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From: TimF6/11/2010 8:07:41 PM
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About That Pay Cut For Federal Workers
Brian S. Wesbury and Robert Stein, 03.09.10, 12:01 AM EST
We stand behind the idea.

Last week we wrote that one way the federal government could show it was serious about the budget deficit would be an across-the-board pay cut of 10% for all civilian federal workers. Although the savings would be only about $15 billion per year (roughly 1% of the budget deficit), the "cut" would send a clear signal to our creditors that policymakers were concerned about the deficit and were willing to take on sacred cows.

It seems like we touched a nerve. No article we've ever written has generated as much response.

In the larger picture, this is a bad sign. If government has become so big that articles about changes to government generate more interest than articles about stock prices, then government has become too big and too entangled in the lives of the American people. Government has become the intermediary in so much of our life that it has crowded out ways of relating to each other through civil society itself.

That said, while many of the comments we received were supportive, the majority were downright hostile. Some were too silly to warrant a reply. Maybe it was just a coincidence, but those comments seemed to come from federal employees during work hours.

Other criticisms, including some from government workers, were more serious and fell into a couple of groups. One argument against the pay cut was that many young federal workers are already underpaid.

Truth be told, we're sympathetic. Young workers may do the same jobs as older workers, yet they receive much lower pay--think TSA passenger screening. But, since federal pay is based on seniority, they can move up that scale rapidly, and once ensconced in the federal system become very difficult to dislodge. While the federal system attempts to use merit-based pay, the seniority system can undermine the productivity improvements that come from merit.

In addition, federal pensions are generous when compared to the private sector, as is worker pay and other benefits. A story published in USA Today three days after our last column showed that federal workers were paid more than their private-sector counterparts in more than 80% of occupations. And that does not include benefits, which are on average four times higher in the public sector vs. the private sector. Maybe that's why the statistics show that federal workers only quit their jobs at about 25% the rate of private-sector workers. This is an amazing difference. If that's not the definition of highly paid, we're not sure what is.

Another argument used by government employees was that the earnings of federal workers get spent in the local community, which multiplies the benefits of their pay across the economy. So a pay cut would hurt the economy.

This multiplier argument is fallacious and worries us because it seems that government employees do not understand basic economics. Every dollar the federal government pays its workers has to come from someone else (through taxes or borrowing), who would have spent it anyhow. Why is a federal paycheck any more likely to be multiplied than a private paycheck?

Even if you buy into the idea that a boost in federal spending can temporarily have a multiplier effect, raising pay for government workers--who would provide the same services anyhow--is wasteful. The same money could be spent on hiring new workers to perform additional tasks, like providing greater port security, for example.

Also, the "multiplier" argument implicitly accepts that federal workers are not really paid for the value of the services they render, but instead receive a premium for some larger social good. In essence, they are saying federal pay is a form of "workfare," a hybrid of a paying job mixed with a welfare payment. That's a reason to cut pay right there.

We are ready for more criticism ... and support ... from our readers, but we think we've made our point.

Brian S. Wesbury is chief economist and Robert Stein senior economist at First Trust Advisors in Wheaton, Ill.They write a weekly column for Forbes. Brian S. Wesbury is the author of It's Not As Bad As You Think: Why Capitalism Trumps Fear and the Economy Will Thrive.

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From: TimF6/21/2010 7:14:22 PM
   of 3816
Robert Frank's Strange Case for Taxing "The Rich"
By David R. Henderson

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From: TimF6/27/2010 11:48:49 AM
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Wayne B. Wheeler: The Man Who Turned Off the Taps
Prohibition couldn't have happened without Wheeler, who foisted temperance on a thirsty nation 90 years ago

* By Daniel Okrent
* Smithsonian magazine, May 2010

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From: TimF7/1/2010 11:07:17 AM
   of 3816
“In the Long Run We Are All Dead” What Does It Mean?
June 28, 2010

by Mario Rizzo

Paul Krugman continues to invoke Keynes’s famous statement. I wish Krugman and others would give some serious thought about what it is supposed to mean and the errors it involves.

In the first place, Keynes was complaining about the “classical” economics, that is, the ideas of the economists before him who believed that the market, if unhampered after a recession, could reduce or eliminate the unemployment associated with the business cycle.

Of course, this puts many economists – with different ideas – in the same category and treats the issue of cyclical unemployment in a grossly simplified way. But this, in general, is how Keynes treated those who disagreed with him. Keynes, the polemicist, was without inhibition.

Some basic methodology is in order. When economists talk about “the long run” they do not mean calendar time. Yes, that’s right. They do not mean long in the sense of many years or perhaps even many decades. (On this see Fritz Machlup, ”Equilibrium and Disequilibrium: Misplaced Concreteness and Disguised Politics,” Essays in Economic Semantics (1963))

Then what do they mean? It is actually a technical term that has meaning only in the context of a specific model. I believe that Keynes knew this but used the everyday meaning of the term to sow confusion about the ideas of his predecessors and to use that to his advantage.

The long run happens when all of the variable elements in a model are fully adjusted. It is an intellectual experiment. Suppose, simply, that a model says there are firms which face prices, make quantities of outputs and have a certain size. Now let the “permanent” demand for their product increase. Firms will face higher prices and their outputs will increase. But until firm-capacity is adjusted, there is no long run. Not everything in the model has adjusted.

Will this complete adjustment take a long (calendar) time? Maybe or maybe not. It will depend on many specific circumstances in the industry. It could be extremely rapid.

The impression that Krugman wants to convey is that only the stimulus-crowd wants to make things better now. The opponents, on the other hand, want to let present suffering continue as they fear some possible problems in the distant future of calendar time.

But let’s look at the arguments made by the opponents of fiscal stimulus.

Some have argued that, as deficits increase, people now offset the putative stimulus by increasing their savings in anticipation of future tax increases. So there is no stimulus now.

Others have argued that, for example, extending unemployment insurance (again) to those unemployed for more than six months will increase the length of unemployment now (by subsidizing it) while failing to stimulate.

The stimulus failure is due to the relatively small increase in spending induced by non-permanent increases in income (as unemployment insurance is certainly not permanent source of income). Even more, producers know that the spending is non-permanent so it is unlikely to result in increased employment of labor. Thus, there is no stimulus now; in fact if unemployment continues there is a kind of anti-stimulus now.

Austrians have argued that failing to allow the housing market to adjust by both fiscal and monetary propping-up measures, worsens the situation now by prolonging the inevitable adjustment to a bubble sector. As the adjustment is dragged out and the rest of the economy suffers the dampening effects now. This must include the uncertainty as to when (in calendar time) the market will be allowed to adjust.

In empirical work, John Taylor finds that to the extent there was some effect of the fiscal stimulus it was very small and lasted only a matter of two or three months for each major injection. So I guess the long run is four or five months by this reckoning:

Compared with the 2008 stimulus, the 2009 stimulus was larger, but the amount paid in checks was smaller and more drawn out. Nevertheless, there is still no noticeable effect on consumption. I also show the timing of the “Cash for Clunkers” program in Figure 7; it did encourage some consumption, but did not last and cannot be considered an effective method to stimulate the economy. In addition, my analysis of the government spending part of the stimulus is that it too had little positive impact.

Even frameworks that stress future consequences of current stimulus need not be long-run theories in the calendar sense. For example, if the anticipated taxes required to pay off or service current deficits consist of rises in marginal income tax rates, output will be considerably lower and the real interest rates higher in a matter of a couple of years than without stimulus.

The upshot of all of this is that the anti-stimulus economists are not claiming we must trade off benefits now for some long-term pie-in-the-sky benefits. Most are saying: The stimulus route leads to (almost) no benefits now as well as costs later.

If we are all dead in the long run, then Keynes-Krugman must argue that we are all dead in the short run as well, too.

All of this confusion could have been avoided if Krugman did not follow Keynes in his disrespect and disregard for those who dare to disagree.

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From: TimF7/1/2010 11:08:26 AM
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Two on Inequality
by Will Wilkinson on June 4, 2010

Jason Shafrin notes a new NBER paper (gated) by Richard Burkhauser and Kosali Simon on the implications of including health insurance in measures of income:

Burkhauser and Simon (2010) … shows that inquality is in fact decreasing once one taking into account health insurance costs. This chart provides information on changes in income and total income between 1995 and 2008. Income includes only raw wages, but “total income” also takes into account workers compensation in the form of health insurance. The authors use this evidence to claim that “…ignoring the value of health insurance coverage will substantially understate the level of economic well being of Americans and its upward trend and overstate the level of inequality and its upward trend.”

Meanwhile, Scott Winship replies to Mike Konczal by clarifying the upshot of Christian Broda and friends’ work on trends in food prices and their effect on real income growth and income inequality. Winship:

Broda and his colleagues find that the prices of what the poor buy (that is, “price” when the satisfaction derived, or utility, is held constant) have risen less than the prices of what the rich buy. That’s because when prices of related goods change, the poor are more likely to switch to cheaper goods, all the while maintaining their overall level of satisfaction with their purchases. If it becomes cheaper to maintain a constant level of satisfaction, then one’s wages have effectively grown. So poor consumers may switch from Green Giant frozen veggies to generics when the latter go on sale, or they might buy their frozen veggies at the chain a couple of neighborhoods over rather than the local grocery store when the latter’s prices go up. Rich consumers, on the other hand, may be relatively unlikely to stop buying Whole Foods vegetables when the plebian chain’s prices are cut. They may not switch to generics as those products become cheaper relative to those on offer at the farmer’s market.

It’s not that we should be excited about how great the generic frozen veggies bought by the poor are compared with the Whole Foods produce. It’s that we should be excited that the poor are either more willing or more able to economize to maintain a constant lifestyle than the rich are, and so inflation eats into their quality of life to a lesser extent than it does among the rich, holding in check other forces that would increase inequality.

Now, Broda’s research is based on purchases of a limited number of commodities and over a limited number of years, but if his findings extend to other goods and services and to earlier periods (which he believes they do), then the implication is that inequality between the poor and the well-off — though not necessarily the richest of the rich — has not grown. We can still worry about the quality of the food purchased by the poor and their health outcomes, but that’s a story about poverty and deprivation, not about inequality or growth in inequality.

?I’m still waiting for good data on the effects of the recession on incomes at the top of the distribution. Have you seen any?

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From: TimF7/1/2010 12:23:09 PM
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More Reliable Cars
By Robin Hanson · June 25, 2010 8:00 pm

The most recent survey by the Consumer Reports National Research Center found that five-year-old vehicles had about one-third fewer problems than the five-year-old vehicles we studied in April 2005. In fact, owners of about two-thirds of those vehicles reported no problems. And serious repairs, such as engine or transmission replacement, were quite rare. (p.15, June ‘10, Consumer Reports)

Car problem rates falling 1/3 in five years is change you might not notice, but if you think about it, its a pretty big deal. Most people are surprised to hear that the world economy doubles roughly every fifteen years; when they think back fifteen years, the world doesn’t seem that different. Besides a few big changes, most things seem pretty similar. But this is illusory – most change happens behind the scenes. In fact, one of the reasons why change can be so fast is that most of it happens behind the scenes. If ordinary people had to notice and deal with more changes, we just couldn’t change this much.

from the comments

June 26, 2010 at 2:06 am | Reply

According to google public data, world gross product per capita doubled from 1994 to 2008. (~$4700 to ~$9200). Yes that is inflation adjusted. Thats about 15 years.

June 26, 2010 at 7:39 am | Reply

The big changes are in the lives of the world’s poor. In China and India alone, the improvements for the bottom half in terms of access to food, clothing, and basic medicine have been very substantial over the last quarter century. In dollar terms they may not seem that big. In utility adjusted terms, going from a bowl of rice a day to two bowls of rice a day with an easier time buying the occasional aspirin or antibiotic is a vastly greater change than going from a rundown Chevy to a new Lexus.

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From: Brumar897/7/2010 7:43:49 PM
2 Recommendations   of 3816
Is Divorce Contagious? [Maggie Gallagher]

The British press is reporting on a new study showing that your divorce risk soars if any of your close friends divorce. This is consistent with a lot of what we know about divorce.

We often act as if divorce is the result of a careful and considered range of alternatives, or that it happens without forethought, for no good reason at all. The truth is that people who divorce have had dissatisfaction in their marriage (like a lot of other people), but most can also identify good things about their marriage. The decision to divorce is not inevitable; it is a decision that often could have gone either way.

I have stopped divorces in my own social circle, simply by saying “It sounds like you would be better off, but there’s not much in it for your kids.”

Gordon Liddy once told me that a woman wrote to him when he was in jail saying she felt sorry for him. He wrote back and said, “I sense sadness in your note,” at which point she unloaded her marital dissatisfactions on him. He wrote back and said, “If you are that unhappy, maybe you should divorce.” A few years later, she wrote back: “You SOB, I’m a poor broke single mother with two kids.”

He thought that was a lesson in how some people need to reflect more. I marveled, “Some guy in jail told her to get a divorce and she did!”

Inevitability is almost always a story we construct afterwards, not the truth before.

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From: TimF7/7/2010 11:10:48 PM
2 Recommendations   of 3816
Give Fat Presidents a Chance

In the Washington Examiner this week, Cato's Gene Healy convinces me that we need a heavier president:

A few years back, Slate examined the relationship between flab and presidential performance. What it found suggests that if you want New Frontiers and crusades for democracy, then vote for the skinny striver. If you'd prefer someone who leaves well enough alone -- who's content to preside over peace and prosperity -- pick the porker.

... I once joked that my favorite president was a chunky, draft-dodging, scandal-plagued Democrat elected in '92 ... (wait for it) ... Grover Cleveland. (The Big-Mac-gobbling Bill Clinton was pretty flabby himself, and lately he looks ever better compared to his successors.)

(He certainly does.)

Like a giant, implacable Buddha, the Great Cleveland set his bulk against Big Government, wielding the veto pen more than any president before. Even $10,000 to relieve Texas farmers during the 1887 drought was too profligate: "I can find no warrant for such an appropriation in the Constitution."

He cannot sign the bill because the Constitution doesn’t authorize the spending? What a concept!

Our 27th president, William Howard Taft, didn't start any major wars or federal programs, so he's now best known for weighing in at 355 and installing a plus-sized White House bathtub. But Taft fought hard against Teddy Roosevelt's grandiose visions of presidential power, insisting that "the president cannot make clouds to rain, cannot make the corn to grow" -- and that Roosevelt's notion of the chief executive as national savior would lead to an imperial presidency.

America's best governor today is New Jersey's Chris Christie, who took office despite his opponent's juvenile "check out the fat guy" campaign ads. Since then, Christie's faced down Jersey teachers' unions and made major budget cuts -- showing the kind of gumption America could use in the fiscal crisis to come...Yet most discussions of Christie's political future end with the observation that he's just "too fat" to be president.

Since the advent of television, we've reliably opted for the taller candidate … We seem to have forgotten the purpose of the office. We're not casting a chick flick here.

Americans fantasize about a magical politician who will fix all our problems and "run" the economy. This is a dangerous fantasy. I’ll take a corpulent defender of constitutional government over a svelte crusader any day.

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From: Brumar897/9/2010 7:33:22 PM
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France passes law to jail men who criticize their wife’s appearance

An entire nation whipped.

Feminist Nadine Morano
Story here in the UK Telegraph.


Couples who insult each other over their physical appearance or make false accusations about infidelity face jail, under a new French law making “psychological violence” a criminal offence.

The law – the first of its kind – means that partners who make such insults or threats of physical violence faces up to three years in prison and a €75,000 (£60,000) fine.

[...]Nadine Morano, the junior family minister, told the National Assembly that “we have introduced an important measure here, which recognises psychological violence, because it isn’t just blows (that hurt), but also words.”

Miss Morano said the primary abuse help line for French women got 90,000 calls a year, with 84 per cent concerning psychological violence.

[...]The bill, which has been unanimously approved by French MPs, defines mental violence as “repeated acts that could be constituted by words,” including insults or repeated text messages that “degrade one’s quality of life and cause a change to one’s mental or physical state.”

[...]Miss Morano said witnesses could be called on to testify in such cases and doctors’ certificates charting a patient’s descent into nervous depression as a result of such insults could be used as evidence.

“The judge could (also) take into consideration letters, SMSs or repetitive messages, because one knows that psychological violence is made up of insults,” she added.

The law technically applies to women, but I doubt it will be enforced equally – just consider the lighter sentences for women who murder their husbands. For example, Mary Winkler murdered her husband and got 67 days in jail. No abuse by her husband was ever proved in court – her husband just questioned her when she lost tons of money through the Nigerian internet hoax. She later shot him while he was sleeping and left him, so he bled to death. 67 days in jail is not a fair punishment for murder, and she got full custody of the children, too.

So, I think that this French law is not going to encourage men in France to marry. The risks are too great. To get men to marry, you have to lower the risks, and help women to be extra careful when choosing men.

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To: Brumar89 who wrote (3771)7/9/2010 7:42:48 PM
From: Brumar89
1 Recommendation   of 3816
Former Lesbian: I Craved Emotional Balance of Hetero Relationship

By Kathleen Gilbert

UNITED KINGDOM, July 7, 2010 ( - British comedienne and former lesbian Jackie Clune has published an account of how, exhausted by the emotional dysfunction of her lesbian relationships, she discovered in her subsequent relationship with her husband a freedom to "[walk] alongside each other rather than spending life locked in face-to-face intimacy or combat."

"Looking at my four children racing around the garden with their father, it seems almost impossible to believe that only a few years ago I never imagined having a family," writes Clune in a column published in the UK's Daily Mail June 26.

Clune, who is also known as a cabaret performer, actress, and broadcaster, says she was raised in a "very traditional Irish Catholic" home and and fell in love with a man at 17. It was in college that she stumbled upon a pamphlet claiming that heterosexuality is a mere construct to be altered at will, which prompted her to break up with her boyfriend and live the typical lesbian lifestyle for the next 12 years, until she was 34 years old.

"I was excited by the close bond a relationship with another female could bring," she writes.

But the experience was not as she at first envisioned it to be. In an interview with the Times' Penny Wark in October 2005, Clune called lesbian culture "dictatorial and intimidating" and "the opposite of the sapphic fluffy nirvana I expected."

Despite the closeness of her relationships, Clune admits that the hyper-emotional world of a female-to-female sexual bond was "exhausting." "The women I went out with were by and large more inclined to be insecure and to need reassurance and I found myself in the male role of endlessly reassuring my girlfriends," she writes. "The subtle mood changes of everyday life would be picked over inexhaustibly."

Clune describes how one lover was so jealous and insecure that "every single time we enjoyed a night out ... we would have a row and have to leave." "Back home, we would then spend the next four hours arguing about our relationship and my feelings of loyalty, fidelity and so on,"
she writes. "It was never-ending."

[ Boy, that sounds like fun. LOL

"Can you imagine waking up beside a woman when you've both got raging PMT (premenstrual tension)?" she adds.

Ultimately, she says, the emotional rollercoaster forced her to reconsider her lesbian plunge - something she clearly says she "chose," and was not born into. "Unlike most men, women, of course, offer each other endless support and there's hardly ever any lack of communication," writes Clune. "But - bizarre as it may seem - I found myself longing for exactly the opposite."

Following "a calculated decision to try men again,"
Clune says that she found in her future husband Richard a "quiet kindness" and "lack of neediness" that appealed to her. "I felt we were walking alongside each other rather than spending life locked in face-to-face intimacy or combat," she writes. "It felt natural and not at all scary. He was sanguine about my past and never suffered the insecurities I had come to expect."

"It was a breath of fresh air. I've always been fiercely independent and felt I could be myself with him."

Although harboring no hard feelings toward her former companions and way of life, Clune concludes that she had "outgrown lesbianism." "When we're young, we all need to belong to a tribe and to have a banner to march under," she says, adding that "calling myself a lesbian was almost like calling myself a punk or a goth."

She says her return to heterosexuality continues to draw vitriol from the lesbian community: one major lesbian publication voted her "Most Disappointing Lesbian Of The Year," and a now-defunct Facebook group was erected entitled, "People Like Jackie Clune Should Be Taken Outside And Shot." "Although the criticism is hurtful, I understand where it's coming from - I've confused everybody," she says.

Arthur Goldberg, a board certified counselor and expert on assisting individuals with unwanted same-sex attraction, told (LSN) that Clune's story is "not atypical" of the lesbian lifestyle. Goldberg, who is co-founder of Jews Offering New Alternatives to Homosexuality (JONAH), argued that if proponents of the homosexual agenda "admitted what the true aspects of many [homosexual] relationships are," the notion that they are simply equivalent to heterosexual relationships wouldn't hold water.

"One of the key criteria of lesbianism is emotional dependency," said Goldberg. "In male gay relationships, it's much more about sex. More typically [with] lesbian women ... it's much more serial monogamy.

"Your relationship lasts 2-3 years [in which] you can't live without the other person, your whole world is this person, which is why there's so much jealousy in the lesbian world, and why there's so much violence in the lesbian world."

Goldberg said it was also not uncommon for women, often more "sexually fluid" than men, to choose to enter the lesbian lifestyle after some experience of disillusionment with men, before returning to heterosexuality.

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