Peggy Noonan Channels Grover Norquist, Economists Have a Dirty Little Secret, Greece Gets More Money, Cheating on Beating . . .

And Other News That Needs Commenting on

As previously noted, The Dismal Political Economist is a fan of the writing of Ms. Peggy Noonan of the Saturday Op/Ed page in the WSJ.  Even when he disagrees with her position he finds he writing crisp, entertain and right on the point.  In her June 4^th column, however, while Ms. Noonan continues to write in here admirable style, she commits the dishonest act we ascribed to Grover Norquist, namely advocating large cuts in government spending without specifying which programs are to be cut.

In this case the number is $2.4 trillion, although over what time period is not mentioned.  But scanning the column closely we have nary a mention of a single program.  And calling for a specific amount of spending cuts without specifics is just not the standard of opinionating we expect from a columnist of Ms. Noonan’s quality.

The main economic news this week was a very small increase in job creation and an upward bump in the unemployment rate for May.  This has received all sorts of attention, but there is a dirty little secret about Economics and Economists at work here which we Economists do not want you to know (The Dismal Political Economist is willing to risk his membership in the American Economic Association to reveal it).  That secret is that one month’s data is meaningless.  It is too short a time period to draw conclusions, and is often revised significantly.  Of course were Economists to openly admit such a thing they would have to forego their daily dialogue.

To illustrate, in April there was strong job creation and the economy was being hailed as having a strong recovery, one month later with weak job creation, everyone has taken the opposite view.  The real conclusions from just the May employment data, there are none.  We need more time to see what the trend is doing.

Greece is expected to get its regularly scheduled bailout funds from the rescue fund that was set up by the IMF and European groups.  The choice for those groups was between giving Greece the money and giving Greece the money (no there is no typo here, those were the choices).  Let’s hope they made the right choice.

The way that investment professionals gauge performance of the portfolios they manage is to measure that performance against a broadly based index.  This takes away the factor of market trends, and answers the question, did my investment manager beat the average, which I could have had without engaging an investment manager.   Well it turns out some investment managers are cheating, comparing their performance including dividends with an index without dividends. 

Here’s One Way to Beat the Market

Really, given the financial history these past few years did anyone expect otherwise?

The fact that Katie Couric is going to do a syndicated afternoon talk show tells us why her stint as a news anchor failed.  People who are under no financial constraints do what they want to do, and the fact that Ms. Couric does not want to do hard news tells us she never really wanted to do hard news.  Can anyone imagine Walter Cronkite, Dan Rather or Bob Shieffer on afternoon TV?