Brad DeLong's Egregious Moderation

Daniel Davies: Is there a general skill of “management”?

Crooked Timber » » Is there a general skill of “management”?: Synopsis: yes.

I promised this post in comments to Chris’s on Blackburn’s myths below, where I took my life in my hands and disagreed with John. I think that actually, there probably is “a general skill called management which works in any and all domains”, and, just to raise the tariff and secure gold medal position for myself in the Steven Landsburg Memorial Mindless Contrariolympiad, I’ll also defend the proposition that this skill is pretty closely related to what they teach on MBA courses. But first a couple of remarks on Blackburn’s own “Myth of Management“.

In his very definition, Blackburn pretty much gives it away; he says that “[the myth of management] claims that people can be managed like warehouses and airports”. What does this even mean? How do you manage a warehouse or an airport if it’s impossible to manage people? If he had said “like machines” or even “like factories”, then it might have been comprehensible, but a warehouse which doesn’t have any people working in it is just a shed full of stuff and doesn’t require any management because no deliveries or shipments are being made. And an airport without people is just a warehouse for planes. Warehousing and transport are two very labour-intensive industries.

There are two possibilities here. One is merely that Blackburn is a snob – that writing as a professor of philosophy in the THES, he felt entitled to assume his audience would know that “people” meant “middle class people”, and would agree with the implicit assertion that “people” of this sort were capable of independent thought and could not be tied down, man, unlike the meat robots who packed their books for Amazon or swiped their tickets at Heathrow. But to assume this would be wildly uncharitable. The other, and I think more likely, explanation, is that Blackburn has no idea whatsoever about what managing a warehouse or an airport would entail, and no real interest in finding out.

There is a clear analogy here to CP Snow’s famous point about “Two Cultures”:

A good many times I have been present at gatherings of people who, by the standards of the traditional culture, are thought highly educated and who have with considerable gusto been expressing their incredulity of scientists. Once or twice I have been provoked and have asked the company how many of them could describe the Second Law of Thermodynamics. The response was cold: it was also negative. Yet I was asking something which is the scientific equivalent of: Have you read a work of Shakespeare’s?

I now believe that if I had asked an even simpler question—such as, What do you mean by mass, or acceleration, which is the scientific equivalent of saying, Can you read?—not more than one in ten of the highly educated would have felt that I was speaking the same language. So the great edifice of modern physics goes up, and the majority of the cleverest people in the western world have about as much insight into it as their neolithic ancestors would have had

What I mean, of course, is that if a middle manager were to mention over the dinner table that one of his proudest boasts was that he had never engaged in abstract thought in the last twenty years, had consistently managed to avoid doing so throughout his career, and that indeed whenever he was asked to provide an informed opinion on a general or abstract subject, he typically did it intentionally badly in order to make sure he was never asked again, then we would presumably agree that we were dealing with an unusually awful species of pig-ignorant chucklehead.

And yet of course, for both of CP Snow’s intellectual cultures, the parallel view of administration and management is so commonplace as to be a cliche. The abhorrence of academics of management is notorious (the abominable fashion in which so many academic institutions are actually managed even more so). Conversely, the practical men of engineering have developed an entire culture of their own based round the assumption that everything in the world is done by small groups of engineers who spontaneously organise themselves into work units, with occasional interference and distraction caused by “marketroids” who perform no function at all. Very rare indeed is a figure like Fred Brooks who actually applies scientific principles to the analysis of the organisation of computer programmers, and when he does arise, he’s honoured but largely ignored; real engineers write code, they don’t do admin.

This of course has fairly severe real-world consequences. As anyone who followed the link to my comment in the first paragraph will know, the kernel of my argument for the existence of a general skill of management is that it is pretty obvious that there is a general deficit or “negative skill” of mismanagement, which equally obviously appears to work in roughly the same way in a variety of fields, and that therefore an opening stab at a definition of the general skill of management would be that it’s the absence of this deficit. Someone like Larry Summers had a particular form of this deficit in spades. It was widely known, throughout the economics profession and beyond, that Summers was not good at handling people. The job of President of Harvard is a management job, the vast majority of which involves being good at handling people. Nevertheless, Summers was given the job by fellow academics who respected his intellect, energy and ideas and who either rationalised to themselves or never even considered the fact that they were giving an important job to somebody who very clearly didn’t have the necessary skills for it.

Then a year later, he had crashed and burned in the job, because he was no good at handling people. Nobody learned a damn thing from this debacle, of course; in general, lots of institutions are surprisingly resistant to the idea that talent in management ought to be a criterion for awarding management jobs, and the reason is that they don’t believe in a general skill of management, despite universally recognising (and often admitting to possessing) a generally applicable skill of disorganisedness.

The general skill of management has two basic components – administration and leadership.

The first is the ability to keep track of and prioritise detail. Some people are naturally better at this than others, but natural ability doesn’t actually make much of a difference in terms of one’s possession of the skill of management. The reason for this is that more or less any management task bigger than a single in-tray (and there are plenty of us, including me, who are flat out keeping control of one of those) is going to exhaust a normal human being’s memory and attention span. In order to cope with this, people through the ages have come up with a number of technologies to extend the human ability to administrate, such as alphabetical filing systems, double-entry accounts, activity reports and so on; the majority of the structures in Fred Brooks’ book fall into this category too. The majority of the skill of organisation is having the mastery of these tools and the self-discipline to use them consistently. The first is what they teach you in business schools; the second sounds more like an innate ability, but I would guess that it too can be taught.

The second is basically a species of emotional intelligence; some people are better applied psychologists than others. I must say I didn’t get much out of the “leadership” course I went on, but I wouldn’t necessarily say that there is nothing about motivating and managing people that can be taught; at the very least there’s an obvious body of applied economics which could be brought to bear to make sure that you don’t create incentives which are fundamentally inimical to yourself. So in summary, I think that there is a pretty identifiable set of skills, which can be grouped together into a category at least as coherent as most of the other things that we regard as subjects and which can be defensibly identified as the general skill of management ability.

Of course, the fact that there’s a general skill of management doesn’t mean that everything can be managed, any more than the fact that there’s a general attribute of strength means that everything can be lifted. Organisations have a lot more to them than the simple will of the people managing them and some organisations can be (or become) so pathological that there’s no managing them – either they’re too lacking in the necessary infrastructure to administer, or they’re so riven with interpersonal conflicts or perverse incentives that they can’t be led, or both.

Nor does it necessarily mean that there is a caste of individuals who can be dropped into managerial roles in any organisation and immediately start managing successfully; any organisation above trivial size is going to have a lot of idiosyncratic information (explicit and tacit) which is relevant to its management, and learning this is a difficult or even impossible task. On the other hand, it does suggest that if you have a management problem, there is some sense in asking someone who’s really good at management if they have some advice about it, which is the basis of the consultancy industry (a rather large global industry, which certainly might owe its existence purely to the desire of a self-perpetuating elite to look after their own and act as scapegoats for unpopular decisions; on the other hand, a lot of people think university education is just a racket providing certificates of entry to the middle class, and they’re wrong too).

What it does mean is that the fundamental attribution error is not always an error in this context. As in military matters, where the different abilities of generals often really do make an important difference, it really can be the case that one company succeeds and another fails because of the abilities of the person at the top. There really is a right way and a wrong way to run a warehouse.

Barro: Sketch of a Model of Microsoft’s Social Value

Robert Barro (2007), "Sketch of a Model of Microsoft’s Social Value" http://economistsview.typepad.com/economistsview/files/gates_varieties_model.pdf

Bruce Bartlett: The GOP's bait-and-switch tax strategy

The GOP's bait-and-switch tax strategy - Los Angeles Times: It is an article of faith among Republicans that tax cuts are the cure for every problem the economy faces, and that tax increases are the equivalent of economic poison. Any hint by Democrats that the current administration's tax cuts should be revisited in light of changing economic or fiscal conditions is met with charges that they are proposing the largest tax increase in history.

The truth is that President Bush's tax cuts didn't do much good for the economy; they were mostly giveaways to GOP political constituencies and were little different conceptually from pork-barrel spending. Although there were some good elements to the tax cuts, such as the reduction in marginal tax rates, they were fatally undermined by their temporary nature.

The fact is that the massive tax increase Republicans claim the Democrats are proposing is entirely the result of the GOP's penny-wise and pound-foolish policies. Rather than expend the effort to make their tax cuts permanent in the first place, they attached expiration dates to every major provision. Most will expire automatically at the end of 2010. The alleged tax increase that would result is simply a consequence of the tax system returning to what it was before 2001, when the first tax cuts were implemented.

In other words, no one is proposing new taxes -- so GOP activist Grover Norquist's famous "no new taxes" pledge that virtually all Republicans have signed in blood wouldn't even be violated. It is simply a matter of allowing the law that Republicans enacted to follow the course that they chose in the first place.

Republicans respond that they had no choice; they didn't have the votes to enact permanent tax cuts, so it was temporary cuts or nothing. This is not true. They could have made them permanent, but that would have required bipartisanship and more political capital than Republicans were willing to spend. So they took the easy way out, figuring that Democrats wouldn't dare oppose extending the tax cuts when the time came, lest they be accused of favoring a vast tax increase.

But this isn't even the worst of the Republican dishonesty. That goes to projections from the Congressional Budget Office showing a sharp reduction in budget deficits after 2010. But these lower deficits result largely from the expiration of the tax cuts and the higher revenues that would result. Thus, Republicans are trying to have their cake and eat it too. They get to blame Democrats for advocating higher taxes while implicitly using those higher taxes to make future deficits smaller.

This sort of political game may be fun for Republicans who think that they have boxed Democrats into a corner. But this game has had real economic consequences. Because the tax cuts are not permanent, their economic impact has been severely diminished.

All economists know that permanent tax changes have far more effect than temporary ones because people won't change their behavior significantly unless they have some assurance that the tax regime will be in effect for the long term. Businesses and individuals often make economic decisions that won't pay off for many years. If they think the tax system will be more unfavorable when the payoff comes, they will act differently, favoring smaller, short-term gains and rejecting opportunities for higher profits in the future.

There is little doubt that the economy would have been stronger with permanent tax cuts. But that would have meant fewer tax cuts and thus fewer opportunities to buy votes. It also would have forced Republicans to deal with the true budgetary consequences of their actions.

The reality is that we are not going to see the biggest tax increase in history in 2011 because neither Congress nor the White House will allow it to happen, regardless of which party is in control. The choice is not between full extension of all the Bush tax cuts or a massive tax increase, but between extension of the Bush tax cuts and some other sort of tax cuts that would keep the tax burden from rising on the vast majority of taxpayers.

Tax policy is an important campaign issue, and it would be good to get agreement on the post-2010 tax code as soon as possible. Current law makes it impossible to plan for the future with regard to taxes. Whatever is done should be done permanently to the greatest extent possible.

Elizabeth Drew: Dems' suspense may be unnecessary

Dems' suspense may be unnecessary - Elizabeth Drew - Politico.com: The torrent of speculation about the end game of the Democratic nomination contest is creating a false sense of suspense – and wasting a lot of time of the multitudes who are anxious to know how this contest is going to turn out.

Notwithstanding the plentiful commentary to the effect that the Pennsylvania primary must have shaken superdelegates planning to support Barack Obama, causing them to rethink their position, key Democrats on Capitol Hill are unbudged.

“I don’t think anyone’s shaken,” a leading House Democrat told me. The critical mass of Democratic congressmen that has been prepared to endorse Obama when the timing seemed right remains prepared to do so. Their reasons, ones they have held for months, have not changed – and by their very nature are unlikely to.

Essentially, they are three:

(a) Hillary Rodham Clinton is such a polarizing figure that everyone who ever considered voting Republican in November, and even many who never did, will go to the polls to vote against her, thus jeopardizing Democrats down the ticket – i.e., themselves, or, for party leaders, the sizeable majorities they hope to gain in the House and the Senate in November.

(b) To take the nomination away from Obama when he is leading in the elected delegate count would deeply alienate the black base of the Democratic Party, and, in the words of one leading Democrat, “The superdelegates are not going to switch their votes and jeopardize the future of the Democratic Party for generations.” Such a move, he said, would also disillusion the new, mostly young, voters who have entered into politics for the first time because of Obama, and lose the votes of independents who could make the critical difference in November.

One Democratic leader told me, “If we overrule the elected delegates there would be mayhem.” Hillary Rodham Clinton’s claim that she has, or will have, won the popular vote does not impress them – both because of her dubious math and because, as another key Democrat says firmly, “The rules are that it’s the delegates, period.” (These views are closely aligned with Speaker Nancy Pelosi’s statement earlier this year that the superdelegates should not overrule the votes of the elected delegates.)

Furthermore, the congressional Democratic leaders don’t draw the same conclusion from Pennsylvania and also earlier contests that many observers think they do: that Obama’s candidacy is fatally flawed because he has as yet been largely unable to win the votes of working class whites. They point out something that has been largely overlooked in all the talk – the Ohio and Pennsylvania primaries were closed primaries, and, one key congressional Democrat says, “Yes, he doesn’t do really well with a big part of the Democratic base, but she doesn’t do well with independents, who will be critical to success in November.”

So, the fact that Mrs. Clinton has shown herself to be a remarkably resilient, tough campaigner, an attribute that the Clintons hope will carry much importance, this Democrat says, “is irrelevant.” This person added: “Many of the superdelegates are not going to be naïve enough to not realize the handwriting on the wall that this thing is going to Obama” – barring, he added, some major event like the Wright matter that he can’t seem to manage. They consider this unlikely. (There’s almost always a “something-might-happen” factor in elections.) As for the Wright matter, a key Democrat on Capitol Hill says, “Though it makes [his Democratic colleagues] a little nervous, it’s not enough to change their minds.” Moreover, the Wright matter may be old news come the general election.

At first, a large number of superdelegates planned to announce their support for Obama following Super Tuesday, but he didn’t do well enough to warrant that; then it was to be after Ohio and Texas; then after Pennsylvania; and some Democrats suggest that if Obama wins both Indiana and North Carolina a number of superdelegates will announce for him then. But the prevailing thinking is to allow the race to play out, avoiding a confrontation with Clinton and her backers, but also letting the pressure grow on her to justify continuing to fight a bloody but lost cause. This is, the thinking goes, the best and perhaps only way to get the thing wrapped up, as they so desperately want to do.

“We may have to go to June, and whoever ends up with the most delegates wins,” a key Democrat says. “Meanwhile, the attention will be on the battle she can’t win, so why is she doing this – from here on out she’s only bleeding the party. The right way to put it is, ‘This is a war of attrition and it’s obvious that the numbers aren’t going to add up, so what’s the point?’” He added, “The hope is that at some point the superdelegates will get frustrated and join the Obama bandwagon.”

This pressure may not be enough to get the tenacious Hillary Rodham Clinton to quit the race, but, says a leading Democrat, “Sometime in June we will make it clear to her that this thing isn’t going to the convention.”

Dan Froomkin: The Most Disappointing President

The Most Disappointing President: No president in recent history has let the American people down the way this president has. In the past six and a half years, the public's view of President Bush has gone from one extreme to another. After the 9/11 terrorist attacks, a record-breaking 90 percent of Americans approved of the job Bush was doing, according to the Gallup Poll. Now, Gallup reports that a record-breaking 69 percent of Americans disapprove of his work in office. The same number call his presidency a failure.

Pundits focused so intently on the race to replace him risk losing sight of just how unhappy the American people are with Bush, how dismally they regard his tenure, and how eager they are to set off in a new direction. But Bush's decline and fall may be the dominant political story of our time -- and one that will certainly be on the minds of the American people as they head to the polls in November.

By the Numbers

Susan Page writes in USA Today:

President Bush has set a record he'd presumably prefer to avoid: the highest disapproval rating of any president in the 70-year history of the Gallup Poll. In a USA TODAY/Gallup Poll taken Friday through Sunday, 28% of Americans approve of the job Bush is doing; 69% disapprove. The approval rating matches the low point of his presidency, and the disapproval sets a new high for any president. . . .

The previous record of 67% was reached by Harry Truman in January 1952, when the United States was enmeshed in the Korean War. . . . In another record, the percentage of Americans who say the invasion of Iraq was a mistake reached a new high, 63%, in the latest poll. . . . By 69%-27%, those polled say Bush's tenure in general has been a failure, not a success."...

It's just the latest evidence of a spectacular crash. Back in November, Page reported that for the first time in the history of the Gallup Poll, 50 percent of Americans said they "strongly disapproved" of the president. That shattered the previous high of 48 percent reached by Richard Nixon just before an impeachment inquiry was launched in 1974. In my Jan. 15 column, I wrote about two polls showing that Americans by an overwhelming 4-1 ratio want the next president to set the nation in a new direction. And last week, in my April 15 column, I wrote about a Washington Post/ABC News poll that found Bush had surpassed Harry Truman's record as the president to linger longest without majority public approval. Bush's job-approval rating has been under 50 percent since January 2005 -- three years and three months and counting.

Don't Count Him Out Yet

Presidential confidante Fred Barnes writes in the Weekly Standard about his "pet peeve": When people call Bush a lame duck.

[H]e's not that lame. . . . Bush lacks popularity, but he has plenty of power. And he's committed to using it. Bush's power--indeed, any president's--comes from the Constitution, not from opinion polls or the number of months left in his White House tenure. He is commander in chief and architect of America's foreign policy. He can use his veto to shape or kill legislation. He can exploit the presidential megaphone to express his views and raise alarms, and his power to issue administrative decrees is significant as well. . . . For months now, the buzz in Washington has been about Bush's ability to go about his presidential business and remain upbeat and determined. The suspicion is he's simply pretending, since his power is gone. Wrong on both counts.

Torture Watch

Joby Warrick writes in The Washington Post about Adel al-Nusairi, a former Saudi policeman captured in Afghanistan in 2002, who says he was drugged before his interrogations in U.S. custody.

At least two dozen other former and current detainees at Guantanamo Bay and elsewhere say they were given drugs against their will or witnessed other inmates being drugged, based on interviews and court documents. The Defense Department and the CIA, the two agencies responsible for detaining terrorism suspects, both deny using drugs as an enhancement for interrogations, and suggest that the stories from Nusairi and others like him are either fabrications or mistaken interpretations of routine medical treatment.

Yet the allegations have resurfaced because of the release this month of a 2003 Justice Department memo that explicitly condoned the use of drugs on detainees. Written to provide legal justification for interrogation practices, the memo by then-Justice Department lawyer John C. Yoo rejected a decades-old U.S. ban on the use of 'mind-altering substances' on prisoners. Instead, he argued that drugs could be used as long as they did not inflict permanent or 'profound' psychological damage. U.S. law 'does not preclude any and all use of drugs,' Yoo wrote in the memo. He declined to comment for this article.

The memo has prompted new calls for the Bush administration to give a full accounting of its treatment of detainees, and to make public detailed prison medical records. Legal experts and human rights groups say that forced drugging of detainees for any nontherapeutic reasons would be a particularly grave breach of international treaties banning torture...

Matthew Yglesias: Hillary Rodham Clinton Shoots Herself and Barack Obama in the Foot

Matthew Yglesias: Elect Hillary or OBL Will Devour Your Children: Some Obama elements are trying to whip me into a fit of outrageous over Hillary Clinton deciding that she wants to cross the Rudy Line and enlist Osama bin Laden in her latest campaign ad.... I think the problem with this whole line of attack -- 3AM ads, etc. -- is [that it is] such a limited posture to take up. At the end of the day, if this is an election about how in uncertain times we need to flee into the arms of a strong, comforting, figure of experience and authority then that figure is John McCain. The alternative story is that in uncertain times we need to turn the pages on disastrous policies that have gotten us into our current mess. But Clinton often, from her vote to authorize the war through to a lot of her primary season gambits, seems too invested in the politics of "toughness" to really chart a better course.

Brad Setser: Inequality in America

RGE - Inequality in America: Unions in the American manufacturing sector used to have the bargaining power to secure a middle class wage for their members. Not any more. And no one else -- apart from corporate CEOs, hedge fund managers and star athletes -- seems to have all that much bargaining power either.

The chart that accompanies Justin Lahart and Kelly Evan's report on voter angst in Pennsylvania is worth the price of the Saturday Wall Street Journal.... It shows the enormous gulf between the income of the top 0.1% of the income distribution and the rest of the population. It also shows that family income, adjusted for inflation, has fallen by 4% for the bottom 90% of the population while rising 22.2% among the top .0.01%....

I am not sure than Mankiw's explanation -- a fall-off in educational achievement and slower growth in the supply of highly-skilled workers -- is sufficient. The top 5% of the American families are all reasonably well-educated. But even among the 5%, almost all the income gains have been concentrated at the top. A fall-off in educational achievement can perhaps explain why the real income of the top 10% of American families is rising (a bit) while the income of the bottom 90% isn't. But it cannot explain increasingly inequality among those at the top.

It isn't that hard to see why so many Americans think the US is on the wrong track. Most Americans didn't benefit from the expansion of the past few years. And now the economy isn't expanding....

It isn't clear that increased trade with low-wage countries has contributed to lower wages for less-skilled workers in the US.... The impact of globalization on prices isn't all that clear: competition for oil has pushed its price up.... Cheap financing from the rest of the world did make it easier for Americans to make up for falling wages by borrowing against their homes. That strategy was never sustainable, and it has clearly run its course....

I am not sure that China has had a huge impact on the US income distribution, one way or the other. It may be that China had a bigger impact on prices for the basket of goods that lower-income households consume than it had on wages -- directly, and indirectly, through reductions in workers bargaining power in manufacturing sectors exposed to Chinese competition -- for those households. The overall effects are complex, because they offset. I am fairly confident that China isn't going to just produce low-quality durables for much longer.

Gristmill: McCain's Climate Policy

McCain's climate policy | Gristmill: The environmental news blog | Grist: Opinions differ on the quality of John McCain's domestic policy agenda, but you'd have trouble finding anyone in Washington who would disparage the man he's chosen as one of his top advisers. Douglas Holtz-Eakin has a dauntingly long resume and a reputation among policy wonks on both sides of the aisle for fair-minded number crunching. He has taught economics at top-notch universities, served as a senior economist in both Bush administrations, and run the Congressional Budget Office from 2003 to 2005 (where he was a "thorn in the side" of the current administration). He is now running the Center for Geoeconomic Studies at the Council on Foreign Relations. I caught him by phone to get the scoop on McCain's climate and energy policy.

David Roberts: How urgent a problem is climate change in John McCain's mind?

Douglas Holtz-Eakin: Senator McCain has a very serious sense of urgency about moving on [climate] legislation, directly from his hearings and his travel to Antarctica to the Arctic. It is augmented by the national security component. Given his strong beliefs on the need to make America safe, the idea that we're sending $400 billion to nations where it is actively turned into financing for terrorists -- and other nations who are simply not supportive of democracy -- he finds that incredibly troubling.

DR: At the ECO:nomics conference, and again in an interview with E&E ($ub. req'd), you distinguished McCain's policy approach from his competitors' by saying he favors putting a cap-and-trade system in place and otherwise refraining from further policies and regulations -- even getting rid of a lot of sector-specific or industry-specific regulations and subsidies. Is that fair?

DHE: Right; that's a fair description of the philosophy.

DR: How literally should we take that? Is the idea that cap-and-trade is going to be, at the end of the day, the only necessary policy on this issue?

DHE: Probably wouldn't take it that literally. What you want to think about is stepping back and asking yourself, what should an appropriate policy toward climate change look like? What are the components that matter? The components that everyone has agreed are essential are, No. 1, pricing carbon in some way -- the caps do that, showing a value to emissions reductions. No. 2, lots of flexibility in responding to the need to reduce emissions, so that you can take advantage of low-hanging fruit. And No. 3, radical technological advances, which would allow us to do business better.

There's going to be a role for policy in augmenting the technologies -- basic research, targeting whatever it may be to allow us to burn coal cleanly, sequester carbon if necessary, those kinds of things. But to the extent possible, he'd like to not have too much interference in allowing the ingenuity of Americans to find the emissions reductions in the easiest places.

DR: That notion has gotten some pretty heated reactions in the environmental community. The reports and research I'm familiar with say that cap-and-trade is a necessary but not sufficient step. I'm trying to get a sense of where McCain draws the line.

DHE: So would this rule out efficiency measures, with the evidence that people don't buy the most lifecycle-energy-efficient appliances and as a result might need some help where pricing alone doesn't do it? I don't want to suggest he's taken that off the table; of course he'd still be interested in that.

I think he's more interested in not having large, redundant mandates like carbon cap-and-trade and a low-carbon fuel standard, because those are both going to end up being the same thing when taken for the transportation sector as a whole.

But I don't it want to come across as some sort of ideological adherence to no things other than cap-and-trade, because that's not John McCain. John McCain's style is to solve problems. In that way, he's going to be pragmatic about it. But he certainly doesn't want too many of these things simultaneously, with the impact that you undercut your ability to do it well.

DR: Let's focus for a second on the transportation sector. Analyses have found that the price of carbon would have to reach politically untenable levels -- $200, $300 per ton -- to move gas prices even a dollar or so. We've already seen a $2 rise in the price of gas, which hasn't produced much of a sea change away from emission-heavy transportation. So if you're going to get rid of CAFE, or the low-carbon fuel standard, how do you move the transportation sector?

DHE: The basic construct is, you don't target the transportation sector. Obviously as part of the overall policy we'd expect it to change, but when you do the economy-wide cap-and-trade, you don't pick each sector to have a particular part of meeting the caps. If you can trade across sectors, then off you go. It's always important to remember that, because people do start to think, "I've got to get this sector down 65 percent by 2050." Well, not every sector's going to come down uniformly. That's point No. 1.

Point No. 2 is, you don't get rid of CAFE -- which was just passed and increased -- right away, because we haven't even implemented cap-and-trade. So there's no reason to imagine this is all being suggested as an in-the-door, 2009 approach to the problem. It's not. You would not simultaneously find an effective cap-and-trade program creating movement away from petroleum and then double up on your CAFE standards anyway. I might've said it too bluntly at the [ECO:nomics] conference -- it was 8:00 at night on the West Coast after I'd gotten up at 4:00 in the morning on the East Coast. [Laughs.]

When we saw those large oil price spikes in '79, '80, we saw dramatic changes in the energy content of the U.S. economy. We cut it in half. And then oil got cheap again, and we stopped. I would never want people to underestimate the power of just pricing oil. Sustained changes in energy prices matter -- "sustained" being the key -- and you have to have policy to ensure that.

DR: One of McCain's signature issues is opposition to a lot of subsidies and earmarks. But on climate policy, this is coupled with a stated insistence on heavy subsidies for the nuclear industry. Is there a principled distinction between which subsidies are good and bad?

DHE: There's a pretty straightforward philosophy. The fundamental concern he has -- not with just climate policy but on earmarks and things like that -- is that you are using the taxpayers' dollars for special interests, not for the national interests. When you have a practice of providing subsidies, you invite lobbying on the part of special interests, and this leads to political corruption, if not criminal corruption. That's point No. 1.

No. 2 is a powerful belief that the private sector will pick the right thing, and the government doesn't need to be in the business of doing that. You set the broad incentives and let it go.

But then, there are roles for government. And if there's a genuine national interest in using nuclear power as an available, feasible, zero-emissions technology, I don't think he would argue that that's a special-interest thing. It's something the nation needs to do as a priority, and if that means a subsidy, then we need to make the agreement we're going to do that for those reasons. I think that's an appropriate role for government, in his view.

The other thing he believes is that we need research in all sorts of technologies, including carbon sequestration and things like that. If that research is best conducted in the private sector, the government providing the monies for that research is not an inappropriate thing to do. But you've got to make sure, in the conduct of those efforts, that you are not having funds allocated on the basis of political connections instead of good science.

DR: One of the ideas behind cap-and-trade is precisely as you said, to put the incentive for carbon reduction out there and let the market see who can reach it first. If you give nuclear those subsidies, you are giving it a head start in that market race -- precisely, it seems to me, the distorting effect of subsidies you claim to be trying to avoid.

DHE: I think his view is that those [subsidies] simply offset powerful political obstacles to using grid power that he thinks are inappropriate, and he's willing to take on that battle. He views this as leveling, not subsidizing.

DR: Is that a top-line goal, leveling the playing field? If so, it seems like there's a lot more to do than boosting nuclear. Don't fossil fuels enjoy political, technological, and regulatory advantages?

DHE: The stated use of cap-and-trade is to harness market forces to the greatest extent possible; that's the basic philosophy. Obviously there are differences of opinion on the starting point, but I don't think his intention is to disfavor biofuels in any way.

DR: Is he opposed to ethanol subsidies?

DHE: Yes.

DR: Will he work to eliminate existing ethanol subsidies?

DHE: Yes. The exclusive reliance on corn-based ethanol is, in his view, inappropriate, relative to other potential sources for ethanol. And the combination of the subsidy and the tariff barrier against the sugar-based ethanol from abroad strikes him as inappropriate.

DR: Is he willing to go the mat to battle Big Ag?

DHE: He was certainly willing to stand up in Iowa, with his political future on the line, and tell people the truth. There was a speech at the BioEconomy Conference during the Iowa primary -- he said, I'm a good Republican, and I like Iowa, but I'm opposed to these subsidies.

DR: You said something to E&E that raised my eyebrow a little bit -- that McCain's not necessarily committed to the McCain-Lieberman climate bill. Does he still stand behind that bill?

DHE: Obviously it was his bill; he thought it was the best effort at the time. But what he said when he introduced it was: Here's my bill. I think this is an important issue and we ought to get moving on it. If you've got a better bill, let me see it. Let a thousand flowers bloom. It's not so much that this bill is the end-all and be-all; it's that this issue must be addressed.

DR: Does he now think there's a better bill on the table?

DHE: He certainly would revise the bill in light of what's transpired, and I expect he'll put out, during the course of the campaign, something like an updated version of his view of how it should go.

DR: Will he vote for Lieberman-Warner?

DHE: We don't generally take positions on Senate legislation, as a campaign rule, until it gets to the point where you see the final legislation, exactly what's up for vote. But obviously this is an important initiative and he's following it pretty closely. We'll see how it goes.

DR: What are his concerns with the bill as currently written?

DHE: If you look at the kinds of things talked about on the trail, one might be greater allowance for offsets out of the agricultural sector; another might be a stronger nuclear section.

DR: Does he have an emissions target in mind?

DHE: I'm just going to defer until he puts out the climate policy.

DR: Economic models vary quite a bit in their assumptions and their outcomes, but most of them project that cap-and-trade will raise energy prices for average families and slow the growth of GDP. What's McCain's response?

DHE: One has to be cautious and judicious in looking at the results of models. I am a Ph.D. economist and a former computer scientist; I have built econometric and simulation models of the U.S. economy. They are very good tools for ordering the impacts of different policies -- for comparing Policy A vs. Policy B vs. Policy C to see which has the greatest impact on emissions, which might involve the most dramatic sectoral shifts, which would lead to higher retail energy prices, a whole list of things in which you have a deep interest. They force the analyst to put in the assumptions and comprehensively model the problems to the extent of their ability. They're very valuable for that reason.

They are least useful for predicting the actual outcome. The impact of the policy is ultimately the outcome of whatever you decide will be the world in the absence of policy -- which is a fundamentally impossible projection. We're going to ask what the world would look like without a carbon policy in 2050, then put the carbon policy in and pretend that somehow we've got it right? You really have to take all those things with a grain of salt.

DR: Do you think the models have consistent biases, or are they just all-over-the-map wrong?

DHE: Economic models have consistently underestimated the capacity of the U.S. economy to recover from shocks and to be flexible and grow. Econometric models of the current oil price increase would have said that it was over -- that the U.S. economy would be badly damaged by it. And that just has not been the case. We've continued to grow; oil prices are $100 a barrel. We have consistently underestimated the capacity of the U.S. economy to adjust to things. You learn from that, and the next generation of models might be better.

DR: Do you think climate policy could be a net positive, a net GDP boost?

DHE: As an economist, I find the framing of the question disturbing. I understand it's a conventional framing, but it suggests that GDP growth, per se, is the right objective. But the world is a better place if you do this policy, even if GDP growth is a little bit smaller.

Say Katrina knocks down billions of dollars' worth of houses. They're gone. Then we start building them. GDP growth is the value of production -- we produce houses; GDP goes up. Are we better off? No. People were wiped out. If you think the world is driven by GDP alone, you're making a very big mistake. You have to be careful with it.

But I absolutely agree it's quite possible that instead of having what [the Energy Information Administration] is estimating to be modest impacts -- a tenth of a percent on GDP growth -- it could turn out to be positive. That's well within the margins of error of these things.

DR: Do you think it's fair to say that McCain will not implement mandatory caps in the U.S. until and unless China and India implement some sort of cap?

DHE: I think that's fair. You could begin down the path toward the mandatory caps. You could demonstrate leadership. You could begin research programs. You can do a lot in the area of improving the probability of having a successful climate policy, domestically and internationally. The main concern -- expressed by folks who don't want to see India and China free-ride and not suffer the same cost-containment issues -- is that we do it, they don't, and we're at a competitive disadvantage. The senator's very cognizant of that issue and doesn't want to put anyone in the United States in that position.

Matthew Yglesias: Foreign Policy After Bushism

Foreign Policy After Bushism: [T]he Iraq War has been a fiasco, the Bush administration’s policies are disastrous, etc.... [W]hat alternative strategies [should] progressives... put forward. My preferred answer is liberal internationalism... responsible for most of the successes of the post-war years... interactions between nations can and ought to be primarily cooperative.... But... it is difficult for countries to cooperate... when international relations is a series of anarchical conflicts between heavily armed powers. Liberal internationalists seek to ameliorate this problem by creating international institutions and systems of international law.... The liberal internationalist imperative is... for the United States to use its substantial economic, military, and political power to build and strengthen international institutions and international law.

This is, of course, inimical to the conservative mindset whose dominant nationalism... flit[s] between indifference to matters beyond our shores and a desire to coercively dominate foreign people or territory... international law and institutions are seen as irrelevant or... dangerous.... [T]he Bush administration’... lumps “international fora” and “judicial processes” together with terrorism terrorism as “weapons of the weak” used to challenge “our strength as a nation state. The consequences of this line of thinking have, clearly, been disastrous. But a surprisingly broad swathe of opponents of Bush-style foreign policy object to it on oddly narrow grounds.

Neither Hillary Clinton, who of course voted to authorize the use of force against Iraq, nor Barack Obama, who did not, have been willing to disavow the underlying doctrinal concept of unilateral preventive war as a tool of non-proliferation policy.... [S]uch notions continue to be affirmed... by a group who’'ve decided that if institutions and legitimacy are good, then we need more institutions and more sources of legitimacy.

The problem, allegedly, is that relying on the U.N. Charter’'s definition of when force may legally be used isn'’t good enough. Peter Beinart and Francis Fukuyama... wind up calling for “multi-multilateralism... Ivo Daalder and James Lindsay have written of an “Alliance of Democracies,” Daalder and James Goldgeier have advocated a “Global NATO,” and John Ikenberry and Ann-Marie Slaughter... argue that we need a “Concert of Democracies.” These ideas... all share a common flaw -- the envision these new limited-member organizations as purporting to possess the right to authorize military action in the absence of a U.N. Security Council resolution in circumstances other than individual or collective self-defense.

One suspects that, in practice, this idea would be deemed a non-starter by the non-U.S. democracies who are supposed to sign up. But its prevalence in liberal security circles is distressing -- the alleged advantage here is that we could take action even in the face of Russian or Chinese opposition -- but by the same token it would be a recipe for a new Cold War that would only make it more difficult for the United States to advance its core interests...

Hilzoy: Approving Torture: Better Late Than Never?

Obsidian Wings: Approving Torture: Better Late Than Never?: On the one hand, I wanted to write about it. On the other, I wasn't sure what to say. It doesn't particularly surprise me to learn that Cheney et al signed off on torture, and I do not, myself, regard the fact that they signed off on specific interrogation plans, as opposed to general policies allowing plans like those, as all that significant. (It might be significant legally, but not morally. Policy makers have an obligation to consider the specific ways in which policies they approve might be implemented.) The one minor surprise was how big a role Rice seems to have played, both as the chair of these meetings and in particular decisions ("This is your baby. Go do it.")

On the third hand, while I can toss off little posts about, say, Michael Medved's silly article while I'm here in Pakistan (read article, stop laughing, run searches on "Guantanamo" etc., publish results), I'm really not in a position to write anything that requires genuine reflection. And this clearly does. Members of this administration, at the most senior levels, have approved of torture. This might not be news, but I think it is never, never a good idea to lose one's capacity to be outraged by it.

One of the great dangers of the Bush administration is that it will permanently alter our sense of what is possible or acceptable. You can see an analog of this when people say things like: Bush won't be able to do X, or: he will have to do Y, where these statements do not refer to physical necessity or impossibility. (E.g., if memory serves, when the surge began, some Republicans said: if it doesn't work, Bush will have to withdraw.) The sense in which people who say such things think that Bush "has to" or "can't" do something or other is just that there are certain things we do not believe that any President would do, and others we think he must do. There are lines we assume he would never cross.

But this administration does not recognize the existence of any such lines. They do not "have to" withdraw just because none of their plans have worked, the army is breaking, and the war has next to no popular support. They would "have to" withdraw only if someone put a gun to their collective heads and forced them to. They do not "have to" obey the law or the Constitution: they will only if they are literally compelled to. Likewise, they do not "have to" respect even the most basic principles of decency and humanity, even when obligated to do so by US law and treaties we have signed, which are, according to the Constitution, the law of the land. Neither moral suasion nor legal obligation seem to matter to them. The only sense in which they "have to" do anything is the sense involving physical necessity.

It would be a catastrophe if we lost our sense that there are certain things that our government just cannot do, where "cannot" means something more than physical impossibility. Imagine the possibilities: we normally think that the President "cannot" just shoot his political opponents. But surely in one sense he can, at least if he's a decent shot. Maybe he couldn't do it without being thrown in jail. But that's not right: surely in one sense he "can" bribe the judges, suborn perjury, impose martial law, or do something else to get himself off the hook. Do we really want to go down this road? I don't.

The Bush administration threatens us with the catastrophe of losing our sense that there are things the government cannot do every time they do one of those things. I never, ever want to go along with their redefinition of what is possible, which is why I refuse to stop being outraged when something like this happens. (It's also why saying: hey, why are you still surprised? is beside the point. I'm not.)

But I really couldn't think what I could say that would do justice to this, sitting on the other side of the world, and trying to do my thinking in tiny snatches of time. So all I'll say is: it is an outrage, and we should never lose sight of that fact, or become inured to it.