Month: October 2003

I wanted to see what people are saying about Krugman today, but the Technorati: Link Cosmos is empty just for this one article.

The left doesn’t want you to know what a liar Krugman is, apparently.

UPDATE: I’ve shamed Technorati into showing some links, but it’s a small list.

UPDATE AGAIN: It looks like Technorati has finally more or less caught up with Blogistan, after about 48 hours of being far behind. This tool doesn’t appear to be incredibly useful with such a long lag time. But in this case there wasn’t much to see: Krugman, who’s supposed to be a brilliant economist, simply parroted Nancy Pelosi’s line on the third quarter economic results: “So what if consumer spending, business investment and exports are are all up? Next quarter might not be so good, neener neener.”

Why does the Times pay Krugman for such crap when Pelosi dispenses it for free?

This seems like important news:

WASHINGTON (AP) – The economy grew at a scorching 7.2 percent annual rate in the third quarter in the strongest pace in nearly two decades. Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence.

I wonder why this isn’t headlines?

UPDATE: Reader points out that it is headlines in some places: New York Times, LA Times, and Wall St. Journal specifically. But it’s not headlines in Frisco, Silicon Valley, and Washington. Here’s the report with the breakout of growth areas (durable goods and consumer spending) and here’s an analysis from the Journal (for subscribers).

“The biggest upside surprise was a larger-than-expected narrowing of the net export deficit, which was the product of a 9.3% rate of gain in exports and a scant 0.1% increase in imports. ? Looking ahead, it is probable that consumer-spending growth is going to cool off as the benefits of tax refunds and mortgage refinancings fade. ? However, capital spending growth is likely to remain firm on the back of much improved corporate profits and stronger domestic output. Most important from the short-term standpoint, however, will be a need to boost inventories in order to replenish depleted stocks and to satisfy final demand. ? it is likely that real GDP growth will be solid in Q4, albeit probably not as robust as in Q3.” — Joshua Shapiro, chief U.S. economist, MFR Inc.

“This report provides further confirmation that the real recovery has begun. The economy was firing on all cylinders from the demand side in the third quarter. Importantly, business-equipment spending continues to strengthen while the strength of nominal GDP growth and productivity gains points to even stronger gains in corporate profits. ? My forecast prior to the release of GDP was 4.2% for Q4 and I have not made any material changes to it following today’s number. ? We see growth remaining significantly above trend in the fourth quarter and we continue to believe that the Fed can raise rates” at its March meeting. — John Ryding, chief market economist, Bear Stearns

Tomorrow, look for Krugman to explain that it really means Bush is a very, very bad man.

See also Megan’s take on these numbers. Her last link is especially interesting; it shows a flat economy in Europe, poor dears.

There’s been a fair degree of whining on the left about the audacity of Tom DeLay’s redistricting in Texas, simply because DeLay is a Republican and therefore a lightning rod for left-wing hate. There is apparently some democratic principle, knowable only to those with rarefied sensibilities, that dictates a state with a 60% Republican population should be required to send a Congressional delegation to Washington with a Democratic majority in perpetuity. I don’t understand that kind of thinking.

And I expect there will be the same sort of whining in California as the Ted Costa plan nears the ballot, for pretty much the same reasons. California’s legislature and Congressional delegation are to the left of the population thanks to the 1980 district maps drawn up by the late Phillip Burton, elder brother of state Senate leader and major coke fiend John Burton. (Phillip’s life is chronicled in A Rage for Justice by John Jacobs, a great read.)

Burton’s 1980 map was the first use of computers in redistricting, although the driving force was Burton’s rabid partisanship. Check this description on a notable members of Congress site (scroll down):

At least two political surnames have become verbs. “Gerrymandering” entered the political lexicon in 1812, in association with a formidable leader, Elbridge Gerry, and refers to “the drawing of legislative district boundary lines to obtain partisan or factional advantage.” (Plano, 1993, p. 140) Given the high stakes that ride on redrawing district boundary lines every decade, it may not be surprising that the verb “to burtonize” also has to do with political cartography. It derives from the work of Rep. Phil Burton, a Californian, whose computer-based skills after the 1980 census brought gerrymandering into a whole new level of precision….

Nature abhors a vacuum, so when the legislature in Sacramento had given little thought to redistricting, Burton moved in. Officially, he was the Democratic congressional liaison to the state legislature; but politically he was the close ally of House Speaker Willie L. Brown, Jr, who later has become the mayor of San Francisco. Because Burton had an abrasive side, he also had a number of enemies in Sacramento — many of them Democrats.

California had acquired two additional seats in Congress under the 1980 apportionment, raising its number of congressmen from 43 to 45. Most of this increase was owing to immigration into Republican-dominated southern California, and the districts in the San Francisco Bay area in 1981 were from sixty to eighty thousand people smaller than the Supreme Court’s one-person, one-vote dictum would have them be.

Burton was the leader of the congressional Democrats, who held a paper-thin 22-to-21 majority. Early on, it was clear that Burton was seeking a potential Democratic of two seats by placing one of the two new districts that would be needed in central San Diego. Also, if another district were carved into the San Joaquin Valley, there was hope of gaining another Democratic seat in the Fresno area. The real challenge, however, was in the Bay Area. In addition to his brother John’s Fifth District and his own Sixth, there were those “undersized” districts represented by Vic Fazio (4th), Ron Dellums (8th), Fortney “Pete” Stark (9th), George Miller (7th), Don Edwards (10th), and Norman Mineta (13th). In addition, Hungarian-born Tom Lantos had won an unexpected upset of a Republican in the 11th District, and it seemed improbable that this additional seat could be retained. As one Democratic strategist observed, “It’s going to be a phenomenal feat to balance them in such a way that all five are preserved.”

In the end, taking maximum advantage of computer technology, Burton redrew the state in a way that created five new Democratic districts. His GOP congressional counterpart on the state redistricting panel fumed that the result was “bizarre,” and “an abomination,” and that Burton had “personally put his thumb print on the state of California.” (CQWR, 1981, 2155.). Burton loved being chastised however, and gleefully pointed out that the mean variance in population among the forty-five districts he had created was a scant 65 people! (CQWR, 1983, 2155.)

Phillip Burton called his map his “contribution to modern art” because it was so ugly and obviously unfair, but he got it passed by creating safe seats for enough Republican incumbents to ensure its approval by the legislature, and the incumbency protection racket was born. Burtonized maps create special districts for minorities and Republicans that essentially guarantee regular re-election at the expense of obscurity: the holders of these seats never have to reach out to the majority with the kinds of policies that might win them acclaim and state-wide recognition. So California has no blacks and no Republicans in the US Senate or in statewide office except one, Swarzenegger, who was able to become famous outside politics.

If California had a fair and straight district map, the legislature would be about 45% Republican instead of 36%, and legislative battles would be about policy instead of party loyalty. The Costa plan is even more dangerous to the anti-democratic spirit of the Left than the Recall was, and they fear it.

We’re in the lull between elections right now, but expect the unions and the Casinos to pump all their spare cash into the defeat of this measure.

See: Irish Lass for more.

One of the myths swirling around the California budget deficit is a claim that tax rates in the Golden State are modest. This is hard to swallow when we look at neighboring states. Oregon has no state sales tax, and an income tax rate that peaks out at 9 percent. California’s peaks at 9.3 percent.

Washington, which has no state income tax, has a state sales tax of 6.5%, plus local taxes. California has a state sales tax of 7.25% plus local taxes. In Santa Clara, CA, I pay 8.5% sales tax; in Vancouver, WA, I pay 7.3% sales tax.

It’s odd that California, which charges both sales and income taxes, would charge these at rates that exceed nearby states that manage to get by on only one; perhaps the property tax is lower thanks to the infamous Prop. 13.

But no, not even that’s the case. While California’s property tax rate of $1.05 per $100 is lower than Oregon’s $1.35 and Washington’s $1.10, the higher prices of California real estate push it though the roof. A 1200 sq. ft. home in Portland is going to run you about $150,000, give or take a few, and about $120,000 in Vancouver, WA. But that same house would run you at least $450,000 in Santa Clara, and your property tax bill will reflect that. So you’re gonna pay 2 to 3 times as much property tax in California along with your double taxation on income and sales.

California tax revenues took a big jump in 2000, and have been essentially flat since then, except for a slight upward creep this year:

1998-99 …. 58,615.3
1999-00 …. 71,930.5
2000-01 …. 71,428.1
2001-02 …. 72,238.6
2002-03 …. 81,527.4*

*Includes $10,675.4 million for the Deficit Financing Bond

But spending exceeded revenues in 2000-01 and stayed there until this year’s budget, aided by the big bond sale:

1998-99 …. 57,827.1
1999-00 …. 66,494.0
2000-01 …. 78,052.9
2001-02 …. 76,751.7
2002-03 …. 78,141.7

This in a state that has a balanced-budget provision.

Now why is it that a state that taxes so much more heavily than its neighbors can’t balance its budget as its own laws require?

One reason is a wuss governor, another is a legislature that’s far to the left of the people thanks to Gerrymandering, and another is a media establishment that doesn’t cover Sacramento. At least one of these things is going to change, and perhaps two.

For the last, Ted Costa will have to be successful with his latest initiative, but stranger things have happened.

George Lakoff is a student of propaganda and influence who uses his learning to take shots at moderate and conservative Americans in the interest of his left wing values. His method is pretty transparent once you’ve seen it a couple of times. He ostensibly tosses out a theory of journalism that attempts to wring some controversy over the practice of finding the story behind the story, and then he maps a theory of politics on top of that. The theory of politics holds that the right appeals to a “battered child” instinct, while the left is virtuous and pure. But that’s not really the message, it’s the misdirection that’s calculated to get an emotional reaction from the reader, which suspends his critical reasoning and therefore enables Lakoff to get into their heads with some warped perceptions, such as these:

…the national Republicans [made an] effort over several years to make Davis look bad by hurting the California economy…energy deregulation was brought in by Republican governor Pete Wilson…there was no real “energy crisis.” It resulted from thievery by Enron and other heavy Bush contributors, thievery that was protected by the Federal Energy Regulatory Commission run by Bush appointees. The Bush administration looked the other way while California was being bilked and went to great lengths not to help California financially in any of the many ways the federal government can help. Arnold had had a meeting with Ken Lay and other energy executives in spring 2001 when Lay was promoting deregulation, but denies any complicity in the theft. Arnold is now promoting energy deregulation again.

The energy bill that was passed in 1996, while Wilson was governor, was written by the man who would become Davis’ finance director, Steve Peace, and approved unanimously by the legislature. If Steve Peace, a Democrat, wrote a bill that was intended to get Davis recalled, he was pretty far-sighted about it, as nobody had any idea that Davis would someday be elected governor and then would attach conditions to the bill through his PUC that would make it suck, and cause a crisis in California before Bush was elected President.

If the architects of the deregulation were so clever, how come they didn’t realize Enron would be bankrupt by the time Davis was recalled? Only Lakoff knows for sure. But there’s more:

…California’s Republican legislature also went out of its way to make Davis look bad, refusing to support reasonable measures for dealing with the budget problems…the recall petition was paid for by a wealthy conservative legislator… signature gatherers were paid handsomely… some signatures were from out of state, which is illegal. [There was] an enormous amount of money and organization put into the Schwartzenegger [sic] campaign by Republicans.

California’s legislature had comfortable Democratic majorities in both houses throughout the Davis governorship, of course. The recall petition, which started as a grass-roots effort by Ted Costa, was certainly accelerated by Darrell Issa’s $1.6M contribution, about ten cents a voter. But how does that compare to the $60M Davis spent on his re-election and the $25M he spent fighting the recall? Like what it is, nothing.

But there’s more:

The Republicans manipulated the media using some of the frames we have discussed to hide facts and create false impressions. From the perspective of the facts we have discussed, the election does seem to fit the Right-Wing Power Grab frame.

Except, gee whiz, the media were relentlessly pro-Davis and anti-recall. Not only did the LA Times assign an unprecedented squad of 24 to dig up dirt on Arnie, all the major papers editorialized against the recall. So where was this media manipulation, on the Fox News channel watched by, at most 500,000 California voters out of an electorate of 9 million?

The people recalled Davis and elected Arnie because they, unlike Lakoff, aren’t fools, and they can’t be manipulated by fools all of the time. It’s called “democracy” and that’s what you ignore at your peril.

Hat tip to Doc Searls.