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June 2012

Scott Brown Backs Out of His Debate with Elizabeth Warren

Since he appears to be behind, one would think that variance--and what are debates but variance?--would be his friend:

Kennedy Institute Rejects Scott Brown’s ‘Unprecedented’ Debate Demand: Republican Sen. Scott Brown’s terms for debating Democratic nominee Elizabeth Warren at the Edward M. Kennedy Institute in Massachusetts were rejected Tuesday, a move that prompted Brown to pull out of the event altogether. The Kennedy Institute rebuffed the Brown campaign’s demand that Vicki Kennedy, widow of the late Sen. Ted Kennedy and president of the institute named in his honor, pledge to not make any endorsement throughout the Senate race. “This non-endorsement pledge is unprecedented and is not being required of any other persons or entities. To us, such a pledge seems inappropriate when a non-media sponsor issues a debate invitation,” Kennedy Institute chief operating officer Lisa McBirney and chief of staff Christopher Hogan wrote in a letter released Tuesday.


Ezra Klein: Do Democrats Have Their Own Individual Mandate Level Flip-Flop? No.

Why am I not surprised to find Peter Suderman saying something that does not have the truth nature as he plays for Team Republican?

Peter Suderman: Democrats and liberal policy wonks took a similar turn with Medicare premium support, now championed in broad form by both GOP presidential nominee Mitt Romney and the party’s leading policy entrepreneur, House Budget Committee Chairman Paul Ryan. The story is remarkably similar: The idea started out as a policy promoted by prominent liberal wonks, briefly gathered support from a handful of top-level policymakers near the end of the Clinton presidency, and is now deeply opposed by the majority of Democrats, who often refer to the idea as a plan to “end Medicare as we know it” — or occasionally just a way to “end Medicare,” period. Premium support, which would pay a flat rate toward the purchase of a private insurance plan for each Medicare beneficiary, was first developed by Alain Enthoven, a Democratic adviser who had previously served as a health policy consultant to President Jimmy Carter,  in “The History of Principles of Managed Competition” in 1993. In 1995, Henry Aaron, a scholar at Brookings who served as a senior official in President Carter’s Department of Health, Education, and Welfare, gave the policy its name — premium support — and suggested that it represented a Medicare reform compromise, a “middle ground” that could retains Medicare’s strengths but address budgetary challenges. In 1999, the National Bipartisan Commission on the Future of Medicare, which was chaired by Democratic Senator John Breaux and included Democratic Sen. Bob Kerrey, met to develop a proposal to reform the seniors’ health entitlement. The first item in the final proposal put forth by Breaux and supported by Kerrey was “the design of a premium support system.”

Ezra Klein:

There are a few problems with drawing an equivalence between “premium support” in Medicare and the individual mandate in health care. The first, and biggest, is simply who supported it… a few Democratic wonks, and then-Sens. Breaux and Kerrey. Of those Democratic wonks, some, like Alice Rivlin, continue to support a premium support system…. The reason the report from the National Bipartisan Commission on the Future of Medicare never went anywhere is that every other Democrat on the Commission voted against the recommendations, and the Clinton White House quickly released a statement opposing premium support. There were, in other words, exactly no leading Democrats who signed onto premium support…. [T]he most significant elected Democrat to sign onto premium support is Sen. Ron Wyden, who crafted a plan with Paul Ryan earlier this year.

Compare that to the individual mandate. The mandate’s first political appearance was in a brief from the conservative Heritage Foundation. It then appeared in legislation co-sponsored by 18 Senate Republicans, including Bob Dole… Newt Gingrich… Mitt Romney… the Wyden-Bennett plan… Lamar Alexander… Chuck Grassley…. As late as June 2009, Grassley was telling Fox News, “there is a bipartisan consensus to have individual mandates.”

To my knowledge, there are no senior Republicans who have maintained or announced their support for an individual mandate in the manner of Rivlin or Wyden.

Premium support, in other words, was once endorsed by a handful of Democratic wonks and heterodox senators, though it was, from the beginning, a policy that gained the vast bulk of its political support from elected Republicans. It never gained any serious traction within the Democratic Party. The individual mandate was a Republican idea that garnered support from a diverse array of Republican leaders and institutions over the course of almost 15 years. And unlike with Breaux and Kerrey, many of those Republican leaders and institutions — like Gingrich and Romney and Grassley and Hatch and the Heritage Foundation — are still around today.

That’s not to say motivated reasoning doesn’t happen on both sides. But premium support isn’t a very good example of it. Rather, the clearest example of motivated reasoning among Democrats probably comes in the civil liberties sphere….

Finally, on premium support, it’s not clear to me that Democrats actually oppose it…

For the record, I support premium support--if Henry Aaron, Ron Wyden, or Alain Enthoven design it. I don't think that what Paul Ryan is proposing is anything that Enthoven, Aaron, or indeed Wyden would call "premium support": it is something else.

For the record, I believe that Glenn Greenwald is correct in being absolutely terrified of the Obama administration's continued and expanded abuses of power in national security. We may all suffer someday from the failure to confirm Dawn Johnson:

Glenn Greenwalda: To avoid counting civilian deaths, Obama re-defined "militant" to mean "all military-age males in a strike zone": Virtually every time the U.S. fires a missile from a drone… American media outlets dutifully… cite always-unnamed “officials” claiming that the dead were “militants.” It’s the most obvious and inexcusable form of rank propaganda: media outlets continuously propagating a vital claim without having the slightest idea if it’s true.

This practice continues even though key Obama officials have been caught lying, a term used advisedly, about how many civilians they’re killing. I’ve written and said many times before that in American media discourse, the definition of “militant” is any human being whose life is extinguished when an American missile or bomb detonates (that term was even used when Anwar Awlaki’s 16-year-old American son, Abdulrahman, was killed by a U.S. drone in Yemen two weeks after a drone killed his father…. “Another U.S. Drone Strike Kills Militants in Yemen”)…


Sara Robinson: Ron Unz and the Initiative Process Made My Daughter's Education Worse

Sara Robinson emails:

Our local school had a bilingual Spanish-English immersion program that had been running for a dozen years with stunning results. They took 10 kids from Spanish-speaking homes, and 10 kids from English-speaking homes, and put them together in the same class from K all the way through to fifth grade. In K, they got 90% of their instruction in Spanish, and 10% in English. In first grade, it was 80/20; in second, 70/30, and so on. By fifth grade, all the kids were fully fluent in both languages, often without an accent. More importantly: they were each others' best friends, and completely comfortable with each others' cultures.

The test scores for both groups as they got into high school were through the roof, and the Hispanic kids (having absorbed the same career expectations as their white middle-class classmates) were college-bound at a rate something like twice that of their peers. The program also attracted the very best teachers, so the quality of instruction was marvelous no matter what language the kids were being taught in. The whole thing was considered a raging success, and the school was in the process of doubling the capacity of the program to serve all the parents who wanted their kids in it. Other schools around the state were implementing our model as well: it was a coming trend, and our district was proud to be one of the innovators.

My daughter was in second grade in this program when Unz came along. His amendment rendered the program illegal, forcing our program and all of its brethren around the state to shut down. It was an irrational and stupid thing to do,

Referenda have increasingly become the playthings of rich people with really dumb ideas they want to foist off onto the rest of us. You can get anything on the ballot here in WA State for a million bucks -- the kind of money that's hard to raise if you're a public interest group, but easy to write a check for if you're, say, a Microsoft millionaire. Most of the propositions on ballots here these days (and in California, too, where the buy-in is 10x higher) are stuff that nobody really wants, but somebody who can write big checks has unilaterally decided we should have.


Ezra Klein: DeLong Smackdown Watch: Romney Now Sincerely Believes the Individual Health Insurance Mandate Steals Our Liberty Department

Mitt Romney, July 2009, on how great the individual mandate is:

Mr. President, What's the Rush?: No other state has made as much progress in covering their uninsured as Massachusetts.... I worked in a bipartisan fashion with Democrats to insure all our citizens... it passed the 200-member legislature with only two dissenting votes. It had the support of the business community, the hospital sector and insurers…. Our citizens purchase private, free-market medical insurance.... Using tax penalties, as we did... encourages “free riders” to take responsibility for themselves rather than pass their medical costs on to others. This doesn’t cost the government a single dollar….

Ezra Klein claims now that Mott Romney and all his supporters have had a genuine change of mind:

My view — based both on my experience as a reporter in Washington and on an increasingly voluminous psychological literature about how partisans form opinions — is that human beings are very good at convincing themselves of whatever their self-interest would have them believe, and that Washington has become an increasingly sophisticated machine for encouraging and accelerating this sort of “motivated reasoning.”... [Romney's] new opinions are sincerely held. 

I don't buy it. Ezra summarizes my position better than I do:

Coming to any conclusion about that requires disentangling the mechanisms by  which these shifts are happening. One popular perspective — see this post by Brad DeLong — is that this is rank cynicism. The Republican Party hasn’t changed any of its positions, or if it did, it didn’t hold those positions in the first place. Rather, the Republican Party is coldly taking whatever position happens to be most strategically convenient, and if that requires pretending to jettison their previous beliefs, then so be it. 


The Microsoft Surface Does Look Like a Really Cool Idea. But...

Reality Distortion Field: Farhad Manjoo of Slate:

Microsoft Surface: I love the Surface….

I was allowed to spend only about 90 seconds with Microsoft’s new tablet device….

I was only permitted to touch the device while the machine was powered off….

They didn’t let me actually use the new tablet….

Microsoft won’t tell us its price…. We don’t know when it will go on sale…. [W]e don’t know if the tablet’s build quality will hold up….

I’m already deeply smitten….

Microsoft has clearly spent a lot of time making this thing look and feel just right….

If it works well, the keyboard—which I got to inspect at great length but not actually type on—is going to be the Surface’s killer attraction….

At long last, the PC industry has some real hardware competition. And whether the Surface wins or loses, Microsoft is finally in the game.

But, Farhad, if the keyboard worked well, they would have let you type on it. The keyboard doesn't work well, yet.

Why oh why can't we have a better press corps?


Hoisted from the Archives: "Lord, Enlighten Thou Our Enemies"

Lord, Enlighten Thou Our Enemies: 12/13/2006:

Where Oh Where Are the Smart Conservatives?

Let us start with John Stuart Mill's prayer: "Lord, enlighten thou our enemies," prayed nineteenth-century British economist and moral philosopher John Stuarrt MIll: http://olldownload.libertyfund.org/Texts/MillJS0172/Works/Vol10/PDFs/Mill_1277.pdf:

Sharpen their wits, give acuteness to their perceptions, and consecutiveness and clearness to their reasoning powers: we are in danger from their folly, not from their wisdom; their weakness is what fills us with apprehension, not their strength...

In economics, John Stuart Mill's prayer have been answered. We neoliberal types are, I think, a bare plurality, but the Chicago School is powerful, articulate, brilliant, and energetic. On our left thing are less healthy, but improving: the left has escaped its destructive embrace of Marxism. And there are signs of a fundamental rethinking of economics in embryo as the borderland between economics, sociology, and psychology becomes more active.

Outside economics, however, things are much less healthy. John Stuart Mill's prayer has not been answered. Witness Mark Bauerline in the Chronicle of Higher Education, which leads me to beg: Can we please ask the Chronicle of Higher Education to print the works of a smarter class of conservatives? Calls for a diversified intellectual portfolio fall flat when the conservative assets on offer are intellectual shell corporations. The benefits of a Millian clash of views to stimulate and deepen our thoughts are nonexistent when one side in the battle of wits is unarmed.

I mean, what can one make of Mark Bauerlein's charge that liberals--like The Baffler's Thomas Frank--are biased against Friedrich Hayek because they talk about what Hayek actually said in his 1956 preface to The Road to Serfdom?

The Chronicle: 12/15/2006: "How Academe Shortchanges Conservative Thinking": Public intellectuals are less parochial, and even some of those on the left do acknowledge Hayek's eminence -- but too often with just a dismissive tack.... Thomas Frank, the editor of The Baffler, briefly summarizes Hayek's legacy with a run of high-handed jibes. He mentions Hayek's seminal The Road to Serfdom, but only to disparage it for equating "British-style socialism with the Nazi obscenity."...

But, Mark, Thomas Frank is right. I am a Hayek fan, or at least somebody who thinks it is important to wrestle with Hayek at least once once a month. Nevertheless, here is Hayek, in the 1956 preface to The Road to Serfdom:

Of course, six years of socialist government in England have not produced anything resembling a totalitarian state. But those who argue that this has disproved the thesis of The Road to Serfdom have really missed one of its main points: that "the most important change which extensive government control produces is a psychological change, an alteration in the character of the people." This is necessarily a slow affair... attitude[s] toward authority are as much the effect as the cause of... political institutions under which it lives.... [T]he change undergone... not merely under its Labour government but in the course of the much longer period during which it has been enjoying the blessings of a paternalistic welfare state, can hardly be mistaken.... Certainly [Weimar Germany's] Social Democrats... never approached as closely to totalitarian planning as the British Labour government has done.... The most serious development is the growth of a measure of arbitrary administrative coercion and the progressive destruction of the cherished foundation of British liberty, the Rule of Law... [E]conomic planning under the Labour government [has] carried it to a point which makes it doubtful whether it can be said that the Rule of Law still prevails in Britain...

In other circumstances, I might cavil at Thomas Frank--I would say that Hayek draws a line connecting Britain's Labour Party and Germany's Nazi Party, but that he does not quite equate them: In Hayek's view, the Labour Party has not established Nazi-like serfdom, but only placed Britain on the road to Nazi-like serfdom. However, not here: the Road to Serfdom that the Labour Party placed Britain on leads, in Hayek's estimation, to serfdom and nowhere else. And I cannot read Bauerlein's complaint as anything other than saying that it is rude and biased for Thomas Frank to, you know, talk about things Hayek actually believed and cite things Hayek actually wrote.

Bauerline is similarly irate at Michael Berube for "bias." What is the bias? It is pointing out that George Will, Michelle Malkin, and David Horowitz self-identify as conservatives. An unbiased writer, Bauerline claims, would pretend that Will, Malkin, and Horowitz do not exist at all. To note their existence is "stigmatizing" and unfair to conservatives:

In What's Liberal… ?, conservatism suffers similarly from stigmatizing references. [Michael] Bérubé focuses on the anti-academic conservatives and fills his descriptions with diagnostic asides. Gay-rights debates "transform otherwise reasonable cultural conservatives into fumbling, conspiracy-mongering fanatics." The columnist George Will is "furious," and the columnist Michelle Malkin writes "shameful" books pressing "'interpretations' that no sane person countenances," while Horowitz exaggerates "hysterically." Such psychic wants explain why, according to Bérubé, "we just don't trust cultural conservatives' track record over the long term, to be honest. We think they're the heirs of the people who spent decades dehumanizing African-Americans and immigrants, arguing chapter and verse that the Bible endorses slavery and the subjection of women"...

Note the lineage: Not a line of reasoning, but a swell of mad wrath. Not Burke, Alexis de Tocqueville, T.S. Eliot, and Leo Strauss, but slaveholders, nativists, and sexists. Nothing from Elizabeth Fox-Genovese, E.D. Hirsch Jr., Harvey C. Mansfield, and the late Philip Rieff, to cite more-recent writers who may be termed "educational conservatives." The scholarly conservative case against higher education is overlooked, while Bérubé devotes too many words to the claims of discrimination by a conservative student on television's Hannity & Colmes, to a worry by a state legislator about "leftist totalitarianism," and so on...

I truly don't get Bauerlein here. First, by what warrant does Bauerline call Alexis de Tocqueville a "conservative"? Why not call John Maynard Keynes, Max Weber, and Oliver Cromwell "conservatives" as well? Burke, too, has conservative moods but is only a conservative thinker in a modern American sense if you take a chainsaw and reduce him to selected passages from Reflections on the Revolution in France. In Reflections Burke does make the argument that we should respect the traditions and institutions we have inherited because they incorporate the Wisdom of the Ancestors, but he only makes that argument because he thinks that in this case the Ancestors--not his personal ancestors, note--were wise. The argument that it was one of the traditions and institutions of Englishmen that they would conquer, torture, and rob wogs cut no ice with Edmund Burke when he was trying to prosecute Warren Hastings. The argument that it was one of the traditions and institutions of England that power flowed to Westminster cut no ice with Burke when he was arguing for conciliation with and a devolution of power to the American colonists. To Burke, conservative arguments based on respect for the Wisdom of the Ancestors are to be deployed in support of traditions, institutions, and practices that he approves of--they are not trumps. Burke is no more a conservative than Adam Smith is a Thatcherite. And anyone who classifies Burke as a conservative has not read much beyond scattered selections from Reflections on the Revolution in France.

Second, does Bauerline really think that Berube's take on Leo "The Text Means What I Say It Means" Strauss or Harvey C. Mansfield--a man who regards the admission of Blacks to Harvard as the cause of the baneful curse of grade inflation--would be significantly different than his take on Will, Malkin, Horowitz? I agree that we should get Michael to write on Mansfield as soon as possible. But I guarantee you that it won't lead to a more favorable view of modern American conservatism.

And I truly don't get what Bauerlein means when he says "the scholarly conservative case against higher education is overlooked." Does he mean that Michael Berube overlooks the scholarly conservative case against higher education? If so, then why not say so: what is Bauerlein's purpose in removing the active subject from his sentence by placing it in the passive voice? And what is "the scholarly conservative case against higher education" anyway? Is it that people shouldn't learn about science because it will undermine their trust in throne and altar? Is it that only a small, narrow elite should go to college because the masses will get bad ideas if they read Voltaire? Bauerline never says.

Lord, enlighten thou our enemies. Sharpen their wits, give acuteness to their perceptions, and consecutiveness and clearness to their reasoning powers: we are in danger from their folly, not from their wisdom; their weakness is what fills us with apprehension, not their strength...


Some of What I Found Worth Noting: June 18, 2012

  1. Paul Krugman in February 2009 on the Inadequacy of Obama Administration Stimulative Policy
  2. Zeke Miller: When Mitt Romney Went To “WaWas” Romney amazed by the convenience store’s hoagie ordering terminals
3. Underbelly: UVA: What the Hell were they Thinking?
  3. James Hamilton: Options for Europe
  4. Menzie Chinn: Austerity, Forced and Unforced
  5. Don Taylor: Teaching the Individual Mandate
  6. Ed Balls: Austerity has failed in Europe - we must all now go for growth

Possible Questions for Elizabeth Warren

  1. What would you have done differently than Richard Cordray to give the Consumer Financial Protection Bureau a better chance of successfully accomplishing its mission? FOLLOW UP: What can we who are here today do in the future to give the CFPB a better chance of accomplishing its mission?

  2. You and your causes have been victims of our dysfunctional senate. When elected, will you use all the procedural tools at your disposal to block Republican initiatives root-and-branch, without compromise, on the principle that turnabout is fair play? Or will you seek to build comity and bipartisanship and make the senate a functioning deliberative body? FOLLOW UPS: (1) Doesn't that guarantee and dysfunctional government, and allow Republicans to say: "We told you so: government is dysfunctional?" (2) Doesn't that simply make you a doormat for the next wave of right-wing policy proposals?

  3. America's debt crisis is, I think, primarily an affordability-of-middle-class-needs crisis and a stagnant-wages crisis. When elected, what will your priorities be in addressing those two aspects of the crisis?

  4. What can one senator do to reduce income inequality, and make America more of a middle-class society?


I asked #2...


Felix Salmon: Krugman vs. Bishop

Felix Salmon explains why Sam Tanenhaus has a lot of explaining to do:

Felix Salmon: Paul Krugman was not happy with the choice of Matthew Bishop to review his new book in the NYTBR, and the main locus of the disagreement seems to be, at heart, how much respect Krugman should give to people who disagree with him. Here’s Bishop:

No opportunity to preach to the choir is missed by the populist Mr. Krugman, nor any chance to mock those he calls the “Very Serious People” who disagree with him…. Krugman’s habit of bashing anyone who does not share his conclusions is not merely stylistically irritating; it is flawed in substance…. [D]oes Krugman really need to take passing shots at Erskine Bowles and Alan Simpson, the chairmen of the widely respected bipartisan Bowles-Simpson Commission on deficit reduction appointed by President Obama? Maybe his case for stimulating the economy in the short run would be taken more seriously by those in power if it were offered along with a Bowles-­Simpson-style plan for improving America’s finances in the medium or long term. Instead, Krugman suggests cavalierly that any extra government borrowing probably “won’t have to be paid off quickly, or indeed at all.”

I can see why Krugman finds this annoying. Krugman’s whole point is that Bowles, Simpson, and the like are wrong and dangerous. And as he reminds us today, he was right and they were wrong, two years ago. He should get credit for that. But Bishop, the kind of person who loves nothing more than schmoozing important people at Davos, thinks that Krugman “would be taken more seriously” if he were more polite to “widely respected” people with the word “chairman” in their names.

This criticism is off-base for three different reasons, I think. Jared Bernstein deals with the substance very well:

Krugman has been consistently empirical on this point. His argument is not that investors’ sentiments don’t matter. It’s that they’re embedded in prices and can be followed on an hourly basis. Those numbers—the bond yields on sovereign debt—show that markets judge US debt to be safe…. If you want to criticize Krugman on this count, you need to explain what’s wrong with the markets themselves—why they’re giving the wrong signals….

This is a point I myself tried making to Bishop back in April, with no visible success: Bishop’s convinced that when it comes to gauging future inflation expectations, we should for some reason trust the volatile and largely-insane gold market at least as much as we should trust the most liquid and efficient market in the world….

[T]he entire Obama administration deals constantly with calls for fiscal prudence and austerity, and takes them very seriously. There’s something of a bipartisan consensus on the issue — so if like Krugman you think that the consensus is bonkers, the only real way to get your point across is to be very clear that no matter how grand these people are, they’re simply wrong, and do not deserve to be taken seriously.

And then there’s the whole class-based undertone to the discussion…. [R]ich people… don’t actually worry much about unemployment…. What they do worry about is inflation, since that erodes the value of their dollars. And so when Krugman calls for a nice dose of inflation to help cure the economy’s ills, what he’s really calling for is for a significant chunk of the fixed-income portfolios of the rich to be devalued in real terms.

The rich don’t like that, and the austerity consensus is in large part a closing of ranks — one of the few areas where left and right can agree, at least at the upper end of the income spectrum. And that’s why my own review of Krugman’s book was a pessimistic one. When rich liberals and rich conservatives agree on something, that thing is going to happen. Especially when that thing is in their own self-interest.


The Croaking of a Cassandra

Paul Krugman croaks:

We’re coming up on the second anniversary of my piece “Myths of Austerity“, in which I tried to knock down the simply insane conventional wisdom then gelling among Very Serious People. Intellectually it was, I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.

But I had no success in deflecting the terrible wrong turn in policy. Moreover, as far as I can tell none of the people responsible for that wrong turn has paid any price, not even in reputation; they’re still regarded as Very Serious, treated with great deference. And the political tendency behind that terrible economic analysis has at least a 50% chance of triumphing in America.

Continue reading "The Croaking of a Cassandra" »


Will Wilkinson on Mini-DREAM

Will Wilkinson:

Executive discretion: Mini-DREAM and the rule of law: It appears that Mr Obama's own view on this matter may have recently evolved. Here he is at a town-hall meeting broadcast on Univision in 2011, saying that the president does not have the power to do something that sounds quite like what his administration has just done.

Mr Obama's move is surely motivated in part by the political need to shore up support among Hispanic voters miffed by the administration's record-setting deportation numbers. While Mr Obama's aggressiveness about deportation may lead some of us to look sceptically upon the DHS's new stop-gap, the administration's history of zealous enforcement seems to me to work in its favour in this dispute, lending considerable credibility to its claim that the new mini-DREAM scheme is consistent with precedent and not part of a larger pattern of selective disregard for America's immigration laws.

Is the discretion, both de facto and de jure, of the vast executive-branch bureaucracy inconsistent with the rule of law? It sure is. The executive branch has usurped much of the legislative branch's law-making powers, in flagrant violation of the framers' intended separation of powers. Something ought to be done about that. But what does it say about us if the fact of illegitimately expansive executive discretion is suddenly of especially great concern, now that it has been exercised in a way that will protect the prospects of hundreds of thousands of vulnerable and innocent young people? Heaven forbid a politically opportunistic abuse of executive power ever help someone!


David Silbey: On the University of Virginia

David Silbey:

Edge of the American West: The organizers of the coup d’academic [against UVA President Teresa Sullivan] must have started a while back, having decided that Sullivan, in the months she had been in office, had not turned the ship of the University sufficiently quickly. If this seems to have been mishandled, it was. The Board does not seem to have actually met to dismiss Sullivan. Instead, the head of the Board, Helen Dragas, met with the President, claimed she had enough votes to oust her, and forced Sullivan’s resignation….

In the UVA situation, one of the complaints seems to have been that Sullivan was unwilling to cut “obscure academic departments in classics and German.” I shall have to ignore a series of complications in that demand…. The first complication is the idea that at a university founded by Thomas Jefferson–a man deeply in love with Greek and Latin–members of its Board would consider the classics obscure. The second complication is the idea that members of UVA’s board would find obscure the study of the language of the dominant economic power of Europe, one that is for better or worse (mostly for worse) running the European response to the Great Recession. The third complication is that UVA may, in fact, be required to study both of those subjects by state law and thus pressing the President to cut them seems incitement to a crime…. The fourth complication is that both disciplines are remarkably cost-efficient…. Classics at UVA almost certainly makes a profit (based on the number of majors in this story) and German probably does as well….

Cutting things simply because they are obscure, lost, unpopular, and unfashionable, the heart of the market’s discipline, cuts out the core of the scholarly discipline. If business and academia function exactly as they should, especially if they function exactly as they should, they are antithetical to each other. The American secular religion may be business and its temple Wall Street, but scholars and their institutions should avoid genuflecting. There are few universities in the United States with more such responsibility than one birthed by a founding father.


Greg Ip Wonders What the Sam Hill the Federal Reserve Is Doing

Greg Ip: The Federal Reserve's inflation target: Shiny, new, unopened & unused:

What critics say the Fed needs is a wholesale makeover of its goals and methods. Some want the Fed to raise its inflation target. Others would have it adopt a nominal GDP target…. Lost in this blizzard of outside advice is the fact that the Fed actually has a new framework of its own. In January it declared that henceforth its long-run target for inflation was 2%…. It also said it considered its two statutory goals, low inflation and full employment, equally important. Previously, employment was, de facto, subordinate to inflation.  If you haven't heard more about this, it's because the Fed has treated the target like an unwanted Christmas gift, still unopened months after the tree has been taken down…. Indeed, the Fed acts as if nothing has changed. Its "appropriate" monetary policy in April yielded  forecast inflation of 2% or lower over the next few years. This vindicates critics who say the Fed acts as if 2% is a ceiling, not a target.

If the Fed were conducting policy based on this new framework, inflation would be centered around 2%. Indeed, if the Fed treated employment and inflation equally, it would likely tolerate inflation above 2% given that it is missing its full employment mandate more than its low inflation mandate. 

What would such a policy look like? Fortunately, we don’t have to speculate. Janet Yellen, the Fed’s vice-chairman, described one in detail in speeches in April and in June. Ms Yellen uses a fairly conventional monetary policy rule in which the Fed seeks to minimize variations in inflation around its 2% target and in unemployment around its natural rate of 5.5%. In her simulation the Fed, by putting equal weight on its employment and inflation objectives, eases monetary policy more aggressively, keeping the federal funds rate at zero through the end of 2015 (instead of 2014 as currently projected). The result is a much more rapid decline in unemployment. Inflation briefly tops 2%, before returning to 2% over the long term….

Ms Yellen’s approach is that it permits the more aggressive monetary policy that Mr Krugman and his ilk want without sacrificing the inflation target. Indeed, the target is crucial to the result. By pushing so hard on employment, the Fed generates transitory pressure on resources, a declining exchange rate, and some pass-through to commodities that together nudge inflation over 2%. But it doesn’t stay there because stable expectations drag it back to the 2% target. If, instead, inflation kept going higher, it would impose a variety of costs that negate the benefit of faster falling unemployment. 

If anything, Ms Yellen’s model understates the case for more aggressive easing. That’s because it assumes overshoots and undershoots on the Fed’s objectives are equally bad. But that defies common sense. Temporarily undershooting on unemployment is much less costly to society than overshooting on it….

Recall that as of April, Mr Bernanke was more dovish than almost everyone else on the FOMC; Ms Yellen and Mr Evans are rare exceptions. Mr Bernanke may struggle to get a majority of the FOMC to swallow an even more aggressive path than the one already laid out. It's also possible that Mr Bernanke already intends to pursue a monetary policy similar to what Ms Yellen has described, but this cannot be detected since his views are buried in the FOMC consensus…


Aaron Swartz: Chris Hayes’ "The Twilight of The Elites"

Aaron Swartz: Chris Hayes’ The Twilight of The Elites:

Chris Hayes manages the impossible trifecta: the book is compellingly readable, impossibly erudite, and—most stunningly of all—correct…. We thought we would just simply pick out the best and raise them to the top, but once they got there they inevitably used their privilege to entrench themselves and their kids (inequality is, Hayes says, “autocatalytic”). Opening up the elite to more efficient competition didn’t make things more fair, it just legitimated a more intense scramble. The result was an arms race among the elite, pushing all of them to embrace the most unscrupulous forms of cheating and fraud to secure their coveted positions. As competition takes over at the high end, personal worth resolves into exchange value, and the elite power accumulated in one sector can be traded for elite power in another: a regulator can become a bank VP, a modern TV host can use their stardom to become a bestselling author (try to imagine Edward R. Murrow using the nightly news to flog his books the way Bill O’Reilly does). This creates a unitary elite, detached from the bulk of society, yet at the same time even more insecure…. The result is that our elites are trapped in a bubble, where the usual pointers toward accuracy (unanimity, proximity, good faith) only lead them astray. And their distance from the way the rest of the country really lives makes it impossible for them to do their jobs justly—they just don’t get the necessary feedback. The only cure is to reduce economic inequality, a view that has surprisingly support among the population…. This is just a skeletal summary—the book itself is filled with luscious texture to demonstrate each point and more in-depth discussion of the mechanics of each mechanism…. So buy the book already….

Class hangs over the book like a haunting spectre (there’s a brief comment on p. 148 that “Mills [had] a more nuanced theory of elite power than Marx’s concept of a ruling class”) but I think it’s hard to see how the solution relates to the problem without it. After all, we started by claiming the problem is meritocracy, but somehow the solution is taxing the rich? The clue comes in thinking clearly about the alternative to meritocracy. It’s not picking surgeons by lottery, Hayes clarifies, but then what is it? It’s about ameliorating power relationships altogether. Meritocracy says “there must be one who rules, so let it be the best”; egalitarianism responds “why must there?” It’s the power imbalance, rather than inequality itself, that’s the problem….

The trend in recent decades (since the fall of the Soviet Union and the ruling class’s relief that “There Is No Alternative”) has been for the people at the top to seize all the economic gains, leaving everyone else increasing insecure and dependent on their largesse. (Calling themselves “job creators”, on this view, is not so much a brag as a threat.) But with less inequality, it could be otherwise…. Even on strict efficiency grounds, this strikes me as a more alluring view than the usual meritocracy. Why put all your eggs in one basket, even if it’s the best basket? Surely you’d get better results by giving more baskets a try…


Let's Have a Constitutional Moment, Nino...

Kevin Drum:

The Clock Ticks Down on Whether We've Entered a New Era in American Politics: If the court does overturn the mandate, it's going to be hard to know how to react. It's been more than 75 years since the Supreme Court overturned a piece of legislation as big as ACA, and I can't think of any example of the court overturning landmark legislation this big based on a principle as flimsy and manufactured as activity vs. inactivity. When the court overturned the NRA in 1935, it was a shock — but it was also a unanimous decision and, despite FDR's pique, not really a surprising ruling given existing precedent. Overturning ACA would be a whole different kind of game changer. It would mean that the Supreme Court had officially entered an era where they were frankly willing to overturn liberal legislation just because they don't like it. Pile that on top of Bush v. Gore and Citizens United and you have a Supreme Court that's pretty explicitly chosen up sides in American electoral politics. This would be, in no uncertain terms, no longer business as usual.


Hoisted from the Archives: Niall Ferguson and Donald Kagan Are Not Members of My Civilization

Brad DeLong: Department of "Huh?!": "Benevolent" Colonial Officials Department (November 2011): I must say it is unclear where Donald Kagan spends his time. It certainly isn't on the Yale campus, talking to students and faculty.

Donald Kagan:

Civilization - The West and the Rest - By Niall Ferguson - Book Review: This is a difficult time in which to present an account — and what amounts to a defense — of the West’s rise to pre-eminence and its unequaled influence in shaping the world today. The West is on the defensive, challenged economically by the ascent of China and politically and militarily by a wave of Islamist hatred. Perhaps as great a challenge is internal. The study of Western civilization, which dominated American education after World War II, has long been under attack, and is increasingly hard to find in our schools and colleges. When it is treated at all, the West is maligned because of its history of slavery and imperialism, an alleged addiction to war and its exclusion of women and nonwhites from its rights and privileges….

Kagan goes on:

Niall Ferguson thinks otherwise. A professor at both Harvard University and the Harvard Business School…. [He] decides that in comparison with other civilizations, the better side “came out on top.” Many of the observations in “Civilization: The West and the Rest” will not win Ferguson friends among the fashionable in today’s academy…. Ferguson is so unfashionable as to speak in defense of imperialism: “It is a truth almost universally acknowledged in the schools and colleges of the Western world that imperialism is the root cause of nearly every modern problem… a convenient alibi for rapacious dictators like Zimbabwe’s Robert Mugabe.” Contradicting historians who “represent colonial officials as morally equivalent to Nazis or Stalinists,” he points out that in most Asian and African countries “life expectancy began to improve before the end of European colonial rule”…

Ever since at least the time of Bartolomé de las Casas and of Hernan Cortes, it has been very clear to anyone who cares that the slavers and the conquerors who spread misery were, as they have always been, very different people from the traders and the teachers and the doctors--and, yes, the missionaries--who brought science, industry, technology, and public health. Life expectancy in India was not "improved" by the Amritsar massacre, after all, or by Winston S. Churchill's querulous telegram to his Viceroy Archibald Wavell asking:

if food [in India] was so scarce, why Gandhi hadn’t died yet.

Who the F%CK are Donald Kagan and Niall Ferguson to dare to claim that I share an essential "Western Civilization" identity with somebody like Brigadier General Reginald E.H. Dyer? Or with somebody like Marcus Tullius Cicero, who joked that Julius Caesar was an idiot for invading Britain for the island had no silver to plunder and its inhabitants were too stupid and uneducated to make good slaves?

They can all go off in their corner together.

I am not one of them, and my civilization is not theirs.


Liveblogging World War II: June 18, 1942

Janet MacDowell:

Chief of Engineers Major General Eugene Reybold summoned to Washington, DC, Colonel James C. Marshall, the experienced district engineer of the Syracuse District… a polished officer who was firm yet tactful…. Major General Wilhelm Styer, the chief of staff to the commanding general of the War Department's Services of Supply, a major division newly created to oversee Army logistics. From Styer, Marshall learned that Reybold had chosen him to establish a new engineer district and construct new manufacturing plants for atomic fission bombs at a cost of $90 million.The plant would be part of a project already in progress to develop atomic energy for military purposes…. Marshall's task was unprecedented: to take the project from the laboratory stage to the production stage with the establishment of large industrial plants...


Jared Bernstein: Yes, Matthew Bishop's Review of Krugman's "End This Depression Now" Was 100% Wrong

Sam Tanenhaus has a lot of explaining to do…

Jared Bernstein:

The NYT’s Book Review today includes a review of Paul K’s new book… his critiques struck me as wrongheaded. Complaining about Paul’s exclusive focus on demand, the reviewer conflates the structural with the cyclical:

The rise in unemployment may be largely the result of inadequate demand, but that does not mean there has been no contribution from structural changes like the substitution of cheap foreign workers and innovative technology for some jobs in rich countries.

This is just plain wrong.  Technology and trade are ongoing, structural forces that have been influencing jobs and wages and much else for decades.  Unless the reviewer is asserting that tech and trade somehow accelerated sharply in the recession, they don’t explain the change in unemployment.  And even in expansions, this type of hand-waving falls short. In the Clinton boom, trade and tech were huge factors, yet the job market achieved full employment for the first time in decades.   Unemployment fell below 4% for a few months in 2000.  Clearly, there was a bubble in the mix—when hasn’t there been in recent years?—but the point is that strong demand offset the trade and tech impacts.  And as Paul relentlessly stresses, it’s weak demand that’s to blame today.

Next problem:

The austerians may be excessively fearful of so-called “bond vigilantes,” but that does not mean there is no need to worry about what investors think about the health of a government’s finances.

Krugman has been consistently empirical on this point.  His argument is not that investors’ sentiments don’t matter.  It’s that they’re embedded in prices and can be followed on an hourly basis.  Those numbers—the bond yields on sovereign debt—show that markets judge US debt to be safe and Spanish and Greek debt to be risky.  If you want to criticize Krugman on this count, you need to explain what’s wrong with the markets themselves…. He next takes a swipe at Krugman for not embracing a  Bowles-Simpson style budget plan, suggesting Paul would be taken more seriously if he had a plan not just for hitting the accelerator now by for applying the brakes later. Meh. First, that “accelerator now, brake later” frame doesn’t work–it doesn’t make the politics any easier.  Believe me, we’ve tried it, and no one buys it, even though it’s correct–it just comes out muddled (sorry, Peter).

Second, summarizing a more detailed part of his book, Paul’s argument here is perfectly and fiscally sound: get out of the damn recession, apply more progressive tax rates like those in the Clinton years, and there’s no reason we can’t stabilize the near term debt (in the longer term, it’s all about getting health care costs under control, something Paul’s also consistently stressed).

If you want to criticize Paul’s book–and Joe Stiglitz’s excellent new book on inequality as well–it’s that they make the solutions sound easier than they are.  And I think I understand this.  These Nobelists see the solutions so very clearly that it looks easy to them.  Their logic is, in fact, air-tight and our natural experiments with austerity are turning out exactly the way they (and I, and others) predicted.  Remember, in economics, go with the guys and gals whose models best explain what’s really happening, not what you wish was happening, not what you think should be happening, but what’s actually in the numbers.

So I really wouldn’t waste time trying to prove that Paul and Joe et al are wrong about austerity, bond vigilantes, Bowles-Simpson, confidence fairies, and “very serious people”…

Why oh why can't we have a better press corps?


Ezra Klein: Why Republicans Used to Support and Now Oppose the Individual Health-Care Mandate

I think that the broad thrust of this article by Ezra Klein is largely wrong. I don't think Republican politicians have convinced themselves that the individual mandate is a bad idea. I do think Republican politicians think it is worth saying that the individual mandate is unconstitutional--because there may be five judges who will say that is is unconstitutional, and if they do, then it is. "Motivated reasoning" plays a much, much, much smaller part in the current mishegas than Ezra Klein thinks it does.

Certainly in private Republicans willing to talk about policy will admit that, yes, if Romney had won the 2008 election, nearly all the Republian politicians now condemning nationwide RomneyCare would be its biggest boosters.

Ezra Klein:

The mandate made its political début in a 1989 Heritage Foundation brief titled “Assuring Affordable Health Care for All Americans,” as a counterpoint to the single-payer system and the employer mandate, which were favored in Democratic circles. In the brief, Stuart Butler, the foundation’s health-care expert, argued:

Many states now require passengers in automobiles to wear seat-belts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement….

Ten years later, Senator Ron Wyden… began building a proposal around the individual mandate, and tested it out on both Democrats and Republicans. “Between 2004 and 2008, I saw over eighty members of the Senate, and there were very few who objected,” Wyden says. In December, 2006, he unveiled the Healthy Americans Act. In May, 2007, Bob Bennett, a Utah Republican, who had been a sponsor of the Chafee bill, joined him. Wyden-Bennett was eventually co-sponsored by eleven Republicans and nine Democrats…. In a June, 2009, interview on “Meet the Press,” Mitt Romney, who, as governor of Massachusetts, had signed a universal health-care bill with an individual mandate, said that Wyden-Bennett was a plan “that a number of Republicans think is a very good health-care plan—one that we support.”...

Democrats lining up behind the Republican-crafted mandate, and Republicans declaring it not just inappropriate policy but contrary to the wishes of the Founders—shocked Wyden. “I would characterize the Washington, D.C., relationship with the individual mandate as truly schizophrenic,” he said. It was not an isolated case. In 2007, both Newt Gingrich and John McCain wanted a cap-and-trade program in order to reduce carbon emissions. Today, neither they nor any other leading Republicans support cap-and-trade. In 2008, the Bush Administration proposed, pushed, and signed the Economic Stimulus Act, a deficit-financed tax cut designed to boost the flagging economy. Today, few Republicans admit that a deficit-financed stimulus can work. Indeed, with the exception of raising taxes on the rich, virtually every major policy currently associated with the Obama Administration was, within the past decade, a Republican idea in good standing….

Orin Kerr says that, in the two years since he gave the individual mandate only a one-per-cent chance of being overturned, three key things have happened. First, congressional Republicans made the argument against the mandate a Republican position. Then it became a standard conservative-media position. “That legitimized the argument in a way we haven’t really seen before,” Kerr said. “We haven’t seen the media pick up a legal argument and make the argument mainstream by virtue of media coverage.” Finally, he says, “there were two conservative district judges who agreed with the argument, largely echoing the Republican position and the media coverage. And, once you had all that, it really became a ballgame.”

Jack Balkin, a Yale law professor, agrees. “Once Republican politicians say this is unconstitutional, it gets repeated endlessly in the partisan media that’s friendly to the Republican Party”—Fox News, conservative talk radio, and the like—“and, because this is now the Republican Party’s position, the mainstream media needs to repeatedly explain the claims to their readers. That further moves the arguments from off the wall to on the wall, because, if you’re reading articles in the Times describing the case against the mandate, you assume this is a live controversy.” Of course, Balkin says, “if the courts didn’t buy this, it wouldn’t get anywhere.”

But the courts are not as distant from the political process as some like to think….

What is notable about the conservative response to the individual mandate is not only the speed with which a legal argument that was considered fringe in 2010 had become mainstream by 2012; it’s the implication that the Republicans spent two decades pushing legislation that was in clear violation of the nation’s founding document…. In February, 2012, Stuart Butler, the author of the Heritage Foundation brief that first proposed the mandate, wrote an op-ed for USA Today in which he recanted that support. “I’ve altered my views on many things,” he wrote. “The individual mandate in health care is one of them.” Senator Orrin Hatch, who had been a co-sponsor of the Chafee bill, emerged as one of the mandate’s most implacable opponents in 2010, writing in The Hill that to come to “any other conclusion” than that the mandate is unconstitutional “requires treating the Constitution as the servant, rather than the master, of Congress.” Mitt Romney, who had both passed an individual mandate as governor and supported Wyden-Bennett, now calls Obama’s law an “unconstitutional power grab from the states,” and has promised, if elected, to begin repealing the law “on Day One.”

Even Bob Bennett, who was among the most eloquent advocates of the mandate, voted, in 2009, to call it unconstitutional….

All this suggests that the old model of compromise is going to have a very difficult time in today’s polarized political climate. Because it’s typically not in the minority party’s interest to compromise with the majority party on big bills—elections are a zero-sum game, where the majority wins if the public thinks it has been doing a good job—Washington’s motivated-reasoning machine is likely to kick into gear on most major issues. “Reasoning can take you wherever you want to go,” Haidt warns. “Can you see your way to an individual mandate, if it’s a way to fight single payer? Sure. And so, when it was strategically valuable Republicans could believe it was constitutional and good. Then Obama proposes the idea. And then the question becomes not ‘Can you believe in this?’ but ‘Must you believe it?’ ”

And that means that you can’t assume that policy-based compromises that made sense at the beginning will survive to the end, because by that time whichever group has an interest in not compromising will likely have convinced itself that the compromise position is an awful idea…


Economics and Politics by Paul Krugman - The Conscience of a Liberal - NYTimes.com

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Paul Krugman:

Early in the euro crisis, Jean-Claude Trichet knew what the Greeks had to do: “Greece has a role model and the role model is Ireland,” he told the European Parliament in March 2010.... The funny/sad thing is that the Irish have been proclaimed a success story not once but twice — last fall, a year and a half after Trichet’s triumphalism, Merkel declared Ireland an “outstanding example” and Sarkozy declared the country “almost out of the crisis”. But once again they were premature. The most interesting and depressing thing about the latest IMF report is the cold water it throws on claims about the success of “internal devaluation”, the attempt to regain competitiveness with a fixed exchange rate. Last fall there was much trumpeting of a big fall in Irish unit labor costs due to rising productivity; this report more or less concedes (Figure 2) that this was a statistical illusion, reflecting the fact that very capital-intensive industries, especially pharma, had weathered the crisis better than labor-intensive sectors. Meanwhile, the real thing — slight wage decline in Ireland while wages rise in Germany — has been proceeding at a relatively glacial pace. And the promised payoff in increased market share is still invisible. Again, this is in a country that has done everything it was supposed to do. So even if the mainstream parties hold on in Greece today, what chance is there that the current strategy will work?


Matthew Yglesias: Labor Unions and Public Opinion

Matthew Yglesias:

Labor Unions and Public Opinion: In the wake of the failed recall of Scott Walker, Doug Henwood of the Left Business Observer wrote a stirring from-the-left critique of American labor unions (more or less along the lines of Bob Fitch) that's prompted a number of interesting responses, relatively few of which grapple with what I think is Henwood's strongest point:

And as much as it hurts to admit this, labor unions just aren’t very popular. In Gallup’s annual poll on confidence in institutions, unions score close to the bottom of the list, barely above big business and HMOs but behind banks. More Americans—42%—would like to see unions have less influence, and just 25% would like to see them have more. Despite a massive financial crisis and a dismal job market, approval of unions is close to an all-time low in the 75 years Gallup has been asking the question. A major reason for this is that twice as many people (68%) think that unions help mostly their members as think they help the broader population (34%). Amazingly, in Wisconsin, while only about 30% of union members voted for Walker, nearly half of those living in union households but not themselves union members voted for him (Union voters ≠ union households). In other words, apparently union members aren’t even able to convince their spouses that the things are worth all that much.

Gordon Laffer's response to this in the Nation is typical… unions can't be unpopular because many non-union workers say they'd like to be in one….

This misses the force of Henwood's point. I wish billionaires had less influence over American politics. The fact that I would, personally, like to be a billionaire does not contradict that point. On the contrary, the untoward level of political influence enjoyed by billionaires is one of the main things that's appealing about my hypothetical billionaire lifestyle. If someone is inclined to view labor unions as primarily dedicated to advancing the interests of a privileged (remember that wage premium) minority of American workers, that's in no way inconsistent with a large share of the non-unionized minority wishing that they enjoyed those privileges.

If the upshot of those mixed feelings was a rapid rise in the rate of union membership, the contradiction would work itself out quickly. But since Taft-Hartley that hasn't been the case, and the union share of the private sector's been steadily declining...


The Fed: Once Again Behind the Curve and Scrambling to Catch Up...

Bernanke's Fed has spent his entire term skating toward where the puck is, rather than toward where the puck is going to be.

Gavyn Davies:

Fed doves ready to act: A further large bout of unconventional easing is now on the agenda. As usual, the Federal Reserve will be the critical player in leading a co-ordinated easing in global monetary policy. Until recently, the Fed was not generally expected to ease policy at all after the FOMC meeting on Tuesday/Wednesday of next week, but economic conditions inside the US, not all of which are directly related to the eurozone crisis, have now changed markedly…. Why will the Fed have changed its thinking, compared to the neutral tone it was adopting only a few weeks ago? There are three key reasons for this:

  1. The US economy has slowed down markedly since the early spring. At the April meeting of the FOMC, the central tendency of the committee’s forecast for GDP growth in 2012 was 2.7 per cent, which is a little above the Fed’s 2.5 per cent estimate of long term trend. This forecast for GDP growth in 2012 is no longer tenable, and it is likely to be downgraded to around 2.0-2.2 per cent this week…. Hence, the growth rate has fallen well below the level which would normally be required to bring unemployment down…. The inadequacy of GDP growth is not a short run phenomenon. As the graph above shows, GDP growth has only been above trend in one of the last 8 quarters, which must be alarming the doves.

  2. Core inflation is now hovering around the Fed’s 2 per cent target. Probably the main reason why the doves fell silent earlier this year was the fact that core price inflation was running at higher levels than had been generally expected. This never seemed likely to prove to be a permanent problem, given the absence of any acceleration in unit labour costs. But the rise in commodity prices was taking time to pass through the rest of the economy, and the Fed had only recently introduced a formal 2 per cent inflation target…. [T]he doves thought it was worth waiting for core inflation to subside before easing again…. Overall, the inflation picture might normally induce the Fed to wait another month or two before easing, but the luxury of delay may not be open to them this time. This is because:

  3. Financial conditions have been tightening as the economy has slowed. Fed policy has always been highly sensitive to an undesired tightening in monetary conditions, caused by declines in equity prices, rises in credit spreads or appreciation in the dollar. This is exactly what has happened since the April meeting of the FOMC….

Goldman Sachs and Morgan Stanley both think that that this tightening in monetary conditions will induce the Fed to act more aggressively than is generally expected this week. According to a recent survey undertaken by the Wall Street Journal, 63 per cent of market economists do not expect the Fed to announce a QE3-style increase in its balance sheet, and only 43 per cent expect a lessor action, such as a renewal of Operation Twist…. But Goldman Sachs says its quantitative model assigns a probability of 75 per cent to easing this week. Vincent Reinhart of Morgan Stanley, who in a previous role attended many meetings of the FOMC, judges that there is an 80 per cent chance of easing, and if it occurs, he says there is a 70-30 chance that it will come in the aggressive form of QE3…


William Saletan Embarrasses Himself and Slate Even More

Why oh why can't we have a better press corps?

The first-order filter to apply to Slate is: if it's new to you, it's probably not true; if it's true, you probably already knew it.

E.J. Graff:

Why is William Saletan Apologizing for Slate's Mistake?: Two days ago, I wrote that Slate’s editors should be ashamed of having published Mark Regnerus’s propagandistic tripe about his “study” comparing how children fare under intact families versus how they fare when their biological parents have a rocky time because one discovers or accepts that he or she is lesbian or gay…. Saletan writes about the responses…. Saletan knows better…. I wasn’t taking aim at Slate for the underlying research. What Slate should be ashamed of is publishing Regnerus’s sleight-of-hand interpretation of his results. Saletan’s first-take analysis was correct: the study did not measure what Regnerus said it measured. Here’s what Saletan wrote originally (emphasis mine):

In his journal article, Regnerus says it “clearly reveals that children appear most apt to succeed well as adults—on multiple counts and across a variety of domains—when they spend their entire childhood with their married mother and father.” In Slate, he notes, “On 25 of 40 different outcomes evaluated, the children of women who’ve had same-sex relationships fare quite differently than those in stable, biologically-intact mom-and-pop families, displaying numbers more comparable to those from heterosexual stepfamilies and single parents.” These findings shouldn’t surprise us, because this isn’t a study of gay couples who decided to have kids. It’s a study of people who engaged in same-sex relationships—and often broke up their households—decades ago.

But that’s not what Regnerus wrote in his Slate article, or even in his journal article. He wrote that the conventional wisdom is false, and that lesbian and gay parents are bad for kids…. Regnerus knows what he did. He set up a study that would make it seem that anyone who ever slept with someone of the same sex hurts their children by doing so. Instability is well known to be harder on children than stability…. Regnerus… did one thing while purporting to do another….

Saletan writes, “There’s nothing evil about the data set.” True. But there’s something evil about the propagandistic distortion of that data set…


Liveblogging World War II: June 16, 1942

Dogfight Over Port Moresby June 16, 1942: Dogfight Over Port Moresby June 16, 1942 Description of June 16, 1942 dogfight from Samurai! by Saburo Sakai pages127-128

On the sixteenth [June, 1942] the air war exploded with renewed furry.  It was a field day for our fighters, when 21 Zeros caught three enemy formations napping. We hit the first group of twelve fighters in a massed formation dive which shattered the enemy ranks.  I shot down one plane, and five other pilots each scored a victory.  The remaining six enemy fighters escaped by diving.

Back at high altitude, we dove from out of the sun at a second enemy formation of twelve planes.  Again we struck without warning, and our plunging pass knocked three fighters out of the air.  I scored my second victory in this firing run.

A third wave of enemy planes approached even as we pulled out from the second diving attack.  Some two dozen fighters came at us as we split up into two groups.  Eleven Zeros dove to hit a climbing formation, and the others met us at the same height.  The formation disintegrated into a tremendous free-for-all directly above the Moresby air base.  The enemy planes were new P-39s faster and more maneuverable than the older models; I jumped one fighter, which amazed me by flicking out of the way every time I fired a burst.  We went around in the sky in a wild dogfight, the Airacobra pilot running through spins, loops, immelmanns, dives, snap rolls, spirals and other maneuvers.  The pilot was superb, and with a better airplane he might well have emerged the victor.

But I kept narrowing the distance between our two planes with snap rolls to the left and clung grimly to his tail at less than twenty yards.  Two short cannon bursts and the fighter exploded into flames.

That would be my third victory for the day.  The fourth, which followed almost immediately after, was ridiculously simple.  A P-39 flashed in front of me, paying attention only to the pursuing Zero which zoomed upward in a desperate climb, firing as he went.  The Airacobra ran directly into my fire, and I poured 200 rounds of machine gun bullets into the nose.  The fighter snapped into an evading roll.  I was out of cannon shells, and fired a second burst into the belly.  Still it would not fall, until a third burst caught the still-rolling plane in the cockpit.  The glass erupted and I saw the pilot slam forward.  The P-39 fell into a spin, then dove at great speed to explode in the jungle below.

For enemy fighters in one day!  That was my record to date, and it contributed to the greatest defeat ever inflicted on the enemy in a single day’s action by the Lae Wing.  Our piloted claimed a total of nineteen enemy fighters definitely destroyed in the air.

On our way back, Yonekawa kept breaking formation… I understood why when he pulled along side my own plane and held up two fingers, grinning broadly.  Yonekawa was no longer the untried fledgling, now he had three planes to his credit…  He exuberance was infection.  I waved four fingers at him, and then opened my lunchbox and we drank a happy toast to one another.

The day of victory was not over yet.  Hardly had our planes been refueled and our ammunition belts replaced then a spotter report came in.  The B-26s were on their way to the base.  They could not have chosen a worse time, for 19 fighters were off the ground before the Maruaders reached Lae.  We failed to shoot any down but damaged most of the planes, and caused them to scatter their bombs wildly.  During the pursuit away from Lae, ten P-39s came after us over Cape Ward Hunt, apparently in reply to the bombers’ distress calls.  One Airacobra went down in flames.

Lae went wild with the victory that night.  All the pilots were given extra rations of cigarettes, and the mechanics swarmed over us to share our jubilation.  Even better news was the word that we were to receive five days leave at Rabaul.  The cheers of the pilots shook the surrounding jungle.  I was particularly relieved of the new of five days’ rest.  Not only was I tired from the almost daily flights, but my mechanics wanted several days to work on my fighter.  They called me over to show me the bullet holes in the wings and fuselage, and my stomach dropped when I saw a row of holes running directly behind the cockpit.  They had missed me by no more than six inches.

: http://www.pacificwrecks.com/people/veterans/sakai/samurai/06-16-42.html

Three Tests of Macroeconomic Theory

Paul Krugman:

Still A Phantom Menace: The policy response to financial crisis has, in effect, given us a great natural experiment in macroeconomics — an experiment that can and should be viewed as a test of two views of the economy. One view — which includes both freshwater macro and much of what Austrians say — is in effect classical macro as Keynes described it, in which the economy is always constrained by supply. The other is a more or less Keynesian view in which a depressed economy is constrained by demand, not supply.

These two views had strong implications on three fronts. One was interest rates: would large budget deficits drive rates up, as a classical view implied, or would they do no such thing under depression conditions? A second was the effects of austerity (which has been much larger than the weak efforts at stimulus, and therefore provides the real test); would austerity policies release resources to the private sector, as per the classical view, or lead to economic contraction? Finally, a third implication involved inflation: would large increases in the monetary base produce soaring inflation, again as classicists of all kinds claimed, or do no such thing under depression conditions?


Richard Yeselson: Shorter David Brooks

Richard Yeselson (yeselson) on Twitter:

Shorter David Brooks: My fantasy of the GOP as progressive welfare state reformers will come true iff my fantasy of the EU crisis as a sovereign debt driven morality play concludes before the election.

Why oh why can't we have a better press corps?


I must say, 10,000 years from now there will be statues of and memorials to--large, imposing, greater than life size marble statues in huge imposing classical memorial buildings--Daniel Davies for his single-handed invention of the "Shorter X" idea...


Ruth Bader Ginsburg, June 15, 2012

Justice Ginsburg Predicts “Sharp Disagreement”:

The term has been more than usually taxing, some have called it the term of the century….

As one may expect, many of the most controversial cases remain pending, so it is likely that the sharp disagreement rate will go up next week and the week after….

No contest since the court invited new briefs and arguments in 'Citizens United' (a 2009-10 campaign finance spending case) has attracted more attention -- in the press, the academy. Some have described the controversy as unprecedented and they may be right if they mean the number of press conferences, prayer circles, protests, counter protests, going on outside the court while oral argument was under way inside….

If the individual mandate, requiring the purchase of insurance or the payment of a penalty, if that is unconstitutional, must the entire act fall? Or, may the mandate be chopped, like a head of broccoli, from the rest of the act?


Some of What I Found Worth Noting: June 15, 2012

  1. Felix Salmon: Where exactly the “middle class” begins and ends in the income distribution is a question that probably has no firm answer that will satisfy everybody. But any reasonable definition of it ends well before even the $250,000 threshold.
  2. Greg Sargent: While Beltway press pans Obama speech, local newspapers cover clash of economic visions
  3. Steve Benen: Chronicling Mitt's Mendacity, Vol. XXII
  4. Mike Konczal: An Elite Like Any Other? Meritocracy in America
  5. Suresh Naidu: Suffrage, Schooling, and Sorting in the Post-Bellum U.S. South
  6. Severin Borenstein and Ryan Kellogg: The Incidence of an Oil Glut: Who Benefits from Cheap Crude Oil in the Midwest?
  7. Juan Botero et al.: Education and the Quality of Government
  8. Jess Benhabib et al.: Liquidity Traps and Expectation Dynamics

Michael DeLong: Mann and Ornstein's "It's Even Worse than It Looks" Reviewed

Thomas Mann and Norman Ornstein’s It's Even Worse Than It Looks convinced me that having a political system where corporations can spend unlimited amounts of money for or against politicians is a recipe for favoritism and corruption. We need to reduce the influence of money in politics.

But there's much more to the book than that. Here are some of my thoughts:

Both Mann and Orntein have written about Congress for many years. Both are well-respected centrist scholars. They know what they are talking about. And both Mann and Ornstein agree that politics today is far worse than usual: that our political process right now is unusually broken.

Theywrite that our current political process has two overreaching problems:

  1. The two political parties now behave like parliamentary parties, while the structure of our government--unlike the government of a parliamentary system--makes it very difficult for a bare single-party majority to pass legislation; and

  2. It is the Republican Party that has become more extreme and more determined to block anything that might help the Democrats--significantly more so.

The federal government has always had many blocking veto points that must be overcome in order to pass legislation. The House of Representatives must pass a bill. The Senate must also pass the bill. The President must sign the bill (except for the rare occasions where two-thirds of both houses vote to override the President’s veto). Lately yet another veto point has emerged: a 60 vote threshold in the Senate. Filibusters used to be very rare. Now they are routine. All these obstacles make it difficult for the government to act unless one party controls all three--and controls the Senate with 60 votes.

Democrats and Republicans used to be very heterogenous, with liberals and conservatives in both parties and only the loosest semblance of party discipline. Now practically all the Democrats are liberals or moderates and the Republicans are conservatives. Mann and Ornstein do an excellent job of explaining these changes. They criticize those who claim that both parties are equally at fault. Both Democrats and Republicans now view each other as adversaries, Republicans, however, are far more unified and obstructionist--and also have become more conservative in part because of primary challenges.

Obstruction has been taken to ridiculous levels, with Republicans now using holds and filibusters to block nominees and legislation. Obama nominated economist Peter Diamond to the Federal Reserve. Senator Richard Shelby placed a hold on his nomination, claiming he was too inexperienced for the job. While being delayed, Diamond was awarded the Nobel Prize in Economics. Shelby kept blocking his nomination. After a year of waiting, Diamond withdrew. Other nominees, such as Donald Berwick (to head the Center for Medicare and Medicaid Services) and Richard Cordray (to head the Consumer Financial Protection Bureau) were also blocked. Every one of Obama's bills has had to get 60 votes or more to pass, due to the threat of the filibuster.

Republican obstruction is not entirely new. In a 1993 memorandum, William Kristol urged Senator Bob Dole and other Republicans to oppose Bill Clinton's health care plan “sight unseen”, no matter what the substance of the policy he proposed. Passage of any health care reform at all, he argued, would harm the Republican Party.

It is good to see two respected centrist observers of Congress recognizing that Republican obstruction of Obama's proposals is largely driven by a desire to hurt him politically, no matter what its effect on the country.

So are there any solutions to our current state of affairs?

The authors reply “yes.” But their solutions are not the ones pundits and politicians usually advocate.

There is no silver bullet. Pundits love to call for a third “centrist” party. But90 percent of voters identify with either the Democratic or the Republican parties. Even if a candidate from a third party were elected President, he or she would still have to work with Congress. The United States's plurality voting system promotes a two-party system.

Pundits tout term limits as a way to fix American politics. Mann and Ornstein point out that term limits have had little effect on partisanship in the state legislatures that have adopted them. What they have done is to prevent legislators from acquiring experience and getting things done, and empowered lobbyists and sometimes staff.

Pundits also call for a balanced-budget amendment. Mann and Ornstein dismiss a balanced budget amendment to the Constitution, since it would require massive spending cuts or huge tax increases and prevent the government from using fiscal policy to counter an economic downturn.

They do list a bunch of reforms that they believe will help things. Among them are:

  • making it easier for citizens to register and vote,
  • moving Election Day to the weekend to make it more convenient for voters
  • making attendance at the polls mandatory,
  • having independent commissions draw congressional districts, and
  • open primaries.

Mann an Ornstein also suggest that the United States experiment with different elctoral systems, such as ranking candidates in order of preference. They call for limiting filibusters. They say that the nomination process should be sped up. They say that the Senate should require forty-one votes to continue the debate instead of sixty votes to end it.

All of these ideas are excellent. They would greatly improve American politics. But the question is: will politicians push for them? And won't Republicans oppose all of these reforms, because they will result in political benefits for the Democratic Party? These are good questions that they do not answer.

I wish the two authors had come up with explanations on how to implement their proposed solutions—heaven knows, the United States could use them. But that wish is not a statement that the book is not good. This is an excellent little book that should be read by all people interested in what is really wrong with U.S. politics.

This book convinced me that in order for the American political system to work, we will need to make drastic changes--to make it more like a parliamentary system. Currently, it is far too easy for the minority party to obstruct the majority's agenda, producing gridlock, frustration, inefficiency, and political victory for the minority as the voters throw the ineffective bums out. But while our broken system harms everybody, it harms the Republicans least--inasmuch as they claim that government is useless and inherently wasteful, and should be dismantled and privatized, an ineffective government boosts their case.

Perhaps the biggest first step would be removal of the Senate filibuster. If we really want to make it easier for government to act and want a better country, we should work to get rid of the filibuster. Right now the Senate is a political graveyard where good bills go to die. Changing the Senate to operate on majority rule would be a step, and a step we should take now.


Republican Shill Robert Ehrlich Picks the Wrong Week to Give Up Sniffing Glue...

Robert Ehrlich:

There are pitfalls attached to any activist campaign. The tea party movement is no exception. One obvious example concerns the NAACP, whose leadership decided early on in the Obama administration that the tea party's agenda was contrary to the interests of its constituency. In short order, charges of racism against all things tea party were lodged by a number of high-profile Democrats intent on minimizing political damage to the president and his administration. A successful demonization campaign against "tea party Republicans" soon followed. Indeed, I still recall the vitriol directed against the tea party and its sympathizers during my campaign appearances on urban radio in 2010...

John Celock:

Inge Marler, Arkansas Tea Party Leader, Makes Racist Joke: The Bulletin reports that Marler… said the following as an ice-breaker in her speech:

A black kid asks his mom, ‘Mama, what’s a democracy?’

‘Well, son, that be when white folks work every day so us po’ folks can get all our benefits.’

‘But mama, don’t the white folk get mad about that?’

‘They sho do, son. They sho do. And that’s called racism.’


Mark Kleiman Watches the American Media Put Its Thumb on the Scale for Mitt Romney...

Mark Kleiman

Precis « The Reality-Based Community: Republicans are nasty and lie a lot. Really, it ought to be astounding that the mainstream press has bought into Karl Rove’s claim that “Obama is going negative” when 2/3 of the Obama ads are positive while 2/3 of the Romney ads are negative. The high rate of Pants on Fire for Romney is, of course, no surprise…

Why oh why can't we have a better press corps?


George Osborne Says: The Policies I and the Rest of Britain's Conservative-Liberal Government Have Been Pursuing for the Past Two Years Have Been Badly Mistaken

George Osborne:

Credit is not the only area where we can use the global confidence in our balance sheet to boost private sector growth. We are already taking action to support new house-building and infrastructure investment through government guarantees. In the next month we will set out how we can do much more.

Jonathan Portes comments:

Not the Treasury view...: The Chancellor accepts the logic of more government-financed investment: As a matter of simple logic, this statement implies that the government believes:

  1. more investment, particularly in house-building and infrastructure, would be good for "private sector growth" - demand, output and employment in the private sector;

  2. given current policies, the private sector will not deliver this desired extra investment on its own;

  3. nor will monetary policy, conventional or unconventional;

  4. moreover, if the government intervenes to facilitate such extra investment the impact will not be offset by monetary policy (that is, the Bank of England will not tighten monetary policy in response because of concerns about inflation)

  5. if the government, via government guarantees, assumes some or all the risks associated with such investments (in particular that the direct cash returns on the investment will not be sufficient to repay the borrowing) these additional fiscal liabilities will have no adverse impact - either on gilt yields in the short-run or perceived fiscal sustainability in the long run.

This chain of logic is, of course, precisely the one I and others (in particular Martin Wolf) have been outlining for some time….

[T]he government has now conceded the intellectual and economic argument. Let us hope that they proceed to deliver the meaningful policy change that we have been calling for, however it is labelled.


Dean Baker: David Brooks Says That Mitt Romney and the Republicans Are Not Very Good at Arithmetic

Dean Baker:

David Brooks Says That Mitt Romney and the Republicans Are Not Very Good at Arithmetic: That probably was not his intention, but that is the only conclusion that numerate readers can take away from his column. He tells readers….

many Republicans have now come to the conclusion that the welfare-state model is in its death throes.

He points to the crises in Greece, Spain, and Italy and then adds:

In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The average growth was a paltry 1.7 percent annually between 2000 and 2009. It averaged 0.6 percent growth between 2009 and 2011….

Greece, Spain, and Italy have among the least developed welfare states in Europe. If someone wants to make an argument that there is some inherent problem with the welfare state model then we should look for crises in Sweden, Denmark and Germany… the welfare states of northern Europe are doing relatively well through the crisis…. Brooks account of U.S. growth is just bizarre. Did he somehow miss the collapse of the housing bubble?… The economy definitely did better in the three decades immediately following World War II, when the top marginal tax rate was between 70-90 percent than it did in the post-Reagan years, but there was a substantial uptick in productivity growth in the mid-90s….

The economy did turn down with the collapse of the stock bubble in 2000-2002, but it is hard to see how Republicans tie the collapse of this bubble to the death throes of the welfare state, just as it is difficult to see how the more recent collapse of the housing bubble implies the death throes of the welfare state. In principle the Los Angeles Kings victory in the Stanley Cup could also signal the death throes of the welfare state, but it is not easy to see the connection. The more obvious take away from this story is that a corrupt financial sector can wreck the economy.

In terms of the link between wages and productivity growth, Brooks Republican friends seem to be in an inverted world. If this is the concern, then the welfare states in Europe would seem to be the answer, not the problem. Workers have certainly seen more of the benefits of productivity growth over the last three decades in northern Europe than in the United States. If Brooks has a point here, it is very difficult to see what it is.

He then comments:

Money that could go to schools and innovation must now go to pensions and health care… a giant machine for redistributing money from the future to the elderly….

All the welfare states in Europe have much lower per person health care costs than the United States…. If the U.S. paid the same amount per person for health care as Denmark, Germany, or Sweden we would be looking at massive budget surpluses…

Why oh why can't we have a better press corps?


Is the Chinese Communist Party Really Subjecting 1% 0.2% of Its Cadres to Extended Severe Torture Every Year?

If so--if somebody joining the Chinese Communist Party that Deng Xiaoping built at 25 must even now look forward to a future in which there is a 40% 10% chance that they are caught up in some faction fight that leads to their severe torture sometime during their career (and a 3% chance that they are "shot while trying to escape"--that has very powerful and very negative implications for the future of China.

ByElMar emails:

Why isn't this story getting much more attention? It seems to me to be very important: http://www.nytimes.com/2012/06/15/world/asia/accused-chinese-party-members-face-harsh-discipline.html


Bloomberg Blames Obama Rather than the Republicans

Why oh why can't we have a better press corps? That the Republicans are blocking reasonable, bipartisan policies to strengthen the American economy is not Obama's fault. But the Bloomberg editors pretend to believe that it is. They ought to be better than this:

Bloomberg Editors: Less Talk, More Stimulus: It's not that Obama's proposals -- a mix of tax credits for small businesses and clean energy, and spending on infrastructure and education -- are bad. It's just that they're shopworn and too timid to break the political stalemate in Washington. The Democratic president effectively showcased the differences between his vision and Republican candidate Mitt Romney's plan for a rollback of regulation and $5 trillion in new tax cuts. Unfortunately, drawing these distinctions won't do much for the U.S. economy; it's stalling now….

It's no wonder Federal Reserve Chairman Ben S. Bernanke practically begged lawmakers last week to take some of the burden off the Fed's shoulders and help goose the economy. Election-year politics and entrenched Washington gridlock have stymied most of Obama's spending proposals. Breaking through will require more political ingenuity than the president has shown. Still, he ought to have plenty of incentive: His job is at stake.…

The rationale for additional government spending at this moment is compelling: Interest rates are near a historic low, and long-term unemployment is threatening the future of millions. More than 5 million of the 12.7 million people who are unemployed have been jobless for 27 weeks or more, a higher portion than at any time over the past 60 years. A new paper by former Obama economic adviser Lawrence Summers and Berkeley economist J. Bradford Delong suggests that under current conditions stimulus could ultimately be self-financing; it would put people back to work and increase the tax base, thus reducing the long-run debt burden.

To be effective, a new stimulus must be temporary, targeted and big enough to break the economy's inertia. A rebate can offer more bang for the buck than other forms of tax relief, in part because rebates are often perceived by recipients as a bonus that they can afford to spend. (We are a consumer-driven economy.) By contrast, research shows that most recipients didn%u2019t even notice the tax relief from Obama's 2009 Making Work Pay credit, which provided an average tax cut of $508. Another benefit: Rebates have no risk of becoming permanent, unlike payroll tax cuts, which are difficult to claw back….

[A]ny such expense now should be paired with a detailed framework for long- term deficit reduction. A good blueprint for fiscal rectitude is the report by the Simpson-Bowles commission, which sensibly calls for spending caps, reducing tax rates, eliminating backdoor tax breaks and reforming entitlement programs such as Social Security.

Speaking n Ohio, Obama said he sees a determination to overcome the challenges we face. It would be nice, in the days ahead, to be able to say the same about Democrats and Republicans, incumbents and challengers alike.


joe Weisenthal: Rusfeti And Haratsi

The problem of how Greece is going to balance its taxes and its spending going forward is only one of our four problems right now--and is the smallest problem.

Joe Weisenthal is in Greece, with smart but depressing things to say about it:

Rusfeti And Haratsi: I spent this morning with a 31-year old computer engineer named John, who lives two hours away, cares for his mother who is ill, and is planning on emigrating to Australia in September. John is a self-described Marxist, and he even wrote a book blasting globalization. But even he spent a lot of time identifying internal corruption as the main problem in Greece.

Over iced coffee, he told me two words that basically sum it all up, and both come from the old Ottoman Empire days. The first is Rusfeti, which basically means: "If you vote for me, I'll give you a job." This is the source of the massive public sector that everyone identifies as a problem. Supporters of New Democracy who get jobs are are called "blue shirts." Supporters of PASOK who get jobs are called "green shirts." While left-wing leader Alexis Tsipras plans to expand the public sector, his opposition to this kind of patronage employment is apparently one thing that sets him apart from the old, mainline parties.

The other word, and this too comes from the Ottomans is Haratsi, which means that the local ruler (mayor, Sultan in the old days, etc.) has the right or ability to tax anyone for whatever reason, without the establishment of the rule of law. This is the essence of what everyone seems to acknowledge is a system of massive innovation with respect to not paying taxes.

Says John: "If you want to avoid these issues, the euro is the perfect decoy." People will say 'It's the euro's fault. It's Merkel's fault,' if they're not interested in addressing Rusfeti and Haratsi.

But of course even he sees the problems with the euro and globalization, and the fact that the system does not incentivize Merkel to address anything. The euro is "a problem [but] it's just one problem."


Some of What I Found Worth Noting: June 14, 2012

  1. Full transcript of Obama’s speech on the economy in Cleveland, Ohio
  2. Richard Green: The irony of Victor Davis Hanson
  3. Francis Spufford: Red Plenty: Response: Part 3
  4. Dam Kotsko on Francis Spufford's Red Plenty: Footnote Fairy Tale
  5. Time Travel and the Black Death: Connie Willis’s Doomsday Book
  6. Menzie Chinn: Contractionary Fiscal Contraction, Quantified: European Edition
  7. Why Romney’s “repeal and replace” plan for Obamacare would fail millions of Americans

If There Are Any Health and Budget Experts Still Supporting Mitt Romney, They Are All Running Screaming into the Night Right Now….

Mitt Romney wants to bust open the federal deficit by creating yet another huge tax expenditure:

Mitt Romney: Well, right now, most people get their insurance through their employer and the reason they do that is because their employer gets a tax deduction when they buy insurance for you. But if you're a very small-business person--let's say a one-person business--you don't get a tax deduction for buying insurance. And if you're an individual that's not employed, you don't get a tax deduction for buying your own insurance. What I would do is level the playing field and say individuals can buy insurance on the same tax advantage basis that businesses can buy insurance.

And Austin Frakt writes:

Most economists… many policy wonks… deficit hawks, advocate eliminating or phasing-out the tax deductibility of employer-sponsored health insurance…. Seems like a good idea to dump this tax subsidy…. Can anyone tell me why Romney wants to expand the tax preferred status of health insurance? Doesn't he believe we overspend on health care? Doesn't he believe in the incentive effects of taxation? Isn't he interested in reducing the deficit and/or cutting marginal tax rates? Why, then, would he want to create an even bigger tax expenditure? If Romney means something else (e.g., removing the tax deduction and offering tax a tax credit for group- and non-group health insurance products alike), then I'd like to know where he said or printed that, because his website doesn't say it. Frankly, I'm puzzled.

The answer is simple: Romney is a dangerous clown. And any health and budget experts still supporting him are dangerous clowns as well.


Hale Stewart: The Financial Times Rules OK!

Hale Stewart:

The Bonddad Blog: Why I Dropped My WSJ Subscription for the Financial Times: Here are the reasons for the switch:

  1. A far more international orientation: the Financial Times is truly an international paper…. [The] world is now one giant inter-related system; you have to know what is happening in Europe, Australia and India and how that inter-relationship relates to the US. The WSJ falls down on this connection in a pretty big way….

  2. Much better blogs: Compare Alphaville and Money Supply to the WSJ's Market Beat or Real Time economics. There is no comparison…. [T]he FT blogs which provide some excellent in-depth research on meaty topics.   The posts are longer and filled with far more nuance.  The different is night and day.

  3. A great writing style.  The FT has shorter stories, but there is no fluff; once the writers have said their piece, they stop writing….

  4. When was the last time the WSJ did a really good piece on anything?… The WSJ used to provide great well-researched articles economic on topics (in fact, it used to be  a daily occurrence, running down the right or left side of the front page).  They've just lost that edge.  I think a big problem there is the attempt to make the WSJ a competitor with the NYT….

  5. The lack of an "ick" factor.  The ongoing investigations in the UK indicate there are serious management problems that have obviously filtered down throughout the Murdoch media group.  Put another way, if the head is that corrupt, I don't see how that doesn't trickle down

  6. Whatever isn't covered in the FT is covered by Bloomberg…


jonathan Chait Explains One of Many, Many Reasons That the Washington Post Is Such an Embarrassment

Jonathan Chait:

Sally Quinn Forced to Dine With Non-Fake Friends: After pretty much the entire journalistic world has made fun of Sally Quinn’s weekend Washington Post essay declaring the End of Power, further abuse may seem unnecessarily cruel. And yet even the fulsome stream of disparagement directed at Quinn has not adequately conveyed the full awfulness of her piece….

When assessing Quinn’s sense of the Lost Eden of Washington, we should also have a firmer sense of what the culture was actually like. Here is one scene from Quinn’s inculcation into the Washington elite:

Washington writer Sally Quinn told of a 1950s reception where: “My mother and I headed for the buffet table. As we were reaching for the shrimp, both of us jumped and let out a shriek. Senator Strom Thurmond, grinning from ear to ear, had one hand on my behind and the other on my mother’s. As I recall, we were both quite flattered, and thought it terribly funny and wicked of Ol’ Strom.”

Once Washington was a happy place where a girl and her mother could be groped simultaneously in good fun by a white supremacist. Sadly, it has all been ruined by Kim Kardashian and Ezra Klein.

Why oh why can't we have a better press corps?