GDP Watch: Q4 2008 prelim

As expected, the revisions are trending down. Remarkably, the US economy is declining in real terms, which, at 6.2 percent, is almost the same annual rate as the real contraction that took place from 1930 to 1931, 6.4 percent. A few of you may recall that after the last report, I wrote the following: Notice that according to the current Advance report on the fourth quarter of 2008, the economy actually grew 1.3 percent this year. I’m guessing that they just might revise that down a bit in the next report or two. So, it’s not surprising to learn that the 2008 figure was revised down to 1.1 percent today.

Quarter Adv Pre Final Rev Annual
2008 Q4 -3.8 -6.2 1.1 (1.3)
2008 Q3 -0.3 -0.5 -0.3 -0.5
2008 Q2 1.9 3.3 2.8 2.8
2008 Q1 0.6 0.9 1.0 0.9
2007 Q4 0.6 0.6 0.6 -0.2 2.0
2007 Q3 3.9 4.9 3.9 4.8
2007 Q2 3.4 4.0 3.8 4.8
2007 Q1 1.2 0.5 0.6 0.1
2006 Q4 3.5 2.2 2.5 1.5 2.8
2005 Q4 1.1 1.6 1.7 1.3 2.9
2004 Q4 3.1 3.8 3.8 2.4 3.6

UPDATE – By way of comparison, Roundtine points out the GDP growth assumed in Obama’s budget:
2009: -1.2
2010: 3.2
2011: 4.0
2012: 4.6

It will be interesting to hear an explanation of how the economy is supposed to enjoy such rapid growth when it did not reach such a pace even during the recent housing boom.

Farah on Medved

It seems I’m not the only one at WND the Gay Mustachio is less than fond of:

Think about this. With all the problems our nation is facing today – economic crisis, the breakdown of Judeo-Christian values, a government out of control – why is Michael Medved so angry about WND? Does that seem just a little strange to you?

I don’t know why Medved is bent out of shape about Farah, Corsi, WND, and me. Nor do I care. The guy is a movie critic, and while he’s probably perfectly competent at that, he’s in over his head when it comes to political commentary. I’ve never listened to his show, and after reading a column or three, never saw much need to read his writing either.

In feeble defense of IP

Stephen Kinsella summarizes the usual arguments in defense of intellectual property at the Economicon:

There are some decent arguments out there that argue in favor of a state, welfare rights, war, democracy, drug laws, and so on. They are all flawed, since libertarianism is right, but there are coherent, honest arguments that we libertarians have to grapple with. But it is striking that there are no decent arguments for IP…. One sees the same incoherent or insincere claims made over and over, such as:

1. It’s in the constitution (argument from authority; legal positivism)

2. Intellectual property is called property! (argument by definition?)

3. No movies would be made and kids would die without medicine (artworks and medicine have been produced for ages without IP law; and where’s the evidence?)

4. If you “create” something you own it (despite all the exceptions, and despite the fact that creation is neither necessary nor sufficient for ownership; despite the fact that you either limit these rights in scope or time arbitrarily, or you extent them to infinity, choking off rights in real things and forcing life and commerce to a screeching halt)

5. It generates net wealth–more value than its cost (no evidence, ever, for this contention–just assumptions; not to mention the problem of utilitarian summing of values)

6. IP infringement is “theft” (even though the owner still has his property and ideas, and even though IP infringement is just learning and emulating)

7. People “could” create variants of IP via private contracts… therefore artifical patent granting bureaucracies legislated by a criminal state are… justified?)

My only quibble here is that point 1 is somewhat incorrectly labled; to the extent that an appeal to the Constitution is an appeal to the law and therefore the government, it’s less argumentum ad verecundiam than argumentum ad baculum. A pure “appeal to authority” would be arguing that intellectual property is real property because Milton Friedman said it was.

To me, the most obvious flaw in the IP defenders’ arguments is the undeniable fact that very, very few authors of the tens of thousands of book published every year earn enough from their literary activities for it to be their primary means of support. The median SF/F advance is $13,750, and this doesn’t even account for the unpaid efforts of the much larger number of unpublished authors. This is the result of supply and demand; the supply of would-be authors far outstrips the demand. I theorize that if the median book advance was dropped to zero, the number of books being written would drop by a significant percentage, the number of books being published would increase, and the quality of books being published would also increase. The first two conclusions are obvious, while the rationale behind the third one rests on my belief that the new situation would disincentivize those who are writing primarily for pecuniary purposes and whose skills primarily lie in selling themselves to the publishing gatekeepers rather than in their writing talents.

There is empirical evidence supporting this notion, especially if one stops to consider the fact that most of the novels that are considered great were published prior to the modern IP era. People create things for a variety of reasons, and their primary motivation is very seldom financial reward. I’m pleased that five of my six books have sold well enough to be profitable and I hope my next book will do even better. But, like the countless legion of unknown writers whose works will never see print, I would write books even if I was not paid to do so. (On the other hand, I only not write for profit.) The mere existence of blog, and the existence of a million others like it, should suffice to conclusively prove that the prospect of financial gain is not an essential component of Man’s motivation to create.

It may be worth noting that even though copyright does not protect the titles of books or movies, one does not see quantities of publishers attempting to sell books entitled “Gone With the Wind” or “Harry Potter and the Philosopher’s Stone”. Now, I don’t actually have serious a problem with minor patent protection and reasonable copyright; this is mostly an intellectual exercise for me. But I do take serious issue with the current system, which is abusive of both the consumer and the creator alike, and abuses them in the interest of non-creative corporations.