Free Frank Warner

Russia: Is Medvedev bossing around Putin?

It sounds as if Dmitry Medvedev, who is the only elected president of Russia, is telling Prime Minister Vladimir Putin to lay off presidential powers.

“The final responsibility for what happens in the country and for the important decisions taken would rest on my shoulders alone and I would not be able to share this responsibility with anyone,” Medvedev told an interviewer on Dec. 24.

But Putin controls Russia’s oil and gas money, and more importantly, the oil and gas bureaucracy. The question is, how closely tied is that bureaucracy with the army? Is the army so dependent on Putin for its income that it will crush Medvedev to save Putin?

And does Medvedev, whose election this year was arranged by Putin, know where all the polonium-210 is?

Frank Warner

Of top 10 news stories of 2008, Victory in Iraq is No. 1

The military, political and social turnaround in Iraq in 2008 is a major victory for democracy. Twenty-five million humans were liberated in 2003 from a totalitarian regime that made war, mass murders and cruel repression a way of life. Now, with the hard and heroic work by Americans, Iraqis and others, the old tyranny has been replaced securely by Iraq's own democratic government.

It is a monumental accomplishment that President Bush was able to defeat the fascists in spite of the partisans and selfish cynics of the Free World who for five years did everything they could to return Iraq to a deadly darkness it might not have escaped for another century.

Other major stories of 2008:

2. The financial meltdown, the result of massive U.S. home-loan defaults and U.S. dependence on foreign oil.

3. The election of Barack Obama, an American whose father was from Kenya, as president of the United States.

Frank Warner

Roland Burris, accomplice

Roland Burris knew Gov. Rod Blagojevich had been charged with corruption. Burris read the wiretap transcripts of the governor’s dirty plot to sell a U.S. Senate seat to the highest bidder.

Burris also knew that, once caught red-handed, Blagojevich would try to mislead his jury-to-be by appointing someone whom most Illinois residents would regard as a nice guy.

Burris knew that, considering those facts, Senate leaders vowed not to accept into the Senate anyone chosen by Blagojevich to succeed Sen. Barack Obama, currently the president-elect.

Soul sold. But Burris conspired with Blagojevich anyway. For a position of power and prestige, Burris traded away his reputation and soul. He accepted Blagojevich’s offer of the Senate seat.

Well, now the Senate should hold to its promise. Democrats might want to end this scandal quickly, but they can’t end it by rewarding someone who obviously was willing to help cover up Blagojevich’s crime.

Keep Burris out. Hold a special election or let the next governor name Obama’s successor. As Blagojevich’s accomplice, Burris should be punished, not elevated.

Frank Warner

The transparent Blago

If you're Rod Blagojevich, you don't surrender anything valuable under your control. If if you don't own it, you rob it of its value. You exploit it for yourself.

So it should have been no surprise that today he used his power to fill that Senate vacancy. Caught in the act of demanding bribes, he could no longer sell the appointment. But now, by choosing someone who wasn't in the bidding, he uses his power to throw off the jurors who will hear his case. You see, he'll tell them, I didn't sell the office. I chose a man who offered me nothing for it. My innocence is obvious.

That man is totally corrupt.

Frank Warner

UCLA economist: Don’t tell me you see New Deal success in 1939’s woe (the prolonged Depression)

Those who claim FDR ended the Depression by 1934 ignore the human misery of that entire decade, according to Lee E. Ohanian, one of the two UCLA economists who found that the New Deal prolonged the Depression by seven years.

Responding by e-mail to a post here two days ago, Ohanian explains that he and fellow researcher Harold L. Cole evaluated the New Deal by how quickly it gave Americans jobs, measured in hours of work. Compared to the other recessions in U.S. history, the economist says, the rebound from the Depression was exceptionally slow.

Even in 1939, Ohanian says, the increase in hours worked was too small to declare the Depression over. With 17 percent unemployment, about 8 million workers had no work and little hope of finding jobs.

Job hours and investment. Defenders of Franklin D. Roosevelt’s New Deal have argued that Ohanian and Cole are wrong. They note that our Gross National Product grew in five years of the mid and late 1930s.

But Ohanian says a rising GNP isn’t enough:

“In terms of gauging the impact of the New Deal on the speed of recovery from the Depression, Cole and I first determined that the recovery from the Depression was much weaker than a typical recovery,” Ohanian wrote me yesterday. “We came to this conclusion by examining patterns of recovery in typical US recessions, in which productivity rises rapidly, the money supply expands, and hours worked and investment quickly return to normal levels, and then for some time exceed their normal level.

“During the New Deal, productivity rises rapidly, as does the money supply, but there is very little recovery in hours worked or investment. Total hours is 27 percent below its 1929 level at the trough of the Depression in 1933, and remains 21 percent below its 1929 level in 1939. Similarly, investment remained far below trend, averaging about 60% below trend between 1933-39. I prefer hours as a measure of recovery rather than unemployment, not only because it directly measures how many returned to work, but also because unemployment rates vary substantially when there are changes in labor force participation rates.

“Our research shows that New Deal industrial and labor policies can account for much of the weak recovery. These policies boosted wages far above normal, which kept both hours worked and investment low. If wages had been at their normal level, the recovery would have been much stronger, with hours and investment returning to normal levels by the mid-late 1930s.”

New Deal stress. Ohanian and Cole in 2004 determined that FDR’s National Industrial Recovery Act extended the Depression because it strained the economy with high prices and high wages. Under the NIRA, corporations were permitted to collude, setting artificially high prices, as long as they also accepted labor unions and higher union wages.

Unfortunately, the NIRA program drove up the price of certain essential materials, such as steel, and it gave union workers pay so bloated that employers could not afford to hire more. The GNP went up, but unemployment remained stiflingly high.

Ohanian didn’t say so, but probably the closest current idea to the failed NIRA is the recent $17.4 billion bailout of the auto industry. President Bush and much of Congress have told U.S. car makers that, even if consumers won’t buy your cars, taxpayers will allow you to keep prices artificially high, and taxpayers will allow you to keep paying relatively high union wages.

Clinging to failure? Fortunately, the automotive bail-out is a relatively small part of the $1 trillion or more in “economic stimulus” that President-elect Barack Obama is considering. Unfortunately, most of the stimulus proposals include measures designed more for holding onto failures rather than stimulating new success.

Policy makers hoping to shorten the recession would be wise to look at the Ohanian-Cole study before committing such large borrowed sums. As the UCLA economists have demonstrated, a poorly targeted stimulus can delay a recovery.

Four years from now, we don’t want historians singing “Happy Days Are Here Again” to a 14 percent unemployment rate.

Frank Warner

* * *

Note: Just for the record, I wrote the headline for this post. It’s an attempt to distill the debate. I’m sure Mr. Ohanian wouldn’t say “Don’t tell me” to anyone who wants to discuss this subject. He seems as open-minded as you’d want an economist to be. -- FW

See also: March 4, 2009: Professor Barro: 20% odds of a depression.

Dr. John P. Pryor: Philadelphia soldier-doctor is killed in Iraq

Dr. John P. Pryor, an Army Reserve major and a surgeon on his second tour in Iraq, was killed by a mortar fired on his living quarters in Mosul on Christmas Day.

He had returned from Christmas Mass shortly before the random attack on Forward Operating Base Marez, the Air Force base where he was stationed. A mortar landed near his trailer.

Dr. Pryor, 42, of Moorestown, N.J., is survived by his wife, Dr. Carmela Calvo, a daughter and two sons, ages 10, 8 and 4. He also served in Iraq in 2006. He returned on Dec. 6.

Photo shows Dr. Pryor in Iraq during a sandstorm.

For freedom. The doctor was director of the University of Pennsylvania trauma unit in Philadelphia.

“In Iraq, ironically, I found myself drawing on my experience as a civilian trauma surgeon each time ‘mascals,’ or ‘mass casualty situations,’ would overrun the combat hospital,” he wrote in The Washington Post last year. “As nine or 10 patients from a firefight rolled in, I sometimes caught myself saying, ‘Just like another Friday night in West Philadelphia.’…

“In Iraq, soldiers die for freedom, for honor, for their country and for their buddies. Here in Philadelphia, they die without honor, without purpose, for no country, for no one.”

When the history is written of the liberation of 25 million Iraqis, Dr. Pryor will be remembered as one of the true heroes of liberty.

A funeral Mass for Dr. Pryor is set for 10 a.m. Monday, Jan. 5, at the Cathedral Basilica of SS Peter and Paul, 1723 Race St., Philadelphia. All are welcome.

Frank Warner

Depression: David Sirota attacks New Deal critics as ‘right-wing automatons’

David Sirota is complaining that Fox News anchor Gregg Jarrett carelessly claimed yesterday that “historians pretty much agree” that Franklin Roosevelt’s New Deal prolonged the Depression.

Sirota goes on to cite a historian who believes FDR’s policies ended the Depression quite nicely. For Sirota, a Democrat, it’s simply heresy to be critical of the New Deal. After all, he says, FDR was popular. Sirota ignores legitimate criticisms of the New Deal, or pretends they’re not legitimate at all.

His Huffington Post piece appealed much too long to his fellow partisans’ contempt for the only Republican-friendly TV news network. “Right-wing automatons,” Sirota called those who find fault with New Deal policies. But this isn’t a time for superficial name-calling. It’s the perfect time to learn something about the Depression. It’s time to ask those UCLA economists to explain further why in 2004 they concluded that FDR’s New Deal added seven years to the Depression.

Serious examination. Considering today’s dangerously stalled economy, it would be a good idea to weigh the UCLA findings before our leaders make any major decisions on changing the roles of industry, labor and government.

UCLA economists Harold L. Cole and Lee E. Ohanian had no problem with Roosevelt setting up the FDIC or the SEC. Those agencies rebuilt financial confidence. But neither agency was involved directly in stimulating the economy. According to Cole and Ohanian, the problem with the New Deal was the National Industrial Recovery Act, which encouraged industries to collude on higher prices, and gave businesses incentives to accept unions and pay higher union wages. The artificially inflated prices and wages made essential materials like steel too expensive, and while the higher pay benefited a few union members, it priced millions of other workers out of jobs.

Sirota relies primarily on historian Eric Rauchway to defend the New Deal. (It’s interesting that even Rauchway says, “Any smart historian of the 1930s is a New Deal critic.”) But what do Cole and Ohanian say about Rauchway’s good reviews of FDR’s economics? I haven’t seen that story anywhere. Let’s broaden the debate with a few rounds of points and rebuttals.

Airing the questions. Cole and Ohanian aren’t “historians.” And Jarrett obviously was wrong to claim that historians pretty much agree the New Deal was bad. After all, most notable historians are Democrats. Economics seems to attract more Republicans.

Let’s air out these questions. For one thing, there appears to be a disagreement over definitions. At which date was the Depression over? When the stock market again reached mid-1929 levels? When employment returned to the mid-1929 rate? When employment dipped below 10 percent? The first quarter of increased industrial output? The day the first jobless man returned to work? Or is the answer more complicated than any one factor?

We can learn from a vigorous public debate. Here’s a chance to discover something that might quickly end the current recession. Let’s not throw this chance away with claims that “everyone says” or “everyone knows” whatever it is we already happen to believe. Let’s challenge what we believe and find out what works.

Frank Warner

See also: UCLA economist: Don’t tell me you see New Deal success in 1939’s woe.

Tired of losing Baby Jesus, Christians turn to GPS to catch thieves

All over the nation, mean mischief makers steal Baby Jesus figures from Nativity scenes this time of year. Some of the small statues are costly to replace. Others have priceless sentimental value.

Well, now Jesus is striking back.

Aided by GPS systems and security cameras, the owners of these religious figures are tracking down the thieves. Not only are the Savior-snatchers going to jail, they are suffering the scorn of their neighbors.

Caught red-handed. An 18-year-old Florida woman was arrested last year when a Global Positioning System located a stolen Jesus in her apartment.

Forgive them, but come let us abhor them first.

Frank Warner

Vitamins don’t prevent cancer?

Daily supplements of vitamin C, vitamin E and selenium really don’t do anything to ward off cancer, a thorough study by the National Institutes of Health has concluded. Geez.

From the Los Angeles Times:

“These things are ineffective, and in high doses they can cause harm,” said Dr. Edgar R. Miller, a professor of medicine and epidemiology at Johns Hopkins University School of Medicine in Baltimore. “People are unhappy with their diets, they're stressed out, and they think it will help. It's just wishful thinking.”

Johns Hopkins was part of the study? I’m surprised the researchers didn’t conclude the Iraq war causes cancer.

Frank Warner

I finally got paid for $2 a gallon gas bet

As a few of you might remember, immediately after Hurricane Katrina in September 2005, as the price of gasoline soared close to $3 a gallon, a friend of mine declared that we’d “never” see $2 a gallon a gas again.

“They know they can charge $3. Why should they ever drop prices?” my friend said.

So I bet him $10 that gasoline would be selling for less than $2 a gallon somewhere in eastern Pennsylvania, where I live, within three years of September 2005.

Down 3 times. Since then, the price has dropped three times below $2 a gallon. I didn’t feel right to demand my $10 winnings the first two times, because the $1.99 price lasted only one day each time.

Now the price is well below $2 a gallon, and it’s been below $2 for more than a month. Yes, we’re just a little beyond the bet’s three-year limit, but four days ago, my friend agreed I’d won the bet, and he paid me off.

The gasoline price drop is a reminder that economic cycles are as common as the seasons. Some products might look so essential and scarce that we can’t imagine the price ever falling, but the producers eventually push the price so high it kills the goose that laid their golden eggs.

Free gas. Gasoline is $1.66 a gallon now. Winning that bet got me six free gallons.

Frank Warner