35 Million Still Not Hungry

Once a grim statistic gets some play in the media, it keeps getting repeated even if it is completely erroneous.

On the Washington Post front page Saturday: “In soup kitchens, food pantries and universities across the country, activists are planting the seeds for an overhaul of the way America feeds its more than 35 million hungry people….”

Doesn’t 35 million seem kinda high to you? It did to me, and so I looked up the official data. As I noted in prior blog posts (and here), the the actual number of Americans going hungry is about 11 million, according to U.S. Department of Agriculture data.

Reporters seem to grab data from past stories, or get data from lobby groups, without going to the original government sources to check the accuracy. Hunger is a serious problem in America, but so is sloppy and biased newspaper reporting.

Topics:

Pat Lang on Israel/Palestine

National Journal’s Sydney Freedberg asks a group of distinguished foreign policy types, “Is the two-state solution dead?” Pat Lang offers some sensible remarks:

It is expected ritual to say that the Palestinians and Israelis want peace. What is never specified as part of that incantation is the description of just what sort of peace each group wants. Here it is… What they still want (on both sides) is to win in the contest for that sad, beautiful, stony little strip of land and for their own group to live in peace and possession of the country.

There is no external power preventing the sides from making peace. If the Israelis and Palestinians wanted peace more than they want to win, they would make peace. They do not make peace because there is not enough good will toward the “other” among them to allow peace to exist. No. I no longer really believe that the inhabitants of Israel/Palestine want peace for other than their own side in the bloody mess that has persisted there throughout their lives.

Someone has said on this blog that the United States lacks the ability to “make peace” between these two peoples. That is profoundly true. It is part of our national illusion that we Americans think of the rest of the world as though we are the guardians of distant, unruly and childish folk who act in strange, inexplicable and unreasonable ways. We tend to believe that their quarrels are errors in information or simply bad behavior of the kind seen in school yards.  This mistake on our part is persistent….

Then, however, I’d humbly submit that Lang goes astray in arguing that while neither side appears ready to make the sacrifices required for a workable peace deal, the problem will ultimately “require an external formulation of a peace settlement when they ARE ready.”

Why am I skeptical? Because, as Lang admits, what would be required for this to work is “a consensus of the interested parties across the Middle Eastern, Islamic and Western regions, a consensus that does not shrink from domestic political pressure, that does not fear to apply the inherent leverage provided by huge annual budgetary contributions to both sides and that values human life and happiness more than it does momentary advantage.” If both sides were ready for peace, why would pulling budgetary levers be required? Alternatively, it seems terribly unlikely that pulling budgetary levers could make either side amenable enough to genuine concessions to make peace work. And aside from the extreme unlikelihood of the blessed convergence described above happening in our lifetimes, I’m reminded of George Kennan’s concern in the 1970s about the responsibilities that come with imposing a settlement:

[W]e should not try to tell [the Israelis], or the Arabs, what the terms of a settlement should be. It is they, after all, not we, who would have to live with any settlement that might be achieved. Many of us can think, I am sure, of concessions which, in our personal opinion, it would be wise for the Israelis to make; but for the United States government to take the responsibility of urging them to make such concessions is quite another matter. There are many who would think, for example, that it would be wise for them to give up the Golan Heights. They may of course be right. But how can we be sure? What would our responsibility be if we urged this upon them and it turned out to be disastrous?

It seems like the problem for the United States is less that the Israelis and Palestinians seem unwilling to make the sacrifices required for peace, and more that we find ourselves in a position such that, as Kennan wrote, with respect to both sides of the dispute, “each has the impression that it is primarily through us that its desiderata can be achieved, with the result that we are always first to be blamed, no matter whose ox is gored; and all this in a situation where we actually have very little influence with either party. Seldom, surely, can a great power have gotten itself into a more unsound and unnecessary position.”

GDP Is Down 1% — Not 3.8%

The preliminary GDP estimate for the fourth quarter of 2008 is $11,599.4 billion (in 2000 dollars). That was 0.965% smaller than the third quarter — a figure commonly multiplied by four to convert it into a more dramatic 3.8% annual rate. But these quarterly rates are highly erratic, even in recessions, so converting them into compound annual rates is misleading if not foolhardy.

The table  below compares recent quarterly GDP figures with those of 2000-2001.

The first quarter of 2001 and second quarter of 2008 look no worse than the third quarter of 2000.  The second quarter of 2008 was stronger than the fourth quarter of 2000. Yet the entire years of 2001 and 2008 are labeled recessionary and 2000 is not.

Percentage Changes in Real GDP

    Quarterly Annualized
2000 III -0.115 -0.5%
2000 IV 0.52 2.1%
2001 I -0.123 -0.5%
2001 II 0.307 1.2%
2001 III -0.352 -1.4%
2001 IV 0.395 1.6%
       
2008 II 0.699 2.8%
2008 III -0.127 -0.5%
2008 IV -0.965 -3.8%

 

Looking at any extended period, such as the 2000-2001 figures or the 2008 figures, shows why annualized quarterly changes are a very poor guide to future trends. It makes no more sense to use this figure to suggest the economy will keep falling at a 3.8% rate than it would have been to cite the second quarter figure as evidence the economy would keep rising at a 2.8% rate.

The annualized fall in GDP in the first quarter of 1982 was 6.4%, yet the overall drop between the peak and trough quarters of that deep recession was only 2.3%. The annualized drop in first quarter of 1975 was 4.7%, yet that overall cyclical decline was 3.1%.

Obama’s First Broken Campaign Promise

Over on the Tech Liberation Front blog, I’ve been following the Obama administration’s early steps on transparency, a subject we dove into at a December Cato policy forum called “Just Give Us the Data!

President Obama committed to make his administration “the most open and transparent in history.” Boilerplate promises like this often go into campaigns and electioneering. But as a senator, Obama was a leading proponent of the Federal Funding Accountability and Transparency Act, which created USASpending.gov. Unlike typical politicians promising the most ethical [whatever-they’re-running-for] in history, President Obama and his staff know what transparency is and how to deliver it.

Breaking from the pack, who were (rightly) appreciative of early presidential memoranda calling for new guidelines governing the Freedom of Information Act and an Open Government Directive, I noted the absence of concrete action on the part of the White House itself.

The new administration did not port over the transition’s excellent “Seat at the Table” program, in which documents submitted to the transition team were posted online and subjected to public comment. That failure I called “The Transparency Dog that Didn’t Bark.”

The economic stimulus bill contains a helpful, if imperfect, requirement for disclosure of stimulus spending on a site called Recovery.gov — perhaps the most-visited non-existent Web site in history.

The White House is not walking the talk on transparency, and yesterday the president violated a campaign promise on transparency. Instead of posting bills sent to him by Congress for five days and taking public comment, President Obama signed non-emergency legislation the day after receiving it. PolitiFact.com rated this as President Obama’s first broken campaign promise.

The president’s good intentions are not in doubt, but nobody ever said delivering on transparency was going to be easy. So far, he seems to be having a rough time of it. The Obama administration can still deliver revolutionary change in the transparency area, but it has to actually work at it and take concrete steps.

Schools Have Plenty of Money!

How many times do we have to repeat that the United States spends more per elementary and secondary student than almost any other industrialized nation before our political leaders stop talking like our schools get by on pennies a day? And how often do we have to point to state spending to show that, annual cries of the sky falling notwithstanding, expenditures have been on a very long, inflation-adjusted upward trend?

Judging by this tired fare from new U.S. secretary of education Arne Duncan, and this standard story of rage from California, a lot more. So here you go:

Check out the OECD data here (table B1.1a)…

…see the figures for state spending here

…and reporters who cover incessant assertions of financial misery from educators, please check out the contact info for Cato’s media department here.

Operators are standing by.

Week in Review

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Cato Leads Opposition to Fiscal Stimulus

In reaction to statements from Obama administration officials who say “all economists agree” that the only way to fight the economic recession is to go on a massive government spending spree, the Cato Institute took out a full page ad in the nation’s largest newspapers that showed that those words were not true. Signed by more than 200 economists, including Nobel laureates and other highly respected scholars, the statement was published this week in The New York Times, The Washington Post and many other publications.

On the day the ad ran in The New York Times, Cato executive vice president David Boaz added more names to the list of economists who are skeptical of the spending bill.

Commenting on the principles behind the stimulus, Cato adjunct scholar Lawrence H. White and fellow economist David C. Rose discuss why we can’t spend our way out of this mess:

You can’t solve an excessive spending problem by spending more. We are making the crisis worse.

In The Wall Street Journal, Cato senior fellow Alan Reynolds examines the numbers and discovers that each government job created  will cost taxpayers a staggering $646,214 per hire.

The stimulus package now moving through Congress will spend nearly $1 trillion that the government does not have. With the nation already $1.2 trillion in the hole, Cato director of Tax Policy Studies Chris Edwards discusses the sheer illogic behind pushing for stimulus at a time like this:

If I get up in the morning and drink five cups of coffee and that doesn’t stimulate me, I don’t go and drink another five. I’d recognize my addiction problem and start reforming my bad habits. Federal policymakers should do the same.

For more on the stimulus plan, read Edwards’s Tax and Budget Bulletin, “The Troubling Return of Keynes,” (PDF) co-authored by Ike Brannon, former senior adviser to the U.S. Treasury.

During the House vote on the stimulus bill, just 11 Democrats voted against it, leaving Boaz to ask, “What Happened to the Blue Dog Democrats?

“Blue Dogs supported fiscal responsibility at some vague point in the misty past, and they will strongly support fiscal responsibility at some vague point in the future,” writes Boaz. “But right now they’re going to vote to put their constituents another $825 billion in debt.”

Obama Promises to Close Guantanamo Bay Detention Center

Cato legal policy analyst David H. Rittgers explains why he approves of Obama’s choice to shut down the prison at Guantanamo Bay and offers advice on how to proceed with the plan:

The Founders wrote the Bill of Rights after a violent insurgency brought on by government oppression, and the principles contained therein are no weaker while countering today’s terrorists. Using national security courts to try the detainees in Guantanamo opens the door to closed and classified trials of domestic terror suspects. This degradation of essential liberties is unwise and avoids the social function of trials.

Listen to a Cato Daily Podcast interview with Rittgers to learn more about the future of the Gitmo detainees.

In the forthcoming Cato Handbook for Policymakers, Timothy Lynch, director of Cato’s Project on Criminal Justice, lays out a plan for the future of our government’s strategy for dealing with terrorism. (PDF)

Gore Global Warming Hearing Goes on Despite Snowstorm

Undeterred by a snowstorm that shut down schools and gave federal workers “liberal leave,” the Senate Foreign Relations Committee held a hearing on global warming this week with star witness Al Gore. Gore promoted ways to end climate change through cap-and-trade legislation and investment in renewable energy, reported U.S. News and World Report.

In a Cato Policy Analysis, author Indur Goklany offers his commentary on how government should handle climate change.

Cato senior fellow in environmental studies Patrick J. Michaels offers his analysis on climate change, and how the international community should react.

Appearing on Fox News, Michaels, who is a former Virginia state climatologist, asserts that when it comes to climate change, there is no immediate emergency. For more, don’t miss Michaels’s new book, Climate of Extremes: Global Warming Science They Don’t Want You to Know, co-authored with Robert C. Balling Jr.

Burden of Stimulus and Debt

Politico noted that those opposing the stimulus plan:

 …say that borrowing more money to finance a stimulus package will pass a crushing and possibly permanent debt load on to the next generation. “The question is,” says Chris Edwards, the director of tax policy studies at Cato, “is this morally proper?” Edwards says no. “Policymakers are saying: ‘Screw the future generations.’”

Some people are skeptical of such statements, asking how government debt can impose a cost on future generations — after all, don’t we “owe it to ourselves?”

There is an economics answer to this, but you can also consider the basic libertarian theme of voluntarism vs. coercion.

Suppose there are three groups in society: beneficiaries of government programs, taxpayers, and creditors. Now suppose that in year one the government borrows $800 billion for a spending plan, which must be paid back in year two.

In year one, government beneficiaries are better off, taxpayers are not affected, and creditors are better off because they entered a voluntary financial exchange with the government. Since voluntary exchanges are mutually beneficial, nobody is worse off in year one.

The burden of deficit spending must be moved elsewhere — to year two. In year two, government beneficiaries are not affected and creditors receive their repayment. But taxpayers are hit with a bill for $800 billion plus interest, and this is no voluntary exchange. This is an $800 billion extraction with the full coercive power of the government coming into play.

Deficit spending pushes burdens into the future because it delays the use of coercive power. And unfortunately, there is a growing amount of federal coercion awaiting the next generation of young Americans, given that federal public debt is $7.2 trillion and rapidly rising.