A room without books is like
a body without a soul.
Marcus Tullius Cicero
News Quotes of the Day
In Woodward's recent Washpo op-ed;
In fact, the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection. So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts.So we now have the president going out (saying) 'Because of this piece of paper and this agreement, I can't do what I need to do to protect the country.' That's a kind of madness that I haven't seen in a long time." -Bob Woodward
According to Politico
Woodward — first in “The Price of Politics,” his bestseller on the failed quest for a grand budget bargain, and later with his opinion piece in The Post — makes plain that sequestration was an idea crafted by the White House. Obama personally approved the plan and later signed it into law. Woodward was right, several congressional officials involved in the talks told us.From CNN via RealClearPolitics:
WOLF BLITZER, CNN: You're used to this kind of stuff, but share with our viewers what's going on between you and the White House.Sigh, I've tried to stay out of the partisan sniping over sequester. I've been pointing out Democratic budget games for a long time in this blog. Let me give a very simple example. Take government employee pay scales. A lot of these have time in service components. This means your pay automatically goes up every job anniversary. It doesn't mean the government employee has actually improved productivity; the government doesn't add widgets to the economy. Quite often when they talk about raising government pay, they may be referencing the full pay matrix. In other words employees might get two types of an increase.
BOB WOODWARD: Well, they're not happy at all and some people kind of, you know, said, look, 'we don't see eye to eye on this.' They never really said, though, afterwards, they've said that this is factually wrong, and they -- and it was said to me in an e-mail by a top --
BLITZER: What was said?
WOODWARD: It was said very clearly, you will regret doing this.
BLITZER: Was it a senior person at the White House?
WOODWARD: A very senior person. And just as a matter -- I mean, it makes me very uncomfortable to have the White House telling reporters, 'you're going to regret doing something that you believe in, and even though we don't look at it that way, you do look at it that way.' I think if Barack Obama knew that was part of the communication's strategy, let's hope it's not a strategy, that it's a tactic that somebody's employed, and said, 'Look, we don't go around trying to say to reporters, if you, in an honest way, present something we don't like, that, you know, you're going to regret this.' It's Mickey Mouse. (The Situation Room, February 27, 2013)
There are some basic facts most business-literate people know. Managers are scared of ending a year with a budget in surplus (there could be a variety of reasons, e.g., an unfilled position). Heaven forbid corporate finds out they can make do with less budget when they are fighting the bureaucrat's good fight for annual budget increases. I've given personal examples from past experience; I once worked for computer timesharers, i.e., selling premium-priced, value-added mainframe computer time. Say, an energy company manager told my boss Brian, "Look, I have $3000 left in my budget, use it or lose it. Can you provide me programs in 3 months if I give you the money now?" We actually had "dollar-burn" utilities that would stop after it chewed up $3000 in computer time. Brian loved claiming the bonus accruing from dollar-burn, but less enthusiastic about carrying out his end of the bargain, he was now working on this month's bonus: what have you done for me lately?
Stupid budget games play out wherever bureaucracy exists, but government is a monopoly which uses force to guarantee its funding. Obama has been playing the same old same old games. First, the Democrats often play the baseline budget games. Basically many government budgets have funding increases baked in. In other words. all existing inefficiencies within and across agencies. I remember supporting Jimmy Carter whom promoted zero-based budgeting. Basically you drill down on specifics and ask, e.g., does it make sense for us to be doing this anymore? If so, can we do it better/cheaper? No doubt Congressional leaders probably had a good chuckle over Carter's naivete. So now what passes for budget cuts is not the equivalent of a family on lower income canceling Suzy's voice lessons but allowing the allocated amount for Suzy's lessons over the coming year to go up only 2% versus a planned 5%.
Second, the Democrats want to make budget cuts as politically painful as possible on the GOP. There are 1001 ways businesses handle tough times--they may layoff employees, freeze or cut training and travel costs; postpone hiring, projects, purchases; reduce operating hours; close down unprofitable locations, cut dividends, declare a 401K match holiday; etc. Obama has fought such savings tooth and nail. Recall for instance when it came to compensation, Obama made a trivial accommodation of freezing compensation for political appointees, not, say, on government employees with at least $100K salary/benefits. Getting Obama to be financially responsible is like pulling teeth.
So what we get is pathetic, predictable variations of fear-mongering based on popular government benefits. We don't hear, say, putting off new PC's for SSA employees and contractors or shrinking relevant managing bureaucracy: it boils down to cutting benefits on Granny whom is forced to live on cat food. It doesn't take a genius to figure out how to translate that into attacking Big Defense, Big INS conservatives: you send out token Republicans in the Administration out in their Chicken Little suits; Janet Napolitano warns she might have to cut Border Patrol staffing (not say, on that porous Canadian border, but Arizona); we have Pentagon officials complaining they don't have fuel for ships to run their missions.
These are, of course, contrived, false choices. McCain is not for these types of cuts. Obama doesn't really care about Border Patrol or fueling carriers. He wants to control the money in the Pentagon budget, and he has very different priorities than McCain.
As for Woodward, I've found him a straight shooter with gold standard credentials and highly ethical. My shift in position towards a non-interventionist foreign policy was largely inspired by Woodward's The War Within. We see an untrustworthy Obama reneging on a deal with Republicans (as if that's going to improve partisan gridlock in Washington!) Why? I think Obama has been emboldened by finally getting the Clinton class warfare tax hikes reinstated and he hopes he can get the GOP to capitulate on spending cuts if he can define spending cuts as politically unpopular as possible.
Picking on Mark Perry/Carpe Diem
I am generally a huge fan of Mark's blog (in my blogroll). There are a couple of themes where I plainly disagree with him and other economists. (Mark tends to be libertarian, e.g., on misguided wage policies, crony licensing practices, the war on drugs, bloated state universities, etc.)
First, Mark and others have been hyping good news in the economy as much if not more than the Obama Administration. I've even heard one economist claim there is no problem in the college-educated segment with unemployment there under 5%. Some of this is just common sense--if we extrapolate long-term growth rate of 3%, which we haven't seen in some time, how can even college graduates do well? In fact, let me quote this 2009 post from the liberal Economic Policy Institute (yes, things have modestly improved since 2009, but the general observation is relevant):
Nobody can seriously believe that if colleges made graduates more attractive job candidates, this would cause the unemployment rate for college graduates to fall. If employers are now filling vacancies for recent college graduates in a number equal to only 20% of their class, surely this is not because graduates are insufficiently attractive as candidates. The unemployment rate for those with a college degree (including both mature workers and recent graduates) was 4.8% in May, up from 2.1% at the start of the recession, and higher than at any time since 1979. These unemployment numbers are probably understated.From my own anecdotal experience in the IT industry, I have seen postings for phantom positions, e.g., for staffing a project if they win a contract (they don't mention this until the face-to-face); duplicate postings from competing agencies, many times assigned a candidate quota; gold-plated job requirements impossible to fill, positions canceled, filled internally, redefined or put on hold. Employers fret you are overqualified and worry you are a flight risk in an improving economy.
I talked to an anonymous recruiter whom has been making his living in the profession since the 1980's; he says it has never been this bad and he's seen recessions come and go over the past 30-odd years. He volunteered one word to describe it: (client) arrogance. He gave one telling example: one candidate did an interview and it took a full month before getting feedback: the client concluded that he was not a fit (keep in mind the client selected him to interview based on his resume).
I know of several experienced college graduates making a fraction of their pre-recession income, e.g., shifts as a Home Depot cashier. A college graduate counts as employed in national statistics even if he or she is filling coffee orders at Starbucks. You still have to find a way to pay rent.
One final note: I've looked at unsolicited direct employer queries over the past few months. Universities or IT positions? No--three were in commission sales (insurance or investments), and one was a franchised eatery. I am not your typical college graduate, and if a former senior principal for Oracle Consulting who has also worked for IBM, another highly selective employer, finds landing the next gig challenging, just imagine the candidate with less than 18 years of experience and marginal communication skills.
Second, Perry waxed enthusiasm over Bernanke's inflation fighting performance. I'm not impressed by relatively low inflation in a low-growth economy with the lowest labor force participation in decades over 3 years into the Obama recovery. After all, Japan has been doing this for 2 decades running. Ask John Williams of shadowstats what he thinks of CPI. Food and energy inflation are particularly corrosive of purchasing power, an implicit tax of bad monetary policy, while the Fed caps interest rates near zero. Every monetarist and Austrian free market economist I know pans the Fed (even the market monetarists want to automate or rule-base money supply, not manipulate interest rates).
Political Cartoon
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| Courtesy Gary Varvel and Townhall |
Political Humor
Doesn't sequestration sound like some kind of side effect from a bad medicine? - Jay Leno
[Like what happens to your finances under ObamaCare.]
The Pope does not earn a nickel. No paycheck, no money coming in, nothing. That must drive his wife crazy. - David Letterman
[He'll retire to live in a monastery on Vatican grounds. Many men his age are living the lifestyle.]
Anybody see the Academy Awards last night? The show last night was so long that by the middle of the show the audience was begging Daniel Day-Lewis to free them. - David Letterman
[Day-Lewis found playing Lincoln to be very natural. For example, Lincoln as President kept forgetting things like habeas corpus and didn't like his reviews in the local newspapers.]
Musical Interlude: My Favorite Groups
Aerosmith, "Angel". Hands down, my favorite Aerosmith single and one of my all-time favorite songs. I dare you to resist your inner yodeler in the shower. Pity my poor neighbors... No, that horrible noise is not the building plumbing run amok...
