Rupert Murdoch must have loved his Wall Street Journal front page on Saturday. Editors splashed this headline across the top of the paper:
Higher-Ups Knew of IRS Case
Hearing Shows Obama Administration Officials Were Told in June 2012 of Probe Into Tea-Party Targeting
The WSJ’s own second paragraph shows why this story is sexed up and then reverts to sexing it up in the third paragraph:
The disclosure to the Treasury general counsel and the deputy secretary was a cursory one, according to J. Russell George, the Treasury inspector general for tax administration. He said he didn’t reveal conclusions of the probe, which was in its early stages, and his disclosure came as part of a routine update to Treasury leaders. At the time, Republican lawmakers were complaining publicly about alleged IRS targeting of tea-party groups.
The revelation nonetheless raised a fresh set of questions about who was aware of the problem within the Obama administration.
— The new site PunditTracker’s “mission is to bring accountability to the prediction industry,” which sounds good to me.
The first pundit to get an in-depth look is an excellent choice: CNBC’s Jim Cramer. He gets an F:
Given our assumed three-month holding period, we have now graded two years worth of Cramer’s picks: those made from January 2011 through December 2012. That amounts to 552 calls overall, of which 254 outperformed the index (46% hit rate).
On average, Cramer’s picks returned -0.08% versus the 1.35% S&P 500 return over the corresponding period. That amounts to 142 basis points of quarterly underperformance, or 568 basis points on an annualized basis, which amounts to an F grade in our grading system. (We award an A for 500+ basis points of annual equity outperformance and an F for 500+ basis points of underperformance).
For more on Cramer, read Dean Starkman’s 2008 piece on a dispute between CNBC and Barron’s over his picking prowess.
PunditTracker says it will post quarterly updates of Cramer’s performance. Now, how about all those austerity proponents?
— The Atlantic’s Matthew O’Brien, Foreign Policy’s Daniel W. Drezner, and Berkeley’s Brad DeLong tear apart this truly terrible Michael Kinsley column on “Paul Krugman’s Misguided Moral Crusade Against Austerity.”
Krugman also is on to something when he talks about paying a price for past sins. I don’t think suffering is good, but I do believe that we have to pay a price for past sins, and the longer we put it off, the higher the price will be. And future sufferers are not necessarily different people than the past and present sinners. That’s too easy. Sure let’s raise taxes on the rich. But that’s not going to solve the problem. The problem is the great, deluded middle class—subsidized by government and coddled by politicians. In other words, they are you and me. If you make less than $250,000 a year, Obama has assured us, you are officially entitled to feel put-upon and resentful. And to be immune from further imposition.
Austerians don’t get off on other people’s suffering. They, for the most part, honestly believe that theirs is the quickest way through the suffering. They may be right or they may be wrong. When Krugman says he’s only worried about “premature” fiscal discipline, it becomes largely a question of emphasis anyway. But the austerians deserve credit: They at least are talking about the spinach, while the Krugmanites are only talking about dessert.
This gets things completely backwards. The longer we put off austerity, the lower the price will be, since fewer of the long-term unemployed will become unemployable. And besides, there’s no reason we shouldn’t produce as much as we can now just because we made mistakes before. As Keynes said, the resources of nature and men’s devices are just as fertile and productive as they were — or, as John McCain might put it, the fundamentals of the economy are strong. It’s up to us to make those fundamentals work with the right ideas.