A Smackdown

From: RedState

There was a surreal moment after the debate last night. On CNN, the polling went overwhelmingly for Mitt Romney among debate watchers. Basically two-thirds of the American public who watched the debate claimed Romney won. A majority claimed Romney was with them on taxes, the economy, healthcare, their views of government, etc. He dominated.

A CBS poll of undecided voters who watched the debate mirrored the CNN poll.

Suddenly the Democrats took to the airwaves and twitter to rail against the polls oversampling Republicans and being too heavily skewed, too instant to be meaningful, and clearly not an accurate statistical sample of anything.

About the same time Barack Obama’s campaign team was melting down on television, the campaign sent out an email that did not even mention the Presidential debate. It just wanted more money.

The debate was so bad for Barack Obama I expect Eric Holder to send Jim Lehrer to GTMO. Barack Obama suddenly agrees with Republicans on defunding PBS. Without his precious TelePrompTer to feed his Gollumesque addiction to its illuminated, precious words, the President fell flat. Instead of John Kerry for a debate partner, the President should have just gone through airport security a few times or embraced BOHICA as a debate preparation strategy.

Put it to you this way, within ten minutes of the debate ending, Jessica Yellin of CNN spoke with Stephanie Cutter of the Obama campaign. Ms. Cutter conceded up front that Mitt Romney won on both debate preparation and debate style. It went downhill from there. She began parroting talking points about the debate she herself released to Obama surrogate at sun up yesterday morning. She had nothing new to add.

Mitt Romney had substance, counterarguments for Barack Obama’s points, rebuttals, and a friendly manner. Barack Obama kept his head down at the podium and refused to make eye contact with Mitt Romney. This too is what Barack Obama did with the economy and Libya.

Barack Obama, at one point, interrupted Jim Lehrer and asked Lehrer to move on to a new topic. It was a brilliant metaphor for what Barack Obama did coming into office. He looked at the economy and decided to move on to Obamacare. His whole career has been one of passing the buck, shifting blame, and failing to take responsibility for tough challenges. He did the same last night.

For four years, Barack Obama has rarely been challenged and he handled it poorly last night. He was ill prepared, flustered easily, and came off as petulant. At some point we should expect the empty chair to ask Barack Obama to take a vacation day and let it debate instead.

I think the explanation for Obama’s performance is pretty simple. Gods in the cult of personality do not like to come off Olympus to be challenged by mere mortals.

There is an important point, however, for Republicans. This was one debate. This was not the election. Mitt Romney showed he can do it. But the campaign needs your help now more than ever. Every penny helps. I guarantee you we are about to see the media resurrect the “Obama is the underdog” theme and, in the meantime, look for most media polls to suddenly have a D+20 sample.

Mitt Romney did fantastic last night.

Trickle Down and Tax Cuts

By Walter E. Williams

Dr. Thomas Sowell’s “‘Trickle Down Theory’ and ‘Tax Cuts for the Rich'” has just been published by the Hoover Institution. Having read this short paper, the conclusion you must reach is that the term “trickle down theory” is simply a tool of charlatans and political hustlers.

Sowell states that “no such theory has been found in even the most voluminous and learned histories of economic theories.” That’s from a scholar who has published extensively in the history of economic thought. Several years ago, Sowell, in his syndicated column, challenged anyone to name an economist from any economic school of thought who had actually advocated a “trickle down” theory. To date, no one has quoted any economist who ever advocated such a theory. Trickle down is a nonexistent theory. Those who use it simply argue against a caricature rather than confront an argument actually made.

President Barack Obama recently criticized Mitt Romney and Paul Ryan for trying to sell a tax plan, which he called “trickledown snake oil.” Criticizing tax cuts as trickle down is a way not to confront the argument; however, there’s empirical evidence about the effects of tax cuts. Sowell shows that during the Warren Harding administration, in 1921, Secretary of the Treasury Andrew Mellon advocated tax rate cuts, which were enacted into law by Congress. Afterward, there was rising output; unemployment plummeted; and the resulting higher income produced greater federal tax revenues, even though the tax rate had been lowered (see: The Great Depression). There were somewhat similar results in later years after high tax rates were cut during the John F. Kennedy, Ronald Reagan and George W. Bush administrations.

The facts about the 1920s tax rate cuts are unmistakably clear for those who bother to check the facts. In 1921, when the tax rate on people earning more than $100,000 a year was 73 percent, the federal government collected a little more than $700 million in income taxes, of which 30 percent was paid by those earning more than $100,000. By 1929, after the tax rate had been cut to 24 percent on incomes higher than $100,000, the federal government collected more than $1 billion in income taxes, of which 65 percent was collected from those with incomes higher than $100,000.

In 1962, Democratic President John F. Kennedy pointed out that “it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.” Both Presidents Ronald Reagan and George W. Bush made similar arguments, and the tax rate cuts had the effect of stimulating economic growth while increasing federal tax revenue and shifting a greater percentage of the tax burden on to wealthier individuals.

One very insightful part of Sowell’s paper is the discussion about what Mellon called the “gesture of taxing the rich” — namely, tax-exempt securities that he tried unsuccessfully to put an end to. Tax-exempt securities and other tax breaks are valuable tools in the politics of class warfare and envy. Politicians have it both ways. They get votes by raising taxes on the wealthy — or threatening to do so — and at the same time provide the wealthy with a way out of high taxes through tax-exempt securities. This explains how President Obama can raise tens of millions of dollars in campaign contributions from Hollywood millionaires and Wall Street’s rich and powerful. “Tax cuts for the rich” demagoguery is simply the height of deceit perpetrated on gullible people and useful idiots.

You can bet that the White House has people reading every bit of the news, including this column and Dr. Sowell’s article. You can bet some people in the news media will read it, as well. Despite the facts that Sowell has marshaled, they will continue to use trickle down theory and “tax cuts for the rich” demagoguery, even though they now have hard evidence to the contrary, because they can count on widespread gullibility and inability to do critical thinking.

Power of Kawaii

One thing the internet has  shown us, it is that few  people can resist looking at images of cute animals.

Now new research has  revealed that looking at cute images of baby animals doesn’t just make you feel  warm and fuzzy inside, but can actually improve your work performance and help  you concentrate.

The study comes from  researchers at Hiroshima University. In Japanese, the word ‘kawaii’ means cute,  and so the report is rather appropriately entitled ‘Power of Kawaii’.

The subjects were told the  pictures, which they viewed during a ‘break’ in the tasks, were for a separate  experiment.

In the Operation  experiment, the participants who were shown images of puppies and kittens  performed their tasks better after the break than those who looked at cats and  dogs. Performance scores improved by 44%. They also took their time. The time it  took to complete the task increased by 12%.

‘This finding suggests that  viewing cute images makes participants behave more deliberately and perform  tasks with greater time and care,’ said the researchers, according to the  published paper.

Similar jumps in  performance were seen in the numbers experiment, suggesting that looking at cute  images increases attentiveness even when the task at hand is unlikely to raise  feelings of empathy.

The group that saw kitten  and puppies were more accurate, improving their scores by about 16%. They were  also faster, increasing the number of random numerical sequences they got  through by about 13%. There was no change among groups that saw cats and dogs,  and food images.

‘Kawaii things not only  make us happier, but also affect our behavior,’ wrote the researchers, led by  cognitive psychologist Hiroshi Nittono. ‘This study shows that viewing cute  things improves subsequent performance in tasks that require behavioral  carefulness, possibly by narrowing the breadth of attentional  focus.’

The study’s authors write  that in the future cute objects could be used as a way to trigger emotions ‘to  induce careful behavioral tendencies in specific situations, such as driving and  office work.’

How Depressing

Another shoe falls in Europe. Note the references to similar events in early 1930’s Europe which just happen to lead to the rise of a certain German promising to lead them back to prosperity. It’s a bit of a dry and cumbersome read, but important.

The French Depression

Ambrose Evans-PritchardBy  of the UK Telegraph

His tragically-misguided budget offers no strategic plan to reverse — or even to stop — thirty years of slow national decline. He offers no worthwhile measures to slim the Leviathan state, now a Nordic-sized 55% of GDP (Gross Domestic Product), without Nordic labour flexibility or Nordic free markets.

He does not tell us how he will stem the slide in France’s share of eurozone exports over the last decade, down from 17% to 13%, or what he will do about the disastrous swing in France’s trade balance from a surplus of 2.5% of GDP to a deficit of 2.4% since 1999.

He proposes nothing credible to restore France’s viability within EMU (Economic and Monetary Union), or to stop public debt spiralling beyond 90% of GDP. Instead he has served up the most drastic retrenchment in forty years, at the worst possible time, and in the worst possible way. And markets are supposed to applaud?

The budget will tighten discretionary fiscal policy by 2% of GDP next year into the teeth of deepening depression, without offsetting monetary stimulus or exchange rate relief.

Mr Hollande likes to quote Leon Blum, the Popular Front leader of the interwar years. The reality could hardly be more cruel. He is replicating the disastrous deflation policies of Labour Chancellor Philip Snowden in 1931, before the Labour Party woke up to the delicious possibility that you could lift two fingers to the forces of reaction and leave the Gold Standard.

Worse yet, he is perilously close to re-enacting the desperate deflation decrees of Pierre Laval — an ex-Socialist dreamer, pacifist, and utopian who lost his way, and ultimately cleaved too closely to foreign ideologies — and like Laval he is doing so to uphold a fixed exchange system that is slowly asphyxiating his country and no longer makes any sense.

His budget is pro-cylical error of the first order, carried out to meet an EU (European Union) deficit target of 3% of GDP that has no economic logic and is plucked out of thin air to meet bureaucratic tidiness and enshrined like so much other idiocy into EU treaty law. The certain result will be hundreds of thousands of lost jobs.

“To save the dogma of single currency, they are imposing absurd hyper-austerity on France,” said Marine Le Pen from the National Front, France’s unlikely apostle of Keynesian doctrine.

France now joins Italy, Spain, Portugal, Greece, Ireland, and parts of Eastern Europe in synchronized tightening, with the Netherlands and Belgium cutting too, all dragging each other down in a 1930s style slide into the political swamp.

Mr Hollande has not been entirely passive. He threw his weight behind the Latin revolt earlier this summer, forcing German Chancellor Angela Merkel to sanction mass bond purchases by the European Central Bank. This would not have been possible in the Merkozy era, when Nicholas Sarkozy sacrificed all else on the altar of the Franco-German unity.

But he has not followed through and there were in any case two quid pro quos to this deal with Germany. One was that Spain and Italy must submit to Troika Hell before the ECB (European Central Bank) buys a single bond. The second was that France must submit to fiscal Hell.

Mr Hollande has his own motives for bowing to austerity demands. He learned the lesson as an aide to François Mitterrand that you cannot deviate too far from Germany if you share a currency peg. There will be no repetition of 1983, the epic U-turn or `tournant de la rigueur’.

He may judge it tactically clever to get his recession out-of-the-way early in the electoral cycle. If so, it is a very risky strategy.

Professor Jacques Sapir, director of the École des hautes études en sciences sociales in Paris, says the more likely outcome is a downward economic spiral, pushing the declared numbers of jobless from 3m towards 4m — and the real number to 6m — by the end of next year. The economy will not spring back of its own accord this time because the contractionary structure of EMU has jammed the mechanism.

Prof Sapir fears global markets will turn on France with “full fury” before long, at which point, events will slip entirely beyond political control. “François Hollande is making a dangerous bet that he can only lose,” he said.

The French economy has already been in quasi-slump for five quarters. Dominique Barbet from BNP Paribas says the latest crash in the manufacturing PMI (Purchasing Managers Index) to 42.6 — the lowest since April 2009, and lower that at any time in the dotcom bust — is “potentially alarming”.

Indeed it is. Data collected by Simon Ward at Henderson Global Investors shows that a key leading indicator of the money supply –`six-month real M1 money’ — is now contracting even faster in France than in Spain. The shock will hit over the winter. “The budget looks increasingly misguided and self-defeating,” he said.

Mr Hollande thinks his budget will safeguard jobs. The fiscal burden will fall on the rich with a top tax rate of 75%, and on industry. Barclays Capital says three-quarters of the total will come by raising revenue, with the taxes “front-loaded” while spending cuts are “back-loaded”. The ratio of taxes to gross wages will rise to an all-time high of 46.3%. (Finance ministry estimates). [ Notice that like in the U.S., tax hikes always come first with hollow promises of mythical spending cuts later, that, of course, never materialize.]

Harvard Professor Alberto Alesina says this flies in the face of all we have learned about austerity. “The accumulated evidence from over 40 years across the OECD ( Organization for Economic Co-operation and Development) peaks loud and clear: spending cuts are less recessionary than tax increases,” he said.

France, above all, screams out for a blast of tax-cutting Thatcherism and pension reform. The IMF (International Monetary Fund) says the country’s “tax wedge” – or tax as a share of labour costs – is one of highest in the world at almost 50%.

Just 39.7% of those aged 55 to 64 are in work, compared with 56.7% in the UK and 57.7% in Germany. Early retirement incentives are to blame. “French workers spend the longest time in retirement among advanced countries,” says the Fund.

France coasted through the last decade, losing 20% unit labour cost competitiveness against Germany as it screwed down wages and pushed through the Hartz IV reforms. French industry has been losing 60,000 jobs a year for a decade. Manufacturing has shrunk to 12% of GDP, as bad as Britain.

Renault chief Carlos Ghosn warned last week that France’s biggest car company would “cease to exist” in its current form unless there was a radical change in the country’s work climate. “Not over three or six months perhaps, but over three years, or five years, yes, the danger is real,” he said.

The whole economic structure of France is an anachronism in a Chinese world and a German currency union. “We are consuming the leftovers of a past prosperity,” says Jean Peyrelevade, ex-head of Credit Lyonnais.

Sovereign debt strategist Nicholas Spiro says growing doubts about the “credibility of French fiscal and economic policy” may soon bring Mr Hollande’s strange honeymoon to a close. It is a widely-shared view. Danske Bank’s bond team sees a “significant risk that the market will turn on France in 2013”.

Huw Pill from Goldman Sachs said the detonator may be activation of the European Stability Mechanism to bail out Spain and then Italy.

The potential ESM demands are too large for the “vulnerable core” of France, Belgium, and Austria. Their own fiscal health would come under the microscope. The shock would push them “from one equilibrium to another.”

Mr Hollande has swallowed the argument that drastic cuts are the only way to cap debt at 90% of GDP and keep the debt trajectory under control.

Yet we already know from Greece, Ireland, Portugal, and Spain that fiscal shock therapy makes little dent on the deficit without monetary shock absorber. It causes nominal GDP and the tax base to shrink, making debt ratios even worse.

France does not have to put up with destructive 1930s policies imposed by Germany. It is not a vassal state. It remains a great nation, the beating heart of Europe and the EU’s balancing force.

It can break out of this awful trap by leading a yet more determined Latin revolt, this time marshalling its voting majority in the Council to force an end to contractionary policies.

A French-led growth bloc can strike back by inflicting an intolerable level of inflation on Germany. It can, if necessary, cause the North Europeans to walk out of EMU altogether — the optimal solution for the North and South respectively.

For that, Mr Hollande must be willing to abandon the Franco-German condominium, the central tenet of French foreign policy for almost sixty years. The cautious, plodding Enarque from the Limousin is not the type for fireworks, but give him time.

Melts in Your Mouth or in Your Hand

MEDFORD/SOMERVILLE, Mass.–Tiny, fully biocompatible electronic devices that are able to dissolve harmlessly into their surroundings after functioning for a precise amount of time have been created by a research team led by biomedical engineers at Tufts University in collaboration with researchers at the University of Illinois at Urbana-Champaign.

Dubbed “transient electronics,” the new class of silk-silicon devices promises a generation of medical implants that never need surgical removal, as well as environmental monitors and consumer electronics that can become compost rather than trash.

“These devices are the polar opposite of conventional electronics whose integrated circuits are designed for long-term physical and electronic stability,” says Fiorenzo Omenetto, professor of biomedical engineering at Tufts School of Engineering and a senior and corresponding author on the paper “A Physically Transient Form of Silicon Electronics” published in the September 28, 2012, issue of Science.

“Transient electronics offer robust performance comparable to current devices but they will fully resorb into their environment at a prescribed time—ranging from minutes to years, depending on the application,” Omenetto explains. “Imagine the environmental benefits if cell phones, for example, could just dissolve instead of languishing in landfills for years.”

The futuristic devices incorporate the stuff of conventional integrated circuits — silicon and magnesium — but in an ultrathin form that is then encapsulated in silk protein.

“While silicon may appear to be impermeable, eventually it dissolves in water,” says Omenetto. The challenge, he notes, is to make the electrical components dissolve in minutes rather than eons.

Researchers led by UIUC’s John Rogers — the other senior and corresponding author — are pioneers in the engineering of ultrathin flexible electronic components.   Only a few tens of nanometers thick, these tiny circuits, from transistors to interconnects, readily dissolve in a small amount of water, or body fluid, and are harmlessly resorbed, or assimilated. Controlling materials at these scales makes it possible to fine-tune how long it takes the devices to dissolve.

Device dissolution is further controlled by sheets of silk protein in which the electronics are supported and encapsulated.   Extracted from silkworm cocoons, silk protein is one of the strongest, most robust materials known. It’s also fully biodegradable and biofriendly and is already used for some medical applications.   Omenetto and his Tufts colleagues have discovered how to adjust the properties of silk so that it degrades at a wide range of intervals.

The researchers successfully demonstrated the new platform by testing a thermal device designed to monitor and prevent post-surgical infection (demonstrated in a rat model) and also created a 64 pixel digital camera.

Collaborating with Omenetto from Tufts Department of Biomedical Engineering were Hu Tao, research assistant professor and co-first author on the paper; Mark A. Brenckle, doctoral student; Bruce Panilaitis, program administrator; Miaomiao Yang, doctoral student; and David L. Kaplan, Stern Family Professor of Engineering and department chair. In addition to Tufts and UIUC, co-authors on the paper also came from Seoul National University, Northwestern University, Dalian University of Technology (China), Nano Terra (Boston), and the University of Arizona.

In the future, the researchers envision more complex devices that could be adjustable in real time or responsive to changes in their environment, such as chemistry, light or pressure.

The work was supported by the Defense Advanced Research Projects Agency, the National Science Foundation, the Air Force Office of Scientific Research Multi University Research Initiative program, the National Institute of Biomedical Imaging and Bioengineering of the National Institutes of Health under award EB002520 and the U.S. Department of Energy.

Attribution: Real Clear Science