Brad DeLong

Why Oh Why Can't We Have a Better Press Corps? (Washington Post Nell Henderson and Neil Irwin Edition)

Nell Henderson and Neil Irwin of the Washington Post mischaracterize Ben Bernanke's testimony. Their article begins:

Bernanke: The U.S. economy is off to a strong start this year and is likely to perform well in the months ahead, despite the risks of a cooling housing market and high energy prices, Ben S. Bernanke told Congress yesterday in his public debut as Federal Reserve chairman. Bernanke's remarks, just two weeks after the retirement of his famous predecessor Alan Greenspan, suggested that Fed officials are increasingly likely to raise their benchmark short-term interest rate next month to keep inflation contained. "The economic expansion remains on track," Bernanke told the House Financial Services Committee, citing recent reports showing that factory production, job growth and retail sales all rose last month.

Bernanke renewed his pledge to maintain continuity with Greenspan's policies but noticeably broke with the former Fed chief's practice of using Capitol Hill appearances to advise Congress on taxes, spending and other fiscal issues. Greenspan, a Republican, urged Congress several times last year to cut federal spending, make the recent tax cuts permanent, reduce the deficit, create private Social Security investment accounts and lower the government benefits promised to future retirees. His past public comments helped win passage of President Bill Clinton's 1993 budget and President Bush's 2001 tax cuts. Greenspan's forays into such territory was criticized by Fed colleagues and others who worried that the public inevitably confused his personal opinions with the positions of the central bank, which is supposed to be politically independent. Bernanke, in response to questions on those and similar topics, begged off...

Reading this, you might think that Bernanke refused to advise congress on fiscal issues, no?

But Bernanke did advise congress on fiscal issues. Here's how the Washington Times puts it:

Washington Times : Mr. Bernanke was disappointing in his steadfast refusal to express an opinion on the proposed restoration of PAYGO budget rules.... Bernanke nonetheless held no punches in warning about the implications of the nation's rising federal budget deficit.... "Increased [budget] deficits are a negative for the economy, certainly," Mr. Bernanke candidly acknowledged. Earlier, he explained that he was "concerned about the prospective path of deficits" because "it does reduce national saving and therefore imperils, to some extent, the prosperity, the future prosperity of our country." Noting that the share of gross domestic product spent on Social Security, Medicare and Medicaid will increase from 8 percent today to 16 percent by the time his college-attending children will be contemplating retirement, he declared that it was "appropriate for me to talk about long-term government spending, taxes and deficits" because "that bears on economic stability and financial stability."... Bernanke warned that there may come a time "when foreigners are not willing to continue to add to their holdings of U.S. dollar assets, and that, in turn, will lead to perhaps an uncomfortable adjustment in the current account." If foreigners do continue financing America's excess consumption and budget deficits, Mr. Bernanke hypothesized, they would likely charge higher prices (i.e., higher interest rates), which "would feed back on the U.S. economy in ways that might be uncomfortable" -- to say the least. As the Fed's Monetary Policy Report to Congress argued, "If not reversed over the longer haul, persistent low levels of [national] saving will necessitate either slower capital formation or continued heavy borrowing from abroad."...

Bernanke is saying that whether the budget should be balanced by raising taxes or cutting spending and whether government spending should be a higher or a lower share of GDP are political and not technocratic decisions that should be made by elected politicians. But Bernanke is crystal clear that the budget should be (approximately) balanced over the course of the business cycle.

That's not Henderson and Irwin's "broke with the... practice of... advis[ing] Congress on... fiscal issues." That's the Washington Times's "Bernanke... held [back] no punches in warning about the... budget deficit."

Bernanke is not giving congress no advice on fiscal issues. He is giving congress different advice than Greenspan gave. A good story could have been written on the reasons for Bernanke's shift away from Greenspan's position: (a) Bernanke's wish to build non-partisan credibility; (b) Bernanke's greater respect for the limitations of the Federal Reserve's role; (c) Bernanke's lack of Greenspan's Randian certainty that a smaller government would be a better government; (d) Bernanke's wish to focus his advice on the most important task facing congress--that of restoring long-run fiscal stability.

But Henderson and Irwin did not write that article. Instead, rely on Henderson and Irwin, and you wind up believing something that is not true.

Why Oh Why Are We Ruled by These Liars? (HSA Edition)

Mark Thoma points us to Edwin Park and Robert Greenstein of CBPP writing about the Bush administration's numbers on Health Savings Accounts.

They lie. About everything. No surprise:

http://www.cbpp.org/2-16-06health.htm ADMINISTRATION DEFENSE OF HEALTH SAVINGS ACCOUNTS RESTS ON MISLEADING USE OF STATISTICS By Edwin Park and Robert Greenstein: [T]he Administration is proposing significant new HSA-related tax breaks that it estimates would cost $156 billion over ten years....

Allan Hubbard, director of the White House’s National Economic Council, stated at a press briefing on February 1 that 40 percent of HSA enrollees have incomes below $50,000. Treasury Secretary Snow repeated this statement at a Senate Finance Committee hearing on February 7, and President Bush repeated it in a speech in Ohio on February 15. Hubbard, Snow, and the President implied that this refutes claims that HSAs are disproportionately attractive to the affluent.... [D]ata are available from three recent surveys of HSA enrollees. These surveys found, respectively, that 29 percent, 33 percent, and a little over 40 percent of HSA enrollees had incomes below $50,000. Mr. Hubbard and Secretary Snow ignored the two surveys with the lower figures and presented the 40 percent figure... as though it were the only one available.... [T]he survey cited by Hubbard and Snow was restricted to HSA enrollees in the individual health insurance market, who tend to have lower incomes than HSA enrollees who have employer-based coverage....

Mr. Hubbard also said... that 37 percent of people with HSAs were previously uninsured.... Secretary of Health and Human Services Michael Levitt rounded this figure up to 40 percent... ignored the results from other surveys.... Mr. Hubbard cited only the results from a survey, conducted by America’s Health Insurance Plans, that produced the higher number....

Claim #3: HSAs are not disproportionately attractive to healthy individuals.... Past studies have consistently found that plans with higher deductibles tend to attract a disproportionate number of healthier people. (This is not surprising, given that people with significant medical conditions and high medical costs would end up paying large out-of-pocket medical costs under high-deductible plans.) Preliminary studies indicate that this seems to be occurring with high-deductible policies tied to HSAs... survey conducted by the Employee Benefit Research Institute and the Commonwealth Fund... a study by Blue Cross and Blue Shield of Minnesota, as well as two recent GAO studies....

Serious concerns have been raised about HSAs, and the experience of HSAs thus far has not dispelled those concerns. It would be unwise to enact additional costly, deficit-financed tax cuts aimed at promoting HSAs until these concerns are resolved.

Getting Incentives Wrong...

Environmental Economics tells us that Rob Stavins has concluded that EPA's New Source Review has been a huge mistake:

Environmental Economics: Stavins on new source review : Rob Stavins' seventh "Environmental Perspective" column [The Environmental Forum®, May/June 2005] weighs in on new source review. In "Regulating by Vintage: Let's Put A Cork In It." In short:

Research has demonstrated that the NSR process has driven up costs tremendously (not just for the electric companies, but for their customers and shareholders —that is for all of us) and has resulted in worse environmental quality than would have occurred if firms had not faced this disincentive [to upgrade and replace generating plants].

Tighter regulations for new plants and upgrades provides an incentive for firms to let their plants get old and dirty. This increases the cost of generating output and cleaning air. One solution, not surprising if you've hung out here for any amount of time, is marketable permits.

Do We Need to Change the Fourth Amendment?

The Fourth Amendment currently reads:

FindLaw: U.S. Constitution: Fourth Amendment: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Looking ahead to a century of suitcase nukes, terrorist attacks, and non-state actors, do we need to amend the amendment? Should we perhaps change it to read:

FindLaw: U.S. Constitution: Fourth Amendment: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause or, in cases affecting the national security, reasonable suspicion, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Tom MaGuire Watches Carl Hulse Perform a Hit on John McCain

Tom MaGuire watches Carl Hulse perform a hit on John McCain:

Foe of Earmarks Has a Pet Cause of His Own: WASHINGTON, Feb. 17 — It is just the sort of parochial spending request that might lead Senator John McCain, nemesis of pork barrel projects, to give somebody an earful. The bill would direct $2 million annually over five years to establish a center at a specified law school to honor a renowned jurist from the state. While the goal may be laudable, some critics say, the measure is a classic case of lawmakers' trying to funnel money directly to a home-state institution for a project that should find financing elsewhere. But it is doubtful that Mr. McCain will weigh in against the idea this time: the legislation to support the project is being sponsored by him and Senator Jon Kyl, Arizona Republicans who are among those aggressively promoting new rules for handling Congressional spending requests... the center, a tribute to the late Chief Justice William H. Rehnquist...

As Carl Hulse knows, and any careful reader will figure out, the Times is blurring two related issues - "pork", which we will describe as "wasteful" Federal spending that ought better to be done at a lower level of government, privately, or not at all"; and "earmarks", which are a particularly surreptitious Congressional tool for sneaking pork into bills.... No one in the article thinks it is an earmark, or that this push by McCain contradicts his position taken on earmarks. But with careful phrasing Mr. Hulse managed to preserve the suspense for several paragraphs. And Dead Tree readers will note that this page A11 story gets a promotional blurb on the front page: "Pork Critic seeks $10 Million".

So why is the Times turning on their own St. John with this silly attack? Have they moved on from McCain-Feingold, and are they positioning themselves for their endorsement of Hillary in 2008? Who knows?

As long as reporters for daily newspapers play these silly games of misleading their readers, people are going to continue to get their news and information from respected weblogs--like that of Tom MaGuire.

I wonder if we will get an apology from the New York Times, or Carl Hulse? I'm not holding my breath.

The New York Times Does the Semi-Right Thing

Knock me over with a feather! The New York Times does the semi-right thing:

Editors' Note - New York Times : A review on Jan. 15 about "Women Who Make the World Worse: And How Their Radical Feminist Assault Is Ruining Our Families, Military, Schools, and Sports," by Kate O'Beirne, repeated a misattribution, contained in the book, of the quotation "All heterosexual intercourse is rape." The quotation, from "Professing Feminism: Education and Indoctrination in Women's Studies," by Daphne Patai and Noretta Koertge, is part of those authors' characterization of the views of the late Andrea Dworkin, the feminist writer, and Catharine MacKinnon, the law professor and legal theorist; it is not from MacKinnon's own writings.

The review, however, endorsed the quotation as representative of MacKinnon's expressed opinions, calling it "MacKinnon's (decades-old) contention." In fact, while this and similar statements equating heterosexual intercourse and rape have often been atttributed to MacKinnon, she has long and vigorously denied having made such assertions or that they represent her beliefs.

MacKinnon's past efforts to correct the record on this matter include a letter, written with Dworkin, published in the Book Review on May 7, 1995. The issue has also been the subject of an article in The Chicago Tribune ("Fighting a Lie That Just Won't Die," by Cindy Richards, May 30, 1999) and of an entry on Snopes.com, a Web site that specializes in investigating Internet rumors (www.snopes.com/quotes/mackinno.htm). MacKinnon traces the origin of her identification with such statements to attempts by ideological opponents to discredit her.

But where is the statement that "The New York Times regrets and apologizes for the error? And where is the statement that the reviewer, Ana Marie Cox, regrets and apologizes for the error (as I am sure she does)?

Kate O'Beirne, of course, neither apologizes for nor regrets the error.

Impeach George W. Bush. Impeach Richard Cheney. Do It Now

Steve Clemons writes:

The Washington Note : TWN has just been sent some very interesting material posted at OutragedModerates.org. A blogger's FOIA request has yielded Steven Cambone's handwritten notes of Secretary of Defense Don Rumsfeld's instructions to General Myers at 2:40 pm on September 11, 2001. Some of the lines are fascinating:

"Go massive. . . Sweep it all up. Things related and not."

Judge whether hit S.H. (Saddam Hussein) @ same time -- Not only UBL (Osama bin Laden)

Hard to get a good case

Need to move swiftly

Disparate Impact...

Peter Lawrence on discrimination in academic math and science personnel selection:

Peter Lawrence:there is a different kind of discrimination that particularly damages creative pursuits such as science. There is good psychological evidence that aggression and lack of empathy are on average male characteristics, and we may agree with Baron-Cohen that for both sexes, “nastiness... gets you higher socially, and gets you more control or power” [2,10,11]. Science should not be a military or a business operation, but nowadays it increasingly resembles one—for most, it is a vicious struggle to survive.

In this struggle, men climb higher because they are on average more ruthless, and many women, as well as a gentle minority of men, shy away from competing with them [12]. And I think that our selection methods exacerbate this tendency.... [I]n job searches and in considering people for promotions, we have been asking women to take tests, largely devised by men, that tend to overvalue [typically] masculine characteristics... these tests become discriminatory....

At present, in the competition for academic posts, we expect our candidates to go through a gruelling process of interview that demands self-confidence. We are impressed by bombast and self-advertising, especially if we don't know the field, and we may not notice annexation of credit from others, all of which on average are the preferred province of men. But we should also seek out able scientists who would care well for their groups, those who would mentor a distressed student and help her or him back into productive research. And if we did, we would choose more feminine women as well as more feminine men.

And most important of all, could we try to select for the one characteristic we need most, scientific originality? Originality and creativity are all too rare, and I know of no evidence that these traits are more frequent in one sex [13]. As we busily compare candidates, adding up their papers and calculating impact factors, do we remember to look for these qualities? Instead of reading the papers, we count them. Counting rewards those who have had many papers accepted, and those who have worked their names into the author list. But is the editorial process of selecting papers an objective one? Certainly not; in the jungle where we fight to publish, salesmanship and pushiness pay off [14], and these tend to be masculine characteristics. Thus, if we were to read the papers of candidates and search for originality and insight, I believe we would select more women, as well as more men with feminine qualities. So I am not advocating overt positive discrimination; instead, I suggest we consciously try to see through showmanship and select the qualities we actually need...

Stick a Fork in: They're Done!

Steve Pearlstein, who is *not* the author of the excellent Goldwater book Before the Storm, roasts the Bush Council of Economic Advisers:

Did You Hear the One About the Trade Deficit? : The White House Council of Economic Advisers is not generally known for its playful sense of humor. But in the annual Economic Report of the President, released this week, the CEA decided to have a bit of fun with the record $726 billion trade deficit.... [T]hose wry PhDs framed their analysis not as consumption exceeding production (the so-called current account deficit), but as a consequence of cheap foreign capital financing our profligacy (the capital account surplus, which by definition is its mirror image). It's a bit like General Motors, ending a disastrous sales month, declaring what a good period it had been for inventory replenishment....

I'll Stop Calling This Crew "Orwellian" When They Stop Using 1984 as an Operations Manual

Josh Micah Marshall is totally bemused by this CNN headline: SHOOTING VICTIM APOLOGIZES TO VICE PRESIDENT.

Talking Points Memo: by Joshua Micah Marshall February 17, 2006 04:50 PM : Let's put this headline in amber and pack it into the time capsule. Let folks know what it was like.

The Washington Post Returns to the Internet

UPDATE: Yes. The microphone is now back on.

Ah. The Wahington Post returns to the internet:

Poynter Online - Forums: Memo from Rajiv Chandrasekaran, Washington Post continuous news editor: 02/16/2006 07:19 PM

To: [Washington Post newsroom]

Subject: Comments resuming in post.blog

Starting Friday morning, washingtonpost.com will allow people to once again post comments in post.blog, the blog used to announce new features on the site. As many of you may recall, the comments feature was shut down a few weeks ago after some users posted offensive and inappropriate messages. Since then, the editors at washingtonpost.com have taken several steps to minimize the chance that offensive or inappropriate comments will get posted. Those steps include:

-- A profanity filter to automatically block messages with offensive content.
-- The ability to block the Internet (IP) addresses of people who persist in trying to post inappropriate material.
-- The assignment of washingtonpost.com staffers to read every message that comes into the blog.
-- The immediate removal of messages deemed to be offensive or inappropriate.
-- The posting on washingtonpost.com of a new comments policy.

In a message that will be posted on washingtonpost.com, the site's executive editor, Jim Brady, notes that the Web site "allows something invaluable: a continuing conversation with readers, and among them." But he also warns those who want to comment to respect "minimal but firm rules." Among them:

· Tough criticism is welcome; personal attacks on writers or other readers are not.
· No use of profanity is permitted.
· You may not pose as someone else when posting.

But the microphone is not yet plugged in.

The Pace of White-Collar Outsourcing

How rapidly will outsourcing of U.S. white collar jobs proceed? The consensus bet is 300,000 a year, but it all depends on how rapidly the English-literate populations of emerging markets expand:

India%u2019s Outsourcing Industry Is Facing a Labor Shortage - New York Times : February 16, 2006 By SARITHA RAI MUMBAI, India, Feb. 16 — India’s leadership in global outsourcing may be in jeopardy unless it increases its supply of skilled workers.... Experts... said Thursday that an incipient skills shortage was the biggest threat to the industry’s blazing growth.... Pramod Bhasin, chief executive of Genpact, a back-office outsourcing company once owned by General Electric, set the tone when he said, “If the talent in India is scarce, we will go wherever the labor pool is available.”

Lower-cost centers like Eastern Europe and China could become serious rivals for outsourcing business from Western multinational companies.

Until now, corporations mainly looked to India to do work from customer support to writing software code to designing chips. But the supply of India’s famed “skilled, low-cost, English-speaking” work force may not quite match the sizzling demand.

India’s $23.4 billion outsourcing industry accounts for most of the country’s software and services industry, which makes up nearly 5 percent of gross domestic product. The industry employs 1.2 million workers, has sparked a consumer revolution in India, and is accelerating at more than 30 percent a year.

On the sidelines of the Nasscom meeting, B. Ramalinga Raju, chairman of India’s fourth- largest outsourcing company, Satyam Computer Services, said that India produced three million college graduates every year, including nearly 400,000 engineers. “But most of these are uncut diamonds that have to go through polishing factories, as the trade requires only polished stones,” Mr. Raju said.

In a country of 1.1 billion people, raw talent is plentiful, he said, but not all of it is market-ready.... The supply shortfall is even more acute in mid-level jobs, like software engineers. Salaries in this segment are rising an average 20 percent a year, and in some segments even 50 percent annually, compared with 5 percent annual raises for software engineers in the United States.

“The irony is that while the outsourcing industry partially fueled an economic boom amongst the middle classes, the growth has now spilled onto other areas offering ambitious young college graduates an array of job options outside of the outsourcing industry,” said M. S. Krishnan , professor of business information technology at the Stephen M. Ross School of Business at the University of Michigan....

Outsourcing companies are taking matters into their own hands to meet mid-level skills shortages by setting up vast, dedicated training centers. Tata Consultancy Services... has a large training center in Trivandrum... its nearest rival, Infosys Technologies, has a training campus in Mysore.... “At any given point in time, there are 4,000 people in the pipeline at Infosys’s training center,” Mr. Krishnan said.

Many companies believe the skills deficit will only grow. “We are in the people business, and the situation will become more challenging in five years,” said Amitabh Ray, director of global delivery, IBM Global Services India....

The situation is much the same in the back-office and call center jobs: of 100 college graduates applying, only 8 are immediately employable. Another 20 require considerable training to be hired, according to Nasscom data...

Raise Taxes on Gasoline!

Robert Frank points out the obvious--time to raise taxes on gasoline. I will always have great respect for Al Gore for pushing hard for an energy tax in 1993--it was the act of a statesman, shot down by the oil lobby and the Republican congressional leadership:

A Way to Cut Fuel Consumption That Everyone Likes, Except the Politicians - New York Times : By ROBERT H. FRANK: SUPPOSE a politician promised to reveal the details of a simple proposal that would, if adopted, produce hundreds of billions of dollars in savings for American consumers, significant reductions in traffic congestion, major improvements in urban air quality, large reductions in greenhouse gas emissions, and substantially reduced dependence on Middle East oil. The politician also promised that the plan would require no net cash outlays from American families, no additional regulations and no expansion of the bureaucracy.

As economists often remind their students, if something sounds too good to be true, it probably is. So this politician's announcement would almost surely be greeted skeptically. Yet a policy that would deliver precisely the outcomes described could be enacted by Congress tomorrow -- namely, a $2-a-gallon tax on gasoline whose proceeds were refunded to American families in reduced payroll taxes.

Proposals of this sort have been advanced frequently in recent years by both liberal and conservative economists. Invariably, however, pundits are quick to dismiss these proposals as "politically unthinkable."

But if higher gasoline taxes would make everyone better off, why are they unthinkable? Part of the answer is suggested by the fate of the first serious proposal to employ gasoline taxes to reduce America's dependence on Middle East oil. The year was 1979 and the country was still reeling from the second of two oil embargoes. To encourage conservation, President Jimmy Carter proposed a steep tax on gasoline, with the proceeds to be refunded in the form of lower payroll taxes.

Mr. Carter's opponents mounted a rhetorically brilliant attack on his proposal, arguing that because consumers would get back every cent they paid in gasoline taxes, they could, and would, buy just as much gasoline as before. Many found this argument compelling, and in the end, President Carter's proposal won just 35 votes in the House of Representatives.

The experience appears to have left an indelible imprint on political decision makers. To this day, many seem persuaded that tax-cum-rebate proposals do not make economic sense. But it is the argument advanced by Mr. Carter's critics that makes no sense. It betrays a fundamental misunderstanding of how such a program would alter people's opportunities and incentives.

Some examples help to illustrate how the program would work. On average, a family of four currently consumes almost 2,000 gallons of gasoline annually. If all families continued to consume gasoline at the same rate after the imposition of a $2-a-gallon gasoline tax, the average family would pay $4,000 in additional gasoline taxes annually. A representative family with two earners would then receive an annual payroll tax refund of $4,000. So, if all other families continued to buy as much gasoline as before, then, this family's tax rebate would enable it to do so as well, just as Mr. Carter's critics claimed.

But that is not how things would play out. Suppose, for example, that the family was about to replace its aging Ford Explorer, which gets 15 miles per gallon. It could buy another Explorer. Or it could buy Ford's new Focus wagon, which has almost as much cargo capacity and gets more than 30 miles per gallon. The latter choice would save a whopping $2,000 annually at the pump. Not all families would switch, of course, but many would.

From the experience of the 1970's, we know that consumers respond to higher gasoline prices not just by buying more efficient cars, but also by taking fewer trips, forming carpools and moving closer to work. If families overall bought half as much gasoline as before, the rebate would be not $2,000 per earner, but only $1,000. In that case, our representative two-earner family could not buy just as much gasoline as before unless it spent $2,000 less on everything else. So, contrary to Mr. Carter's critics, the tax-cum-rebate program would profoundly alter not only our incentives but also our opportunities.

A second barrier to the adoption of higher gasoline taxes has been the endless insistence by proponents of smaller government that all taxes are bad. Vice President Dick Cheney, for example, has opposed higher gasoline taxes as inconsistent with the administration's belief that prices should be set by market forces. But as even the most enthusiastic free-market economists concede, current gasoline prices are far too low, because they fail to reflect the environmental and foreign policy costs associated with gasoline consumption. Government would actually be smaller, and we would all be more prosperous, if not for the problems caused by what President Bush has called our addiction to oil.

At today's price of about $2.50 a gallon, a $2-a-gallon tax would raise prices by about 80 percent (leaving them still more than $1 a gallon below price levels in Europe). Evidence suggests that an increase of that magnitude would reduce consumption by more than 15 percent in the short run and almost 60 percent in the long run. These savings would be just the beginning, because higher prices would also intensify the race to bring new fuel-efficient technologies to market.

The gasoline tax-cum-rebate proposal enjoys extremely broad support. Liberals favor it. Environmentalists favor it. The conservative Nobel laureate Gary S. Becker has endorsed it, as has the antitax crusader Grover Norquist. President Bush's former chief economist, N. Gregory Mankiw, has advanced it repeatedly.

In the warmer weather they will have inherited from us a century from now, perspiring historians will struggle to explain why this proposal was once considered politically unthinkable.

Ben Bernanke Reports to Congress for the First Time

Andrew Balls on what Ben Bernanke meant:

FT.com / World / US - Fed chief hints at further rate rises : By Andrew Balls in Washington Published: February 15 2006 15:46 | Last updated: February 15 2006 23:30: Ben Bernanke, Federal Reserve chairman, said on Wednesday that interest rates might have to rise to prevent the US economy overheating but inflation remains moderate.

Mr Bernanke, giving evidence before Congress for the first time since taking over from Alan Greenspan, made an assured debut.

He told the House financial services committee: “The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately – in the absence of countervailing monetary policy action – to further upward pressure on inflation.”

“In these circumstances, the FOMC judged that some further firming of monetary policy may be necessary, an assessment with which I concur.”

While energy prices had increased inflation pressure and headline inflation numbers, Mr Bernanke characterised last year’s 1.9 per cent rise in the Fed’s preferred inflation measure – the core personal consumption expenditures index excluding food and energy – as “moderate”.

Recent data have supported the Fed’s view that the economy snapped back after a weak fourth quarter. With little spare capacity in the economy, the central bank wants to see growth slow to the economy’s trend rate.

Bond prices were little changed after the testimony before the House financial services committee, and the dollar rose slightly. Investors expect the Fed to raise the federal funds rate a quarter point to 4.75 per cent at the end of March, and see a good chance of another rate increase in May.

“Overall, it came across as pretty balanced, with the lean towards more tightening but the signal that they problably don’t have a lot more to do,” said Peter Hooper, chief US economist at Deutsche Bank.

While stressing the many uncertainties in the outloook, Mr Bernanke endorsed the consensus forecasts of the FOMC members, collated last month before he joined the Fed, which expect core inflation at about 2 per cent this year and at 1.75-2 per cent in 2007.

Since monetary policy would be expected to influence inflation in the second year, this can be seen as an implicit objective as well as a projection.

That is the top of the 1-2 range that Mr Bernanke popularised as the FOMC’s comfort zone during his three years as a Fed governor before he joined the White House last year...

Theorem 68

From the Fifteen-Year-Old's geometry textbook, Geometry for Enjoyment and Challenge, Theorem 68:

If an altitude is drawn to the hypotenuse of a given right triangle, then (a) the two triangles formed are similar to the given right triangle and to each other; (b) the altitude to the hypotenuse is the mean proportional between the segments of the hypotenuse; and (c) either leg of the given right triangle is the mean proportional between the hypotenuse of the given right triangle and the segment of the hypotenuse adjacent to that leg (i.e., the projection of that leg on the hypotenuse).

Richard Rhoad, George Milauskas, and Robert Whipple, authors of said Geometry for Enjoyment and Challenge, I summon you all to the bar of the Hypatian Court for trial on the charge of exceeding the allowable maximum of dorky impenetrability in the teaching of geometry.

Menzie Chinn Is an Unhappy Camper

He writes:

Econbrowser: Dick Cheney on economics : The vice president holds forth on the elasticity of tax receipts with respect to the tax rate.... "Nobody's perfect, but when revenue projections are off by 180 degrees, it's time to reexamine our assumptions and to consider using more dynamic analysis to measure the true impact of tax cuts on the American economy," he said.... This view is, apparently, the motivation for the President's proposal for a new unit in the Treasury Department to implement dynamic scoring. From the Washington Post:

Treasury officials said yesterday that the president's proposed Division on Dynamic Analysis -- with a handful of employees and a $513,000 budget -- would go beyond the government's old "static" methods of analyzing proposed changes in tax policy only in terms of their direct effects on certain affected taxpayers. Instead, "dynamic" analysis looks at how tax changes cause consumers and businesses to behave differently in ways that affect the overall economy's growth.

Dynamic scoring... in proper hands, and with proper deference to our uncertainty... in the hands of a professional staff... well insulated from political pressures, would be a good thing. However, WMDs, "last throes of the insurgency", and the "Clear Skies" initiative, might give an impartial observer pause for thought.

Impeach George W. Bush. Impeach Richard Cheney. Do it now.

A Paperness on the Floor

The last several signatures of my--hardcover--copy of Vernor Vinge's A Deepness in the Sky fell out last night.

In order to save time, we are copying this rant from our archives:

They Sure Don't Make 'Em Like They Used to: Archive Entry From Brad DeLong's Webjournal: Our family copy of Harry Potter and the Goblet of Fire--our hardback family copy of Harry Potter and the Goblet of Fire--is in serious disarray. Three huge chunks of the book have fallen out of the binding: pages 53-144, pages 145-340, and pages 341-528.

And the book has not been dropped into the bathtub even once!

Curse you, Scholastic Press! Curse You!

May the curses of Anu, Enlil, and Ea descend upon the Scholastic Press! May Marduk and Sarpanitmn deal justly with those who put insufficient glue into the binding of a book! May the flocks of Scholastic Press be devoured by the lion and the leopard! May the crops of Scholastic Press by devoured by crows! May Utnapishtim the first of scribes turn his countenance from Scholastic Press! And may all their pages have at least one embarrassing typographical error!

UPDATE: The Ten-Year-Old has made a legal proffer. If informed that the statute of limitations is less than nine months, she will confess to having dropped Harry Potter and the Goblet of Fire into a snowbank in Vail last Christmas vacation.

UPDATE: The Thirteen-Year-Old reports that our replacement copy of Harry Potter and the Sorcerer's Stone is in similarly sad shape--and it has never been dropped into either a bathtub or a snowbank.

UPDATE: Ann Marie suggests that all future purchases of books by J.K. Rowling be purchases of the edition with the library binding....

Comments

Yeah, curse them for publishing a book you all liked so much you read it through several times. Curse them! The villains!

Here's a hint: Look into the increasingly monopolistic book printing and binding business sometimes. American publishing consists of thousands of publishers contending for the business of fewer and fewer printers and binders. It doesn't give the publishers a lot of leverage, even for bestselling titles like the Potter books.

Posted by: Patrick Nielsen Hayden on October 21, 2003 06:53 PM

Who Are All of You?

I feel that I know a great deal about who writes weblogs, and why, and how weblogs link to each other, and how ideas are sparked by and diffuse across weblogs.

But I know very little about who reads weblogs.

I guess I should get rich, and then give a large grant to Eszter Hargittai (who it says will be spending next academic year out here in the Garden of Earthly Delights) to find out.

Fire Stuart Taylor, Jr. Impeach George W. Bush. Impeach Richard Cheney. Do It Now.

UPDATE: A Correction: Stuart Taylor sends me angry emails stating that I was wrong to claim that he was recently an enthusiastic supporter of the Bushies in Guantanamo, with phrases like: "I was right about you. Distortion through selective quotation is your purpose.You appear to be as dishonest as the worst of the wingnuts on the right."

Stuart Taylor's complaint is correct: I was wrong to claim that he was until recently an enthusiastic supporter of the Bushies in Guantanamo.

I misread my files, and thought that some statements of Taylor from 2002 were in fact from 2004. For example, Taylor's accusations that those worrying about what was going on in Guantanamo were in an "overwrought tizzy" and were "anti-American hypocrites who habitually turn a blind eye to egregious human rights violations in the Arab world and in Castro's Cuba" did not come from 2004 but from February 4, 2002.

I apologize for the error.

For the record, Taylor last carried water for Bush administration actions in Guantanamo on March 1, 2004, where the beginning of his column is:

The perception* that the Bush administration has systematically denied due process to the more than 650 alleged "enemy combatants" at Guantanamo Bay has both shocked Americans who care about the rule of law, me included, and done America enormous damage in world opinion. But the system may be starting to work. Indeed, it may have been working for some time better than I had thought.... [T]he administration has made a plausible case that its process for deciding whether to send prisoners to Guantanamo -- where detainees from more than 40 countries have been held for as long as two years -- has far more rigorous safeguards than had previously been disclosed...

For the record, Taylor's last piece of open cheerleading for George W. Bush that I have been able to find comes on March 14, 2005:

As time passed, I came to fear that the invasion [of Iraq] had probably been a disastrous mistake.... I descended into dismay about Bush.... Bush's feckless failure to prevent North Korea from going nuclear... Guantanamo abuses... disdain for diplomacy... irresponsible approach to global warming... fiscal recklessness... shifting of tax burdens from the rich... swaggering refusal to ever admit error, the smirk, and more. Now, though, I am rooting for Bush to go down in history as a great president. That could happen.... How can we not root for Bush to win this campaign for Arab democracy, even if his chances still seem no better than even? And while celebrations are premature, shouldn't we sometime Bush-bashers -- and even the full-time Bush-haters -- be prepared to give great credit to him and his neocons, if and when it becomes clear that they have engineered a historic breakthrough?... [N]o matter how shallow, slippery, and smug Bush sometimes seems, if he ends up changing the world for the better, he will be entitled to a presumption of wisdom, even brilliance...

---

*Note Taylor's definition of the real problem at Guantanamo: the "perception" of the systematic denial of due process. Yyou can find similar "definitions" of the real problem elsewhere, for example December 17, 2005, where Taylor says that the real problem is that there is an "uproar over the use of coercive interrogation techniques" that "squeeze potentially life-saving information out of suspected terrorists." His column begins:

There is more than enough blame to go around for the disastrous damage done to our international standing and national security by the uproar over the use of coercive interrogation methods -- all of them "torture," in the parlance of many critics -- to squeeze potentially life-saving information out of suspected terrorists...

---

Voltaire said: "I may disagree with what you say, but I'll defend your right to say it." In the case of Stuart Taylor, Jr. of the National Journal, I want to turn this around:

I agree with what Taylor is now saying about how "many of us have suspected for years" that "countless assertions by administration officials... that all -- or the vast majority -- of the prisoners at Guantanamo Bay are... terrorists... captured on 'the battlefield'... have been false.... Many scores... innocent, wrongly seized noncombatants... handed over by reward-seeking Pakistanis and Afghan warlords... noncombatant teachers and humanitarian workers.... Bush administration... very little effort to corroborate... plausible claims of innocence..."

I agree with what he says. But I think he has no right to say it. Back in 2004--less than two years ago--and before, you see, Stuart Taylor, Jr., was an enthusiastic endorser of the Bushies' deeds at Guantanamo [CORRECTION: Taylor points out that he has been a longtime critic of how Guantanamo was run] critic of those who were "unduly fastidious", with phrases like "It's easy to sit in judgment on those assigned to deal with the threat of catastrophic terrorism.... Telling a prisoner that he or his family will be killed unless he talks is not torture.... Torture may be justified.... [D]efine "torture" narrowly enough on a case-by-case basis to leave considerable leeway for tough, coercive interrogation.... [U]ndue fastidiousness in interrogating terrorists could lead to the preventable murders of thousands of people..."

Ah. Back in 2004 Stuart Taylor, Jr., was an enthusiastic endorser of the Bushies' deeds at Guantanamo, [Taylor points out--correctly--that he was then a critic of how Guantanamo was run. But he was and remains eager that we not be unduly fastidious in interrogating terrorists] with phrases like "It's easy to sit in judgment on those assigned to deal with the threat of catastrophic terrorism.... Telling a prisoner that he or his family will be killed unless he talks is not torture.... Torture may be justified.... [D]efine "torture" narrowly enough on a case-by-case basis to leave considerable leeway for tough, coercive interrogation.... [U]ndue fastidiousness in interrogating terrorists could lead to the preventable murders of thousands of people..."

Feh.

When, in mid 2004, Erin Waters of the National Journal wrote me to ask why I had not resubscribed, I wrote back saying that I would never pay another cent to the National Journal as long as it employed ethically-challenged lawyers like Stuart Taylor Jr. who took America's major edge--that we are the Good Guys--and threw it in the trash. I had examples:

Why I Will Not Resubscribe to the National Journal:

Stuart Taylor: There is no evidence that the administration ever approved "torture" (which it has defined extremely narrowly) as a matter of policy. Justice did approve a number of highly coercive, still-classified interrogation methods, such as feigning suffocation and subjecting prisoners to sleep deprivation and "stress positions." Using such methods, the CIA squeezed valuable information out of Qaeda leaders...

Stuart Taylor: Some of the attacks on the recently leaked Bush administration legal memoranda about the use of torture and lesser forms of coercion to extract information are a bit facile. It's easy to sit in judgment on those assigned to deal with the threat of catastrophic terrorism. It's much harder to provide morally or legally satisfying answers.... Telling a prisoner that he or his family will be killed unless he talks is not torture, for example, unless the threat is of "imminent" death...

Stuart Taylor: Torture may be justified in rare [cases].... [W]hat about the Qaeda member caught by Philippine intelligence agents in 1995 in a Manila bomb factory? Defiant through 67 days of savage torture -- most of his ribs broken, cigarettes burned into his private parts -- he finally cracked when threatened (falsely) with being turned over to Israel's Mossad. And he revealed the so-called "Bojinka" plot to crash 11 U.S. airliners and 4,000 passengers into the Pacific...

Stuart Taylor: The best way to minimize the conflict between the need for aggressive interrogation and the prohibitions of human-rights law may be to define "torture" narrowly enough on a case-by-case basis to leave considerable leeway for tough, coercive interrogation short of excessive brutality.... Coercive interrogation of suspected terrorists is arguably legal.... This view... seems right.... [U]ndue fastidiousness in interrogating terrorists could lead to the preventable murders of thousands of people...

Stuart Taylor: [I]t's clear... there should be no Miranda warnings or lawyers for suspected Qaeda terrorists.... The same logic holds to some extent even if the suspect is a U.S. citizen, and even if he is seized on U.S. soil, as in the case of the Brooklyn-born Padilla...

http://nationaljournal.com/members/buzz/2004/openingargument/070604.htm http://nationaljournal.com/members/buzz/2004/openingargument/061404.htm http://nationaljournal.com/members/buzz/2004/openingargument/051004.htm http://nationaljournal.com/members/buzz/2004/openingargument/051004.htm
http://nationaljournal.com/members/buzz/2003/openingargument/031003.htm

And, yes, now--many days late and many dollars short--Stuart Taylor, Jr. has changed his tune. Gary Farber points us to:

Stuart Taylor: Falsehoods About Guantanamo (02/06/2006): [C]ountless assertions by administration officials over the past four years that all -- or the vast majority -- of the prisoners at Guantanamo Bay are Qaeda terrorists or Taliban fighters captured on "the battlefield"... have been false.... [M]any of the 500-odd men now held at Guantanamo... were captured on Afghan battlefields or were terrorists... [but] many of us have suspected for years:

• A high percentage, perhaps the majority, of the 500-odd men now held at Guantanamo were not captured on any battlefield...
• Fewer than 20 percent of the Guantanamo detainees, the best available evidence suggests, have ever been Qaeda members.
• Many scores... were innocent, wrongly seized noncombatants with no intention of joining the Qaeda campaign to murder Americans.
• The majority were... handed over by reward-seeking Pakistanis and Afghan warlords and by villagers of highly doubtful reliability. These locals had strong incentives to tar as terrorists any and all Arabs they could get their hands on... including noncombatant teachers and humanitarian workers. And the Bush administration has apparently made very little effort to corroborate the plausible claims of innocence detailed by many of the men who were handed over....

The tribunal hearings, based largely on such guilt-by-association logic, have been travesties of unfairness. The detainees are presumed guilty unless they can prove their innocence -- without help from lawyers and without being permitted to know the details and sources of the evidence against them. This evidence is almost entirely hearsay from people without firsthand knowledge and statements from other detainees desperate to satisfy their brutally coercive interrogators. One file says, "Admitted to knowing Osama bin Laden," based on an interrogation in which the detainee -- while being pressed to "admit" this, despite his denials -- finally said in disgust, "OK, I knew him; whatever you want."... The administration's unspoken logic appears to be: Better to ruin the lives of 10 innocent men than to let one who might be a terrorist go free.

This logic would be understandable if the end of protecting American lives justified any and all means, including the wrecking of many more innocent non-American lives. So, too, would be the torture (or near-torture) in late 2002 of the above-mentioned al-Kahtani... interrogated for 18 to 20 hours a day for 48 of 54 days; he had water dripped on his head and was blasted with cold air-conditioning and loud music to keep him awake; his beard and head were shaved; he was forced to wear a bra and panties and to dance with a male jailer; he was hooded; he was menaced with a dog, told to bark like one and led around on a leash; he was pumped full of intravenous fluids and forced to urinate on himself; he was straddled by a female interrogator and stripped naked; and more -- all under a list of interrogation methods personally approved by Rumsfeld. Al-Kahtani may well have had valuable information. But it appears that many other detainees who had no information... have been put through "humiliating acts, solitary confinement, temperature extremes, use of forced positions" in a systematic effort to break their wills that is "tantamount to torture."...

Bush has... pledged that the Guantanamo detainees are treated "humanely." At the same time, he has stressed, "I know for certain... that these are bad people" -- all of them, he has implied.

If the president believes either of these assertions, he is a fool. If he does not, choose your own word for him.

Stuart Taylor Jr. Many days late. Many dollars short. And not a single sentence apologizing for his enthusiastic endorsements of the Bushies in the past.

Impeach George W. Bush. Impeach him now. Impeach Richard Cheney. Fire Stuart Taylor too.

Radio Silence at the Washington Post...

Jay Rosen writes:

PressThink: I thought I would be featuring at PressThink this week a long and (I thought) very interesting Q and A with John Harris, the political editor of the Washington Post. It was completed over the weekend, but at the very last minute Harris pulled the plug and decided against publishing the interview, which we had worked on for several weeks. (I'd tell you the reason, but I don't know the reason.)

Unfortunately, I cannot bring you his replies, but I can show you one [of] the questions I asked Harris. It was my attempt to lay out what has happened to the press under Bush, and Cheney.

Why only one question? Why not show us all the questions?

A Few Bad Apples

Impeach George W. Bush. Impeach Richard Cheney. Do it now.

Salon exclusive: The Abu Ghraib files (News at Salon.com) : Salon has obtained files and other electronic documents from an internal Army investigation into the Abu Ghraib prisoner-abuse scandal.... The source who gave the CID material to Salon is someone who spent time at Abu Ghraib as a uniformed member of the military and is familiar with the CID investigation... the following summary of the material included: "A review of all the computer media submitted to this office revealed a total of 1,325 images of suspected detainee abuse, 93 video files of suspected detainee abuse, 660 images of adult pornography, 546 images of suspected dead Iraqi detainees, 29 images of soldiers in simulated sexual acts, 20 images of a soldier with a Swastika drawn between his eyes, 37 images of Military Working dogs being used in abuse of detainees and 125 images of questionable acts."

Elementary Open Economy Macroeconomics

Menzie Chinn finds an error in the 2006 Economic Report of the President:

Econbrowser: Open Economy Macro in the 2006 Economic Report of the President : One virtue of the ERPs of the past has been the caveats that are usually attached to strong assertions of economic behavior. But in this edition, there is an uncharacteristically unhedged assertion on page 146:

The interdependence of the global financial system implies that no one country can reduce its external imbalance through policy action on its own. Instead, reducing external imbalances requires action by several countries. Specifically, at least four steps may help to reduce these imbalances.

But this is not true, even taking the chapter... at face value. In box 6-3 assessing "the link between fiscal and trade deficits", the authors cite favorably the Fed's estimate of an elasticity between fiscal and trade deficits of 0.20. [I.e., that if you cut the budget deficit by $5 you cut the trade deficit by $1, without any policy action by other countries.] They don't note that this result from a calibrated model (Sigma) is at the low end of the estimates. The OECD macroeconometric model incorporates an elasticity of about 0.40 [i.e., $5 gets you $2], while the IMF's calibrated model implies an elasticity of 0.50 [i.e., $5 gets you $2.50].

Stupidest Man Alive: Allan Hubbard

Today's contestant for the Stupidest Man Alive^TM award is Allan Hubbard, Assistant to the President for Economic Policy, who attempts to push back against Bruce Bartlett's book Imposter (and if my copy isn't here tomorrow, I'll go out and buy one):

White House Watch: White House pushes back on economist's knocks: By Paul Bedard: The White House is pushing back hard against claims from a Reagan-era budget pro that policy is whipped together without much thought and then presented to a compliant Congress for passage.

Allan Hubbard, assistant to the president for economic policy and the director of the National Economic Council, flatly rejected the allegations made by GOP economist Bruce Bartlett in his new book, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Hubbard specifically faulted claims that the tax bill and healthcare changes were rushed through.

"I can assure you that we spent hours and hours and hours working on the tax-cut proposal" in the 2000 presidential election alone, Hubbard said. He added that the cabinet and outsiders had a big advising role in working on healthcare issues. "The policy process in the White House just isn't the White House itself," he said, explaining that outside experts are called upon when developing new policy. And just getting a policy ready for legislation, he said, "is a feat in itself."

Hours. Not months. Not weeks. Not days. Hours.

"Hours" is in all probability a good estimate of the time spent trying to figure out what the right thing to do was. Remember John DiIulio's account of life inside the Bush White House:

"There is no precedent in any modern White House for what is going on in this one: complete lack of a policy apparatus. Besides the tax cut, which was cut and dried during the campaign, and the education bill, which was really a Ted Kennedy bill, the administration has not done much, either in absolute terms or in comparison to previous administrations at this stage, on domestic policy. What you've got is everything, and I mean everything, being run by the political arm. It's the reign of the Mayberry Machiavellis. [They] consistently talked and acted as if the height of political sophistication consisted in reducing every issue to its simplest black-and-white terms for public consumption, then steering legislative initiatives or policy proposals as far right as possible." The former White House director confides, "I heard many, many staff discussions but not three meaningful, substantive policy discussions. There were no actual policy white papers on domestic issues. There were, truth be told, only a couple of people in the West Wing who worried at all about policy substance and analysis.... Every modern presidency moves on the fly, but on social policy and related issues, the lack of even basic policy knowledge, and the only casual interest in knowing more, was somewhat breathtaking: discussions by fairly senior people who meant Medicaid but were talking Medicare; near-instant shifts from discussing any actual policy pros and cons to discussing political communications, media strategy, et cetera."

Timor Mortis Conturbat Me

The past is another country: mortality:

Done With Mirrors : [S]eeing certain facts gathered together illuminates them.... [S]omething keeps punching through... to almost wrest control of the narrative....

When I read early 19th century biographies and life stories I always notice the fearful swath death cut through young families. Seeing five different biographical stories overlaid, as in "Team of Rivals," makes that effect all the more dramatic.

Edwin Stanton lost his daughter to scarlet fever, then three years later his wife, Mary, at age 29. He buried her in a bridal gown and was distraught for months; his sister had to come live with him as he stalked the house at night, from room to room, with a lantern, sobbing and screaming, "Where is Mary?" At the time he was the leading lawyer in Jefferson County, Ohio, with a hand in almost every case, and the entire spring court session had to be canceled while his wits were lost. His younger brother, a medical student, suffered a fever that damaged his brain and he took his own life by puncturing his throat with a medical tool.

Salmon Chase lost his first wife after 18 months of marriage from complications in childbirth. She was only 23. The daughter she bore died of scarlet fever at age 5. Chase fell in love with and married a friend of his wife, but their daughter also died, and tuberculosis felled the mother at age 25. Chase married a third time, to a society belle in Cincinnati, but of their two daughters only one lived past a year and the mother soon died as well. By 44, he had buried three wives and three daughters. He never remarried, and the sole surviving child, Kitty, was his brilliant "first lady" throughout his political career.

The Sewards lost a baby daughter to smallpox in 1837. William tried to bring his wife, Frances, with him in his political posts, but she prefered to stay home. She wrote to a woman friend, "you can very well understand that I am more happy to be here -- There is a sort of satisfaction, menancholy it is, in being once more in the room where my darling babe lived and died -- in looking over her little wardrobe -- in talking with those who missed and loved her."

Lincoln himself, as a young man, lost the three women he most loved: his mother, his sister, and Ann Rutledge; the death of the latter threw him into a suicidal despair. Mary Lincoln never recovered mentally from the loss of her 3-year-old son, Eddie, in 1850, after she nursed him in vain as tuberculosis tore through his body in seven weeks.

Researchers into early nineteenth century families quickly come to accept the high death rates among children as a fact of life in those days. Families were large, medicine was crude, disease ran rampant, and it seems no family was untouched by the tragedy of a child lost.

We tend to think of death as a country for the old. It was not so then. People of all ages were vulnerable, the cold calculus of contagation meant that often if a disease got into a household parents would lose some or all of their children in a matter of days.

Parental bereavement came not only by the sudden stroke of a gunshot or accident; with tragic frequency they had to watch, deperate and powerless as death took its agonizing time with their children, who writhed as parasites dissolved their bowels or languished delirious in parching fevers.

Nowadays, parents who lose a child have to go in search of support. No one, it seems, really knows how to talk to them. Parental bereavement is alien to most of us. But 150 years ago, death of a child was a common denominator among American families.

All this first struck me ten years ago when I wrote a cinder-block-sized history of a small city in Pennsylvania. In this comparatively wealthy and healthy place, as many as a third of the children born in the early 1800s died before age 10. I was reading through fat caches of letters, mainly to sort out the political evolutions of that turbulent time and trace the rise of the Republican party from wind-blown threads of abolitionists, Know-Nothings, and other fringes.

But I kept meeting family tragedies. Such as Townsend Haines, a leading political lawyer who left a voluminous correspondence and who had lost a young daughter, Sarah, in 1824....

Edmund Andrews on the Clown Show That Is Bush Tax Policy

A good thumbnail sketch:

Cracking the Tax Code - New York Times : ANYONE who thinks that the federal income tax code is baffling now ought to brace for what lies ahead: big changes and uncertainty.... Never before has so much of the income tax code consisted of temporary measures. And never before has it been so inherently unsustainable. Virtually all of President Bush's tax cuts and credits... are set to expire by 2011.... [N]either Mr. Bush nor the Congress has started to address... the alternative minimum tax... a tax that was originally aimed at only the very richest people but is now set to impose big tax increases on tens of millions of middle-income families over the next few years. Mr. Bush and Congressional leaders in both parties have vowed to prevent that....

If Mr. Bush's tax cuts are extended, but the A.M.T. is unchanged, tens of millions of people will face big new surcharges. If the alternative tax is frozen or simply repealed, Congress is likely to make up for the lost money by cutting back or eliminating scores of other tax breaks. If Congress lets Mr. Bush's tax cuts expire, regular tax rates are likely to shoot up sharply but the A.M.T. may become fairly easy to repeal....

House and Senate Republicans have also been increasingly unable to agree on any long-term tax plan. Far from making Mr. Bush's tax cuts permanent, they are now struggling just to extend today's tax breaks for another year or two. "The process itself is really broken," said C. Eugene Steuerle, a senior fellow at the Urban Institute and author of numerous books on tax policy. "It presents people with a very misleading picture of what's going on. You have increases in spending without tax revenues to pay for them, and you have tax increases that won't occur."... Mr. Bush omitted any mention of the issue in his State of the Union address on Jan. 31, and the White House has been silent about the detailed proposals made last fall by his handpicked advisory council on tax reform....

This is a result of a deliberate decision by the White House and Republican leaders in Congress to have the tax cuts of 2001 and 2003 expire by 2011.... Republican lawmakers... saw political advantages. Temporary tax cuts look cheaper than permanent cuts. And many Republicans delighted in voting for the same tax cuts year after year. "What started to happen in 2001 was qualitatively different," said Joel B. Slemrod, a professor of tax policy at the University of Michigan. "Part of it was to fit the letter of the law into the budget rules, and part of it was calculated to keep issues on the agenda that were to the Republicans' favor." Whatever the reasons, virtually all the tax cuts of 2001 and 2003 and scores of other tax breaks are set to expire by 2011....

To glimpse the difficulty of the tax choices ahead, look no further than the struggle this month among House and Senate Republicans to extend just a small collection of expiring tax breaks. President Bush had placed special urgency on permanently extending his tax cut on stock dividends. But Republican leaders have not come close to that goal. The Republican-led Senate passed a $60 billion package that omitted any extension of the tax cut on stock dividends, which does not expire until 2008, in order to keep the A.M.T. from rising in 2006.

Restraining the alternative minimum tax for just one year will cost about $34 billion, while extending the dividend tax cut alone for one year would cost about $10 billion...

Asbestos...

Does anybody know what *really* happened with Spector's asbestos bill in the Senate?

Jon Gruber Doesn't Like HSAs Much

Whenever I'm called upon to pretend to be a health economist, Jon Gruber is one of the top people I steal an informed opinion from. Today, CBPP reports that Jon doesn't like the Bush administration's Health Savings Accounts proposals:

http://releases.usnewswire.com/GetRelease.asp?id=61021: A new analysis by one of the nation's leading health economists finds that the Administration's proposals to expand tax breaks for Health Savings Accounts (HSAs) would cause a net increase in the number of uninsured Americans.

The analysis, conducted by Jonathan Gruber of M.I.T., projects that while 3.8 million previously uninsured people would gain health coverage through HSAs as a result of the President's proposals, 4.4 million people would become uninsured because their employers would respond to the new tax breaks by dropping coverage and they would not secure coverage on their own. The net effect would be to increase the number of uninsured Americans by 600,000.

"The Administration estimates that its HSA-related tax proposals would cost $156 billion over the next ten years, which would worsen the nation's fiscal problems," Robert Greenstein, the Center on Budget and Policy Priorities' executive director, noted. "Professor Gruber's study raises very serious questions about the wisdom of these proposals."

Under current law, individuals who enroll in high-deductible health plans (at least $1,050 for individuals or $2,100 for families) can contribute to a HSA. Contributions to HSAs are tax deductible, earnings on the HSA accounts accumulate tax free, and withdrawals from the accounts are tax free if used for qualified medical expenses.

In its new budget, the Administration proposes substantial additional tax subsidies designed to encourage more people to open HSAs, such as providing a tax credit as well as a deduction for contributions to HSAs, making the premium costs for HSA- related health plans tax deductible (and providing a tax credit for them as well), providing a tax credit for low-income households that purchase high-deductible insurance in the individual market in conjunction with an HSA, and increasing the amount that can be deposited in a HSA each year to $5,250 for an individual and $10,500 for a couple or family.

These proposals would eliminate all tax advantages for employer-sponsored coverage (as compared to coverage purchased in the individual health insurance market). Those tax advantages were designed to encourage employers to provide insurance to their workers. As a result, some employers -- typically, small business owners -- would respond to the new HSA tax breaks by dropping coverage for their workers or (in the case of new businesses) electing not to offer coverage in the first place.

To estimate the impact of these proposals on health coverage, Professor Gruber employed a micro-simulation model that is very similar to models used by the Congressional Budget Office, the Congressional Joint Committee on Taxation, and the Treasury Department. His findings include:

-- Under the proposed tax breaks, the number of people with individual health coverage would increase by 8.3 million when the proposals were fully in effect. Some 3.8 million of these people would previously have been uninsured; about 4 million of them would have switched from employer-sponsored coverage to individual coverage coupled with an HSA; and 500,000 would previously have received coverage through Medicaid.

-- Some 8.9 million people would lose employer-sponsored coverage as a result of the tax breaks. About half of them -- 4.4 million people -- would become uninsured, while another 4 million would switch to individual coverage coupled with an HSA, and 500,000 would enroll in Medicaid.

Cheney v. Kennedy

Sick, but funny:

B**** | Lab: State of the nation: From a client: Cheney invited Ted Kennedy on a hunting trip. Kennedy agreed, but only if he could drive....

Impeach George W. Bush. Impeach Richard Cheney. Do It Now.

Impeach George W. Bush. Impeach Richard Cheney. Do it now.

Politics - Military, spy whistle-blowers allege retaliation - sacbee.com : Spc. Samuel Provance, also dressed in Army green, said he was demoted and humiliated after telling a general investigating the Abu Ghraib scandal that senior officers had covered up the full extent of abuse during interrogations of detainees at the U.S. military prison in Iraq. "Young soldiers were scapegoated while superiors misrepresented what had happened and tried to misdirect attention away from what was really going on," Provance said.... Provance made a new allegation about the Abu Ghraib controversy, saying that U.S. forces had captured the 16-year-old son of an Iraqi general under Saddam Hussein, Hamid Zabar, to pressure the general into providing information. "I was extremely uncomfortable about the way General Zabar had been treated, but particularly the fact that his son had been captured and used in this way," Provance said. "It struck me as morally reprehensible, and I could not understand why our command was doing it."

What, exactly were we doing?

Daily Kos: SacBee: Innocent minors abused at Abu Ghraib : According to... Der Standard, Zabar's son was hosed down with ice water and locked into a cell block with another prisoner notorious for raping fellow inmates. At this point, it is not known whether the minor was actually raped. Apparently the tactic backfired, as General Zabar was "so devastated that he was incapable of giving further testimony".

Please note that these are allegations made in the foreign press not yet confirmed...

"A Lot of Political Upside for Cheney"

Unbelievable:

The Corner on National Review Online : Warrantless searches, Katrina fingerpointing, $7.8 trillion budget, Abramoff spin: these were the stories buffetting the White House last week. This week, it's Dick Cheney's hunting accident.... [O]ne would think the Democrats would understand that it will be difficult to return to many of these themes.... This is not a partisan point, but mere media analysis.... [O]nce the media starts ignoring you, it's unlikely to come back again, never mind pick up where it left off.... I still think there's room for a lot of political upside for Cheney.... [T]hat's certainly the way to bet.

Yes, it is Jonah Goldberg. He is really saying that Cheney has improved his national political standing by shooting Whittington in the face, liver, and heart.

And should somebody point out to Goldberg that the U.S. government spends $2.8 trillion a year, not $7.8 trillion? Or is that simply a completely lost cause?

Linkrot!

It is sad that of the three posts that provoked Belle Waring to write the Best Weblog Post Ever! , two have been claimed by the Linkrot Monster. Only mine remains.

Fortunately for Yglesias and Chavetz, there is the Wayback Machine.

Protect yourself against Link Decay!

Paul Krugman on "Risks" to the Forecast

He writes:

Debt and Denial - New York Times : Last year America spent 57 percent more than it earned on world markets. That is, our imports were 57 percent larger than our exports... running up debts to Japan, China and Middle Eastern oil producers. We're as addicted to imported money as we are to imported oil. Sometimes large-scale foreign borrowing makes sense. In the 19th century the United States borrowed vast sums from Europe, using the funds to build railroads and other industrial infrastructure. That debt-financed wave of investment left America stronger, not weaker. But this time our overseas borrowing isn't financing an investment boom: adjusted for the size of the economy, business investment is actually low by historical standards. Instead, we're using borrowed money to build houses, buy consumer goods and, of course, finance the federal budget deficit.

In 2005 spending on home construction as a percentage of G.D.P. reached its highest level in more than 50 years. People who already own houses are treating them like A.T.M.'s, converting home equity into spending money: last year the personal savings rate fell below zero for the first time since 1933... the Bush administration actually boasted about a 2005 budget deficit of more than $300 billion, because it was a bit lower than the 2004 deficit. It all sounds unsustainable. And it is.

Some people insist that the U.S. economy has hidden savings that official statistics fail to capture.... [But] the more closely one looks at the facts, the less plausible the "don't worry, be happy" hypothesis looks.

Denial takes a more systematic form within the federal government, where Dick Cheney is doing to budget analysis what he did to intelligence on Iraq.... Sooner or later the trade deficit will have to come down, the housing boom will have to end, and both American consumers and the U.S. government will have to start living within their means.

So how bad will it be? It depends on how the binge ends. If it tapers off gradually, the U.S. economy will be able to shift workers... into sectors that produce exports or replace imports.... In practice, however, a "soft landing" looks unlikely, because too many economic players have unrealistic expectations... international investors... snapping up U.S. bonds... oblivious both to the budget deficit and to the consensus view among trade experts that the dollar will eventually have to fall 30 percent or more... American home buyers... a "bubble zone" along the coasts, where housing prices have risen far more than the economic fundamentals warrant....

So it seems all too likely that America's borrowing binge will end with a bang, not a whimper.... [Greenspan's] successor may be in for a rough ride. Best wishes and good luck, Ben; you may need it.

I would still put the chances of a "soft landing" at 75%--but dropping.

Snort! Snort! Guffaw! Guffaw! Snort!

Bush's Council of Economic Advisers redefines our trade deficit to be a *capital account surplus.* "Surplus" sounds so much better than "deficit", doesn't it?

Snort, snort, guffaw, guffaw, snort.

Max Sawicky is more polite:

MaxSpeak, You Listen!: DON'T CALL IT A TRADE DEFICIT : So says the new Economic Report of the President... in a chapter entitled "The U.S. Capital Account Surplus." "Surplus" sounds much better, don't you think? We've got a surplus in the capital account. Capital is flowing in. It shows foreigners love us, they really love us.... Capital account surplus means foreigners are taking increasing ownership of U.S. dollar-denominated assets, since we buy more from them than we sell to them. It's like this: if you own your home free and clear and take out a mortgage to buy skittles and beer, you've got yourself a capital account surplus.

We learn, in this chapter about the movements of capital, that the best thing the U.S. can do about the surplus is to raise national saving. Turns out that "At 13 percent of GDP... the U.S. domestic saving rate is the lowest among the advanced economy countries," them Euro-socialist countries with the big, bad tax systems. Much else can be done to reduce our trade deficit capital account surplus, according to the report, but it all must be done by other countries.... Worse, the savings rate has decreased since 1995, the bad old days of sky-high Clintonian Euro-socialist taxes. One component of this rate is the rise in the Federal deficit after 2001.... The reductions in the top marginal rates and the special preferred rates on dividends and capital gains are the jewels in the crown of supply side tax policy. They are supposed to raise saving. How can you not get more saving if you increase the returns to saving? It's like a law of physics, goddamn it...

Hearts and Minds: Thoughts on Danny Okrent, the New York Times, and Time

Doug Henwood directs us to Bill Densmore, reporting on New York Times ex-ombudsman Danny Okrent:

Densmore: Blogs will overcome mainstream media as a source of news unless traditional media organizations successfully transfer the integrity of their brands onto the Internet, the former ombudsman of The New York Times says. Family ownership is the common thread among the three most prestigious newspapers in America, adds Daniel Okrent, the first “public editor” of The Times. Okrent was at Williams College tonight for a public talk.... Okrent also said poor news coverage allowed the Iraq war to happen, it’s a “horrible time - financially” for newspapers, and the death of print is happening more quickly than he predicted six years ago.

The three best newspapers in America — The New York Times, Washington Post and Wall Street Journal are each controlled via blocks of stocks owned by families, said Okrent.... [W]hatever the management failings of Sulzberger or other family owners, said Okrent, these three papers are managed for posterity and quality “rather than another two cents worth of quarterly earnings....”

Okrent... said poor press coverage lead to the Iraq war, because “in a time of war, editors being to wear epaulettes on their shoulder” and The Times was not exceptional in jumping on the bandwagon.... Okrent said he is fearful about the growth of Internet web blogs because of the difficulty in determining their credibility. He said the future of newspaper organizations lies in their ability to be seen as more reliable than blogs.... “The good news, I think - my fingers are crossed - is if the responsible, serious members of the so-called mainstream media live up to their own standards, when you see something by okrent.com and nytimes.com you are more likely to trust these guys [nytimes.com] because their brand means accuracy and thoroughness and fairness,” said Okrent.... “[W]hat’s essential is that those brand names still mean what they mean or even more. If not, then we will not only have reason to fear these blogs - we will be beaten by them.”...

He told a questioner: “The general rolling over on the part of the American press allowed the war to happen. I do believe that is true, and I think the press is extremely chastened by that. I think we all know how bad it was.”...

Author: Bill Densmore, densmore@mediagiraffe.org

Three things have crossed my desk so far this week suggest that Danny Okrent is behind the times: that the struggle for credibility--for "hearts and minds"--is not in the future but is largely behind us. There is no http://okrent.com. If there were, it would have moderately high credibility--Danny Okrent strikes me as a smart person who often gets it wrong, but is trying hard to get it right. By contrast, experience has taught me that I have no assurance at all that what is printed at http://www.nytimes.com/ is written by people who are trying hard to get it right.

Here's one example: as far as the Times is concerned, it has already lost the struggle for Lance Knobel's heart and mind:

Lance Knobel: In my naivety, I looked to this morning's New York Times to fill in the details of the Cheney hunting accident. More fool I. In an article that concentrated as much on the jokes of television comics as the substance, Elisabeth Bumiller took expert hunting advice from the following: two people who were on the hunt with Cheney, and Cheney chum and former Wyoming senator Alan Simpson. Is it any surprise that they all blamed the victim, Harry Whittington, and not Cheney?

Other sources do much better. Knight Ridder’s account makes clear that it is a fundamental rule of hunting that the shooter is responsible for knowing what is in his line of fire. The San Francisco Chronicle interviews a disinterested expert, who confirms that basic rules of hunting safety were ignored.

Of course, I learned all this yesterday from blogs that covered the story far more thoroughly than any of today’s papers. Firedoglake was particularly stellar...

Here's another example via, well, me: things like this mean that it would take a huge amount of work for the New York Times to regain my heart and mind:

Elisabeth Bumiller: White House Letter: Criticism of Bush leaves conservative in the cold - Americas - International Herald Tribune: One Republican, Scott McClellan, the White House press secretary, responded to Bartlett's book by e-mail message over the weekend. "Spending is coming under control," McClellan wrote, adding that in the 2007 budget submitted to Congress this month, "the president put forward the most disciplined nonsecurity discretionary proposal since the Reagan era."

Elisabeth Bumiller tells her readers that McClellan's email is a "response" to the accusations of gross moral fiscal turpitude that Bruce Bartlett hurls at George W. Bush. "Response" implies--and Bumiller wants her readers to think--that McClellan's email is a counter or a refutation of a correction or a qualification to Bartlett's claims that the Bush budget is out of control. But I know, and Bruce Bartlett knows, and Scott McClellan knows, and Washington insiders assure me that Elisabeth Bumiller knows, that "nonsecurity discretionary" spending only is 15% of the total budget, and the other 85% of the budget is running wild and free: highly "undisciplined." Bumiller, however, is anxious not to tell her readers that.

Anybody at the New York Times who wants their organization to have any credibility at all needs to think very hard about what is going on here. Why isn't "nothing in this story should mislead readers" the first commandment imposed upon those who write for the organization?

The New York Times is not alone in being eager to burn its credibility. My third example comes from Time magazine: its October 2003 relaying of Scott McClellan's declaration that:

McClellan: accusations of Rove's peddling information [about Valerie Plame to reporters] are "ridiculous." Says McClellan: "There is simply no truth to that suggestion."...

when at least three people who worked on the Time story--Michael Duffy, Matthew Cooper, John Dickerson--and quite possibly more knew that McClellan's statement was false: that Karl Rove had in fact peddled information about Valerie Plame to reporters.

I have asked why Time did not add a sentence like "Time reporters have good reason to believe that McClellan's denials are not accurate," in order to keep the story from misleading its readers.

The official, on-the-record response of Time is that adding such a sentence to the October 2003 story would have violated Time's pledge of confidentiality to Karl Rove. I don't see how. Nobody has been able to coherently tell how. And the assumption that the duty to go many extra miles to protect sources trumps the duty not to mislead readers is not one that Time can adopt and still expect to survive as an organization.

The off-the-record responses have been more interesting. They include, roughly and paraphrased:

• It's well known that you can't trust what Scott McClellan says. There's no need to point out that you can't rely on White House spokesmen.
• Everyone reading Time's series on Valerie Plame already knew that Rove was the source of the leak.
• The pictures accompanying the story told everyone interested that Rove was the source of the leak.
• It was an open secret in Washington that Rove was the leaker.

These suggest that Time is in a better position than the New York Times: Time, at least, has a guilty conscience--and understands, at some level, that its credibility to be in the business of informing and not misleading its readers is its only long-run asset.

Dead-Eye Dick...

Ah. I guess it really is too early for the jokes. Whittington's back in the ICU:

Hunter Shot by Cheney Suffered Minor Heart Attack - New York Times : By THE ASSOCIATED PRESS Filed at 1:51 p.m. ET CORPUS CHRISTI, Texas (AP) -- The 78-year-old lawyer who was shot by Vice President Dick Cheney in a hunting accident has some birdshot lodged in his heart and he had a ''a minor heart attack'' Tuesday morning, hospital officials said. The victim, Harry Whittington, was immediately moved back to the intensive care unit for further treatment, said Peter Banko, the administrator at Christus Spohn Hospital Corpus Christi-Memorial in Texas. Banko said there was an irregularity in the heartbeat caused by a pellet, and doctors performed a cardiac catheterization. Whittington expressed a desire to leave the hospital, but Banko said he would probably stay for another week to make sure more shot doesn't move to other organs or to other part of his body.

''Some of the bird shot appears to have moved and lodged into part of his heart in what we would say is a minor heart attack,'' Banko said in a news conference outside the hospital. The doctors said Whittington did not experience symptoms of a heart attack or any other problems. They left the birdshot in place and said he could live a healthy life with it there.... Whittington had initially been placed in intensive care after the accident Saturday evening. He had been moved to a ''step-down unit'' Monday after doctors decided to leave several birdshot pellets lodged in his skin rather than try to remove them.

A Texas Parks and Wildlife Department report said Whittington was retrieving a downed bird and stepped out of the hunting line he was sharing with Cheney. ''Another covey was flushed and Cheney swung on a bird and fired, striking Whittington in the The wildlife department issued a report Monday that found the main factor contributing to the accident was a ''hunter's [i.e., Cheney's] judgment factor.'' No other secondary factors were found to have played a role.

The rumors from South Texas are that Cheney dodged seeing the sheriff until Sunday to give time for his blood alcohol level to drop...

---

It's too early for the jokes: Whittington's still in the ICU in Corpus Christi.

But when he does get out of the hospital, then it will be time for:

So pull up a chair and stand me a drink,
And a tale to you I'll tell
About Dead-Eye Dick and...

Blaming the Victim

Scott McClellan blames the victim:

KRT Wire | 02/13/2006 | Cheney's companion at fault in shooting, White House says : The White House blamed the 78-year-old man whom Vice President Dick Cheney shot during a weekend quail hunting trip in Texas for the incident, as officials struggled Monday to explain why they waited nearly 24 hours before making the news public. White House Press Secretary Scott McClellan tried to absolve Cheney of blame for shooting wealthy Austin lawyer Harry Whittington, saying that hunting "protocol was not followed by Mr. Whittington when it came to notifying others that he was there. And so, you know, unfortunately, these types of hunting accidents happen from time to time."

Several hunting experts were skeptical of McClellan's explanation. They said Cheney might have violated a cardinal rule of hunting: Know your surroundings before you pull the trigger. "Particularly identify the game that you are shooting and particularly identify your surroundings, that it's safe to shoot," said Mark Birkhauser, the incoming president of the International Hunter Education Association, a group of fish and wildlife agencies. "Every second, you're adjusting your personal information that it is a safe area to shoot or it's not a safe area to shoot."

Safe-hunting rules published by the National Rifle Association and the Texas Parks and Wildlife Department echo Birkhauser's advice. "Be absolutely sure you have identified your target beyond any doubt," the NRA says in the gun-safety rules on its Web site. "Equally important, be aware of the area beyond your target. This means observing your prospective area of fire before you shoot. Never fire in a direction in which there are people or any other potential for mishap. Think first. Shoot second."

The Best Weblog Post Ever!

The New Yorker has a very, very sad article about Bush speechwriter Mike Gerson.

This reminds me that it is time to once again reprint the best weblog post ever, by Belle Waring:

John & Belle Have A Blog: If Wishes Were Horses, Beggars Would Ride -- A Pony!:

I think Matthew Yglesias' response to Josh Chafetz' exercise in wishful thinking was about right, even if Brad DeLong's is more nuanced. I'd like to note, though, that Chafetz is selling himself short. You see, wishes are totally free. It's like when you can't decide whether to daydream about being a famous Hollywood star or having amazing magical powers. Why not -- be a famous Hollywood star with amazing magical powers! Along these lines, John has developed an infallible way to improve any public policy wishes. You just wish for the thing, plus, wish that everyone would have their own pony! So, in Chafetz' case, he should not only wish that Bush would say a lot of good things about democracy-building and fighting terrorism in a speech written for him by a smart person [like Mike Gerson], he should also wish that Bush should actually mean the things he says and enact policies which reflect this, and he should wish that everyone gets a pony. See?

Brad DeLong's Semi-Daily Journal: Jim Brady of the Washington Post: A Case for Professional Help?

In comments, Charles of http://phoenixwoman.blogspot.com/ writes:

Jim Brady of the Washington Post: The number of misleading, exaggerated or simply odorous statements in Brady's piece is remarkable. And I am purposefully excluding anything to do with Abramoff, Indian tribes, and Democrats in Congress.... No one should believe what's printed in The Post without checking it out--you could end up bogged down in a nasty war in the Middle East or running uncontrollable deficits if you do.

Very nicely done.

Stanley Fish's Antimoral Philosophy

I think we have a new frontrunner in the Stupidest Man Alive^TM contest: Stanley Fish with another case of this-is-so-funny-because-it's-so-sad.

Two "religions." One of them believes in free speech: that people who think differently should engage each other, learn from each other, and try to get along. The other believes that people who think differently should be hated, terrorized, and scorned. Stanley Fish declares he favors the second: that it is to the discredit of liberals that their faith doesn't hold that you should cut the throats of infidels who blaspheme. That it is to the credit of those he calls "Muslims" (but are, I believe, not so) that they believe in "fighting... to the death"--which would seem to imply killing others--for their faith:

Our Faith in Letting It All Hang Out - New York Times: [Some say] it is hypocritical for Muslims to protest cartoons caricaturing Muhammad... cartoons vilifying the symbols of Christianity and Judaism are found... in the media of many Arab countries.... [But] the difference is that those who draw and publish such cartoons in Arab countries believe... Jews and Christians follow false religions and are proper objects of hatred and obloquy.... [T]he editors who have run the [Muhammed] cartoons do not believe that Muslims are evil infidels... they [publsh them] gratuitously, almost accidentally. Concerned only to stand up for an abstract principle — free speech — they seize on whatever content happens to come their way.... The fact that for others the content may be life itself is beside their point.

This is itself a morality — the morality of a withdrawal from morality... different from the morality of those for whom the Danish cartoons are blasphemy and monstrously evil... the difference... is to the credit of the Muslim protesters and to the discredit of the liberal editors....

[C]alls for "dialogue," issued so frequently of late by the pundits with an unbearable smugness... depends on the assumption (central to liberalism's theology) that, after all, no idea is worth fighting over to the death....

[But] dialogue is not a tenet in his creed, and invoking it is unlikely to do anything but further persuade him that you have missed the point — as, indeed, you are pledged to do, so long as liberalism is the name of your faith.

The best way to deal with this is, I think, via cartoons:

And by a captioned picture of Stanley Fish:

"The splendrous blond beast, avidly rampant for plunder and victory"

---

But I suppose we have to use words as well:

Note that to Fish the problem with those he calls "liberals" is not that they are unwilling to die for their faith: it is that they are not willing enough to kill others--to "fight" for their faith, and to fight "to the death" for it. Fish admires rather than laughs at those whose theology is "Believe in a loving God, or die!" That's sad. That's perverted. That's funny.

That Gail Collins thinks this is worth publishing is, on the other hand, only sad.

Books: The Pile Grows...

The pile of must-read excellent books grows higher and higher. In this morning's mail:

• Eric Jones (2006), Cultures Merging: A Historical and Economic Critique of Culture (Princeton: Princeton University Press: 0691117373).
• Harold James (2006), The Roman Predicament: How the Rules of International Order Create the Politics of Empire (Princeton: Princeton University Press: 0691122210).

Jim Brady of the Washington Post: A Case for Professional Help?

Ah. The Washington Post's Jim Brady strikes back:

BLOG RAGE | By Jim Brady : The afternoon of Jan. 19.... I closed down the comments area of one of our many blogs.... In her Jan. 15 column, [Deborah] Howell erred in saying that [Jack] Abramoff gave campaign donations to Democrats as well as Republicans. In fact, Abramoff directed clients to give to members of both parties, but he had donated his own personal funds only to Republicans.... So was I suppressing free speech? Protecting the Bush administration? That's what you'd think, judging by the swift and acid reaction to my move...

I think Jim Brady needs help--professional help. Moreover, I think he needs three kinds of professional help.

---

First, I think Brady needs professional help understanding the nature of effective moderation in virtual conversational spaces. Here the professional I recommend he should consult/engage/listen to/pay $$$$ is the currently snowbound Teresa Nielsen-Hayden: http://nielsenhayden.com/makinglight/archives/006036.html.

1. There can be no ongoing discourse without some degree of moderation, if only to kill off the hardcore trolls. It takes rather more moderation than that to create a complex, nuanced, civil discourse. If you want that to happen, you have to give of yourself. Providing the space but not tending the conversation is like expecting that your front yard will automatically turn itself into a garden.
2. Once you have a well-established online conversation space, with enough regulars to explain the local mores to newcomers, they'll do a lot of the policing themselves.
3. You own the space. You host the conversation. You don't own the community. Respect their needs. For instance, if you're going away for a while, don't shut down your comment area. Give them an open thread to play with, so they'll still be there when you get back....
4. Over-specific rules are an invitation to people who get off on gaming the system.
5. Civil speech and impassioned speech are not opposed and mutually exclusive sets. Being interesting trumps any amount of conventional politeness.
6. Things to cherish: Your regulars. A sense of community. Real expertise. Genuine engagement with the subject under discussion. Outstanding performances. Helping others. Cooperation in maintenance of a good conversation. Taking the time to teach newbies the ropes. All these things should be rewarded with your attention and praise. And if you get a particularly good comment, consider adding it to the original post....
7. If you judge that a post is offensive, upsetting, or just plain unpleasant, it's important to get rid of it, or at least make it hard to read. Do it as quickly as possible. There's no more useless advice than to tell people to just ignore such things. We can't. We automatically read what falls under our eyes....
8. You can't automate intelligence. In theory, systems like Slashdot's ought to work better than they do. Maintaining a conversation is a task for human beings.

And lots, lots more really good stuff

---

Second, I think Brady needs professonal help understanding the evolving culture of the internet. Here the professional I recommend is the impeccably right-wing but thoughtful and intelligent Eugene Volokh: http://volokh.com/archives/archive_2005_04_03-2005_04_09.shtml#1113000593. Brady should especially consider Volokh's thumbnail sketch of the downsides of the weblog, and think hard about whether washingtonpost.com as he envisions it belongs in this market niche:

1. Takes time and effort.
2. Yields zero money for most, a little for some, decent money only for a very few.
3. May make one a controversial figure, which may be bad for some day jobs.
4. Off-hand remarks on controversial topics sometimes push you to spend much more effort than you ever intended on follow-ups, rebuttals, and the like.
5. Don’t blog if you aren’t willing to get (and ignore) nasty e-mail.

---

Third, I think Brady needs professional help understanding the mission of washingtonpost.com. Its mission is to inform its readers--to help them learn true things--in the hope that advertisers will pay enough for access to those readers' eyeballs to keep the operation solvent.

With that in mind, let's back up to the substance of the Abramoff story.

There are four money flows here that Jack Abramoff is connected with:

1. Jack Abramoff's personal campaign contributions. Perhaps $150 thousand.

2. The normal campaign contributions--mostly to Democrats--that Jack Abramoff's Indian clients made and continue to make in order to support legislators whom they regard as on their side in issues of special concern to Indians. Perhaps $3 million.

3. The extra campaign contributions--almost all to Republicans--that Jack Abramoff directed his Indian clients to make as part of his lobbying efforts on their behalf. Perhaps $6 million.

4. The fees--perhaps $80 million--paid to Abramoff and company, of which perhaps a quarter was respent as "lifestyle enhancements" for an overwhelmingly Republican group of legislators friendly to Abramoff. Perhaps $20 million.

With respect to these money flows, a few questions naturally arise:

1. Would anybody--anybody trying to inform and not mislead their readers--who had to summarize these money flows in one sentence do so by writing--as Deborah Howell did--that Jack Abramoff "gave campaign contributions to Democrats as well as Republicans"? Is that a fair and balanced presentation of these money flows?

2. Would anybody trying to inform--not mislead--their readers who had to summarize these money flows in one sentence do so by writing--as Brady does--that Jack Abramoff "directed [Indian] clients to give [campaign contributions] to members of both parties"? Is that a fair and balanced presentation of these money flows?

3. What do Deborah Howell and Jim Brady think they are doing in summarizing the money flows from Abramoff in these--misleading, unfair, and unbalanced--ways? Is it consistent with the overall mission of washingtonpost.com?

I would advise Jim Brady of one more thing: As long as his thumbnail summary of the money flows from Jack Abramoff is the sentence "Abramoff directed campaign contributions to both political parties," I will interpret him not as being in the let's-inform-the-readers business but as in the I'm-playing-an-obscure-corporate-political-game business. That's a very awkward position for a journalist to put themselves in.

Covering the Economy: February 14: Readings: Ben Bernanke and the Fed

Bernanke at Princeton: http://www.princeton.edu/~bernanke/
Bernanke at the Fed: http://www.federalreserve.gov/bios/bernanke.htm
Bernanke at Wikipedia: http://en.wikipedia.org/wiki/Ben_Bernanke

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Finance:

Bond Brief: Pre-Bernanke Shuffle: By Katie Benner TheStreet.com Staff Reporter: "Treasuries marked time Monday as the market debated whether new Federal Reserve chairman Ben Bernanke's first public speech would be more of the same or signal a new direction in monetary policy. 'In terms of Bernanke, the market is trying to grapple with how close the Federal Reserve is to ending its tightening', says Michael Cheah, portfolio manager at AIG Sun America Asset Management. 'It is important for the Fed to show that they will not overdo it, because the risk of going wrong is now very serious.'..."

---

News:

FT.com / US / Bernanke steps up - Bernanke set for debut on Capitol Hill: By Andrew Balls in Washington: "Ben Bernanke's debut on Capitol Hill this week will provide the first glimpse of the more transparent approach he intends to take as chairman of the Federal Reserve. A host of Fed watchers expect more plain language from the new Fed chairman, in contrast to the Delphic approach of his predecessor, Alan Greenspan. Reflecting his belief that the Fed should provide more quantitative guidance to market participants, Mr Bernanke is also expected to place much greater emphasis on the consensus forecasts of the Federal Open Market Committee Members. Mr Greenspan, who did not participate in the forecast round, often avoided mentioning them in testimony. But it is unlikely Mr Bernanke will provide much more detail on the likely course for the federal funds rate. He will be speaking on behalf of the whole committee, and although the need for further rate increases is a matter of debate among members, the view that decisions will be data-dependant is unanimous..."

WSJ.com - Bernanke the Inflation Fighter: By TIM ANNETT: "Economists have some advice for Ben Bernanke as he takes over at the Federal Reserve: establish your credibility as an inflation fighter. But, at the same time, they have concern that he could take that effort too far. When asked in the latest WSJ.com forecasting survey which mistake Mr. Bernanke is more likely to make -- raising rates too much or not enough -- three-quarters of economists said he is more likely to lift rates too high. The new Fed chief faces the same puzzle that always confronts the Fed: how to check inflation without lifting rates so high that economic growth is snuffed out. But the challenge is especially acute now. Soaring energy prices have nudged up inflation pressures at the same time the Fed has been steadily lifting rates. Now, Mr. Bernanke must pick the right time to stop the increases..."

http://www.economist.com/agenda/displaystory.cfm?story_id=5077535: "FOUR years ago, Ben Bernanke was a professor of economics at Princeton whose policymaking experience consisted of a stint on the local school board. On February 1st, barring any unforeseen hiccups in his Senate confirmation, he will become the most powerful central banker in the world, replacing Alan Greenspan as chairman of the Federal Reserve Board..."

---

Economists:

Max Sawicky of EPI on Ben Bernanke: "The Economic Thought of Ben Bernanke: Actually it's pretty good. I was leafing through his textbook, co-authored with Robert Frank, looking for bloopers, and I was at a loss for material..." http://maxspeak.org/mt/archives/001314.html

Taking the measure of Ben Bernanke: By PETER MORICI: "Repeatedly, I have been asked: Will Ben Bernanke, who next week takes over as chairman of the Federal Reserve Board, fight inflation as effectively as Alan Greenspan? That is the wrong question. The Fed has responsibility for both containing inflation and sustaining growth. It is easy to do one, but not both. The Bundesbank and European Central Bank have demonstrated that achieving modest inflation and 10-percent unemployment is easy, whereas Alan Greenspan has shown that containing inflation and keeping unemployment at 5 percent or less is doable. But unfortunately, Bernanke will have fewer tools than did Greenspan, or his predecessor, Paul Volcker. Both had to manage monetary policy around less than prudent fiscal policies: Democratic presidents bent on punishing enterprise with high taxes and Republican presidents inclined to spend the Treasury broke. Now, President Bush and Treasury Secretary John Snow have abdicated exchange-rate and interest-rate policies to Beijing. Since 1995, China has pegged the yuan to the dollar, and bought large sums of U.S. securities to sustain an undervalued currency as its trade surplus swells..."

---

Others:

: Some advice for incoming Fed Chairman Ben Bernanke By Robert B. Reich: "Dear Ben, Congratulations on taking over the Fed. You're now the most powerful person in the American economy. It would be presumptuous of me to tell you how to do your job. But 'm about to tell you anyway. First off, don't worry about speculative bubbles. Just because there's irrational exuberance in one sector or another -- high tech or housing, for example -- does,'t mean you should raise interest rates and put a brake on the economy. It's not your responsibility to protect speculators from their own foolishness. And don't pay attention to what the bond traders want.... Don't try to get inflation down to zero..."

Telegraph | Money | Ben Bernanke: An unworldly professor

: By Ambrose Evans-Pritchard: "Ben Bernanke admits with disarming candour that he has never run anything beyond deciding 'whether to serve tea or coffee' at the Princeton University faculty meetings. The new chairman of the US Federal Reserve has spent the best part of his life studying the archives of the 1930s, engrossed in the arcana of monetary policy under the gold standard.... Changes of the guard at the Fed's marble temple have a nasty habit of rattling global markets, bringing festering problems to the fore as investors suddenly shun risk..."

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(Incomprehensible) Background:

Open Market Operations: http://www.federalreserve.gov/pubs/bulletin/1997/199711lead.pdf
The Yield Curve: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.html

Grownup Republican Watch: Richard Epstein

Richard Epstein appears--on FISA at least--to be a grownup Republican. Welcome:

WSJ.com - Executive Power on Steroids : I believe our first order of business should be to retool the Foreign Intelligence Surveillance Act (FISA) to meet the challenges of modern communications technology. Yet the key legal struggles over domestic spying go not to its wisdom, but to the thorny issue of whether the president has exceeded his constitutional powers in disregarding FISA. He has. The Constitution gives Congress the power to set policy; it gives to the president the right, and the duty, to execute it.

More Journamalism from the New York Times

Be sure not to miss Elizabeth Bumiller's rolling out Scott McClellan to respond to Bruce Bartlett:

White House Letter: Criticism of Bush leaves conservative in the cold - Americas - International Herald Tribune: One Republican, Scott McClellan, the White House press secretary, responded to Bartlett's book by e-mail message over the weekend. "Spending is coming under control," McClellan wrote, adding that in the 2007 budget submitted to Congress this month, "the president put forward the most disciplined nonsecurity discretionary proposal since the Reagan era."

Now I know, and Bruce Bartlett knows, and Scott McClellan knows that "nonsecurity discretionary" spending is 15% of the total budget. I know, Bruce Bartlett knows, and Scott McClellan knows that the other 85% of the budget is running wild and free: "undisciplined."

Elizabeth Bumiller, however, is anxious not to point out--anywhere in the story--that a claim by Scott McClellan that 15% of the budget is "disciplined" is not a refutation of Bruce Bartlett.

Grownup Republican Watch: Bruce Bartlett

Anybody in the Republican Party--or elsewhere--who wants there to be an honest conservative economic policy wing of the Republican Party in the future needs to think very carefully about the case of Bruce Bartlett.

Here's Elizabeth Bumiller from today's International Herald Tribune--tomorrow's New York Times:

White House Letter: Criticism of Bush leaves conservative in the cold | Elisabeth Bumiller International Herald Tribune | SUNDAY, FEBRUARY 12, 2006: What happens if you're a Republican commentator and you write a book critical of President George W. Bush that gets you fired from your job at a conservative think tank? For starters, no other conservative institution rushes in with an offer for your superb analytical skills. "Nobody will touch me," said Bruce Bartlett, the author of the forthcoming "Impostor: Why George W. Bush Bankrupted America and Betrayed the Reagan Legacy." He added, "I think I'm just kind of radioactive at the moment."

Bartlett, a domestic policy aide at the White House in the Reagan administration and a deputy assistant Treasury secretary under the first President Bush.... "Impostor" is flamboyant in its anti-Bush sentiments... [but] its basic message reflects the frustration of many conservatives.... Like them, Bartlett is particularly upset about Bush's Medicare prescription drug plan, which is expected to cost more than $700 billion over the next decade.... "The Clinton people were vastly more open and easier to deal with and, quite frankly, a lot better on the issues," Bartlett said.... "I haven't switched to the Democratic Party," he said. "I wrote this for Republicans."

One Republican, Scott McClellan, the White House press secretary, responded to Bartlett's book by e-mail message over the weekend. "Spending is coming under control," McClellan wrote, adding that in the 2007 budget submitted to Congress this month, "the president put forward the most disciplined non-security discretionary proposal since the Reagan era."...

Bartlett, 54, the author of a syndicated newspaper column and articles in academic journals, was dismissed in October as a senior fellow at the National Center for Policy Analysis... fired because his increasingly critical comments about Bush... had hampered the ability of the research institution to raise money among Republican donors.

He also provided a copy of an e-mail message... by Jeanette Goodman, the vice president of the research institution. "100K is off the table if you do another 'dump Cheney' column and 65K donor is having a rebuttal done, in a national magazine, to your attack on the fair tax people so that 65K may be gone also."... "Do you have any ideas on where I could raise that amount quickly?" John Goodman, the president of the organization and Goodman's husband, said in a telephone interview over the weekend that he did not know what his wife had said to Bartlett and that he did not want to say whether Bartlett "did or didn't hurt fund-raising."...

So what now? "I've been thinking about writing a history of the Democratic Party," Bartlett said. "It kind of seemed an interesting thing for a Republican to do."...

I'll Stop Calling This Crew "Orwellian" When They Stop Using 1984 as an Operations Manuael

Orin Kerr has an "Oceania has always been at war with Eurasia" moment from John Yoo:

[Orin Kerr, February 12, 2006 at 2:17pm]: Guess Who Wrote This, and About What President: Here is the quote:

President ____ exercised the powers of the imperial presidency to the utmost in the area in which those powers are already at their height — in our dealings with foreign nations. Unfortunately, the record of the administration has not been a happy one, in light of its costs to the Constitution and the American legal system. On a series of different international relations matters, such as war, international institutions, and treaties, President ____ has accelerated the disturbing trends in foreign policy that undermine notions of democratic accountability and respect for the rule of law.

Who do you think wrote the passage above, and who was the President? (Professor John Yoo, discussing President Bill Clinton. Source: John C. Yoo, The Imperial President Abroad, in Roger Pilon, ed., The Rule of Law in the Wake of Clinton 159 (2000).)

Republican Reformers...

From Talking Points Memo:

Talking Points Memo: by Joshua Micah Marshall: February 05, 2006 - February 11, 2006 Archives : Newsweek: "Over the years, [John Boehner] has made the most of controversial rules allowing members to accept free trips to luxury retreats around the world. Since 2000, Boehner has taken more than $150,000 worth of junkets paid for by private interests--ranking him in the top 10 of all members of Congress."

Jackie Calmes of the WSJ on the Bush Budget

How do you report on a budget proposal that is neither (a) what a strong president hopes to get congress to approve, or (b) what a weak president wants to set out as his initial position for negotiations with congress, but is instead (c) a political-propaganda document? Jackie Calmes takes a shot at it:

WSJ.com - Bush's Deficit Math Sidesteps Some Big Outlays : By JACKIE CALMES February 7, 2006; Page A2: WASHINGTON -- President Bush projects the deficit will widen again this year to $423 billion, but steadily shrink for the rest of his term if his new budget proposals are adopted. But even if they were, which isn't likely, there are significant caveats to the rosy scenario.

In the budget request sent to Congress yesterday, Mr. Bush revived his unsuccessful bid to divert surplus Social Security payroll-tax revenue to personal accounts for workers. But with Mr. Bush promising to cut the deficit in half by the time he leaves office in 2009, the change wouldn't take effect until fiscal 2010. From then, through fiscal year 2016, it would add $712 billion to annual deficits, according to the administration.

For Social Security's long-term solvency, the president renewed his call for "progressive indexing" of initial benefits, which would reduce them from promised levels for all but the poorest workers. But the idea wasn't reflected in his budget, and Mr. Bush won't be pressing the idea in an election year. An administration aide said he won't send legislation to Congress, and Budget Director Josh Bolten didn't mention the idea in his news conference on the president's priorities....

[C]urrent government projections assume Mr. Bush's first-term tax cuts would all expire by 2011. But Mr. Bush hopes to extend them, for a revenue loss put at $1.8 trillion over 10 years. Current forecasts also assume more middle-income Americans will be paying the "alternative minimum tax," which was intended for wealthy taxpayers who otherwise can use tax breaks to reduce or wipe out their income-tax liability. But the president and Congress want to fix or repeal the AMT. That also would reduce anticipated revenues in coming years.... The AMT "is something that we hope can be addressed in the context of revenue-neutral fundamental tax reform," Mr. Bolten said. But other Bush officials in recent days have said the administration has no plans to pursue tax overhaul, only to make the tax cuts permanent.

It is also unclear that Congress will follow Mr. Bush's proposals for reducing spending, especially for Medicare and Medicaid, in an election year. He is seeking greater reductions in the programs' spending than he did last year, yet lawmakers in recent days managed only to narrowly approve that package...

Why Not Subsidize Health Care Through the Tax Code?

Douglas Holtz-Eakin objects to yet more tax breaks for health care:

The Tax Foundation - Why Not Subsidize Health Care Through the Tax Code? : Why Not Subsidize Health Care Through the Tax Code?by Gerald PranteFormer Congressional Budget Office director Douglas Holtz-Eakin had some insightful comments at an American Enterprise Institute conference last week exploring a proposal to use the federal income tax system as the vehicle for health care reform. In response to the idea of adding a tax exclusion for individually purchased health care expenses -- in addition to the current one for employer-provided care -- Holtz-Eakin had this to say:

I think it's bad tax policy. We ought to have in this country a tax system that means something. I am less in favor of tax systems that are designed to do things other than raise revenue. We are likely to spend a lot of money in the future. The government is likely to be bigger than it is now -- I don't know how much -- and we need a tax system that raises those revenues efficiently and doesn't muck up our economy too much. Things like this are a recipe for mucky up the tax system and the economy and so I really am nervous about that as -- from a tax-policy perspective, and implementation perspective.

So, you know, I would just do it. I would get rid of the deduction, but I'm never going to run for office, and I obviously am immune to people's anxiety....

I hate -- let me say it more carefully -- I really hate -- the notion of making everything that you want to label a healthcare cost deductible. I mean, if you want to have a personal relationship with the IRS do that because we are going to have to investigate everybody's home to see if their running shoes are a medical expense...

The Composition of China's Exports

Marginal Revolution tells us to go read Dani Rodrik and company:

Marginal Revolution: What is so special about China's exports? : Dani Rodrik writes:

...what is so special about China’s exports is not that they are voluminous or that its large pool of labor gives it a huge labor cost advantage. What stands out is that China sells products that are associated with a productivity level that is much higher than a country at China’s level of income. This helps account both for why China’s trade is viewed as problematic in advanced countries, and for China’s rapid economic growth.

The economically relevant question for sustainability is not whether trade-GDP can keep on rising, but whether China will manage to latch on to higher- and higher-income products over time, and continue to fuel its growth thereby.

Anyone interested in China should read this paper. The key question is how the Chinese managed this trick. My gut suggests two factors: the predominance of joint ventures (the best of foreign technology and management, yet with domestic diffusion of best practices), and the benefits of a very large population. Your best producers will do wonders for the quality of your best ventures. I am not persuaded by Rodrik's praise of Chinese industrial policy...

There is one potential loose end: China *sells* high-productivity products. It's not clear that it makes them. To some degree, it simply assembles components made in richer countries like Malaysia, Korea, et cetera.