What the Hell?!? Friday - The Rains of Castamere

The conversation about the current season of Game of Thrones here, (where SEK has some great insights on the cinematography) led me to this excellent site, which led me to this review of Blackwater, the most recent episode.  As the forces defending King's Landing are preparing for battle - or more accurately, waiting for the enemy led by Stannis Baratheon to arrive by sea - they fill the long hours drinking and whoring.  And singing.  Since these forces are led by the Lannisters, they are singing a traditional Lannister song, The Rains of Castamere, along with the sellsword Bronn, who Tyrion Lannister has made head of the King's Guard.  It goes like this.




We hear this song again, over the closing credits, this time performed by Indy band The National.  The Rains of Castamere, even the relatively upbeat version sung by drunk Lannisters is not a jolly song.  But the treatment given by The National's Matt Berninger darkens it to a smoky ebon hue.





I'm only vaguely aware of Leonard Cohen, but this clip immediately brought him to mind.

Here, at no extra charge, is the Leonard Cohen song the oldest granddaughter danced to in competition recently, as an ensemble routine.

Wisconsin Recall

Insights from Randi Rhodes and John Nichols.

This is Beyond Awesome

What the Hell?!? Friday - Castoria

What The Hell?!? Friday - Testy, Swagering Rodent Edition

I have an optical mouse with my lap top, but the old relic desk top in the office has a mechanical mouse with that essential tracking item commonly called a "mouse ball."  That is not what this is about.

On measuring the males, they found that the testicles of the yogurt consumers were about 5 percent heavier than those of mice fed typical diets alone and around 15 percent heavier than those of junk-eating males.

If you ever needed a reason to eat yogurt - well, here you have it.

 Now - what are you - a man or a mouse?

H/T to Tux.

Sunday Music Blogging - Live Jazz Edition, Part 2

Last week I posted  a couple tunes from our Up Jumped Spring Concert.  Here are a couple more.




Blue Samuel is a great Sammy Nestico tune, based on Blue Daniel, an original composition by the Motor City's own tragic trombone genius, Frank Rosolino.  Solos by Vince on guitar,  Marion on alto, Patrick on tenor,  Mike on trombone, and Ryan on piano.  Kodos to Tim for his soaring trumpet lead.  I'm really happy with the way this turned out





Howdiz Songo? is by Gordon Goodwin.  It's more tricky than difficult, but the layered complexity, especially in the ensemble section following Ryan's piano montuno, makes it quite a challenge.  I'm pleased with the ensemble performance here.  Solos by Joe on alto, me on trombone, Vince on guitar and Marion on soprano.

Corporate Tax Rate and Revenues

Art directs us to this article at Remapping Debate by Craig Gurian, containing this graph of effective corporate tax rates and tax revenue as a percentage of GDP.   He also disputes the graph title's claim that as rates go down, so does the revenue share of GDP.  He has a point.  After about 1982, the tax revenue/GDP line never makes another new low, while the effective tax rate keeps dropping.

Let's have a close look.   In graph 1 below, I've added parallel channel boundaries and a few other details to both lines.  

Graph 1 Parallel Trend Channels

From the high around 1950, the effective rate line travels in a well defined trend channel.   I've imposed a parallel channel on the blue line, with less than satisfying results.   In each channel we can see two areas of more or less sideways motion, underscored in black, the first in the 70's, and the next, following a drop in both lines, begins in the early 80's.

In the 70's, the orange effective tax rate line made an excursion from the channel bottom to the channel top, while the blue revenue by GDP line stayed about in the middle third of its channel.  In the 80's, after an initial rise, the orange line had a slight downward trend, while the blue line had a slight upward trend, both indicated by brown arrows.  In the 2001 recession (green vertical line,) the effective rate took a big drop, while the blue line merely sagged a little.

Those three details account for the major discrepancies between the two lines.  In fact, the sideways motion in the blue line since 1982 can be seen as a long, slow excursion from channel bottom to top - with a bit of an overshoot.

While lines in channels can slither in a variety of ways, two characteristics we look for in declining channels are successively lower tops and successively lower bottoms.  The orange line is well behaved in this way.  Not so the blue line, which has made no new low since 1982, instead bouncing two more times off of the 2% line.  However, the major top in the blue line in 2006 is just barely below the top of ca 1979, as indicated by the horizontal green line.

Art notes that the distance between the lines has narrowed since 1982.  However, since the 2003 bottoms, the distance has been essentially constant, as indicated by the red arrows.  (FWIW, this same gap occurred earlier, in about 1966.)  He also notes the denominator effect.  GDP growth has been slower since the early 80's than it was in the earlier post WW II decades, and this would tend to give the blue line a boost.

Though graphed together, these lines have very different scopes, as indicated by the two scales.  There is no reason for the two channels to be parallel; and, since both data sets are the resultants of many factors, there is no reason to expect them to move in lock-step over long periods.

In graph 2, I've given the blue line a slightly different channel, with parallel borders aligned to its own highs and lows.  In this view, the long horizontal trek from 1982 to 2006 is an excursion from the bottom to the top of the channel.

 Graph 2 Independent Trend Channels

In a big picture sense, Gurian has it right.  Lowering the effective rate lowers tax revenues as a percentage of GDP.  But Art's point is also valid.   Thee has been no new low in 30 years.

I think the denominator effect that Art mentioned plays a part.  Another thing to think about is that each of these data sets is bounded, and can be effected by, a zero lower limit.  The effective rate is nowhere near it, but the revenue share percentage has been close to it during the entire horizontal period.  So the sideways trek of the revenue share line might be a data artifact caused by some sort of edge effect.  FWIW, the corporate percentage of total tax revenues has followed a similar path, and has been essentially horizontal since the early 80's.

Anyway, it will be interesting to see how these data sets continue over the next few years.

Sunday Music Blogging - Live Jazz Edition

From our Up Jumped Spring Concert, April 23, 2012.


Just Friends, featuring Tim on trumpet




Things Aint What They Used To Be; solos by Kristin on tenor, Patrick on tenor, me on trombone then Fred's alto brings us home on the high road.

Republicans, All Wrong, All the Time, Part 33 - Mitt Romney vs Reality Edition

Which is a polite was of saying he is still still a god damned liar.  Synonymous with Rethug these days.





H/T to Randi Rhodes on Facebook.

A Different Look at GDP and Inflation

At Illusion of Prosperity, Stagflationary Mark posted this scatter-graph of quarterly GDP YoY growth and CPI data from Q1, 1948 through Q4, 2011.  Each point represents the differences from the medians of each data set for each of the variables, respectively.  This gives you a picture of time spent above and below what might be considered normal performance.

I wondered how this would look if each point were identified by presidential administration, and if this would suggest any particular narrative.  So I redid the graph, data from FRED, using mean instead of median as the determinant.  It is presented here as Graph 1, with each data point (256 total) color-coded by presidential party; red for Republicans, blue for Democrats.  The calendar quarter of each president's inauguration is allotted to the previous administration.

I've labeled the quadrants as follows, and indicated the frequency of data points populating each quadrant.

Here are the Mean and Standard Deviation values.

 

Graph 1  CPI and GDP, data from FRED

The GDP data has something close to a normal distribution, with approximate symmetry around the mean.  The CPI data does not.  For CPI, the highest frequency is 2 percentage points below the mean, and there is a long tail on the high side, so the distribution looks more like a Poisson type.

I've broken out presidential administrations, 3 or 4 to a graph, to avoid excessive clutter.  Graph 2 shows the administrations of Truman (light blue), Eisenhower (red), and Kennedy-Johnson (dark blue.)

Graph 2  CPI and GDP, Truman, Eisenhower, Kennedy-Johnson

Results during the Truman administration were erratic, with both inflation and deflation occurring, and GDP growth widely variable as the nation made post WW II adjustments, and several million G.I.'s reentered the work force.  Ike was an inflation hawk, and one of only two presidents to achieve below average inflation in every quarter of his administration.  (Take your guess now as to who the other might be.  All will be revealed in due time.)  Still, the road was bumpy, with GDP growth highly variable, and two rather severe recessions during his term.  The Kennedy-Johnson administration enjoyed superior economic performance and relatively low inflation, with only 6 quarters of below average GDP growth, and only five quarters of above average inflation during the entire 8 years.  This was one of only two administrations to avoid recession for an entire 8-year term.

Graph 3 shows the Nixon-Ford (orange), Carter (blue), and Reagan (red) administrations.

Graph 3  CPI and GDP, Nixon-Ford, Carter, Reagan

Here we find three increasingly extreme excursions into stagflationary territory, two under Nixon-Ford (remember Whip Inflation Now buttons?) and one under Carter. The first and mildest was in 1970, the second in 1974-5, and the last, in 1979-80 probably played a part in holding Carter to a single term.  Inflation far above average plagued both of those administrations.  Each spent time above and below average in GDP growth with term averages very close to the grand average.  However, Carter's last two years were consistently below average, and coupled with high inflation, earning him his moribund reputation.  Early in Reagan's first term, Volker finished slaying the inflation dragon.  But the cost was high in terms of depressed GDP growth, and during that time Reagan was extremely unpopular.  But, as the economy recovered, so did his reputation, and he is now remembered, for good or for ill, as one of America's most beloved presidents.  The remainder of his presidency resided along at least one of the two average lines, including four consecutive quarters of exceptional GDP growth coupled with only slightly above average inflation, spanning 1983-4.

Graph 4 shows the Bush Sr. (orange), Clinton (light blue), Bush Jr.(red), and Obama (dark blue) administrations.

Graph 4  CPI and GDP, Bush Sr., Clinton, Bush Jr., Obama

During the Bush Sr. administration, 11 of 16 quarters had below average GDP growth, 10 quarters had above average inflation, 8 of these quarters had both.  Clinton's term began and ended with below average GDP growth, but during his 8 years here were only 9 below average quarters.  Four of them occurred in sequence from Q2, 1995 to Q1, 1996, but the remainder of 1996 was quite strong, and Clinton was granted a second term. Clinton was both the other president who avoided having even a single quarter of above average inflation, and the other president who avoided having a recession during an entire 8-year term.  During the 8-year term of Bush Jr. there were only 4 quarters of only slightly above average GDP growth, occurring from 2003 to 2005.  There were 7 quarters of above average inflation, 3 of them just barely so in 2005-6, and the other 4 in 2007-8, just prior to the economic collapse.  The remainder of his term was in the mild doldrums region.  The collapse ushered in the Obama administration.  Within his first year, the economy was back into the mild doldrums area that has so far been typical of the current century. 

Here is one more graph, showing how each administration performed, as an average over its entire term.  Starting with Truman, the yellow line leads us to each successive administration, up to Obama.

Obama's position suffers from the recession he inherited.  Whether he gets reelected or not, his average will move up each remaining quarter of his presidency.  If he gets a second term, we can expect more of the doldrums we have experienced over the last two years.

This clearly belies the Romney claim that Obama's economic policies have failed.  His policies have moved us from near-depression to mere mediocrity.  That counts as some sort of success.

So, here is my narrative.  First off, one can argue that the president does not directly determine the economic fate of the country, and that is partly true.  The other part is that the president sets the policy and the tone, and that both of these things matter.

-  The only presidents to have achieved term averages in the prosperity quadrant were Democrats.
-  The only Republican to achieve above average real GDP growth was Reagan, and that was only by an increment.
-  The only president since Reagan to achieve higher GDP growth than his predecessor was Clinton, other than that, it's been a downward spiral.
-   Carter had below average GDP growth by a slight margin, but he beat every Republican other than Reagan, and he didn't trail him by much.
- The last 44 years have been characterized by secular decreases in both CPI inflation and GDP growth.
- They have also been characterized by Republican presidencies 64% of the time, decreasing regulation, lowered tax rates, safety net erosion, loss of labor union strength and participation, and the systematic undoing of of New Deal policies.

What I conclude is that New Deal (dare I say Keynesian?) policies were successful in generating real prosperity, and free market policies have been far less successful.  Over time, Reaganomic trickle-down, free market policies have given us first, the Great Stagnation, and ultimately the worst economic crisis in 80 years.  These policies were, by no coincidence at all, quite similar to those in effect when the Great Depression of the 30's happened - and also all the other earlier depressions that are no longer very prominent in people's memories.

As I said, policy matters - and it matters profoundly.

With that in mind, here is my question to the Fed:  Since the average of CPI inflation since WW II is 3.7%, and there is ample evidence that we can have very reasonable economic performance with inflation in that range, why have you set an inflation target that is effectively half of that level, while ignoring high unemployment -  the other half of your alleged dual mandate?

Of course, I'm being rhetorical.  It's because they are bankers, and inflation favors creditors, not lenders.  The fact is they don't care one whit about unemployment.

Policy.

It matters.

Update: Cross-posted at Angry Bear.

Quotes of the Day, With a Dash of WTH?!?

A man must be orthodox upon most things, or he will never even have time to preach his own heresy.
-- G. K. Chesterton

Quoted by John Holbo, at CT, where (in comment #13) Jim Harrison adds:

 Rhetoric, after all, has always been about making the worse case defeat the better.

But (of course) I wholly misunderstand (you remember my definition of misunderstand) rhetoric.

WTH?!? Friday - So Wrong on So Many Levels

Really - There's nothing I can say that will make it any better.

Or any worse.

If I'm reading my Roman (the only thing appropriate in the whole clip) numerals correctly, it's from 1933.





Aaaack!   Now, I must scrub my brain with a Brillo pad, then go hug a squid.