Tom Bozzo

is amazed at the reaction of leading figures in the left blogiverse to the W$J's "news" that there will be tax cuts as part of the stimulus. See Aravosis, Digby, Krugman, Marshall.

Can we cancel the circular firing squad?

As far as I can tell from the Journal's reporting, the main tax elements are largely indistinguishable from what Obama was promoting in the fall. Here, for instance, is a snippet of the third debate:

[Bob Schieffer:] Senator Obama, you proposed $60 billion in tax cuts for middle- income and lower-income people, more tax breaks to create jobs, new spending for public works projects to create jobs...

[TB Note: The $60 billion mentioned by Schieffer is an annual figure, while the $300B reported by the W$J is over two years.]

[Sen. Obama:] Number one, let's focus on jobs. I want to end the tax breaks for companies that are shipping jobs overseas and provide a tax credit for every company that's creating a job right here in America.

Number two, let's help families right away by providing them a tax cut -- a middle-class tax cut for people making less than $200,000, and let's allow them to access their IRA accounts without penalty if they're experiencing a crisis.

Now Prof. Krugman's analysis actually is pretty solid on the economics of stimulating via a combination of tax cuts and public expenditures, and he seems to detect the underlying politics. That is, use a spoonful of tax cuts that the Obama camp was going to push anyway to peel off enough Republican votes to advance a lot of stuff that the Senate Republicans' paleolithic caucus won't like (and, let's face it, can't stop, whatever Mitch McConnell might say about wanting to lend rather than grant money to the states and such). If the 'carrot' approach is followed by capitulation rather than by aggressive pressure to promote the plan a la Obama, then the political observers may have something to gripe about.

On the economics, I don't especially care for the business tax cut components, which in the absence of a general loophole-closure program I'd expect would as likely as not stimulate the tax law sector of the economy while the Tax Foundation still gets to gripe about high statutory corporate rates. And it's a matter both of Our Stupid Discourse and government accounting methods that fail to distinguish between government consumption and investment spending that tax cuts are less controversial than appropriately targeted spending. But anyone who's surprised by this part of the stimulus package wasn't paying attention during the campaign.

davenoon at LG&M and Kikuchiyo Jones subbing for the good Roger Ailes both clobbered the WSJ's most egregious fluffing this year.

Martin Feldstein continues to try to destroy the previously-brilliant David Warsh's reputation by openly declaring that the major Bush administration policy initiative was a complete failure, and that a dollar spent with a multiplier of at best 1.0 should be preferred to investments with spillover effects into private industry (and therefore multipliers definitionally greater than 1.0).

Warsh may never live down this piece, though economic historians may well find the seeds of the destruction of the discipline outlined therein.

UPDATE: PGL at Econospeak was there first, but is nicer than I am.

Meanwhile, it was left to the WaPo to explain Moral Equivalence in the Beltway:

Bill Clinton was sharply criticized for issuing dozens of pardons in his final days that included fugitive financier Marc Rich, while Bush's father came under fire for forgiving Caspar Weinberger and others involved in the Iran-contra affair.

Yep, a man whose prosecution was viewed by the publisher of the New York Sun as "an error and a tragedy" is at least as evil as actively violating U.S. and international laws while working to support terrorists and destabilize democratic governments. Glad we got that one straight, guys.

Via Dr. Black, this piece yields preciousness:

"You have to stay on top of your game," said Sklar, 65, a straight-talker who wears cuff links to work and has managed sales crews for a quarter-century. "You have to maximize your opportunities. You have to do what you have to do to make a deal." [emphasis mine]

Those who wonder why Philadelphia's economy has lagged the rest of the East Coast may speculate on the quality of its reporters.

More on Dealers later, when I have more dependable Internet access.

This one's for Brad. The Washington Post's Neil Irwin should have his license to write about economic news revoked. His lede:

The U.S. economy grew at a healthy pace in the second quarter, the government said today, despite being buffeted by a financial crisis, a deep housing slump, high fuel prices and a weak job market.

Gross domestic product rose at a 1.9 percent inflation-adjusted annual rate in the April through June period, far above what forecasters would have expected just a few months ago.

Compare Bloomberg:

The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than many investors and analysts had thought...

The economy may weaken further as the temporary boost from tax rebates, which aided a pick-up in gross domestic product last quarter from the previous three months, fades.

U.S. population growth is around 0.9% p.a. So real GDP growth of -0.2%, 0.9%, and 1.9% for the last three quarters implies growth per capita of roughly -1.1%, 0%, and 1%, respectively, with hopes for Q3 not exactly running high. How on earth can a reporter with half a brain call that a "healthy pace," and an editor let the claim into print?

Added: Here's an optimistic but informed take from Prof. Hamilton; my concern is that lots of mischief can be made with "apart from the things that were bad, things were pretty good!" arguments.

Update: The current version of the story (12:39 P.M.) replaces "healthy" with "solid," and adds a "but" paragraph before the "above what forecasters would have expected" bit.

This one's for Brad. The Washington Post's Neil Irwin should have his license to write about economic news revoked. His lede:

The U.S. economy grew at a healthy pace in the second quarter, the government said today, despite being buffeted by a financial crisis, a deep housing slump, high fuel prices and a weak job market.

Gross domestic product rose at a 1.9 percent inflation-adjusted annual rate in the April through June period, far above what forecasters would have expected just a few months ago.

Compare Bloomberg:

The U.S. economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, signaling that the country is in worse shape than many investors and analysts had thought...

The economy may weaken further as the temporary boost from tax rebates, which aided a pick-up in gross domestic product last quarter from the previous three months, fades.

U.S. population growth is around 0.9% p.a. So real GDP growth of -0.2%, 0.9%, and 1.9% for the last three quarters implies growth per capita of roughly -1.1%, 0%, and 1%, respectively, with hopes for Q3 not exactly running high. How on earth can a reporter with half a brain call that a "healthy pace," and an editor let the claim into print?

Added: Here's an optimistic but informed take from Prof. Hamilton; my concern is that lots of mischief can be made with "apart from the things that were bad, things were pretty good!" arguments.

Update: The current version of the story (12:39 P.M.) replaces "healthy" with "solid," and adds a "but" paragraph before the "above what forecasters would have expected" bit.