Mt Whitney Zone Forums General Discussion Yosemite, Congress & Sequestering

One of the commenters is more astute:

"Economics is not a precise science and unscrupulous folks can always pick and choose a model that fits their ideology."

I'd say economists are probably like stock market analysts, most of whom can't beat their respective indices.

choose your favorite
balancing the budget
the practice of medicine
child rearing
choosing an employee
predicting the future
etc, etc

" ___________ is an unending series of arbitrary decisions based on intuition and inadequate facts."

Mr. Krugman makes so many amateurish mistakes in that piece that I am a little embarrassed for him.

Perhaps the most obvious is that he seems to equate the Dow with the economy. The equities market is a small piece to the economic pie. The bond market is a much larger piece, but even put together they are not "the economy". Sometimes they reflect the economic conditions, sometimes they don't.

He makes the mistake of claiming that workers aren't participating in their own productivity gains through stockmarket activity. The majority of people out there actually do participate in the stock market, even if they don't realize it. Anybody who has a mutual fund or some kind of retirement account is likely to have some mix of stocks and bonds in it. Those evil corporations are funding our collective retirements.

He also makes the mistake in presenting the Dow Industrial average as being indicative of anything. The Dow is 30 hand picked stocks that picked specifically to over perform.

The S&P 500 is testing it's all time high for the third time.
S&P 500 - 1960 to present

The NASDAQ is still only about 66% of it's all time high
NASDAQ 1978 to present

Meanwhile, the New York Composite isn't even close to it's 2007 high.

He's right that wall street pundits can barely predict the weather one hour in advance. But who did wall street support in 2008? Hint Hint, they weren't wearing red.

More later on the Krugman piece. It deserves a spotlight.

It certainly does. He didn't win the Nobel prize because he posted economic gibberish under a pseudonym on an internet BB.

At least there's something I can agree with you on!

Um, I think that at some point you have to reveal some of your own creds. I mean, the guy teaches at Princeton, writes for the NYT (not a shabby thing in itself) and has a Nobel prize**? On Keynes and the current thinking on stimulus vs. austerity, he's in agreement with the majority of economists -- 3 others of whom I can think of offhand with Nobels themselves. But to call him amateurish is pushing it a little unless you're also working at that level.

It's also true that economics is kinda squishy as a science (compared to, say, physics and math) but it (at least Krugman, Reich, Stiglitz et al) insist that models be predictive in nature and that a basic scientific rigor be applied. What he and others keep calling people on is that the predictions made by those advocating austerity -- here and, especially in Europe -- have been wrong. That's wrong, wrong, wrong. The prediction by PK et al was that austerity would put Europe and the UK back into recession and unemployment would increase. That's what happened and, to the extent I understand it, it's basic Keynes.

At no point has he or anyone else said we don't need to deal with so-called entitlements (e.g. SS, medicare). He's only said we don't do it now when we're in a recession. Even the conservative Joe Scarborough now seems to agree the government has to spend now to help the economy.

I mean, we can bandy numbers about all day but I cheerfully admit it's way beyond my grade level, poor but honest Forestry major that I am. The reason I like PK so much is he does tend to agree -- and reinforce -- my wild-eyed radical tendencies (Berkeley '73***) but he (and Reich and even Stiglitz) writes with clarity, humor and brilliant irony (hey, "zombie economics" as a term for discredited ideas that keep coming back whatever the evidence against them? Darned clever). They also use facts from usually reliable government sources (GAO, OMB etc).

So that loops around to a Rumsfeldian what do we know, how do we know it and how do we trust what we know when we know it? And even how and why do we change and evolve in our thinking. It's true we do get into intellectual ruts, often based on our biases and even politics. But much of changing minds is in discussion, presenting what we see as facts and even repeating -- evolving the points as you go and as experience and evidence changes. In that sense, Krugman has been doing a remarkable job. I think his writing has made a major contribution to changing the debate on austerity, the relative importance of federal debt and deficit and the importance of middle class recovery and jobs. Where once what we can call the tea party types dominated the discussion on economics (the deficit will turn our country into Greece!!), increasingly larger segments of chattering class types and politicians have to actually answer the Keynesian model of recovery rather than keep repeating the "family" model as expressed here several times (a model that is simply wrong. Once again, the budget of a family is not the same as that of a government with its own currency: www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html).

For that reason, I'm glad Steve et al haven't pulled the plug. These are discussions about the role of government and the relationship of spending, debt etc. to a country's economy that should be going on everywhere and why not here?

Well, I see our time is up. Tomorrow's assignment is compare and contrast Herbert Hoover's response to a tanking economy with that of FDR and the rise of the Keynes model.

g.

Eeeek. Should we start a battle of footnotes? Wiki entry:

**According to the prize Committee, the prize was given for Krugman's work explaining the patterns of international trade and the geographic concentration of wealth, by examining the effects of economies of scale and of consumer preferences for diverse goods and services.[9]
Krugman is known in academia for his work on international economics (including trade theory, economic geography, and international finance),[10][11] liquidity traps, and currency crises. He is the 20th most widely cited economist in the world today[12] and is ranked among the most influential academic thinkers in the US.[13]

*** Can I also mention that my more conservative grandmother (Berkeley '06) refused to use dimes when FDR's face was put on it? Thus is balance achieved in a turbulent universe.

And, oh yeah, back to the NPS budget:

From: "NTEU Chapter 296 WASO, NPS"
Date: Fri, 1 Mar 2013 15:43:04 -0500
Subject: NTEU update on impact of Sequestration on NPS

Dear fellow WASO Bargaining unit members -

Earlier this afternoon, NPS Director Jarvis spoke to NPS Superintendents and program managers regarding the impact of the government-wide budget Sequestration that goes into effect today. This is a summary of his salient points:
no permanent NPS employees will be furloughed, except in very limited circumstances*
there are @ 1,300 vacant positions - almost all of these will not be filled, unless they are mission critical jobs
regarding seasonal employee hiring - @ 1,000 seasonal employees will not be hired (out of @ 5-6,000 total)
employees subject to furlough - many may be asked to report to duty later than normal
The Director remarked that the NPS was particularly fortunate in regards to being able to avoid furloughs, whereas we are aware of other Bureaus within the Government, and within DOI, which may be forced to furlough staff. He asked that we comport ourselves with compassion and not to act smugly towards these other agencies.

Travel restrictions - Director Jarvis mentioned that he has ordered all travel planned to take place in the month of March cancelled, including his own and that of other 'front office' staff. The only exceptions will be for mission criticaltravel pertaining to health, safety & life-threatening situations.

On Monday, there will be a page on InsideNPS of Q&A posted regarding the impact of the Sequestration on parks, programs and offices. The Director will also be sending out a note on Monday to ALL Employees following up on this call today.

Continuing Resolution - the current C/R runs out on March 27th. When I met with Congressional staff (Ken Cummings - Congressman Van Hollen's senior legislative assistant) this Wednesday, as part of the NTEU Legislative Conference, we learned that Congress is working on a new C/R, but there are no guarantees that a new C/R will be approved, or at what funding level.

The NPS Sequestration plans are contingent upon certain assumptions about what the full year funding will be. Director Jarvis said that the NPS will be asking DOI for blanket approval for seasonal hirings at @ 95% level. If the assumptions turn out to be incorrect, there may have to be changes to the Sequestration plans.

Director Jarvis expressed concerns about the Service's capacity for Search and Rescue, wildland fire management, exotic plant and animal control, and long-term inventory and monitoring. He expressed frustration with "not having the resources to do our jobs." He also mentioned that the Sequester law has provided limited authority to move funding around.

*Union-agency bargaining - Nonetheless, NTEU has invoked its right to bargain with NPS on the impact of sequestration. There may be some small programs or offices where the line-by-line application of the Sequestration law does require staff furloughs.

Next week we will send out a note inviting staff to express any concerns or questions while protecting their anonymity. Employees are encouraged to consider if/how these restrictions affect their annual performance plans.

regards
Rudy

Yup, he posted his economic gibberish in the New York Times.

didn't the nobel committee award a peace price to Yassir Arafat?

Now THERE is a credible organization....LOL

I'm sorry that you consider what I wrote to be gibberish. I am more than happy to expound on what you feel that I failed to properly communicate in my post. I did notice one grammatical error, I do apologize for that. My name is Tom Dietz. I use my full name on the WPS site, but took out a few vowels and a consonant on this site. When you do the search on my name, I'm not the juggler.

But let's try to clear this up, do you consider what I wrote to be gibberish or do you just disagree from where I am coming. Except for the part where I state that he made amateurish mistakes, I don't really see where you can disagree with what I posted. If you do, let's hash it out in a nice healthy debate.

I stated that Krugman made amateurish mistakes and then I backed it up with my case for the assertion. Which part of what I wrote do you disagree with? If you can show where my statements are incorrect, then you will discredit me and it will be clear that my assertion that Krugman made amateurish mistakes is incorrect. Don't go for the ad hominem or appeal to authority approach, attack the words and ideas that I put out.

Tom:

Oh woe! You're right, my hero not only intellectually bankrupt, but fiscally as well:

http://dailycurrant.com/2013/03/06/paul-krugman-declares-personal-bankruptcy/

In logic, this is called a fallacious appeal to authority. There is no consensus among experts in the field of economics. If I pull up Ludwig von Mises as my expert, he will completely disagree with Krugman.

I didn't present my credentials because I don't have any meaningful credentials to this subject matter. What I did is make a statement and then provided information to back my statement up.
Like with Kevin, you are welcome to attack what I have written and debunk me based on the content of my post rather than my credentials.

Which are:
I have worked in technology for most of my 32 years in the business world (yes, I started working in technology when I was 18). I worked at Cisco Systems during a big chunk of the 90s and up until 2001. I got to ride the dotcom bubble to its fullest. I made a million, I lost a million. I worked at a couple of smaller tech companies and then I took some time off from 2003 to 2005 and traded stocks and wrote a stock trading/technical analysis (charts) newsletter. I made another million and lost another million. And then I went back to work in technology where I focus on wireless technologies.

Now, if you want to discredit or otherwise dismiss my views based on my resume instead of the content of what I have written, then can I not do the same for you? I mean, have you seen me say "Don't listen to this George guy, all he knows is woodsy the owl"? The answer is no, I have not. I have shown you the respect to address what you write and not your credentials.

If you disagree with what I write, then make your case, don't go for ad hominem or appeals to authority.




Again, I made my case, show me where I am wrong.



There has been no austerity programs in europe. Every attempt has been met with riots. Real austerity isn't cutting a fraction of a percent from the budget. It actually means giving something up.



First, SS and medicare are not entitlements. We are forced to pay into SS and Medicare and we were promised that we would see the benefits in our later years. True entitlement programs, such as seen with the department of health and human services and housing and urban development should be where the cuts are made.



I do not share your views that a guy with a forestry degree cannot have independent valid views on topics outside of forestry.

I am not going to go point by point on the rest of your post, but I will expound on my case against Krugman.

PK Sez


He is partially correct. A large part of our population is still trying to recover from the fallout of the housing bubble (another result of government intervention in a market). He correctly state that people are paying down debt by spending less than their income. He then equates this to saving. Paying down debt is not saving. The money that is going into debt service is not idle. When I pay off debt, that money goes to the financial institution that holds the debt and they in turn pay their people and they (the people and the company) can invest. Unless they are paying off other debt. But the money that I use to pay off debt is not savings. And I am asserting that it is so basically wrong that it is amateurish.

But let's go to his assertion that interest rates are low because there are excess savings while also making the assertion that people are trying to pay off debt. People don't save when they are awash in debt. They also don't invest. Again, this is an amateurish mistake that should be common sense to anybody.

Interest rates are low because banks can't get the general population to take their money as loans. Interest rates are lowered as incentive to people to take loans. The banks are essentially dropping the price of money. The reason that people don't want to take on more loans is that they already have a bunch of debt that they are already trying to pay down. So even though loan money is cheap, it is impossible for many people to take on more debt. Again, basic stuff here. A nobel prize winning, princeton teaching, new york times writing, economist should know better.

PK Sez:


There are two ways that the government can ramp up spending. They can tax us more or they can run on deficit spending. Both have negative economic impacts. Obviously, taxing us more means that we have less money to spend in the open market and that hurts the economy. Deficit spending has a longer term affect and it is definitely a slippery slope. The more our government borrows, the more it has to borrow to service our debt interest. Deficit spending over the long term is what brought us the situation in Greece and Spain and Portugal and a bunch of the other Euro nations. Keynesian economic policies work as a short term bandaid, but they have longer term economic ramifications that are negative. In many cases, they prolong the economic hardship. Bush's response to the economic mess that he was handed was not an austrian economic approach. He went with a Keynesian response that brought us a housing/credit bubble that necessarily had to pop.

this is not a bad idea in itself. It just never happens.

that's the problem with academic economic models. You can say "if only we did this, then we would be great". But the models forget about human nature.

I wonder if a little bankruptcy will change his economic views. Probably not.

I am not an economist, though my professional life involves writing computer models of million-dollar machines in order to extract the highest return on investment.

Quick visual aid as to how the Gov. should work:

Wagga:

That's the actual engine of capitalism? I thought it was supposed to be an invisible hand! Once again, I'm enlightened as a result of WHA forum.

And, Tom, you misinterpret my asking for background -- not as formal as credentials. I am a major fan of amateurs (myself included) taking part in a robust discussion and using our own interpretation of facts and other authorities to arrive and conclusions. But I didn't find that your references proved your point, or even close. So I was interested in what your background was to call Krugman's knowledge "embarrassing."

You've not reassured me, though I authentically appreciate you (and everyone else here) debating the specifics.

I lost a little more confidence with:



I totally understand not following up on every link/reference posted here, but you might want to look a little more closely at it (Hint: Kim Jong Un voted Sexiest Man Alive).

You said this previously:


I guess there may be other ways to interpret this, but the way that I interpreted it is that you are saying that unless I have some comparable accomplishments in the field of economics, who the hell am I to call him amateurish? Did I miss your intent?

I will retort with a simple "you don't need to be a weatherman to know which way the wind blows" (apologies if I didn't get that exactly right).

so you are saying that I didn't make my case, but you aren't saying what you have a problem with.

Was it where I said that it was a mistake to equate the Dow Jones Industrial average with the overall economy? Something that Krugman clearly did in his article. Are you saying that you equate the DJIA with the economy?

Do you agree with Krugman where he equates paying off debt with savings?

Do you agree with Krugman that the reason that interest rates are too low is because there is too much saving going on?

You say that I haven't made my case, so tell me, which part of my argument do you disagree with.

sorry about not catching that the article you posted was satire. If it said "the onion", I would have got it.

Single-cylinder stationary steam engines need a massive flywheel to operate smoothly. Absorb excess energy during the infrequent power strokes and release energy in between.

Government should operate the same way, stimulating the economy on the upstroke, collecting sufficient taxes on the downstroke.

It's a three-legged dog of an analogy, but you get the idea...

This is the same Mr. Paul Krugman who predicted the unemployment rate would not exceed 9% and that Germany would rue its reduction in spending.

It seems to me, Mr. Krugman has made some predictions that have not been exactly spot on. This is excused and ignored because he is, after all, right on the issues.

I do believe Enron advisers in glass houses should not throw stones.

A further note:

Look at the Governor - It takes balls to work. Good luck on finding that commodity in Congress.

Forums in generally are not well suited to political discourse because people view the world through their own prism and everything tends to reinforce what they already think. This thread has degenerated down to quoting joke articles as if they were fact, and summarizing entire economic theory based on an opinion piece. Expert critique of complex theories should be based on books, not joke articles and short opinion pieces. Blitzkrieg posts with a shotgun blast of subtopics and quotes scattered over pages of screens do not change people's mind.

In case anyone is still reading the sledge-hammer harangues in this thread:

Paul Krugman Declares Personal Bankruptcy

Paul Krugman

I could have sworn that this was one of my original points. I only entered the fray after one of the mods for the site said she lobbied heavily to keep the topic open.

This thread has degenerated down to quoting joke articles as if they were fact, and summarizing entire economic theory based on an opinion piece.

Interestingly, I did quote the joke article, but the one part that I quoted was the part that was an accurate description of one of Keynes concepts. I had no reason to think that a Krugman fan would post a satire piece on Krugman. I find Krugman's views to be irresponsible and delivered in a pompous manner. It's safe to say, I hadn't ready any Krugman crap in a few years until the NYT piece was posted on this thread.

Personally, i thought the degeneration of the thread happened much earlier when there were words like "hypocritical" thrown around.

My opinion, again, is that I tried to bring the conversation to an open debate instead of snide comments and insults. And that's when we started hearing nothing but crickets.

But you are right, my mind hasn't changed one bit from the conversations on this thread.

...and right beside the bankruptcy news: Pope Benedict Comes Out as Gay

If that doesn't raise a flag, then read this, it's pretty funny: Breitbart Site Duped by Fake Paul Krugman Bankruptcy Story

I don't think that George is going to appreciate that you characterized his posts as "sledge-hammer harangues"