The View from Right Field

The Cost of Deficits May Be More Than the Interest On the Debt

While the news media and some of our politicians are focused on Occupy Wherever, a bigger story is occurring under the radar in Europe and the United States.  While Europe may have solved the Eurozone/Greek debt crisis for now – and hopefully for longer, look at one of the parts of the solution: a call by French President Nicolas Sarkozy for China to support the European Financial Stability Facility.   Europe needs money (to support its economy, including importing goods from China), and China has trillions in reserves, so it seems like a match made in heaven – except.  Except that the cost of those loans to Europe may be more than just the interest charged.

The United States is in a similar situation.  While President Obama talks about how we need another stimulus plan (though it’s not called that), the fact is that we already have a huge federal deficit, and that deficit has to be financed by somebody.  In the past, part of the deficit was financed by loans from the Social Security Trust Fund.  But with the Trust Fund now paying out more than it takes in, Treasury can no longer borrow from Social Security.  Fortunately (I guess), the economic turmoil around the world has made the United States seem relatively secure, even with our S&P credit rating downgrade.  But we still need to borrow a lot of money and much of that borrowing has to come from overseas.  Once again, the concern is what might come with those loans, especially if they are from China.

But instead of talking generalities, let’s look back a little over 20 years.  With the 20th anniversary of the fall of the Berlin Wall, the 20th anniversary of the reunification of Germany and the 50th anniversary of the building of the Wall, I have been reading books on the end of East Germany and the reunification of Germany.  There are some lessons to be learned here about over-borrowing, if we want to see them.

First, consider East Germany.  By the 1980s East Germany was supporting its lifestyle, and its “really existing socialism,” by borrowing money from the West, including West Germany.  In fact, in 1976 East Germany stopped publishing separate totals for its exports and imports and reported only aggregate numbers in order to hide its true situation.  By the mid-to-late 1980s, East Germany’s debt was huge.  According to one report, the West German government was buying East German debt “in order to put greater pressure on the SED [i.e., the East German communist party] in the future.”  By 1988, “[t]he GDR had been living beyond its means for years, and the only way out, [planning chief Gerhard] Schürer implied [in a report to Erich Honecker], was a drastic cut in living standards for most East Germans.”* 

We never found out what the political effects of this debt would have been on East Germany because once the Wall was opened on November 9, 1989, the GDR was doomed.  Either East Germany was going to go away or the East German people were.  The Germans were going to re-unite.  It was just a matter of whether East Germany and West Germany were going to become one country or a very large percentage of the East German population was going to move to West Germany.

While we don’t know what would have happened in East Germany, we do know the effect that the Soviet Union’s need for money had on the Soviets’ policies toward German re-unification.  In the late 1980s Mikhail Gorbachev was pursing glasnost and perestroika.  But he needed money and loans to pursue those policies.  And where could he get that money?  West Germany.  Here is an excerpt from Dissolution: The Crisis of Communism and the End of East Germany by Charles S. Maier:

“The Soviet ambassador in Bonn, [Yuly] Kvitsinsky, returning home after the two plus four [talks] to become deputy foreign minister, was unhappy about the concessions that had been made but also aware that his government’s confusions left little to rescue.  Increasingly crucial was the financial calculation.  Since earlier calculations of a profitable Soviet, FRG, and GDR ‘triangle’ had been overtaken by events, West German economic assistance seemed increasingly necessary. 

Soviet military leaders were scornful of the compromises [Mikhail Gorbachev had made] on Germany, but their pressure was countered by the acute financial realities.  Just as it had constrained the GDR and Poland, indebtedness to the West now cut deeply into Soviet options. …

Shevardnadze had been delegated to plead for credits from Kohl on the eve of the two-plus-four meeting of Mary 5: perestroika could not be carried through if the ruble collapsed: might not the Germans therefore, so he had to plead, guarantee loans of DM 20 billion?  Kvitsinsky had deep misgivings about undermining the foreign minister’s leverage by making him play the role of mendicant – but the financial plight seemed determinative. …

Less than two weeks later, on May 16, Kohl proposed to Bush that the United Stated join him in economic credits [to the Soviet Union] ….  But the president refused in view of the Lithuanian situation and congressional unhappiness with the Soviet pressure on the small emerging nation. …

It was up to the Germans to become the Russians’ bankers.  It would not be easy, Bush pointed out, for the Russian supplicants to shut the door on German national aspirations if they hoped to open the purses of the Federal Republic.”**

We know how this turned out: Germany was reunited, it stayed in NATO, and it all happened peacefully.  It was an incredibly good result.  But in 1990 it was the good people who had the financial leverage.  And they were using it for good purposes.

But what about today?  Will what China demand from Europe in return for the help President Sarkozy is seeking?

And what about the United States?  We need loans, too.  In March of 2009, I said that borrowing from China might not affect us too much domestically but that Taiwan should worry (see here and here).  Our reliance on Chinese loans might also mean that we cannot support the Tibetans or the Uyghurs if China cracks down on them.  Our ability to influence what China does with respect to North Korea and its nuclear arsenal could be reduced.  And any chance of our standing up for human rights in China will be gone.

Please understand I am not saying we should isolate ourselves economically from China.  Trade and investment are great.  What I am worried about is dependence on loans from China.  Because the cost of these loans may be more than the interest we have to pay.  It may also be the self-respect we have to give up to get them.

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* Jeffrey Kopstein, The Politics of Economic Decline in East Germany, 1945-1989 (1997), p. 84, 101-103, 224.

** Charles S. Maier, Dissolution: The Crisis of Communism and the End of East Germany (1997), p. 271-72.  Note that in the book itself, this excerpt was part of one long paragraph.  I have divided it into separate paragraphs here to increase its readability on a computer.

     Interestingly, Spiegel, a German news magazine, recently reported that, in 1963, then-Chancellor Ludwig Erhard was seriously considering trying to “buy” East Germany from the Soviet Union in exchange for loans of 100,000,000,000 deutsche marks that would never be repaid.  In 1963, Nikita Khrushchev was still in power, and the Soviet Union was suffering one of its worst crises, as well as facing a new rival in Mao Tse-tung’s China.  But President Kennedy was assassinated before Chancellor Erhard would mention the idea to him, and Lyndon Johnson wasn’t interested.  By 1965, Chancellor Erhard decided the plan was no longer possible.  Khrushchev was out, and the Soviets’ need for loans was being met by other lenders.

     Also with respect to the effects of foreign indebtedness, see this excerpt from In Europe’s Name: Germany and the Divided Continent (1993) by Timothy Garton Ash:

“In fact, Brezhnev was constantly warning Honecker, and other East European leaders, of the dangers of becoming too indebted to the West.  The great lesson of what had happened in Poland, he told the Czechoslovak Politburo in spring 1981, was that they should all make sure that their foreign debt ‘did not reach a dangerous level’.” (p.157)

The Health Totalitarians: Shape Up or …

Ezra Klein writes about the Cleveland Clinic’s efforts to cut its health costs:

“The Cleveland Clinic is best known for providing excellent health care. …

But the clinic has a more interesting – and more consequential – story to tell right now ….

With 40,000 employees, the clinic is the second-largest employer in Ohio. Like most employers, it struggles to contain health-care costs. But according to Michael Roizen, the clinic’s director of wellness, over the past seven years a series of reforms instituted by the clinic’s chief executive officer, Delos Cosgrove, slowed and then arrested the growth in employee health-care costs at the clinic. …

Roizen says the initiative sprang from a single fact. … 70 percent of all medical costs are related to smoking, physical inactivity, food choices and portion size, or stress.

But consider what that actually entails: Changing habits. Breaking addictions. Getting people to the gym. Who wants to hear about any of that from their employer?

The clinic, however, didn’t give employees a choice. … [Roizen said:] ‘Then we banned smoking on campus. You can’t even smoke in the parking lot in your car. … We fired two high-profile physicians who refused to quit.’ …

Food came next. The clinic took out almost every deep-fryer in the building. They removed sugared soda from every beverage case. … 

That left fitness and stress relief. … Usually, you have to pay to hit the gym or attend a yoga class. If you work for the Cleveland Clinic, you have to pay if you don’t.

… The clinic tracks its employees’ blood pressure, lipids, blood sugar, weight and smoking habits. If any of these are what the clinic calls ‘abnormal,’ a doctor must certify that the employee is taking steps to get them under control. Otherwise, no insurance rebate. …

It appears to be working. Not only has the clinic cut its health-care costs, but its employees are also getting healthier in measurable ways. …

In one sense, the clinic has achieved the health policy ideal: cutting health-care costs by making people healthier. But consider how the clinic has done it – tying premiums to personal decisions, firing smokers, tracking employee metrics, eliminating popular sodas and foods from campus. …

The clinic no longer hires smokers. Will the obese eventually face similar hurdles? What about fans of fast food?

The experiment might work at a famed medical center where the CEO plausibly argues that aggressive leadership in health care is central to the institution’s mission. But would it work at General Motors? Caterpillar? Wal-Mart? Medicaid and Medicare?

Roizen thinks it can – and should. He estimates that an aggressive program could cut federal health spending by $300 billion to $600 billion a year. If he’s right, then simply instituting such wellness reforms could cut the federal deficit by far more than the Simpson-Bowles commission or the congressional supercommittee would. …

If we opt for Cleveland Clinic-style wellness programs, we won’t have to gut education, raise taxes or slash Medicare. And we’ll end up healthier. But … are we really ready to let employers – much less the government – tell us to quit smoking, skip the junk food and lose weight?

Megan McArdle, who pointed me to Ezra Klein’s article, is skeptical whether the Cleveland Clinic’s results can be replicated on a nationwide scale:

“One imagines that employees who do not want their employer nannying them about their gym time and alcohol consumption probably decline to work at the Clinic.  

Selection bias will produce good results for the selecting organization, but you cannot replicate its results on a nationwide scale; fat, smoky people have to work somewhere (or go on welfare).”

But, of course (and I think Ms. McArdle might agree with me), the most important question is not whether government can replicate the Cleveland Clinic’s results on a national scale.  The question is whether we want government to replicate the Cleveland Clinic’s methods.

It is one thing for a private employer to tell an employee how to live his or her life.  Maybe it’s okay – though only as long as just a few employers do it and there are places that non-conformists can escape to. 

But for a government?  To tell this to everybody?  I don’t care how much money can be saved.  This is not something government should be doing.  And these are not powers I want government to have. 

But some governments have already raised taxes on cigarettes so high that they are virtually unaffordable.  Other governments have effectively legislated Happy Meals out of existence.  And there are proposals to put extra taxes on fatty foods or on sugared pop (“soda” to those out you who don’t live in the Midwest) because they’re “not good for you”.  Aren’t these ideas precursors to what the Cleveland Clinic is doing – and what some people may soon be proposing that the federal government do to save money on health care?

President Obama Thinks We Have Lost Our Ambition and Our Imagination

Yesterday President Obama told the guests at a Democratic fundraiser in San Francisco that “We have lost our ambition, our imagination, and our willingness to do the things that built the Golden Gate Bridge." 

Maybe the President has lost his ambition.  Maybe the Democrats have lost their imagination.  But I haven’t.  And lots of Republicans haven’t either.  But most importantly, America hasn’t.

Americans haven’t lost our ambition.  We haven’t lost our imagination.  Maybe we just need a president who doesn’t want to spread around our money, who doesn’t think we just cling to our religion, who doesn’t think we have gone soft.  Maybe we need a president who believes in us so we can believe in him. 

Washington Budgeting: Adventure in Fantasy Land

Here is a story about how they do budget numbers in Washington, D.C.  It’s something to keep in mind when the people there start talking about deficits and savings and all those things.

Politicians in Washington almost always support their positions on budget issues by claiming that their numbers are supported or verified by the Congressional Budget Office.  For example, when Congress passed Obamacare in 2010, its supporters claimed that it would save money, and they claimed that the CBO agreed.  One of the reasons that Obamacare was going to “save” money was a new program called CLASS, which was short for Community Living Assistance Services and Support.  CLASS was a voluntary government insurance program that was supposed to cover home health care services for older or disabled adults.  Of course, the reason that the CBO said CLASS was going to save money was that it was going to start collecting premiums right away, but it wasn’t going to pay benefits for five years. 

The important thing to understand about the Congressional Budget Office is that when the CBO “scores” proposals for budget purposes, they only look at the costs and income for the first ten years.  Those are their rules.  (They may even be the law; I don’t know.)  Since the CLASS program was going to collect premiums for ten years and only pay out benefits for five years, it was going to have more money coming in than it would have going out over the first ten years.  Voilá!  It was going to save money – under the rules that the CBO has to operate under.  The fact that the program would be a budgetary disaster later on was irrelevant to the way that CBO counts things.

In fact, even though the program was a long-term budget-buster, since the CBO only looks at the first ten years, and since that is how things are calculated for Congressional budgeting purposes, when some Republicans were talking about repealing the CLASS program earlier this year (because it is unsustainable on a long-term basis), under CBO rules the Republicans would have had to either raise taxes or cut other spending to balance the loss of budget savings from repealing the program.*  Mind-boggling.

But finally, earlier this month, the Obama administration admitted that they couldn’t come up with a way to make the numbers work for the CLASS program, and they shut it down.  (The Senate had included in the original Obamacare legislation a provision requiring the Department of Health and Human Services to certify that the program had an actuarially-sound premium before they could start it up.  When they couldn’t certify that, the program had to be shelved.)

This is where it gets interesting – and really bizarre.  Once the Obama administration finally admitted what everybody already knew (i.e., that the program didn’t work financially) and said that they were shutting it down, the head of the CBO said this:

“Following longstanding procedures, CBO takes new administrative actions into account when analyzing legislation being considered by the Congress – even if it has not published new baseline projections.  Beginning immediately, therefore, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact.”

In other words, if Congress had passed a bill cancelling the CLASS program before HHS acted, then the cancellation would have counted, for CBO purposes, as an $86 million increase in the 10-year deficit calculation.  But a month later, after the Administration decided to shut the program down, repealing it wouldn’t count toward the 10-year budget projections.

While I am sure that this makes sense in the strange world of federal government budgeting rules, it obviously doesn’t sense to anybody who lives in the real world.  And that is something to remember the next time you hear somebody say that their budget numbers have been confirmed by the Congressional Budget Office.

One final point, not on budgeting but on the Obama administration:  Even though the Administration has admitted that it could not come up with a way to make the CLASS program work financially, President Obama still opposes repealing it.  Why?  According to a White House spokesperson:

“We do not support repeal.  Repealing the CLASS Act isn’t necessary or productive. What we should be doing is working together to address the long-term care challenges we face in this country.”

Which is gobbledygook.  Maybe I am being cynical, but I think the reason that President Obama doesn’t want to repeal the program is because, if the President gets re-elected and doesn’t have a Democratic Congress, he wants the ability to be able to have his new person at HHS look at the CLASS program and come up with a new theory on why it does work and start implementing it – without needing any kind Congressional approval.**

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* “The Definition of Insanity,” The Wall Street Journal, October 4, 2011.

** Some health care “experts” have already criticized the President for shutting the program down, saying that it actually could work (see here).  After the election, there is no reason to believe that the President wouldn’t decide they were right after all and start it up again.

Update (10/23/11 9:25 am):  For a prior comment on the CLASS Act, see here.

World Series: Cardinals vs. Rangers

With the World Series starting tomorrow night, I thought it might be appropriate to post this picture, taken on about October 27, 1985:

President Obama and the Republicans Pass Free Trade Bills

You may not have seen it in your local paper last week*, but on Wednesday Congress finally passed the free trade deals with Colombia, Korea and Panama.  These agreements are good news for workers in the United States and workers in each of these countries.

The agreements, especially the one with Colombia, have been hanging around since the George W. Bush administration, but the Democrats, particularly the House Democrats under Nancy Pelosi opposed them and wouldn’t let them come to a vote.  Even with the Republicans taking control of the House in January, the bills were still delayed and delayed as the Obama administration, in spite of the President’s alleged support for them, kept finding new reasons to not send the bills to Congress. 

The President finally sent the bills to Congress in September, and within a few weeks** the bills passed.  Consider the votes in the House and Senate on each of these deals:

Colombia
House  262-167
    Republicans  231-9
    Democrats  31-158
Senate  66-33
    Republicans  44-2
    Democrats  22-31

Korea
House  278-151
    Republicans  219-21
    Democrats  59-130
Senate  83-15
    Republicans  45-1
    Democrats  38-14

Panama
House  300-128
    Republicans  234-6
    Democrats  66-123
Senate  77-22
    Republicans  46-0
    Democrats  31-22

I was glad, and proud, to see the strong support for these bills by Republicans in both houses.  And I am glad that President Obama finally sent these deals to Congress in spite of the opposition by congressional Democrats.

One final point:  Remember how the “Tea Party” elected in November 2010 were supposed to be ignorant isolationists who didn’t appreciate the United States’ position in the world and how the world economy works.  Obviously, it wasn’t true about them.

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* It wasn’t, for example, in the print edition of the Chicago Tribune.  It’s good that the Tribune no longer claims to be “The World’s Greatest Newspaper”.

** Update (10/17/11 8:45 am): It was actually within a week.

Japan Tells President Obama That Apologizing in Hiroshima Is a "Non-Starter"

According to a secret cable published by Wikileaks, it appears that, when President Obama went to Japan in November of 2009, he wanted to go to Hiroshima and apologize for the United States having dropped atomic bombs on Japan in August of 1945 and that it was the Japanese who had to tell him he could not to do it.

While the White House is claiming “there was never any plan for the president to apologize for Hiroshima”, let’s look at what the cable says.  The cable, which was from the United States Ambassador to Japan to the State Department, said this, in relevant part (the whole cable can be found here):

“On the President's upcoming visit to Japan in November [2009], he [Vice Foreign Minister Mitoji Yabunaka] recommended keeping the program relatively simple and centered around the Tokyo metropolitan area, adding that it would be premature to include a visit to Hiroshima.  …

Anti-nuclear groups, in particular, will speculate whether the President would visit Hiroshima in light of his April 5 [2009] Prague speech on non-proliferation.  He [Vice Foreign Minister Yabunaka] underscored, however, that both governments must temper the public's expectations on such issues, as the idea of President Obama visiting Hiroshima to apologize for the atomic bombing during World War II is a ‘non-starter.’”

While the cable does not specifically state that it was the President’s, or the United States’, idea for the President to apologize in Hiroshima, I find it hard to believe Japan would tell the President it was a “non-starter” for him to go to Hiroshima and apologize if the United States did not bring up the idea itself.  Is it really plausible that the Japanese government would tell the President that he shouldn’t go to Hiroshima and apologize on their volition? Would the Japanese really bring this up first, by themselves, without the United States indicating pretty clearly that this is what the President wanted to do?  Highly unlikely.

Which means that President Obama wants to, and apparently thinks it is appropriate for him to, apologize on behalf of the United States for the United States having dropped atomic bombs on Hiroshima and Nagasaki.  Which means I want Barack Obama out of the White House on January 20, 2013, before he gets a chance to do that. 

I am not going to repeat all of the arguments supporting President Truman’s decision to drop these bombs – other than to say that I envy the certainty of those who say that it wasn’t necessary to drop the bombs and that Japan was going to surrender anyway, without an invasion, in a very short time.

I don’t know what Japan was going to do, and I can imagine that the decision to drop the bombs must have been an incredibly difficult one for President Truman.  He couldn’t know for certain if dropping the bombs was necessary to end the war or if they would end the war, whether because they didn’t work or because the Japanese still wouldn’t surrender.  He made the decision because it seemed to him, based on what he knew then, that dropping the bombs was the best way to end the war as soon as possible and with the fewest number of American casualties (he was, after all, President of the United States), as well as the fewest Japanese casualties.  I can only imagine the relief that President Truman felt when Japan announced its surrender six days after the second bomb was dropped. 

But in President Obama’s opinion, this most difficult decision was so wrong and so morally repugnant that he wanted to go to Hiroshima to apologize for it.  I am very glad he was not able to do it. 

One final point:  Next year, during the campaign, when President Obama talks about the obstructionist or “do nothing” Republicans in Congress, trying to invoke the spirit of Harry Truman, remember that President Obama wanted to apologize for President Truman’s decision to drop the atomic bombs on Japan to try to end World War II war as soon as possible.  And realize that Barack Obama is not a Harry S. Truman Democrat.

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Update (10/16/11 8:05 pm): I corrected a typo in the first paragraph.  I changed "November of 1989" to "November of 2009".

Cubs: A Look at 2012 – Because 2011 Was Too Depressing to Think About

Last October I wrote a four-part series on the 2010 season and the then-upcoming 2011 season.  This year I had going to be hard-pressed to do one decent-length post – for a couple of reasons.  One, the Cubs stunk in 2011.  Two, Cubs fans don’t have much reason to think 2012 will be all that much better.  But first, for those of you who do not follow me on Twitter (@PatAllen_VfRF), a comment on the NLCS:  As between a team whose drunk fans cursed my wife while we were just walking down the street (and the Cubs weren’t even in town) versus a team whose drunk fans spilled beer on my wife (and didn’t apologize or even seem to care), there isn’t much to choose.

As the Cubs look to 2012, it is easier to identify where they don’t have holes than to talk about where they do.  There are probably three positions set with really good players for 2012: (i) shortstop; (ii) left-handed set-up (and alternate closer); and (iii) one starting pitcher.  In other words, Starlin Castro, Sean Marshall*, and Matt Garza.  Beyond that, every position is either a hole or filled with somebody who could be upgraded. 

Obviously, some positions are “emptier” than others.  Third base and right field are real holes, along with a couple of spots in the starting rotation.  Other spots, like center field, catcher and one or two starting pitchers are positions that good teams would try to upgrade, but the Cubs will probably just go with what they have because other problems are worse.

Let’s look at what we have.  Starting pitching-wise, there is Matt Garza.  Ryan Dempster is a nice guy, but his ERA has gotten worse every year since 2008.  Still, Ryan will be back because there are still three other starting spots to fill with Randy Wells, Rodrigo Lopez (if he’s back), Casey Coleman, Andrew Cashner (if his arm is okay), Jeff Samardzija (which creates a hole in the bullpen), and whoever there is in the minors.

The bullpen will consist of: (i) Sean Marshall; (ii) a closer who had a really bad year and who I am not sure knows how to get his groove back; and (iii) whoever else might be available.  The only good news (and I’m not trying to be mean) is that John Grabow won’t be back.

Marlon Byrd might be adequate in center if you had good outfielders on the corners, but we don’t.  Right field is a huge hole.  Tyler Colvin was never able to come back after getting the bat splinter in the chest in September of 2010.  I hope he can turn it around, but you can’t count on it.  There is nothing that can be said about left field.  Eventually, the Cubs will have to eat most of the rest of his salary.  Will it be in 2012?  I don’t know.

There is a huge hole at third, and I am not sure whether either Josh Vitters or D.J. LeMahieu is ready now.  Maybe by 2013 or even the end of 2012, but not spring 2012.  Darwin Barney did a fine job at second base, though he didn’t do as well in the second half as the first.  Is that because the league figured him out or was it because of the knee he sprained beating the Brewers on June 13?  I don’t know, but we have bigger problems than second base.

I expect Carlos Pena to be back at first.  He is great defensively, and he gets his walks, but his batting average (.225) just isn’t good enough.  I know he had a decent OBA (.357), but a walk is not as good as a hit for a middle-of-the-order guy.  It doesn’t matter that much how a lead-off man gets on base, hit or walk.  But when your number five batter is up with a runner on third and two outs, a walk is definitely not as good as a hit.

Catching is another weak spot that will probably be ignored because there are bigger problems.  Still, Geovany Soto has to lose some weight to get back to where he was in 2008.  Koyie Hill did his best, but it’s not that good.

Coming off the bench, Tony Campana is one of the most exciting players around.  When he gets on first base, things happen.  He is fun to watch.  The question is whether he can get on base enough.  The Cubs did have a Baseball America minor league All Star in Bryan LaHair.  The only problem is that he was an All Star at DH, and the Cubs are in the National League.

I suppose the Cubs could do a 180^o in 2012.  What it would take, however, is for Brett Jackson to be ready next spring to take one of the outfield spots, Josh Vitters or D.J. LeMahieu to take over at third base, Darwin Barney to play like he did the first half for the whole season, Geo to play like 2008 (or 2010), Dempster to turn it around, Randy Wells and Casey Coleman to pitch like they have occasionally, and Carlos Marmol to get his touch back.  In other words, 1989.  It could happen, but I wouldn’t count on it.

So what do the Cubs do in the meantime?  They are doing two things.  One I am excited about.  The other I am not.  The one I am excited about is that they spent a lot of money in the amateur draft.  In 2009 and 2010, the Cubs were near the bottom of the major leagues in paying bonuses to kids they drafted.  This year they were fourth.  That means they were able to draft the best players available, not just the kids who would sign cheap.  They were even able to draft and sign a kid who was ranked in Baseball’s America top 50 prospects in the fourteenth round by giving him enough money to get him to bypass college.  I have been saying that the Cubs need to build from within.  This is doing it.  This is exciting.

On the other hand, the Cubs are apparently planning to sign a big name general manager.  I’m not excited about that.  I got tired of the big name managers who were supposed to be the answer (Don Baylor, Dusty Baker and Lou Piniella).  They weren’t.  I don’t see a superstar GM being any different.  It’s like players who sign big contracts and then have a bad year because they put so much pressure on themselves to prove that they are worth the money they are getting paid.  A big name GM is going to want to do something right away to prove he is worth it.  This could all too easily lead to unintelligent risk-taking.  That is not the way to go.  We need to build, not gamble.

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* Here is one I got really wrong.  In May of 2009, I said “Sean Marshall Is Not the Answer for a Decent Left-Handed Reliever”.  Obviously, I was wrong.  In fact, Sean Marshall is more than just “decent” and he is way more than one of those left-handers who only comes in to pitch to left-handed batters.  He has been great.

Update (10/12/11 9:00 am): Added a link to the May 2009 post about Sean Marshall.

2011: The 400th Anniversary of the King James Bible

As those of you who read this blog know, I often comment on anniversaries.  Many times they are about baseball, but sometimes I do other things.  This is going to be one of those other things because 1611 is the 400th anniversary of one of the best books, if not the best book, of all time: The King James Bible.

I will admit that at times the King James Bible can be a little tough to read.  It’s not always the words we use today.  But so what, it’s the Bible.  A little extra work now and then is okay.  And when it comes to the King James Version, it is worth it.

So much of the King James Bible has become everyday to us:  “The Lord is my shepherd; I shall not want.”  “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  For that matter could you read Abraham Lincoln without knowing the King James Bible?

But best of all, at least for me, is the story of Jesus’s birth in Luke 2.  It is sad that our church does not read Luke 2 from the King James Version anymore.  Instead, we use the current edition of whatever is deemed the most up-to-date and authentic translation.  And we lose something because of it.

But at least I know I will be able to hear the King James Version of Luke 2 one place on Christmas Eve each year:  “A Charlie Brown Christmas.”  Every year Linus gets it right.  Thank you, Charles Schulz.

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Update (10/09/11 3:15 pm):  A comment from a reader made me realize that I may have overstated things in this post.  While the King James Version should be celebrated, I understand why it is not used in day-to-day worship or Bible study.  What I was saying, and what I miss, is that we don’t seem to use the King James Bible at all, even on special occasions or when we read the especially familiar passages, like the story of Jesus’s birth in Luke 2 on Christmas Eve.  That is when is need to read the King James Version because reading it would help tie the church services of our youth and our parents’ youth with the church services of our children and of their children.

President Obama on Economics

A new book, Confidence Men by Ron Suskin, talks about the making of economic policy in the Obama administration.  One assumes that the Administration was expecting a somewhat favorable book when they gave Mr. Suskin access to write the book.  And it appears that the Administration has not been overly happy with Mr. Suskin’s book.  But that is not the point of this post.  The point here is not what the book says about the President’s economic advisers.  The point is what is says about the President’s own economic knowledge and philosophy.  Consider this excerpt (from Brad DeLong via Tom Maguire):

“[Summers and Romer] were concerned by something the president had said in a morning briefing: that he thought the high unemployment was due to productivity gains in the economy. Summers and Romer were startled. ‘What was driving unemployment was clearly deficient aggregate demand,’ Romer said. ‘We wondered where this could have been coming from. We both tried to convince him otherwise. He wouldn't budge.’ Summers had been focused intently on how to spur demand, and on what might drive a meaningful recovery.... [W]ithout a rise in demand, in Summers's view, nothing else would work.... But productivity?... If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American business, then short-term government measures to spur hiring were not only futile but unwise. The two economists strained their memory... had they said something he'd misconstrued? ... After a month, frustration turned to resignation. ‘The president seems to have developed his own view,’ Romer said.

In August, in a campaign stop in Atkinson, Illinois (which wasn’t called a campaign stop because the federal government was paying for it and the federal government can’t pay for campaign stops, so therefore it couldn’t be called a campaign stop, even though it obviously was), the President explained his view of where jobs come from and where they go:

“When I go into factories these days, what’s amazing is how clean and how quiet they are, because what used to take 1,000 folks to do now only takes 100 folks to do.  And one of the challenges in terms of rebuilding our economy is businesses have gotten so efficient that -- when was the last time somebody went to a bank teller instead of using the ATM, or used a travel agent instead of just going online?  A lot of jobs that used to be out there requiring people now have become automated.”*

Wow.  The idea machines reduce jobs is so wrong** – and has been shown to be wrong so often – that the fact the President apparently believes it is a little scary.  I guess the President never took Economics 101, or if he did, he wasn’t paying attention.

What we have here isn’t a difference of opinion.  It’s a lack of knowledge.  What makes it scarier is that I’m not sure the President realizes he doesn’t understand economics.  Back in 2008, he reportedly told an aide:

“I think I’m a better speech writer than my speech writers.  I know more about policies on any particular issue than my policy directors.  And I’ll tell you right now that I’m … a better political director than my political director.”***

If this is how he feels about economics, then the gridlock we have in Washington might be a good thing.  It would probably be better than any economic theory the President came up.

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* I wonder what the President thinks about the fact we don’t have elevator operators anymore or that people aren’t sending letters because of e-mail?  On the other hand, maybe I don’t want to know.

** Actually, it is called Luddite.

*** Bret Stephens, “Is Obama Smart?” The Wall Street Journal, August 9, 2011.