My Appearance on Freedom Watch

Here is the link to my appearance in Judge Andrew Napolitano's "Freedom Watch." We discuss the recent statements by Paul Krugman. I appear at about the five-minute-mark in Part II, which is linked here.

I tried to download this video directly, but was unsuccessful.

My Appearance on Judge Napolitano's Show Wednesday

I'll be going to New York today (via Amtrak) and will be gone until Friday night, so posting is likely to be spotty at best. I'm attending a conference in the city, and I'll have a report on that later.

On Wednesday night, January 12, I am scheduled to appear on Judge Andrew Napolitano's show, "Freedom Watch," on the Fox Business Channel. We tape between 4:30 and 6, and the show comes on at 8 p.m.

Hope everyone has a great week!

Krugman's Climate of Dishonesty

In reading Paul Krugman's column today on the Arizona shooting -- a very predictable column, I might add, given Krugman's political views -- I am struck by the fact that we have a mathematical economist who adds 2 + 2 and gets 5. Not only is his theme dishonest, but he also goes about presenting the information dishonestly.

When he first heard about what happened, Krugman said the following on his blog Saturday:

We don’t have proof yet that this was political, but the odds are that it was. She’s been the target of violence before. And for those wondering why a Blue Dog Democrat, the kind Republicans might be able to work with, might be a target, the answer is that she’s a Democrat who survived what was otherwise a GOP sweep in Arizona, precisely because the Republicans nominated a Tea Party activist. (Her father says that “the whole Tea Party” was her enemy.) And yes, she was on Sarah Palin’s infamous “crosshairs” list.

So, he right away assumes that some Angry White Male Who Belonged To The Tea Party carried out the shooting. Furthermore, he claims that the ONLY angry rhetoric directed against her was coming from the right, yet he apparently ignores (and one wonders if he is doing this on purpose) the hateful rhetoric that was directed at her from the Daily Kos, which is a hard-left Democrat website that adores Paul Krugman.

(The post quickly was taken down after the shooting, as the Kos wanted to make sure that Sarah Palin received the blame. I checked the site this morning and there is no reference to anything the Daily Kos had from its own side, and it once again is blaming Palin and the Usual Suspects from the Tea Party, as well as a quote from Krugman. Gabrielle Giffords, it seems, committed the sin of voting for John Lewis for speaker instead of Nancy Pelosi. Obviously, according to the Daily Kos, that alone was worthy of death.)

Since the shooting occurred, we have found much more information about the shooter, Jared Lougher. Apparently, the guy was somewhat a person of the Left, and it is quite doubtful that Sarah Palin influenced him to do anything. He apparently is someone whose behavior has been growing increasingly bizarre and disruptive. Furthermore, it is abundantly clear that he has had nothing to do with the Tea Party or any of the other protest movements.

All of that information is known to us, and it was available when Krugman wrote today's column. Thus, I come down hard on him precisely because he purposely ignores the facts. Krugman writes:

...there has, in fact, been a rising tide of threats and vandalism aimed at elected officials, including both Judge John Roll, who was killed Saturday, and Representative Gabrielle Giffords. One of these days, someone was bound to take it to the next level. And now someone has.

It’s true that the shooter in Arizona appears to have been mentally troubled. But that doesn’t mean that his act can or should be treated as an isolated event, having nothing to do with the national climate. (Emphasis mine)

In other words, after first having claimed Saturday that the shooter MUST have been tied to the Tea Party, Krugman now ignores the guy's background and life circumstances. Why? It does not fit Krugman's narrative.

As one who does not watch television -- and especially the political talk shows like those on MSNBC with Keith Olbermann and Rachel Maddow and the ones on the right on Fox News -- I have no idea if the rhetoric is comparable or not between right and left. However, when I read the following from Krugman, I have to wonder how a Nobel Prize winning economist can stretch language with a straight face:

And there’s a huge contrast in the media. Listen to Rachel Maddow or Keith Olbermann, and you’ll hear a lot of caustic remarks and mockery aimed at Republicans. But you won’t hear jokes about shooting government officials or beheading a journalist at The Washington Post. Listen to Glenn Beck or Bill O’Reilly, and you will.

Now, I really doubt that either Beck or O'Reilly (neither of whom I respect) have called for political opponents to be shot and killed. I HAVE seen (on YouTube) some of the hateful rhetoric that Olbermann has directed toward Ron Paul. On this segment, he accuses Paul of treason, which carries the death penalty. No doubt, if O'Reilly were to accuse someone of treason, Krugman would claim he was trying to have that person killed.

In other words, with Krugman it is "heads I win, tails you lose." Anyone who disagrees with Krugman and his friends and makes that disagreement public is a traitor and an inciter of hate. Now, this is the same Paul Krugman who has smeared other economists with hateful rhetoric, calling them "zombies." (Robert Murphy lays out the Krugman theme in this insightful article.)

So, in the end, Krugman jumps into what clearly is a tragic situation and throws around partisan rhetoric, makes up his own narrative, and ignores the facts. Had Sarah Palin written that Rep. Giffords was "dead to me" on her website, would Krugman have pretended she never said anything like that?

Right. Years ago, I wrote that Krugman was not an economist, but rather was a political operative. I have not changed that opinion a whit, and Krugman's column today proves my point.

It is one thing for political hacks like Olbermann or Beck or even the people at the Daily Kos to frame everything that happens in political terms and ignore pertinent facts. I expect that kind of behavior from them.

However, when a decorated academic economist does the same -- and calls it careful analysis -- I draw the line. I NEVER have seen or heard hateful rhetoric coming from other Nobel Prize winning economists, ever, and I have spent hours with many of them. Yet, with Paul Krugman, it seems that all we get is hate and name-calling and political talking points. I will let you be the judge of that kind of behavior.

Krugman is Deep in the Heart of Taxes

Paul Krugman loves those "Aha!" moments in which he believes (or at least wants US to believe) that an economy can thrive only if government tax heavily and have lots of union workers on the payroll. In his Friday column, he claims to have discovered one of those moments in his supposed expose of Texas.

Yes, Texas is having a budget shortfall in state government which is supposed to be shocking to anyone who believes that governments during a recession should cut back upon the burdens they place on others. As usual, Krugman depends not only upon a left-wing "think tank" to supply ideology masquerading as analysis, but also upon the kinds of stereotypes that really are not acceptable in academic thinking.

Krugman writes:

These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.

Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

Gee, I'm shocked. The country is mired in a depression and tax revenues are down everywhere. If anyone would think (or declare publicly) that Texas could be exempt from this problem because of its policies, I would also want to sell them a nice railroad tunnel that runs between New Jersey and Manhattan.

He continues:

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

Once again, Krugman gives us a caricature of analysis versus serious thinking. In theory, obviously, if one cuts any budget enough, be it a state, national, municipal, or home budget, one can balance it. The issue, however, is the opportunity cost of raising taxes, and Krugman has been saying throughout the economic crisis that there is no opportunity cost when it comes to government spending. (In fact, while he has not openly said he believes in the Keynesian balanced budget multiplier -- in which higher taxes lead to more spending, which revitalizes the economy -- he writes as though he believes in it.)

As I see it, there is no "theory" here, unless one brings in the balanced budget multiplier "theory." Instead, we are dealing with an accounting problem: How does a state -- which is required by law to have a balanced budget each year -- deal with the problem in which its projected spending outstrips its projected revenues?

In fact, it seems to me that Krugman discredits his earlier statement in the next paragraph:

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

First, the CBPP is a left-wing organization that is not exactly going to be objective in this situation. My guess is that if someone who were publicly disagreeing with Krugman were to use something from the Heritage Foundation, Krugman immediately would claim that the study is "tainted."

Second, Krugman includes three states that have followed pretty much the Krugman Policy Standards of spending and raising taxes. If Krugman's "theory" were to be applied here -- that militant public sector unions are "good for the economy" and that raising taxes will help stymie a recession -- then California, New York, and New Jersey should be wallowing in surpluses. Yet, they face real crises, and according to Krugman's "theory," that should not be the case.

In other words, Krugman really is saying nothing that is significant. Furthermore, he repeats the canard about education spending, as though it were the key to academic and economic success. If that were true, then Washington, D.C., public schools, which spend more per pupil than any states, would be the best in the country instead of one of the worst systems.

There is a much larger issue here. A welfare state is not an economic plus; it is a financial burden. One can argue as to its necessity, well as debate whether or not it makes things better in the long term, but Krugman is not interested in doing that.

I am not defending Texas or Gov. Rick Perry, or anything about its state government. Being that Texas seems to have this problem about prosecutors being out of control (something with which I deal in my other blog), I have nothing good to say about the issue of governance in that state.

However, if Krugman is wanting to argue that the "theory" of cutting spending is discredited, then one would have to claim that his "alternative hypothesis" (that raising taxes and increasing spending is the way to beat a recession) is true. Yet, we see the "alternative theory" at work in California and New York, and both of those places are bleeding jobs and revenue.

Krugman, not surprisingly, is silent on that point. But I have a better idea: Let us see how the Illinois legislature's current plan works. The Democrats, which control politics in that state (which means they have all of the answers, if one follows Krugman's partisan missives), have proposed a 75 percent increase in the state's income tax rates and a huge increase in the cigarette tax.

If Krugman is correct, then Illinois should be able to solve its budget problems and also create new avenues of prosperity. Perhaps we should revisit the state in a year to see if Krugman's "theory" is correct.

Our family's pursuit of another adoption

In my brief bio sketch on this blog, I note that three of my children are adopted from overseas. My two sons are Ethiopians (now age 15) and my 11-year-old daughter is from Guatemala. I also have an adult daughter who is married and has two young children.

For several years, my wife and I have wanted to adopt another girl who is Sasha's age, but our earlier efforts to adopt through the U.S. foster care system were unsuccessful. (I could say a lot about our experience with that system, but let me just say that it gave us an education in the U.S. childcare bureaucracy, and it both was eye-opening and very unpleasant.)

Last year, we concluded that perhaps God wanted our family to remain as it was, but neither my wife nor I had lost the desire to add one more child. We recently met an 11-year-old orphan from Latvia, Dace (pronounced "Dot-say") who is up for adoption, and after much prayer and deliberation, we have decided to pursue her adoption.

Neither of us have come to this decision lightly, and we have done so only after a lot of prayer and deliberation. This adoption will require that we raise a lot of money, and that we really cut back on discretionary spending. I'll have to work harder than ever, but I believe with all my heart that it is the right thing to do.

You will see that I have placed the link to our website on this blog and in this post. If you feel led to visit our adoption blog, please do. As you can see, we also have a place for people to donate to this project, should they feel led to do so.

I will post updates from time to time. In the meantime, I ask that you pray for our efforts, as this is something we never can accomplish on our own. Thank you.

It's Not the Euro, Paul

When I went to Baylor School in Chattanooga (when it was an all-boys' military school), one of our traditions was to have senior write-ups in the yearbook, along with a quote that would characterize the particular senior. (Perhaps my favorite quote was that given to Mike Aiken of our Class of 1971, which read, "Life is one damn thing after another." If you know Mike, you know that one is perfect.)

For another friend who was graduated several years before me, there was this: "The problem with the world is wine, women, and song. We must stop singing." Obviously, that line is meant to be humorous, but when someone actually tries to apply something similar to economic analysis, well, the joke ceases to be funny.

One of the reoccurring themes in Paul Krugman's blog posts has been his dissatisfaction with the results of European countries adopting the Euro as a single currency. In a recent post, he writes:

As readers may have guessed, I’ve been working on a euro-related project; more about that one of these days. But for now, I thought it might be worth explaining a bit more about how I see the political economy.

Some readers have chimed in that the euro is essentially a political rather than economic project. Well, it’s both; that has been the European strategy ever since the Schuman declaration. The point is to deliver a series of economic integration plans that do double duty: they’re economically productive, but they also create “de facto solidarity”, moving Europe closer to political union.

For 60 years, this strategy has been highly successful. Europe is one of the great, inspiring stories of the modern world, maybe of all time: peace, prosperity, and democracy flourishing where once there were minefields and barbed wire.

But: the strategy depends on each move toward economic integration being both a political symbol and a good economic idea. That was clearly true of coal and steel, the common market, the eurosausage, and so on. It is, however, by no means clear that the euro passes that test. Europe’s limited labor mobility (although there’s more than there used to be) and, crucially, lack of fiscal integration makes a common currency a dubious proposition at best.

In this and in other posts and columns in which he blames the Euro for much of the turmoil on the Continent, Krugman confuses cause with effect. As I have noted in other posts dealing with Krugman's Euro fetish, Krugman seems to believe that the "solution" for Europe is yet another round of inflation, a "hair of the dog" monetary and fiscal strategy.

At the center of this problem is the fact that the huge European welfare apparatus, along with the power of government employee unions such as those in Greece, Spain, and Frace, only can be supported if the economies of those nations produce enough wealth to enable governments to spread it around. Furthermore, the taxation and regulation policies of those nations must be such that it is possible for private firms to create enough wealth in the first place.

Unfortunately, one of the things that happens in economic downturns is that tax revenues fall and it becomes obvious that the lavish government benefits given to government employees cannot be supported by that country's economic activity. Now, as Krugman has noted, in the past, when each of these government controlled its own fiat currency, one "solution" was devaluation, which in reality is nothing more than a government's admission of trying to paper over its losses by engaging in a glorified printing of new money.

This, economically speaking, is not a solution at all. It simply masks the underlying problems and creates new problems in the process. Not only does this strategy continue the charade of "giving" people something that is illusory, but it also undermines an economic recovery.

However, when a country does not control its fiat currency, as is the case of the Euro, then the problems become much more front-and-center. Greece, for example, is in trouble because it no longer can afford to give government employees pay and benefits that they are not earning, and the Greek government employees have responded by going on a rampage of rioting, murder, and destruction of property.

The Euro is not the cause of this trouble; instead, it is the messenger, the entity that bears the bad tidings. What is Krugman's response? It is shoot the messenger. In Krugman's view, there is nothing wrong with runaway government benefits; in fact, he argues, such spending helps the economy by "stimulating" it.

While there often is much not to like about "austerity" moves, nonetheless for the most part they are little more than policies that reflect the economic reality of the present time. (My problem with "austerity" is that it often emphasizes the implementation of new taxes without cutting enough spending; I'm all for the reality of "pay as you go," but we have to understand that we cannot kill the Golden Goose in the process.)

Krugman really seems to believe that we can pretend we are creating wealth simply by borrowing, spending, and creating new money. Yet, these actions don't create wealth; they destroy it. Krugman may call such a statement the product of "zombie economics," but to claim that government spending by itself "creates wealth" is the real "zombie" position.

Krugman's "Death Panels" for the Economy

Paul Krugman definitely has thing thing about "death panels." In fact, he so much is enamored with them that apparently he believes that the American economy itself should be forced to die.

That is not what he believes he is saying, but as I see it, his recommendations are akin to bleeding the patient to death (and digging our economic hole even deeper). He writes in his most recent column:

If there’s one piece of economic wisdom I hope people will grasp this year, it’s this: Even though we may finally have stopped digging, we’re still near the bottom of a very deep hole.

So, what does Krugman recommend? Well, he seems to believe that we are not digging fast enough, and that more digging will get us out of the hole. Krugman declares:

So what can be done to accelerate this all-too-slow process of healing? A rational political system would long since have created a 21st-century version of the Works Progress Administration — we’d be putting the unemployed to work doing what needs to be done, repairing and improving our fraying infrastructure.

Yes, yes, bring back the WPA! Yeah, the organization with the alternative title, "We Piddle Around," and "We Poke Along." I'm not sure that a "rational political system" would be creating such waste, but to Krugman, the economy simply is a mechanistic mass of homogeneous factors into which one throws in a bunch of money, with an economy magically appearing.

What Krugman never will understand is that the kind of government he demands is a burden to the economy, not a stimulator. I have yet to see him suggest one thing that actually would make our economy stronger. Instead, he claims that we can have a recovery based upon government spending and subsidized "green energy" production.

Now, both Krugman and I see problems on the horizon, but for two very different reasons. First, here come Krugman's worries:

Realistically, the best we can hope for from fiscal policy is that Washington doesn’t actively undermine the recovery. Beware, in particular, the Ides of March: by then, the federal government will probably have hit its debt limit and the G.O.P. will try to force President Obama into economically harmful spending cuts.

I’m also worried about monetary policy. Two months ago, the Federal Reserve announced a new plan to promote job growth by buying long-term bonds; at the time, many observers believed that the initial $600 billion purchase was only the beginning of the story. But now it looks like the end, partly because Republicans are trying to bully the Fed into pulling back, but also because a run of slightly better economic news provides an excuse to do nothing.

Now, I am not sure how the Fed's QE2 or QE100 would "promote job growth" in the long term, given that it would more likely result in stagflation. For that matter, what this economy needs is real economic growth, and if that occurs, then "job growth" will follow.

Instead, Krugman really seems to believe that if the government creates official "jobs" and then pays people with printed money (QE2 version), then the result will be a growing, robust economy. Well, maybe Krugman and Brad DeLong believe that nonsense, but everything he is recommending will do nothing but make the economic hole we are in even deeper and the sick economy even more ill.