Want to see the year of jubilee?

Some folks asked me, an economist, to explain the relevance of the Year of Jubilee and the impact of applying it today.  It may seem a bit pedantic, but I need to build up to the answer.  First, let’s look at what Jubilee was in the Bible.  Next, let’s explain what it wasn’t in the Bible.  Third, how do we apply it today?

What’s the Bible say?  The Year of Jubilee is explained in Leviticus 25:9-55. Please take a moment, click the preceding link, and read it. To see what is actually written in the Bible is of the upmost importance.  You should want God’s Word, not what others want you to think it means.

STOP!  Did you really read the passage?

Yeah, it is a long passage.  I know it is hard, but you can do it.  So MAN UP!  (Grow a couple.)  Click: Leviticus 25:9-55.  Let’s do this right!  If you can’t be bothered, then please stop reading this and go back to looking at cat videos and pictures of other people’s food on Facebook.

Highlights Concerning Property in Leviticus 25:

• Land was an inheritance from God and could not be sold outright (v. 23).
• Land could be “sold” but the owner or a relative could redeem it, or buy it back (v. 25).
• The price of the land, and the price to redeem it, was based on how many years were left until the year of Jubilee (v. 26-27).
• If no one redeemed it, then in the Year of Jubilee the land would revert to the original owner since it is his inheritance from the Lord (v. 28).
• A house in a walled city could be sold in perpetuity but the owner had a right to redeem it only during the first year after the sale (v. 29-30).

Highlights Concerning People in Leviticus 25:

•  Lending or selling for profit to an Israelite in need was prohibited (v. 35-37).
• A poor Israelite could not sell himself and his family into slavery to another Israelite.  He must be treated as a hired hand and only required to serve until the Year of Jubilee (v. 39-40).
• The Year of Jubilee did not apply to non-Israelites (sojourners and foreigners).  They could be bought and sold as slaves and owned in perpetuity (v. 44-46).
•  A poor Israelite could sell himself and his family into slavery to a non-Israelite but only until the Year of Jubilee (v. 47, 54)
•  All Israelites could be redeemed, whether serving as a hired worker to another Israelite or as a slave to a non-Israelite (v. 48-49).
• As with land, the redemption price was based on how many years were left until the Year of Jubilee (v. 50-52).

Financially, the Year of Jubilee applies to two things:  the debts of Israelites repaid with labor, and the land that God gave as an inheritance to the Israelites.  First, non-Israelite slaves were not set free.  The Jubilee only applied to slaves who were Israelites.  The Children of Israel belonged to God.  They could not sell themselves into perpetual slavery because they were not their own, but God’s property.  Second, the land was a gift from God, an inheritance, bequeathed with the unchangeable restriction that it was the permanent possession of the Children of Israel.  In short, they could not sell it outright.  It is like Canton’s Village Park which is actually owned by the Presbyterian Church.  It was bequeathed to the church with a restrictive covenant that it could not be sold.  The church cannot give the land title to the Village of Canton and be done with it, even with the guarantee of its continued use as a park.  Neither could the Children of Israel sell their land in perpetuity. 

What’s NOT in the Bible?  An implication of the above is that none of the following has anything to do with the Year of Jubilee:

• Cancel all debts!
• Stop the foreclosures!
•  Free those in financial bondage!

You might be thinking that although it may not literally be in the Bible, can’t the Year of Jubilee be an application of biblical principles that are indicative of God’s desire, his heart for social justice for those in financial bondage?

No.

Why not?  The short answer is because such an application uses the Bible to deny, even pervert, the picture of God’s mercy, love and holiness.

(As you might suspect, the long answer is to follow.)

In Leviticus 25 the Jubilee requires neither the renunciation of debts nor the nullification of agreements or contracts.  The agreement to the sale of land is not voided by the Jubilee because there never was a sale in perpetuity.  It is very clear that both sides were to understand up front that purchasing use of the land was only temporary until a buyback (redemption) or until the Year of Jubilee.  God said, “And if you make a sale to your neighbor or buy from your neighbor, you shall not wrong one another” (v. 14) when outlining the amount of the sale and the redemption prices.  Likewise, the obligation of a hired man or an Israelite slave to work was also known to everyone involved to be temporary until a buyback or the Year of Jubilee.

Of course there are numerous Bible verses concerning the forgiveness, including the forgiveness of debt.  However, the admonition to forgive debts is always to the lender not the borrower.  Forgiveness is voluntary, not imposed by a third party, and certainly not by God.

No one is entitled to receive forgiveness.

God is a promise keeper, not a promise breaker.  He will not coerce a lender to accept another person’s violation of an agreement.  God is all powerful but not unrighteous.

How Do We Apply the Year of Jubilee Today?  The Year of Jubilee presents a beautiful picture of God’s love for his people.  The Children of Israel received an inheritance of land from God.  God guaranteed this inheritance would be restored even if someone purposed to lose it.  Children of Israel may put themselves into slavery but God guaranteed they would be restored.  They were His.

Today each of us was once part of a people who were not His people.  With our sin, we each sold ourselves into slavery.  We belonged to Satan and he was not about to forgive our sins and set us free.  Rather, Jesus redeemed us.  Satan was not forced to renounce his hold over us.  We were not stolen from Satan as a result of the coercion of an all-power God.  Rather, Jesus redeemed us.  The price for sin was death but Jesus paid the price for our sins, life for life, with his own blood.  There is no entitlement to receive such forgiveness.  Rather, Jesus redeemed us.
.

Since Jesus redeemed us, we are now the Children of God by adoption.  We are his and he can renounce the debt of sin because he paid for it.  God owns us and we cannot change that even if we want to because we are not our own but were bought with a price.

In accepting Christ's redemption, we are co-heirs with Jesus.  We cannot lose our inheritance.

Jubilee is not about a Get-Out-of-Debt-Free Card.  It is all about Jesus.  Jesus is our Jubilee.

fb the day after

I am so tired of all the anger, accusations, outrage, contrived victim-hood, and more.  I thought it was just the election bringing out the worst in us.  Now the election is over, but it is continuing.   Now I am beginning to see that it is not the election, it is us.

What is the source of all the filth we see and hear?  Jesus said, "For out of the abundance of the heart the mouth speaks" (Mt 12:34).  The problem with America isn't the media, the candidates,  the President, the President-elect, or those in Washington.  It is us.  We are merely seeing some evidence, the tip of the iceberg, the overflow of the reservoir of filth within us.

This is not the way to act after an election.  It is destructive to a democratic society.  It is not only rude, but unpatriotic and un-American.  "If we can't begin to treat each other in a more human way, this thing is going to go from bad to horrible."

"I'm Bob Blewett and I approve this message."

fb the day after

I am so tired of all the anger, accusations, outrage, contrived victim-hood, and more.  I thought it was just the election bringing out the worst in us.  Now the election is over, but it is continuing.   Now I am beginning to see that it is not the election, it is us.

What is the source of all the filth we see and hear?  Jesus said, "For out of the abundance of the heart the mouth speaks" (Mt 12:34).  The problem with America isn't the media, the candidates,  the President, the President-elect, or those in Washington.  It is us.  We are merely seeing some evidence, the tip of the iceberg, the overflow of the reservoir of filth within us.

This is not the way to act after an election.  It is destructive to a democratic society.  It is not only rude, but unpatriotic and un-American.  "If we can't begin to treat each other in a more human way, this thing is going to go from bad to horrible."

"I'm Bob Blewett and I approve this message."

Voting for evil or voting for what American can be

The following quote is from a video I just watched:

“I will vote to oppose the loss of freedom.  I will vote to oppose the loss of life.  And I will vote to oppose the loss of the traditional family.”

 ~ Tommy Nelson, The Continental Divide 

After some reflection I realize that the sentences above are each negative votes  They are votes of opposition, even votes of fear.  They are defensive.  They are truly votes of protest rather than affirmations of what America can be as a country.  

Maybe we should take a different approach to voting.

As for me, I will vote for one who will support and defend the Constitution.  I will vote for one who will submit to the Constitution as written and to the rule of law.  I will vote for one who does not wink at political corruption as the art of a deal or as a convenient means to an end.

 

Thereby I will vote to support freedom.

As for me, I will vote for one who values all human life since all human life is made in the image of God.  I will vote for one who respects the human rights of all citizens and residents regardless of their race, ethnicity, or national origin, as well as regardless of their religious, political, or social views and beliefs.

Thereby, I will vote to value life and the dignity of people.

As for me, I will vote for a person of competence and character to have the job of President.  I will vote for one competent to deal with Congress, to be commander-in-chief of the military, to be effective in both domestic and foreign affairs.  I will vote for someone I can best trust to lead us through still dangerous times.

Thereby, I will vote to support a better America and a safer world.

After reading the above, you may think me an incredibly self-righteous ass.  Be that as it may, I still have the problem of deciding for whom to vote.  I want my vote to count, to be tallied or enumerated, as well as to count for something important, something positive, something bigger than myself.

Neither of the two leading candidates meet, neither fails to meet, all my criteria.  All candidates are flawed human beings, but I sincerely believe those two are particularly appalling and clearly unfit for the office.  Neither is someone for whom I could vote in good conscience.  Neither am I constrained by the false dilemma of either Clinton or Trump.  In my state I have the option of voting for one out of a total of 36 candidates (four on the ballot, 32 certified for write-ins).

There is one of the 36 that I think is fit for office.  Evan McMullin appears to meet my criteria:  

I am not throwing my vote away voting for McMullin.  Throwing my vote away, as well as selling out my moral values, would be voting for Clinton or Trump.

This is not a “protest” vote.  A protest vote is voting for Trump because you don’t like Clinton or vice versa.  I do not have to vote for the lessor of two evils.  I do not need to settle for voting for evil.  I can vote for Evan McMullin without feeling degraded and ashamed.

In 2016 I do not have to vote for evil, incompetence, or corruption.  I can and will vote for affirmation of what America can be as a country.  I'm voting for Evan McMullin.

Be blessed!

RB

FYI:  Special NYS Rules for Write-in Votes for President

Special NYS Rules for Write-in Votes for President

What to do if you do not want to vote for one of the four candidates for President listed on the ballot in New York?  Of course you can do a write-in vote.  However it must be done correctly or the vote will not count.  Since the President is not elected directly but by electors, rules are different for Presidential write-ins than they are for other offices.

"In order to run as a write-in candidate for President, a person must file a certificate with the State Board of Elections, in which they declare themselves to be a write-in candidate for the office of President" (NYS Board of Election).  If you write-in another name, even a name already on the ballot's list of candidates, the write-in vote will not count.

Here is how it works. "As you sign in to vote, you will be handed a voting card that contains the various offices that you will be voting for.... You will then take this card over to a table that has partitions on it which helps to keep your choices secret. Upon looking at the card, you'll note that each office being contested has the list of the authorized candidates along with a circle next to each name. At the bottom of each list of candidates will be printed the word "Other" with a blank line next to it. Take the marking instrument provided and fill in the circle next to the word "Other". Then write in the name of the person that you wish to vote for. When you are finished, take the card up to the election inspector near the voting machine and give your card to him/her. They will run your card through the machine which will record your vote" (source).

Here is a list of the 32 NYS certified write-in candidates for President:

Arantxa Aranja 725 Ninth Avenue, #2A, New York, NY 10019
Neer R. Asherie 121 Reade Street, PH-H, New York, NY 10013
Mark Blickley 2728 Thomson Avenue, #202, Long Island City, NY 11101
Robert L. Buchanan P. O. Box 6151, Fredericksburg, VA 22403
Gary S. Canns 145 East 23rd Street, #5-D, New York, NY 10010
Willie Carter 5100 Turner Street, Fort Worth, TX 76105
Darrell Castle 2586 Hocksett Cove, Germantown, TN 38139
Ariel Cohen 449 Roy Street, West Hempstead, NY 11552
William J. Connolly 10953 State Route 32, Greenville, NY 12083
“Rocky” Roque De La Fuente 121 Nurmi Drive, Ft. Lauderdale, FL 33301
Jason Fried 757 Jefferson Avenue, Brooklyn, NY 11221
Zoltan Istvan Gyurko 35 Miller Avenue, #102, Mill Valley, CA 94941
Ben Hartnell 1025 Autumn Lake Court, Westerville, OH 43081
Tom Hoefling 101 Third Street, Lohrville, IA 51453
Michael Frederick Ingbar 174 Spring Street, #20, New York, NY 10012
Lynn Kahn 18 Lakeview Way, PO Box 562, Schroon Lake, NY 12870
Chris Keniston 2329 15th Street, Vernon, TX 76384
Gloria La Riva 3207 Mission Street, Apt. 9, San Francisco, CA 94110
Jeffrey Mackler 33 Mandana Circle, Oakland, CA 94610
Michael A. Maturen 3296 East Clemens Road, Harrisville, MI 48740
Evan McMullin 333 Second Street, NE, Washington, DC 20002
Monica Moorehead 37 Bentley Avenue, Jersey City, NJ 07304
Jason Mutford 912 Washington Avenue, Albany, NY 12203
Clifton Roberts 9382 Willow Pond Circle, Elk Grove, CA 95624
Marshall Schoenke 21924 W. Linden Avenue, Lake Villa, IL 60046
Ryan Alan Scott 194 Vincent Circle, Middletown, DE 19709
Emidio Soltysik 11713 Avon Way, #15, Los Angeles, CA 90066
Tony Valdivia 11306 Candle Park, San Antonia, TX 78249
J. J. Vogel-Walcutt 1329 Tall Maple Loop, Oviedo, FL 32765
Esther Welsh 95-20 67th Avenue, Rego Park, NY 11374
Barbara Whitaker 149 West Fourth Street, Apt. 4B, New York, NY 10912
Robert M. Wolff 627 Willoughby Avenue, Brooklyn, NY 11206
 (NYS Board of Election).

The Silence Is Deafening: Zero Support for Trump Among Former Presidential Economic Advisers

Today's Wall Street Journal (Friday 26 August 2016, p. A5) published a survey of all former members of the Council of Economic Advisers (CEA) going back to the Nixon administration.  The CEA was created by the Employment Act of 1946 to advise the President on economic policy and consists of three members appointed by the President.

None of the 45 living former members are willing publicly support Donald Trump.  That is NONE as in ZERO, as in NADA, as in ZILCH. (The results do not indicate whether the non-living former CEA members are, or are not, rolling over in their graves at the prospect of a Trump presidency.)  

While no former member supported the opposition party's candidate, the silence on Trump by economists serving under Republicans is deafening.  Among the Republican-appointed CEA members, all were silent except six, who all opposed Trump.  These six included former CEA chairs who served under Reagan (Martin Feldstein) and Bush #43 (Greg Mankiw).  It is very unusual for advisers to state opposition to the candidate of the party whose President appointed them.

“I have known personally every Republican president since Richard Nixon,” said Harvard University economist Martin Feldstein, who chaired the council under President Ronald Reagan. “They all showed a real understanding of economics and international affairs….Donald Trump does not have that understanding and does not seem to be concerned about it. That alone disqualifies him in my judgment.”  

Source:  http://blogs.wsj.com/economics/2016/08/25/economists-whove-advised-presidents-are-no-fans-of-donald-trump/ 

Abbot & Costello on Unemployment

The following is one of the clearest explanations I've read of alternative unemployment statistics.  Someone sent me this so I do not know the original source. However I have updated the numbers to reflect the January 2015 unemployment statistics. 

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good Subject. Terrible Times. It's 5.7%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's 11.3%.

COSTELLO: You just said 5.7%.

ABBOTT: 5.7% Unemployed.

COSTELLO: Right, 5.7% out of work.

ABBOTT: No, that's 11.3%.

COSTELLO: Okay, so it's 11.3% unemployed.

ABBOTT: No, that's 5.7%.

COSTELLO: WAIT A MINUTE! Is it 5.7% or 11.3%?

ABBOTT: 5.7% are unemployed. 11.3% are out of work.

COSTELLO: If you are out of work you are unemployed.

ABBOTT: No, Congress said you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss the point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But ALL of them are out of work.

ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment rolls that would count as less unemployment? 

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how it gets to 5.7%. Otherwise it would be 11.3%. 

COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work.

ABBOTT: Now you're thinking like an Economist.

COSTELLO: I don't even know what the heck I just said!

ABBOTT: Oh, now you're thinking like a Politician.

for christians only (orthodox, catholic, evangelical)

If you consider yourself devoted to Christ, please watch the following short video:

   

Please consider signing the Manhattan Declaration after reading more:

http://www.manhattandeclaration.org/index.html#1

Thank you,
RB

unacceptable! obama's accommodation compromises religious liberty

The official position of the Bishops’ Conference signals that no compromise concerning the HHS preventive care mandate could succeed. It is not the government's role to define or limit the mission of a church or any other religious organization:

Unacceptable

February 27, 2012

The Obama administration has offered what it has styled as an accommodation for religious institutions in the dispute over the HHS mandate for coverage (without costsharing) of abortion-inducing drugs, sterilization, and contraception. The administration will now require that all insurance plans cover (cost free) these same products and services.Once a religiously-affiliated (or believing individual) employer purchases insurance (as it must, by law), the insurance company will then contact the insured employees to advise them that theterms of the policy include coverage for these objectionable things.

This so-called accommodation changes nothing of moral substance and fails to remove the assault on religious liberty and the rights of conscience which gave rise to the controversy. It iscertainly no compromise. The reason for the original bipartisan uproar was the administration’s insistence that religious employers, be they institutions or individuals, provide insurance thatcovered services they regard as gravely immoral and unjust. Under the new rule, the government still coerces religious institutions and individuals to purchase insurance policies that include the very same services.

It is no answer to respond that the religious employers are not paying for this aspect of the insurance coverage. For one thing, it is unrealistic to suggest that insurance companies will notpass the costs of these additional services on to the purchasers. More importantly, abortion drugs, sterilizations, and contraceptives are a necessary feature of the policy purchased by the religious institution or believing individual. They will only be made available to those who are insured under such policy, by virtue of the terms of the policy.

It is morally obtuse for the administration to suggest (as it does) that this is a meaningful accommodation of religious liberty because the insurance company will be the one to inform theemployee that she is entitled to the embryo-destroying ―five day after pill pursuant to the insurance contract purchased by the religious employer. It does not matter who explains theterms of the policy purchased by the religiously affiliated or observant employer. What matters is what services the policy covers.

The simple fact is that the Obama administration is compelling religious people and institutions who are employers to purchase a health insurance contract that provides abortion-inducing drugs, contraception, and sterilization. This is a grave violation of religious freedom and cannot stand.

It is an insult to the intelligence of Catholics, Protestants, Eastern Orthodox Christians, Jews, Muslims, and other people of faith and conscience to imagine that they will accept an assault ontheir religious liberty if only it is covered up by a cheap accounting trick. Finally, it bears noting that by sustaining the original narrow exemptions for churches,auxiliaries, and religious orders, the administration has effectively admitted that the new policy T2 (like the old one) amounts to a grave infringement on religious liberty. The administration still fails to understand that institutions that employ and serve others of different or no faith are still engaged in a religious mission and, as such, enjoy the protections of the First Amendment.

[Followed by 42 pages of signatures]

Source:

www.becketfund.org/wp-content/uploads/2012/02/Unacceptable-2-27-11am2.pdf

ron paul and michele bachmann are marginal candidates

Jon Stewart and others have wondered why the media is ignoring Ron Paul. It is easy. He is a very marginal candidate with little chance of being nominated. Michele Bachmann is only marginally better as a marginal candidate.

This is not my opinion. It is in the polls and it is what the smart money is saying.

Check the Real Clear Politics poll summary shown above (click image to enlarge). Even though Bachmann is getting all the press, she is way down in the polls at 9.6%, way behind Romney (20.2%) and Perry (18.4%) and even trailing non-candidate Sarah Palin (10.0%). Bachmann is barely ahead of non-candidate Rudy Giuliani (9.3) and the rightfully overlooked Ron Paul (8.8). Ron Paul's support has been in single digits, steady, and not growing. Not a good trend. These folks are the minor candidates with Bachmann at best being the pick of a bad litter.

I do not pay much attention to political polls. If I want a good gauge of what is likely to happen, I go to the prediction markets. These markets are forward looking, in that they show what people bet will happen rather than looking backward to what potential voters were thinking last week. In prediction markets, people are putting their money where their mouths are, rather than just answering the phone and giving their opinion. Prediction polls have a much better track record of predicting outcomes than public opinion polls.

The smart money has Bachmann and Paul as even bigger losers. The bets at Intrade.com predict Perry has a 35.3% chance of winning the nomination with Romney following closely at 31.0%. Sarah Palin is a very distant third at 7.6%. Jon Huntsman is fourth at 5.8% followed closely by Bachmann at 5.3% Where's Ron Paul? At a lowly 4.0% and in sixth place.

You think your know better? Then put your money where your mouth is. If you are so smart then you can make a profit, but only if you are right.

driving while female

Just just coincidence? From Wronging Rights:

Re-ignition of protests against the female driving ban in Saudia Arabia occurs right around the same time as the re-ignition of a certain Summer blockbuster series. Will the history books cite the Arab Spring or Diesel Summer as inspiration?

When viewing note the gender inclusiveness of vehicle operation:

The 20% female participation rate is radically high by Saudi standards!

the economy sucks -- get used to it

The 2012 elections are on the way and the economy will be the big issue. Economics and politics do not mix very well. I take that back; they mix too well. However, what you usually get is a concoction sort of like bad bathtub gin. It feels good but rots your brain.

So what’s going on?

1. The recession is over and the economy is recovering slowly;
2. We’re still in a slump;
3. There’s not much government can do right now to get positive results in the next year or so.

On Tuesday, Federal Reserve System (Fed) Chair Ben Bernanke made a speech stating the obvious and restating the above:

1. “Overall, the economic recovery appears to be continuing at a moderate pace, albeit at a rate that is…frustratingly slow;”
2. “the economy is still producing at levels well below its potential;”
3. “In this context, monetary policy cannot be a panacea.”

Translation: Things still suck and the Fed can’t do anything about it.

This should not have been a surprise to anyone who remembers a little undergraduate macroeconomics and who has been paying attention. Monetary policy works by lowering interest rates to stimulate spending. The problem is that interest rates cannot be pushed much lower by monetary policy. Interest rates do not go below zero. (Like a banker is going to offer to lend $100 and only want to be repaid $98?) There is nothing the Fed can do to stimulate the economy.

(BTW, I found it interesting that the stock market declined Tuesday afternoon on news of Bernanke stating the obvious. The market has since gone back up. In the meantime, some traders needed only a little bit of knowledge to make a quick buck.)

Okay, monetary policy is out and the Fed is benched. Should we try fiscal policy? Time to bring in the President and Congress and see what they can do?

The usual principles-of-economics fiscal policy prescription is to cut taxes to increase household and business spending and/or increase government spending. Economists disagree on the efficacy of this policy and it is controversial. However, let's assume for the sake of argument that the theory behind the policy is correct. Go with me on this.

We've been there, tried that, screwed it up, and don't have another shot at it.

The Obama fiscal stimulus plan of 2009 attempted to implement the policy noted above. Martin Feldstein, chair of the Council of Economic Advisers in the Reagan administration, is also an adherent to the basic model underlying the fiscal policy prescription. In yesterday's Wall Street Journal (June 8, 2011, p. A15), Feldstein outlined how the 2009 stimulus plan mucked the whole thing up:

The administration's most obvious failure was its misguided fiscal policies: the cash-for-clunkers subsidy for car buyers, the tax credit for first-time home buyers, and the $830 billion "stimulus" package. Cash-for-clunkers gave a temporary boost to motor-vehicle production but had no lasting impact on the economy. The home-buyer credit stimulated the demand for homes only temporarily.

As for the "stimulus" package, both its size and structure were inadequate to offset the enormous decline in aggregate demand. The fall in household wealth by the end of 2008 reduced the annual level of consumer spending by more than $500 billion. The drop in home building subtracted another $200 billion from GDP. The total GDP shortfall was therefore more than $700 billion. The Obama stimulus package that started at less than $300 billion in 2009 and reached a maximum of $400 billion in 2010 wouldn't have been big enough to fill the $700 billion annual GDP gap even if every dollar of the stimulus raised GDP by a dollar.

In fact, each dollar of extra deficit added much less than a dollar to GDP. Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending. The most obvious way to achieve that in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future. But the Obama stimulus had nothing for the Defense Department. Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.

If I may add to this critique, Obama had no real plan for spending. He handed over the spending decisions to Speaker Pelosi and Congress went on a spending orgy, targeting pet projects rather than targeting those things most likely to stimulate the economy. We could have had more bang for the buck.

2009 was our one big chance to use expansionary fiscal policy. Any further tax cuts or increases in government spending will increase the deficit. "The national debt has jumped to 69% of GDP this year, from 40% in 2008. It is projected by the Congressional Budget Office to reach more than 85% by the end of the decade, and to keep rising after that" (ibid.). Expansionary fiscal policy was mucked up. Now with the national debt levels so high with S&P and Moody's threatening to downgrade the ratings for U.S. government bonds, we can't do it again.

What is needed is a credible plan to reduce government deficits. This would reduce uncertainty about the future and help economic growth over the long haul. However, despite a reduction in uncertainty, these polices will still reduce spending in the aggregate and won't help the economy recover in 2012. They are needed over the long haul but they are no quick fix.

There will be the usual snake-oil-salesman politicians and pundits who will promise a quick fix. Even if the policy is good, don't be conned into expecting good results immediately.

Be blessed.
RB

reviewing books

After clearing out my files and storing records, I ended my spring semester. This past week I have determined to do nothing productive. That is, take a vacation of sorts. What I like to do when doing nothing is read. I have quite a backlog of titles, mostly gifts, that I haven't had time for in the past year.

I started with Niall Ferguson's The Ascent of Money: A Financial History of the World. Despite its grandiose title, it is accessible to the general reader and written in an interesting fashion. If you could read only one book on the financial/banking crisis, this would be the one. It takes the reader by the hand from the beginning of modern financial markets less than four hundred years ago to the present, explaining how financial markets are inherently unstable. By the end you are not too surprised but still impressed by what happened in the past few years.

After this I purposed to stay away from anything having to do with economics. After all, I am on vacation. I started a recommended Indian (South Asian) novel, which will remain nameless. I read one hundred pages before I gave up. If it hasn't got you by then it is unlikely to ever do so. My wife also had a similar reaction. However if you want a real page-turner of an Indian novel, try Rohinton Mistry's A Fine Balance (an Oprah's Book Club selection).

On Thursday I grabbed off the shelf an unread book given as a gift, Robert Moore's On Hallowed Ground: The Story of Arlington National Cemetery. A great read and I didn't even realize when I started that I'd be finishing it over the Memorial Day weekend!

I'm about to pick up another given-some-time-ago-as-a-gift-but-still-unread book. I'll let you know how it goes.

Be blessed!
RB

P.S. Tired of reading, last night we watched a very good film, End of the Spear. It is available on Netflix, DVD and on hulu.com.

shuck and tyler: give us your huddled masses of engineers - wsj.com

This argument not only applies to engineers but to any foreign student studying in the USA.

Wall Street Journal, 13 May 2011.

Give Us Your Huddled Masses of Engineers:
Why are we educating the best and the brightest, only to turn them down for visas?

By PETER H. SCHUCK AND JOHN TYLER

President Obama devoted almost all of Tuesday's speech in El Paso to the problems raised by illegal immigration: border and workplace enforcement, the need for a fair legalization process, and, almost apologetically, deportation. Only briefly did he mention our interest in attracting more high-skilled immigrants to work in the upper reaches of our economy.

"Today, we provide students from around the world with visas to get engineering and computer science degrees at our top universities. But then our laws discourage them from using those skills to start a business or a new industry here in the United States," Mr. Obama said. This "makes no sense," he added. The president is right.

The critical question is what to do about it. Finding an answer is urgent because the market for these workers is increasingly competitive—and the U.S. is no longer the only powerful magnet. Indeed, new studies from the American Enterprise Institute and the Kauffman Foundation find that we are losing ground in this competition.

Our current policy is plain stupid. Of the more than one million permanent admissions to the U.S. in 2010, fewer than 15% were admitted specifically for their employment skills. And most of those spots weren't going to the high-skilled immigrants themselves, but to their dependents.

The H-1B program that allows high-skilled immigrants to work here on renewable three-year visas, which can possibly lead to permanent status, is tiny. The current number of available visas is only one-third what it was in 2003. Plus, the program is hemmed in with foolish limitations: Visa-holders can't change jobs, and they must return home while awaiting permanent status.

Thus, many employers find the H-1B program useless. Many high-skilled workers prefer to go to more welcoming countries, like Canada and Australia, or to stay home where their economies are now often growing faster than ours. The U.S. does have a program to attract job-creating investors, but it is more limited than some of our competitors' investor programs. In 2010, we granted fewer than 2,500 such visas, down from the 2009 total although higher than in earlier years.

We're shooting ourselves in the foot. Research shows that high-skilled immigrants, particularly those in the so-called STEM (science, technology, engineering and mathematics) fields, enrich American society in many ways. These workers are notably innovative at a time when the U.S. is in some danger of losing its competitive edge. Not only do they apply for patents at a disproportionate rate, but the government grants their applications two to three times as often as with comparably educated Americans. Even if we limit the comparison to scientists and engineers, high-skilled immigrants in those fields still receive 20% more patents than their American counterparts.

In addition to being more innovative, high-skilled immigrants tend to be more entrepreneurial. They start and grow the kinds of new firms, such as Google, that account for the bulk of job creation. Research consistently shows that they start at least 25% of the STEM companies, which is double the percentage of all legal and illegal immigrants in the U.S. population.

So what can be done? Even without increasing the total number of permanent visas, we can redress the imbalance between admission categories to increase the proportion of those that are highly skilled. Two existing allotments merit low priority and should be granted instead to high-skilled workers: the 50,000 "diversity" visas granted at random to applicants who need only have a high-school education, and the 65,000 visas given to siblings of U.S. citizens. A lottery for the low-skilled is an absurd way to select future Americans, and sibling relationships today are readily sustainable through tourist visas and Skype.

A second reform would move to a point system for most would-be immigrants except for immediate family members, in which skills, entrepreneurship, English fluency, and other factors would count as well as close family ties. Third, we should grant permanent visas to any foreigner who receives a graduate degree from a qualified U.S. university. Finally, we should liberalize the H-1B program, perhaps moving from the current bureaucratic approach to an auction of the visas to employers who would bid for the skills they need, but also allowing for more job mobility for workers after a certain period.

Attracting more of the world's best talent should be a no-brainer. It should not be held hostage to the much harder problem of illegal migration.

Mr. Schuck, a professor at Yale Law School, is visiting at NYU Law School. Mr. Tyler is general counsel of the Ewing Marion Kauffman Foundation.

Editor's Note: An earlier version of this article wrongly stated that India is subject to the same H-IB visa ceiling as Iceland. India is in fact subject to the same permanent visa ceiling as Iceland.

the magic washing machine

This explains in an interesting manner what economic development is about:



[ht: him]

no-fly zone buzz kill

I find it hard to see how the no-fly zone over Libya is going to drive Colonel Muammar al-Gaddafi from power. Maybe a couple of weeks ago it would have made sense, but since then pro-Gaddafi forces have recaptured most of the rebel-held cities. The no-fly zones won't help those folks. Even if Benghazi is not retaken, Gaffafi has control over most of the country and will stay in power.

This military strike does not seem to have been thought through. No wonder DOD Secretary Gates opposed the no-fly zone. Most military people do not relish the thought of putting their people in harm's way, to spend hundreds of millions on armaments that kill, to merely send a message.

Think I'm wrong about the no-fly zone? Well you can put your money where your mouth is. At Intrade.com, a prediction market (i.e., an Irish betting site), you can buy "stock" in Muammar al-Gaddafi to no longer be leader of Libya before midnight ET 31 Dec 2011. The current price is $6.67 to get $10 if Gaddafi is gone. If you are correct then you would make a 50% profit!

As you can see from the chart below (red marks price), a week ago the price was $4, but after yesterday's hoopla over tomahawks being fired, the price soared up to $8. Of course, the smart money is moving in and the price is falling. I suspect it will be back to $4 or less in a week or so.


Will I put my money where my blog is? Nah. It is illegal and therefore too much trouble to get money to and from Intrade.com.

Be blessed.
RB

killing bunnies

[ht: him]

international security threat levels

Below is a compendium of security threat levels from various countries. Although RB received a forwarded email attributing this to John Cleese, a careful scholarly inquiry (i.e., searched "clesse terrortist therat" before Google automatically corrected for misspellings, but RB did not use Wikipedia), indicates that John Humberstone seems to be the primary original author, with useful additions provided by various reader comments.

Here are the threat levels with minor editing:

The English are feeling the pinch in relation to recent terrorist threats and have therefore raised their security level from "Miffed" to "Peeved." Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies nearly ran out. Terrorists have been re-categorized from "Tiresome" to "A Bloody Nuisance."

The last time the British issued a "Bloody Nuisance" warning level was in 1588, when threatened by the Spanish Armada.

The Scots have raised their threat level from "Pissed Off" to "Let's get the Bastards." They don't have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.

The French government announced yesterday that it has raised its terror alert level from "Run" to "Hide." The only two higher levels in France are "Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France's white flag factory, effectively paralyzing the country's military capability.

Italy has increased the alert level from "Shout Loudly and Excitedly" to "Elaborate Military Posturing." Two more levels remain: "Ineffective Combat Operations" and "Change Sides."

The Germans have increased their alert state from "Disdainful Arrogance" to "Dress in Uniform and Sing Marching Songs." They also have two higher levels: "Invade a Neighbor" and "Lose."

Belgians, on the other hand, are all on holiday as usual; the only threat they are worried about is NATO pulling out of Brussels.

Canada has also raised its threat level from "No problem, eh?" to "That's not nice and please stop." They may still raise the level further to "Apologize to terrorists we offended by asking them to stop." Of course the top level is painting signs on rooftops with arrows pointing south saying "U.S. THAT WAY."

The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms so the new Spanish navy can get a really good look at the old Spanish navy.

Australia, meanwhile, has raised its security level from "No worries" to "She'll be alright, Mate." Two more escalation levels remain: "Crikey! I think we'll need to cancel the barbie this weekend!" and "The barbie is canceled." So far no situation has ever warranted use of the final escalation level.