Wednesday, April 26, 2017

Nonsensical Numbers

Dean Baker is still engaged in the economist’s favorite pastime of making stuff up as they go along. On Monday he refuted a claim that labor is declining as a percentage of GDP by showing that it is not declining as a percentage of NDP.

First he refers us to a column in Bloomberg News which is concerned about labor’s share of GDP, which Baker describes as “declining from a range of 64 to 65 percent in the 1960s and early 1970s to just over 60 percent in the most recent data.” Actually, the piece provides a chart which shows the rate falling from a high of 66% in 1970 to a low of 59% in 2010, but Dean Baker doesn’t sweat the small stuff.

Then he says that he can show that there has been no drop of labor as a share of GDP by introducing labor as a share of Net Domestic Product, which is GDP “after removing depreciation.”

First of all, this is non sequitur at its worst; similar to proving that trees are not dying on Main Street by showing that I mowed my lawn on Cherry Avenue. He does not claim that anything the Bloomberg author wrote is in error, he doesn’t refute any of the statistics or issues cited in the original column, he merely introduces a new and different measurement which shows labor not declining and pats himself on the back.

And that’s assuming that “GDP after removing depreciation” is a number that has any actual meaning. GDP measures cash flow; how much money is moving in our economy. Yes, investment is one component in that calculation, but that component is the amount of money that has been spent in the current year on investment.

Depreciation exists on a financial statement which evaluates assets and liabilities, known as a “balance sheet,” while GDP is an evaluation of cash flow, known as an “income statement.“ There is no meaningful way to put depreciation on an income statement.

And how was the amount of depreciation determined, do you suppose? How does Dean Baker know the asset value of the US economy, and the lifetime over which it should be depreciated? I suspect the depreciation was determined by applying whatever number was needed to provide an income level that was not falling.

Monday, April 24, 2017

Everybody Wants Heaven

There is a song which starts with, “Everybody wants Heaven, but nobody wants death.”

Right. That is out social discourse today. Everybody wants for all of our illegal immigrants to magically become legal, but nobody wants to address our immigration policy. Everybody wants the “good manufacturing jobs” to come back, but nobody wants to give up buying cheap foreign-made products. Everybody wants a strong social safety net, but nobody wants to pay taxes to support it.

Everyone builds dream castles. Only the insane try to live in them.

Saturday, April 22, 2017

Electing Monsters

I have long considered Lindsay Graham to be one of the most pernicious, evil persons in Congress; one of the few worse than John McCain. He has now convinced me that he has an evilness that is unparalleled in this century, advocating a preemptive attack on North Korea for reasons that are so inhumane that they should serve as grounds for impeachment.

He acknowledges that such a move would almost inevitably provoke war across most of Asia, and that “It’d be terrible” if it did so, but “the war would be over there,” he says, and it “wouldn’t be here [in America]. It’d be bad for the Korean Peninsula," he continues, "it’d be bad for China, it’d be bad for Japan, it’d be bad for South Korea. It’d be the end of North Korea. What it would not do is hit America.”

Is South Carolina actually proud of having elected this monster?

Friday, April 21, 2017

Prima Donna Much?

Danica Patrick, it seems, has an issue with NASCAR giving her insufficient time to before practice sessions begin on the track. “Like there have been many times," she says, "when I’ve been on the bus in my pajamas and they’re like, ‘Green flag in 15 minutes.’ And I’m like,‘What???!!!'" Seriously?

It would be one thing if she had anything to be prima donnaish about, but with no wins, no top fives, and only two top tens in 160 races...

In yesterday's practice session at Bristol she was 38th fastest out of 39 cars. The one car that was slower than her only ran six laps.

Sunday, April 16, 2017

Ideology Over Common Sense

Dean Baker is again demonstrating the difference between economics and business, and proving that the former is voodoo and that economists know nothing about the latter.

On the shortage of skilled workers, he says Friday that, “…the usual way to get better workers is to offer higher pay. And, the workers are almost invariably out there, most likely working for a competitor.”

So. If you hire a skilled worker away from your competitor by offering him a higher wage, and your competitor is now looking to hire a replacement, have you solved the problem of the shortage of skilled workers? Of course not. Moving the job opening from one employer to another is not solving the shortage of workers.

What it does do is increase the cost of producing your product, which you pass on to your customer in the form of higher prices. If you can. Not all companies can do that, for various reasons; a fact which economists vigorously deny. Economists love rising prices because they create inflation, which they think is a good thing. No one else thinks that.

“This means,” he goes on to tell us, “that if there were really shortages of workers with specific skills then we should see pay for workers with these skills rising rapidly.”

To begin with, he sort of blew his theory with his own statement that workers are almost invariably out there.” Even Dean Baker does not claim that such workers are always available, so the claim that there is a shortage of skilled workers may be valid, and raising the offered wage may, in fact, do no good.

And his claim about obtaining workers by raising wages might mean increasing wages in the economy at large if a) his theory was valid and b) the shortage was nation-wide. To the best of my knowledge, Baker has never cited a specific case where a company solved a skilled worker shortage by offering higher wages.

Something like, “The Skunk Iron Works was trying to hire welders at $12/hr and could not hire them. They started offering $20/hr and in one day had more welders than they could use and formed a waiting list.” Got an example like that Mr. Baker?

Did the example get followed by, “The subsequent decrease in sales due to price increases caused them to lay off all of their new hires and some of the original workers, reducing their work force to below its original level,” or something on that order?

Or perhaps, “The original welders, who were still being paid $12/hr, quit and went to work for the competitor from which Skunk Iron Works hired the new guys.”

He claims validation for his theory by saying that, “there is no major segment of the labor market where we see rapidly rising real wages,” but the shortages were not claimed to have been in a “major segment of the labor market,” in fact he mentions “workers with specific skills,” and he is looking at nation-wide statistics while discussing issues which have been described by local businessmen.

Common sense is called that because it is so uncommon. Economists should be put into a wooden whiskey barrel upon graduation and fed through the bung hole.

Clueless in Ramona

This “marketing writer” gives new meaning to “missing the point.”

He made an offer to award free breakfast with him to the reader who best observed a number of marketing campaigns and was able to explain the theory behind them. He writes for a paper in Ramona CA, which is a pretty small town, but even so that fact that only two readers responded should have been a clue that he needs a new writing topic and possibly a new career.

With only two responses, he decided to reward both of them with a free breakfast with him, but has been unable to schedule with either of them. Repeated messages offering dates and times have gone unanswered. He still has no clue, thinks the two lucky people might merely be suffering from a “lack of bandwidth for returning emails,” and is hoping to reach them via yet another column, literally begging them to respond and set up dates for their breakfasts.

Maybe he should start writing about economics for the New York Times.

Friday, April 14, 2017

Svelte

Wife dragged me shopping for new jeans today; at Old Navy no less. In the past year that terrorist at Envision Gym has worked me from a size 44 waist "relaxed" fit jeans to a size 40 waist "slim" fit.

The title may be a slight overstatement, but...

Who's In Charge?

My wife and I are standing in the hallway, both wanting coffee but waiting to go into the kitchen to get it until the cat finishes eating her breakfast. Earlier, I had been standing outside the bathroom with my legs crossed, waiting for the cat to finish using her litter box. We pay for this place, and the food that is in it, but the cat...

Update, 9:00am: Well, perhaps some explanation is in order. The bathroom issue is simple courtesy; cats don't like to be disturbed while they are doing their bidness. Enabling? Perhaps, but the consequence of disturbing them is that they might start doing their bidness outside the litter box. Certain amount of enlightened self interest.

As to the eating. Molly has 20% kidney function and has survived more than three years with Lymphoma and periodic pancreatitis. She has a tendency not to eat, so when she does we leave her the fuck alone.

Thursday, April 13, 2017

False Narrative

“The Syrian regime, backed by the Russians, has been killing its own people for as long as I can remember.” (emphasis mine)

Short memory; just six years. The Syrian civil war started in 2011, triggered by North African food shortages due to prolonged drought. Russian backing has been in place for less than three years.

The part that annoys me is the media usage of “killing his own people.”

What were we doing in 1864 during the lengthy artillery bombardment of Vicksburg? What were we doing when Sherman burned Atlanta to the ground? We were "preserving the union."

As we were in the nineteenth century, Assad is fighting a civil war for the survival of his nation; a war which began not as a protest against the policies of his government, but in protest against a shortage of food and adequate employment. The media even refers to the forces opposing the Syrian Army as “rebels,” but refuses to acknowledge that it is entirely legitimate for a government to defend itself against such rebels.

Assad is certainly not a good guy, but neither are the leaders of a lot of nations that we deal with peacefully. And you think Syria, as a nation, survives if the rebelling forces win? Look at Libya.

Sunday, April 09, 2017

News You Can't Count On

On Friday in the opening segment of its Evening News, CBS reported that 59 cruise missiles hit a Syrian airfield, causing great damage. They tell us that two US Navy destroyers fired 60 Tomahawk missiles and that, “one of them failed and went in the water, while the other 59 flew different routes in order to hit the target all at the same time.”

They go on to say that “Neither Syrian or Russian air defenses tried to shoot the missiles down,” and add a quote from US Navy Commodore Tate Westbrook that, “We had no indication of any Russian intent to interfere with this mission.”

They do not actually say that all 59 missiles hit the airfield, but they certainly make a valiant effort to convey that impression, which caught my attention because I had already read two reports earlier in the day which said that only 23 missiles had hit the airfield. Neither source was entirely reliable, so I spent a good bit of time yesterday digging deeper into the issue.

I now have four sources, all of which I consider reliable, which say that 23 missiles hit the airfield; representing a 38% success rate. One source is Russian, one German and two Syrian, and all four of them are in agreement on 23 missiles specifically.

If you are not familiar with the Tomahawk, it is a missile which is launched from ships against surface targets. It has been in use for more than 40 years, is both reliable and accurate, and is pretty devastating against surface installations, carrying 1000 pounds of varying types of non-nuclear warhead. It flies low to avoid radar, and has a speed of around 550 mph.

So, what happened to the other 36 missiles? One source suggests that some fell prey to anti-aircraft fire, notwithstanding the Commodore’s statement, while others were the victim of something electronic that caused their guidance systems to fail.

Since the Tomahawk is an offensive weapon, not a defensive one, this does not constitute an “oh shit, we’re all going to die” issue, but it illustrates the appalling unreliability of Scott Pelley and CBS News.

Wednesday, April 05, 2017

Did You Notice?

It was only a few years ago that NASCAR had a starting field of 43 cars, and each week had a fairly lengthy list of cars that were too slow in qualifications to be among the 43, and went home. Fifty cars in the entry list was not unusual. Then, last year, they cut the starting field to 40 cars. The reason, we were told, had to do with their new team franchising system. Last week at Martinsville, only 38 cars were on the starting grid.

Texas Motor Speedway is giving free Danica Patrick bobblehead dolls to the first 30,000 fans to enter the gates next weekend for the NASCAR race. I simply cannot come up with a comment that suits here. My brain exploded.

Sunday, April 02, 2017

The Beat Accelerates

At first we had the Russians hiring "more than 1000 hackers" to plant fake news and alter the outcome of our election. Now that has grown to "more than 15,000 hackers in Russia" who were planting fake news to corrupt Google search results.

Democrats also claimed that "hacking vote counts" was impossible back when they were being accused of doing it and were winning elections, now they claim that Republicans are winning elections only because they are "hacking vote counts" on a massive scale.

This has now truly become the children's crusade.