Do People Pay for These Forecasts?

The forecasting firm Macroeconomic Advisers said in a report that Obama’s plan — the American Jobs Act — would boost economic growth by 1.3 percentage points in 2012 and lead to 1.3 million new jobs.... Mark Zandi, an economist with Moody’s Analytics, was even more enthusiastic about the plan. He said the jobs package would increase economic growth by 2 percentage points in 2012 and add 1.9 million jobs.
--Washington Post, September 10, 2011
Obama’s program received generally favorable reviews from economists. “Is it worth doing?” wrote Nigel Gault, an economist at IHS Global Insight. ”Yes, it is a bolder-than-expected attempt to inject fiscal stimulus to support an ailing recovery.”
--Washington Post, September 10, 2011 Here's another view of the Obama proposal. Here's a critique of these forecasts. And here's a graph reminding us what happened after President Obama predicted that his first stimulus would actually stimulate the economy.

Posted on September 10, 2011  Posted to Cato@Liberty

Governor Veto

David Boaz

During his two terms as governor of New Mexico, Gary Johnson got the nickname "Governor Veto" as he vetoed 750 bills sent to him by the legislature. Now California's Jerry Brown is bucking for that title. In June he vetoed the state budget, something that apparently had never happened before. In his veto message he wrote that the budget "continues big deficits for years to come and adds billions of dollars of new debt... contains legally questionable maneuvers, costly borrowing and unrealistic savings."


And this week, facing a flurry of bills landing on his desk, he's giving his veto pen a workout. On Wednesday he vetoed 12 bills, 11 of them sponsored by Democrats in the heavily Democratic legislature. As John Myers of KQED noted, he offered pithy and philosophical arguments in some of his veto messages. Take the bill to impose a $25 fine for kids who ski or snowboard without a helmet. Brown vetoed it, saying, "I am concerned about the continuing and seemingly inexorable transfer of authority from parents to the state. Not every human problem deserves a law."

He also vetoed a bill that would require initiative signature gatherers to wear a button if they're being paid, saying:


If it is acceptable to force paid signature gatherers to place identifying badges on their chests, will similar requirements soon be placed on paid campaign workers? I choose not to go down this slippery slope where the state decides what citizens must wear when petitioning their government.


He had earlier received the "John Lilburne Award" from the Citizens in Charge Foundation for vetoing another attempt to restrict petitioning.

Brown's libertarian streak isn't entirely surprising. When he became governor the first time, in 1975, he talked about "an era of limits" and increased state spending less than his predecessor, Ronald Reagan. He opposed Proposition 13 but then embraced it after the voters did and rode its implementation to easy reelection. Running for president, he supported a balanced budget amendment. He liberalized the state's marijuana law, decriminalized homosexuality, and vigorously opposed the antigay Briggs Initiative. He declared on Meet the Press that his goal was "To stand up to the special pleaders who are encamped, I should say, encircling the state capitol, and to see through their particular factional claims to the broad public interest."

I had high hopes that the 73-year-old newly elected governor, with no more dreams of higher office, would aggressively confront California's out-of-control spending and special-interest deals. Brown watcher Tim Cavanaugh of Reason says that any hope that Brown would actually take on the spending interests, many of them public employee unions that helped him win office again, ended with his sweetheart contract for the prison guards union. But I'm still hopeful. Governor Brown knows his state is in debt up to its eyeballs, he knows where the money goes, and he knows that the special pleaders are still encircling the state capitol. And he's still skeptical about the "inexorable transfer of authority ... to the state" and the idea that "every human problem deserves a law." That's a good basis for a new era of limits on power.

Posted on September 8, 2011  Posted to Cato@Liberty

President Obama vs. the People on Smaller Government

Writers in the establishment media, such as E. J. Dionne Jr., Ezra Klein, and indeed two letters in today's Washington Post, keep insisting that President Obama is moderate or centrist, contrary to the claims of us hysterics who think that a trillion-dollar increase in annual spending, $4 trillion in new debt, a government takeover of two automobile companies, a complete government takeover of health care (which the president preferred but couldn't get out of Congress), and sweeping new financial regulation that doesn't reform the easy-money and housing-preference policies that caused the financial crisis is a pretty statist agenda. But it looks like the American people see a big gap between the kind of government they want and the kind they think President Obama wants. A new Washington Post-ABC News poll finds that
there has been little change in the widespread public perception that Obama favors a bigger federal government that offers more services. That highlights a major disconnect between Obama and the public. Only 38 percent of those polled say they favor a larger government with more services, while 56 percent say they favor a smaller government with fewer services.
As depicted in this graphic: Voters understand that President Obama favors larger government. Duh. And they don't. As I’ve noted previously, I’ve always thought the “smaller government” question is incomplete. It offers respondents a benefit of larger government — “more services” — but it doesn’t mention that the cost of “larger government with more services” is higher taxes. The question ought to give both the cost and the benefit for each option. The Rasmussen poll does ask the question that way, and found a week ago that voters preferred “smaller government with fewer services and lower taxes” by a margin of 62 to 28 percent. I know some people are skeptical of Rasmussen’s polling. (A Republican consulting firm recently found results very similar to the Rasmussen poll.) So I invite Gallup, Harris, the New York Times, the Washington Post, and other pollsters to ask this more balanced question and see what results they get. Meanwhile, only 38 percent of Americans want "larger government with more services," but 70 percent think President Obama does. There's a number that ought to worry Democratic strategists.

Posted on September 6, 2011  Posted to Cato@Liberty

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