Friday, August 7, 2009

Cash for Clunkers Government vs Edmunds

Trucks win in Cash for Clunkers game (8/7/09 CNN)

"What are people trading their clunkers in for? It depends on who you ask.

"The government's results showed small cars as the top choice for shoppers looking for Cash for Clunker deals. But an independent analysis by disputed those results, and showed that two full-size trucks and a small crossover SUV were actually among the top-ten buys.

"The discrepancy is a result of the methods used. uses traditional sales measurements, tallying sales by make and model. The government uses a more arcane measurement method that subdivides models according to engine and transmission types, counting them as separate models." [emphasis is mine]

I see. The government's method was certainly not what I had expected.

So here's top 10 list, the government version and the Edmunds' version:

5 of top 10 are crossover SUVs and trucks, according to the Edmunds' version.

The article continues:

"Sales of GM's Silverado truck, under the government's counting method, were divided among five different versions. So were the Ford F-150s. If the different versions of these trucks were considered the same vehicle, as auto sales are normally reported, sales of these trucks would look much heftier."

I'm sure it's just the matter of the government's bureaucratic, arcane way of counting, and NOT about presenting a convenient result to protect the perception that this program is (supposedly) about "protecting the environment".

Attribution Bias Everywhere

Particularly this one, "actor-observer bias":

"In psychology, people are known to display an actor-observer bias, when actors tend to attribute their own behavior to their circumstances (i.e., situation causes) and the behaviors of those we observe to their dispositions (i.e., person causes) when the situation is not desired.

"Following Jones and Nisbett, the actor-observer bias is distinguished from Ross's fundamental attribution error, which is people's general tendency to overemphasize dispositional explanations and underemphasize situational ones." (

In other words, "if the situation is bad and if others do it, it's their fault; if I do it, it's not my fault, it's because of the situation I'm in."

And "if the situation is good and if others do it, it's the situation, not their ability; if I do it, it's because of ME and not the situation."

The former:

The latter:
  • "I caused the Dow to rise 41%." (Robert Khuzami, Director, Division of Enforcement, SEC, 8/5/09, from a post at Yes, yes, he was joking of course, right?)

    "Before I joined the Division in March, the Dow was struggling around 6500 points. Now the Dow is over 9200. So am I really responsible for a 41% increase in the Dow? I am".

  • "I saved the economy from catastrophe."(President Obama, 8/7/09)

    "While we have rescued our economy from catastrophe, we have also begun to build a new foundation for growth".
And an old favorite of the latter:
  • "I created the Internet." (Then-Vice PresidentAl Gore, 3/9/1999, on CNN Interview)

    "During my service in the United States Congress, I took the initiative in creating the Internet."

Obama Says He Saved US Economy from "Catastrophe"

Obama says US economy saved from 'catastrophe'
(8/7/09 AFP via

"President Barack Obama said Friday his administration had saved the US economy from catastrophe and the worst of the recession may be over, after a surprise drop in the unemployment rate.

""This morning we received additional signs that the worst may be behind us," said Obama in remarks in the White House Rose Garden after new figures showed the jobless rate slipped to a better than expected 9.4 percent in July.

"This morning, we received additional signs that the worst may be behind us," Obama said.
"We are losing jobs at less than half the rate we were when I took office. We have pulled the financial system back from the brink.

""While we have rescued our economy from catastrophe, we have also begun to build a new foundation for growth," Obama said, but he also warned that tough times lay ahead before the economy would be restored to full prosperity.

""We have a steep mountain to climb and we started in a very deep valley.""

Since Obama was the one who repeatedly threatened "catastrophe" if we didn't do his bidding, I'm sure he can declare "catastrophe" over and even take a credit for it. Amazing.

What could that "new foundation for growth" be? Have you seen it? All that's growing seems to be bureaucracy and the federal government.

Thursday, August 6, 2009

Obama and His Media on the Economy

Obama and the Economy [emphasis is mine]
(Llewellyn H. Rockwell, Jr., 8/6/09

Travel with me back to yesterday, the early days of the Reagan administration, when taxes were being cut and spending increases were being curbed (the actual cuts were few), and when journalists were losing their heads about the supposedly catastrophic state of the economy.

The prevailing ethos in those days in the White House was somewhat sensible. The idea was that the recession had to be permitted to run its course. The late 1970s inflation coupled with recession had wrought dollar depreciation plus high unemployment and high interest rates. These were part of the adjustment process. No one doubted it.

Now, there was a time, only a few years earlier, when the Keynesian orthodoxy claimed the power to control the economy the way we control our cars. One could adjust the inflation up to drive unemployment down, and adjust the inflation down and pay the price in higher unemployment. It was a trade off, and the wise economists would decide what was socially optimal.

One can only marvel at the naïveté, but it all came crashing down with the advent of the simultaneous appearance of both inflation and unemployment, and Keynesian confidence was shaken to its core. The better members of the Reagan team were more realistic. They believed that the goal of government policy was to create the conditions for economic growth, and if that meant letting bad policies wash themselves away during the transition, so be it.

The journalistic establishment at the time hated them and their free-enterprise ideas. So, of course, all bad news was treated as not only worse than it really was, it was also blamed on the Reagan administration, as if it had the control over events that Keynesians imputed to government. So, if times were bad, who were to blame but the people in control?

Every day the headlines blasted away, as if the media establishment were trying to whip the public up into a hysterical frenzy against tax cuts. People were encouraged to blame That Man in the White House for all existing evil, and the nightly newscasts were filled with furrow-browed anchors doing stories on the poor suffering masses and their desperate plight. Their political agenda was aggressively on display, brazen beyond belief.

And then something amazing happened. The economy began to recover. Unemployment fell, inflation crashed, interest rates came down, and growth returned. The criticism later changed: the Reagan administration was accused of being too pro-growth and unleashing greed and "cowboy capitalism." But it fell on deaf ears, and Reagan won a landslide reelection in 1984.

Now, I'm not saying that Reagan was laissez-faire or that the economic recovery didn't owe something to a newly fashioned form of military Keynesianism. Rather, my focus here is on the spin: the press hated him, and exaggerated the failings of the economic structure in order to destroy policies it hated.

The contrast with the Obama administration can't be more stark. No one in these ranks said that malinvestments have to be washed out of the system and bankruptcies and unemployment must be tolerated for a time in order to get back on a growth. Nay, nay, they pulled out the old bag of tricks and claim that they only needed to loot the public of hundreds of billions and spend it on building up government, and then, wow, like magic, the entire economy would come back to life.

But it hasn't. The stock markets survive, but that's no indication. Stock markets are never better performing than during a hyperinflation. Interest rates are rock bottom, but only through artificial means. Gross Private Domestic Investment is still falling off a cliff, having already completely erased ten years of investment from the record of history. Here is a fundamental factor that suggests that terrible things are still to come our way. And I guess I'll have to put this in italics because the point seems to be lost in the shuffle: unemployment is still rising, even soaring straight to double digits!

The sociology of this intrigues me to no end. Unemployment is one of the human elements that journalists are supposed to glom onto. Oh, look at poor Bob and Jane and how they lost their jobs and have nowhere to go, etc., etc. Talk about human interest! Where are the weepy stories about the plight of people wandering around with no work? Instead, we get happy clappy stories about how things are not nearly as bad as they might be had the great and powerful Obama of Oz not appeared to save the day. There is also the remarkable spin that things are getting worse, yes, but at a slower pace than before – an observation that might be most commonly heard in Hell.

Obama himself has other lines.

"In the last few months, the economy has done measurably better than expected."

Well, that depends on your expectations, doesn't it? It is irrefutable. But the press is glad to be the echo chamber. "Figures released last week showed that the economy contracted more slowly in the second quarter than many economists had expected."

And then there are the benchmarks, and that might be the scariest part of all. The Obama administration is convinced that we can have no real and lasting recovery until homes go up in price. A top adviser said: "until we see a robust recovery in housing markets, housing prices, in jobs and family income, we’re not anywhere near out of the woods."

This is precisely the same inanity that afflicted the Hoover and Roosevelt administrations. They saw falling prices as the problem to be remedied rather than the saving grace of an otherwise abysmal economic environment. So they kept trying to stamp out good things thinking that they were bad things, effectively burning the crops instead of killing the rats that were poisoning the wheat following harvest.

We can fully expect the mainline press not to understand economics. I can deal with that. But not even to draw attention to the awful reality of the current economic situation, simply because many members of the mainstream press are sympathetic to the idea that the government should be stealing ever more money from us for the state? Here is where ideology leads to blindness, which leads to the worst form of propaganda.

I suspect that they will no more get away with this now than they did in the 1980s.

Wednesday, August 5, 2009

This Isn't America, Is It?

The White House wants U.S. citizens to be a snitch, a Senator thinks health care protestors are fake because they dress too well, House orders up two more private jets for themselves, and a tabloid king defends "quality journalism".

GOP Senator: White House Encroaching on First Amendment (8/5/09 ABC News)

"A Republican senator is calling for the White House to suspend a new project that asks members of the public to flag “fishy” claims about President Obama’s health care plans, arguing that it raises privacy concerns and will serve to chill free speech.

"Sen. John Cornyn, R-Texas, is sending a letter to the White House today asking the president to “cease this program immediately” -- or to explain how Americans’ privacy will be protected if e-mails are forwarded to the White House as requested.

"“I am not aware of any precedent for a President asking American citizens to report their fellow citizens to the White House for pure political speech that is deemed ‘fishy’ or otherwise inimical to the White House’s political interests,” Cornyn writes."

Boxer: Protesters too well dressed to be sincere (8/5/09 Hot Air)

"Senator Barbara Boxer (D-CA) appeared on Hardball last night in support of the Left’s attempt to discredit the people showing up to townhalls in protest of ObamaCare. Boxer says she can tell that they’re fakes, because they’re too well dressed. How does she know that this is a problem? Because well-dressed people apparently told her to get the hell out of Florida in the Bush-Gore recount, too". (The link has the video. See for yourself.)

House Orders Up Three Elite Jets (8/5/09 Roll Call)

"Last year, lawmakers excoriated the CEOs of the Big Three automakers for traveling to Washington, D.C., by private jet to attend a hearing about a possible bailout of their companies.

"But apparently Congress is not philosophically averse to private air travel: At the end of July, the House approved nearly $200 million for the Air Force to buy three elite Gulfstream jets for ferrying top government officials and Members of Congress.

"The Air Force had asked for one Gulfstream 550 jet (price tag: about $65 million) as part of an ongoing upgrade of its passenger air service.

"But the House Appropriations Committee, at its own initiative, added to the 2010 Defense appropriations bill another $132 million for two more airplanes and specified that they be assigned to the D.C.-area units that carry Members of Congress, military brass and top government officials. "

Rupert Murdoch plans charge for all news websites by next summer (8/6/09 Guardian UK)

"The billionaire media mogul Rupert Murdoch suffered the indignity of seeing his global empire make a huge financial loss yesterday and promptly pledged to shake up the newspaper industry by introducing charges for access to all his news websites, including the Times, the Sun and the News of the World, by next summer.

"Stung by a collapse in advertising revenue as the recession shredded Fleet Street's traditional business model, Murdoch declared that the era of a free-for-all in online news was over.

""Quality journalism is not cheap," said Murdoch."

That's a good one, coming from Mr. Murdoch. I'm sure this was from his sincere effort for "quality journalism": "Murdoch Tabloid Hacked into Cell Phones of "Hundreds of Celebrities and Politicians" (7/9/09 AP, via Huffington Post).

Cash For Clunkers Top 10 Best Sellers

Obama administration withholds data on clunkers (8/4/09 AP), but it seems the money, so far $1 billion and probably additional $2 billion, is benefiting foreign car manufacturers.

"WASHINGTON – The Obama administration is refusing to quickly release government records on its "cash-for-clunkers" rebate program that would substantiate — or undercut — White House claims of the program's success, even as the president presses the Senate for a quick vote for $2 billion to boost car sales.

"Transportation Secretary Ray LaHood said Sunday the government would release electronic records about the program, and President Barack Obama has pledged greater transparency for his administration. But the Transportation Department, which has collected details on about 157,000 rebate requests, won't release sales data that dealers provided showing how much U.S. car manufacturers are benefiting from the $1 billion initially pumped into the program."

So much for transparency.

From this AP article and this from Bloomberg and this from, here's what I've gathered:

Top-10 list (from

1) Ford Focus
2) Toyota Corolla
3) Honda Civic
4) Toyota Prius
5) Toyota Camry
6) Ford Escape
7) Hyundai Elantra
8) Dodge Caliber
9) Honda Fit
10) Chevy Cobalt
  • No. 1 in two-seater category is Daimler AG's Smart, followed by GM's Solstice (Pontiac) and Sky (Saturn).

No information whatsoever about the number of cars sold or where these cars are made (could be the U.S., could be Mexico, Canada, Brazil...).

And this is a lame comment from the White House Press Secretary yesterday (8/4):

“... the statistics that I had mentioned yesterday, I mean, 47 percent of the cars sold were from the Big Three, which was slightly larger than their current market share of 45 percent.”

Tuesday, August 4, 2009

Where Dow May Be Headed

Take a peek at my other blog for detailed explanation of my thinking. But I'm putting up the charts here, too. The top chart is daily, the bottom chart is weekly.

The top chart is Dow daily chart from July 17 to October 15, 2007. The bottom chart is Dow weekly chart from the week of September 22, 2008 up to now.

In short, we may have been experiencing, since last October, what we did experience from July to October 2007 (when the stock market topped). Except this time it is taking much longer and in an exaggerated manner (correction is much deeper).

I'm not claiming that we have been experiencing, and that it is going to happen. I am fascinated by the pattern that's emerging, that's all. However, particularly the aspect of augmentation fits with my thinking in my post back in June titled "What If It's 'Slowing', Not 'Quickening'?".

SEC To Ban Flash Trading?

SEC moving toward banning flash orders (8/4/09 AP via Yahoo Finance)

"NEW YORK (AP) -- The Securities and Exchange Commission is moving toward a ban on a trading practice that gives some brokerages a split-second advantage in buying or selling stocks.

"SEC Chairwoman Mary Schapiro has said in a statement Tuesday that the agency is working to create a rule to ban the trades known as flash orders.

"Flash orders give certain members of exchanges including Nasdaq, Direct Edge and BATS the ability to buy and sell order information for milliseconds before that information is made public. High-speed computer software can take advantage of that brief period to allow those members to get better prices and profits."

Direct Edge is the network supported by Goldman Sachs, Citadel, and Knight Trading, and it pioneered in this type of trading.

Let's see... Qui bono?

Answer: New York Stock Exchange, who doesn't have flash trading and whose trading volume has been suffering because of that.

Monday, August 3, 2009

Health Care "Reform" In His Own Words

"I don't think we're going to be able to eliminate employer coverage immediately. There's going to be potentially some transition process..."

Not immediately, that's good to know, isn't it?

Sunday, August 2, 2009

Health Care "Reform" in the Hands of "Deadly Doctors"?

This blog mentioned Section 141 of H.R. 3200, a.k.a. heath care reform bill, which will set up a Presidential appointee as Health Choice Commissioner with vast authority without accountability. And here are two candidates who should never be considered for the position (and for that reason I have a sinking feeling that it will happen), according to New York Post.

(Betsy McCaughey, 7/24/09 New York Post)

"THE health bills coming out of Congress would put the de cisions about your care in the hands of presidential appointees. They'd decide what plans cover, how much leeway your doctor will have and what seniors get under Medicare.

"Yet at least two of President Obama's top health advisers should never be trusted with that power."

Who are they?

One of them is the brother of Obama's Chief of Staff Rahm Emanuel: Dr. Ezekiel Emanuel.

Dr. Emanuel is already working closely with the White House Budget Director on health care reform. (He also happens to be a proponent of VAT, Value-Added-Tax.) What irks New York Post?

"Savings, he writes, will require changing how doctors think about their patients: Doctors take the Hippocratic Oath too seriously, "as an imperative to do everything for the patient regardless of the cost or effects on others" (Journal of the American Medical Association, June 18, 2008).

"Yes, that's what patients want their doctors to do. But Emanuel wants doctors to look beyond the needs of their patients and consider social justice, such as whether the money could be better spent on somebody else.

"Many doctors are horrified by this notion; they'll tell you that a doctor's job is to achieve social justice one patient at a time.

"Emanuel, however, believes that "communitarianism" should guide decisions on who gets care. He says medical care should be reserved for the non-disabled, not given to those "who are irreversibly prevented from being or becoming participating citizens . . . An obvious example is not guaranteeing health services to patients with dementia" (Hastings Center Report, Nov.-Dec. '96)."

So, Dr. Emanuel wants medical doctors to administer social justice by withholding medical care from the disabled, the non-productive and the old. I think I've seen something similar before. It was called eugenics and it was practiced in the U.S. in early 20th century and in Nazi Germany, among other places.

And who is the other one that New York Post hates to have as the Presidential health care Commissioner?

He is Dr. David Blumenthal.

"He recommends slowing medical innovation to control health spending." And that view is shared by Dr. Emanuel, who criticizes "Americans for being too "enamored with technology" and is determined to reduce access to it", according to the article.

"Blumenthal has long advocated government health-spending controls, though he concedes they're "associated with longer waits" and "reduced availability of new and expensive treatments and devices" (New England Journal of Medicine, March 8, 2001). But he calls it "debatable" whether the timely care Americans get is worth the cost. (Ask a cancer patient, and you'll get a different answer. Delay lowers your chances of survival.)

"Obama appointed Blumenthal as national coordinator of health-information technology, a job that involves making sure doctors obey electronically deivered guidelines about what care the government deems appropriate and cost effective.

"In the April 9 New England Journal of Medicine, Blumenthal predicted that many doctors would resist "embedded clinical decision support" -- a euphemism for computers telling doctors what to do."

So this good doctor wants to withhold new health care technology from patients and he is in charge of nationally coordinating the health-information technology?

I wonder if he ever heard of Moore's Law.

Japanese Communist Identifies With Obama

Welcome to a brave, new world. A Japanese blog finds a lot of common ground shared by President Obama and the Japanese Communist Party.

I was searching the articles on how Obama and his policies were perceived in Japan, and up popped this blog. The blog author is a member of the Communist Party in Kochi Prefecture and he is in charge of policy formulation.

"オバマ大統領と日本共産党 経済政策の共通性" [President Obama and Japanese Communist party - Commonality in Economic Policies] (7/29/09, 土佐のまつりごと [Politics in Tosa (old name for Kochi Prefecture)])

The blog post starts with the news headlines of recently announced Manifesto by Japanese Communist Party:

"Communist Party Announces Manifesto, Identifies How To Fund Projects" - Asahi
"Japanese Communist Party Announces Manifesto 'To Eliminate Working-Poor'" - Mainichi Newspaper, 7/28

And here's the opening paragraph of the post:

"Tax cuts for the working class, increased taxation for the rich and big corporations, cut in defense expenditure - public policies to get out of the recession look the same between the capitalist United States and Japanese Communist Party. And we [JCP] are simply talking common sense."

Oh boy. So what's in their Manifesto? Among others,

  1. Eliminate the working poor by raising the national minimum wage above 1,000 yen ($10.55)
  2. Free medical care for children under 6 and elderly over 75
  3. Raise the highest rate for personal income tax
  4. Raise tax rates for big corporations
  5. Cut defense spending
  6. Cut big public works
OK, they sound familiar up to No.4. He seems to think the U.S. is cutting the defense spending under Obama. He is probably looking only at "on budget" spending. The U.S. president is staying the course in Iraq, vastly expanding the Af-Pak front, and may be considering opening a third front (Iran, anyone?). How's that possible with shrinking defense? Also, Obama and Congress are not keen at all on No.6. They want to EXPAND the government projects as the only way out of the recession.

The blog author seems to be cherry-picking somewhat. But what's interesting and instructive is that a Communist Party member gladly identifies himself/his Party with Obama and his policies.

He clearly feels that time is on his and his Party's side. Japan will hold the general election on August 30, and the ruling coalition (Liberal Democratic Party and New Komeito Party) is expected to lose big to the opposition (Democratic Party of Japan). Japanese Communist Party is expected to significantly increase the number of seats, potentially overtaking New Komeito Party to become the third largest party in Japan.

Names of political parties in Japan are misleading. Liberal Democratic Party (LDP) is a centrist to conservative party. Democratic Party of Japan (DPJ) is liberal in the U.S. sense. DPJ was a coalition of small liberal and socialist parties.

Unlike Europe where the national and continental-wide elections saw the resurgence of nationalists and conservatives, Japan is set to go the U.S. way.

Government's Major Revision of Historical Economic Data

I think I found what the curious headline at Drudge Report on Friday (July 31) was about.

Drudge Report said on Friday:

"The government plans big revisions to historical economic data... Developing... "

There was no follow-up on the site.

Just now, I happened to open St. Louis Fed's FRED (Federal Reserve Economic Data), and I saw this announcement:

"NIPA Revision Notice: On Friday, July 31st, 2009 at 8:30AM EDT, the Bureau of Economic Analysis (BEA) will release their 2009 comprehensive revision to the National Income and Product Accounts (GDP & Corporate Profits). Annual revisions for monthly Personal Income and Outlays will follow on Tuesday, August 4th, 2009. This comprehensive revision, the first since 2003, will incorporate changes in definitions, classifications, statistical methods, source data, and presentation. **Please Note: The change in the reference year will move from 2000 to 2005.The BEA will NOT release full history all at once. Data Series will be processed as they are made available by the BEA. For further information regarding the comprehensive revision, please visit the BEA's web site: We are in the process of updating the units for these series to reflect the change to the reference year."

I followed the link to the Bureau of Economic Analysis, and found out that the periods covered for this comprehensive revision were ALL periods since 1929.

According to slides made by BEA, the scope of this revision includes:

  • New concepts or definitions,
  • Changes in presentation,
  • Benchmark source data,
  • Improved source data and methodologies.

The description is too vague to even imagine the impact, if any, of the revision. However, the words like "new definitions", revision in "benchmark source data" don't quite inspire further confidence in the goverment statistics. (The net Birth/Death model used by Bureau of Labor Statistics comes to mind.)