Right Wingery

I've been engaging right wingers in various contexts for over a decade now. Here is my view of how their minds work - and it's stereotypical: you see the same things over and over and over.

The foundation for their belief system is fear and a deep negativity.

Their world view is based on -
- ignorance
- prejudice
- reality denial
- magical thinking

This is supported by cherry picking favorable bits of data and information, while ignoring the larger picture -- epistemic closure. The flip side is steadfastly holding on to ideas that are demonstrably not true - the entire genre of ridiculous conspiracy theories.

Their technique of argumentation is -
- deny
- delay
- distract
- deflect

Hence their tendencies toward what-about-ism, changing the subject and personal attacks.

They manifest all this with the trifecta of right wing behaviors -
- projection
- an often stunning lack of self awareness
- tone deafness to irony

Be on the look out for these things. It is how they always operate. Because when when facts, data and all the other aspects of reality are not on your side, what else are you going to do?

Mitt Romney is a God-Damned Liar

Stumbled across this at Yahoo, but also got wind of it from the LW this morning.  

The title of the Yahoo article,  "Romney turns up the heat on Obama in New Hampshire," is horribly misleading. It should say, " Romney tells bare-faced lies about Obama in New Hampshire."

Democrats on Tuesday took issue with the part of the ad that quotes Obama saying, "If we keep talking about the economy, we're going to lose," pointing out that Romney took the quote out of context. Obama used the line in 2008, but he was talking about his opponent, Arizona Republican Sen. John McCain, not his own campaign. What Obama did say at the time, was this: "Senator McCain's campaign actually said, and I quote, 'If we keep talking about the economy, we're going to lose.'" In response, the Democratic National Committee slammed Romney, calling him "a serial deceiver."

 Here is the HufPo link from the LW, correctly titled:  "Obama Campaign Blasts Romney's First TV Ad As 'Deceitful'"

Serial deceiver strikes again.  God-damned liar is more on the mark.

What the Hell?!? Friday -- "Unfortunate Choice of Words" Edition

"I'm just putting everyone on notice. A car is not a mobile device," 
--   David Strickland, administrator of the National Highway Traffic Safety Administration.

OK - I know the "mobile" in mobile device and the "mobile" in automobile are pronounced differently, but that's really just a phonetic accident.  First off, a car is definitely mobile.  And a car is most assuredly a device.

In fairness, here are the words that followed:   "I'm not in the business of helping people tweet better. I'm not in the business of helping people post on Facebook better."

And the headline of the article is "NHTSA administrator: Apps must take backseat to auto safety."

So, his basic meaning is that a car is not wireless communication hardware, like an i-Pad or Droid.

But, still . . .
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Two Degrees of Steve, and Why Dinosaurs Vote Repugnicant

My friend Steve chides his conservative friend, another Steve: "who is evidently claiming that wisdom and common sense (he seems to be implying that they’re the same thing) and likelihood of voting Republican all increase together with age."

Well, this is some deeply muddled - and from the conservative POV, highly self-serving - thinking.

Two degree Steve cites this rather interesting post at OKTrends - which has some good points, but is pretty badly flawed.

If you're going to read further in this post, I suggest you first read the links to one degree Steve, two degree Steve, and the source, in that order (same links as above.)  Because this is my reply to one degree Steve, and stands better on a foundation of context.  (Typos corrected, slight editing for clarity)

I'm shocked – shocked I tell you – to see a conservative cherry-picking information to confirm his pre-conceived notions. While some people gain wisdom with age, the majority of people simply don’t spend enough time thinking about anything more important than March Madness to develop even the most rudimentary level of sagacity. 

More typically, what happens with age is ossification. The OKtrends article has a lot of good and insightful stuff in it. But it also suggests that people in their 40′s will wander for a time back into the Democratic fold before reaching final fossil status as born again Rethugs. Only anecdotal, but I have never seen even a single individual go through that kind of double-back transformation.

Further, the economic “permissiveness” scale is incorrectly constructed. I’m not even sure there is a single scalar economic concept that could give you a meaningful dimension. How do you accommodate regulation, intervention, transfer payments, tax policy, corporate bailouts, etc. into a scalable entity?

While I recognize that Rethugs are more cohesive in their views than Dems, I contend that is because ossification, and its associated simplistic black-white world view is the common characteristic, irrespective of age. Dems are more diverse because the absence of ossification can manifest itself in an infinite variety of ways, and they populate the gray areas.

The idea that anyone over age 50 in the lower right quadrant would vote Democratic is actually laughable. The authoritarians are in almost 100% overlap with the religious right. Their neighbors in that quadrant are teabaggers. I think the conceptual flaw is in the graph that indicates economic beliefs trumping social beliefs as one ages. It is social beliefs that ossify more (think racism, anti-gay prejudice) with age. 

The other more fundamental flaw is in imagining that peoples’ belief systems are the result of some – indeed, any – rational thought process. I contend that not one person in 10 – or 100, or maybe 1000 – has political beliefs that are derived from thinking hard about policy, the underlying principles, and the results. Most people don’t think any deeper than a sound bite with a simple message. Again, this is an area where the Rethugs excel – not limited by truth, logic, or anything else. 

People vote their comfort zone, and as one ages, that typically becomes more conservative and entrenched. Wisdom and common sense are, at best, orthogonal to these developments.

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Henderson Smack Down?

Over at AB, commenter MG (11/10; 1:24:27 AM)  objects to the way Mike Kimel (and I, I'm assuming) have dissected the data in order to refute Henderson.  I responded to one of his comments like this:

Private Investment Pre and Post WW II

This is another swipe at Henderson.

Data in his working paper (Table 2, Pg. 15) clearly indicates that gross private investment increased during the new deal at a higher and more enduring rate than in the post war period.  Mike Kimel makes this point at AB, using NIPA data, but you can use Henderson's own data against him, and I love that.

Here is growth of gross private investment following designated base years of 1933 and 1944, using both Henderson's data and the NIPA data.  Data sets match very nicely, though Henderson's ends in 1950 (more cherry picking.)  You can quibble over what year to take as your base, but it won't change things by very much.  Mike Kimel uses 1932 and 1944.

Once again, except for the anti-New Deal year of 1938, the New Deal trumps the post war period in rate of growth, and duration of growth.   And this information was staring Henderson right in the face.

The BIG IDEA to be gleaned here is that Government investment does not drive out private investment.  The pie can grow.
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Private Real GDP Growth Before and After WW II

Eyeballing values off of a graph is never easy, but I made an attempt here, to prove a point.

In a Working Paper that can be downloaded here as a PDF, David Henderson makes rather a big deal about an alleged post WW II economic miracle - all because government spending was greatly reduced, as a result of the war ending.

Henderson's big fundamental flaw is the kind of misrepresentation of Keynesianism that is all-pervasive, and generally not challenged.   Keynes only proposed government spending as an economic solution under certain circumstances:  aggregate demand shortfall, zero interest bound, monetary policy not working (kind of like now.)  To the pain caucus, all govt spending is Keynesian.  That's what Ron Paul said about the preceding decade. 

Alas, poor Shirley - We hardly Knew Ye.

But we now have positive confirmation for what we should have known anyway about Andrew Breitbart.

I will spare you the invective that could be expressed here, but encourage you to provide your own.  Breitbart has done something appalling, disgusting and awful.  The victim here - and this is not a word I drag out very often - nor do I feel compelled to talk much about top news items, but this has made my gorge rise - is Shirley Sherrod, a rural development director for the U.S. Agriculture Dept.

Taking words out of context to distort and wrongly indict is a despicable act.  Unfortunately it is common practice among right wingers.  As is mindless repetition of right wing idiocy by the Fox News organization, which happened today, regarding this item - by more than one of their alleged reporters, again by O'Reilly, and yet again by Hannity.  I'm writing this as I watch the Fox clips on the  Rachel Maddow's show rerun.  (P6 already has some of Rachel's video clips posted, here and here.  Wow - fast work!)

It was similar faux reportage by Fox News that that brought down ACORN - again, based on doctored videos originating in Breitbart's organization.

Wake up people.  And ask yourself: Why does anyone tell lies?  The answer is that the truth does not fit their agenda.

If the truth does not fit your agenda, your agenda is unworthy, and might even achieve full-scale evil.

This is how Breitbart operates.  This is how Fox News and all of Murdoch's NewsCorp operates.  It is how Repugnicants operate.  It is what conservatism regressivism has degenerated into.

Equally appalling is the Obama administrations repeated willingness to give in to these lying bastards, regarding Van Jones, ACORN and now Shirley Sharrod - a fine, decent person who went far, far out of her way to help the white farmers at the center of this story - as they have been quick and eager to point out.

I am disgusted by the gutless Obama administration.  My contempt for Breitbart, NewsCorp and right wing regressives cannot be expressed in language I would want to see over my signature.

The NAACP also reacted rashly and incorrectly.  But they had enough integrity and courage to retract, correct and apologize.  (See the 2nd Rachel clip, above.)

Obama?   Vilsack?   Anybody there got either a backbone or some shred of decency?

What a horribly depressing turn of events.  

Thank you, right wing world.

That Damn Krugman

Over at TGGP's stinky blog, in response to one of my comments to one of his posts, he directed me to this piece of drivel from the Econ Journal Watch, by Brett Barkley.  Well, we can see how qualified he is.  I wish him well in his career in the theater, since he's obviously strong on make-believe.

Here is my comment in response.

This is not the first time I’ve seen an EJW article that attacks PK, in an entirely invalid way. I’m not going to wade through 38 Pgs of Brett Barkley bullshit, but I did skim the Krugman section enough to see what he’s doing. Barkley’s unstated underlying premiss – that all deficits are created equal – is either abysmal economic ignorance, in which case the EWJ should have rejected it, if THEY were honest, or mere sophistry – so, clearly, they aren’t. I’m convinced it’s the latter. Though, who knows, BB might be as dumb as this makes him look.

Krugman was against Republican – specifically Bush II – policy because it was unsound, irresponsible, and possibly idiotic. As far as I know, no other regime in the history of the world ever simultaneously cut taxes and went to war.

It’s clear, even from Barkley’s cherry-picked quotes (and note he omits Krugman’s response – whatever it might have been – to Russert’s question) that PK recognizes when and how to have and not have deficits, and why the differences are important. One thing I often see in right wing regressives is a suggestion that policy doesn’t matter. Of course, they turn this on and off as a matter of convenience.

One of the things that inspires PK confidence in me is that his critics are always like this. They misquote, quote out of context, and use all sorts of propaganda techniques to deceive their readers.

The other things I’ve noticed about right wing regressives is a total tone-deafness to irony. Barkley’s Adam Smith quote as a header to his hatchet job is absolutely brilliant.

As I’ve said repeatedly, it’s fine to disagree with PK. In fact, it would be great to see someone actually prove him wrong. But please use real facts in their intended context, and valid logic. Meanwhile, I’m not holding my breath.

Cheers!
JzB

Here is the aforementioned Adam Smith quote, from his Theory of Moral Sentiments

A true party-man hates and despises candour; and, in reality, there is no vice which could so effectually disqualify him for the trade of a party-man as that single virtue. The real, revered, and impartial spectator, therefore, is, upon no occasion, at a greater distance than amidst the violence and rage of contending parties. To them, it may be said, that such a spectator scarce exists any where in the universe.  Even to the great Judge of the universe, they impute all their own prejudices, and often view that Divine Being as animated by all their own vindictive and implacable passions. Of all the corruptors of moral sentiments, therefore, faction and fanaticism have always been by far the greatest.

Update:  There is more to the discussion at PDDB's place.  Follow there if interested.

Yet Another Look at the 20's - Wealth Disparity

In this now infamous article, Thomas E Woods says:

One of the most perverse treatments of the subject comes at the hands of two historians of the Harding presidency, who urge that without government confiscation of much of the income of the wealthiest Americans, the American economy will never be stable:

The tax cuts, along with the emphasis on repayment of the national debt and reduced federal expenditures, combined to favor the rich. Many economists came to agree that one of the chief causes of the Great Depression of 1929 was the unequal distribution of wealth, which appeared to accelerate during the 1920s, and which was a result of the return to normalcy. Five percent of the population had more than 33 percent of the nation’s wealth by 1929. This group failed to use its wealth responsibly. . . . Instead, they fueled unhealthy speculation on the stock market as well as uneven economic growth.8

If this absurd attempt at a theory were correct, the world would be in a constant state of depression. There was nothing at all unusual about the pattern of American wealth in the 1920s. Far greater disparities have existed in countless times and places without any resulting disruption. In fact, the Great Depression actually came in the midst of a dramatic upward trend in the share of national income devoted to wages and salaries in the United States—and a downward trend in the share going to interest, dividends, and entrepreneurial income. 9 We do not in fact need the violent expropriation of any American in order to achieve prosperity, thank goodness.

8 and 9 are Woods' references.
8  Eugene P. Trani and David L. Wilson, The Presidency of Warren G. Harding (Lawrence, KS: University Press of Kansas, 1977), 72.
9 C. A. Phillips,  T. F. McManus, and R. W. Nelson, Banking and the Business Cycle: A Study of the Great Depression in the United States (New York: Macmillan, 1937), 76.

To get to the root of the perversity, lets focus on this statement by Woods.

There was nothing at all unusual about the pattern of American wealth in the 1920s. Far greater disparities have existed in countless times and places without any resulting disruption. In fact, the Great Depression actually came in the midst of a dramatic upward trend in the share of national income devoted to wages and salaries in the United States—and a downward trend in the share going to interest, dividends, and entrepreneurial income.

Setting aside the naked assertion, - and irrelevancy - about greater disparities and other times and places, let's look at what's relevant to the discussion: wealth disparity in the U.S. specifically in the 20's.  To do so, let's have another look at this graph, which I first posted here, in another context.

Unless Nolan McCarty, Keith T. Poole, and Howard Rosenthal have done something very strange, Woods (or his source) either has it exactly backward, is viewing the information through a strange lens, or has cleverly found a way to tiptoe around reality without actually lying.  This seems unlikely, since increasing the wage and salary share is inconsistent with an increasing income share going to the top 1%.  Hmmm.

As I read the graph, income share going to the top 1% made a double bottom somewhere north of 14%  in 1920 and '22, then rose to its peak of slightly over 19% in 1928.  While it's true that this share decreased from '29 through 31, it then leveled out and reached  a secondary peak in 1936.  It then dropped for two years, rebounded for two more, all the while never approaching the previous low from 1920 (of all years) then, finally, in 1941 began a multi-decade decline. For this to be "in the midst of a dramatic upward trend in the share of national income devoted to wages and salaries,"  requires a tortured and indeed perverse reading of the data.

And the graph I presented is typical.  The first and 13th graphs here shows  different slices, but a similar picture.
Similar information, and a whole more can be found here. 

How can we conclude that Woods is anything other than a bare-faced liar?

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.
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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.

Summary:
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.

UPDATE:
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.
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Republicans, All Wrong, All the time, Pt 7.3: Once more, With Failing

All right, I put together another stupid cloud plot.  This time I'm indulging myself.  There can't be much point beyond that.

Here we have, once again, our favorite meaningless non-correlation plot.  Blue dots are points for Democratic presidents; red dots for Republicans.  X axis is Tax receipts/GDP in a given year, Y axis is GDP growth for that same year. Operating on the theory that if it's good enough for Econ. Prof. Lazear, it's good enough  for an old trombonist, let's twist this to serve our purposes. 

The red and blue horizontal lines are averages for the 36 years of Republican presidents and 24 years of Democratic presidents, respectively, from 1950 through 2009.  The slanty lines are best fits for Repug and Demo data sets. The vertical yellow line is Lazear's average of Tax/GDP, the magical 18%.

Note the Inconvenient 2009 point, labeled "What the Hell?!?  Low Tax/GDP along with NEGATIVE GDP Growth.  Don't you love it when a lie crashes and burns?

Some mathechistic stuff:

Demos

Avg.  GDP Growth   4.19%  St. Dev.  2.36

Slope of best fit line  -0.33  Correlation coefficient  -0.20

Repugs

Avg.  GDP Growth  2.77%  St. Dev   2.32

Slope of best fit line  -1.17  Correlation coefficient  -0.45

 Some iron-clad, indisputable conclusions:
1) The average growth of GDP under a Democratic President  is 1.4% higher than under a Republican.
2)  In 25 years, the level of GDP will be about 30% higher if we elect Democrats than it would be if we were  to be stupid and evil (I'm quoting O'Really here) enough to elect Republicans.
3) Never mind that the Standard Deviation of either data set is larger than the difference between their averages.  Shhhhhh!
4) Lazear's point is that high Taxes/GDP causes lower GDP growth.  Well, the correlation coefficient for Repugs is -0.44.  Sadly, this is a weak correlation, but it's more than twice as large as the -0.20 correlation coefficient for Demos.  So: if his premise has any validity (Remember, it doesn't) it is valid only when a Repug is in the White House.  When a Demo is in residence, the meaningless non-correlation, such as it isn't, crumbles.  Damn.
5) Oh.  Slopes.  For Repugs, -1.17.  For Demos, -0.33.   That's right, folks, the slope is 3.5 times greater with a Repug. See point 4.

Have I forgotten anything?  If so, please don't tell me.  I'm sick to the teeth of the whole damned thing.

UPDATE:  Here is part 7.2.


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Was the Sarbanes-Oxley Act Harmful to Business? Part 1

Dale, in comments to D.S. #14, asserts unequivocally that SOX, as it is called, reduced the number of U.S. IPO's (I'm being generous to him in stating it that way,) that the expense of over $4 million per year drove hundreds of publicly traded companies private, and that it has not met any of its goals.

Let's do some fact checking.

In this post, we'll consider IPOs.  Here (above and in the link)  is a chart of venture capital backed IPO's per year, as mentioned in a Business Week article for the years 1980 through 2008.  The latter, of course, was a dismal year for a variety of reasons.  The text of the article informs us that the average number of venture capital backed  IPO's in the 80's was 52, while the average of the naughts through '08, was 49.   Scant difference, especially considering that in the post-bubble shock and recession of  '01 to '03, IPO activity was torpid, and close to non-existant in the recession starting year of '08.    The chart also reveals how Dale cherry-picked 1996 as a bench-mark year, with over 250 VC IPO's, the second highest year of the 1980 - 2008 period.   In my chart, above, the pink line is a 5 year average, to smooth out yearly abberations, such as the big drop in 1997-8.

Now (chart above) look at the number of VC IPO's from '03 through '07. There appears to be a release of pent-up demand in '04, followed by very respectable, and growing activity after '05 until the '08 collapse.  Raw data found here.   Venture capital backed IPO's are only a portion of the total, which also includes buy-out backed IPO's, and a remainder with financing unspecified.  VC IPO's represent new companies going public for the first time, and are the sub-group most relevant to the discussion.  Private equity IPO's are essentially reverse LBO's, and not relevant.  

For comparison, here is chart of relative performance of the S&P 500 stock index, which I am taking as a proxy for general stock market pricing activity.  Data from Yahoo Finance, graph by me.  The graphed line is the percentage increase of the annual S&P average for the subject year, compared to the prior year (YoY.)

Correction:  Wrong data in the graph: see Update 1.


I'm not suggesting anything like perfect correlation to the IPO chart, but there is a general similarity.  Which only makes sense.  When you go public, you want as rich a capitalization as you can get, and an up-market is clearly better than a down-market.

So, sorry Dale.  Your first point is very unconvincing.  Realistic relevant factors influencing IPO activity appear to be general stock market performance in the year leading up to the IPO (no surprise) and the availability of VC money (also no surprise.)  The Business Week article, which never mentions SOX, suggests that VC IPO activity might now be permanently low, inhibiting total innovation, because venture capital is limited.    

It closes with this thought:

All of this could prove problematic for entrepreneurs who need VC-style equity investments. If there are fewer VC firms around to put several million into a high-growth startup, some of those firms aren't going to get the investment that they need. And that could mean fewer successful companies like Google (GOOG) and Genentech (DNA) that provide jobs for many people and innovative products that are valuable to all of us.

Update 1:   I made a data manipulation error in constructing the Relative S&P Performance graph above.   The graph actually represents a year over year change in the running three year average of performance - hence a smoother plot.  I graphed the wrong column from my spread sheet.  Corrected chart follows.  YoY performance in the 80's was generally good, but erratic.  The 90's were up-up-and away.  The naughts were like Ohio - zeros on the ends, "hi" in the middle.  This shows why 2004 was a much better year for IPOs.  It was a much better year for the market.

In fact, here (below) are IPOs plotted (blue line) along with the S&P performance - rescaled and translated to fit on the same chart (yellow line.)  Through the 80's and the noughts, they track together quite well.  Through the 90's bubble - not so much.

Update 2:   As I've indicated, IPO activity in 2004, was pretty robust.  Interestingly, it involved not only domestic IPOs, but also a sharp increase in foreign companies listing on U.S. exchanges, as this article from AltAssets indicates.  The end of the article quotes Scott Gehsmann,  North American leader of PricewaterhouseCoopers Global Capital Markets Group.

'In fact, across virtually every metric - number of deals, size of deals and IPOs by industry sector - 2004 saw a sizable increase over 2003. Moreover, the sharp rise in IPO activity suggests that the enhanced reporting requirements of Sarbanes-Oxley have not had the dampening effect on IPOs that some had predicted,' Gehsmann continued.

The number of non-US companies completing IPOs in the US markets also more than tripled in 2004, with Chinese companies leading the way.

I think Gehsmann might have a better understanding in his field of expertise than Ron Paul does.
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Global Warming Hoax Continues

Just when you thought it was safe to go back out onto the permafrost, Sarah Palin comes out with details of how global climate change has directly affected Alaska.

That's not to say I deny the reality of some changes in climate -- far from it. I saw the impact of changing weather patterns firsthand while serving as governor of our only Arctic state. I was one of the first governors to create a subcabinet to deal specifically with the issue and to recommend common-sense policies to respond to the coastal erosion, thawing permafrost and retreating sea ice that affect Alaska's communities and infrastructure.

Wha-a-a-a . . . ?!?  Oh, but then she goes on:

But while we recognize the occurrence of these natural, cyclical environmental trends, we can't say with assurance that man's activities cause weather changes. We can say, however, that any potential benefits of proposed emissions reduction policies are far outweighed by their economic costs. And those costs are real.

Deep Stupid #12

It almost seems cruel to do a DEEP STUPID entry on the pant-load who foisted LIBERAL FASCISM on the world.  But, since he won't shut the hell up, I'm not going to let that stop me.  In a REAL CLEAR POLITICS entry dated Nov. 20, 2009, the illustrious Jonah Goldberg* excreted this masterpiece on vicious librull criticism of Sarah Palin's new book, GOING ROGUE.

Palinophobes Hate First, Ask Questions Later

Copyright 2009, Tribune Media Services Inc.

This will probably be less painful than actually reading Palin's vapid reality show cum venge-quest of a memoir, so let's have at it.

Slate magazine is just one of the countless media outlets convulsing with St. Vitus' Dance over that demonic succubus Sarah Palin.

Actually, he's off to a pretty good start, having at least accurately portrayed Palin as "that demonic succubus."

GOP victories send message to Democrats

That is the headline of this L A Times article,   which contains a brilliant quote from the always-on-top-of-things Michael Steele.

"It sends a clear signal that voters have had enough of the president's liberal agenda," Republican Party Chairman Michael Steele said after Robert F. McDonnell emerged as the winner in Virginia.

Let's examine these results and see if Steele has a point.  Republican Robert McDonnell crushed his Democratic opponent.  As the linked Times article indicates:

Deep Stupid #9

This is S. E. Cupp's Facebook profile picture.*  She is one of the GREAT CONSERVATIVE AMERICAN WOMEN, who counts among her credits experience as a Fox commentator and columnist for Newsmax.com

Rather attractive in a cute-librarian sort of way, don't ya' think?  Let us determine what makes her so great, by probing one of her recent articles. 

The Democrats' Descent Into Irrelevance

© 2009 Newsmax. All rights reserved.

Sunday, October 4, 2009 9:34 PM

By: S.E. Cupp

“The Democratic Party is the architect of modern-day racism.”

You know right away this is going to be good.

Cherry Picking*

Not necessarily the minor details, though. You can always keep whatever supports your preconceived notion or new pet theory, and disregard the rest. That's simple human nature. Propagandists know how to exploit human nature for their own - usually nefarious - ends; and for them, cherry-picking is a tool.

Conservative commentators do it all the time. Libertarians and neo-cons have to rely on it, because what they're selling is ultimately at variance with reality.

Here**, the Sandwichman calls out a Libertarian on a particularly egregious example. Data cited to support a new variety of New Deal Denialist meme is based on a single corporate experience in Canada during the 90's. Wow - what an amazing lack of relevance.

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* Picture from here.
**Follow the links.