Monday, September 20, 2010

Press Briefing

Sep 20, 2010

Federal President Castigates GOP Leadership for Blocking Fixes for the Citizens United Decision

Barbara Boxer (D., Armenia) - The Democrat trashes an Obama nominee

In "My Nigeria," Peter Cunliffe-Jones traces Nigeria's history since independence and tries to measure the legacy of British rule

Stimulus for Clunkers - A new study charts an economic failure
WSJ, Sep 20, 2010

By now, the only defense Democrats can mount of the Obama stimulus programs is that the economy would have been worse without them. There's no way to disprove this counterfactual, but now we have some empirical evidence other than 9.6% unemployment and 1.6% growth.

To wit, economists Atif Mian of the University of California Berkeley and Amir Sufi of the University of Chicago have examined "cash for clunkers," the $2.85 billion program that subsidized consumers to buy new cars and destroy older ones. Their conclusion: The program "had no long run effect on auto purchases." It did juice sales during its two-month run last summer, by about 360,000 cars, but then it quickly hurt sales by about the same amount, in effect stealing purchases from the future. The program was a wash in a mere seven months.

White House economists might dismiss that finding because their larger goal with cash for clunkers was to stimulate "aggregate demand" in the overall economy. Earlier this year, Christina Romer, the former chairman of the Council of Economic Advisers, wrote that cash for clunkers was an example of "very nearly the best possible countercylical fiscal policy in an economy suffering from temporarily low aggregate demand." The program wasn't sold as a discount for cars people were already planning to buy, but rather to encourage knock-on economic activity such as more consumer spending and job creation.

It's impossible to test what would have happened without cash for clunkers because there's no control group. But Messrs. Mian and Sufi do the next best thing by looking at how clunkers were distributed around the country. Comparing high-clunker areas to low-clunker areas—and thus the areas that were more "stimulated"—allowed them to measure relative economic outcomes.

Lo, Messrs. Mian and Sufi found in their paper for the National Bureau of Economic Research that there was "no noticeable difference" in economic outcomes among the 957 metropolitan areas they studied. They did detect an economic blip in cities where the auto industry is concentrated but note that the rebound can't be disentangled from the Chrysler and GM bailouts.

Messrs. Mian and Sufi caution that their findings "do not warrant the claim that all forms of fiscal stimulus fail to boost long-run economic output" (their emphasis). But if this is the result from the "best possible" stimulus program—per Ms. Romer—the impact of the others must have been awful.

White House Blog - No Excuse for Holding Middle Class Tax Cuts Hostage

New START treaty's China challenge

Hiring More Veterans to Keep Serving America

The Christie Example - New Jersey government workers should have 401(k) plans instead of pensions

U.S. Goals and Priorities at UN General Assembly

'There Is No More Molly' - NYC Mosque it's the only time Barack Obama has ever stood up for anybody's First Amendment rights

Update: U.S. Response to Pakistan's Flooding Disaster

Let Them Eat Tax Hikes - Thirty-one House Democrats signed a letter urging Ms. Pelosi to bring a bill to extend all the tax rate reductions, not just the middle-class cuts

Japan: Lost in Translation? - Why the world's third largest economy has dropped out of the global conversation

The 1099 Stonewall - Harry Reid keeps his majority together - Small business requirements

How the Surge Was Won - America's longest-serving general in Iraq says that when they realized the U.S. presence in their communities was permanent, allies came 'out of the woodwork'

The Republican Answer to George Soros's Money - Steven Law admires how the left organized itself during its wilderness years. Now he's got $50 million to help elect candidates on the right

U.S. Counterterrorism Strategy in Yemen

On Elizabeth Warren - Obama to Senate: Stick that in your advice and consent clause

On 15th Anniversary of the 4th UN Conference on Women, State Department Co-Sponsors Summit to Empower Women Across Asia

Lady Gaga and Liberace: Separated at Birth? - His spangles, her spikes. Hmm. Makes you miss the old days.

State Security, Post-Soviet Style - Closing down independent political life, branding critics as 'extremists.' Review of Andrei Soldatov and Irina Borogan's "The New Nobility"