Redstate

I watched the debate on C-Span and almost blew Diet Coke out my nose when Charlie Rangel said one of the angry North Dakota (?) Democrats was from North Korea.  It was said in jest, you know like a Freudian Slip, I'm sure.  And Dennis Kucinich sure was one angry, teed-off little monkey on the floor tonight as he tossed his smiles and prayerful pleadings right out the window and he shook his fists and screamed in anger like a mad little Vervet on crystal.  Boy am I sad he didn't get the nomination.

I guess this is bad news for the herbal-supplement snakeoil merchants hawking health tonics and other schtuff like Quantum Silver and Serralone and Nattalone and Aloe-Vera Juice.  Hey, man, it's water that's been vortexed, magnetized and oxygenated!  Order now before CAFTA takes effect and ruins your health so the Evil Drug Companies can profit.  I wonder how Schwarzenneger feels about the deal, since he's such a Big Man on supplements.

I must have missed something in the CAFTA discussion. How does it crack down on the magneto-quantum-super-oxy-radical quacks?

It extends patent protections for companies and helps to get the WTO involved in settling disputes; I don't think the snake-oil salespeople want any part of that at all, because they're used to sourcing things like Emu Oil and other all-natural ingredients, putting them together into whatever products they want, not being subject to any kind of manufacturing regulations or testing requirements, things like that.  Check out that website.  When I was listening to the debate on C-Span tonight, a couple of the callers were really opposed to CAFTA because of its supposed terrible effects on this industry.  Course there were the Lyndon LaRouche callers and the people who couldn't remember whether this vote was for NAFTA or CAFTA or SHASTA or whatever, so I didn't pay very much attention to them.  Always good to see that Americans are so well-educated that they think they deserve to be protected from the Central Americans.

CAFTA will destroy the United States, according to them.

http://capwiz.com/lef/mail/oneclick_compose/?alertid=7739691

They're too late. We already have an unelected bureaucracy destroying America.

There's something about issues that start with "CAF" where I disagree with the GOP.

I'm against CAFTA since I have yet to see any benefit (unless you consider the loss of American jobs a benefit) to these other trade agreements.

Where as I'm for CAFE standards being raised with long term goals to help work towards a better environment.

These seem to be the issues where I differ from Bush.

(Love the rest of the stuff ... Roberts, War on Terror, etc).

NAFTA helped create the biggest increase in wealth in human history.  It was not solely resposnible, but it was a factor.

I would also encourage you to compare the level of economic freedom with GDP per capita.  Individuals should be free to buy and sell products with anyone they choose.  And as Adam Smith would predict, everyone is better off when we allow the market to do its thing.

Some jobs are lost, some are created. There is always a net benefit, though, when a country opens its borders to free trade; think of it like global capitalism.

They know better than this.  Free trade makes everyone better off in the long term.  It does disadvantage a minority of people in the short term.  So there is such a thing as easing into it slowly so we give individual workers time to adjust their lives.  I think CAFTA fits that definition fine.  6 countries whose economies are a tiny fraction of the US.  

As a Dem I love seeing Bush fail to pass legislation but this is one I'm glad he got through.

Interesting that there was a two vote margin, and only 3 non-votes (217-215 = 432/435 total) and Rob Portman was one of the non-votes (Oh-2 is vacant), and it's now part of his job as Trade Rep. to get this passed. Haven't quite figured out what all that means, so let's leave it at good vote vounting.

I'll take this vote.  We got just enough, and now we need to work on expanding the free-trade deals some more.

The UK, Ireland, and Iceland come to mind right away.  Maybe working something out with Eastern Europe would be a good idea, too.

My guess (without evidence) is that the vote was artifically close. This tends to happen with trade issues.

Lots of people wanted to vote against CAFTA for political reasons. However a solid majority knew it was a good thing. Therefore as many 'no' votes as possible are allocated and it passes by a whisker. But there may have been 10-30 more votes that could have been called upon if needed.

The fact that the leadership called the vote says that they were comfortable that they had the votes, and that comfort doesn't come from a 2 vote margin.  Probably DeLay had votes in reserve.

Actually what mostly created the boom in the 1990s was the Y2K bug.

This caused companies to spend huge amounts of dollars to fix the bug and to buy new equipment that would already work with the bug.

This put tons of cash into the economy and people spent it on home upgrades, car upgrades, etc which put to more people to work, etc, etc

Funny that we're on the other side.  You a Dem liking it.  Me a RePub disliking it.

Y2K did not create the multi-trillion dollar increase in wealth that was the 1990s.  If that is your explanation for why our economy does so well, then I can see why you don't understand the benefits of free trade.

along with the Dems listed above.

I am writing a letter to my Senator right now demanding he oppose SHASTA.  

The Codex, WTO, and PSP rumors are all false. CAFTA has no change in the way supplements are handled in the US or internationally. Discussion already happen involving the WTO, so that is not a change.

And before ragging on supplements, remember that the supplement industry includes actual products besides the new-agey water salesmen. It includes protein powders, meal replacements, vitamins and minterals, products like ZMA that have real studies behind them, and a number of other things. It used to include the class of substances called prohormores, but now those are banned and classified as steroids unnecessarily (sucks).

But trillions after trillions in personal wealth was created, and then vanished, in the internet/Y2K bubble.  Can we document that NAFTA was on the same or greater scale?  I'd be curious to see this.

Of the kind CAFTA is going to bolster wasn't behind the internet boom and the inevitable bust that followed it.  What created and sustained the Internet boom/bust was an enormous collective hallucination, a proliferation and acceptance of  awful business models and even more awful business practices, a gold-rush mentality, combined with incredible immaturity and a massive demand for "talent" that fuelled enormous and unwarranted salaries and even more incredible claims for profit that were completely unsubstantiated and totally bereft of any sense of reality.  I was there.  I knew people fresh out of college with undergraduate degrees who had starting salaries of $85,000 a year -- and that was for the people pretty far down the food chain.  People actually believed they were entitled to get rich by 35 and retire by 40.  There were another group of people who put in enormously long hours working very hard to build systems for companies that had absolutely no hope of succeeding, all built on a tidal wave of hype and venture capital that they burned through like nitrocellulose.  Anyone who hung out at F%#@*dcompany during the bust or who had friends who changed jobs jumping from one startup to another three times in three years knows what I'm talking about.  Anybody who ever was part of the IT infrastructure building PPTP tunnels for a laptop-based, distributed marketing force of road warriors hawking their "revolutionary supply chain solutions" knows what I'm talking about.  

We had people talking about Dow 30,000 and NASDAQ to the Stratosphere and Beyond.  I went to enough conferences run by marketing types and even trade shows like COMDEX in the late 90's and the atmosphere was surreal.  It was fantasyland.  It was pure adrenaline juice.  For once, the geeks were heroes.  One of the best things about the past five years that I've seen is that the NASDAQ hasn't overstimulated itself again like that.  In my view, the internet entrepreneurs proved just how green and stupid they were, and I'm glad the adults are back in charge.  

Well, sort of.  There are still niches for unique ideas, like this latter-day version of National Lampoon profiled in the New York Times.  But even here you can sense the atmosphere of insanity that obtained during that time:

The euphoria, though, didn't last. Much of the buyout was to be financed with shares of stock. Internet advertising rates were plummeting as the dot-com bubble burst, and with the help of Mr. Abramson's father, a retired chief executive of a food services company, the boys ran the numbers, concluding that they might never see that big payday. So they made what will surely go down as one of the boldest business decisions ever made by undergraduates: they turned down the offer. It was a prescient move; within months, eFront was out of business.

It was all paper wealth, built on pie-in-the-sky projections about the size of the market and paper wealth.  That's what made Bill Clinton look like a hero.

The Democrats helped pass this bill in the House.  Meeks and Bean crossed the aisle to get this bill passed.  They're both from districts that will benefit from CAFTA.

The vitrolic Dems are never reasonable.  But there are Dems that should be commended for voting on the basis of what is best for their district.

Danny Davis voted against CAFTA despite the fact that his district would have benefitted the most from the passage of CAFTA.

It passed anyway which is good for Davis, but I suspect he was kowtowing to interest groups, specifically unions.

about distribution of weatlh.  CAFTA may very well help our GDP, but it'll probably be another incident of the rich getting richer and everyone else either staying put or getting poorer.

If anything Y2K decreased the wealth of the country since it pushed resources into less productive areas. That new Sun rack system might have been a little useful, but not as useful as a couple of new engineers working on the old system.

If Y2K were responsible for the massive wealth generated in the '90s, then the government would just have to pay some companies to insert a 10-year dormant, potentially catastrophic bug in their systems and the US would be rich beyond our wildest dreams.

This is just a modern day version of the Broken Window Fallacy where the government goes and pays a boy to break windows so shopkeepers will buy more window panes magically making everybody richer.

We're the "reality-based" party, and back in the 90s even though some dems were against NAFTA, it was Clinton's issue that people like Buchanan and Perot were against.  Yeah some of the dems in the house crossed party lines but not even close to a majority (don't know what the votes were, assuming some repubs voted against because of their districts).  The Dems should be owning this issue, Clinton was a free trade pioneer.

that seems to be mostly regional. A lot of the NC Republicans voted against it, and if you've seen the cities down there you can understand why.

It sounds like you are just upset because you aren't one of those that got paid $100K right out of college. Oh the tears of unfathomable sadness - yummy, yummy.

Taking your opinions from a website (Fucked Company) that was specifically created to give the worst possible impression of tech companies isn't exactly smart. Fucked Company's track record for predicting demise wasn't very good.

And you bring up possible the best example of tech succeeding as a sign of failure - supply chain systems! Supply chain management went through tremendous revolution in the '90s from the biggest like Wal-Mart to small shops that could on-demand systems to keep inventories slim and ship more efficiently. Of course there were many failures, but that is to be expected.

Even after the market collapse, the broad indices are still much higher than before the boom started. Real wealth was created and still exists now. There is a story in a company failing, but one succeeding and turning into a regular business isn't nearly as interesting, so the media essentially saturates the airwaves with nothing but stories of failure.

The investment boom filled with start ups and young people was an attempt to find the next big thing before everybody else. It was a race, and money was thrown at everything because it was impossible to predict winners that early on. What separated the tech economy of the '90s from other tech segments like biotech or nano was the absurdly low barrier to entry: literally a couple guys in a garage with a small rack of systems.

Re: If anything Y2K decreased the wealth of the country since it pushed resources into less productive areas.

I don't see how this is possible in an absolute sense. After all, the people who were paid for fixing the bug did not take the money out and burn it. They spent it or saved it and as such it continued to circulate within the economy. On the other hand, in a relative sense this may be true if it could be shown that the time and effort expended on the Y2K fix could have been spent more profitably on some other endeavor--that is, we are poorer than we might have been, but not really poorer overall in absolute numbers.

That FC predicted the demise of those companies, but they did report on a lot of them when they went under, pretty hilariously, in fact.  And I don't have any envy for the people who took jobs at companies that were 3 months away from going under at exorbitant salaries:  I'm glad I didn't take the offers I received.  In fact, I have a lot of sympathy for some of my friends who uprooted themselves and spread themselves hither and yon across the country to take a job for a company that was a few months away from going bust.  

One black-humor joke I used to have with a friend who now lives in San Francisco and actually did change jobs three times in three years was that you know the company is about to fire everyone once the CFO issues a press release that they're on track to become profitable by next quarter.  It became so regular for him that it was an unmistakable signal, and it was demoralizing and sad.  These people were duped, as were millions of investors across the United States, and it's taken years for people to pick up the pieces.

I'll agree that the media likes to saturate the airwaves with tales of woe and destruction, but what happened with dot-com companies actually was a tale of woe and destruction that went beyond the media portrayal to horribly bad business models and a basic loss of sanity.  When you have creative consulting firms that are willing to charge $100/page for a basic, HTML-based website to people who are essentially dupes, you know something is wrong, and I dealt with some of those people -- loft style digs in previously industrial sections of cities that had been converted into new meccas of the "new economy" and charged exorbitant fees for slick marketing hype.  

I'm not bitter or sorry in the slightest that I deliberately sidestepped the worst of it.  I feel lucky, in fact.

It says nothing about distribution.  It merely removes one government imposed restriction on your ability to buy and sell from and to whomever you desire.  It will not make you rich.  It allows you and all other Americans to make choices to succeed or not.  I don't believe the government should make people rich.  I believe it should get out of the way and let people make themselves rich.

However, if you have any evidence whatsoever that CAFTA might (or NAFTA did) make all non-rich people poorer, please provide it.  There may be an argument that it makes the rich much richer and the poor a little richer, but personally I've never really cared what happens to the rich... as long as the poor and middle class are doing better, I could care less how many millions the Hollywood and NYC glitterati are taking home.

First, unless you're mocking the "reality-based" meme I wouldn't push it around here too much.

Second, Clinton was pro-free trade and I give him credit for that, but he was no pioneer on the issue.  Reagan and Bush I were pro-free trade and most of the Presidents since WWII have been.  He was a pioneer in the Democratic Party for that reason and it was part of the concept of New Democrats.  Sadly, many of those Democrats have not had much of a voice in the party since that time.  They had kept me in swing voter status and their demise has shifted me toward the Republicans.

Third, Willisms has a post about the shift from NAFTA to CAFTA.  Republicans are voting more pro-trade and Democrats are more anti-trade now.  I think this is probably a symptom of two things: 1) economic populism where Dems are voting against the national interest to appease short term protectionist and 2) the movement in the Democratic Party toward being a Party of No and not wanting to give the administration any votes on their issues.

The "Broken Window" theory used in terms of the government going an hiring someone to break windows to make people rich.  Where on Earth does that come from?

Anyway, Y2K wasn't responsible for much wealth except for the money Ed Yourdon managed to accumulate because of his voluminous and incessant end-of-the-world prognosications.  I think the man single-handedly created the Y2K catastrophe.  For a few months, it was a buzz, but that was about it. It made for a jubilant new years, for me.  You could tell girls:  "Hey, according to Ed Yourdon, the world is going to end tonight..."

They spent it or saved it and as such it continued to circulate within the economy.

But that is not how the economy growth. That is simply money changing hands, and money is not wealth.

Whenever you try and play this follow the money game -- "the baker paid the glazier who paid the blacksmith..." -- you ignore the opportunity costs, and you get into weird territory, like Keynes's idea that you could pay people out of savings to dig holes and fill them up again and somehow that would increase wealth. Wealth is a product of production, not consumption.

Money never just disappears down a black hole. The money spent on all those Y2K compliance people would have either gone to product development, maybe a dividend or stock buyback, maybe some new tools, or maybe just back in the back where somebody else borrows it and puts it to productive use.

The Broken Window Fallacy gets its name from a parable written by Bastiat (paraphrased):

A shopkeeper's son accidentally breaks a glass window. A crowd gathers and consoles the shopkeeper that it is probably best since without broken windows the glazier wouldn't be able to make a living. The shopkeeper pays the glazier, and the glazier happily fixes the window and thanks the careless boy. If this actually improved everybody's life, then you might as well pay a kid to run around throwing rocks through windows. However, this only takes into account what is seen. What you didn't see was that instead of replacing the perfectly good window, the shopkeeper might instead of replaced his old shoes or bought a book.

The point Bastiat was trying to make was that circulating money doesn't create wealth. If you take an inventory of actual wealth of the town you would find out that it was now one window poorer than before the accident. While the glazier might like it, it causes investment into glass making to grow for no reason than to restore wealth that already exists. This detracts since maybe book sales fall and a work of literature isn't produced that would have been.

P.S., Yourdon was a tool.

I realize Tancredo is currently in bad odor, but that, in itself, doesn't make these concerns wrong (h/t Immigration Blog):

One article of CAFTA reads, "Cross-border trade in services or cross-border supply of services means the supply of a service ... by a national of a party in the territory of another party." CAFTA goes on to stipulate that member nations take care to ensure that local and national "measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services," and to guarantee that our domestic laws are "not in themselves a restriction on the supply of the service."

...What those provisions mean is that a foreign company would be empowered under CAFTA to challenge the validity of our immigration laws. If an international tribunal rules against us, Congress would then be forced to change our immigration laws or face international trade sanctions. These tribunals have the authority to rule that U.S. immigration limits, visa requirements, or even licensing requirements and zoning rules are "unnecessary burdens to trade" that act as "restrictions on the supply of a service."

You're right on some of that.  Hopefully, though, you're not right about the mainstream dem party and you're just right about people like dkos.

I headed over there to check out the reaction to the vote... the first 100 posts were people bitching about the dems who crossed 'party lines' to support CAFTA.  Not ONE MENTION of its economic merits/faults.  Idiots.  

Give it a while though.  Right now there's no election coming up for a little while, it's in the dems interest politically to be a party of NO.  Proposing ideas at this point will just get some parts co-opted and others ridiculed since they don't have any power to act on those ideas.  With any luck, they'll start hammering a plan and a platform around this time next year.

What created and sustained the Internet boom/bust was an enormous collective hallucination

I think you are being unfair to capitalism. A "dot com" frenzy is how capitalism figures out a fundamental new infrastructure technology quickly. We saw the same thing in the early days of automobiles, radio and television, computers, personal computers, and the Internet.

I'm old enough to have been dumb enough to leave a perfectly good job and move across the country for "six figures and 3% of the company" in 1984, when the "workstation" boom/bust was at its height. Companies like Sun, Apollo, Masscomp, and a hundred more (101 with the one I joined) were little tiny companies back then. Yeah, it was gold rush... that's exactly what it was. The only one still alive is Sun, but no one could have predicted that at the time, just as no one knew for sure that Hubmobile wasn't going to rule the auto market.

When something like this comes along that's going to alter everyone's life in some fundamental way, capitalism throws money at it. Most of that money gets wasted, and most of the investors lose. But capitalism wins, because it identifies what works and what doesn't at speeds that a carefully planned "industrial policy" (Where was Japan's vaunted MITI when PC's happened?) simply cannot match. So we get Amazon and Yahoo and Google and eBay, and the Yurps and the Japanese get Google.jp and Yahoo.fr instead of their own winners.

I admit you have to really hold your nose to watch that much money get thrown away on things that didn't work, but when it's all over you have to admire the genius of the approach. When there really is a vein of pure gold to be found, "efficiency" in finding it is more important than "effectiveness." And nothing is more effective than letting a thousand people try things and see who wins.  

Make that "efficiency" is less important than "effectiveness."

Capito (R-WV possible challenger to Byrd) voted NO

Kennedy (R-MN running for open MN senate seat) voted AYE

Ford (D-TN running for open TN senate seat) voted NO

Harris (R-FL challenging for FL senate seat) voted AYE

.. I presume.

Every company poured millions of dollars into tech companies during the period of 1998 to 2000 (I'll leave the early 90s to NAFTA although all I ever saw from it was cheap goods for Walmart and fewer US jobs).

These computer sales drove hiring and downstream spending like crazy.

The reason that we had the recession in 2000-2001 is because capital spending had dried up.

The money for 2000-2001 capital spending got spent during the 1998-1999 to fix Y2K and upgrade systems.  As much as anything, NO ONE wanted to be the ones caught with their pants down.

Companies hired like crazy to implement the changes and bought tons of years worth of new equipment.

That supply is now finally being absorbed into the system and going forward, we will see a new tech ramp up as the tech companies shed their extra workers and other companies start looking to upgrade their computers again.

Hi:

With CAFTA passing, what is going on with FTAA?

Anyone know

Free trade is great, but we are not there yet....

Hastert has once again proven himself one of the most effective Speakers of modern times.

With DeLay, Hastert has successfully maneuvered one major piece of legislation after another to narrow passage by only a vote or two.

Newt is one of my political idols based on his vision for the future, but I doubt he had the raw strategic gut to get on the ground and do what Hastert and DeLay do.

Let's hope they stick around for awhile.

"fewer US jobs"

BLS statastics on employment.  NAFTA was passed in 1994, IIRC.  Click on the link, then choose "Total Nonfarm Employment - Seasonally Adjusted - CES0000000001" and click retrieve data.  Change the start year to 1990 and click the "include graph" button.  Look at the graph (which does not have a permalink sadly).  Jobs boomed from 1994 through 2001.

Free trade creates new jobs and destroys old ones.  In the medium-run it creates more, better jobs in America.  Fundamentally, all it does is allow everyone to make a decision on who to buy and sell to and from.  That's economic freedom, and it's good for the country.

So I hope you are right.  But the rise of dKos/MoveOn.org and the embrace of Michael Moore and his rhetoric were reasons why I did not want to see Ds in charge of the country right now.  But besides just their rise, the pew foundation found in their most recent (and very in-depth and interesting) survey on political typology that "The 'New Democrats'­ a key element of the Democratic coalition in typology studies in the 1990s no longer arise as a distinct ideological grouping."  Regardless of whether this is due to polorization or a rise of Moore-like leftists, it is unfortunate in my view.  If you identified with this group, I wish you the best regardless of which party you identify with.

With CAFTA passing 217-215 and only affecting a few small countries, FTAA is on the backburner.  It doesn't help that leftists control many of the major South American countries either.  Brazil specifically will have to move past Lula (who is embroiled in scandal right now) before real progress can be made.  However, CAFTA passing may help the current WTO round (the Doha Round) get a jump start.

First off, very happy to see CAFTA passed. Now about about a little humor. Independent Sources put together their most creative headlines announcing the CAFTA decision. Given tht bloggers only had about an hour to come up with a name, some aren't too bad.

http://independentsources.com/2005/07/28/lafta-at-cafta-independent-sources
-top-blog-headlines/

(warning not all of the headlines are pro-CAFTA but let's not add to their woes tonight. They've already lost one battle.)

if what you are trying to say is that something more productive could have been done and that would have made us richer. What I dispute is that the Y2K made us poorer in the absolute sense: that there is actually less wealth in the economy than before the bug fix was done as a result of the work done on it. No, at worst we broken even (nothing new added, but also nothing lost overall) but more likely we still came out ahead.

And for those who thinks the IT spending of the 90s was all money down a rat hole, where do they think today's productivity figures are coming from? The "dot-bombs" were rat holes, true, but they were a very tiny part of the IT boom, mostly a West Coast phenomenon. Most IT work was done either in old line businesses, revamping their systems and getting online, or else in hardware and software firms supplying these businesse.

wealth creation can emerge from destruction, when replacing what was destroyed leads to the use of an improved product, or research to create such. In the window example this would involve replacing the broken window with a new, better insulated one, hence cutting down on energy waste, which does make society at least marginally richer in the long run. In the case of the Y2K bug fix, in many cases this involved replacing old systems or software with newer, more efficient models.In some cases wealth creation can emerge from destruction, when replacing what was destroyed leads to the use of an improved product, or research to create such. In the window example this would involve replacing the broken window with a new, better insulated one, hence cutting down on energy waste, which does make society at least marginally richer in the long run. In the case of the Y2K bug fix, in many cases this involved replacing old systems or software with newer, more efficient models.

Bastiat's shopkeeper example is trying to make a very simply point, and when you start throwing things like externalities into the mix you really destroy its power. By doing that you can also make any example swing any way by putting in unnecessary facts.

In some cases wealth creation can emerge from destruction, when replacing what was destroyed leads to the use of an improved product, or research to create such.

If the window was perectly good at the time, equivalent to a new window, and all the resources to repair the window (metal and glass, making pieces, hours of labor, etc) was $10, then the town is one window or $10 poorer. If the window had a crack running down it and the frame was rusting, then maybe the window had depreciated to be worth $2. Now the $10 in resources to replace the window isn't entirely a loss, and the town is out only $2 of resources, but unless you can turn a window into something worth negative value, it is hard to make wealth when destroying something to be replaced.

With the improved product, once again you are only valuing what it seen. Why does the town necessarily need a better production method or better windows? If there is a geniune demand, then that method will be developed, but if demand is artifically created by the mayor paying a little boy to run around and throw rocks through windows, the R&D that went into the glazier's opertion could have gone into a more productive use such as better ways to bind books, a theater, or new recipes for baking. This is malinvestment caused by market distortion. You might get some utility from money going to the glazier as you point out, but more utility could be had by better allocation of resources to other areas of the economy. As Bastiat's example points out, it is all about comparative advantage.

In the window example this would involve replacing the broken window with a new, better insulated one, hence cutting down on energy waste, which does make society at least marginally richer in the long run.

You are talking about an externality here. This is really outside the scope of the example and quite orthogonal to it. Regardless of the window breaking there is going to be this externality, so instead of breaking the windows, just tell everybody to replace them with the new more insulated model. At least that way you save the hassle of everybody having to clean up the broken pieces and possibly putting the currently good glass to alternative use. You are trying to use the breaking of the window to argue for replacement. This is just rhetorical trickery.

In the case of the Y2K bug fix, in many cases this involved replacing old systems or software with newer, more efficient models.

If you are trying to say that firms bought more powerful systems to replace the old, maybe they didn't need more powerful systems, and all the new FLOPS are going to waste. If they did need the new processing power, then they would have bought the new systems anyways when needed so Y2K wouldn't be relevant to the situation. If you are trying to argue that these new systems are green and thus saved power and saved on greenhouses gases and made the world happier, good luck. You have to weigh the tiny decrease in pollution against the jobs the money would have created in new projects or building on existing projects. I look forward to your analysis.

In some cases wealth creation can emerge from destruction, when replacing what was destroyed leads to the use of an improved product, or research to create such.

But it is a trade off. Does the town want or need a better glazier with new methods and products or does it need want more books, tarts, sporting events, or other things? If people are happy with the current level of product they get from the glazier, then why improve it? If they aren't then you can be sure that investment is already flowing to the glazier who is busy working on the double paned window as I write.

This isn't like Schumpeter's creative destruction where the entrepeneur spotted a need not currently being provided. This case of the broken window however is about an artificial demand being created.

Re: If the window was perectly good at the time, equivalent to a new window, and all the resources to repair the window (metal and glass, making pieces, hours of labor, etc) was $10, then the town is one window or $10 poorer.

The town is NOT $10 poorer. It hasn't lost the ten dollars. No one burned it in their fire place. If the town's total wealth before replacing the window was X dollars then after replacing the window it is STILL X dollars, albeit differently distribued: the 10$ has changed hands from the householder to the glazier. It is certainly true that the town is also not $10 richer, but it hasn't lost anything either. It has simply broken even.

What I dispute is that the Y2K made us poorer in the absolute sense:

Okay, fair enough. But depending on how you measure, it might not be a very high hurdle to clear.

In that last post I was reluctant to use the word dollar since I didn't want to leave the wrong impression. I actually wrote it using the word "unit", but then replaced it with "dollar" (well, actually the "$" symbol).

The dollar is a unit of measurement like the inch or cup. I didn't mean that ten dollar bills disappeared. I meant that the value of the window -- all the resources and labor used in making the window -- was $10. That could be two hours of time for the glazier, one hour of time from the blacksmith, the proper amounts of silica and lime, and lumber for heat. To wrap up all those into a single measurement of value, I used the dollar. When I said that town was $10 less wealth, I meant that they had spent two hours from the glazier, one hour from the blacksmith, an amount of silica and lime, and some lumber to get that glass back when those could have been used for something else, such as a piece of glass for the new store going up. $10 was just an easy way to represent the value of all the inputs.

Get me started on the ephedra ban either (I thought a court threw it out recently).  Stupid call by Tommy Thompson.

(Hope I'm not risking going to the pile for that...)

A judge ruled that small doses of ephdra, under the supplement law passed in the early '90s, must has the presumption of safety and that it is up to the FDA to prove they are too harmful for their benefits. The company that brought the suit sold a product with a very small amount of ephedrine in it, and I don't believe the judged ruled against the ban in general. He just ruled that at the doses the company was selling, there was no proof of harm.

I don't think anybody knows how this will effect the old ephedra-based diet pills that were banned since they used much higher dosages. They seem to be in limbo right now. Given that the FDA's own study was only able to link five deaths to ephedra, I don't think they are going to have the evidence to continue the ban.

Even if just small doses were legalized by the ruling, that seems like it would be a huge hole in the ban. There is nothing stopping a company from just remaking their old diet pills in half the size. Users would quickly learn to double up on the pills to get the old higher dosage back.

What was the growth rate in non-farm jobs for the last five years before NAFTA versus the five years after NAFTA.

I'm open to being persuaded.