Arthur Laffer: Economic Statistics, Some Matter and Some Are Deceiving

At Real Clear Politics the other day, I came across an article by economist, Arthur Laffer in theWall Street Journal. the same Arthur Laffer whom developed the Laffer Curve during the Reagan administration. As I often do, I scanned the article and bookmarked it as a possible source for a post. Then this morning I had an e-mail in my in-box from Pat Slattery of The Free Market Projectsuggesting that I consider doing a post on an article by John Hayward about the Laffer article. And, I thank him. So, I will discuss both the Laffer and Hayward articles in today’s post on economic statistics.

Economic Statistics that Deceive

With good reason, we mere mortals, without a PhD, have to wonder if government agencies and politicians, including the President, are lying to us. Well, of course, they lie to us. That is a given. But, when it comes government generated statistics, they don’t so much lie to us as they don’t tell us all that we need to know. In other words, they tend to cherry-pick data to put the economy in the best possible. With today’s economy, that is more difficult than usual.

One example of government cherry-picking data is the reported inflation rate. According to the Federal Reserve, inflation is negligible. We know that is not true. The reason reported inflation appears low is that they do not include price changes in oil, gasoline, and food. The items that impact the budgets of 90% of the  population the most are not included in the calculation of inflation.

Anther example of the government only telling us part of the story are the monthly employment numbers. I watched a news video the other day Debbie Whatshername-Schultz say how proud she was of Obama because under his leadership we have had 29 consecutive months of job growth. PROUD!  Give me a break.! The workforce participation rate is getting smaller by the month! The July jobs report announced that non-farm jobs increased in July by 163,000. This was more than what was expected. The stock market went wild.  If you want to know what really happened with the jobs market, check out this article at PJ  Media and this article at Inform the Pundits. You will find out that there was a net loss of jobs in July. Just ask yourself why the unemployment rate increased to 8.3%?

So, with all the efforts to put our economy in the best possible light, our GDP is growing at an abysmal rate of 1.5%. That is pathetic! Let’s find out why our economy is so anaemic.

Some Economic Statistics Matter

The Obama administration, more than any administration in my memory, has based their economic policies on nothing more than tax and spend. Obama has set the all time record for government spending “crapweasels” like Paul Krugman and Democrats in general and the main stream media keep calling for more and more stimulus. (Crapweasel is a term Kurt Silverfiddlealways uses when referring to Paul Krugman.  It fits.)

One of the best ways to measure the success or failure of an economic policy is to look at the empirical results where that policy has been tried. This is exactly what Arthur Laffer has done and reports on his findings in this Wall Street Journal article and suggest that:

Policy makers in Washington and other capitals around the world are debating whether to implement another round of stimulus spending to combat high unemployment and sputtering growth rates. But before they leap, they should take a good hard look at how that worked the first time around.

Dr. Laffer looked at 34 countries that implemented stimulus programs after the 2008 financial crisis. The results weren’t very stimulating:

It worked miserably, as indicated by the table nearby, which shows increases in government spending from 2007 to 2009 and subsequent changes in GDP growth rates. Of the 34 Organization for Economic Cooperation and Development nations, those with the largest spending spurts from 2007 to 2009 saw the least growth in GDP rates before and after the stimulus.

There is a table in Laffer’s article show just badly stimulus worked for these countries. John Hayward in his Human Events’ article about the Laffer report, like this quote from Laffer:

Often as not, the qualification for receiving stimulus funds is the absence of work or income – such as banks and companies that fail, solar energy companies that can’t make it on their own, unemployment benefits and the like. Quite simply,government taxing people more who work and then giving more money to people who don’t work is a surefire recipe for less work, less output and more unemployment.

” a surefire recipe for less work, less output, and more  unemployment.” This reminds me of a conversation back in the eighties, to which I was present, between brother-in-law and two of his friends. They were all UAW members and employees of the Chevrolet plant in Flint, Michigan. They were all in their middle fifties and they had been doing some sharp penciling about whether it made sense for them to take early retirement at age 58.  They concluded that with their General Motor’s pensions and Social Security (in those days you could opt for early Social Security at a reduced rate at 58) that it made no sense to keep working 40 hour weeks for just a few hundred dollars more. I’m thinking that the same thinking applies to many of our citizens on welfare and other government assistance. They are likely figuring why should they take a forty-hour a week job when they can do nothing for only a few hundred dollars less..

John Hayward would add something to Laffer’s analysis:

The other obfuscating factor I would add to Laffer’s analysis is that government spending is treated as highly significant by the media, while private investment is either ignored or criticized.  The financial papers might carry tales of business success, and once in a while the public imagination is captured by a company like Apple… but none of that compares to the front-page, above-the-fold coverage given to huge government spending initiatives.

We know what Obama and his team are up to. With the support of the main stream media, they want to pull the wool over the eyes of those that still have a job (the majority of voters) by convincing them that the economy, however slowly, is steadily growing and now is no to change horses. Economic statistics do matter and it is going to be up to us, the conservative bloggers, to get the truth out there.  It won’t come from the media, that is for sure.

Well, that’s what I’m thinking. What are your thoughts?

Original Post:Conservatives on Fire

I’ve Found a Presidential Candidate I can Support: Unfortunately, He’s British

Yes, I know that we can’t run him for POTUS, but I really wish we could.  For the evidence, behold this rhetorical masterpiece.

http://www.youtube.com/watch?v=BujuEpGmKMg&feature=player_embedded

I know this is a long shot, but given all the conspiracy theories of late, perhaps we can say he was born in, for the sake of argument, Hawaii?  Now, does anyone know Photoshop?  We need a birth certificate!

Seriously though, Mr. Hannan has a better grasp of our founding documents, and he ideas of the founders, than most of our own so-called Conservatives.  We’d do well to listen to this man, even though we cannot elect him.

H/T: Hot Air

Teaching and Brain-Dead Liberal Students

Of all the students in my class, the ones who are the least intelligent are the liberal ones. As Ronald Reagan once said, it isn’t that these students are ignorant- in a great many cases, these students earn A’s in all their classes and have a considerable wealth of knowledge on the issues and the subject matter. But what makes them just so darned unintelligent is that they know so much that isn’t so.

For example, one of my students every day talks about the right to occupy public places that the people in the Occupy Wall Street movements are exercising. He knows that individual citizens have the right to squat on public places and protest, regardless of time, place, and manner restrictions, and he knows this beyond a doubt in his little mind. But what he knows isn’t so- at no time has any court or legal scholar ever argued that people have an unlimited right to live on public lands without being molested- in fact, there are considerable and respected time, place, and manner restrictions on protesting on public property, and this includes not being able to sleep overnight in tents in public parks. My student isn’t ignorant of the laws and rules and regulations regarding the First Amendment; rather, it is that he knows things where aren’t so.

Another one of my students knows that under President George W. Bush and the Republicans, our nation was plunged into a severe recession that President Barack Obama has had to battle his entire time in office. She knows that the recession began under Republican control of Congress and the Presidency, and here in Michigan she knows that the recession can be blamed on a Republican Governor and state Congress. She is not ignorant- if I were to ask her when Congress was taken over by the Democrats, when President Obama took office, when the Great Recession started, or when Democrats lost control of the Michigan Congress or Governorship, she’d be able to tell me. It is just that when I ask her to put all this information together, she suddenly knows things that aren’t so, because the truth of the matter is that the Great Recession began in 2008 during the last year of Bush’s presidency, under a Democrat Congress, and in Michigan there was a Democratic Governor and Congress too. What she knew wasn’t so!

Another student last week knew that global warming was happening- that is, she knew that ever since the industrial age began, human activity has been causing a steady and progressively accelerating of the global temperatures. She knew this to be so, and she was a good student who every day would quote from the New York Timesor Barack Obama, so she wasn’t ignorant- it was just that what she knew wasn’t so. The temperature of the globe has not been steadily rising in temperatures since the industrial age, and to be honest, it is difficult to determine beyond a shadow of a doubt whether it is rising even now, what with data being manipulated by scientists, a lack in measuring stations, and an overall problem of putting thermometers near industrial and populated areas that naturally emit a lot of heat.

Just why exactly are the liberals and left-wing of our nation brain dead? In an article that appears in the Wall Street Journal called The Brain Dead Left, James Tarantohinted at the reason why this may be when he wrote:

…Obama has multiple degrees from Ivy League colleges and spent a good deal of his career as a part-time professor. At Columbia, Harvard and the University of Chicago, he absorbed the politically correct nostrums of the academic left. But he didn’t pick up much by way of critical thinking skills (although at least he doesn’t scream at banks).

He didn’t have to learn how to think, since he was thinking all the “right” thoughts anyway. So he came to office with lots of ideological preconceptions but no ability to adapt or innovate. As a result, he is simply in over his head intellectually—at the mercy of allies, opponents and events…

The reason that our liberal friends know so much that isn’t so may just be the fact that their movement is intellectually bankrupt, starved of critical analysis by supporters who have few thinking skills and are unable to question their own theories and views because of the rigidity of political correctness.

Although they are not ignorant people, they do know so much which isn’t so, and that is why as a teacher I have great job in teaching the students above what is really so- that the OWS people have no right to squat on public lands, that the blame for theGreat Recession is complicated and unclear, that the global warming theory as advanced by this student was incorrect, and that President Obama is a bad bad President.

UPDATE: Today another liberal student, who is a rather intelligent one and who knows a lot about a range of subjects, again demonstrated that the problem with liberals is not they they are not smart or ignorant, but rather it is that they know so much that isn’t true. This student sent me an email that said

"There are two difference between the Occupy Wall Street movement and all other movements in American history- the first is that they represent the views of all Americans, and the second is that the situation today, unlike at other times in the past, justifies any sorts of violent, anti-social, law-breaking behavior."

The liberal student could tell you everything there is to know about other social movements, identifying the main people, years, influences, impact, and other details with these movements, and this liberal student scored very well on Advanced Placement tests in World History and US History and knows all about history.

And yet it isn’t what this student knows that is wrong, but what this student thinks they do know that is wrong.

First, OWS does not represent ‘the views of all Americans’- there hasn’t been a single credible poll that shows that it represents even the majority of Americans, and in fact a lot of polls show that the majority of Americans are against it. Second, there is nothing about the current political situation more so than others in the past that justifies the sort of violent, law-breaking activity that characterizes the Occupy Wall Street movement- today is no more or less unique than the past and the beauty of the law is that it is above the moments of the time and is blind to the passing of the ages. This liberal student’s problem is that the things that they think they know are in fact wrong, and so all actions and decisions based on these wrong things are wrong actions and decisions.

Original Post: A Conservative Teacher