Russia, and the Putin Rules: A Pessimistic Assessment

Russia’s “Moscow Winter” is eating away at Vladimir Putin’s KGB state, but it will survive. Putin will be reelected easily on March 4 for a six year term, but he will have lost the halo of popular support. His political base will shrink to those who depend on him for patronage.

He will compensate for lesser popularity with more repression. He will eliminate the last vestiges of opposition and press freedom, but he cannot tame the internet, no matter how hard he tries. He will work to prevent the emergence of a true opposition figure around whom his opponents can rally. Putin cannot produce a strong economy in a regime rooted in corruption. He will embark on an aggressive anti-Western foreign policy to divert attention from his domestic weakness.

Realize that Putin is the CEO of Kremlin, Inc., a state-capitalist network of state companies, political directorships, and offshore companies, which runs the “national champions” of industry, finance, commerce, media, and even state religion. As CEO of Kremlin, Inc., Putin’s remit is to enrich himself and fellow board members, promote state interests as defined by Kremlin, Inc., and insure political survival by all means no matter how unsavory. If the CEO falls, he threatens to pull down Kremlin Inc. with him. The powers that be cannot allow political competition. Only Kremlin Inc. can replace Putin, but with a clone. Regime opponents, basking in the afterglow of their huge demonstrations, must grasp this reality.

Go to Forbes.com

Advice for Romney: I Have Seen State Health Care Up Close and It Does Not Work

If Mitt Romney wishes to become President of the United States, he must cease any and all defense of  Massachusetts-Care. Rick Santorum told him that in so many words in Thursday's debate, and Santorum is right.

There is no one, however, as qualified as Romney to pass judgement on Obama Care. "We tried it in Massachusetts. It was a noble experiment. I was for it. It did not work, despite Massachusett's favorable conditions. This is why we have a federal system. We can experiment at the state level with all kinds of things, and this experiment warns against trying to do the same thing for the nation as a whole."

Case closed.

Warren Buffett's Secretary Likely Makes Between $200,000 And $500,000/Year

Warren Buffet’s secretary, Debbie Bosanek, served as a stage prop for President Obama’s State of the Union speech. She was the President’s chief display of the alleged unfairness of our tax system – a little person paying a higher tax rate than her billionaire boss.

Bosanek’s prominent role in Obama’s “fairness” campaign piqued my curiosity, and I imagine the curiosity of others. How much does her boss pay this downtrodden woman? So far, no one has volunteered this information.

We can get an approximate answer by consulting IRS data on tax rates by adjusted gross income, which would approximate her salary, assuming she does not have significant dividend, interest or capital-gains income (like her boss). I assume Buffet keeps her too busy for her to hold a second job. I also do not know if she is married and filing jointly. If so, it is deceptive for Obama to use her as an example. The higher rate may be due to her husband’s income.  So I assume the tax rate Obama refers to is from her own earnings.

Insofar as Buffet (like Mitt Romney) earns income primarily from capital gains, which are taxed at 15 percent (and according to Obama need to be raised for reasons of fairness), we need to determine how much income a taxpayer like Bosanek must earn in order to pay an average tax rate above fifteen percent. This is easy to do.

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My Award Goes to, Gulp, New York Times and NPR for Explaining Wall Street

Adam Davidson of NPR’s “Planet Money” gets my award for a clear, fair, and balanced explanation of how Wall Street and financial intermediation contribute to economic prosperity and growth in his  What Does Wall Street Do for You? published in the New York Times Sunday Magazine.

Davidson’s piece is a rare exception to the shrill cacophony of accusations and vitriol leveled against Wall Street, big banks, and big finance, some of which, as Davidson notes, is deserved.

I recommend that Republican candidates read this piece so that they can explain how the financial community contributes to economic well being.

Here is my abridged version that quotes directly from Davidson:

Perhaps the best way to really appreciate what Wall Street does is to imagine life without it.

THE POOR WOULD STAY POOR

Most people in the world don’t have access to a modern financial system, and there is almost no way, other than through greedy loan sharks, for the surplus cash of the very rich to get in the hands of the poor.

THERE WOULD BE NO MIDDLE CLASS

One of the most striking facts of life in countries without a modern financial system is the near total absence of upward mobility. The financial-services industry, however, performs a kind of fiscal time travel by pooling the nation’s collective savings and transforming it into all sorts of loans…. Student loans have largely changed America for the better. Many were able to start businesses because of easier access to credit.

LOTS OF AWESOME THINGS WOULD NEVER HAPPEN

Just about anything that makes you happy …was at one point a risky project. Your money is being pooled with that of millions of other people and institutions to finance risky projects…that would freak you out if you were asked to lend to them. But by pooling so much capital and spreading out the risk, Wall Street creates a safe space for failure, which is an essential part of capitalism.

HOW DOES WALL STREET DO THIS?

Wall Street’s core function is to perform a sort of financial alchemy…. giving a lot of people what they want. Investors with extra cash want constant access to their money with little chance of losing any. Borrowers want to hold on to the loans for a long time and, sometimes, take big risks. Stocks, bonds, savings accounts and money-market funds are all ways of making twitchy, conservative lenders and dreamy, semi-reckless borrowers happy at the same time about the same pile of dough.

IS IT STILL O.K. TO HATE WALL STREET?

Wall Street firms enforce the cold rules of capitalism: hostile takeovers, foreclosures, fee increases, defaults. But those rules clearly do not apply to the largest banks themselves. A variety of economists … (have found) that… a significant part of Wall Street’s business has shifted from serving the financial needs of the nation to profiting from “regulatory arbitrage.” A dollar spent lobbying in Washington can have a return on investment of thousands of dollars. Another reason: Wall Street’s central function is to make our financial system more robust and less susceptible to unexpected risk, but it did precisely the opposite while, maddeningly, avoiding paying the price. (Our financial leaders) were following the hallowed advice that Walter Bagehot… set down in 1873: during a crisis, a country must do everything possible to preserve its banks.

Is President Obama Truly a Socialist?

Pew Research finds that sixty percent of Americans respond negatively to “socialism.” It is clear why President Obama must avoid that label. Words are important. Political candidates who control the language of political discourse win elections.

Most of our elites would certainly not entertain the question: “Is Obama a Socialist?” Only irresponsible fanatics carelessly throw around such epithets, they say. Polite circles ignore such goofiness.

As someone who has professionally studied and written about comparative economics, capitalism, and socialism for almost fifty years, the reticence to probe the core beliefs of a political leader seems odd. The question is perfectly legitimate in both an academic and political context as long as we define terms and place the discussion in proper context.

By “socialist,” I do not mean a Lenin, Castro, or Mao, but whether Obama falls within the mainstream of contemporary socialism as represented, for example, by Germany’s Social Democrats, French Socialists, or Spain’s socialist-workers party?

By this criterion, yes, Obama is a socialist.

to read the rest

Talk About Unanticipated Consequences: ABC, CNN and Juan Williams May Have Made Gingrich President

Conservatives warn liberals of unanticipated consequences.  Liberals claim to have the best of intentions with their economic and social policies, but often they get the opposite result.

ABC, CNN, and Juan Williams, I doubt, would like to see Newt Gingrich President of the United States. ABC's John Ross planned to sabotage his presidential ambitions with a hostile interview with Gingrich's ex wife released on the eve of a key primary. CNN’s John King planned to embarrass Gingrich with his opening question for the New Hampshire debate. Juan Williams played the race card against Gingrich in the Fox News debate.

All three encountered unanticipated consequences. Thanks to their questions, Gingrich soared in the polls, won in New Hampshire, and became a serious contender for the Republican nomination.

Although their attempts to embarrass Gingrich backfired,  John  Ross, John King, and Juan Williams are considered heroic figures within the media. They remain largely clueless. Juan Williams, for example, expressed surprise when his race card question was met with boos from the audience. It was only then that he realized that he was the "bad guy" in the wrestling match versus Gingrich's "good guy."

Those who wish to see Gingrich as the Republican candidate must hope that the media continues its campaign against him.

A New Low for the Times: “Wide Support for Gas Rules”

The NYT’s “New Gas Economy Rules Generate Wide Support” is a dishonest piece of news reporting, claiming:

 “Nearly everyone involved in the process is on board with the results. More than 90 people who spoke throughout the day asserted that the stricter fuel economy requirements would create jobs, reduce oil consumption, create cleaner air and save drivers money, all while helping automakers increase their profits.”

Not surprisingly, the people “on board” are executives of bailout recipients, GM and Chrysler, and the UAW (whom Obama placed in line before secured creditors). Michigan Democrat, John Dingell (a neutral observer) is quoted as asserting  there is “no significant opposition amongst responsible persons.”

Although the headline and Dingel promise wide agreement, the Times mentions in passing that individual automobile dealers, the National Automobile Dealers Association, and high-end foreign car manufacturers oppose the measure. The article cites as gospel the estimates of an environmental advocacy group, the EPA and NHTSA  that vehicle prices will rise only $2,000. They fail to mention the automobile dealers’ estimate that the regulations will add $5,000 to the car price.

If the Times wishes to be called the “Newspaper of record,” it should cease such irresponsible and biased reporting. Clearly, the new mileage standards are controversial. There is no way to calculate their costs and benefits with any certainty, and there will be strong disagreement. Why can’t the Times simply report this fact, instead of promoting its political agenda in an article that purports to be news reporting and not opinion?

Obama, Jobs, and Keystone. This is As Silly As It gets

Barack Obama quote:  "However many jobs might be generated by a Keystone pipeline, they're going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance."

I leave it for Principles of Economics students to tear this one down.

Americans Believe in Conservative Principles, According to Public Opinion

American voters better understand what’s wrong than our politicians and chattering classes.  Public opinion polling shows voters have three basic insights about government that support the Republicans:

First, government is too large, tries to do too much, and regulates too much.

Second, government is run by crooked politicians for special interests.

Third, government is more likely to make things worse rather than better.  Two thirds believe that “big government” is the biggest threat to America and a majority believes government action will make the economy worse. 

Any Republican candidate who speaks to these three core American concerns can easily defeat Obama’s attacks on free enterprise and arguments for a redistributive regulatory state. 

Accordingly, the Republican platform should state two core principles:  

First, oppose to all special interests as creating massive waste when government is large and interventionist. This waste leads to generally lower living standards and less prosperity.  With small government and minimum intervention, special interests have little to gain from government, and the problem disappears.

Second, recognize that politicians and bureaucrats do not remotely have the knowledge to intervene successfully in the economy. Instead, interventions produce negative unanticipated consequences, to the perennial surprise and shock of Washington pros.

These two core principles suggest specific policies, which include:

1. Cap federal spending at a low percent of GDP and balance the federal budget over the course of the business cycle.

2. Limit government to creating stable legal and fiscal rules of the game that encourage the private sector to do its job efficiently. These rules must protect private property from seizure “in the public interest” or de facto confiscation by excessive regulation.

3. Reject all subsidies and bailouts of business, no matter how big. The private enterprise system functions well only if those making economic decisions bear their consequences, positive or negative. Reject government-private partnerships and industrial policy that let the state pick winners and losers. Taxes, bailouts and subsidies favor special interests, do not serve the general welfare, and divert resources from their highest and best use. 

4. Forego counter-cyclical fiscal policy. Instead, create a tax system that promotes growth and efficiency and entitlement programs that we can afford.

5. Review all existing and new regulations using meaningful cost-benefit analysis that does not overstate benefits. Special interests disguise regulations that favor them using false public interest arguments that overstate benefits.

6. Lower marginal tax rates across the board in conjunction with the removal of all subsidies and tax preferences.

7. Require that all government decisions on taxation, spending, and subsidization be perfectly transparent, exposing anyone seeking or receiving preferential treatment to public scrutiny.

8. Support free trade so as to raise living standards, competition, and efficiency. Resist the onslaught of special interests that stand to lose markets through free trade.

9. Insure that health care is provided by markets based on private insurance and co-payments with limits on malpractice damage claims.

10. Continue social security as a payroll tax based system but increasingly give participants ownership of their accounts.

11. Transfer political decision-making to the state and local level and reduce the influence of Washington. Decisions made closer to voters better reflect their preferences.

For a longer version of this piece, see Public Opinion Says a Conservative Message Wins In 2012.

And Deliver Us From Systemic Risk: The Fed Transcripts

The Federal Reserve System is as independent of politics as any of our government institutions. It hires some of the best economists trained in the top PhD finance and economics programs. Each of the fifteen district banks has its own research department, which produces and analyzes tons of data.

The Federal Reserve Board employs some two hundred and twenty five Ph.Ds. The current Chairman of the Fed, Ben Bernanke, is a leading specialist on monetary policy and the business cycle. His predecessor, Alan Greenspan was universally praised as a master of data analysis. If anyone could see trouble ahead, it was supposed to be Greenspan.

Reading the just-released transcript of the Fed Open Market Committee meeting on December 12, 2006 reminds me of the 9/11 Commission Report. The Fed vaguely identified some of the dots, but not one committee member raised the possibility of a housing collapse.

read the rest

Head of Chu Capital Testifies Before Congress on Job Losses

Nobel physicist turned venture capitalist, Steven Chu, testified before a House Sub Committee today to explain the loss of jobs in companies in which his company, Chu Capital, invested.

In questioning Chu, the Democratic representative from California was particularly critical of the loss of more than one thousand jobs in economically-depressed California at Chu Capital’s Solyndra plant.

Democratic representatives from Massachusetts and Nevada expressed similar concerns that companies in their states in which Chu Capital invested are either bankrupt or on the verge of bankruptcy.

In his testimony, Chu testified that companies fail when “the bottom of the market falls out.” That, he said, is what happened for reasons that could not be foreseen. In business start ups, no one has a crystal ball. Chu assured the committee that, at the time the investments were made, Chu Capital’s analysis “showed a low probability that any of the companies would go into default.”

“This company (Solyndra) and several others got caught in a very, very bad tsunami.” New plants to manufacture solar panels started up in China and elsewhere, while the market for the panels was softening because of economic troubles in Europe. Prices dropped 70 percent in two and a half years.

Democratic representatives remained skeptical: Two of the first three deals supported by Chu Capital “have now blown up and filed for bankruptcy, and you admit no fault whatsoever. You just say: “Hey, sometimes things don’t work out.’ ”

The Times of New York comments that the failures of Chu Capital investments will surely harm any future  ambitions of Chu for higher political office.

Satire based DOE Secretary Chu’s Solyndra testimony before Congress.  http://www.nytimes.com/2011/11/18/business/energy-environment/energy-secretary-defends-solyndra-loan.html and http://www.youtube.com/watch?v=NbUu6CrWkmY

Another Laugh: The Putin Superhero Video (You can enjoy without understanding the Russian)

This music video "Vova Rules" (Vova stands for Vladimir Vladimirovich Putin) -- also called "Putin Superhero" is a blast. It has been banned in Ukraine, where it originated as a music video for the singing group "Dress Code.".

Want a Good Laugh: Russian Blogger Navalny's Anti-Putin Campaign Is Funded By Aliens (Putin's Allies Photo-shop Navalny, on the left hand side; Navalny's revenge on the right). Stalin Would Have Done a Professional Job

Award for Best Defenses of Bain Capital Goes To John McCain and Steve Forbes

If Mitt Romney is the Republican nominee, he will somehow have to explain to American voters what private equity  is and its positive contribution to growth and prosperity. Because private equity and venture capital are complicated businesses, this task is not easy. I credit John McCain and Steve Forbes for coming up with the easiest-to-understand explanations.

Number 1: John McCain

Blitzer (Situation Room): How do you rebut that (claims that Bain cost jobs) in the general election?

McCain:  Well I’d compare that with the half billion we put into Solyndra with the 5 million they put into Staples which hires, I don’t know, ten thousands people or more. Unfortunately in the free enterprise system, there are winners and losers, and there is competition in the free enterprise system. When you total up what Bain capital did, the successes far outweigh the failures. And if you are not willing to allow, as tragic as it is, for some enterprises to fail, well obviously that is the essence of socialism.  Source

Number 2: Steve Forbes

In terms of Bain itself, I've not looked at the particulars but that whole nature of that business -- most businesses eventually succumb and if you can save it, that's great.
If you can start one that succeeds, that's great. But it's like baseball. Seven times out of ten you're not going to get that hit. The same is true with what he did in terms of equity capital. But the key thing is -- did he create jobs overall, because a lot of those companies that are going to portray him as killing jobs and that kind of thing would have gone under if they didn't have someone to save it. Sometimes you have to tighten the belt to save the company. Source  

Public Opinion Says A Conservative Message Wins In 2012

Republican politicians should ignore H. L. Mencken’s quip: “Never overestimate the intelligence of the American people.” Americans understand what’s gone wrong better than our politicians and chattering pundits.

The alignment of public opinion with conservative principles offers Republican candidates a unique opportunity in 2012 as the party that opposes big government, special interests, and state intervention. Republican candidates must have confidence that the American people see what’s what through the filter of the liberal media, and are fully capable of understanding a bold Republican message.

Public opinion polling shows voters share three basic insights about government:

First, government is too large, tries to do too much, and regulates too much.

Second, government is run by opportunistic and even crooked politicians for the benefit of special interests.

Third, government is more likely to make things worse.

to read the rest

The Russian Orthodox Church: On a Tight Wire Between Putin and the Demonstrators

Lenin and Stalin did not tolerate alternative sources of power. Immediately after the October Revolution, Lenin declared war on opposition parties and the church. Stalin took the repression of the church to new levels, killing clergy and destroying churches and monasteries. At one point in his regime, there was only one practicing monastery left.  Perhaps no other group suffered as much repression, death, and imprisonment as the Russian clergy. 

Putin shut down political opposition, free press, and uncooperative oligarchs, but he elevated the Russian Orthodox Church to a core societal institution. Instead of attack, Putin (who professes to be a Christian) co-opted the Church with privileges, preferences, and special treatment. His government cracked down on other Christian denominations, poured state money into rebuilding cathedrals, and allowed church properties to be turned into secure sources of money-making for the church. In return, the Church was to keep its mouth shut.   Putin and the Church scratched each other’s backs, but this cozy relationship may be ending.

A hostile Russian Orthodox Church poses a huge danger for Putin and his KGB state. Seventy five percent of Russians declare themselves as Russian Orthodox. Eighty two percent are religious believers, despite a half century of anti-religious propaganda by the Soviet state. The Russian people, despite some reservations, accept the Church as a rare voice of morality in an otherwise corrupt world. Increasingly, young people and the middle class worship alongside the old Babushkas, who kept their faith through the Soviet period.

December’s fraudulent parliamentary election has placed the Church leadership in a bind. They would like to preserve their privileged existence under Putin. But they cannot support a regime, which the majority of believers conclude is corrupt and evil, especially when their own parish priests are speaking against the corruption and injustice of the Putin regime.  Many priests witnessed the vote rigging and fraud of the December elections, which they see as punishable violations of the Ten Commandments.  Grassroots clergy use church websites and Facebook to preach that falsification of the choice of the people is a grievous sin.

The Russian Orthodox Church has no easy dismount from its tight wire. The Communists are the only real organized opposition. An unrigged election could perversely restore the atheist communists to power. Church leaders must fear the power that Putin could bring to bear against them if they cross him openly. Yet, if they ignore election fraud and corruption, they stand to lose their credibility among their clergy and followers.

The Church leadership is trying hard to position itself as a fair mediator between the Putin regime and the protesters. Church leaders have begun to warn Putin to take the legitimate protesters seriously, rather than dismissing them with vulgar language and accusations of foreign espionage. The Church’s reproach has become increasingly blunt, warning that the Putin regime would be “slowly eaten alive” if it ignores the protests. The editor of an influential church journal wrote that “we understand very well that elections have been falsified before, but now public consciousness has matured to the point of expressing its opinion or speaking out against it.” The editor of an influential Church website stated that: “A Christian has to protest against lies, especially lies to millions of people.”

These strong warnings by high Church officials raised hopes that the head of the Russian Orthodox Church, Patriarch Kirill, would pressure Putin for real change in his Christmas Day address. Instead, he offered meaningless pabulum:  Both the government and protesters “should, through dialogue and by listening to society, correct the course and then everything will be fine.”  

Patriarch Kirill also warned protesters to avoid being used for political purposes:  “We destroyed the country [in October of 1917], and why did this happen? Because in general the just protests of the people were cleverly used by political forces [the Bolsheviks] fighting for power.” Protests should lead to political change but not shake the foundations of the state.

In other words, the top leader of the Russian Orthodox Church is not prepared to place real  pressure on Putin. We can only imagine what compromising material Putin has against him. He somehow wants negotiations between Putin who wants no democracy and protesters who do. Patriarch Kirill’s remark must have gone down well with Putin, who intends to survive by vague promises of reform and ignoring the demands of the protesters.

The fact that the Russian Orthodox Church is turning against the Putin regime despite its privileges is yet another chink in Putin’s armor. If the leadership of the Church gets out of step with its grassroots and believers, it stands to lose as much or more than Putin himself.

Putin regrets that he gave the ungrateful Church so much in resources and authority. Stalin would not have made this mistake.

Know Thine Enemy: China, And Obama's Defense Cuts

The Cold War taught us that inefficient planned economies can execute priority projects well. Think Sputnik, the Moscow Olympics, and Russian nuclear physics. Although its output never reached half that of the U.S., the Soviet Union held us to rough military parity until the end of the Cold War.

China will choose a new leadership in 2012, culminating a power struggle between reformists and those who favor a return to neo-Maoism. If the latter group prevails, the level of hostilities with China will intensify beyond their current uneasy status quo.

China enjoys huge advantages over the former USSR that render it a more formidable military competitor than the USSR was:

The Chinese economy has been growing rapidly, while the Soviet economy suffered a lengthy “period of stagnation,” as Gorbachev called it. China is integrated into the world economy and, as such, has access to advanced technology. The Soviet Union remained isolated, was subject to restrictions on technology purchases, and had to rely on espionage to obtain military technology. During the Cold War, we thought twice about selling electric ranges or IBM computers to Russia. In 2012, we share GPS technology and assemble Dell Computers in China.

The list of countries potentially hostile to the United States – Iran, North Korea, Venezuela, Syria, and Russia — is frighteningly long and could increase on moment’s notice to include Pakistan or any number of Arab Islamist states. We already compete with China for controlling military presence in the Pacific. China could decide to take Taiwan by force, or China’s fragile peace with India could break.
Future military conflict with China is likely to be of a conventional sort, rather than the hit-and-run terrorist engagement the Pentagon is preparing for. To counter China, we need substantial conventional forces and a large defense budget.

go to Forbes.com

NPR Complains As Reid's Unicorn Whopper Grows

NPR has asked me to correct certain facts “that undermine the basis” of my blog  Sen. Harry Reid’s Unicorns: Fact Checking a Whopper.

For those who missed it, I demonstrated the utter nonsense of Reid’s Senate-floor statement that “millionaire job creators are like unicorns. They’re impossible to find, and they don’t exist.” Reid went on to claim that only one percent of million-dollar-plus earners are business owners. Most are hedge fund managers and wealthy lawyers, who don’t need a tax break.

I showed that the 236,000 millionaire tax filers earn almost a quarter of a trillion dollars from businesses and professions according to the IRS, and only some 15,000 are hedge fund managers or wealthy lawyers. The Treasury lists 126,000 millionaire small business owners. Seems like quite a few unicorns and unicorn-generated jobs to me.

NPR does not dispute these facts. Instead, NPR objects to my “mischaracterization” of its December 9 broadcast that Reid cited in his December 12 Senate statement.

to continue reading

The EU Must Reject Ukraine’s Bid for Association Status Until Timoshenko Is Freed

Ukraine President Viktor Yanukovich’s plan to straddle East and West depends on the European Union granting Ukraine association status. EU Minister President Barroso and EU President Rompuy, in recent negotiations, did not reject Ukraine’s bid, but appeared to tie it to Yanukovich’s release of his political rival, Yulia Timoshenko, from prison and allowing her to reenter political life.

Yanukovich narrowly defeated Timoshenko in January’s  presidential election. His prosecutors and judges sentenced Timoshenko on October 11 to seven years in prison for  abuse of office. Her crime: She signed in January of 2009 with Russia’s Putin a natural gas contract that was “to the disadvantage of Ukraine!” The court verdict unleashed torrents of protest from the United States, the European Union, and even a rebuke from Russia.

Timoshenko’s sentence would be the equivalent of George Bush sentencing Bill Clinton for signing the “unfavorable” North American Free Trade Agreement.

Yanukovich is using the Timoshenko sentence to intimidate Ukrainian oligarchs into assigning their assets to him and his associates. It also removes his most potent political rival from the political arena.

In response to growing international pressure, Yanukovich has transferred the ailing Timoshenko to a more remote prison camp to keep her as far away from the press as possible.

Yanukovich’s criminal intimidation of his political rivals has largely escaped attention because of the Euro crisis and the U.S. elections. Strategic Ukraine, a land of 50 million,  is on the verge of losing its democracy, and the world is paying scant attention. Timoshenko’s loyal followers continue their tent-city protests in Kyiv, but are largely ignored and isolated.

If we get upset by Putin’s dashing of the vestiges of Russian democracy, we should recognize that Yanukovich’s actions are even more blatant and reprehensible.

Why Don't the Republicans Play the Media Bias Game On Economic Reporting?

The Democratic Party and their media enablers, such as the New York Times, slaughter the Republicans when it comes to economic reporting. The public discussion of social security taxes, unemployment benefits, and stimulus takes place in the language of Keynesian multipliers and stimulus counterfactuals.

He who controls the language of debate has already won, no matter how inappropriate or ridiculous. (I cite as an example of the latter the discussion of unemployment benefits as a form of stimulus that will restore the economy to health).

The Democrats and their media enablers use a tried-and-true template to dominate the debate. I use the New York Times article, “Analysts Say Economic Recovery Might Suffer if Tax Break Is Allowed to Expire,” to illustrate how it works.

The article’s objective is to convince readers that all right-thinking people know that the economy will go down the toilet if there is no agreement on extending the payroll tax cut and unemployment benefits. They claim that “economists” or “analysts” agree on this. They then interview four economists/economic organizations that support this conclusion and they cite one senior White House official who warns of dire consequences. They then dismiss one skeptic, who makes a technical point the average reader will not understand.

Voila! “Economists” agree with the Democrat position.

There is no reason why two cannot tango.

I have taken the liberty to rewrite the Times article to prove the opposite case. I use four respected economists and one respected media outlet and cite only one supporter of the administration case.

Here is my version, new headline and all. I preserve as much of the original Times language as possible:

Read the rest