Peggy Noonan Taking a Shot at Ron Paul?, Rand Paul Defends Tea Party in Senate, Kel Kelly Explains GDP and Money Supply Correlation, and California Teachers Association Resorts to Almost Militant Action

Peggy Noonan, always one of my favorites, seems to be taking a shot at Ron Paul today in her WSJ column:

You would think Democratic professionals, who read the same numbers Republicans do and pick up similar trends, would be hanging their heads in despair.
They are not. They have hope. Their hope is that Republicans in the early caucus and primary states will go crazy.
They hope the GOP will nominate for the presidency someone strange, extreme or barely qualified. They hope that in a mood of antic cultural pique, or in a great acting out of disdain for elites, or to annoy the mainstream media, Republican voters will raise high candidates who are unacceptable to everyone else. Everyone else of course being the great and vital center, which hires and fires presidents. The Democrats' hope is that centrists will look at the Republican nominee and, holding their nose, choose the devil they know. Especially if the one they don't know seems to have little horns under his hair.
Republicans voting in recent presidential primaries have tended to pick the candidates who are viewed as the moderate in the race—Bob Dole in 1996, George W. Bush in 2000, John McCain in 2008. But in truth, there are some pretty antic candidates out there this year.

There is a lot to draw from this.  First off, yes, Republicans do pick moderates for White House runs.  And yeah, she does seem to be taking a shot at Donald Trump with the "under his hair" line.  I can't tell if she is really talking about Paul when she says "antic" but that's how many on the right classify him.  Dems are hoping the Republicans run a supposedly crazy guy like Paul, but it's a damn shame Paul is considered crazy when he will most likely be the most conservative out of every candidate.  Getting Paul elected will be a lot more than people desiring to cut government spending, it will require a whole change in everyone's philosophy of how the government should be involved within our lives.

Well at least another Paul may be entering Congress soon, from the Star-Telegram:

After campaigning for his father, most notably giving speeches during the elder Paul's 2008 presidential bid, Robert Paul is considering whether to jump into the race to replace Sen. Kay Bailey Hutchison when her term expires in January 2013.

"I have thought about running," Robert Paul, one of five children, told the Star-Telegram. "I am very happy as a physician, but [I] have a lot of concern about the debt."

Let's check in with Robert's brother Rand:

Impressive as always.  Huey Long may have been a partial dictator, but at least he hated the Federal Reserve.

Kel Kelly has a great Mises Daily article out today in which he completely busts the myth of Japan having a "lost decade."  Probably the most eye-opening part of the article is where he shows how much GDP figures are influenced by money creation:

Now observe in figure 3 how much lower money-supply growth has been in the 1990s and 2000s as compared to the 1980s. In figure 4, describing that same time frame, you will notice a reduction of GDP; it went from being in the 4 percent to 10 percent range in the 1980s to the −2 percent to +2 percent range in the 1990s and 2000s.

The same evolution is presented from a slightly different angle in figure 5, where, instead of real-time changes as depicted in figures 3 and 4, GDP and money supply are smoothed in the form of a 40-quarter (10-year) compound annual growth in Japanese nominal GDP and the 120-month (10-year) compound annual growth in the Japanese M2 money supply.

It should be noted that, because it takes time for new money to multiply and be disseminated in the fractional-reserve system, money supply has a delayed effect of about one to two years on GDP growth.

Fig. 3. The decline in Japan's money-supply growth rate since the 1980s. The red line is M2, and the blue line is M3. Source: Bank of Japan.

Fig. 4. The decline in Japan's GDP growth rate since the 1980s. Source: Seeking Alpha.

Fig. 5. Japan's GDP and money supply moving together. 

The lagged money supply affects both GDP and prices (because GDP consists of prices). As would be expected, Japan's GDP and M2 have moved largely in line with each other (figure 5). Notice that after the money supply dropped precipitously in 1990 (as seen in figure 3), GDP, after peaking, fell off over the next two years (as seen in figure 4).

Kel Kelly's thoroughness in his article should be commended, it is absolutely fantastic.  I once tried arguing with my labor relations professor why GDP was not a great indicator of productivity but did not do very well.  As long as Sweden is more unionized than the U.S. and has better GDP measures, it will always be a better place. I wish I had read Kelly's article back then.

I bet my labor relations professor would love this:

The California Teachers Association is planning a week’s worth of Wisconsin-style protests and rallies, from May 9-13, to “force legislature to pass tax extensions.”

How do the CTA members plan to pressure California lawmakers on the tax extensions? With an allegedly $1 million budget and a 10-page action plan. You can read the organization’s full list of possible activities, but we present to you this snapshot (hat tip Hot Air):
* Target the businesses of legislators in their home districts.
* Circle the offices of “problem legislators.” Target them with various actions.
* Picket/rally in front of legislators’ offices/homes.
* Follow targeted legislators for the entire day.
* Have students and parents do informational picketing for one hour outside their school site.
* Have parents and students camp in front of schools all night.
* Have teachers being laid off contact parents and other CTA members.
* Make phone calls on Parents’ Day. Call parents to tell them how their child is doing and then talk about the budget cuts and invite them to attend the rallies.
* Refrain from Shopping Day. Show the value of educators and other public employees and the economic contribution they make to local communities by refraining from shopping one day.
* Throw monopoly money in the toilet to show that all our money is going down the drain
* Publish a list of companies that are not paying their fair share of taxes. Send letters to these companies and the media and picket their offices. Withdraw funds from banks that are not paying their fair share. (Editor’s note: CTA is a tax-exempt organization.)
* One-day boycott of Microsoft and other corporations that are pushing failed education reform efforts.
* Turn fire/earthquake drill into crisis response drill to the budget cuts (involve students and the community)
* Attempt to close a major artery into town/cities

Those are only a few of the tactics proposed.  I doubt most will be carried out, but they really do have their thinking caps on.  Maybe if the union would devote half of its time and money to actually educating kids instead of these idiotic pleas for more money, California kids would be a lot better off.  "Throw monopoly in the toilet?"  I bet whoever came up with that was taught by a teacher so inadequate at their job, they were unable to be fired.

I mentioned some inflation numbers yesterday, so you would know that following the PPI data comes the CPI.  Well here it is:

The Consumer Price Index  increased 0.5% March on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics, This is an annualized growth rate of 6%.

Here is Bloomberg on India's inflation:

India’s inflation accelerated more than economists estimated in March as the cost of fuel and manufactured goods rose, putting pressure on policy makers to raise interest rates in Asia’s third-largest economy.
The benchmark wholesale-price index rose 8.98 percent from a year earlier after an 8.31 percent gain in February, the commerce ministry said in a statement in New Delhi today. That exceeded all 28 estimates in a Bloomberg News survey, where the median forecast was for an 8.36 percent increase.

Inflation is beginning to heat up worldwide, and reactions such as China proposing cost controls are only going to make things worse. At least you-know-what just keeps going up in price:

Hopefully this won't be what comes next:

MINSK, April 15 (Reuters) - Belarus' central bank has stopped selling gold to local retail customers for Belarussian roubles BYR=, it said on Friday, after demand for precious metals soared due to expectations of a currency devaluation.
The bank did not explain its decision.

The only person fighting to make sure there the Mint has enough precious metal is of course Ron Paul. It's sad that this is what it comes down to.

I will end the week with a fairly humorous clip of the E-Trade baby:

Should have gone with silver.