The New Republic (for incomprehensible reasons) invites Robert Samuelson to trash Bob Rubin and the Clinton administration's economic policies:
The New Republic Online: What the Boom Forgot (1 of 3): In hindsight, though, Rubin's accomplishments seem less grand. The economic expansion of the early 1990s would have occurred even if he had not joined the Clinton administration in 1993, initially as head of the White House's National Economic Council. Similarly, the emergence of a budget surplus in 1998--the first since 1969--stemmed mainly from outside events: the end of the Cold War, which prompted a large (and probably excessive) reduction in defense spending; and the economic boom, which caused a huge and unanticipated surge in tax revenue. Good luck, more than good policy, produced the surpluses....
The man who emerges from these pages... didn't have then--and, based on this book, doesn't have now--many original economic ideas beyond the bland standbys of curbing budget deficits at home and promoting free trade and free markets abroad...
And it's at this point that I stopped reading for a while.
Curbing budget deficits at home is not a "bland standby" but an essential prerequisite for a healthy economy. Free trade and free markets abroad are the most powerful instrumentalities of American foreign policy, and it matters not a whit that they are not "original." To sneer at good policies as "bland standbys" is an intellectual foul--one that should get you thrown out of the serious-economic-analyst game.
But I came back, only to get even more annoyed: If you want to claim that the budget surpluses of 1998-2000 were the result of "the end of the Cold War, which prompted a... reduction in defense spending" rather than to "good policy," you need to tell your readers that the defense spending share of GDP fell by 2.2% points between fiscal 1990 and fiscal 2000 while the Bush-Mitchell-Foley 1990 deficit reduction package reduced the fiscal 2000 deficit relative to baseline by 3.6% points and the Clinton-Mitchell-Foley 1993 deficit reduction package reduced the fiscal 2000 deficit relative to baseline by an extra 2.8% points. The defense cuts are part of that reduction, yes. But there is an extra 4.2% points from "good policy" that are bigger than the impact of defense spending share reductions, and an honest journalist would tell his readers about the relative sizes of the factors.
And there are the virtuous circle effects. In the absence of the 1990 and 1993 deficit-reduction packages, we would have had an extra 35% of GDP worth of government debt--an amount that using Greg Mankiw's and Doug Elmendorf's rules-of-thumb (which I regard as too optimistic) would have reduced year-2000 GDP by 2.5% via the effects of crowding out on income from private capital alone. That's a good third of the cumulative year-2000 surprise good luck boost to production brought about by the late 1990s boom: remove good policy, and the boom loses a third of its boominess. Remove a third of the boom's boominess, and you remove one of the three percentage points' worth of extra deficit reduction coming from the strength of the boom. (And I would argue that there are bigger linkages between the budget and the boom than Mankiw-Elmendorf allow.)
When I do the rough numbers, I get that our 2.4% of GDP fiscal 2000 surplus was the result of (a) 2.2% of defense share reductions as a result of the end of the Cold War, (b) an additional 1.8% of deficit closing from other provisions of the Bush-Mitchell-Foley 1990 deficit reduction package, (c) an additional 2.4% of deficit closing from other provisions of the Clinton-Mitchell-Foley 1993 deficit reduction package, (d) the fact of political gridlock preventing the rescission of any part of the 1990 and 1993 programs as fiscal news became brighter, (e) an extra 1% (Mankiw-Elmendorf) of deficit reduction coming from the fact that good fiscal policy strengthened the boom, (f) an extra 2% of deficit reduction coming from the fact that the information age showed up on a macroeconomic scale in the late 1990s, (g) all built on top of a baseline no-good-policy no-good-luck fiscal 2000 deficit of -7% of GDP or so.
I can't see how anyone who knows the budget numbers and the 1990 spending projections can say that we were in good fiscal shape in 2000 primarily because of "good luck" and not "good policy." It's just not so. You can't look at the numbers--at the size of the Bush-Mitchell-Foley and Clinton-Mitchell-Foley shifts in the budget--and think it is so.
Moreover, Samuelson is eager (for incomprehensible reasons) to tell the story that deficits don't matter:
...budget deficits have assumed a symbolic importance out of all proportion to their true economic significance. By themselves, budget deficits--and surpluses, too--do not matter nearly as much as the public and many economists believe.... deficit mythology... profoundly misleading, and it needs to be punctured.... Myth: Big budget deficits depress private investment and thereby hurt future wages and living standards. Reality: The adverse effect is tiny or non-existent.... Again, the logic seems impeccable: higher federal borrowing would seem to "crowd out" some private investment. Since investment raises productivity (the source of higher wages and profits), lower investment ultimately hurts living standards. In practice, however, the logic isn't infallible. Bigger budget deficits can also crowd out consumer spending... housing construction... large trade deficits... the dollar's special role as the major global trading and investment currency... it's not just how much a country invests but how well. As the recent dot-com and telecom debacles attest, investment is not automatically productive...
An America without the 1990 and 1993 deficit-reduction packages would have been an America in 2000 where the federal debt held by the public would have been 70% rather than 35% of GDP, and would have been rising at 5% points per year. I cannot imagine why Samuelson wants to argue that such an America would have been able to borrow abroad on a large scale to fund domestic investment rather than an America from whose unsustainable fiscal policies foreign investors would have fled in terror. I cannot imagine where Samuelson thinks the purchasing power to maintain domestic investment would have come from in the face of the switch of an additional $3.5 trillion of investors' portfolios into government bonds. I cannot imagine who Samuelson thinks he is fooling in implicitly claiming that such swings in the federal debt would not have had powerful impacts on investment in the short and medium run, and on the pace of economic growth in the medium and the long run. You cannot divert 35% of a year's GDP from financing private investment to buying government debt and expect it to have "tiny, or nonexistent" effects on the real economy.
Posted by DeLong at April 29, 2004 10:35 PM | TrackBack | | Other weblogs commenting on this postWell there is one potential benefit of the alternative policy regime: if the debt had been higher and there had been a large deficit in 2000 the current administration probably wouldn't have been able to run up so much more debt after that. Of course, I don't think that is the benefit Samuelson had in mind...
Posted by: Ravi Nanavati on April 30, 2004 12:03 AMI feel like you must have deleted the last graf of your post, which I imagine went something like: "And screw, may I add, you."
Posted by: Chris Marcil on April 30, 2004 12:14 AMBrad writes: I cannot imagine who Samuelson thinks he is fooling in implicitly claiming that such swings in the federal debt would not have had powerful impacts on investment in the short and medium run, and on the pace of economic growth in the medium and the long run.
Samuelson is on the Washington Post editorial board and has been credited with helping to push the Post toward being a supporter and apologist for the Bush administration. This looks like a warm up for Post editorials that Bush's economic policies are not really harming the country.
Posted by: waldtest on April 30, 2004 12:45 AMSo, Samuelson is saying that the Reaganauts were wrong about the deficit? I don't buy it. Am I the only Republican deficit hawk left posting on this board?
Posted by: Steven Rogers on April 30, 2004 12:52 AMEconomists Gone Wild! Spring Break 2004!
Posted by: pat on April 30, 2004 01:19 AMIt's not incomprehensible. The editor responsible for book reviews is Leon Wieseltier, someone who:
1) Knows nothing about economics or policy.
2) Is a critic of Clinton's foreign policy and a supporter of Bush's foreign policy (though not necessarily of Bush himself).
3) Is a curmudgeon/ reactionary of the TNR school.
4) Is a social climbing egomaniac.
Posted by: Opinionator on April 30, 2004 04:19 AM"Republican deficit hawk left posting on this board?"
Posted by Steven Rogers at April 30, 2004 12:52 AM
Steven, try 'in the country'. I'm afraid that you'll have to report to the museum now, to be preserved for posterity :)
Posted by: Barry on April 30, 2004 04:40 AM"the emergence of a budget surplus in 1998--the first since 1969--stemmed mainly from"
The 1984 increase in FICA tax when we went from a pay as you go system to a pay in advance system.
From 1984 through 2002 $1.7 trillion more Social Security taxes (95% from paychecks of bottom 95% incomes) were collected than distributed in Social Security benefits.
Excess Social Security taxes collected were recognized as part of the total US budget. Hence the “budget surplus” which existed in late ‘90s (during the same ’84 –’02 timeframe benefits rose by 50% while Social Security taxes doubled)
Promises of “lockbox” to protect the excess Social Security taxes during & after 2000 campaign were made and broken.
June 7, 2001 Bush signs a tax cut package lowering top rate of income tax and eliminating the estate tax ($1.3 trillion tax cut; 50% going to the richest 1%)
June 19, 2001 (a mere 12 days later) Treasury Secretary Paul O’Neill in a speech to the Coalition for American Financial Security at the World Trade Center in New York City states “ I come to you as managing trustee of Social Security……Today we have no assets in the trust fund.”
Call me crazy, but shouldn't a publication like TNR be able to hire, say, an actual economist instead of a hack journalist with a stupid-looking moustache?
Just wondering.
Posted by: asdf on April 30, 2004 05:59 AMWhat is a Republican deficit hawk? I didn't know there was any such thing. Haven't all Republicans since Ronald Reagan been in favor of huge tax cuts and running up huge deficits?
As for GHWBush and Clinton cutting defense spending, one has to ask "compared to what?". Reagan DOUBLED defense spending from about $158 billion in 1981 to $304 billion in 1989. That money was neither spent wisely nor sustainable. There were huge commitments to procurements that did not make sense. 600 ship navy, etc.
The low point for Clinton defense spending was still $266 Billion in 1996 (cbo) and that is still $100 billion over 1981 levels. By 2001, Clinton was spending more on defense ($306 Billion) than Reagan ever spent and eclipsed every GHW defense budget except the 1991 budget that included Gulf War I costs (back when the costs of war were added to the defense budget).
2003 defense spending was over $400 Billion and that does not include the costs of Iraq. We are quickly racing to $500 Billion. We have returned to traditional Republican fiscal policy. Spend more money on defense procurements than is sustainable. Lower revenue collection to below 1999 levels and borrow huge amounts of money.
How can giving the investor class huge tax breaks, and then having to sell bonds to cover $1.5 Trillion in deficit possibly stimulate the economy or be good fiscal policy?
Posted by: bakho on April 30, 2004 06:20 AMBakho, you beat me to the punch on the subject of defense expenditures compared to what, so let me add one further point to your comment: in constant dollars, the average Clinton defense budget was higher than the average Cold War defense budget (1946-1991).
It does seem to me that, once upon a time, Samuelson wasn't a complete idiot (although i could be wrong) but now he's a complete idiot. I commend opinionator for getting to the heart of why a complete idiot was allowed to use the new republic to trash the most successful economic policies, certainly, of the last 40 years (and maybe longer).
Steven Rogers, i keep hunting for honest conservatives. It appears that you are among them. Congratulations.
Posted by: howard on April 30, 2004 07:00 AMI started reading the piece before I realized who was writing. Then I went back to look, and it was Samuleson. I quit right there. Samuleson comes from the Jane Galt (or perhaps the reverse) school of objective analysis: all politicians are stupid and dishonest and silly, but the Democrats always seem to be especially so.
Posted by: Amitava Mazumdar on April 30, 2004 07:09 AMBrad:
You are trying to use a factual argument against pure propaganda. They aren't interested in what is correct or reasonable.
Who does Samuelson think he's fooling? You should meet a few of my friends who believe every word of his type of "historical accounting". Samuelson is writing canon fodder for Limbaugh and co. to spew endlessly as truth and fact.
The goal is not to be honest - it is to trash all things not-Republican!
Posted by: Mark S. on April 30, 2004 07:13 AMLongshanks, I'm not trying to deny the enormously depressing fiscal consequences of the aging of the Baby Boomers, Bush's deficits, etc. But if I were to come to you and say, "I have $600,000 in government bonds in my retirement account," would you tell me, "My God, you have no assets in your retirement account"?
The Social Security trust fund has more than a trillion dollars in government bonds. Do you really think it's broke?
Posted by: Steve Carr on April 30, 2004 08:03 AMRead elsewhere:
The pursuit of "balance" with, by necessity, create imbalance -- because *something* is true.
One must wonder about people like Samuelson who claim that growth is totally exogenous. If that's so, as he seems to claim (when it suits his purposes: i.e. during the Clinton administration), then why bother worrying about good economic policy at all? Government can't do anything about it anyway, so might as well just pursue other, socially beneficial ends. If you actually think about where Samuelson's argument leads, it's a huge boon for the ideoligically socialist left: after all, policy can't effect the economy, and the pie cannot be made higher, as Bush might put it, so the best thing in the circumstances would be to focus on distribution. Somehow, though, I don't think that Samuelson would accept that interpretation.
Posted by: Julian Elson on April 30, 2004 08:17 AMIt's much more parsimonious to assume TNR stupidity and then try to explain the occasional good piece. The good pieces always baffle me.
Kerry gets a lot of flak for having acquired a fortune via his schlong, but Peretz reinvested his dirty schlong money in the media and multiplied it a hundredfold. Along the way he abased and degraded a whole generation of American political journalists, achieving corruption-effects normally thought attainable only by large corporate organizations.
Except for Krauthammer, it's wrong to assume that they had to turn out that way. It's heart-rending to think that even Sullivan, Kaus, Kelly, and the rest of them once had mothers who loved them.
I wonder if the schlong features in Peretz's hiring interviews, the way LBJ's sometimes did when he was trying to achieve alpha-male dominance.
(/gross snarkiness).
Posted by: Zizka on April 30, 2004 08:55 AMBrad,
You could have grad students filling entire libraries documenting everything Robert Samuelson gets wrong: http://plec.blogspot.com/archives/2004_03_28_plec_archive.html#108075470918787966
Posted by: Adam on April 30, 2004 08:56 AMIf growth is totally exogenous as Samuelson frequently claims, one must wonder how the real gdp of earth has increased over time. I think Mark S has it right in an earlier comment.
If growth is totally exogenous as Samuelson frequently claims, one must wonder how the real gdp of earth has increased over time. I think Mark S has it right in an earlier comment.
Sorry for the double post.
Steven Rogers you are going to have to admitt someday that the Republican party you joined has been hijacked by a bunch of wing nuts and the party you believe in no longer exist.
What are you, and the other responsible Republicans going to do when you finally admitt the truth about your party?
Posted by: spencer on April 30, 2004 09:20 AMSteve Carr
I'm not trying to deny that we got left a “Thanks sucker, here’s an IOU” note.
Maybe the enormously depressing fiscal consequences of the aging of the Baby Boomers, Bush's deficits, etc. would be less depressing if the money had been invested in increasing future productivity instead of a give away to the political donor class.
Can we go back to the pay as you go system now? It obvious the Republicans cannot keep their hands out of the cookie jar.
Of course, the Samuelson answer could well be that only microeconomic policy matters. Thus while the overall fiscal balance is an accident relative to fiscal policy, it is not an accident as regards regulation, the incidence of taxation, the rule of law and so forth. Not that this argument is correct, but it is available.
Posted by: K Harris on April 30, 2004 09:45 AM"The pursuit of "balance" with, by necessity, create imbalance -- because *something* is true.
Posted by MattB"
I'm afraid, Matt, this bit of apparent "common-sense" is totally wrong in the real world. It is only correct in extremely simple one or two dimensional problems. In all higher dimensional problems, perspective is a complicating factor because you can only see what you're looking at.
I refer you to Plato's PARABLE OF THE CAVE.
Another metaphor is the cylinder. If you look at it from its' axis you see a circle, if you look at it from a point midway between the ends and perpendicular to the axis, you see a rectangle. WHO'S RIGHT? WHO'S WRONG? Who's lying, stupid, an idiot or immoral?
As a person who's formal education was mainly limited to science and mathematics, I'm amazed that you guys consider your "economics" a science.
I never heard physicists with different points of view calling each other stupid liers. Einstein and Heisenberg never disparaged each other. In fact, the holy grail of modern physics is to somehow UNIFY their two totaly different physicses - General Relativity and Quantum Mechanics.
When oh when will economics become a real science?
ONLY WHEN THE LEFT AND RIGHT WORK TOGETHER.
Adrian the physical economist
I'm beginning to despair over whether the denizens of this blog (and all the other left-wing economists and politicians) will ever be serious about doing what's best for the USA and the world.
It's become clear to me, today, that your lust for political power has surpassed your commitment to understanding the truth and doing what's best for our fellow citizens.
If you guys insist on denigrating those of us who don't share your very limited perspective, then there is really no hope in our world for a responsible and respectful scientific enquiry in how to best improve the lives of our species.
Adrian
Posted by: Adrian Spidle on April 30, 2004 10:28 AMYa know, at first, when he began showing up, i thought that Adrian Spidle was a typical victim of the right-wing media.
Then i began to think that he was part of the emerging new class of performance artists (Ricky Vandal being another) that satirizes the right-wing mind.
But now i'm convinced that he's merely a crank.
Adrian, to try and address what might be the core of your comments: the issue isn't left and right.
The issue is honest and dishonest.
Dishonest folks like Samuelson make stuff up that fits the argument they want to make; there is no reason to listen to them.
Honest economists of the left and right may disagree over the appropriate size of government, or the best tax system, or whether the physical and economic problems of old-age should be solved entirely through the market system, but they don't disagree about facts: they don't overstate the "decline" in Clinton defense spending; they don't pretend that deficits don't matter; they don't use investment bubbles as evidence of anything other than the manic-depressive nature of markets.
Posted by: howard on April 30, 2004 10:40 AM"but they don't disagree about facts: they don't overstate the "decline" in Clinton defense spending; they don't pretend that deficits don't matter; they don't use investment bubbles as evidence of anything other than the manic-depressive nature of markets.
Posted by howard"
Tell me howard, you have a degree in Political Science from some state college and you've never passed a math or science course, right?
There is no other way that you could confuse what you think are "facts" with the real world. Are processes facts? Are models facts?
Give me a break,
Adrian who, unlike you, can tell a hamburger from a picture of a hamburger
Posted by: Adrian Spidle on April 30, 2004 10:49 AMAnybody notice any content in Adrian's post? It's all meta, and basically just highfalutin insults.
Guess what, Adrian? We don't like you either, and wish you'd go away. And what's your thing about state colleges, anyway? You flunk out of Berkeley or something?
Yes, I'm aware that this post of mine is meta-meta. And your response will be meta-meta-meta. Let's see if we can get it up to Meta Level Seventeen, in order to make sure that the topic under discussion (Samuelson's economics) is never mentioned again.
The performance-art speculation has merit.
Posted by: Zizka on April 30, 2004 11:22 AM"What are you, and the other responsible Republicans going to do when you finally admitt the truth about your party?
Posted by spencer at April 30, 2004 09:20 AM"
Go Independent, probably.
Adrian: OK, so do lyou think that Bush's tax cuts are justifiable in a time of war? I don't.
"I never heard physicists with different points of view calling each other stupid liers."
Heh. Then you must never have read anything from the trenches of a significant disagreement over theoretical physics.
Adrian, all I've seen from you is declarations that everyone else is stupid and you're the only one who's right, supplemented by the occasional more specific ad hominem attack against anyone who disagrees with you. If you want to be a "real scientist," you have to propose hypotheses that can be tested against the real world and proven or disproven.
But if you just want to be a crank, carry on, you're doing a great job.
"Adrian: OK, so do lyou think that Bush's tax cuts are justifiable in a time of war? I don't.
Posted by Steven Rogers"
Good question. The answer depends on where you think the inflection point in the Laffer curve is. I think the cuts are justified because I think we are still below the point where further reductions in marginal rates will reduce revenues and therefore I believe the cuts will stimulate the economy AND increase revenues.
Adrian the commonsense economist
Adrian
Posted by: Adrian Spidle on April 30, 2004 11:34 AMOn my site, I've got graphs of some of the relevant data.
Federal outlays as a percentage of GDP:
http://www.truthandpolitics.org/outlays-per-gdp.php#graph
Components of discretionary spending as percent of GDP, 1962--2003:
http://www.truthandpolitics.org/comp-fed-outlays.php#graph-discretionary
waldtest wrote, "Samuelson is on the Washington Post editorial board and has been credited with helping to push the Post toward being a supporter and apologist for the Bush administration."
But the _Post_, editorially, moved to the right a long time ago (before or during the Reagan administration).
bakho wrote, "Reagan DOUBLED defense spending from about $158 billion in 1981 to $304 billion in 1989. That money was neither spent wisely nor sustainable. There were huge commitments to procurements that did not make sense. 600 ship navy, etc."
I agree with you here, though the pro-military-rat hole folks will point out that military spending increased only from 5.1% to 5.6% GDP in the time period you cite.
Posted by: liberal on April 30, 2004 01:28 PM"On my site, I've got graphs of some of the relevant data...
Posted by liberal"
WOW, what a great bunch of data. Do you have a chart/table of Federal Revenues and marginal tax rate changes?
Adrian
Posted by: Adrian Spidle on April 30, 2004 01:31 PM"I agree with you here, though the pro-military-rat hole folks will point out that military spending increased only from 5.1% to 5.6% GDP in the time period you cite.
Posted by liberal"
Interesting. Many of us righties think money paid out in "social services" is going down a rat hole.
This begs the question - Is protecting the lives of all of our citizens from foreign enemies more or less important than providing employment for government employees and contractors while fostering dependence on federal largesse for our least competent citizens.
Hmmm. Maybe we can agree that neither priority should get 0% or 100% of our money, so the political question is what amount should be spent on each priority.
Adrian
Posted by: Adrian Spidle on April 30, 2004 01:42 PMBrad You are too kind to Samuelson. He writes "Bigger budget deficits can also crowd out consumer spending". This shows that he is totally clueless. Mr Samuelson does not seem to have heard of national income accounts. It would be reasonable to say that government consumption could crowd out consumer spending and not investment. It is totally idiotic to think that higher deficits imply either lower consumption or lower investment or both.
He could have argued Ricardian equivalence and claimed that deficits have no effect on anything, but he clearly hasn't heard of this new idea.
My question is would anyone print his blatherings if he didn't have Paul Samuelson's last name ?
To Adrian, there have been very heated debates in physics between, for example, Galileo and Barberini (the grand inquisitor) or between Einstein and the (forgotten) proponents of Arian physics. In fact, not far from where I type, a disagreement about physics (ok astronomy) got really heated when Giordano Bruno was burned at the stake.
Since you are, proudly, unschooled in economics, you don't realise that someone who is capable of writing "Bigger budget deficits can also crowd out consumer spending" is playing with words whose meanings escape him entirely. Samuelson is an economist to the same extent that Barberini (a very decent man) was a physicist.
Posted by: Robert Waldmann on April 30, 2004 02:01 PMAdrian: "The answer depends on where you think the inflection point in the Laffer curve is."
You mean the maximum point, not the inflection point.
And if we were on the right side of the Laffer Curve, shouldn't Bush 41 & Clinton's tax increases have lowered revenues?
Posted by: fling93 on April 30, 2004 03:15 PMAdrian, how sweet - you want to know about my alma mater? I graduated summa cum laude from one of the Little Three, in American History, which i chose over economics as a major, and i've always done quite well in math, as a matter of fact, thanks for asking.
Now, as Zizka noted, do you have any actual facts to oblige us with? When I note - as Brad noted - that Samuelson mis-represents the level of spending cut that the Clinton administration (and congress) made to defense spending, that's an empirical matter.
And by facts, i mean facts, not Laffer Curve babble, which i believe any qualified state college graduate in Poli Sci would know better than to cite as a meaningful response to the question of whether it's legitimate to conduct the Iraq War on a credit card, and run up bills (with interest) that we will largely have to repay to Chinese and Japanese bankers for the next 10-30 years.
That, too, is a fact and not a photograph.
Posted by: howard on April 30, 2004 03:21 PMFellow commenters, been there, I know it's fun for a while but try refraining from feeding the trols. Responding to a substantive comment from the other side is one (useful and interesting) thing but draging down this blog into irrelevance is another. Thank you. And I am not lecturing you, again, been there...
Posted by: Jean-Philippe Stijns on April 30, 2004 04:02 PMLiberal,
There was a lot of questionable defense spending under Reagan, but I think the 600 ship Navy was a good idea, what with the USA being a maritime nation and all.
Posted by: Steven Rogers on April 30, 2004 04:29 PMAdrian Spidle wrote, "WOW, what a great bunch of data. Do you have a chart/table of Federal Revenues and marginal tax rate changes?"
Federal revenues: that's on the "to do" list.
*Top* marginal tax rates:
http://www.truthandpolitics.org/top-rates.php#graph
Steven Rodgers wrote, "There was a lot of questionable defense spending under Reagan, but I think the 600 ship Navy was a good idea, what with the USA being a maritime nation and all."
Well, you should give credit to bakho for making the claim, not me (though I agree with it).
You need stronger evidence than that to claim that the US needed a 600 ship navy.
The journalist Robert Samuelson could not possibly know what he is talking about here. But people will read him as though he has some sort of authority on this issue. (At work yesterday some colleagues were talking about "Samuelson's" view on the budget.) So it is not a waste of time to point out the journalist's many mistakes. But it must be tiring.
I have a few questions for Dr. Delong or any other reader here. Do you think efforts to point out the obvious foolishness of people like Robert Samuelson have much political effect? Is your typical swing voter or decision maker influenced by such arguments? Or do people learn only by experience? Will we need to have 10% mortgage yields and untimely steep tax hikes before people realize that sustainable fiscal policy is a good idea in most seasons? My questions are serious. I don't mean them only as rhetoric.
Sorry for the mis-attribution. How about the size of the Soviet navy as a factor for determining the power of the US Navy? Not the paper tiger that the Russian navy is today, nosirreebob.
Another prime factor for determining the required strength of the USN might be a consideration of the unholy hell raised by the US Navy and associated privaters against British Commerce during the War of 1812. For that matter, the havoc wrought by Confederate commerce raiders against the US Merchant Marine during the Rich Man's War And the Poor Man's Fight?
For a maritime nation, "too much" navy is a concept that does still exist, but the threshold is quite a bit higher than most would think.
Posted by: Steven Rogers on May 1, 2004 06:52 AMSteve Rogers wrote, "Sorry for the mis-attribution. How about the size of the Soviet navy as a factor for determining the power of the US Navy? Not the paper tiger that the Russian navy is today, nosirreebob."
What was Soviet navy threat? My impression is that all sorts of estimates of Soviet military strength were exaggerated during the Cold War. Furthermore, it's not like the Soviets could undertake a naval action against our interests even if the local naval force ratio favored them, since most such actions would be actions of war and thus would quickly no longer be localized.
"Another prime factor for determining the required strength of the USN might be a consideration of the unholy hell raised by the US Navy and associated privaters against British Commerce during the War of 1812. For that matter, the havoc wrought by Confederate commerce raiders against the US Merchant Marine during the Rich Man's War And the Poor Man's Fight?"
Uh, that was how many years ago, and in a context predating modern communication and the arrival of air power as an important feature of modern naval warfare?
Posted by: liberal on May 1, 2004 07:35 AMHow about the context of asymmetrical warfare? Which essentially is the sort of naval war the US fought against the British in 1812-1814 and the CSA fought against the USA in 1861-1865. Or submarine warfare in general for that matter.
As to the threat, who knows for sure, there were a couple of scandals in the 1990s about American military personnel selling US navy coees to the Soviets. That sort of thing evens material odds quite a bit.
Note that I am not saying that every penny Reagan spent of the military was a penny well spent, but the spending on the USN is easier to defend than most.
Posted by: Steven rogers on May 1, 2004 01:38 PM1. I'm not an economist but I do a lot of lay reading, especially econ policy history. I didn't really pay attention to Samuelson's economic "argument" after the first page, where it was obvious the article is a political piece packaged as economic policy. The dead give is the bizzare standard he sets for a Treasury Secretary: Rubin's lack of "original" economic ideas beyond the "bland standbys of curbing budget deficits....". This standard makes sense only if Samuelson is promoting himself as a candidate for Bush's next guy at Treasury, or if this is a key set-up for the author's political agenda.
After that I didn't waste any effort trying to make sense of his "economic arguments. Thanks to Prof DeLong and the non-troll-related commenters above for doing my work for me.
A couple of comments on the "political agenda" in Samuelson's article. Samuelson seems to have two objectives: to make a personal attack on Clinton through dismantling his most positive "legacy" of economic performance and fiscal responsibility; and to ride his own hobby-horse de jour, the approaching armegeddon of the boomers' retirement.
Clinton-attackers come in at least 57 varieties. Samuelson in this piece comes on like the jilted-lover type -- ya could'a been great big fella, if you had just used listened to me and not (choose one option) (a) been governed by polls; (b) been snake-bit by Health Care so refused to tackle another hot button issue; (c) been entranced by your "legacy" and let yourself get suckered by the Israelis and Palestinians; or (d) learned to control your baser urges. Samuelson spends quite a bit of space making clear to us that he rejects (d). He also clears Rubin of any blame for Clinton's lack of action on the pending crisis -- other than that Rubin is an intellectual lightweight with no "original ideas." He wants us to conclude with him that Clinton's betrayal of the country's future was a deliberate personal failure of Clinton's.
2. Re the 600 ship navy, it was a catchy phrase for marketing, but actually fairly misleading. The proposed fleet upgrading reflected technological changes that didn't fit in a "maritime naton" model inherited from the 19th century, when the ranking of nations' navies on the basis of number of vessels and tonnage was clearly more meaningful than today.
Compared to a land-locked nation (or one with a limited number of year-round ports), a maritime nation has a much wider set of options as to how it allocates functions among land, sea and air capacities. Not that there aren't differences between a ballistic missile fired from a Minute Man silo and one fired from a submarine, but the really important thing to count relative to potential opponents is number of missles, not number of submarines. The Minute Man silo and the submarine are alternative weapons delivery systems, and we can choose to have more of one or the other based on factors that really aren't "naval" per se, such as range, size of warhead, survivability, ongoing cost of operation, frequency required to upgrade or replace, etc. Another important function that could not have been contemplated in earlier maritime models is marrying the (relative) mobility of sea-based systems with the stand-off weapons (cruise, Tomahawk) the US developed initially for the Eurpoean theatre.
The main similarities to a traditional maritime model are the functions of (a) patrol/interdiction of ports and sea lanes, so for that purpose the US Coast Guard must be factored into the mix, (b) force projection and (c) mobile command and control. Force projection and C&C, like weapons delivery, can be achieved through a mix of land (US bases, mostly air, in other countries ), naval (carriers, transport ships, amphibious assault, hospitals, etc.) and air (e.g. transport planes, J-stars). The US has had a wider range of options than other major military powers because its economic and political power has allowed it to establish bases in key parts of the world. One of the outcomes of the conflicts in Afghanistan and Iraq may be to place a larger emphasis on naval capacity for force projection and C&C by comparison to land bases.
I was under the impression that the "600 ship Navy" catchphrase came about because the Reagan administration decided that the USN should have 15 Aircraft Carriers. Since USN doctrine stipulated that each CV needed a number of supporting submarines, destroyers and cruisers totaling in the high thirties, the resulting number was rounded to 600 to create said nifty catchphrase.
Posted by: Steven Rogers on May 1, 2004 04:06 PM
Steven rogers wrote, "How about the context of asymmetrical warfare? Which essentially is the sort of naval war the US fought against the British in 1812-1814 and the CSA fought against the USA in 1861-1865. Or submarine warfare in general for that matter."
Sure. And you think that the Soviet submarine force was any match for the USN?
The *real* asymmetry was in the quality of hardware and training between Western military forces and Warsaw Pact forces. An asymmetry in our favor.
"I was under the impression that the '600 ship Navy' catchphrase came about because the Reagan administration decided that the USN should have 15 Aircraft Carriers."
Exactly my point. Why was this decision made, and what were the comparable Soviet forces?
Posted by: liberal on May 2, 2004 08:15 AMnadezhda wrote, "A couple of comments on the "political agenda" in Samuelson's article. Samuelson seems to have two objectives: to make a personal attack on Clinton through dismantling his most positive "legacy" of economic performance and fiscal responsibility; and to ride his own hobby-horse de jour, the approaching armegeddon of the boomers' retirement."
It's good that you mention the second objective. I've been reading Samuelson for a couple of years in the Washington Post, and as you point out, that's one of his main hobby-horses. His other is a fear that progressive taxation will lead to a big chunk of voters voting themselves benefits without having to pay the costs.
What I find so despicably ignorant about Samuelson's attitudes about government transfers and progressive taxation is that he overlooks the sizable *indirect* benefits that the rich obtain from government. My impression is that the classical liberals, on the other hand, were well aware of these advantages.
Posted by: liberal on May 2, 2004 08:22 AMDid they have to be a match to carry out a sea denial campaign as opposed to sea control campaign? After all, the 1812 USN and the ACW CSN were no match for their opponents, but the damage they inflicted was quite high.
As to the 15 carriers decision, heh. James F. Dunnigan points out tht in the days when the battleship was the capital ship of choice, the USN also regarded 15 as the magic number of prime fleet units. So how many CVs did the USN really need during the Cold war? Damn good question.
Posted by: Steven Rogers on May 2, 2004 01:12 PMSteven Rogers wrote, "Did they have to be a match to carry out a sea denial campaign as opposed to sea control campaign? After all, the 1812 USN and the ACW CSN were no match for their opponents, but the damage they inflicted was quite high."
(a) Soviet submarines were undoubtably relatively primitive.
(b) A "sea denial campaign" sounds like an act of war. The Soviets would be well aware of the consequences.
"As to the 15 carriers decision, heh. James F. Dunnigan points out tht in the days when the battleship was the capital ship of choice, the USN also regarded 15 as the magic number of prime fleet units. So how many CVs did the USN really need during the Cold war? Damn good question."
There's no reason to believe it's 15. How many did the Soviets have? It's funny how social spending is expected to be held to the most stringent cost-benefit standards, and military spending is held to no cost-benefit standards.
Posted by: liberal on May 3, 2004 05:45 AM
No matter who should get credit for the massive "clinton surpluses", any progressive must condemn clinton's lack of vision. W/ such surpluse, such an opportunity to start working on America's many many problems. But not one meaningful idea from Clinton or the democrats. The idea vacuum was predictably filled by the republicans and thus the massive tax cuts for the wealthy. Kerry seems to be following the same vision. Might as well vote Nadeer.
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There's no reason to believe it's 15. How many did the Soviets have? It's funny how social spending is expected to be held to the most stringent cost-benefit standards, and military spending is held to no cost-benefit standards.
This is false -- military spending is subject to cost-benefit analysis. Programs are evaluated, requirements are generated, and projects which don't pass muster are defunded or canceled. Studies are done to determine what the force structure of our navy (and other services) should be. You might disagree with the assumptions that go into the studies, but they are done and there is an analytical basis for the decisions that are made.
You're missing one important componant: The debt as a percentage of GNP had been falling since 1987.
As for Rubin's contribution: He was certainly not a vocal supporter of Clinton's free trade policies, the one area where Clinton used political capital and acted contrary to the wishes of his core supporters. You've certainly got to give Clinton credit for acting like a statesman there.
Rubin was part of the group that pushed through the mid-term tax hikes that slowed economic growth in the early 90s in the name of deficit reduction- despite the fact that the deficit was already shrinking.
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