Friday, October 03, 2003
RUSH, McNABB, AND RACE
My new column at the American Prowler.
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Wednesday, October 01, 2003
KRUGMAN CAN’T DO MATH; CAN HE READ?
Upon reading Paul Krugman’s 4,781st anti-Bush screed yesterday (titled “Who’s Sordid Now?”) I had to ask myself if Krugman is so brazen that he thinks no one will read the newspaper articles he refers to. Or perhaps he doesn’t read very well. You know the type: the one who reads an article and only sees what he wants to see.
Exhibit A is this passage:
Then there's electricity. One reason Iraq still faces blackouts is that local experts and institutions were excluded from the repair business. Instead, the exclusive contract was given to Bechtel, whose Republican ties are almost as strong as Halliburton's. And if a recent story in The Washington Post is accurate, Bechtel continues to ignore pleas by Iraqi engineers for essential spare parts.
First of all, the article in the Washington Post notes that:
The Army engineers allowed Iraqi managers and technicians to resume control of their facilities.
Now, wait a minute. How can local experts and technicians be allowed to resume control of their facilities and at the same time be excluded from the repair business? It seems very unlikely that those who run a facility would not be involved in the repair process.
Nor is Behctel ignoring the Iraqis pleas for new parts. As the Post notes, “U.S. officials said the requests for new parts were beyond the scope of Bechtel’s contract”:
At Baghdad South, for instance, Bechtel provided chemicals to treat water in the steam turbines because it was deemed an emergency issue, but the company lacked funds to buy spare parts for the plant, even if they would improve performance. That responsibility was subsequently shifted to the country's electricity commission, which has a tiny budget and no phones to contact foreign suppliers.
Indeed, the problem isn’t that Bechtel is doing lousy job because it was given an unwarranted contract. The problem is the $230 million it received was not enough to rebuild Iraq’s electrical system. That’s why the Bush Administration is now requesting over $5 billion for the job. Perhaps it was poor planning on the Bushies part, but that’s not crony capitalism.
Next,
For example, in July two enterprising Middle Eastern firms started offering cellphone service in Baghdad, setting up jury-rigged systems compatible with those of neighboring countries. Since the collapse of Baghdad's phone system has been a major source of postwar problems, coalition authorities should have been pleased.
But no: the authorities promptly shut down the services. Cell service, they said, could be offered only by the winners in a bidding process — one whose rules, revealed on July 31, seemed carefully designed to shut out any non-American companies. (In the face of strenuous protests the rules were revised, but still seem to favor the usual suspects.) Oddly, the announcement of the winners, originally scheduled for Sept. 5, keeps being delayed. Meanwhile, only Paul Bremer and his people have cellphones — and, thanks to the baffling decision to give that contract to MCI, even those phones don't work very well. (Aside from the fact that its management perpetrated history's biggest accounting fraud, MCI has no experience in building cell networks.)
Now, I don’t know what the link is between MCI and the Bush Administration since Krugman doesn’t give one—considering the spanking MCI/WorldCom recently got from the FTC, it probably would be hard to establish a cozy connection. Anyway, what you need to focus on is that last sentence, that “MCI has no experience in building cell networks.” Yet, according to this article at CNN,
[Lt. Col. Ken McClellan] pointed to the company's work on a wireless system in Haiti in the 1990s and a 2002 contract, in which it served as a subcontractor, to provide long-distance connections for a wireless network in Afghanistan.
McClellan agreed that WorldCom's experience in Haiti and Afghanistan is "analogous work" to what is needed in Iraq.
No experience? Gee, it looks like MCI has experience in two places that the U.S. has engaged in military action. That seems exactly the kind of experience one would look for when rebuilding a country that the our armed forces recently invaded.
Krugman makes another stupid error in his quest to bash the Bush Administration. So who’s sordid now?
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GOVERNMENT NEVER HAS ENOUGH
According to the Des Moines Register op-ed page, Iowa is shortchanging education.
As it is, the state underfunds education.
We now need government-funded pre-school. Government just never spends enough!
It is true that what Iowa spends per pupil ($7,126) is less than the U.S. average ($7,524). However, we rank 9th in state and local tax funds for higher education. We have the 5th highest high school graduation rate, and are in the top 15 in the pupil-teacher ratio—another blow to those who say we must spend more money to produce better education.
Furthermore, it is important to note that total spending on education in Iowa over the last ten years has risen 7.2% after controlling for inflation. Furthermore, enrollment in Iowa’s public schools has declined by more than 3% since 1997. Thus, more resources for fewer students.
But for those who always want to spend other people’s money, we never spend enough.
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MEANWHILE…
The Register is also worried about the federal budget deficit, claiming that:
Your tax cuts are going to cost you a whole lotta money.
That may seem nonsensical at first. Tax cuts are supposed to give you money. But in the case of the recent federal tax cuts, the gain is only temporary…
The long-term costs of borrowing to finance tax cuts are staggering. Over a six-year period, Americans will get $1.04 trillion in tax cuts, but during the same period they'll take on $3.78 trillion in additional national debt…
…the net additional debt burden per Iowan, minus the gain from tax cuts, will be $9,374 per person, or about $37,496 for a family of four.
You know, I could go on and on about an editorial like this—as I have done before, surely—but instead I am just going to quote from Thomas Sowell’s recent column:
There are basically only two ways of reducing a deficit -- cut spending or collect more taxes. When you see liberals in politics and in the media going ballistic about the deficit, you know that they are not thinking about cutting spending.
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Tuesday, September 30, 2003
THE MATH CAN NO LONGER BE DENIED
That’s the meaning that I take for this editorial in the Des Moines Register urging an increase in the retirement age for the Iowa Public Employees Retirement System (IPERS). The number of retirees is growing faster than there are workers to replace them, and this is putting more and more stress on public retirement systems. And raising the retirement age is a good idea. Still, there are many things wrong with the editorial.
Like Social Security, the Iowa Public Employee Retirement System (IPERS) sets its tax rates today based on what it is likely to need 20 or 30 years from now. And like Social Security, IPERS faces the reality that retirees are living longer than they used to, meaning they'll be drawing IPERS benefits for more years.
The current tax rate for Social Security is not in any way based on what is needed 20 or 30 years from now. If it was, we’d be paying payroll taxes of at least 20%. The only way that is true is if you count the bonds in the Social Security Trust Fund. But those are only claims on future tax revenue, and the current payroll tax rate will not be enough to pay for the bonds plus whatever amount of Social Security benefits are not paid for by the bonds.
Next,
Erasing that unfunded liability means adopting new policies that either spell reduced benefits (but not for many years) for retirees, or increased contributions by those still working and their employers (the taxpayers). But the options are many. More 20 years ago, Congress foresaw the increased longevity of retirees and adopted legislation that is just now taking effect - changing the retirement age for Social Security. Workers born in 1938 or later must wait beyond the traditional 65-and-out age to retire with full benefits. The retirement age increases by a couple of months each year for some years to come. The same formula could be applied to IPERS - and for the same reasons: People not only live longer today than when IPERS was established, but are far healthier at 65 now than they were then.
Yes, but raising the Social Security retirement age won’t fix the long-term problem with Social Security. It will only delay it a few years. You can look it up.
Then there is this wing-dinger:
IPERS wouldn't be nearly as flush as it is today were it not for the investments made in the bloated markets of the 1990s. But as the market has demonstrated repeatedly, history offers no promises. More than three-fourths of IPERS funds are in stocks and bonds, which can look gorgeous in the bloom of spring but can wilt grotesquely in the heat of summer.
That's worth keeping in mind, not only about IPERS but about the schemes to take money out of Social Security and put it into the markets.
Now let me get this straight. Because of the stock market, IPERS is in much better shape than it would be otherwise. But since the stock market is not perfect, we should not invest our Social Security funds in it. I’m sure there is logic in there somewhere, and if any of you spot it, be sure to leave a comment.
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Monday, September 29, 2003
BUSH IS DOWN. PANIC TIME?
My new column at the American Prowler.
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MORE ON PRESCRIPTION DRUGS
Well, the Des Moines Register is at it again. They are upset that Americans can buy cheaper prescription drugs from Canada. Look at the title:
SPONGING OFF CANADA
Think about that for a second. Canada has cheaper prescription drugs because the government there forces drug companies to sell at a lower price than they would have to in a free market. Drug companies recover their R&D costs in America, where they can charge market-based (higher) prices. Thus, it is far more accurate to say that Canada is sponging off of us.
The Canadian government, by using the bargaining power of the country, secures cheaper drugs for Canadians.
This is the second time the Register has gone to the well on this one. “Bargaining power” implies that actual bargaining goes on. That is, a seller offers a good at price X, a buyer offers to purchase them at lower price Y, and both sides negotiate until a deal is reached. Canada sets a price, by law, that drug companies can sell their products for. The far more accurate term for that is “price control,” not bargaining power.
The U.S. government doesn't have enough guts to put pressure on drug manufacturers in this country.
Oh yeah, price controls in the U.S., here we come.
Finally,
All this flocking to Canada by Americans is downright embarrassing.
I didn’t know that embarrassment was sufficient reason to change a government policy. You know, I’m embarrassed that many Eastern European countries have a flat tax, and the U.S. does not. I’m embarrassed that Iowa has more income-tax brackets—nine—than all but two other states. I’m embarrassed that the top bracket, 8.98%, is higher than most other states. I’m embarrassed that the Iowa government doesn’t have spending limits based on inflation and population growth.
You know, I kind of like the embarrassment principle.
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NOT SEEING THE HANDWRITING
I like how this editorial in the Des Moines Register began the other day:
Some days, we just run out of things to say on the big, important events that usually occupy the top spot in this editorial column.
Actually, that’s true of most days.
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