs with profane language.

Presentation to Titan Society

Tonight I am presenting to the Titan Society.  Among other topics, we will be discussing the contents of this column.   From Alhambra Associates, a financial consulting firm, the column details all actions by the BHO administration in a one week period of time that would give pause to business. 

"In a hurry, will pay"

One of the persistent dreams for future transportation is a road/vehicle/transportation network in which personal vehicles (cars) talk to each other. The hoped-for result is to create a smoother traffic flow with fewer (or no) traffic jams or accidents.

If cars are talking to each other, then it should be entirely possible for you to program your vehicle to offer to pay/bribe other vehicles (and their occupying passengers) to move our of your way. Emergency vehicles will already, I expect, have this power - - so why not create a system that allows your car to implement the same "get out of my way" program for a price?

But such a system might not be so simple. In many urban areas (especially DC) everyone will program their cars to scream "I AM IMPORTANT! MOVE!!!" And because everyone has programmed their vehicles to be important, no one will move, and no one will benefit.

To solve this impasse we turn to the economist's favorite tool - pricing. For most economists, the creation and function of prices is the equivalent of duct tape, a good knife, all-purpose oil/grease, and adjustable pliers all rolled into one. Prices hold things together, allowing people within a market to trade with each other and function as one unit. Prices remove and separate unwanted or unproductive portions of the economic structure, resulting in concentration of resources on productive uses. Prices speed and smooth interaction between the various elements of an economy, allowing greatly reduced friction (transaction cost) and less wasted energy. Prices continually adjust to best regulate the good or service being traded, adjusting much faster and more precisely than human-controlled mechanisms ever could.

But how do prices help us solve our priority-auto-driving problem? Well, the simplest way would be to have each driver program a price at which (s)he is willing to move out of the way for other drivers. In this case your vehicle would automatically accept a move request, and payment, from the vehicle of a driver who is willing to pay more than the minimum you have set. You could even allow drivers to change their prices on the fly. Say you have an important meeting to rush to. You set your "priority price" at $0.75 and set off. Many people move out of your way, but as traffic gets heavy and you are forced to slow, you look up from your laptop and instruct your car to offer $0.80. That doesn't free you, so you increase your "bid" to a full $1.00. That does the trick, and you are soon zooming on your way.

You, as the driver, may also opt to allow your car to automatically increase your bid to whatever level is necessary (or some maximum you pre-select) to buy speedy passage.

Both of these methods are, however, potentially subject to what economists call the "holdout problem."

Presumably, drivers of vehicles would be able to set not only their "priority price" - the price they will pay to pass others - but also their "move aside price", the price they expect to receive before they will reduce their own speed or change lanes for someone else.

A holdout would potentially occur if, for example, you are trying to hurry your way through heavy traffic and, instead of allowing you to pay them and move out of your way, the vehicle in front of you sees your hurry and simply increases its prices. Dramatically. Before you know it, you might be asked to pay $50 or more before the person in front of you will move out of the lane.

One potential way of solving this problem would be to program your vehicle to hold a brief, almost instantaneous, auction. By communicating with the vehicles in relevant positions around you, your car could determine whether it would be cheaper/faster to negotiate a path around the recalcitrant vehicle in front of you rather than buy him off. Though you may run into areas (especially around DC) where everyone expects a fair amount to cede right-of-way, peoples' self-interest should give them enough incentive to accept your offer before someone else does.

Oil Prices

I don't really have anything earth-shaking to say, but I know that oil and gas prices have been large in peoples' minds and pocketbooks.

Oil prices are going down. Despite explosions and further uncertainties of supply. See This, and This. This is a good thing, but I hope it doesn'(though it probably will) take focus and impetus away the various domestic oil production/replacement possibilities. Just to make sure you don't misunderstand, I don't think such schemes are necessary for any nationalistic/environmental/global warming reason, but rather for reasons that there seems to be decent statistical information that links (relatively) cheap energy with greater rates of economic growth around the world. And I like economic growth because nothing else comes close to being as effective at lifting people from poverty and saving lives. Economic growth also gives people more slack in life to pursue political/personal/religious freedoms.

Why are oil prices falling? Probably due to a variety of factors - but all are related to supply and demand. Iraq is restarting exploration, Saudi Arabia is signaling that they may increase supply, the summer driving season is slacking off, world oil/gas consumers have (slightly) decreased consumption,

High oil prices were never the doomsday scenario that many people assumed they were, but I'm comfortable seeing them decrease.

Overton Window Follow Up

So I've decided that I won't be posting my scholarly writings on Overton Window Theory. Primarily because I plan to do more with them in the future, but also because, well, I just don't have time right now to clean them up and bring them up to speed with my current thinking.

However, just in case anyone finds their way here after reading discussions regarding the Overton Window that have taken place on several Internet discussion boards, I would like to point out that the whole idea behind Overton Window Theory is not for it to be a grand strategic design of the conspiratorial right-wing. Rather, OWT is simply a tool to explain what a think-tank does and to help people understand how a think-tank or public research organization can have an impact on public policy.

In reality, the entire concept of the Overton Window is merely a further example of a fundamental economic trait - one that I have picked-up over the years and one that Joe Overton apparently possessed. That trait is the naming of and fitting complex theories to common truths/mechanics that have been occurring of their own accord, happily un-named. Then along comes an economist, joyously declaring "look, supply and demand" or "hey, let's formalize how think-tanks impact policy."

And that is really what the Overton Window is all about - the formalization of think-tank workings and influence in a way that can be understood by just about anyone, and yet is also of interest to the most highly educated economists and public policy nuts.



Oh, and the impetus behind this post? My recent discovery that my Current Comment for the Mackinac Center for Public Policy (on Overton Window Theory) was the second most read CC of 2006, that there is a Wikipedia page for OWT, and that the concept of OWT was picked up by several blogs holding views very different from MCPP's limited-government, free-market, ideals. Do a search for "Overton Window" and you will see what I've seen - with the exception of my academic stuff.

Here is the ranking of MCPP CCs.

Here is the original MCPP article.

Here is my previous blog posting on the Overton Window.
(similar to the previous, but I like it a little more)

my quasi-necessary paper

Early March, and it's sunny and clear outside - warm enough not to need anything more than a light longsleeve shirt. If I could, I would be playing frisbee in this weather! So this weekend, with the studying for a major exam tomorrow, dancing, and church responsibilities, I made time to write a short piece on political possibility theory. Enjoy!

An introduction to the Overton Window

Of the many ideas and options that exist in the political world and in the minds of politicians, what determines which ideas become reality and which ideas remain banished to the political ether? Somewhere on the spectrum of ideas from the crushingly socialist, and therefore radical, to the breathtakingly libertarian, and therefore also radical, must exist a range of ideas that actually stand a chance of being successfully implemented in the current socio-political climate. The range on the spectrum of ideas in which a policy initiative can be considered politically and socially viable is called the Overton Window of Political Possibilities. Regardless of the economic validity of an idea and how fervent its supporters are, if the idea does not lie within this window of opportunity it simply will not happen.

Politicians are self-interested. Of this there has been little serious doubt since the general acceptance of public choice arguments. Lawmakers will not support an idea unless it receives sufficient public acclaim and acceptance so that backing the idea does, at the very least, not harm the politician. Public policy is judged not its merit, but on its political viability. This only makes sense given politicians’ interest in preserving their jobs, but is often lamented by advocates of any policy that seems doomed to languish in the political shadows. The key insight of the Overton Window theory is that ideas initially outside the range of the politically possible are brought within that range not by political lobbying, but by moving the ‘window’.

Think tanks, pundits, and those economists who engage in policy issues often seek to advance their agendas though direct interaction with politicians. This strategy is a misdirection of energies. In the words of the Mackinac Center for Public Policy; “However principled a politician may be, he or she can only accomplish those things which are within a narrow window of what is politically possible at the present time.” Granted, there are some actions that lie within the discretion of politicians, but instead of expending resources to influence things that cannot be changed, those same resources should be used to shift the Overton Window.

Shifting the Overton Window requires changing the public’s perception of a policy issue. Perspective must be changed so things formerly infeasible become inevitable, through interactions with the public, educating, speaking, providing written perspectives, and conducting sound research. It is towards these aims that many who wish to see policy implemented should orient their resources. By shifting the window of possibilities, policies can be brought into effect with fewer negative “adjustment effects” among the people and whatever unenforceable intent supported the desire to create the policy will be more likely to emerge in society.

One example of an application of the Overton Window is homeschooling. Not too many years ago homeschooling was illegal in many states, and frowned upon even when it was legal. My family still knows people who faced state legal action in Michigan because they dared homeschool their kids during a period of time in which the laws were unclear at best. Yet, in Michigan and every other state, through a mixture of political and popular action, the window of political possibilities was shifted. What was once considered outrageous is now common, and no significant door of educational or employment opportunity remains closed to homeschoolers.

Could Overton Window theory also be applied to concepts of the slippery slope? It is fascinating to dream of ways that could be found to let socio/political “gravity” do the work of enacting and reforming policy, yet the difficulty has always been to find a way to guide the weight of policy as it rolls downhill. However, integrating a concept of political possibilities and the theory of slippery slopes results in the idea that instead of trying to guide the “stone” of policy it would be more advantageous to “shape” the slope so that policy will be “slippery” in the direction you like. Instead of putting a priority on efforts to influence policy makers directly, economists and proponents of ideas should focus on the people of the polity in question. In this way will the most pervasive and lasting reforms be made.

Some late-night thoughts.

Ok, so it’s pretty obvious that I’m not writing about social security tonight. In fact, I’m not writing about much of anything. Just wanted to write about an idea that is floating around in my head these days. See, last week I went to a presentation about theories of slippery slopes. This got me thinking – “how can we determine the direction the slope will take? More importantly, how can we influence that direction?” I think this will tie in closely with the Overton Window Theory of political possibilities. Could be some very interesting possibilities in this…. Just think, if you could determine the direction a “slippery slope” would take public policy, you would know the proper time to give the governmental structure a little push to achieve your desired result – using the gravity of the slope. Even more powerful, what if the very direction/angle of the slope could be manipulated?