Pejman Yousefzadeh

Cities and counties in Florida are getting more money in their coffers. Want to know how? I’ll tell you; they are shortening yellow light intervals so that more drivers are made to run red lights, and fined as a consequence.

If this doesn’t offend you, then I don’t know what to say.

Certain people in North Carolina desperately need to read some Mandeville, Smith, Hayek and (Milton) Friedman:

The proposal, which the Raleigh News & Observer reports was unanimously approved by the state’s Senate Commerce Committee on Thursday, would apply to all car manufacturers, but the intended target is clear. It’s aimed at Tesla, the only U.S. automaker whose business model relies on selling cars directly to consumers, rather than through a network of third-party dealerships.

The bill is being pushed by the North Carolina Automobile Dealers Association, a trade group representing the state’s franchised dealerships. Its sponsor is state Sen. Tom Apodaca, a Republican from Henderson, who has said the goal is to prevent unfair competition between manufacturers and dealers. What makes it “unfair competition” as opposed to plain-old “competition”—something Republicans are typically inclined to favor—is not entirely clear. After all, North Carolina doesn’t seem to have a problem with Apple selling its computers online or via its own Apple Stores.

Crook has taken their measure:

Brad DeLong has commented on my beef with Paul Krugman. I’m reluctant to engage, to be honest, because his post exemplifies the intemperance I’m addressing. Once an admirer, I gave up on his commentary a long time ago. You get a sense of the problem from his post about me. He illustrates it with a picture of a clown. He also wants me fired. “Bloomberg has some house-cleaning to do,” he says — charming, and from a tenured academic, to boot.

DeLong’s fine under the supervision of a competent adult, as here (an excellent paper, which I praised at the time). But as an unattended blogger he regresses to intellectual adolescence, light on thinking and exhaustingly heavy on peevish belligerence. Not just uncivil, he actually disapproves of civility — today, as you see, I’m trying to meet him halfway.

The substance of DeLong’s complaint about my column and post appears to be that they lack supporting documentation. I asserted (thinking it self-evident) that many Republicans are thoughtful and public-spirited. DeLong is incredulous and finds it revealing that I failed to give examples. I also accused Krugman of letting partisan politics taint his analysis and said he cared as much about undoing the Bush tax cuts as about expanding and extending the fiscal stimulus. At this, DeLong is aghast. He demands to see my evidence.

Will this do? From Krugman’s column, Let’s Not Make a Deal, in December 2010.

Back in 2001, former President George W. Bush pulled a fast one. He wanted to enact an irresponsible tax cut, largely for the benefit of the wealthiest Americans. But there were Senate rules in place designed to prevent that kind of irresponsibility. So Mr. Bush evaded the rules by making the tax cut temporary, with the whole thing scheduled to expire on the last day of 2010.

The plan, of course, was to come back later and make the thing permanent, never mind the impact on the deficit. But that never happened. And so here we are, with 2010 almost over and nothing resolved.

Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate tax cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class. It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?

The answer is that they should just say no. If GOP intransigence means that taxes rise at the end of this month, so be it.

Krugman proposed raising taxes on all Americans while the recovery was still very weak. He recognized this as a fiscal tightening that would put people out of work. He advocated it because the alternative of retaining the Bush tax cuts would have handed the Republicans a victory, and because — get this — he was worried about the long-term deficit implications. There you have it: Krugman the apolitical Keynesian.

I suppose that it would be churlish of me not to note that DeLong has (uncharacteristically) said some nice things about me recently. I wish that I could return the favor, but for the moment, anyway, I can’t.

I am late to this, but this past Friday, we had yet another jobs report. Yet again, we were told by various pundits that we ought to be happy with the details of the report. Yet again, I am forced to join James Pethokoukis in begging to differ:

US job growth in April beat economist expectations as nonfarm payrolls rose 165,000, and the jobless rate fell to a four-year low of 7.5%. But the report contained worrisome signs that President Obama’s health care reform law is hurting full-time, high-wage employment.

While the American economy added 293,000 jobs last month, according to the separate household survey, the number of persons employed part time for economic reasons — “involuntary part-time workers” as the Labor Department calls them – increased by almost as much, by 278,000 to 7.9 million. These folks were working part time because a) their hours had been cut back or b) they were unable to find a full-time job. At the same time, the U-6 unemployment rate — a broader measure of joblessness that includes discouraged workers and part-timers who want a full-time gig – rose from 13.8% to 13.9%.

What’s more, there wasa  0.2 hour decline in the length of the average workweek. This led to 0.4 percentage point drop in the index of average weekly hours, “equaling the largest declines since the recovery began,” notes economist Dean Baker of Center for Economic and Policy Research.

Let’s see, more part timers and fewer hours worked. Economist Douglas Holtz-Eakin says what we’re all thinking: “This is not good news as it reflects the reliance on part-time work. … the decline in hours and rise of part-time work is troubling in light of anecdotal reports of the impact of the Affordable Care Act.”

Anecdotal reports like this one from the Los Angeles Times: “Consider the city of Long Beach. It is limiting most of its 1,600 part-time employees to fewer than 27 hours a week, on average. City officials say that without cutting payroll hours, new health benefits would cost up to $2 million more next year, and that extra expense would trigger layoffs and cutbacks in city services.”

Regardless of whether one thinks that Obamacare is weakening the labor market—and there is evidence for that proposition—168,000 jobs created just barely helps keep up with population growth. We really need to be creating 100,000 jobs more per month in order to have any hope of reaching full employment anytime soon. And we just aren’t doing it.

This is appalling:

Harvard professor and famous historian Niall Ferguson reportedly made some bizarre and offensive remarks about economist John Maynard Keynes at an investment conference yesterday.

According to financial writer Tom Kostigen, the editor at large of Private Wealth and Financial Advisor magazines, Ferguson made two startling suggestions about Keynes at the Tenth Annual Altegris Conference in Carlsbad, California:

• Keynes’ economic philosophy, Ferguson reportedly suggested, was the result of Keynes not caring about future generations.
• Keynes didn’t care about future generations, Ferguson reportedly suggested, because Keynes was gay and did not have children.

To his credit, Ferguson has now apologized. Good for him, but why make the comments in the first place? It is incumbent on those who criticize the application of Keynesianism—and I include myself in that group—to make sure that we understand what Keynesian arguments are, lest responsible criticisms get drowned out by the backlash against irresponsible criticisms. And as a general matter, it helps not to cite Keynes’s sexual orientation when criticizing his economic philosophy. There is no tie whatsoever between the two, and frankly, even before he sought to make the connection, Ferguson should have wondered whether the presence of heterosexual Keynesians might undermine his argument.

But as I write, at least Ferguson has apologized. Dick Harpootlian, by contrast, doesn’t seem to have the good grace or intelligence to follow Ferguson’s example:

Conservatives are outraged after a Democrat in South Carolina allegedly insulted Republican Gov. Nikki Haley’s Indian heritage at a party gathering in Columbia on Friday.

The state’s Democratic Party Chairman, Dick Harpootlian, is believed to have said the party will take on the Conservative in the next gubernatorial race and send ‘Nikki Haley back to wherever the hell she came from.’

Gov. Haley was born in the U.S. but her parents are from India.

Yahoo political reporter Chris Moody tweeted on Friday that Mr Harpootlian made the comment, in support of Democrat challenger Vince Sheheen, who has declared he will run for governor.

There were no details on the venue or context for the comment but Harpootlian is at the helm the 2013 Dem Weekend in Columbia, South Carolina.

One can easily imagine what the popular media reaction would be if a Republican state party chair made similar comments. Note that Harpootlian was an early and fervent supporter of Barack Obama in 2008, and bundled nearly $400,000 for Barack Obama’s re-election. The responsible thing for any enterprising journalist to do is to ask the president whether he stands by Harpootlian’s disgusting comments, or whether he is willing to condemn them. Thus far, of course, we have heard crickets from the administration, from the media in general, and naturally, from the port side of the blogosphere.

Matthew Yglesias asks whether we should all become Marxists.

No. We shouldn’t.

This has been the first of doubtless many Simple Answers to Ridiculous Questions.

Venezuela’s new supposed president  has decided to go to Cuba in order to “ratify a strategic, historic alliance that transcends time, that is more a brotherhood than an alliance.” The language Maduro employs is, of course, ridiculously over-the-top, so readers can feel free to point and mock. But what really makes this story newsworthy is the fact that Maduro has demonstrated the same propensity to back a loser that marked the political career of Hugo Chavez:

On weekend nights in Havana, young hipsters fill the sidewalks at a busy intersection near the seafront and spill into the park below, passing rum bottles between them, smoking cigarettes and playing guitars.

Black t-shirts, low-slung jeans, oddball haircuts and tattoos are in vogue at this spot, a favorite hangout for Cuban youth with a counter-cultural, slightly rebellious feel to it.

On one corner, police question a few overzealous partiers, but generally leave people alone compared to years past, when, according to one regular, Ernesto Ramis, they made everyone move along.

Ramis, 25, says you can get drugs here - uppers, downers, maybe some ecstasy - but there is no overt evidence of illegality this night, only a sense that being young in Cuba today is different, that conformity to the old ways has faded.

“The main difference,” says Ramis, pointing toward the Straits of Florida, barely visible in the darkness, “is that everyone wants to leave.”

One can readily understand why—assuming, of course, that one is not the supposed president of Venezuela. Young Cubans yearn to vote with their feet and leave their homeland. Nicolas Maduro seems to think that everything in Cuba is hunky-dory. One can readily forgive the people of Venezuela for being appalled by the fact that their supposed president has no grasp whatsoever on reality.

The Affordable Care Act states that employers with fifty or more employees need to provide their employees health care, or pay a penalty.

So now, more employers are shifting full-time employees to part-time so that they don’t have to pay for health care, and can avoid paying any kind of penalty as well.

Now, to be fair, the story does mention that there has been a trend towards part-time work in employment rolls even before health care “reform” came on the scene. But the story also mentions that the Affordable Care Act is definitely a factor in contributing to the shift, and when one reads the story in full, it becomes exceedingly difficult to avoid the conclusion that the shift to part-time work will only accelerate as a consequence of Obamacare. And in an employment market that features an unemployment rate still alarmingly close to 8%, with massive amounts of underemployment to boot, that’s very, very bad news.

Longtime readers of mine know that this is the part of the blog post where I lament that we decided to pass health care reform in order to find out what is in it—instead of, you know, finding out what’s in the bill before passing it. Incidentally, I will bet dollars to doughnuts that Obamaphiles will attack employers for acting in accordance with the perverse incentives contained in Obamacare, while ignoring the fact that the people who drafted and passed the Affordable Care Act, are the ones who should be blamed for bringing about those perverse incentives in the first place.

Instead of constantly sneering at Texas, maybe people in my home state would do well to study why so many jobs are getting created in Austin. Just a suggestion—which, if adopted, may serve to dramatically improve the economy in Chicago, and in Illinois in general.

A few weeks ago I was talking to a very nice, very liberal wonk type who had tried to start a small business and come away with a changed vision of regulation. The most dispiriting thing, he told me, was that it wasn’t even possible to know whether he was in compliance. He’s a very smart guy with top-notch research skills, but if he’d spent all his time researching the rules, and none running his business, he still couldn’t have been sure that he was legal. (This was a tame office sort of business, not a hazmat disposal firm.) Instead, he had to pay professionals and blindly rely on what they said. This was both expensive and demoralizing.

Megan McArdle. Anyone who thinks that the economy is not being held back by excess regulation should perhaps think again.

A very good essay by Bryan Caplan. I hope that it gets more free-market economists involved in the discussion on how to alleviate unemployment—especially the long-term variety. No excerpts; just read the whole thing.

That’s fine with me. I think that we need all the GDP boost that we can get nowadays:

The U.S. economy will officially become 3 percent bigger in July as part of a shake-up that will for the first time see government statistics take into account 21st century components such as film royalties and spending on research and development

Billions of dollars of intangible assets will enter the gross domestic product of the world’s largest economy in a revision aimed at capturing the changing nature of U.S. output.

In an interview with the Financial Times, Brent Moulton, who manages the national accounts at the Bureau of Economic Analysis, said the update is the biggest since computer software was added to the accounts in 1999.

“We are carrying these major changes all the way back in time - which for us means to 1929 - so we are essentially rewriting economic history,” said Mr Moulton.

Of course, I hope that it is not too much to ask for when I pray to the economy gods for GDP growth that doesn’t have anything to do with the modernization of statistical methods.

Margaret Thatcher was of the leaders of the side that won the Cold War. A number of the Thatcher-haters were on the other side. I am betting that is one of the reasons why they hate her so much.

The above may read like hyperbole. But if the jackboot fits …

Newly discovered documents showed substantial sums of money in hard currency were secretly transferred to the National Union of Mineworkers (NUM) during the major industrial action.

They also stated that the former German Democratic Republic offered free holidays to the country for striking miners and their families in 1984 and 1985.

Food parcels and clothing were also shipped to those taking part in the strike, which ended in a historic defeat for the miners.

Professor Stefan Berger, from the University of Manchester, and Dr Norman LaPorte, from the University of Glamorgan, detail the documents in their new book, Friendly Enemies: Britain And The GDR 1949 to 1990.

Prof Berger, who is based at Manchester’s School of Languages, Linguistics and Cultures, said: ”My research finds that the NUM and the East European communists wanted to keep the affair secret and had some consequential problems getting the money to the NUM.

”The documents talk about the possibility of using a ‘go-between’ from the French communist union CGT who would deliver the money straight from Eastern Europe to representatives of the NUM.

”They also allege that the East German FDGB union (Free German Trade Union Federation) helped the miners by providing free holidays for the families and children of British miners in the German Democratic Republic.

”The FDGB, the documents say, also co-ordinated the shipping of food parcels, clothing and so on to British miners.”

He added: ”The communists perceived the NUM as an ally in the international class struggle against capitalism - hence the close interest in the strike.

”Relations between the NUM and East European communism had been good since the 1960s.

The article is from 2010, so the documents and the information are no longer “newly discovered.” However, I don’t see many Thatcher remembrances bringing up this issue, so I thought I should.

Here is another thing worth noting:

Baroness Thatcher would have viewed the parties held to celebrate her death as a “remarkable tribute” to her achievements, one of her closest friends has said.

Conor Burns, a Conservative MP who visited Lady Thatcher on a weekly basis in her final years, said she would have been pleased they felt “so strongly” about her.

He said that when he told her that “death packs” including commemorative T-shirts had been sold at the TUC congress last year she saw them as a tribute.

He said: “Funnily enough the parties that we’re seeing, the things in some of these mining communities and those young people opening the champagne in Glasgow, they’re a remarkable tribute to her you know.

“I remember telling her last year about the TUC congress selling the Thatcher death party packs.

“She said the fact that they felt so strongly about her more than 20 years after she left Downing Street was a tribute to the fact she had done something in politics rather than simply been someone.”

If death partiers wanted to insult Thatcher, they would have ignored her passing. They can’t even hate competently.

Having dispensed with the Thatcher-haters, we can turn our attention instead to the Economist, which critiques Thatcher in some respects in its remembrance, but gets the main point right:

Because of the [economic] crisis, the pendulum is swinging dangerously away from the principles Mrs Thatcher espoused. In most of the rich world, the state’s share of the economy has stubbornly risen. Regulations—excessive as well as necessary—are tying up the private sector. Businesspeople are under scrutiny as they have not been for 30 years and bankers are everyone’s favourite bogeyman. And with the rise of China state control, not economic liberalism, is being hailed as a model for emerging markets.

For a world in desperate need of growth, this is the wrong direction. Europe will never thrive until it frees up its markets. America will throttle its recovery unless it avoids overregulation. China will not sustain its success unless it starts to liberalise. This is a crucial time to hang on to Margaret Thatcher’s central perception: that for countries to flourish, people need to push back against the advance of the state. What the world needs now is more Thatcherism, not less.

Quite so.

There is angst and ferment on the port side:

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.

In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.

Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. The administration’s hope is to create cracks in Republicans’ antitax resistance, especially in the Senate, as constituents complain about the across-the-board cuts in military and domestic programs that took effect March 1.

Mr. Obama’s proposed deficit reduction would replace those cuts. And if Republicans continue to resist the president, the White House believes that most Americans will blame them for the fiscal paralysis.

I remember when the White House thought that Republicans would never agree to the sequester, and if they did, they would be instantly punished in the court of public opinion. How did that turn out?

For port-siders who hate the deal, see Brian Beutler, Sahil Kapur (who points to other port-siders who hate the deal), and Paul Krugman. The objections mainly revolve around the administration’s acceptance of chained CPI when it comes to Social Security. I would take the time to drink their tears and pronounce them to be delicious, but I have to agree with the notion that the president is making compromises that he doesn’t need to make. His popularity has fallen, but he is still more popular than congressional Republicans, and running against cuts in Social Security—demagogic though this stance may be—isn’t out of style just yet. Additionally, the GOP as a whole is still battered and bruised as a consequence of the election and its general public image. I don’t see why the administration doesn’t just hold fast to a liberal line, demand more tax increases on the rich and insist that it will protect Social Security from the supposed ravages of chained CPI, thus preventing old people from having to get by on cat food. Again, I stress that such a negotiating stance would constitute pure demagoguery, but I would have thought that the demagoguery would work, and the administration would be happy to pursue it—especially in the run-up to the 2014 midterm elections. The negotiating stance they have chosen instead seems sub-optimal when one considers the political aims of the administration and its congressional Democratic allies.

I tried to think up a clever title for this blog post, but I decided to go for truthful and descriptive instead:

The economic recovery, which looked promising as the year began, appears ready to stall for the third year in a row. And once more, Washington gets much of the blame.

Friday’s disastrous employment report, which showed a gain of just 88,000 jobs, down from 236,000 last month, is a flashing red signal that the economy is again in serious danger.

And it’s just the latest in a string of softening numbers. The jobless rate dropped to 7.6 percent in March, but only because nearly half a million people stopped looking for work. The percentage of people in the workforce dropped to 63.3 percent, the lowest level since 1979.

Other ominous signs: Jobless claims spiked this week to 385,000, and a gauge of the massive services sector of the economy declined. Wall Street economists now expect growth to come in around a solid 3 percent in the first quarter and then drop back sharply, possibly close to zero later this year.

Austan Goolsbee, former chair of President Barack Obama’s Council of Economic Advisers, called the March jobs report a “punch to the gut” on CNBC.

I have seen a number of reports blaming the bad jobs numbers on the sequester. While I certainly think that random and arbitrary cuts from the budget are a bad idea—I prefer cuts to be focused, targeted, and proposed with actual rationales behind them—I have a lot of trouble with the idea that taking a mere $85 billion from the budget is responsible for the bad jobs numbers (and yes, in the grand scheme of things, when one considers just how big the federal budget is, $85 billion qualifies as “mere”). A more likely culprit is the increase in payroll taxes that was agreed to as part of the fiscal cliff deal. I have written before that I think Republicans ought to push for the repeal of the payroll tax increase; it’s certainly good policy to keep taxes low in a recession and it would be terrific politics for Republicans to push for a tax cut that cannot possibly be characterized as a giveaway to the rich. Alas, the GOP has not yet seen fit to follow my advice, but hope springs eternal that eventually, they will.

For more on this issue, see James Pethokoukis, who very definitely does not like what he sees in the March jobs report, and who also does not think that the sequester is responsible for the bad numbers.

UPDATE: Joe Weisenthal also thinks that it is time to cut the payroll tax.