January 11, 2012
January 9, 2012
December 17, 2011
The traditional lightbulb may be safe for a bit longer
From the Washington Times:
Congressional negotiators struck a deal Thursday that overturns the new rules that were to have banned sales of traditional incandescent light bulbs beginning next year.
That agreement is tucked inside the massive 1,200-page spending bill that funds the government through the rest of this fiscal year, and which both houses of Congress will vote on Friday. Mr. Obama is expected to sign the bill, which heads off a looming government shutdown.
Congressional Republicans dropped almost all of the policy restrictions they tried to attach to the bill, but won inclusion of the light bulb provision, which prevents the Obama administration from carrying through a 2007 law that would have set energy efficiency standards that effectively made the traditional light bulb obsolete.
H/T to Virginia Postrel for the link.
December 7, 2011
Greek army reduces from 30 to 19 brigades
Strategy Page lists the initial impact on the Greek armed forces due to the financial squeeze:
The current financial crisis in Greece has led to enormous cutbacks in government spending. The military has not been exempt. This year alone, the defense budget will be cut about a third. Over the next two years, the reduced budget will be cut another 15 percent. The army will lose 11 of its 30 brigades, but the air force has disbanded one of 16 squadrons, but kept the aircraft in service by moving them to surviving squadrons. The navy has retired some older patrol boats.
The army is apparently coping by disbanding many reserve units and retiring older tanks and equipment. There won’t be much new equipment purchased for the next few years, at least. Training will also be cut, because operating vehicles, aircraft and ships for these exercises is expensive. The reduction of training will decrease the combat capabilities of the troops. But the government does not want to dismiss lots of the 156.000 active duty troops. That will just increase the already high (approaching 20 percent) unemployment rate. It’s never a good idea to have a lot of professional soldiers among the unemployed.
November 28, 2011
Megan McArdle reviews some recent scolding books on thrift
Megan McArdle admits right up front that she recently splurged on a very spendy kitchen appliance, so you know she does not number herself among the community of scolds on the topic of thrift:
For decades, Americans have wallowed in credit, shunned savings and delighted in debt. In 1982, the personal savings rate was 10.9% of disposable income, by 2005 it had fallen to just 1.5%. It has since rebounded, but remains a measly 5%.
All this profligacy supports a rather vibrant cottage industry in polemics against consumerism. Authors as varied as the economist Robert H. Frank (1999’s “Luxury Fever”) and the political theorist Benjamin R. Barber (2007’s “Consumed”) have ganged up on what they see as the particularly unequal and excessive American spending habits. Unsurprisingly considering their abhorrence of waste, they are avid recyclers; the same arguments, behavioral economics studies and anecdotes appear time and time again. Access to credit makes consumers overspend. Materialistic people are anxious and unhappy. The conspicuous-consumption arms race is unwinnable. Down with status competition! Down with long work weeks, grueling commutes and McMansions! Up with family time, reading and walkable neighborhoods! The effect is rather like strolling down the main tourist strip in a beach town: Each merchant rushes out of his shop, gesticulating wildly and showing you exactly the same thing that you saw at all the previous stores.
The latest person to open up shop on this boardwalk is Baylor marketing professor James A. Roberts. “Shiny Objects: Why We Spend Money We Don’t Have in Search of Happiness We Can’t Buy” runs mostly true to form, its main innovation being to add financial self-help advice to the usual lectures. The book includes not only exhortations but actual instructions—how to make a budget, get out of debt and save for retirement.
It’s a thorough survey of both academic research on consumerism and basic finance advice. Still, I first ran into an argument I hadn’t seen before somewhere around page 200 — that the perfect surfaces of modern products hasten the replacement cycle because they show wear so badly — and well before then Mr. Roberts had fallen into some of the terrible habits of the genre. Though less openly contemptuous of the spendthrift masses than many of his fellow scolds, he still exudes that particular sanctimonious anti-materialism so often found among modestly remunerated professors and journalists.
Here are some of the things that upset him and that “document our preoccupation with status consumption”: Lucky Jeans, bling, Hummers, iPhones, 52-inch plasma televisions, purebred lapdogs, McMansions, expensive rims for your tires, couture, Gulfstream jets and Abercrombie & Fitch. This is a fairly accurate list of the aspirational consumption patterns of a class of folks that my Upper West Side neighbors used to refer to as “these people,” usually while discussing their voting habits or taste in talk radio. As with most such books, considerably less space is devoted to the extravagant excesses of European travel, arts-enrichment programs or collecting first editions.
November 23, 2011
QotD: How the sequester is a symptom of political cowardice
Those who can do. Those who can’t form a supercommittee. Those who can’t produce a majority vote in a supercommittee sequester. Those who can’t even sequester are telling the world something profound about American inertia.
As Veronique points out [. . .], the “automatic” sequestration cuts would over the course of ten years reduce US public debt by only $153 billion. Which boils down to about a month’s worth of the current federal deficit.
Yet even slashing a pimple’s worth of borrowing out of the great oozing mountain of pustules will prove too much for Washington.
Mark Steyn, “Happy Sweet Sequester’d Days”, National Review Online, 2011-11-21
November 22, 2011
Another case where “spending cuts” still mean increased spending
No, not the US government, even though the media will be talking up the “savage” spending cuts coming because of sequestration (which will only reduce the rate of increase, not actually reduce spending). In this case it’s Britain:
Why is Britain growing more slowly than other developed nations? Why have we been outperformed over the past 12 months by every EU state except Greece, Ireland, Portugal and Romania?
Let’s start by dismissing the Labour-Guardian-BBC explanation: the idea that the economy is shrinking because of ‘the cuts’. As this blog never tires of pointing out, net government expenditure is higher now than it was under Gordon Brown. We are set to borrow at least £122 billion this year. Spending is above 50 per cent of GDP. How much more ‘stimulus’ do critics want?
What the international league tables show is that the countries which decreed the biggest bailouts experienced the sharpest contractions. Far from ‘stimulating’ the economy, these various programmes have taken money out of the productive sector. If stimulus spending worked, the Soviet Union would have won the Cold War.
November 20, 2011
How is a member of the Joint Chiefs of Staff like a used car salesman?
Answer: when he uses the latest technology to get the Defense Secretary to a meeting on time.
Defense Secretary Leon E. Panetta shoved his head into a snug aviator helmet topped with goggles one September morning and swooped into Lower Manhattan on a V-22 Osprey, a $70 million aircraft that Marines use for battlefield assaults in Afghanistan.
“How’d you like that gizmo?” Mr. Panetta said after landing at the Wall Street heliport in the Osprey, which takes off like a helicopter, flies like an airplane — and has been responsible for the deaths of 30 people in test flights.
Defense Department officials say the hybrid aircraft was the fastest way to get Mr. Panetta and his entourage to New York that day. But anyone who has followed the tortured history of the Osprey over the past quarter-century saw the persistent, politically savvy hand of the Marines in arranging Mr. Panetta’s flight — and another example in what has become a case study of how hard it is to kill billion-dollar Pentagon programs.
“At a car dealership, what the salesman wants to do is get you inside the vehicle,” said Dakota Wood, a retired Marine lieutenant colonel and defense analyst. “You take the test drive and wow, it’s got a great stereo, it feels good, it has that new-car smell.”
That flight with Mr. Panetta, he said, is “an insurance policy against future defense cuts.”
September 18, 2011
The Pentagon’s current big fear: the sequester
George F. Will explains why Leon Panetta, the secretary of defense, is very worried about the outcome of the “supercommittee” deliberations:
This would take from military budgets nearly $500 billion, in addition to a minimum of $350 billion cuts already scheduled. An almost trillion-dollar trimming, Panetta says flatly, “cannot take place.” Actually, he knows it can: “The gun to the head could really go off.” Even without a sequester, the military “is going to be a smaller force.” And with a sequester? The 1.5 million active-duty members of the armed services and 700,000 civilian employees of the Defense Department depend on an industrial base of more than 3.8 million persons. According to the Pentagon, a sequester would substantially shrink those three numbers, perhaps adding a point to the nation’s unemployment rate. The cuts would leave the smallest Army and Marine Corps in more than a decade and the smallest tactical Air Force since this service became independent of the Army in 1947. The Navy has already shrunk almost to its smallest fleet size since World War I.
Time was, when Democrats looked at the defense budget with a skeptical squint, Republicans rallied ’round it. No more. Few tea partyers remember Washington’s hawk-versus-dove dramas. They live to slow spending, period. They are constitutionalists but insufficiently attentive to the fact that defense is something the federal government does that it actually should do. And when they are told that particular military expenditures are crucial to force projection, they say: As in Libya? Been there, don’t want to do that.
Much of the defense budget is consumed by pay and health care for uniformed personnel, who have been abused enough by repeated deployments. The priciest new weapon, the stealthy F-35 Joint Strike Fighter (at least $90 million per plane), is vital for the continued salience of aircraft carriers, which are the basis of the U.S. strategic presence in the Western Pacific. Inferring China’s geopolitical intentions from its military purchases is difficult, but Panetta says guardedly that in five years China’s force projection will be “much better.” The Marines, with their smaller carriers, need a short-takeoff model F-35. Cut the number of planes built, the cost per plane rises, and the ability to recoup costs through sales to allies declines.
August 22, 2011
August 11, 2011
Canada’s debt crisis happened at a fortunate time
Father Raymond J. de Souza explains why Canada’s financial success story can’t be easily replicated by Europe or the United States:
The slaying of the deficit by Paul Martin saved Canada from the sovereign debt turmoil now afflicting Europe and America. While full credit is due to Mr. Martin, and it is gratifying to see other countries look to our experience, the turnaround in fiscal policy that Canada achieved in the 1990s is simply impossible to achieve in Europe or the United States in the near term. When we had our debt crisis, sparked by downgrades of the federal government’s credit rating between 1993 and 1995, we could make tough choices with the prospect of almost immediate results. No country has that option today.
That is only partly due to politics. Many have observed that the Liberal majority government of the day had the power to take dramatic action. That understates the case. Not only did the Grits have a majority, they had the near-certainty of another majority in 1997, given the disarray among the four opposition parties. The Chrétien government of 1995 was the most electorally secure government in Canadian history. No other country — not even Canada — has that circumstance today.
[. . .]
Europe and America face weak economic growth, rising debt service costs and no tax reforms to provide robust new streams of revenue. Even if granted the vast powers of the Chrétien government — not for nothing was it called the “friendly dictatorship” — neither Europe nor America have a path to slaying their deficits, aside from ever more brutal spending cuts. And indeed, if serious spending cuts add to unemployment and, in the short term, restrain economic growth, then the deficit may not shrink as welfare costs rise and revenues shrink.
Canada did well to respond to our crisis in the 1990s. We were lucky to have had it when we did.
August 8, 2011
“Canada has become the snotty kid at the front of the class that gets every answer right”
Kelly McParland reads the fine print:
Near the bottom of the Standard & Poor’s report that downgraded U.S. debt last week is a tribute to the Canadian economy that could contribute to what’s becoming a serious case of swollen-headedness.
In comparing the U.S. situation to “relevant peers”, i.e. other western economies, it notes that Canada has become the snotty kid at the front of the class that gets every answer right. Of five countries — Canada, the U.S., Germany, France and Britain — Canada has the lowest government debt burden (net debt to gross domestic product), at 34%.
It adds: “By 2015, we project that … net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%.”
And while the other four are all expected to see their debt declining, in the U.S. it could still be on the rise. So nya-nya to you, rest of western world.
July 23, 2011
Virginia’s state surplus less than meets the eye
Doug Mataconis takes a jaundiced eye to the Virginia “surplus”:
So, in other words, what we’ve got here are accounting gimmicks. In one case, the State legally permitted itself to defer a contribution to public pensions that were twice as big as the reported budget surplus. In the other, they legally permitted themselves to collect thirteen months of sales taxes for a twelve month fiscal year. The impact of both of these should be rather obvious. Reduce obligations while you are increasing revenues and, wow what do you know, we’ve got a surplus.
This isn’t at all new. As Virginia political bloggers Norm Leahy and Adam Bitley noted last August, the legislature used virtually the same accounting tricks to create the $220 million surplus that was reported last year.
It’s also not unique to Virginia. The same techniques are used in states across the country, and in the Federal Budget. Call it “off book budgeting.” Call it “creative accounting.” Call it whatever you like really, but it’s a pretty stark demonstration of the just how hard it really is to believe any government when they say their budget is balanced. More likely than not, they’ve used one or more of these gimmicks, plus a few others, to defer budget items and artificially increase revenue to make it appear that the budget is in balance when it really isn’t.
