Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

Copyright Notice

Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Wednesday, March 31, 2010

Mish Mash

Mish Reveals himself to be an absolute bufoon, in a post titled:

Time To Take Back The Country; Congressional Candidates Deserving Your Support: Ron Paul, John Dennis, BJ Lawson, Rand Paul

Evidently these clowns (I've dealt with the iconic Ron Paul before) are prepared to takes the country back - but from whom?  Those of us who still believe in the last vestiges of the New Deal?  Flaming Librullz?  That Socialist Nazi Muslim Darkie in the White House?  And for whom?  The latest generation of robber barons?

Rand Paul proudly wears his support from the Louisville Tea Baggers.  I don't know anything about the other two, but, since I have to leave for a rehearsal in a few minutes, will just assume that they are twits cast in the same mold.

Mere speculation on my part, but Mish might want to take the country back for Bush, Cheney and the neocons, (nah - Cheney has endorsed Rand's opponent.)  who did such a fine job with their CEO skill sets.

Alternatively, he might want to take it back for big Pharma, Wall St. and the elite top 1% of the population, who became fabulously even more wealthier during the dark Bush years.

Yeah.  We are SO  screwed.

Now, I must go hug a squid.

Haiku Wednesday


But what if I have 
Nothin'?  All style, so free, with
No wild thoughts to share?!?

Join the fun!

Tuesday, March 30, 2010

Republicans: All Wrong, All the Time, Pt. 13.1 - Health Care Costs Redux

A while back, I posted a slightly different version of this graph.

It puts the budget-busting health care reform bill into some kind of perspective, doesn't it!

Iraq is the undeclared war.  PPACA is the recently passed health care reform act.

JGTRRA and EGTRRA are the Bush tax cuts of '01, and '03 which are contributors to the enormous upward redistribution of wealth that has taken place over the last decade.

Graph from Menzie Chinn.  H/T to Krugman.


Sunday, March 28, 2010

Six Word Saturday - 3/27

Here I am - a day late!

We did an early Easter celebration on Saturday, and had a house full of kids.  I forgot about SWS.  (Oh, the shame . . .)

Shadow Shot Sunday, March 28

Here they sit, waiting
(Accomplices to spoiling)
For kids to arrive.

Saturday, March 27, 2010

Sunday Music Blogging - 3/28

I have just been exposed to the music of Ukranian composer Nikolai Kapustin.   His 24 Preludes in Jazz Style cover the major and minor in all 12 keys.  Here is a sampling of these short works, played by the composer.  Truly top-notch stuff.  Presentation order here is #1, #2, and #6.  (I like 6!)  Enjoy!

Hmmmm . . .

Every new thing I learn about the 20's makes me even more pessimistic than I have been about our near to medium term future.

That's right, kids - I have been growing ever more pessimistic for the greatest part of a decade.

Here is information on Sophisticated Financial Securitization, back in the 20's.

So, once again, we are SO screwed.

L.A. Times Crossword Puzzle Blogging

Saturday, March 27, 2010, Brad Wilbur

Theme: None

Total words: 70

Total blocks: 28

No extra-long stacks this week.  More words and fewer blocks than last Saturday.  Pretty open-looking grid. These are not details I usually pay much attention to.  Hi gang, it's JazzBumpa taking a big step out of the comfort zone.  C.C. wished a Brad Wilbur puzzle on me, and her wish came true.  Regular readers will know themeless Saturday Puzzles are not my favorite.  This one seems perhaps a bit easier than usual, though I went for technical assistance early and often, in the interest of getting to bed before dawn.

Pretty good puzzle.  By my reckoning, a Q and X away from a pangram.

Friday, March 26, 2010

Wednesday, March 24, 2010

Haiku Wednesday


I dream in colors,
So vivid they feel real, but
Still don't make much sense.

Join the fun!

Tonight, before going to sleep, I'll be rehearsing for a performance of Mussorgsky's PICTURES AT AN EXHIBITION, which is a dream come true for me.  It was written for piano, though Ravels's brilliant (however flawed) orchestration is far more commonly heard.

Here is an odd take on "The Old Castle" by Sissel, that I just stumbled across.  After one listening, I'm not quite sure what to make of it.

It does tie things together rather neatly, though.


And here is closer to what Mussorgsky had in mind.

And here it is in Ravel's colorfully dreamy orchestration, with a rare symphonic use of an alto saxophone.

Tuesday, March 23, 2010

Quote of the Day

"Ignorance breeds monsters to fill up the vacancies of the soul that are unoccupied by the verities of knowledge."
--- Horace Mann

I'm too tired at the moment to put Mann's idea in the particular context that I have in mind.  Will probably be too busy tomorrow.

But soon, I will have something to say about this 19th Century quote that brings it right up to date.

Monday, March 22, 2010

Quote of The Day

On History repeating itself.  (Emphasis added.)

In all our thoughts and feelings and projects for the betterment of things, we should have it at the back of our heads that this is not a crisis of poverty, but a crisis of abundance. It is not the harshness and the niggardliness of nature which are oppressing us, but our own incompetence and wrong-headedness which hinder us from making use of the bountifulness of inventive science and cause us to be overwhelmed by its generous fruits. The voices which -- in such a conjuncture -- tell us that the path of escape is to be found in strict economy and in refraining, wherever possible, from utilizing the world's potential production are the voices of fools and madmen. There is a passage from David Hume in which he says: 'Though the ancients maintained that, in order to reach the gifts of prophecy, a certain divine fury or madness was requisite, one may safely affirm that, in order to deliver such prophecies as these, no more is necessary than merely to be in one's senses, free from the influence of popular madness and delusion.'
Obviously it is much more difficult to solve the problem to-day than it would have been a year ago. But I believe even now, as I believed then, that we could still be, if we would, the masters of our fate. The obstacles to recovery are not material. They reside in the state of knowledge, judgment, and opinion of those who sit in the seat of authority. Unluckily the traditional and ingrained beliefs of those who hold responsible positions throughout the world grew out of experiences which contained no parallel to the present, and are often the opposite of what one would wish them to believe to-day. In France the weight of authoritative opinion and public sentiment is genuinely and sincerely opposed to the whole line of thought which runs through what I have been saying. In the United States it is almost inconceivable what rubbish a public man has to utter to-day if he is to keep respectable. Serious and sensible bankers, who as men of common sense are trying to do what they can to stem the tide of liquidation and to stimulate the forces of expansion, have to go about assuring the world of their conviction that there is no serious risk of inflation, when what they really mean is that they cannot yet see good enough grounds for daring to hope for it. In Great Britain opinion is probably more advanced. I believe that the ideas of British bankers are on sounder lines than those current elsewhere. What we in London have to fear is timidity and a reluctance to act boldly.
Nothing could be a greater advantage to the world than that the United States should solve her own domestic problems, and, by solving them, provide the stimulus and the example to other countries. But observing from a distance, -- a nearer view of the prospect might modify my pessimism, -- I am unable to imagine a course of events which could restore health to American industry in the near future. I even fancy that, so far from the United States giving the example, she will herself have to wait for stimulus from outside. I, therefore, dare to hope -- however improbable it may seem in the light of recent experience -- that relief may come first of all to Great Britain and the group of overseas countries which look to her for financial leadership. It is a dim hope, I confess. But I discern less light elsewhere.
May 1932
John Maynard Keynes

H/T to Delong

Mellow Purple Monday

A close-up companion for yesterday's Shadow Shot

One purple crocus
Aloof from all his cousins.
We blame the squirrels.


Sunday, March 21, 2010

Interstate Protectionism

Austrian Economist Russell Roberts was gracious enough to visit my blog and leave a comment.  Though our disagreement is fundamental - really, we seem to live in different worlds - I appreciate the participation.

Adam Ozimek of MODELED BEHAVIOR, on the other hand, has not seen fit to acknowledge my comment on his blog.  It's been over a week now, so it doesn't like like he's going to.  I haven't read Ozimek extensively, but it appears his world is closer to Roberts's than to mine.  In fact, I found CAFE HAYEK by following his link.

Here is his post, where he quotes Roberts.  My comment (with typos correct) follows.

Which of us lives in your world?

Shadow Shot Sunday, March 21

In late afternoon
Long shadows linger over
Spring's first crocuses

Sunday Music Blogging - 3/21

I can't say I'm a big fan of Neko Case.  But she is interesting, and has integrity - which I respect* - and a decent set of pipes.  You'll never find her using Auto-Tune.

Her lyrics are enigmatic.  This song, DEEP RED BELLS, almost seems like stream of unconsciousness** rambling.  The melody, in a vague way, evokes Ghost Riders in the Sky, which makes the mystery a little deeper, though probably not redder.  (Except for the cattle's eyes.)

H/T to B.T., for turning me on to Neko.

Oops - that video is down.  Here's another try, with even worse video.

* Contrast Lady Gaga
** Another bit of failed originality.  Google it.

Saturday, March 20, 2010

Sandwich Generation

The Lovely Wife and I had dinner at my mother's house tonight, and my sister was the cook.  She made a Jig's Dinner of corned beef brisket, cabbage, potatoes, and carrots.  She also informed us that she could make a "kick-ass" Reuben, and that option was on the table as well.  We all opted for Ruebens, with the other items as sides.

The bread was a pumpernickel - rye marble (high in minerals, I assume) from Pepperidge Farm.  The Sour Kraut was Vlasic, with caraway seeds.  We eschewed  the Russian Dressing in favor of French's Spicy Brown Mustard.  Her secret (shared here with permission) to making a Reuben that hangs together is to place the Swiss Cheese between the meat and the kraut, where it acts like glue.

The built-up assembly is grilled, of course, so that the cheese can melt, the bread toast, and everything get warm and gooey.

Credit where it's due:  the result was a fine - in fact, I would say KICK-ASS - Reuben.

Well done. Sis!

Six Word Saturday - 3/20

Krugman's recent blog titles  are AWESOME!

Harry Gives 'Em Hell
Debt and Transfiguration   (Possible Best Blog Post Title EVAH!)

Saving Ryan's Privatization

Smelly Stupid Mutants

China's Water Pistol

Alexander Hamilton Was Always At War With Eastasia

Crying Fire! Fire! In Noah’s Flood

Who Woulda Punk’d It?

Friday, March 19, 2010

What the Hell?!? Friday, Pt 2 -- Quote of the Day

Re: a McDonald's Happy meal allowed to age on a shelf for one year, and showing no signs of mold or decay.

well at least now we know what to stock up the bunker with when a nulcear war looms., and you get toys to play with during the fallout.
-- zgz

H/T to BT

What the Hell?!? Friday -- Of Boys and Hygiene

An off-line (well, on-line, actually?!?) conversation with Cate (you can call her Cate) of SWS fame got me thinking about my long-ago experience as a Webelos leader.  This started when my son was eight, and joined the Cub Scouts.  I helped coach softball, which is a hoot, 'cause I'm less athletic than the average trombonist.  But, I also became the Webelos leader, since the Pack needed one (and it's easy to talk me into things) with a meeting at my house on Wednesday evenings.  This went on for four years - my house infested with invaded by 11-year-old boys, until my son passed through Webelos, and we moved on to Boy Scouts.

As a result of this ordeal  experience, I know a lot about 11-year-old boys.  The path from cute little baby boy to grown man is long, twisting, and full of pot holes.  One of the deepest and muddiest of these is age 11.  A typical 11-year-old boy is only marginally human, and not at all civilized.   In the absence of diligent parental supervision, he will happily spend that entire year in a cave with a colony of toads, never brushing his teeth, combing his hair, taking a bath, or changing his socks.   I have a clear recollection from my own checkered youth of being sent to wash my hands before dinner one day.  They were literally covered in dirt on all sides.  I carefully washed the palms of my hands, since those are the parts you use to hold the bread and utensils.  I was really quite exasperated with my father when he sent me back with explicit instructions to wash all surfaces of both hands.

I genuinely didn't get it.

This 11-itis-hood is a wonderful, primal, enigmatically feral time of life, if you can avoid major infections.  But, alas, all good things must end.  For many boys, this primitive, idyllic quasi-nirvana pops with the suddenness of a lightning-strike, on the day that they discover GIRLS.  The transformation is a wonder to behold.

It goes more or less like this, usually some time between ages 12 and 30:

Tuesday evening: GIRLS discovered.  In this epiphany, they are revealed as something not yuckie and disgusting, to be avoided at all costs. Frex:
They smell good.
They look . . . interesting.
Their voices - what is it about their voices?
They're -- soft.   Well, probably, I imagine, don't ya think?
When did THEY change?

Wednesday morning (after a night of disturbing, incomprehensible dreams):
Bath taken, hair combed, teeth brushed, fresh underwear and socks donned.
Mirror looked into, for maybe the first time ever.

Several days later: Question pondered:
"Is it worth the trouble of shining my shoes?"
The first of many moral dilemmas.

The actual timing of this metamorphosis is deeply personal.  Possible spectrum runs from as early as eight (very rare) to never. (Unfortunately, not so rare.)

And, as Howard Hughes so capably demonstrated, considerable backsliding is possible at any later phase of life.  This may be why wives are important.

A note on Fate:
Early bloomers can become metrosexuals
Late bloomers can become math or science teachers.

Some are immune.  For the most part, they become chemists and/or engineers.


Thursday, March 18, 2010

On Hackery

Oh my.  I stumbled onto CAFE HAYEK, where exactly 37 months ago today, Russell Roberts wrote a post titled, with apparent ironic intent but a total lack of prescience: I'M A HACK.

Here's why, as Roberts's self query and answer in a linked L.A. Times piece indicate.

So where does the average worker get bargaining power if unions are in decline?
The simple answer is that bargaining power comes from having
 alternatives. Even in the absence of unions, employers have to treat
 workers well to attract and keep them. In a workplace as dynamic as
 that of the United States, where millions of jobs are destroyed and 
created every quarter, a company’s ability to exploit workers is
 greatly limited by how easy it is to find another job.
Ultimately, it is competition among employers that protects us from exploitation. 
Even those who would seem to be the most vulnerable — immigrants who 
struggle to speak English, for example — can earn much more than the
 minimum wage simply because of competition for their skills. Cleaning 
people routinely earn $20 an hour, more than most cities’ so-called 
living wage.

OK. I'll grant that this probably didn't look as mind-bogglingly stupid in the halcyon days of February, 2007 as it does in March, 2010, when there are six workers competing for every available job.  But that business about "Cleaning 
people routinely earn $20 an hour" had to be a hoot, even back in the day.

When called a hack by Kevin Drum of the Washington Monthly, Russell, with characteristic Libertarian aplomb retorted:

I assume his facts are right. Only they have nothing to do with the point I was making. I didn’t say that the national average for janitors was $20 an hour. I wasn’t saying that it’s fun to be a cleaning person. I was trying to make a much simpler point. In many American cities, the going rate to have someone come to your home and clean your house is $20 an hour.

Setting aside that he made NO indication that he wasn't talking about janitors,  Russell must have been assuming that the fee that is payed translates into the rate that is earned - no transportation time or expenses, no overhead costs, no intermediary skimming off the top, etc.  Also, no realistic chance to make $40 x 20 = $800 dollars in a 40 hour work week.  Clearly, he was scrambling to cover his ass.

This is what you can always expect from Hayek acolytes: a world that bends itself to their pre-conceived notions of ideal economic balance and equilibrium, courtesy of THE FREE MARKET FAIRY, and her (his?) magic wand.

In Hayek's world, markets are rational and perfectly efficient.  If you lose your job today, all it takes to find one tomorrow is some serious looking.  Details such as a likely pay cut, necessity to relocate, to retrain, or whatever else you might have to do are simply indicators that you need to adjust yourself to the realities of your situation.  Being trapped, helpless and hopeless is not a reality the Austrian Economists are able to recognize.  Or if they are, so what.  Get off your duff and start working, slaggard.  Unemployment compensation is just a paid vacation.

RUSSELL ROBERTS is a professor of economics at George Mason University and a distinguished scholar at the University's Mercatus Center. He does a weekly podcast at EconTalk.org.

JazzBumpa is a holder of two Masters Degrees in totally unrelated disciplines, neither of which is economics, who is distinguished by his bizarre poetry and strange habit of producing sounds by shoving air through a variable-length tapered metal tube.   He occasionally performs this odd activity in public.


Global Warming Hoax Continues - Pt 4

One of the reasons AGW proponants are so successful with their hoax - really, nobody in politics, government or the MSM ever questions them, and denialists are universally scoffed at - is that they present data like what follows.  These are graphs of the  Combined land-surface air and sea-surface water temperature anomalies. (Land-Ocean Temperature Index, LOTI)
This is the deviation of monthly temperatures, in degrees C, from a base line, taken as the global average of 1951 to 1980, which was a relatively stable period, as the graphs will reveal.  The data is from this table, linked at this NASA page

Here is the data for January, in blue, and July, in red, from 1880 until now.

Here is the data presented as a 13 year moving average.  Would it be hyperbolic to say the advance since the 1976 bottom is HYPERBOLIC?

Doesn't it look disturbingly like an Elliott Wave?  Anyway, now you can see why so many reasonable people get taken in by their claims.


Global Warming Hoax Continues - Pt 3

Used to was, 1998 had been the warmest year EVAH, so George Will and other AGW denialists could cheerily cherry-pick that year and say, "It was so much warmer then, it's cooler than that now.   Bwa-ha-ha-ha-ha!"

But them flip-floppers at NASA say it's not 1998 any more - It's 2005, by a slight fraction of a degree over 2009.   Well - what do you expect; they're part of the Gummint, and therefore pinko socialistical Librullz who can't be trusted.  And never mind they've been saying it since January, 2006.  Repeating a hoax doesn't make it true.  At least not for Librullz

Now here comes that infamous Keynsian, Paul Krugman, saying that 2010 is even hotter, as if he's a freaquin' expert.  Well, hell - when has HE ever been right about anything?  He posts this absolutely silly graph, when we all know that it snowed during the Winter, so global warming is either a Librull plot to kill the economy and steal our freedoms, or just so much hot air; and Al Gore (as a letter-writer to my local paper so lucidly pointed out when it snowed LAST Winter) "can go suck eggs."

Here is the aforementioned silly graph.  Krugman says the yellow line is 2005.

Yeah.  Like that's supposed to prove anything.  We all know how liars can figger!

And 2009, that 2nd hottest year - why, it was scarcely any hotter than 1998, 2002, 2003, 2006, and 2007!  That's what them NASA people said.

So -- are we screwed, or what?

For Pt. 2, see here.

Why Health Care Reform is so Bad

This, From the House Democrats Web Site.

The Top Ten Immediate Benefits You’ll Get When Health Care Reform Passes

As soon as health care passes, the American people will see immediate benefits. The legislation will:
  • Prohibit pre-existing condition exclusions for children in all new plans;
  • Provide immediate access to insurance for uninsured Americans who are uninsured because of a pre-existing condition through a temporary high-risk pool;
  • Prohibit dropping people from coverage when they get sick in all individual plans;
  • Lower seniors prescription drug prices by beginning to close the donut hole;
  • Offer tax credits to small businesses to purchase coverage;
  • Eliminate lifetime limits and restrictive annual limits on benefits in all plans;
  • Require plans to cover an enrollee’s dependent children until age 26;
  • Require new plans to cover preventive services and immunizations without cost-sharing;
  • Ensure consumers have access to an effective internal and external appeals process to appeal new insurance plan decisions;
  • Require premium rebates to enrollees from insurers with high administrative expenditures and require public disclosure of the percent of premiums applied to overhead costs.
By enacting these provisions right away, and others over time, we will be able to lower costs for everyone and give all Americans and small businesses more control over their health care choices.
Clearly, these horrible things are unconstitutional, and rob us of our freedoms.  But what can you expect when the invalidly elected president is a foreign-born Dark-Skinned Muslim socialist?

Why, yes, I would very much like a cup of tea.  Oh, no! Wait.  What are you doing?!?  Not THAT bag . . .Eeeewwww!


Wednesday, March 17, 2010

Haiku Wednesday



"Selfishness is a virtue."
I won't give them that!


Giving from the heart
To someone whose need is great
Is an act of love.

On St. Patrick's Day

They came in hunger,
Leaving behind their green home
For new life and hope.


Tuesday, March 16, 2010

The Facts About Facts

There are things that are ambiguous, things that are uncertain, and things that are open to various kinds of interpretations.

Then, there are cold hard facts:

The law of gravity.

In the long run, we are all dead.

Newton's laws of motion.

David Brooks is an utter buffoon.

Here is his latest Op-Ed piece.

Here is well-placed, pointed ridicule of that piece by Jonathan  Chait.

Here is Ezra Klein calling him out on his errors and/or lies.

To recap, Brooks argued that reconciliation is being used more frequently, and that past reconciliation bills, like Bush's tax cuts and prescription drug benefit, were significantly bipartisan. Reconciliation is, in fact, being used less frequently, past reconciliation bills like the tax cuts were not significantly bipartisan by any stretch of the imagination, and the prescription drug benefit did not go through reconciliation. Brooks isn't wrong in the sense that "I disagree with him." He's wrong in the sense that the column requires a correction.

Can it be that liars, fools and tools - exclusively right wingers and their fellow-travelers - have gotten away with misleading non-information, misrepresentation, chicanery and outright lies for so long that they think they can simply make stuff up that is easily refuted by a little fact-checking, and still get away with it?

The alternatives are that Brooks is either too lazy to make the effort required to get it right, or too stupid and/or ignorant to present an opinion worthy of consideration.

No matter which of these is correct, he should be collecting unemployment.  That's a fact!

H/T to Delong, who is nowhere near harsh enough.


That's the best word I can think of for something that has been shrinking since the Reagan Administration Regime, even without the recent collapse.

And what would this $hriveling thing be?

The M1 Money Supply multiplier, which has been below 1 for over a year, and, after a dead cat bounce, is now at .79, with every indication of falling further.

What this means is
for every $1 increase in the monetary base – the money supply only increases by 79 cents.

And it's not just here.

"Money multipliers have collapsed everywhere. What M3 is telling us is that confidence is missing.  I don't see any way to stabilise M3 in such circumstances," he said.
Professor Tim Congdon from International Monetary Research called on the ECB to buy state bonds in a blitz of QE to insure against a double-dip recession.  He said: "2010 is going to be very difficult."

Could this long range drop be the behind-the-scenes actor that has been responsible for lagging GDP growth over the period?

At any rate, this is NOT a good thing.  (Emphasis added)

The chain of causes of the Great Depression thus leads back to the restrictive monetary policies of the Federal Reserve System. Those policies led to fear of bank collapses which caused the money multiplier to decline thus leading to a decrease in the money supply. This decrease in the money supply led to deflation which raised the real interest rate to extraordinary levels. This drastically discouraged investment purchases causing the level to decline by about 90 percent. Businesses found they were not selling as much as they had been producing. This led to cutbacks in production and layoffs of the labor force. The decline in employment then resulted in reduced incomes and consequently reduced consumer purchases leading to further cutbacks in employment and reductions of income.

One of the differences between the Depressions of 1921 and 1929 was that in '21, deflation, though deep, was a specifically U.S phenomenon.  In the 30's, it was world wide.  Like it is now.

Every new thing I learn just increases my pessimism.

Penguin With Attitude

I received this image in an e-mail.  Don't know the origin, but my caption for it is

B.T. in Austria 


Monday, March 15, 2010

Mellow Yellow Monday - March 15

On a Summer day
Spread a blanket on the lawn.
It's time for some fun!


Sunday, March 14, 2010

Moron The Free Market Fairy

Full disclosure.

Man, we were totally scooped, and never even knew it.


Actually, the (first) linked post is a pretty serious and thorough examination of the FREE MARKET FAIRY concept that I was just having fun with.   Do check it out.

And here, from two years ago, is a nice paraphrase of an argument I made somewhere recently.  I'll add a link later, if I can remember where.

Bottom line:  I have never, ever, ever had an original thought.  (sigh)

Update 2:
Found it, over at the Baseline Scenario, and at Modeled Behavior, (I repeat myself when I feel upset* . . .) with some help from TEH Google.  (Laprice's is actually better. Oh, well . . .)

In the natural sciences we have the ideal gas law, for example. Simple and elegant
P * V = N * R * T. We also realize that it is an IDEAL, a hypothetical construct, and that no actual gas in the real word follows it.
Of course, things are much simpler when dealing with statistical numbers of thinking, feeling, screaming, sweaty human beings than with essentially indistinguishable helium molecules.
-- JzB

* Update 3: Correction: "I repeat myself when under stress"  Memory is an imperfect thing.

I'm Not A Leader, But . . .

In comments, Betty chides me for not having a followers list.

Turns out, there actually are some.  (Gasp!)

So I added that gadget.  It can be found in the right hand column ---->

C'mon, Betty -- sign up! 

You, too.  Don't be shy.

Sunday Music Blogging - 3/14

There are many recordings of this Dowland fantasy on YouTube.  Alas, a lot of them have distractingly noisy backgrounds, or tape hiss. This clean recording is just a bit on the slow side for my taste, but the playing and the musicianship are wonderful. 

I loved this piece the first time I heard it.  Several years later, I wrote this fugue, based (sort of) on the theme, and incorporating some of its nuances and devices.  

Here is a midi recording, voiced for four woodwinds: flute, clarinet, oboe and basoon.

Shadow Shot Sunday, March 14

We find where paws pause
And see the feat of leaving
Footprints in the sand

Saturday, March 13, 2010

What Decade Is It?

I'm still pondering the Depression of 1920-21 and its aftermath.

It's difficult to find hard data on the peiod.  Beareau of Labor Statistics information only goes back to the 40's.

Anecdotal information from J and Tux about the 20's are consistent with the same kind of top-only "recovery" we have experience over the last decade.  For a while, I though that 2000 was a 1929 equivalent, and that the stock market rebound of the last 12 months was something like the ups and downs of the 30's.  My feeling has been that we are about to fall into the second depression leg, a la 1938.

Analogies are never perfect, but now I wonder if 2000 wasn't like 1919, and the Bush years weren't the roaring twenties, but with better record keeping.  The recent recovery, such as it was (or might it have been a sham?) was jobless.  Income and wealth disparity have continued to rise over the last decade.  That was they way in went it the 20's, but was not the main thrust of the 30's, as regulations were put into place.

Nothing in the last several years has happened to dampen my pessimism.  What is the best analogy for today?  Is it 1929 or 1937?

Or do I have this all completely wrong, and recovery is a shiny package waiting on the door step?  If this is true, please convince me so I can stop worrying about my grandchildren.

Meanwhile, idiots like John Kyl spew this kind of dreck. (Emphasis added.)

Sen. Jon Kyl (R-Ariz.) did not join Bunning's effort, but he defended his colleague's point of view. Kyl told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market.

"If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work," Kyl said. "I am sure most of them would like work and probably have tried to seek it, but you can't argue it is a job enhancer."
Andrew Stettner, deputy director of the National Employment Law Center, says there's a good reason people are out of work for so long. There are six unemployed Americans for every available job, he said.

In other words, according to Kyl, unemployment is a nice cushy vacation, so why would these new welfare queens go back to work?   As Mark Thoma puts it:

Conservatives whine about everything, and the noise they make is often quite disconnected from the importance of the problem, so the mere fact that they are making noise doesn't say much. The real problem is those who refused to give the help that was needed, people like Jon Kyl. The people sitting at home jobless as a consequence of this failure, people just trying to get by until there are jobs again, are not the ones to blame.


Daylight Savings Time


Spring ahead tonight:
Time to withdraw that hour's sleep
We banked in the Fall.


Six Word Saturday 3-13

Playing tonight - jazz amidst other music.

Friday, March 12, 2010

What the Hell? Friday Part 2: The Free Market Fairy

Adam Smith didn't quite get it right.  It isn't the INVISIBLE HAND that magically restores all markets at all times everywhere to perfect frictionless efficiency, it is the wand-waving of the FREE MARKET FAIRY.

I'm pretty sure I can't take total credit for this startling discovery. It flowered in discussions here and at Bad Tux's place. If he didn't have a visible hand in creating this notion, he at least encouraged and nurtured it in not-too-subtle ways.

I will, however, stake claim to the idea that the visible manifestation of the FREE MARKET FAIRY is an image of Milton Friedman in drag.

Full credit to BT for actually locating his (her?, its?) picture.

Free Market Fairy
Wave your wand, for rational,
Efficient magic.

What the Hell? Friday

If you can't make the Free Market Fairy cry, Glen Beck is the next best thing.

Chained H/T to LGM.

Thursday, March 11, 2010

Quote of the Day

Excerpts of Senate Majority Leader Harry Reid’s letter to Senate Minority Leader Mitch McConnell:

While Republicans were distorting the facts in the health care debate and inflicting delay after needless delay, millions of Americans have continued to suffer as they struggle to afford to stay healthy, stay out of bankruptcy and stay in their homes.  Thousands of Americans lose their health care every day, and tens of thousands of the uninsured have lost their lives since this debate began.

Many Republicans now are demanding that we simply ignore the progress we’ve made, the extensive debate and negotiations we’ve held, the amendments we’ve added (including more than 100 from Republicans) and the votes of a supermajority in favor of a bill whose contents the American people unambiguously support.  We will not.  We will finish the job.

As you know, the vast majority of bills developed through reconciliation were passed by Republican Congresses and signed into law by Republican Presidents – including President Bush’s massive, budget-busting tax breaks for multi-millionaires.  Given this history, one might conclude that Republicans believe a majority vote is sufficient to increase the deficit and benefit the super-rich, but not to reduce the deficit and benefit the middle class.  Alternatively, perhaps Republicans believe a majority vote is appropriate only when Republicans are in the majority.  Either way, we disagree.

At the end of the process, the bill can pass only if it wins a democratic, up-or-down majority vote.  If Republicans want to vote against a bill that reduces health care costs, fills the prescription drug ‘donut hole’ for seniors and reduces the deficit, you will have every right to do so.

Where in the hell did THIS guy come from?!?

(H/T to Krugman)

Rational Efficiency

Yesterday, as this graph from Yahoo Finance shows, Radio Shack (RSH) stock was up over 6% on take-over rumors.  The price continued to rise in after hours trading

This is typical behavior when a company is a real or imagined take over target.

Consider the efficient market hypothesis: everything that can be known about a company is known, and baked into the stock price at any time.

Consider rational expectations theory: any investor makes investment decisions in the light of cold logic and a desire to maximize returns, consistent with individual risk tolerance.

So, as a result of these perfectly efficient and rational decisions, at 1:00 p.m., RSH was worth more than it had been at noon, or would be at 2:00 p.m.

The rational expectation is that the acquiring company will pay a premium, and that drives up the price.   But if the noon price was correct, then why would the acquiring company pay more than market value?

Maybe they know something the rest of us don't . . .

No -- wait . . .

And why was it down at 2:00 p.m.?

Er . . . ah -- wha . . . ?

Wednesday, March 10, 2010

Haiku Wednesday


See what goes into
The cocoon. The mystery
Is what will come out . . .

Join the fun!

Monday, March 8, 2010

Mellow Yellow Monday - March 8

A prickly-leaf weed
On its evil mission to
Take over the world.


Sunday, March 7, 2010

Sunday Music Blogging - 3/07

Here is some music I got to play just a couple of days ago, along with the Brahms Symphony #2.


More Thoughts on the Depression of 1920-21

Comments by J and Bad Tux in Friday's post got me thinking.  That blog entry discussed exogenous factors contemporary with the 1921 depression.  But what about endogenous factors?  What J and BT suggested is that this depression was characterized by a surplus of finished goods, commodities and labor resources.

There is an old description of inflation as too many dollars chasing too few goods.  Here, we see deflation as not enough dollars and too many goods - exactly the opposite.  My hypothesis on the difference between the 1920 and 1929 depressions now is that, in addition to the many exogenous factors which could have influence the depth and duration of these deflationary depressions, there is a fundamental endogenous difference as well.

The 1920 depression resulted from supply factors - an over-abundance of labor resources and material goods that the economy could not absorb.  This difficulty was made considerably more difficult by restrictive fed interest rate policy.

The 1929 depression resulted from demand factors - the severe loss of wealth and purchasing power in the general population.

Any ideas on how to gather the relevant data are welcome.

Meanwhile, here is an excerpt from the Wikipedia entry on the 1920 depression, relating to Government activity.

President Warren Harding convened a President's Conference on Unemployment at the instigation of then Commerce Secretary Herbert Hoover as a result of rising unemployment during the recession. About 300 eminent members of industry, banking and labor were called together in September 1921 to discuss the problem of unemployment. Hoover organized the economic conference and a committee on unemployment. The committee established a branch in every state having substantial unemployment, along with sub-branches in local communities and mayors' emergency committees in 31 cities. The committee contributed relief to the unemployed, and also organized collaboration between the local and federal governments.

The Unemployment Conference stands as a watershed in federal policy with respect to depressions and unemployment relief. In sharp contrast to the total inaction and benign neglect that had characterized the response of previous administrations, the Conference not only conducted studies aimed at preventing future depressions through better management of the business cycle, but also provided practical assistance to local committees and encouraged a variety of local actions. These included the stimulation of public works and clean-up projects, advice on the organization and techniques of fund raising, and exhorting employers to adopt "work-sharing" plans. The Conference soon became an effective clearinghouse, disseminating ideas that local committees had found effective in providing jobs and temporary relief.

Field representatives were dispatched to assist local committees and to monitor their progress. Thus they not only facilitated the sharing of ideas, but provided vital situation reports by which overall progress could be measured. Reports from hundreds of cities provide interesting insights into conditions, responses and attitudes toward relief. In a few instances, field representatives discovered that very little was being done and that city fathers were not interested in cooperation. In such instances, the realization that their inactivity was being reported usually had the effect of prodding them into action.

Here is a better graph of Fed interest rate movements around the time of the 1920 depression.

Clearly, and contrary to the Austrian allegations, there was considerable government and Fed activity aimed toward influencing the business cycle.

Saturday, March 6, 2010

Six Word Saturday 3-06

Last night played Brahms' Second Symphony

To Toledo today for mom maintenance.

Seeing granddaughter's Irish Dance Recital tomorrow.

Friday, March 5, 2010

What the Hell Friday - The Depression of 1921

Austrian Economists and their acolytes claim that the depression of 1921, which was deep but short, (January 1920 to July 1921) refutes Keynesian economics, since the recovery occurred with no government action.   The corollary is that Government  action interferes with the economy, distorts asset allocation and other economic factors and either causes or prolongs times of economic hardship.

As is always the case with people who reason based on dogma rather than data, the 1921 depression is a cherry-picked instance.  I suspect they keep coming back to it because it is the only data point that is consistent with their view of the world.

For example, one can look at Federal spending and see that the Government did not run a deficit to recover from the 1921depression .

The blue line is receipts, the pink line is expenditures, and the yellow line is the surplus or deficit.  Sure enough, no deficit spending in 1920 or 21, following the deficits of the WW I years.

But what gets ignored is the entire economic background was different in1921 as compared to 1929.  First off, the graph indicates that in 1918 and 1919, there were sizable deficits.  In 1920, the budget ran a tiny surplus, and surpluses are slight through most of the roaring 20's.  So - the 1921 depression was preceded by two years of large deficits, the 1929 depression was preceded by several years of steady surpluses.

It is worth noting that the 1921 depression came on the heels of WW I.  Coincidentally, there was a sharp, rather short recession following WW II, as well.

Van Mises acolyte Robert Murphy recently posted this graph on his blog.

His point is that deflation couldn't have caused the lengthy 1929 depression, since the deflation in 1921was steeper and deeper, and that depression was short-lived.  Wow!  Look at that cliff-fall in CPI in 1921.  Nothing like that happened in the 30's.  OK - fair enough.  If everything else is equal.  We've already had a hint of how they weren't, but let's examine this graph a little more closely.  The years from about 1915 to 1920 were characterized by high inflation - way over 10% that entire time, and popping up above 20%, just before the crash.  On the other hand, the years leading up to 1929 were characterized by no inflation at all. 

So, deflation in 1921 is a crash from several years of high inflation, the slump starting in 1929 followed several years of no inflation.

Let's look at Fed activity.  I was not able to come up with much information, but did find some on the St. Louis Fed website.

Here is the Discount Rate during years of both depressions.  Depression times are indicated in red, non-depression times in blue.  Selected dates of Fed activity are noted.  The rate was raised to 6% on 1/24/1920, and lowered on  to 5% 11/03/1921, and again to 4.5% on 4/06/1922.  A cynic might say the interest rate hike of 1920 helped bring on the depression, while the quantitative easing of 1921-2 secured its end, but we won't go there.  Based on this graph alone, it does look as if the interest rate situation were nowhere near the 0-rate bound in 1921, and might have been approaching it in the 30's.  At any rate, the statement that the economy quickly recovered after 1920 in the absence of fed and Government activity is simply false.

One criticism leveled against the Fed from a modern perspective (but not by Austrians) is that in the 30's there was no appreciation that during deflation real interest rates are higher than nominal rates.  Rates were going down, so the contemporary understanding was that easing was taking place.  Unfortunately, real rates were rising, and the economy was effectively being choked.

 Randall Parker explains
The giving/taking of credit to/by the Federal Reserve has particular value pertaining to the recession of 1920–21. Although suggesting the Federal Reserve probably tightened too much, too late, Friedman and Schwartz (1963) call this episode “the first real trial of the new system of monetary control introduced by the Federal Reserve Act.” It is clear from the history of the time that the Federal Reserve felt as though it had successfully passed this test. The data showed that the economy had quickly recovered and brisk growth followed the recession of 1920–21 for the remainder of the decade.

Another reason to criticize the early Fed is that they did not have a proper understanding of the devastating effects of deflation.  Parker continues (emphasis added):

Moreover, Eichengreen (1992) suggests that the episode of 1920–21 led the Federal Reserve System to believe that the economy could be successfully deflated or “liquidated” without paying a severe penalty in terms of reduced output. This conclusion, however, proved to be mistaken at the onset of the Depression. As argued by Eichengreen (1992), the Federal Reserve did not appreciate the extent to which the successful deflation could be attributed to the unique circumstances that prevailed during 1920–21. The European economies were still devastated after World War I, so the demand for United States’ exports remained strong many years after the War. Moreover, the gold standard was not in operation at the time. Therefore, European countries were not forced to match the deflation initiated in the United States by the Federal Reserve (explained below pertaining to the gold standard hypothesis).

So, countering the effects of the depression we have strong U.S. exports.  And what's this about gold?  Because of WW I, the gold standard was abandoned by the involved countries.  Later in the 20's the U.S. and Europe went back on the gold standard, but at the time of the 1920 depression, nobody important was on it.

This is not a trivial point, when we consider he part gold played in the Great Depression of 1929.  Parker again:

Looking back, we observe that the record of departure from the gold standard and subsequent recovery was different for many different countries. For some countries recovery came sooner. For some it came later. It is in this timing of departure from the gold standard that recent research has produced a remarkable empirical finding. From the work of Choudri and Kochin (1980), Eichengreen and Sachs (1985), Temin (1989), and Bernanke and James (1991), we now know that the sooner a country abandoned the gold standard, the quicker recovery commenced. Spain, which never restored its participation in the gold standard, missed the ravages of the Depression altogether. Britain left the gold standard in September 1931, and started to recover. Sweden left the gold standard at the same time as Britain, and started to recover. The United States left in March 1933, and recovery commenced. France, Holland, and Poland continued to have their economies struggle after the United States’ recovery began as they continued to adhere to the gold standard until 1936. Only after they left did recovery start; departure from the gold standard freed a country from the ravages of deflation.

The depressions of 1920-21 and 1929-4? (pick an number) occurred in very different circumstances.  My cursory check uncovered this list:

1920 preceded by large deficits, 1929 preceded by surpluses.
1920 preceded by inflation, 1929 preceded by no inflation.
1920 preceded by war, 1929 preceded by peace.
1920 depression possibly softened by export strength, 1929 ???
1920 evidently not near the 0-interest rate bound, 1929 probably approaching it.
1920 gold standard not in force, 1929, gold standard in force.

Every bit of this gets ignored by Austrians.  Some of this is probably more important than the rest.  I find the gold facts to be especially intriguing. There are probably more differences than can be discovered in 20 minutes of fumbling around on the intertubes.   I welcome any additional information.

In comments, J points out some other relevant historical information.  In addition there is the matter of debt ratio that I spoke about in a different context recently.  In 1920-21 the ratio of debt to GDP increased from about 150 to 190% during the course of the depression.   In 1929, this ratio started at about 190%, and by 1933, had increased to 299%.

Update 2:
Rereading the second Parker quote above, I gleaned the following inference.  During the 1920-1 depression, deflation was a local U.S. phenomenon.  In the 1929 depression, deflation was a nearly world-wide phenomenon.

Thursday, March 4, 2010

If Anti-CFPA Folks Ran Toyota Today

Discovered this clever cartoon via James Kwak at Baseline Scenario.

CFPA is the proposed Consumer Financial Protection Agency.

If Anti-CFPA Folks Ran Toyota Today

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