Interested in a slimmer government? [Bryan]

There has been much talk lately about how we can reduce the budget deficit over the long run. Hmmm, let me think...

Triology Meter [Bryan]

This chart measures the "quality" of each installment of a movie trilogy. I can't say I disagree with any of it -- although, to be sure, I haven't seen all the Mad Max movies. Interesting how the third movie is always the worst, and the second is often the best. I wonder why that is.

I love charts [Bryan]

To be sure, much of how one reads this chart depends on what is meant by evolution being the "best explanation" of human life. But it was still shocking to me. We Mormons have a huge number of scientists among us, compared to others. We also have scriptural tools and resources that suggest the creation accounts are not to be taken so literally (we have 5 distinct creation accounts, after all, each one different from the last!). And yet, we are more fundamentalist than almost anyone on this issue. What's up with that? Yikes.

That captures the recent use of the filibuster by the Senate Republicans. Looks like the Republican strategy is this: obstruct anything and hope things get a lot worse. Country first indeed!

Americans seem to think the current health care system just isn't working.

Baby Pictures [Bryan]

Stephen arrives and is rushed to the NICU -- but was released quickly.

Here he is -- doing well now.

Nora is going to be a great big sister...

...and Andrew a great big brother.

Dad with that overwhelmed feeling.

He has arrived! [Ellie]

Just wanted to announce the birth of our newest little Warnick, Stephen Ray. He was born Tuesday, Feb. 10 at 5:39 a.m. He weighed 9 lbs. and a little bit and was 20 3/4 inches long. Just like I'd hoped, I went into labor myself--for the first time. I arrived at the hospital dilated to a 7! My water even broke!

Things continued to be exciting, though, and Stephen had to come out via emergency C-section. He was big, transverse, and distressed. Fortunately, all is well now.

More details and pictures to come.

Recent pictures [Bryan]

Due date is tomorrow!

After church

Andrew got a toolbox for Christmas, along with safety glasses.

Mitt is (probably) wrong [Bryan]

Apparently, Mitt Romney has been in the news again lately talking about the alleged benefits of tax cuts as economic stimulus. Normally, I would ignore this, but I know a lot of people who seem to respect his opinion. Well, here is a reading list for Mitt:

1. Steven Pearlstein (Washington Post business columnist) explaining the rationale for spending as stimulus in clear, concise, and accessible language.

2. The much-discussed congressional testimony of Mark Zandi (pdf) of economy.com -- see particularly page five for a comparison of the types of stimulus. Most tax cuts, he concludes, are ineffective as stimulus.

3. Analysis from the non-partisan Tax Policy Center. Doubts about most forms of tax cuts as stimulus are expressed here. Their helpful chart of the stimulative effect of the tax cut and spending provisions in the House and Senate plans are here -- complete with A-F grades.

4. Nobel Laureate Paul Krugman on the myths of the stimulus debate. See Kurgman also here and here. Krugman is a partisan, to be sure, and you can find Nobel Laureates disagreeing about these things, but Krugman seems to have been right about a lot of issues from the beginning.

5. Criticism from the Economic Policy Institute relating to the regrettable Senate "compromise" bill that increases largely ineffective tax cuts and reduces much needed spending in things like schools, research, state aid, etc.

6. On the nearly unanimous public support for new infrastructure spending.

The verdict? Mitt's analysis seems to go against what most economists are saying about stimulus. We need spending for stimulus, nearly everyone agrees that we need new infrastructure to stay competitive, so why not just do it?

Naming our baby [Bryan]

Ellie and I have had a difficult time naming our new baby (due date Feb. 9). Nothing seems to match right. We've played around with many names: Stephen Ray Warnick, Geoffry Bryan Warnick, and so forth. We are not entirely happy with what we've thought of.

My dad recently gave us a good idea, though. Some of you might know that I recently received a grant from the Spencer Foundation. It is a small, but prestigious award, and it may very well help me get tenure someday. We were very happy to receive a Spencer grant.

Now, every month Dad puts out a family newsletter and asks us by email what news we want to contribute. On my list of news items from our side of the family, I put down simply "Spencer Grant" remembering that Dad and I had talked earlier about the award. I was proud of it, and I wanted the family to know the exciting news. Apparently, though, Dad forgot about our earlier conversation, got confused about what I meant, and wrote in the newsletter that we had apparently decided to name our baby........Spencer Grant.

It has a nice ring to it actually.

Ignorance on Parade -- Updated Thrice [Bryan]

This is not a stimulus plan, it's a spending plan. It won't create the promised jobs. It won't activate our economy.

Senator Mike Johanns (R)

I have rarely seen such breathtaking displays of ignorance as I have in the past few days. I am trying to decide who is dumber when it comes to the economic stimulus package, the media or the politicians like Johanns. It's a tough call.

Let's review where we are at . The economy is in serious, serious trouble. This is reflected in economic data out today, as well as personal experience. I know several families who have lost their jobs. How did we get here? Well, in 2005 the housing bubble pops. House prices decline. Banks heavily invested in bad loans nearly go under, and people see their equity evaporate or turn negative. Credit almost completely freezes. No one lends money and people feel poor. Businesses and families start to restrict spending, and investors get stingy. Businesses then need to cut back on production. Jobs are then lost. Due to this unemployment, people then buy even less, leading to more production cuts and more failing businesses. More jobs lost. This leads to yet more cuts in consumer spending and investment...and so forth and so on.

One way to deal with this problem is for the Federal Reserve bank to lower interest rates -- this makes lending easier and can entice spending. Alas, the Fed has lowered interest rates to zero and things keep getting worse. To break this cycle, somehow spending needs to pick up again, but no one is going to start spending or investing on their own in this climate.

Luckily, since John Maynard Keynes was around, we now have the idea of "counter-cyclical fiscal policy" solutions. When spending takes a nose dive, Keynes realized that the government can step in a make up the difference. The government can increase spending directly or lower taxes and hope that people will spend themselves. What happened in the Great Depression was that spending was cut and taxes raised at very inappropriate times (thanks to both Hoover and FDR), which is why it turned out so bad. Now we know better. We even know what kind of budget expenditures work best as stimulus: aid to low income families, unemployment benefits, and infrastructure investment (see chart below, which shows the amount of effective stimulus per each government dollar spent).

Now, most Republicans want to exclusively cut taxes for stimulus. While some tax cuts are necessary for quick stimulus, they are less preferable for two reasons. First, notice from the chart that tax cuts don't stimulate all that effectively -- people (understandably) don't spend their tax cut in tough times unless they need to. Second, tax cuts miss the chance to spend money in ways that help us to solve our big social problems. Last year, when the stimulus tax rebate checks arrived, pornography sales increased 20-30%. Imagine: instead of stimulating with porn, we invest that money in medical and clean energy research, broadband expansion, Pell Grants, roads and schools, bridges, high speed trains, and so forth. This is the stuff that makes for long term economic success. Porn doesn't. Tax cuts alone can't make the community investments that really make a difference.

It is maddening to me, not that people like Johanns disagree about the details here, but they don't even seem to understand the basic principles at issue. Either they do not understand, or they want to embarrass the other side so badly that they are willing to let the country burn to score a political victory.

Behold the fall of civilizations.

Update: I should add that expected shortfall in demand from the current recession is a whopping $1-2 trillion. So the problem with the current $900 billion stimulus is not that it spends too much; rather, it spends too little.

Update 2: So it looks like the Republicans have pushed for less spending on food stamps, state aid, and infrastructure. This is all a very bad idea. It is the opposite of what we want to do.

Update 3: I was talking to some guys today who said (1) we should worry that the government is just printing money (presumably this is a worry about inflation), and (2) just giving money to people in food stamps makes them dependent.

With regard to (1) I should point out that inflation is the least of our worries right now. If our currency does start to lose value (and prices rise) we should worry. But the Consumer Price Index has been falling recently. Deflation is the worry right now, not inflation. With regard to (2), I should point out that this is all about economic stimulus. Poor people need the money and will spend it. If that is the goal, you can't stimulate any better way. The increase is temporary whatever the case.