Link: http://www.forbes.com/2010/08/30/economics-paul-krugman-stimulus-opionions-columnists-richard-epstein.html?boxes=Homepagelighttop

Richard Epstein crushes the Obama administration and Keynesian macro-theorists like Laura Tyson and Paul Krugman. Lots of good material here, but I liked this especially:

Our economic woes are so manifest that we have to look for an alternative strategy to getting out of the current hole. It will not do to take a fatalist attitude toward lackluster private demand. Something has to be done to revive it–now. Here is one agenda: reduce the level of economic uncertainty by getting government out of the stop and go business once and for all. What is needed are stable economic policies that work as well in good times and in bad ones, so as to remove the need to articulate and implement some nonexistent exit strategy.

I couldn’t agree more. Temporary stimulus is the whole source of the problem. When it runs out, a vacuum is left, and government clumsily fills it with even more stimulus. Supposedly, the government is trying to be counter-cyclical; but have you ever heard anyone say that we need a destimulative fiscal policy? If macroeconomic stabilization policy were in any way consistent, policymakers would work just as hard to promote saving and reduce spending when the economy is humming as they do to fight unemployment and stoke consumer spending when it’s on the rocks. The Federal Reserve under Alan Greenspan did make great strides in softening the business cycle by moving toward a non-cyclical approach. But that appears to be jettisoned now.

Link: http://online.wsj.com/article/SB10001424052748703959704575454431457720188.html?mod=WSJ_Opinion_LEADTop

Respected economist Robert Barro argues that unemployment insurance extensions are responsible for the sustained long-term unemployment that has become emblematic of this recession.

The peak unemployment rate of 10.1% in October 2009 corresponded to a mean duration of unemployment of 27.2 weeks and a share of long-term unemployment of 36%. The duration of unemployment peaked (thus far) at 35.2 weeks in June 2010, when the share of long-term unemployment in the total reached a remarkable 46.2%. These numbers are way above the ceilings of 21 weeks and 25% share applicable to previous post-World War II recessions. The dramatic expansion of unemployment-insurance eligibility to 99 weeks is almost surely the culprit.

Indeed, I can not think of a policy that is closer to 180 degrees from where it should be. When a reduction in unemployment is an ostensible goal of this administration, paying people to stay out of work longer is at war with this goal.

How much has this mattered?

To get a rough quantitative estimate of the implications for the unemployment rate, suppose that the expansion of unemployment-insurance coverage to 99 weeks had not occurred and—I assume—the share of long-term unemployment had equaled the peak value of 24.5% observed in July 1983. Then, if the number of unemployed 26 weeks or less in June 2010 had still equaled the observed value of 7.9 million, the total number of unemployed would have been 10.4 million rather than 14.6 million. If the labor force still equaled the observed value (153.7 million), the unemployment rate would have been 6.8% rather than 9.5%.

Usually, when people say that a President or his party will pay a political price for a weak economy, a few astute journalists point out that the President has in fact little control over the economy for which his fortunes rise and fall. In this situation that is surely less true. This President and this Congress have chosen to impose policy controls on this economy, and they should pay the price for the disastrous effects.

Link: http://www.cato.org/pub_display.php?pub_id=12088

Michael Tanner makes it clear that while the deficit (and the debt it adds to) is a big problem, it is federal spending that has created the problem, not lack of taxes.

It makes me laugh the number of lefty columnists who say that conservatives are hypocritical for raising the alarm about the deficit while calling for an extension of the Bush tax cuts. Must it really be spelled out for them? Conservatives want to eliminate the deficit by cutting spending, not by raising taxes. After all, the reason the deficit has grown from a $251 billion average under Bush to a $1,400 billion average under Obama is all due to increased spending. Tax rates have not gone down, but spending has gone way up. For the big spenders to ask Americans to pay higher taxes to fix the deficit problem is offensive.

Shout them down! No, you don’t get a bigger allowance because you overspent. This is not your money! Live within your means, damn you!

Chris Christie nails the administration for being “mindless drones".

Of course, anyone who has worked with the federal government on anything knows this is how government operates. And the bigger government gets, the more people realize that government is the problem. And playing musical chairs, putting in smart people instead of dumb people, Rs instead of Ds, or anything like that isn’t going to solve anything. Returning power to the people, or in this case to local governments, is the only solution.

Link: http://www.bigquestionsonline.com/columns/susan-jacoby/multiculturalism-and-its-discontents

The wheels of multiculturalism are coming off. Susan Jacoby writes in the linked article,

I am an atheist with an affinity for non-fundamentalist religious believers whose faith has made room for secular knowledge. I am also a political liberal. I am not, however, a multiculturalist who believes that all cultures and religions are equally worthy of respect. And I find myself in a lonely place in relation to many liberals, political and religious, because I cannot accept a multiculturalism that tends to excuse, under the rubric of “tolerance,” religious and cultural practices that violate universal human rights.

The crux of her argument boils down to this:

It is understandable that American liberals, and particularly religious liberals, are wary of anyone who makes negative public judgments about other faiths. There is a long history of disrespect for various minority cultures and religions in America, although the Constitution and the First Amendment — products of Enlightenment secularism and Enlightenment-influenced religion — have (usually) stopped the disrespect from turning into bloodshed..

But it is one thing to recognize the legal right of all Americans to believe whatever they want and quite another to maintain that all belief systems are compatible with democracy. In a free society, religion should be no more immune to criticism than atheism, and the First Amendment does not give anyone carte blanche to violate secular law in the name of faith. This crucial distinction applies to all religions, not only to Islam.

One would think that with all the human rights abuses of Islam (granted, not all are observed by all adherents), liberals would be the first to demand that religion take a back seat to core secular values. But today’s liberalism is simple-minded (the legal right to practice religion entitles you to any sanction and even approval from society) and increasingly about interest groups, not principles. It believes that whatever government does, we are obliged to follow.

It’s good to know that someone on the Left thinks differently.