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September 14, 2008
The Economy Ain't In Bad Shape
Don Boudreaux
In today's edition of the Washington Post, Donald Luskin does his best to calm people's fears about the state of today's economy. He's got lots of solid facts on his side.
Posted by Don Boudreaux in Current Affairs, Myths and Fallacies, Standard of Living, The Economy, The Hollow Middle | Permalink
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Do you feel that the real GDP is distorted in times of war, or otherwise very high government spending? If it weren't for the Iraq and Afghan wars, would we be in a recession?
Posted by: Tim | Sep 14, 2008 2:40:04 PM
Don Luskin has been spouting the same nonsense for the last 18 months. The GDP measure is a very Keynesian statistic. If you just spend money on digging ditches and filling them up, GDP will go up. Which is what it does when you "stimulate" the present by borrowing it with future.
PPI and CPI are at multi-decadal highs and yet the GDP deflator used for last GDP report was almost at a historic low.
Posted by: Oil Shock | Sep 14, 2008 2:43:13 PM
Tim is totally right.
This post on Don Luskin is a MUST read.
Posted by: Victor | Sep 14, 2008 3:23:04 PM
Obama is flat-out wrong when he frets on his campaign Web site that "the personal savings rate is now the lowest it's been since the Great Depression." The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.
At least, Luskin bothered to link the Commerce Department data substantiating his claim. So the saving rate in the second quarter of '08 was 2.6%? O.K. Maybe we should wait for the revisions, but I'll accept this figure.
The saving rate in the first quarter according to the same source is 0.2%, and the Obama web site undoubtedly refers to this statistic. Luskin knows this.
The figure for the four quarters of 2007 are 1.1%, 0.3%, 0.5% and 0.4%. The figure for the four quarters of 2006 are 1.0%, 0.6%, 0.5% and 0.9%. 2.6% is one of high levels reached during the Bush administration. The statistic has never risen even to three percent and hasn't often risen above two percent.
By contrast, the average during the Clinton administration was well above four percent. The statistic peaked at 7.9% and rarely fell below three percent.
What does all that mean, really? Probably not much. This statistic has fallen consistently for decades; however, Luskin is lying by omission with his statistics, and he knows it.
Full disclosure: I'm an adviser to John McCain's campaign, though as far as I know, the senator has never taken one word of my advice.
Obviously. After that whopper, you obviously felt a strong enough pang of guilt to add this proviso.
Why the spike in the savings rate in the second quarter? We "saved" the "stimulus" package. At least, it hasn't appeared on the outgo side of the ledger yet.
See lines 16 and 25 in the chart Luskin links. 16 shows a large rise in government benefits received. 25 shows a corresponding fall in taxes paid. These two lines alone account for practically all of the large increase in personal savings. The change in personal outlays from quarter to quarter was negligible. We spent more in the second quarter (line 27), and we didn't earn correspondingly more (line 1), not enough to account for the rising "savings" anyway.
So this "rise in personal savings" is a political concoction, and Luskin knows it, but he doesn't say so, because he's a politician himself. Of course, most McCainiacs won't follow the like or digest the chart. They'll just repeat the statistical factoid as though it means something.
Posted by: Martin Brock | Sep 14, 2008 3:38:57 PM
What does it say about our nation that it has become political suicide to state the good news that our economy is not in recession?
Duh! It says we're in an election year.
What does it say about our nation when an obviously fabricated rise in "personal savings" is evidence for a good-economy line? Same thing.
Posted by: Martin Brock | Sep 14, 2008 4:04:53 PM
It looks like Lehman is going bankrupt before the market opens tomorrow morning, prepare for a wild ride.
I think the economy is splintering, some areas are very strong, some very weak, some difficult to measure. I think in the global economy some of our economic measures are not working properly - just a guess.
At least Luskin smacked down Forbes, who tends to prattle nonsense.
Posted by: save_the_rustbelt | Sep 14, 2008 4:47:35 PM
Lehman looks basically done. B of A is in talks to buy Merrill. This is going to be an interesting day, probably week.
Creative destruction.
Posted by: Mesa Econoguy | Sep 14, 2008 5:17:11 PM
And Fed meeting Tuesday….
Posted by: Mesa Econoguy | Sep 14, 2008 5:21:01 PM
Creative destruction.
Very inappropriate term to describe what is going on with Lehman. It is simply destruction. THere is nothing creative about bailing out a private corporation using public funds or the power of the government.
Posted by: Oil Shock | Sep 14, 2008 6:08:14 PM
Luskin's article strikes me as a hodge-podge of more or less arbitrarily selected data in the service of a preconceived conclusion. I can't help recalling the "permanently high plateau" and "fundamentally sound" reassurances issued by Irving Fisher, Andrew Mellon, and Herbert Hoover, among others, late in 1929.
One reason some economists now fear a major downturn springs not from their data mining but more fundamentally from an Austrian perspective on business fluctuations. For several years during the first part of the present decade, the Fed pursued very expansionary policies with regard to credit and money growth. This policy almost certainly created a raft of malinvestments, including many in the construction sector. The current mortgage-related woes in the financial markets owe much, though not everything, to the same cause. If a lot of malinvestments have been made, then the die has been cast for a wave a unpleasant adjustments--that is, for what is known these days as a recession. Keeping these malinvestments afloat with another round of inflationary credit and money creation only portends an even greater recession later. If real savings have not been made that are sufficient to bring projects to completion, then that is that: projects must necessarily be abandoned short of completion and resources reallocated, where possible, to better alternatives.
Posted by: Robert Higgs | Sep 14, 2008 7:45:33 PM
I'm as libertarian as the next guy, but I don't understand why it is such a common conservative/libertarian position to state that the economy is doing just fine. You guys may want to talk to an average Joe Sixpack or pick up a newspaper. Has anyone noticed that Fannie and Freddie tanked a week ago or that Lehman Brothers is right behind them? I would hate to see what would happen if the economy was in bad shape.
Posted by: The Dirty Mac | Sep 14, 2008 8:27:46 PM
Found this interesting article on bloomberg.
Posted by: Sanjiv | Sep 14, 2008 10:21:59 PM
TDM,
No, it is not a libertarian position at all. It is a politcally motivated position. I have also noticed that those who call themselves monetarists tend to belong to this camp of Pollyannas. They constantly gloat about the wonders of the "market economy" ( which it isn't ) then when an inevitable downturn occurs turn around and tell us why it is not the fault of the market ( which it isn't ).
Posted by: Oil Shock | Sep 14, 2008 10:22:47 PM
"The Economy Ain't In Bad Shape"
There is a book from 1931 called Oh Yeah? by Edward Angley. This book consisted in its entirety of quotes from members of the US political and financial establishment of the day. All of them, without exception, called for the imminent recovery of the US markets and the US economy. All of them, without exception, were debunked and in fact made to look utterly ridiculous by subsequent events on the markets.
From; http://www.the-privateer.com/gold/week352.html
And Thomas Franks new book Wrecking Crew.
Anybody else care to share their change in net worth over the last 2 years?
I'm down at least 25% and I have a steady job. I'm scared to death to know what a bad economy will look like.
There were prognosticators who over 2 or 3 years ago predicted the current situation. They are suggesting things will get worse (possibly significantly) before they get better. It's interesting to me that the conservative leaning prognosticators are the ones who rarely made these predictions and are the ones still denying any problems. The sides are the same as those lined up on either side of the climate change issue as well.
Posted by: muirgeo | Sep 14, 2008 10:36:08 PM
I'm down at least 25% and I have a steady job.
If that's the fall in your house price, I need to know how much you were up in the preceding few years. House prices were too high a couple of years ago. Now, they're lower, but they're the same houses. If these changing signals lower an excessive rate of new house construction, that's a good thing.
If you borrowed to buy in a highly area three years ago, you may be in a world of hurt now, but your solution is not catastrophic. Either you write off the loss and move on, or you default on the mortgage. Defaulting on a mortgage, even declaring bankruptcy, is not the end of the world. It's only a correction of mistaken figures in accounting ledgers. The sooner it's over the better for everyone. Not balancing these books would be a problem.
I own a house without a mortgage and have no idea how much its nominal value has fallen, but I'll know soon as I plan to sell this year or early next. I own a second house with a mortgage, and I don't know what'll happen to its nominal value in the coming year either, but I'm not losing any sleep over it. I recently changed jobs with a significant salary rise, so I'm at least keeping up with inflation for the moment.
There were prognosticators who over 2 or 3 years ago predicted the current situation. They are suggesting things will get worse (possibly significantly) before they get better.
I was one of them. Things may get worse, but I think we're near a bottom now, and I don't expect a major depression, because people don't want a major depression. The supply of potentially profitable organizations is literally limitless. Avoiding a recession is a matter of declaring an end to some experimental organizations that haven't proven profitable and beginning new ones.
I worry about inflation, because the baby boom may expect more entitlement to consume without producing than younger people can satisfy without declining living standards, but I don't see how that translates into unemployment. Maybe we'll shoot some statesmen as a consequence, but I'm not holding my breath.
I also expect more inflation from the declining dollar, but this change likely portends increased consumption in China and elsewhere with some shift of production back to the U.S., so I don't see how that translates into unemployment either. We don't import much that we haven't produced ourselves in the not too distant past, and we can retool our economy very rapidly. If we've passed laws (like patents) against this production in the U.S., that's a problem, but we can always change the laws.
The sides are the same as those lined up on either side of the climate change issue as well.
One has nothing to do with the other, but although the climate is changing, Climate Change is largely a political fad that will subside soon because peak oil is more of a reality. Unless the price of oil falls back a lot more than it already has, people will be in no mood to listen to preaching about Climate Change, and we'll be exploring fossil fuel alternatives anyway. If I made a living theorizing about climate catastrophes, I'd be worried. I hope most of these people lose their jobs soon, but I'm not holding my breath.
Posted by: Martin Brock | Sep 14, 2008 11:32:40 PM
Martin,
Climate change and deregulatory financial collapses are both antithetical to classic liberal ideologies.
If major market externalities can have massive unintended consequences and if the market recurrently collapses coincident with deregulation the guys holding up these ideologies first response is denial of the data as we see here regularly.
Climate change is as much a political fad as is evolutionary theory. The evidence is mounting that climate change is having and will have dramatic effects on my states water supplies.
Posted by: muirgeo | Sep 15, 2008 12:08:12 AM
No amount of Central Planning is going to fix climate change, if it exists at all. More over any planned deindustrialization will devastate the human life on the planet. the reason why the planet is able to support the current population level is the current level of industrialization.
Markets are evolutionary, central planning is not. Markets are like nature taking its course. Central Planning economy is like trying to central plan the global climate, both have about the same probablity of success.
THere is no such thing as a deregulatory collapse. Soviet Union collapsed. Before the so called "deregulations" we still had the 1970s.
All this analysis about deregulation leaves out one major event in economic history. THat was the bankruptcy of the United States in 1971. World changed when Nixon took us off the gold standard, the anchor was removed from the global financial system. Global financial system just based on paper was without precedent. Of course it had happened for short durations during wars and with severe inflationary consequences. Financialization of the economy is possible only because the monetary systems are not anchored to anything tangible.
THe bail outs that you complain about is a 100% Keynesian "idea". History of largescale bail outs go all the way back to 1930s.
Posted by: Oil Shock | Sep 15, 2008 12:39:56 AM
Climate change and deregulatory financial collapses are both antithetical to classic liberal ideologies.
Not at all. States impede financial correction by protecting established financial interests. Classical liberals have addressed this problem for ages. In spite of what you might think, based on modern revisions, classical liberalism is traditionally a critique of the rich protecting their riches, not a critique of forcible equality. The whole point of The Road to Serfdom is that socialism would not enforce equality but would only reinstate the forcible inequality of medieval estates.
Climate change is an inevitable, natural occurrence. A CO2 level rise and man's contribution to it are well enough established. The extent of man's effect (through CO2 emissions) on average global temperature rise is still an open question. The extent of this rise and whether it will continue indefinitely is also an open question. Any catastrophic effects of the warming are an open question, and the potentially beneficial effects of rising CO2 are also an open question.
However all of these questions are less pressing than the question of sustaining development as oil production peaks while demand for energy, particularly energy for transport, continues to rise. The Chinese and Indians want U.S. living standards, and either they'll get them or we'll lose them. That's an assumption I don't much question.
If major market externalities can have massive unintended consequences and if the market recurrently collapses coincident with deregulation the guys holding up these ideologies first response is denial of the data as we see here regularly.
Of course, markets have unintended consequences, but global warming is not a consequence of market organization, and I'm not sure it's a consequence of human action at all.
I fully expect economic organization regularly to shift and occasionally to shift rapidly. It's like punctuated equilibrium in the development of living forms. These shifts don't bother me at all, and a regulatory state can't do anything to prevent them other than establish a stagnant system of entitlement suppressing growth possibly only through necessarily uncertain, dynamic reorganization. States establishing propriety can cushion the effects, and I favor of some cushioning.
I can avoid painful falls by never running. My mom taught me this lesson when I was three. I kept running anyway.
Climate change is as much a political fad as is evolutionary theory.
A changing climate is not a fad. It's a fact of life. Climate Change, like the Global Warming that preceded it (and the Global Cooling that preceded Global Warming), is a fad.
Climate Change is a political ideology going far beyond observed changes in the climate. The ideology also asserts that burning fossil fuels is primarily responsible for the change, that changes will accelerate and become increasingly catastrophic, that changes are always detrimental and never beneficial, that a global regulatory regime is the only possible solution. All of these assumptions are questionable. Some are highly questionable.
The evidence is mounting that climate change is having and will have dramatic effects on my states water supplies.
Climate change always has dramatic effects. You have little more clue what effect these changes will have on your state's water supply, ultimately, than you know what sort of species will evolve over the next few million years. You think you know where climate change is leading, but you don't. You think you know what's causing it, but you don't.
Credible scientists believe for good reason that rising CO2 in the historical record (though not the current rise linked to fossil fuel burning) is a consequence of warming rather than a cause, because the ocean releases more CO2 as it warms. Physicists may soon explain the striking correlation between solar activity and global temperature measurements, correlations apparently more compelling than the dubious correlation with rising CO2 concentration. The possible theoretical explanation does not involve increasing heat from the sun. It involves the effect of cosmic rays on cloud formation and the effect of the solar wind on cosmic rays.
Then again, maybe this theory won't hold up. Regardless, if the intensity of the solar wind declines in the next decade as expected and global temperature measurements decline with it, we'll certainly have a Global Warming crisis then. Meanwhile, the price of oil is still over $100/barrel, and the search for alternatives proceeds.
Posted by: Martin Brock | Sep 15, 2008 9:00:38 AM
... the reason why the planet is able to support the current population level is the current level of industrialization.
Right. And the reason why most of the world's population lives in relative poverty is a lack of industrialization. We need to write off the bad debts a.s.a.p. and reorganize resources to address this poverty. Writing off the debts means that people who thought they were rich aren't as rich as they thought, because they're entitled to consume less of the economy's output than records now seem to indicate. We should correct these records.
The problem with "investments" like Treasury securities is that we can't correct the record. "Investments" like FNMA bonds are similar, because they irrationally conflate good investments with bad investments, so that rather than disentangling the good investments from the bad ones, "investors" simply expect the state to compel taxpayers to make up the difference. Debtors defaulting on their mortgages need not benefit from this bailout. The bondholders may.
There is no such thing as a deregulatory collapse. Soviet Union collapsed.
The Soviet Union's economy collapsed when the planners stopped regulating it. That's true enough. They stopped regulating it, because they had regulated it to death, so it wasn't worth regulating anymore. A less centrally planned organization doesn't just appear miraculously overnight.
Financialization of the economy is possible only because the monetary systems are not anchored to anything tangible.
Monetary systems are always linked to tangible things, but they needn't be linked to a single tangible thing with a fixed price.
Posted by: Martin Brock | Sep 15, 2008 9:41:28 AM
Sure enough, as soon as I wrote the post above, the price of oil fell below $100/barrel. [I'm very happy about that by the way.] Still, I remain a believer in peak oil production globally, in the next decade or so if not now, so I expect the market to sort out solutions to any looming catastrophe wrought by oil burning long before the political process does.
Posted by: Martin Brock | Sep 15, 2008 10:37:02 AM
"Credible scientists believe for good reason that rising CO2 in the historical record (though not the current rise linked to fossil fuel burning) is a consequence of warming rather than a cause, because the ocean releases more CO2 as it warms." Martin
Credible scientist understand that a change in orbital parameters can indeed lead to one of the oceans warming out-gasing CO2 then warming more from the positive feedback effect of CO2
"Physicists may soon explain the striking correlation between solar activity and global temperature measurements, correlations apparently more compelling than the dubious correlation with rising CO2 concentration. The possible theoretical explanation does not involve increasing heat from the sun. It involves the effect of cosmic rays on cloud formation and the effect of the solar wind on cosmic rays."
Simply NOT TRUE and unsupported by the data. The experts admit the most uncertain part of their models has to do with cloud feedbacks. Claiming certainty or near-certainty of cosmic rays cloud formation effects and the subsequent feedback effects of said clouds is completely unfounded based on the evidence or lack there of.
Climate myths: It’s all down to cosmic rays
Don't want to debate climate science here but can't let a claim I know to be false go uncorrected.
Posted by: muirgeo | Sep 15, 2008 12:44:58 PM
Ah, but what does anyone really know?
IAC, the Soviet economy didn't really collapse, it had always been a basket case sustained only by black market activity. What acrually collapsed was the USSR. The "union" broke apart.
Posted by: Sam Grove | Sep 15, 2008 1:21:04 PM
Credible scientist understand that a change in orbital parameters can indeed lead to one of the oceans warming out-gasing CO2 then warming more from the positive feedback effect of CO2.
You miss the point. CO2 concentration and temperature are correlated in ice core and other measurements in fact. The question is: which of the two (if either) is the cause and which (if either) is the effect. I don't know what you mean by "orbital parameters" here, but we know that temperature varies. The Thames regularly froze over in the 15th century, during the Little Ice Age. We have paintings of people skating on it. The Thames never freezes over now, so climate certainly changes without men burning fossil fuels.
We also know that CO2 concentration changes over centuries, because we can measure it in ice core samples, and we know that a rise in temperature is correlated with a rise in CO2. This fact does not imply that a CO2 rise causes a temperature rise. It's possible that a temperature rise, from whatever source, causes a CO2 rise as oceans emit more CO2, and it's also possible that something else causes both. Oceans emit far more CO2 than man emits by burning fossil fuels, so a relatively small change in this emission is very significant.
Simply NOT TRUE and unsupported by the data. The experts admit the most uncertain part of their models has to do with cloud feedbacks.
Here again, you miss the point. A strong correlation between global temperature and solar activity (sun spots indicating storms on the surface of the sun emitting an ionic wind) is supported by the data. The correlation is a fact. We don't know how these changes in solar activity could affect global temperature on the Earth, because the sun does not radiate enough additional heat as a consequence to account for the temperature changes; however, the correlation exists regardless, and credible scientists suggest an indirect effect on cloud formation.
Claiming certainty or near-certainty of cosmic rays cloud formation effects and the subsequent feedback effects of said clouds is completely unfounded based on the evidence or lack there of.
Except that I never claim any certainty or near-certainty. On the contrary, I explicitly state that the theory might not hold up. I'm not the one pretending certainty that I don't have here.
I followed your link. The author essentially says that the question of a link between cosmic rays and cloud formation is open but then calls the theory "far-fetched" without any quantitative theoretical support. That's not an argument against the theory.
The author calls attempts to measure the effect "unstuck", but then he seems to concede a correlation between cosmic ray intensity and cloud cover. He goes on to say something about solar irradiance, but solar irradiance is irrelevant here. Cosmic rays don't come from the sun. They come from the cosmos (the entire sky in every direction). The theory is that the solar wind affects the intensity of cosmic rays reaching the Earth, the correlation in question is between cosmic ray intensity and cloud formation, not between solar activity and cosmic ray intensity.
The author then goes on to dispute the methodology of the measurements and to claim that measured variations in cosmic ray intensity can't account for temperature changes during the 20th century. That's fine, but you've apparently convinced yourself that this disputation is unassailable while disputation of Climate Change is not.
Don't want to debate climate science here but can't let a claim I know to be false go uncorrected.
You are debating it and then saying that you don't want to debate it. Why would you do that? You haven't shown any claim to be false. You've linked a web site that disputes a claim, as though this site settles the question. Real science doesn't work this way. You're still left with a correlation between solar activity and temperature to explain even if this theory of the correlation doesn't withstand scrutiny.
Posted by: Martin Brock | Sep 15, 2008 1:33:57 PM
Martin,
Did you even read the article or look at the graph? We have direct measurements of cosmic radiations and they don't even show a correlation with temperatures at all.
Also from Real Climate;
"This comes in addition to the previously shown fact that the correlation of cosmic ray flux with paleoclimatic data proposed by Shaviv and Veizer (2003) only arises “by making several arbitrary adjustments to the cosmic ray data” (Rahmstorf et al. 2004)."
There is NO CORELLATION much less explained mechanism for cosmic rays and climate change.
There IS a correlation of the current rise of CO2 from man made sources with a subsequenbt consistent and markedly anamolous rise in global temperature.
THERE IS a definite mechanism as to the reason for believing CO2 will cause a rise in temperature as it's levels increase. To argue against it is to argue against the sky being blue because it is a fact of fundamental physics, electromagnetic theory and the absorption spectrum of the CO2 molecule.
Posted by: muirgeo | Sep 15, 2008 2:12:33 PM
The Global Warming Gravy Train
Posted by: Oil Shock | Sep 15, 2008 2:17:05 PM
Very inappropriate term to describe what is going on with Lehman. It is simply destruction. THere is nothing creative about bailing out a private corporation using public funds or the power of the government.
Oil Shock, while I agree that there is nothing creative about bailing out private companies with taxpayer funds (who are we kidding about the funds being "public"?), this is not what's going on with Lehman and it never was. Paulson was steadfast throughout the negotiations that the taxpayers will not provide backstops for these deals. This time. For once. I'm very quick to call the out the Fed and Treasury, but I this time they did the right thing.
Posted by: Methinks | Sep 15, 2008 2:59:47 PM
Did you even read the article or look at the graph?
Yes, I did. I summarized the article to prove that I had read it, but you ignored the summary and responded with this rhetorical question.
We have direct measurements of cosmic radiations and they don't even show a correlation with temperatures at all.
You've linked a chart without reference to temperature and then you've linked another site claiming that a third source's claim of a correlation is based on "arbitrary" adjustments, though the experimenters themselves presumably didn't consider their analysis arbitrary. You don't really know much about the details of this controversy. I don't either of course, but I'm not the one claiming sufficient certainty to spend billions, perhaps trillions, of dollars of other people's money here.
There is NO CORELLATION much less explained mechanism for cosmic rays and climate change.
Your own source says that a correlation is claimed while disputing the claim.
There IS a correlation of the current rise of CO2 from man made sources with a subsequenbt consistent and markedly anamolous rise in global temperature.
But there was no correlation in the sixties and seventies when global temperature was falling, and the current rise is "anomalous" only because you use this word to describe it. We know that more extreme swings in global temperature have occurred in the past, only a few centuries ago, and we have no reason to attribute the swings to fossil fuel burning or even to CO2 increases from other causes, yet you call the current rise "anomalous". Why not call it "a rise within historical norms"?
THERE IS a definite mechanism as to the reason for believing CO2 will cause a rise in temperature as it's levels increase.
Actually, there isn't a very good mechanism. There are models that theoreticians tweak to fit temperature data. You concede yourself above that cloud cover is a major uncertainty in these models. You acknowledge that the models depend on feedback effects for the warming they predict, because a CO2 rise itself is not adequate, CO2 being a relatively impotent greenhouse gas. Most scientists agree that water vapor and clouds are more important, so the "it's all down to CO2" theory must somehow have rising CO2 cause rising water vapor and clouds, and that's how the modelers build their models.
To argue against it is to argue against the sky being blue because it is a fact of fundamental physics, electromagnetic theory and the absorption spectrum of the CO2 molecule.
But I'm not arguing against any well established science. In fact, the Climate Change models you champion here don't rely on IR absorption by CO2 for most of the warming they predict, because physicists long ago agreed that this effect is too small if the CO2 rise accounts somehow for observed warming, just as your sources claim that the effect of cosmic rays on cloud formation is too small.
Posted by: Martin Brock | Sep 15, 2008 3:07:25 PM
... this is not what's going on with Lehman and it never was. Paulson was steadfast throughout the negotiations that the taxpayers will not provide backstops for these deals.
Then what is Paulson doing in the negotiations?
Posted by: Martin Brock | Sep 15, 2008 3:11:50 PM
The assertion that increases in CO2 are responsible for climate warming are still theoretical and the climate models based on this assumption DID NOT predict the past decade of cooling.
T repeat, the climate models based on CO2 forcing DID NOT predict the last decade of cooling.
According to those models, it was supposed to keep warming.
And curse you for bringing this up here.
Posted by: Sam Grove | Sep 15, 2008 3:14:25 PM
I really enjoy this very entertaining blog
Nowhere else in the blogosphere can I read such comedy material.
Posted by: RN | Sep 15, 2008 3:32:51 PM
It's kind of funny how this was posted the day before the Dow and S&P fell 4.5%.
Posted by: Charlie | Sep 15, 2008 4:29:24 PM
Charlie, watch mr. Boudreaux silently add a "tongue-in-cheek" tag to his post :)
Posted by: kurt | Sep 15, 2008 5:12:56 PM
Paper pushers are in bad shape, but it sure ain't the first time, and it won't be the last. Here's a lesson for holders of Lehman's paper? Don't bring up the rear. Be first in line to fail.
Posted by: Martin Brock | Sep 15, 2008 5:26:24 PM
10 year Treasury notes haven't been so costly since 1958. Despite the incredible state of Uncle Sam's finances, entitlement to His tax revenue has rarely been dearer, with a yield well below the CPI-U. What does that mean?
Posted by: Martin Brock | Sep 15, 2008 5:39:50 PM
It's kind of funny how this was posted the day before the Dow and S&P fell 4.5%.
The stock market is not the economy.
and the S&P futures closed down almost 5%.
Posted by: Methinks | Sep 15, 2008 5:52:59 PM
Just heard Obama say, in the same breath, that trickle down doesn't work and that the economy is in crisis. So which is it. It can't be both. Either trickle down does work, or a good democrat shouldn't be the least bit concerned if a bunch of rich wall street bankers lose some money.
Posted by: Randy | Sep 15, 2008 7:13:08 PM
"The stock market is not the economy."
Haha, good point.
It's too bad we don't have some sort of prediction market that could assess the accurracy of Luskin's article. Like, if people were somehow able to buy and sell the rights to companies' future profits.
Posted by: Charlie | Sep 16, 2008 1:11:02 AM
The market for financial services is not the entire economy, though it might appear to be when state monetary authorities hand out their entitlements too freely.
Posted by: Martin Brock | Sep 16, 2008 8:03:34 AM
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