The View from Right Field

Economic Indicators: Can You Believe Them?

I normally don’t do follow-up posts talking about how right I was in some prior post, but I am going to make an exception in this case because it is such an important point.  This is from my post of May 4 entitled “Increasing Interest Rates and Economic Indicators”:

“The government issues all kinds of economic numbers every month.  And every month thereafter, it corrects those numbers.  For example, that 0.2% annual growth rate in GDP for the first quarter of this year [which was reported on April 29], will get changed.  I don’t know if it will go up or down, but it will change.  And sometimes these numbers get changed a lot.”

The updated estimate of GDP growth for the first quarter came out last Friday.  Instead of a positive 0.2% annual growth rate, the government is now estimating that the economy contracted at an annual rate of 0.7% in the first quarter.  That’s a pretty big difference.

Illinois Democrats Want Credit for Spending Money Without Taking Responsibility for Raising It. So Some People Blame Bruce Rauner.

In today’s Chicago Tribune, Eric Zorn takes Governor Bruce Rauner to task for not proposing a proper budget.  The Illinois Constitution requires the governor to submit a budget in which the money to be spent does not exceed the money available.  According to Mr. Zorn, Governor Rauner hasn’t done this because the budget he proposed in February includes $2.2 billion in pension savings that would require a constitutional amendment and, therefore, couldn’t kick in 2017, at the earliest.

Mr. Zorn, however, gives the Democrats in Springfield pretty much a free pass for failing their constitutional obligation to pass appropriation bills that do not exceed the money available to be spent: “We know what the Democrats propose to spend and more or less how they hope to pay for it.”

While Mr. Zorn says we “more or less” know how the Democrats would pay for their spending, what he fails to mention is that they didn’t pass any bills to do it.  They passed the bills to spend, but they didn’t pass the necessary bills to pay for their spending.  The Democrats have supermajorities in both houses of the legislature, so they could pass tax bills over Governor Rauner’s veto, if they wanted to. 

Even if the Democratic leadership couldn’t get enough votes to override a gubernatorial veto, I can’t believe they couldn’t get a regular majority to at least pass a tax bill to cover the spending bills they were willing to pass.  What this is really all about is that the Democrats are willing to claim the credit for spending money, but they are not willing to take responsibility for raising the money to do it.  Which is something Mr. Zorn did not comment on.

What Should the Cubs Do at the Trading Deadline?

This time last year (and the year before, and the year before that; actually this time every year since the Ricketts bought the team), people started talking about who the Cubs would be trading away.  Finally, it looks like this year may be different (though I shouldn’t get ahead of myself; you can never tell whether we will swoon in June).

Still, if we can avoid having to sell in July, should we be aggressive buyers?  I say no.  I understand the Cubs have lots of prospects in the minors.  Some people will ask: Why don’t we trade some of those prospects to get what we need to win now?  It is a legitimate question, but I wouldn’t do it.  Here’s one example:

At the beginning of July last year, the Oakland A’s were in first place in the AL West.  Billy Beane, however, felt the A’s needed more starting pitchers to do well in the playoffs.  So, who did he come to?  The Cubs, course.  The Cubs were in their normal selling mode.  The Cubs had traded two starting pitchers in 2012 and again in 2013.  They were ready to do it again.