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November 29, 2005

Glenn Hubbard Is Off Message...

Mark Thoma quotes from a debate between Glenn Hubbard and Bob Reich, which reveals that Glenn Hubbard is no longer under Bush message discipline. Glenn says (a) that Bush's prescription drug program without a funding source was "unwise," and (b) that "we will have to raise taxes" if the rate of growth of spending on health care and other entitlement programs isn't greatly reduced.

Economist's View: Guns, Butter, and Retired Boomers: MR. HUBBARD: The problem is not the next three or even five years; the problem is the long-run fiscal picture.... [T]he Medicare expansion without substantial reform of the system was unwise fiscal policy. The current Social Security and Medicare systems are on an unsustainable path.... If we cannot bring these deficits... under control, we will have to raise taxes.... I believe we should and will scale back the growth in the entitlement programs that are the clear and present fiscal danger. I would like to see the government spend more on basic research and on training (because our employment policies are outdated) -- but these $$$ are not large in the context of the overall federal budget.... [T]he real area for spending restraint is the entitlement programs.... I couldn't agree with you more on Medicare being the more significant problem and that reform of health care markets is central....

Welcome back to the reality-based community.

Posted by DeLong at 01:20 PM | Comments (0) | TrackBack

Kinsley vs. Kinsley, Round II

I was surprised to find in my inbox Michael Kinsley, writing:


Seems to me that you wildly misinterpret both of the columns that you say demonstrate my intellectual inconsistency. The column a few months ago about the Downing Street Memo didn’t reject the possibility that Bush & Co had “fixed the intelligence” in order to justify a war they were already committed to. It said that this particular document (the DSM) was not the smoking gun that proved the case. Tthe column yesterday did not assert that Bush & Co had fixed, etc etc etc. It said that the Bush administration now concedes that much of the intelligence used was wrong, and that this undermines the justification for the war whether or not the administration “fixed” it.

Where is the contradiction?

Ps Could you post this on your site? (And by all means reply if you wish.) Thanks.

Let's just take Kinsley's first claim: that his "column a few months ago about the Downing Street Memo didn't reject the possibility that Bush & Co had 'fixed the intelligence' in order to justify a war they were already committed to." Here are the opening two paragraphs of that column:

No Smoking Gun : After about the 200th e-mail from a stranger demanding that I cease my personal coverup of something called the Downing Street Memo, I decided to read it. It's all over the blogosphere and Air America, the left-wing talk radio network: This is the smoking gun of the Iraq war. It is proof positive that President Bush was determined to invade Iraq the year before he did so. The whole "weapons of mass destruction" concern was phony from the start, and the drama about inspections was just kabuki: going through the motions.

Although it is flattering to be thought personally responsible for allowing a proven war criminal to remain in office, in the end I don't buy the fuss. Nevertheless, I am enjoying it, as an encouraging sign of the revival of the left. Developing a paranoid theory and promoting it to the very edge of national respectability takes a certain amount of ideological self-confidence. It takes a critical mass of citizens with extreme views and the time and energy to obsess about them. It takes a promotional infrastructure and the widely shared self-discipline to settle on a story line, disseminate it and stick to it.

Posted by DeLong at 01:20 PM | Comments (0) | TrackBack

November 28, 2005

Markets in Everything: Textbook Desk Copies

It's Marginal Revolution that specializes in "markets in everything." But I want to join in.

I was just quizzing the guy wandering Evans Hall buying "excess" textbooks from professors. He ships them to Barnes and Noble in Missouri, which then distributes them as "used" to college bookstores. He does about 3000 books a year, he says--working six hours a day forty weeks a year.

The college bookstores sell the textbooks at $65 each. They have next to no value sitting unused in my office. That's $65 x $3000 = $195,000 of value created a year, of which (if the $25 a book I get is typical) $75,000 goes to professors, roughly $15,000 to shippers, leaving $100,000 to be split between him and Barnes and Noble--plus the consumer surplus going to the students.

A complete welfare analysis would have to take account as well of the effects on the new book market, with its large pockets of local monopoly power once a book has been adopted for a course. But I don't have any more time before my next committee meeting.

Posted by DeLong at 12:51 PM | Comments (0) | TrackBack

Military Analyst Martin van Creveld Calls for Bush's Impeachment

Martin van Creveld is really shrill!

Forward Newspaper Online: Costly Withdrawal Is the Price To Be Paid for a Foolish War By Martin van Creveld November 25, 2005: The question is no longer if American forces will be withdrawn, but how soon -- and at what cost.... Confronted by a demoralized army on the battlefield and by growing opposition at home, in 1969 the Nixon administration started withdrawing most of its troops in order to facilitate what it called the "Vietnamization" of the country.... [T]his is not a pleasant model to follow, but no other alternative appears in sight.

Whereas North Vietnam at least had a government with which it was possible to arrange a cease-fire, in Iraq the opponent consists of shadowy groups of terrorists with no central organization or command authority.... [S]imply abandoning equipment or handing it over to the Iraqis, as was done in Vietnam, is simply not an option.... [T]he new Iraqi army is less skilled, less cohesive and less loyal to its government than even the South Vietnamese army was.... Washington might just as well hand over its weapons directly to Abu Musab al-Zarqawi. Clearly, then, the thing to do is to forget about face-saving and conduct a classic withdrawal....

American forces will have to fall back on Baghdad. From Baghdad they will have to make their way to the southern port city of Basra, and from there back to Kuwait, where the whole misguided adventure began.... A withdrawal probably will require several months and incur a sizable number of casualties. As the pullout proceeds, Iraq almost certainly will sink into an all-out civil war from which it will take the country a long time to emerge -- if, indeed, it can do so at all. All this is inevitable and will take place whether George W. Bush, Dick Cheney, Donald Rumsfeld and Condoleezza Rice like it or not.... A continued military presence, made up of air, sea and a moderate number of ground forces, will be needed.

First and foremost, such a presence will be needed to counter Iran, which for two decades now has seen the United States as "the Great Satan." Tehran is certain to emerge as the biggest winner from the war -- a winner that in the not too distant future is likely to add nuclear warheads to the missiles it already has.... [A] divided, chaotic, government-less Iraq is very likely to become a hornets' nest. From it, a hundred mini-Zarqawis will spread all over the Middle East, conducting acts of sabotage and seeking to overthrow governments in Allah's name....

Maintaining an American security presence in the region.... will involve many complicated problems.... Such an endeavor, one would hope, will be handled by a team different from -- and more competent than -- the one presently in charge of the White House and Pentagon.

For misleading the American people, and launching the most foolish war since Emperor Augustus in 9 B.C sent his legions into Germany and lost them, Bush deserves to be impeached and, once he has been removed from office, put on trial along with the rest of the president's men. If convicted, they'll have plenty of time to mull over their sins.

Now this is, even by my standards, very shrill. Has Martin van Creveld simply caught an extreme case of the madness to which we have all succumbed as a result of the incompetence, malevolence, mendacity, and stupidity of George W. Bush and his administration? Or is van Creveld hearing things about the White House--through his own military-academic and Israeli-security networks--even more terrifying and devastating than I am hearing through my networks.

The Bush administration: worse than you can imagine, even after taking account of the fact that it is worse than you can imagine.

Posted by DeLong at 12:49 PM | Comments (0) | TrackBack

Just What Was Einstein's Theory of Relativity?

Steven Weinberg gives his view: arXiv:hep-th/0511037 v1 3 Nov 2005 UTTG-12-05

Living in the Multiverse: Opening Talk at the Symposium "Expectations of a Final Theory" at Trinity College, Cambridge, September 2, 2005; to be published in Universe or Multiverse?, ed. B. Carr (Cambridge University Press).

Steven Weinberg, Physics Department, University of Texas at Austin

Most advances in the history of science have been marked by discoveries about nature, but at certain turning points we have made discoveries about science itself. These discoveries lead to changes in how we score our work, in what we consider to be an acceptable theory.

For an example look back to a discovery made just one hundred years ago. As you recall, before 1905 there had been numerous unsuccessful efforts to detect changes in the speed of light due to the motion of the earth through the ether. Attempts were made by Fitzgerald, Lorentz, and others to construct a mathematical model of the electron (which was then conceived to be the chief constituent of all matter), that would explain how rulers contract when moving through the ether in just the right way to keep the apparent speed of light unchanged. Einstein instead offered a symmetry principle, which stated that not just the speed of light but all the laws of nature are unaffected by a transformation to a frame of reference in uniform motion. Lorentz grumbled that Einstein was simply assuming what he and others had been trying to prove. But history was on Einstein’s side. The 1905 Special Theory of Relativity was the beginning of a general acceptance of symmetry principles as a valid basis for physical theories.

This was how Special Relativity made a change in science itself. From one point of view, Special Relativity was no big thing — it just amounted to the replacement of one 10 parameter spacetime symmetry group, the Galileo group, with another 10 parameter group, the Lorentz group. But never before had a symmetry principle been taken as a legitimate hypothesis on which to base a physical theory...

Posted by DeLong at 12:47 PM | Comments (0) | TrackBack


A new and worthwhile find on the internet:

Nick Szabo's Home Page : Essays, Papers, and Concise Tutorials

Posted by DeLong at 12:46 PM | Comments (0) | TrackBack

Hilzoy of Obsidian Wings Writes About Princeton and Judge Alito

Hilzoy (Princeton '1981) points out just what Samuel Alito was being proud of when he was proud of his membership in the Concerned Alumni of Princeton:

Obsidian Wings: Alito And CAP :

The fact that Samuel Alito was a member of the Concerned Alumni of Princeton, and cited that fact on his 1985 job application, has been in the news recently; and it occurred to me that since I was a Princeton undergraduate (class of '81) while CAP was active, I might be able to provide some useful background on this one.

CAP is generally described as 'a conservative group'. But this is as misleading as calling the John Birch Society a 'conservative group' would be. There are lots of conservatives who are thoughtful and intelligent, and who have real intellectual integrity. Conservatives like this did not tend to join CAP. CAP was dedicated to finding outrages that it took to be caused by the horrible fact that women and minorities were being admitted to Princeton. The need to find outrages generally came first; any encounter with facts came later. For this reason, CAP tended to attract not conservatives per se, but the sort of conservative who is forever getting deeply hysterical about some perceived threat to a supposed previous golden age, who sees such threats everywhere, and who is willing to completely distort the truth in order to feed his (and it generally was 'his') obsessions.

(I mean: just ask yourself: what sort of person would devote time and energy to a group focussed entirely on combatting trends at his undergraduate institution, trends that the actual undergraduates of the time had no problem with? We used to wonder: don't these people have lives?)

CAP did a number of things to combat Princeton's slide into mediocrity and decadence, otherwise known as its decision to admit women and more than a token number of minorities. It published a magazine, Prospect, devoted to lurid stories about all that decadence and mediocrity and outraged editorials calling for a return to the halcyon days of the 1950s. These stories had the same relation to reality as the views of those fundamentalists who imagine that a life without Christ is necessarily composed of mindless and sordid sexual episodes, punctuated by periods in which one drugs oneself into a stupor, carried out in an attempt to avoid having to recognize one's own appalling inner emptiness: they were just plain false, and reveal more about the person who believes them than anything else. We used to read stories in Prospect aloud to one another for laughs. (CAP was very well funded, and copies of Prospect were everywhere.)

But CAP also did other things. The Daily Princetonian cites two:

"-- In 1973, CAP mailed a letter to parents of freshmen implying that their sons and daughters were living in "cohabitation," rather than simply coeducational dorms.

— In 1975, a CAP board member tried to disrupt Annual Giving by writing to alumni in the business community to consider whether their gifts were "being used to undermine, subvert, and otherwise discredit the very businesses which are helping fund private education.""

They really did mail letters to the parents of incoming freshman trashing the university, and they really did try to disrupt annual giving. These are serious things to do. About CAP's tactics generally, I agree with Stephen Dujack, who was Associate Editor of the Princeton Alumni Weekly during the period when I was an undergrad:

"So in 2005, we know that in 1985, Alito belonged to a group that was dedicated to pointlessly interfering with the functioning of a university because its student body had representative numbers of women and minorities, as required by law. A group which, for its entire existence, used as its only tactics dissembling and dirty tricks; the list above doesn't begin to do justice in describing the organization's destructiveness. A lot of people were hurt in the process. A great university was damaged."

CAP would have been just a destructive joke had it not been for what the joke was about. Princeton only started to admit women in 1969. Moreover, Princeton had traditionally been the school where Southerners who wanted their sons to get an ivy league education sent them. Why? Because for a long time Princeton did not admit blacks, and until (iirc) 1967, admitted them only in very, very small numbers:

"A significant development, more recently, concerned blacks and other minority groups. Although a few blacks studied privately with President Witherspoon as early as 1774, and although, beginning in the last quarter of the nineteenth century, black students occasionally earned University degrees, the first appreciable influx did not begin until the 1960s when the University adopted an active recruitment policy for minority students."

To understand CAP, you really have to understand that until the late 60s, the almost total absence of black students at Princeton was a feature, not a bug. It was one of the reasons people went there.

Consider, against this backdrop, the following quote:

""Prospect" was founded in October 1972 by the then-newly-formed CAP, which was co-chaired by Asa Bushnell '21 and Shelby Cullom Davis '30. The latter, who was the University's largest donor at the time, was a strong traditionalist, firmly opposed to the many of the new directions Princeton was taking, including coeducation.

He wrote in "Prospect": "May I recall, and with some nostalgia, my father's 50th reunion, a body of men, relatively homogenous in interests and backgrounds, who had known and liked each other over the years during which they had contributed much in spirit and substance to the greatness of Princeton," according to an account in "The Chosen," a book by Jerome Karabel on the history of admissions at Harvard, Yale and Princeton.

"I cannot envisage a similar happening in the future," Davis added, "with an undergraduate student population of approximately 40% women and minorities, such as the Administration has proposed." "


"An alumnus wrote in 1974 in CAP’s magazine that “We had trusted the admissions office to select young men who could and would become part of the great Princeton tradition. In my day, [Dean of Student Affairs] Andy Brown would have been called to task for his open love affair with minorities.”"

For a sense of Prospect's general level of discourse:

"People nowadays just don't seem to know their place," fretted a 1983 Prospect essay titled "In Defense of Elitism." "Everywhere one turns blacks and hispanics are demanding jobs simply because they're black and hispanic, the physically handicapped are trying to gain equal representation in professional sports, and homosexuals are demanding that government vouchsafe them the right to bear children."

About coeducation, try this

"T. Harding Jones, Alito’s classmate and CAP’s executive director in 1974 (two years after they graduated) told the New York Times that “Co-education has ruined the mystique and the camaraderies that used to exist. Princeton has now given into the fad of the moment, and I think it’s going to prove to be a very unfortunate thing.”"

And this:

"CAP supported a quota system to ensure that the vast majority of students would continue to be men. Asa Bushnell, then chairman of CAP, told the New York Times in 1974 that “Many Princeton graduates are unhappy over the fact that the administration has seen fit to abrogate the virtual guarantee that 800 [out of roughly 1,100] would continue to be the number of males in each freshman class.”"

And for those conservatives who oppose affirmative action on the grounds that we should pay no attention to gender or ethnicity:

"Another article published that same year bemoaned the fact that "the makeup of the Princeton student body has changed drastically for the worse" in recent years--Princeton had begun admitting women in 1969--and wondered aloud what might happen if the university adopted a "sex-blind" policy "removing limits on the number of women." In an unsuccessful effort to forestall this frightening development, the executive committee of CAP published a statement in December 1973 that affirmed unequivocally, "Concerned Alumni of Princeton opposes adoption of a sex-blind admission policy.""

CAP was not about opposing affirmative action. It supported quotas that favored white men. CAP was about opposing the presence of women and minorities at Princeton. Period. Moreover, its tactics were despicable. In retrospect, it was one of the first instances of what has now become a familiar pattern: an extremely well-funded organization dedicated to spreading lies about some opponent in an effort to force that opponent to change course through the sheer volume of vitriol and harassment that a lot of money can buy. Samuel Alito pointed with pride to his membership in CAP in 1985. What relevance this should have now is open to debate; I just wanted to clarify what exactly it was that he was proud to be a part of.

Posted by DeLong at 12:45 PM | Comments (0) | TrackBack

The Unfortunately Limited Influence of Clive Crook

One of the bad consequences of the high-cost low-circulation National Journal's placing its columnists behind a subscription wall is to greatly diminish the influence of Clive Crook, who I think may well be the most intelligent right-of-center writer about America today.

He has been very depressed this fall.

On the Bushies :

WEALTH OF NATIONS: Disenchanted With Politics? Who In The World Is Not? (11/18/2005): [T]he Bush administration continues to watch its approval ratings sink. In last week's elections, Republicans could be observed delicately distancing themselves.... You cannot help but wonder what so enfeebled an administration can achieve in its remaining three years....

Tony Blair is also in deep trouble.... The fact that so many of his own Labor members in Parliament were willing to rebel against him is telling: It means that they think he is on the way out, and sooner rather than later.

German politics is in a state of something close to paralysis... a coalition of the unwilling.... But America, Britain, and Germany all look fine compared with France.... Bush and Blair are both paying a heavy political price for the war. The failure to find weapons of mass destruction... and the costly, bungled execution of the postwar strategy, have bled support from both leaders. Each is tainted by the suspicion of dishonesty.... Both leaders' competence is called into question, too.... [T]he charge of incompetence certainly sticks, and if you go with that line, Iraq falls neatly into place. Next, add the Hurricane Katrina fiasco....

The encompassing theme, if there is one, is powerlessness. In all four countries, people feel that their governments are wrestling with issues that are beyond them.... There are worse things than weak government: Strong government dedicated to (or inadvertently serving) bad ends.... But these are not normal times. All four countries face enormous domestic challenges.... The world faces too many other challenges that will not wait... development... pandemic disease, on international trade and finance, on climate change... implacable enemies who will, one day soon, get their hands on WMD. One of the biggest costs of the misadventure in Iraq is that it has -- to some extent, as yet unknown -- inhibited and disarmed America and its friends in that life-or-death struggle....

The enfeeblement of the Bush administration is a setback not just for Americans but for everybody else as well -- except, of course, for those enemies of the West....

On Hurricane Katrina:

WEALTH OF NATIONS: An America I Never Expected To See (09/09/2005): I more or less made a career of defending American supremacy.... I admire the United States so much... that I am even willing to give the Bush administration a chance to explain itself -- a vanishingly rare thing in the part of the world I come from.... I stand before you this week, having followed events in New Orleans with mounting incredulity, a sad and disillusioned man.

I still find this epic of incompetence -- sustained, systemic, outrageous incompetence -- genuinely hard to believe. If you had told me that the flooding of the city would be followed by day after day of chaos, with officials at every level incapable of any effective action; if you had told me that an uncounted number of dead bodies would be floating in the street days after the levees were breached, while huge crowds of abandoned victims, filmed from helicopters, clamored for food and water, with not a police officer or a soldier or an emergency worker of any kind to be seen; if you had said that as the country watched all of this go on, and on, and on, the head of the Federal Emergency Management Agency should appear on television to tell open-mouthed news anchors how pleased he was that everything was going so well -- if you had described all of this to me ahead of time, I would have said you were crazy... in the United States? For heaven's sake, it simply could not happen....

And the more one watched and read and thought about this, the more perplexing it became. Because this was no hitherto-inconceivable catastrophe. It had been imagined, it had been foreseen, it had been predicted in detail. It had even been -- or so one supposes -- planned for....

The answer seems to be: sheer incompetence, before and after the storm, at every level of government -- local, state, and federal. I cannot accept that the blame lies solely with the Bush administration.... Everybody you might have expected to be in command -- the mayor, the governor, FEMA, the Department of Homeland Security, the White House -- seemed mainly concerned about offering a commentary on the poor performance of other agencies...

Posted by DeLong at 12:43 PM | Comments (0) | TrackBack

A Short Rant on MS Word

It is a truth universally acknowledged that Microsoft Word is still the worst-behaved program running under Mac OS X. (For some reason, Excel is much better behaved).

I was originally sent this back in June 2002:

Procrastinating Since 1979 Dan Hon's relationship with Microsoft Word, v. X, has taken a turn for the worse:

Date: Wed, 12 Jun 2002 10:48:45 +0100 
Subject: A short rant on the topic of MS Word 
From: Dan Hon dan@danhon.com 
To: Culture culture@busstop.org 
X-Mnemonic: [CULTURE:78453] 
 Seeing as MS Word ATLs and mini-rants appear to be in vogue...

A Short Rant Concerning Word v.X, or, A series of Heartfelt Pleas

  1. Please, Word v.X, do not consume up to 1gb of virtual memory--it is unbecoming of you as a jumped up word processor
  2. Please, Word v.X, do not protest that you cannot save the notes for my exam, for it shall not only vex me but cause much stress
  3. Please, Word v.X, an "Automatic Save" feature is only useful if it (a) saves and (b) saves automatically (I feel an element of predictability would not go amiss, at least when I click print, I don't get a wet fish thrown at me. Though I wouldn't put it past you, Word v.X)
  4. Please, Word v.X, when I mount a network share, actually notice that it and let me do something useful with it, such as saving or opening files (I realise that many things in Mac OS X are there just to look pretty, but I did not think that network shares were among those things)
  5. Please, Word v.X, proper use of your facilities should not require copying all of the text into the clipboard, shutting you down, waiting for five minutes until you rid my display of the Spinning Beachball of Death, re-opening you and then pasting text back in.

Thank you for listening, Word v.X.

I feel that today the customary prolonged screams, shouts of agony and frustration, banged tables, naming of eventually-saved files as "This Had Better Bloody Well Work So Help Me God" and quiet whimpers of pleading took far long to have their required effect.


Posted by DeLong at 12:42 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (Stumbling-and-Mumbling Eviscerates the Times)

It's nice to see that our economist cousins in the land of roast beef and plum pudding have eaten their wheaties this morning:

Stumbling and Mumbling: Degrading economic reporting : The Times confirms why I couldn't work for a conventional dead tree. It reports these figures (pdf), showing a fall in research and development spending as a "blow to Gordon Brown." Economic issues are thus subordinated to the worst soap opera in the country. There are two things that are offensive about this.

First, the figures could be a blow to all of us, because they might lead to slower economic growth generally.The link here is both causal and diagnostic. Lower R&D spending could cause slower technical progress, which is the main contributor to long-run GDP growth. And it could be diagnostic of slower growth, as it signifies that firms are pessimistic about the future.

Second, there are interesting questions here. Why is R&D spending falling when interest rates are low and corporate cash balances healthy? Have firms cut the productive or unproductive parts of R&D spending? Can they tell?

But the dead tree ignores these issues. All that matters to it is the fleeting convenience, or not, of some politician.

Posted by DeLong at 12:41 PM | Comments (0) | TrackBack

Kinsley vs. Kinsley

Last July Michael Kinsley said that the belief that the Bushies fixed the intelligence about Iraq to justify a previously-made policy decision to attack Iraq was a "paranoid theory":

No Smoking Gun : After about the 200th e-mail from a stranger demanding that I cease my personal coverup of something called the Downing Street Memo, I decided to read it.... I don't buy the fuss. Nevertheless, I am enjoying it.... Developing a paranoid theory and promoting it to the very edge of national respectability....

It's a report on a meeting of British Prime Minister Tony Blair and some aides... the head of British foreign intelligence (identified, John Le Carre-style, simply as "C")... reported that "Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But intelligence and facts were being fixed around the policy...."

There is no claim of even fourth-hand knowledge that [Bush] had actually declared this intention [to attack Iraq]. Even if "Washington" meant actual administration decision makers, rather than the usual freelance chatterboxes, C is saying only that these people believe that war is how events will play out.... [I]f "intelligence and facts were being fixed around the policy"... [that is] a scandal.... But C offered no specifics, or none that made it into the memo. Nor does the memo assert that actual decision makers had told him they were fixing the facts. Although the prose is not exactly crystalline, it seems to be saying only that "Washington" had reached that conclusion...

Today Kinsley changes his tune and says that the Bushies' arguments that intelligence was not fixed around the policy are transparently false:

The Phony War Against the Critics : [Cheney] hurling adjectives like an ape hurling coconuts.... "Dishonest." "Reprehensible." "Corrupt." "Shameless."... morally outraged.... Cheney and others insist that Bush couldn't possibly have misled anyone... everybody had assumed for years... that there were weapons of mass destruction in Iraq.... But this indignation is belied by Cheney's own remarks in the 2000 election.... Cheney was happy to agree with Bush that Saddam Hussein's possession of weapons of mass destruction would be a good enough reason to "take him out." But he did not assume that Hussein already had such weapons. And he certainly did not assume that this view was the general consensus. "We'll have to see if that happens," he said. "It's unfortunate we find ourselves in a position where we don't know for sure what might be transpiring inside Iraq. I certainly hope he's not regenerating that kind of capability."

If you're looking for revisionist history... [g]oogle up Cheney's bitter critique, in the 2000 campaign, of President Bill Clinton's military initiatives, specifically the need for more burden sharing by allies and a sharply defined "exit strategy." At the time, there were about 11,000 American troops in Bosnia and Kosovo, working alongside about 55,000 from allied countries. If only!...

Kinsley-of-the-summer is calling Kinsley-of-the-fall paranoid. Kinsley-of-the-fall is calling Kinsley-of-the-summer hopelessly gullible. All this is fine--crossing the aisle when evidence convinces you that your previous position is wrong is a good thing.

But may I ask for a little self-knowledge? It's important that you explain not only why but that you have crossed the aisle. As adjectives go, Kinsley's "paranoid" is in the same league as Cheney's "dishonest" and "shameless." Kinsley would be more credible today if he would apologize--to Mark Danner http://www.nybooks.com/articles/18131 and others--for having signed up last summer as an enthusiastic coconut-flinging wingsoldier in Richard Cheney's circular firing squad of flying attack monkeys.

Posted by DeLong at 12:39 PM | Comments (0) | TrackBack

Marginal Revolution Looks at Musical Protectionism in Europe

European labor and musical protectionism:

Marginal Revolution: Musical protectionism, continued :

The French police are arresting symphony orchestra musicians from Eastern Europe. Why?

The reason for importing musicians from the east to play in countries like France is simple: money. "The tour would've been too expensive with French musicians, so there wouldn't have been a tour at all," Mr. Miller argues. While a company like the one conducted by Mr. Miller might charge about €15,000 ($20,055) for a show, a French orchestra would probably cost three times that amount, Mr. Miller reckons--pricing them out of the 300- to 800-seat venues they were playing, typically in towns of less than 100,000 people. "I don't feel at all that I'm taking work away from a French musician," Mr. Miller told me. Musicians like the Bulgarians he was conducting, meanwhile, "need the work, they don't hold out for very high fees and they play well." "Artistically," he added, "the tour was a great success."

Not all the musicians have their papers:

A German conductor, Volker Hartung, whose Cologne New Philharmonic was also employing some East European musicians, was arrested as he came out for an encore following a performance of Ravel's "Bolero" and Bizet's "Carmen." After also being held for two days, Mr. Hartung was released with a warning but, according to the Guardian newspaper, has been banned from performing in France "until further notice." This was, according to Gerald Mertens, director of Deutsche Orchestervereinigung, or the German orchestra union, the second time Mr. Hartung was arrested in France for underpaying his musicians and not obtaining proper authorization for them to perform in France.

After deep reflection and debate, the French musicians' unions have decided to side with the French police, and not with the Muse. In fact, some of the arrested musicians blame the unions themselves for the crackdown.

Posted by DeLong at 12:38 PM | Comments (0) | TrackBack

George Clooney Reprimands the President

"Good Night, and Good Luck" is an excellent movie--as a piece of cinema, as a piece of journalism, and as a political intervention. The use of Eisenhower on the blessings of the writ of habeas corpus is especially nice. Go see it.

It is, of course, about Tail-Gunner Joe McCarthy, Edward R. Murrow, Fred Friendly, and Bill Paley. It is also about Richard Cheney, George W. Bush, and their circular firing squad of flying attack monkeys.

Highly recommended.

Posted by DeLong at 12:37 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps (Daniel Gross Reads Michael Barone and Shudders Edition)

Daniel Gross is shrill today. He takes on Michael Barone:

Daniel Gross: November 20, 2005 - November 26, 2005 Archives : VULGAR OPPORTUNIST: As an analyst of business and economic trends, Michael Barone is a pretty good political analyst. Today, he pens a piece in the Wall Street Journal... places the blame for the decline of big industrial firms in sectors like steel and autoparts squarely on labor.... "Union-driven legacy costs have already force many steel compnaies adn airliens into bankrupty," he notes. It takes two parties to iron out labor agreements. And as much as unions like "legacy costs" -- for yuppies who labor over their keyboards, like Barone, that translates to health insurance and retirement benefits -- management liked them perhaps even more. Throughout the 1980s and 1990s... management of the Big Three continually agreed to deals with the unions that added legacy costs--in exchange for keeping current wages down, and hence [reported] profits up....

Worse, [Barone] celebrates the replacement of the value-adding, high-paying auto industry--which created jobs in dozens of related industries--with the rise of lower-paying, value-subtracting industries like gambling.

On the Michigan freeways going up north, the big attractions are not the UAW's cultural haven of Black Lake but Indian casinos and outlet malls... where people throng to win sudden riches or to take advantage of low prices.... The attempt, made when the economy seemed static, to promise security and leisure and restrained good taste, has failed. We remain, as we have been in most of our history, a nation of hustlers... who strive mightily to get ahead and advance their interests, enjoying the sometimes vulgar opportunities a dynamic economy provides.

Casinos are affirmatively not "places where people throng to win sudden riches." They're places where suckers, many of them people without much in the way of resources, throng to engage in rigged games in which the odds are always -- always -- against them.

Now I never understood why Michael Barone has a "reputation" as a political analyst in the first place. Can somebody please point me to something he's written that's worth reading?

UPDATE: The consensus is that people think Michael Barone made his reputation by writing large chunks of the Almanac of American Politics. I took a look at the introduction. I am not impressed. Anybody who thinks that the U.S. armed forces are "decentralized" doesn't know the first thing about military command-and-control. Anybody who thinks that welfare reform has produced greater incomes for America's poor hasn't looked at the CPS. Anybody who thinks that FedEx is in the same business as the U.S. Postal Service knows nothing about FedEx's business model. Anybody who thinks that the fall in crime in New York City is the result of a "network-connected police force" knows nothing at all about the causes and control of crime.

So, once again: anybody have anything Michael Barone has written that is worth reading?

American Politics In The Networking Era: By Michael Barone: On the surface, the 2004 election looked very much like the 2000 election. George W. Bush was again running against a liberal Democrat who had spent much of his career in the Senate and who had clinched his nomination by early victories in Iowa and New Hampshire. In November, 47 of the 50 states and the District of Columbia voted for the candidate of the same party as they had in 2000. Only three states switched, New Hampshire to the Democrats, Iowa and New Mexico to the Republicans. Bush won again, this time without a court battle. Republicans ended up with majorities in both houses of Congress. But in many ways, the 2004 campaign was very different from 2000. It produced a different kind of politics, a politics that reflects the character of the post-industrial, networking age we live in.

For changes in politics resemble changes in the larger society. For several decades now, we have seen the change from industrial America to post-industrial America, from an industrial nation characterized by centralization and large command-and-control organizations to a post-industrial, Information Age nation characterized by decentralization and network-connected organizations. This is an America where Microsoft overtakes IBM, where FedEx overtakes the U.S. Postal Service, where Wal-Mart overtakes Sears. It is an America whose network-connected Special Forces overthrow the Taliban in Afghanistan and whose network-connected Army and Marines overthrow Saddam Hussein in Iraq. It is an America where the abolition of guaranteed welfare has produced higher incomes and greater independence for the target population, where network-connected police forces have cut crime by more than half in New York City and shown the way toward vast reductions in crime across the nation. Our private sector and important parts of our public sector have moved from industrial command-and-control America to post-industrial, Information Age, network-connected America. In 2004, our politics followed....

Posted by DeLong at 12:36 PM | Comments (0) | TrackBack

What Do You Mean "We" Kemosabe?

Eric Umansky is really shrill. He fears that what General Petraeus and others are doing in Iraq is to train Iranian-allied Fedayeen Death Commandos:

Eric Umansky: 'Training' Iraqi Forces Won't Do It : James Fallows' opus on how the U.S. has FUBARed training Iraq's army has been rightly getting a lot of attention. But there's one thing I think it misses.... If the U.S. helps create 'capable' soldiers... loyal to, say, their own Shiite militia, is that a net positive? From Newsday....

[P]olice commandos. In combat uniforms, bulletproof vests and wrap-around sunglasses or ski masks, they muscle through Baghdad's traffic jams in police cars or camouflage-painted pickup trucks... part of the Iraqi security forces... blamed for a wave of kidnappings and executions around Baghdad since the spring. One such group, the Volcano Brigade, is operating as a death squad, under the influence or control of Iraq's most potent Shia factional militia, the Iranian-backed Badr Organization, said several Iraqi government officials and western Baghdad residents.... In the past year, the U.S. military has helped build up the commandos under guidance from James Steele, a former Army Special Forces officer who led U.S. counterinsurgency efforts in El Salvador in the 1980s. Salvadoran army units trained by Steele's team were accused of a pattern of atrocities.... The [new] Volcano Brigade was built up under the current, Shia-led government and "is mostly made of men from the Badr militia," said a Shia source close to the unit. Like most of a dozen people interviewed about the commandos, he asked not to be named for fear of being killed....

Insisting--hoping--that the U.S. can "train" Iraqi forces to drop their ethnic loyalities is strikes me as nothing more than an assumption, an assumption upon which much of the U.S.'s chance for 'success' rests.... Peter Galbraith's piece in the New York Review of Books... there is no "Iraqi" army; there are basically only units loyal to their own ethnicities...

Posted by DeLong at 12:33 PM | Comments (0) | TrackBack

"Universal" Values

The end of "civilization" as we knew it.

"Thus Blogged Anderson" finds that history--and George W. Bush and company--have played a very cruel joke on Isaiah Berlin's confience in human "progress":

Thus Blogged Anderson. : Berlin on Cheney: Picked up Isaiah Berlin's greatest-hits volume, The Proper Study of Mankind, and have even read the 1st essay therein, "The Pursuit of an Ideal," the overture as it were. One timely passage:

There are, if not universal values, at any rate a minimum without which societies could scarcely survive. Few today would wish to defend slavery or ritual murder or Nazi gas chambers or the torture of human beings for the sake of pleasure or profit or even political good--or the duty of children to denounce their parents, which the French and Russian revolutions demanded, or mindless killing. There is no justification for compromise on this.

Not so few as he thought, back in 1990 when he published the essay.

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

Posted by DeLong at 12:32 PM | Comments (0) | TrackBack

Bad for the Country - New York Times

Paul Krugman starts his latest article on health care by quoting Engine Charlie Wilson from his confirmation hearing to be Eisenhower's Secretary of Defense:

Bad for the Country - New York Times : "What was good for our country," a former president of General Motors once declared, "was good for General Motors, and vice versa." G.M., which has been losing billions, has announced that it will eliminate 30,000 jobs. Is what's bad for General Motors bad for America? In this case, yes.

Most commentary about G.M.'s troubles is resigned: pundits may regret the decline of a once-dominant company, but they don't think anything can or should be done about it. And commentary from some conservatives has an unmistakable tone of satisfaction, a sense that uppity workers who joined a union and made demands are getting what they deserve.

We shouldn't be so complacent. I won't defend the many bad decisions of G.M.'s management, or every demand made by the United Automobile Workers. But job losses at General Motors are part of the broader weakness of U.S. manufacturing... that offers workers decent wages and benefits. And some of that weakness reflects two big distortions in our economy: a dysfunctional health care system and an unsustainable trade deficit.... If the United States had national health insurance, G.M. would be in much better shape than it is... tying health insurance to employment... systematically discourages the creation of good jobs, the type of jobs that come with good benefits.... G.M.'s health care costs are so high in part because of the inefficiency of America's fragmented health care system. We spend far more per person on medical care than countries with national health insurance, while getting worse results.

About the trade deficit... a reorientation of our economy away from industries that export or compete with imports, especially manufacturing, to industries that are insulated from foreign competition, such as housing. Since 2000, we've lost about three million jobs in manufacturing, while membership in the National Association of Realtors has risen 50 percent. The trade deficit isn't sustainable... one of these days the easy credit will come to an end... we'll have to reorient our economy back toward producing things we can export or use to replace imports. And that will mean pulling a lot of workers back into manufacturing. So the rapid downsizing of manufacturing since 2000 - of which G.M.'s job cuts are a symptom - amounts to dismantling a sector we'll just have to rebuild a few years from now.

I don't want to attribute all of G.M.'s problems to our distorted economy.... But the distortions in our economy clearly make G.M.'s problems worse. Dealing with our trade deficit is a tricky issue.... But... [i]t's long past time to move to a national [health] system....

Fixing health care would be good for General Motors, and good for the country.

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Reasons to Be Thankful

Charlie Stross on why he'd rather be alive now than in the past--and, presumably, why he'd rather be alive in the future than now:

Autopope! - On being born in the past : Every so often, someone asks me: "given the choice, what period of history would you prefer to have been born into?" Let's interpret this pedantically and evaluate my survival prospects, given what we know at present about my physical characteristics. (If they'd asked, "given the choice, what period of history would you prefer to have been born into, and as whom" the answer would be different.)

  1. Born any time prior to 1942: I die before the age of 5. (I was peculiarly susceptible to bronchitis as an infant, and would have died around age 2-4 without the ready availability of antibiotics.)

  2. Born prior to 1950: I inherited weirdly thin retinas (my maternal grandmother had macular degeneration when she died, aged in her mid-sixties). By 18 I had some retinopathy in my right eye; at 25 I sprang a severe retinal detachment in my left. Microsurgery was required, but because this happened in 1989 the operation was successful. If it had failed I'd have been down to maybe 20-30% of a full visual field by the time I was 26. As you wind the clock back before the 80s, eye surgery grows progressively more primitive. I'm fairly sure that if I'd been born before 1950, I'd have been carrying a white stick or relying on a guide dog.

  3. Born prior to 1940: Even if you assume I could have survived the bronchitis in infancy, I also inherited hypertension via the maternal line, serious enough to kill if untreated. Today, I've got a wide range of medication -- ACE-II antagonists, Ca-channel blockers, and so on. Prior to 1980, however, the most widely used antihypertensives were diuretics (which I do not get on well with).

Upshot: if I had been born at any time prior to 1900, my life expectancy, assuming I survived infancy at all, would be 40-45 years -- the latter 20 of which would be rendered miserable by blindness. Between 1900 and 1940 I might have made it to 60. Only the fact that I was born as recently as 1964 has allowed me to live a comparatively normal life.

Hopefully this explains why the question "given the choice, what period of history would you prefer to have been born into" annoys me so much. There's a big difference between being interested in or nostalgic for a specific historical period and actually wishing you lived in it.

Nor are medical issues the only reasons for not wanting to live in the past. The legal rights of an English woman circa 1930 were in most respects weaker those of an Iranian woman today; if you look at the rights of women in the 1870s a comparison with Afghanistan under the Taliban is more apposite. To be a gay man in England prior to 1968 was to be a member of a legally persecuted out group. To be black in England prior to the late 1970s was likewise to be exposed to racist abuse with no legal recourse. Today we take for granted liberties hard-won by our elders; it seems to me to be almost obscene to wax over-nostalgic for the past, or to want to set the clock back.

Posted by DeLong at 12:28 PM | Comments (0) | TrackBack

What Makes Us Happy: on the Job

Stumbling and Mumbling directs us to John Helliwell on the value of job satisfaction:

Pricing job satisfaction : A new paper from the NBER puts a price on job satisfaction - and it's huge... John Helliwell and Haifang Huang:

To reduce job satisfaction from 9 to 8 on the 10-point scale... would, for a family with $65,000 income, have to be matched by an income increase of more than $30,000 a year [to leave life satisfaction unchanged]... Moving from the middle to the 75% percentile in job satisfaction would have a personal income equivalence, for someone of median income, of $17,000 per annum. These dollar amounts would be correspondingly lower for families with lower incomes.

What aspect of job satifaction is most valuable? It's not autonomy, in the sense of being able to make lots of decisions on one's own. Controlling for other things, this is negatively correlated with happiness. Responsibility, it seems, is a burden. Instead, it's task variety, skill intensity and having enough time to do the job that makes us happy. What's really important, though, is working somewhere where workers trust bosses....

There is, though, a caveat here. One reason why it requires huge rises in income to compensate us for falls in job satisfaction is that our happiness doesn't rise much with incomes. Indeed, it is relative income, more so than absolute income, that makes us happy...

Posted by DeLong at 12:27 PM | Comments (0) | TrackBack

New York Power Couple

David Edelstein may well be the best movie critic around these days. And he's leaving Slate for New York Magazine. Scott Rosenberg writes:

Scott Rosenberg's Links & Comment : My friend, the movie critic David Edelstein, has been writing wonderfully alive and intelligent pieces for Slate from its very beginning in 1996. That makes him a true Web old-timer. (He's also on NPR's Fresh Air.) But today the news broke that he is leaving Slate for Adam Moss's revamped New York magazine, which will begin featuring his reviews beginning in January. Congratulations to David -- the Web's loss is New York's gain, and those of us beyond the five boroughs now have one strong reason to point our browsers to http://nymag.com..

And his spouse Rachel Klayman--who is at least as sharp-eyed and quick-witted--is backing Barack Obama for policy and profit:

The Telegraph - Calcutta : International : Nine years ago, Obama's memoir, Dreams From My Father: A Story of Race and Inheritance, was published to good reviews and lacklustre sales. The best estimate his publisher and agent can come up with is that it sold around 15,000 copies. But after his rousing keynote address at the [Democratic] convention [in August 2004]... the Crown Publishing Group [was] racing to ship copies of the book to stores around the country.... "What's really gratifying is that as the months have passed, we've seen him become more and more visible, with booksellers' enthusiasm rising and reaching a fever pitch after the speech," said Rachel Klayman, a senior editor at Crown....

[L]iterary agent Jane Dystel.... "The thing that struck me was his writing, which was unbelievably gorgeous," Dystel said.... [T]he young politician... caught Klayman's attention after he became the Democratic nominee in the Illinois Senate race. Klayman broached the idea of an Obama book a few days after he won the hard-fought primary. But she also had a dim memory... discover[ed] that her own company was the publisher of Dreams From My Father. But there was no copy of it to be found, not even on the Crown shelves -- something Klayman said is not unusual for a book published so long ago....

"I haven't read too many books by politicians that are as eloquent as his," Klayman said. "I told him that if I were his speech writer, I'd be intimidated."

Posted by DeLong at 12:26 PM | Comments (0) | TrackBack

Lessons from the T-Shirt Industry

Pietra Rivoli on pro-poor pro-market global trade policies:

What actually drives the t-shirt industry... : From this talk given by Pietra Rivoli (hat-tip Isaac):

So over and over again, as I tried to understand something, I kept coming back to politics. I kept saying, okay, the way to understand why this happened is to understand how the politics works. The markets are really not central; they're not that big a part of the story.

Now, much of the debate over globalization is about markets. On the right you have people saying that unfettered markets will lift all boats. On the left you say unfettered markets are crushing the poor. Coming out of writing this book, one of my conclusions was that this particular debate on the virtues versus the evils of markets was misspecified, at least for this T-shirt. It wasn't whether markets were good or bad but about whether the politics were good or bad and what the effects of the politics were on various actors in the T-shirt story.

Now, this relates to a second point. Many activists—more broadly, people on the left—have a variety of proposals or ideas that kind of go something along these lines: we have to protect the poor, we have to protect those that don't have resources from the cruelty of market forces. That's not something I found in my T-shirt's life story. What I did find over and over again is that those people without power, those people that were poorer, those people that had fewer resources, didn't so much need to be protected as they needed to be allowed to play. And they needed to be allowed to play with the same deck of cards as everybody else.

Posted by DeLong at 12:25 PM | Comments (0) | TrackBack

Nouriel Roubini Says: Behave Like Cocks-of-the-Walk

Nouriel Roubini worries about the long-run economic destiny of the U.S. and Europe, and tells both Jean-Claude Trichet and Ben Bernanke to act like roosters: jump up on top of the fence and crow loudly:

RGE - The "Game of Chicken" (or Roosters?) between the ECB and the EU fiscal authorities..and how will Bernanke deal with the US fiscal time bomb? : There are different ways to interpret the decision by the ECB to make explicit that it will not accept bonds with a credit rating below A- as collateral.... Buiter and Sibert argue - in a very interesting paper - that the operating procedures of the ECB in its repo operations [have] impl[ied] an effective subsidy to the use of inferior collateral, i.e. the government debt of poorer credits with higher sovereign risk....

A complementary interpretation is that the ECB is now trying to restore a first-mover advantage in the classic "game of chicken" between a monetary and fiscal authority. The "fiscal theory of the price level" suggests that fiscal deficits may or may not lead to high inflation depending on whether there is "fiscal dominance" or "monetary dominance" in this game of chicken. If there is "fiscal dominance", reckless deficit policies... will eventually force the central bank to... use the inflation tax to finance an exogenous fiscal deficit path. If there is "monetary dominance", the... fiscal authority is forced to blink and adjust its budget policy (cut spending or raise taxes).... [If] neither authority blinks... default risk increases, interest rates go higher and the debt dynamics worsen.... [S]trong forms of the fiscal theory of the price level suggest strange cases... a[n immediate] jump of the initial price level (and high inflation)....

Is this EU game of any relevance for the U.S. and for the new Chairman of the Fed Ben Bernanke? Very much so, as a similar game of chicken is starting to take place between the Fed and the US fiscal authorities. The current US fiscal policy is on a train wreck path and the Fed is now tightening, in part, to signal that they will not monetize fiscal deficit.... Dallas Fed [President] Fisher.... "The FOMC has taken note of the fiscal situation, as shown by this pre-Katrina passage from the released minutes of the Aug. 9 meeting: 'Few signs were evident that greater fiscal discipline in the budget process would emerge any time soon.' In this environment, the markets, if left to their own devices, would produce higher interest rates to ration money and balance the demand and supply of capital. If the Federal Reserve were to resist the upward pressure on interest rates, it would in effect monetize the burgeoning fiscal deficits. The Federal Reserve has staunchly resisted monetizing deficits for more than a quarter century, and I feel strongly that it can ill afford to monetize them today."

That is the language of a true rooster in this game of chicken!... [B]oth Brad DeLong and Jagadeesh Gokhale have recommended to the Fed - in two FT oped pieces - to behave like a "monetary dominant" rooster to avoid the unpleasant monetary arithmetic of an unsustainable fiscal policy train wreck. Gokhale tells the Fed to play like a dominant rooster to defuse the "fiscal time bomb" while DeLong argues that "Fiscal Stability Should Be the New Fed Mantra".

So the final and most important question is whether Ben Bernanke will turn out to be a rooster or a chicken.... [S]ince Bernanke is smart and wise enough to know that fiscal deficits matter (even for the current account) and that fiscal dominance would be poison for the Fed, he may soon want to speak also about the importance of fiscal discipline.... [I]n spite of Milton Friedman, inflation is always a "fiscal" - not "monetary" - phenomenon when fiscal policy is on a train wreck path....

Posted by DeLong at 12:24 PM | Comments (0) | TrackBack

Mark Thoma Watches as Paul Blustein Tries to Gain Some Tim Adams Points

Mark Thoma finds Paul Blustein answering questions about the trade deficit:

Economist's View: The Trade Deficit: Northville, Mich.: Why is it the U.S.A. deficit has gone so long uncheck[ed] that we now owe every country around the world boat loads of money. Is it that this administration is so corrupt and greedy it does not care?

Paul Blustein: Actually, I think some people in the administration care quite a bit about the problem. Not all--some think the problem is overblown, and some of their rhetoric has certainly reflected that. But in talking to people like Tim Adams, the undersecretary of the treasury for international affairs, I'm quite struck by the fact that he seems determined to take measures that will ameliorate the global imbalances. ...

Monroe Township, N.J.: Why is China willing to hold a large part of US debt? Can they use the debt aggressively against us?

Paul Blustein: ...The Chinese are "willing" to hold our Treasury securities for one important reason--for the past decade or so, they have rigidly linked their currency, the yuan, to the U.S. dollar, ... As for the second part of your question, if you read Saturday's story, ... I quoted from a Foreign Affairs article by Nouriel Roubini and Brad Setser. They pointed out that the Chinese COULD use their vast holdings of Treasury securities against us, by threatening to dump them, in some sort of foreign policy confrontation. Of course, that would hurt the Chinese a lot--perhaps more than it would hurt us; it's hard to say. But one way of thinking about this is that it's a sort of "balance of mutual terror"--a term used by former Treasury Secretary Larry Summers. It's not a very healthy situation, in other words.

Burke, Va.: In his recent book recent book "Three Billion New Capitalists" Clyde Prestowitz's argues that the trade deficit in combination with budget deficits and a debt-dependent economy will result in an "economic 9/11" where the dollar collapses and interest rates sky-rocket. What ... changes in policy would be necessary to avert these sequences of events?

Paul Blustein: ...I think there's pretty broad agreement among economists on both the right and left about what ought to be done. First of all, the U.S. needs to increase its savings... Second, Asian countries need to raise the value of their currencies. ... Third, Europe needs to take steps to increase its growth, so that Europeans would import more too. But Europe is a far smaller part of the global imbalance problem than is Asia. ... Not all economists agree, of course, but the consensus is pretty broad. ...

I note that Blustein's answer (3) contradicts his answer (1). In answer (3) he says that the most important thing is for the U.S. to boost its savings rate. Getting the federal budget into surplus is the best way to do that. It will be a cold day in hell before the Bush administration does so.

In answer (1), however, Blustein claims that there are people in the administration who "care quite a bit about the problem" and mentions Treasury Undersecretary Tim Adams. What measures is Adams going to take to "ameliorate global imbalances"? I see no sign he is going to take any--to urge the White House to shift the budget into surplus would, Adams knows, be the ultimate career-limiting move on his part.

I realize that Blustein wants Tim Adams points. But surely some intellectual consistency could be maintained from one minute to the next?

Posted by DeLong at 12:22 PM | Comments (0) | TrackBack

Alex Tabarrok Gives Thanks for the Market Economy

He writes:

Marginal Revolution: Giving Thanks : I went to Wegman's less than 24 hours before Thanksgiving and purchased a turkey, yams, cranberries, a pumpkin pie, wine, cranberry cheese, fresh bread, peanut butter and some more wine. Not a single item was in short supply let alone in shortage. I give thanks for capitalism.

He speaks for himself. Over here in Greater San Francisco, there is a sage shortage. The produce manager said that the San Francisco Chronicle's turkey recipe called for lots of sage, and they were unprepared.

Posted by DeLong at 12:21 PM | Comments (0) | TrackBack

I Wish I Had Said That

Mark Kleiman renews his store of aphorisms:

The Reality-Based Community: Sad but true : At the drug policy meetings I picked up two aphorisms which I intend to steal shamelessly for the rest of my career. (The ground rules forbid me to name the authors unless/until I get explicit consent.) Though they were said about the drug-policy arena, they have much wider applications.

Does research influence policy? Certainly it does. Especially bad research.

Yes, it would be nice to have evidence-based policy-making. But even if we can't get that, perhaps we can do away with policy-based evidence-making.

Was it Oscar Wilde who, in response to "I wish I had said that," said: "You will, you will"?

Posted by DeLong at 12:19 PM | Comments (0) | TrackBack

Was There Ever Trust in the First Place?

Daniel Froomkin writes:

The Trust is Gone: Within official Washington, politicians and journalists keep going round and round about whether or not the Bush administration deliberately misled the public in the run up to war in Iraq.But out there in America, it appears the general public has already made up its mind. In fact, a very solid majority of Americans apparently feels that the Bush administration is being consistently deceptive, on a wide array of issues.The Wall Street Journal reports: "A majority of U.S. adults believe the Bush administration generally misleads the public on current issues, while fewer than a third of Americans believe the information provided by the administration is generally accurate, the latest Harris Interactive poll finds." Overall, 64 percent of Americans believe the Bush administration "generally misleads the American public on current issues to achieve its own ends" -- including 91 percent of Democrats, 73 percent of independents and 28 percent of Republicans.

Well, yes, of course they lie. It's what they do. Why, just from Duncan Black this evening:

Eschaton : Big Time, 9/2002:

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: The regime says it has no weapons of mass destruction, but we know that is a lie.

At another time:

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I don't think they know the same information. I think the fact is that, in terms of the quality of our intelligence operation, I think we're better than anybody else generally in this area.I think many of our European allies, for example, who are reluctant to address this issue, or who have been critical of the suggestion that somehow the United States wants to aggressively go address this issue, I think many of them do not have access to the information we have.

Posted by DeLong at 12:18 PM | Comments (0) | TrackBack

Paul Krugman Gets a--Well, It Looks Like a Weblog

There go my chances of getting him to write for the Economists' Voice http://bepress.com/ev/:

Welcome - Krugman - NYT Web Journal : What can you do on the Web that you can't do in print? A lot. There's still no substitute for traditional newspapers, but adding online material can really enhance the overall product. One thing I've often wanted to do is supplement my regular columns with additional information -- charts, tables, links to useful Web sites. So this site will sometimes provide readers with further information, information that didn't fit in print.

I'll also use this site for commentary on issues -- mainly economic and business questions -- that I wish I had space to cover in the print edition, but don't. What's more, this site will give readers a chance to put in their own commentary.

For what it's worth, for me this new Times feature represents a bit of a homecoming. I began my career as an opinion journalist on the Web, as a writer for Slate. And I developed a healthy appreciation for the usefulness of the Internet during the world financial crisis of 1997-1998, when economics Web sites -- including my own -- became a key channel of communication among analysts; things were moving fast, ideas were rapidly changing, and traditional publication was just too slow.

Well, things are still moving fast -- faster than ever. Let's see if this new site helps us all keep up.

Denial and Deception, Revisited - Krugman - NYT Web Journal : I'm trying not to write too much about the Iraq war these days.... [T]here was a long time when I felt I had to speak out, even though I have no special expertise in national security, because it seemed that so few people in major news organizations were willing to say the obvious. But now there are many voices talking... so... it makes sense for me to focus more on the economic issues.... There is one question about Iraq, however, on which I think I can shed some light: Why now?...

Part of the answer is that some new information has emerged about how the White House misrepresented the intelligence it had. But the truth is that by the summer of 2003 there was ample evidence that the administration had deliberately misled the public to promote a war it wanted. So why didn't the public read and hear more about this evidence until very recently? The answer, I'm afraid, is that the polls led the discussion, rather than following it.... I'm sorry to say that I saw it coming. What follows is a column I published... on June 24, 2003....

On the White House Web site, George W. Bush's speech from Oct. 7, 2002 -- in which he made the case for war with Iraq -- bears the headline ''Denial and Deception.'' Indeed. There is no longer any serious doubt that Bush administration officials deceived us into war. The key question now is why so many influential people are in denial, unwilling to admit the obvious.... Leaks from professional intelligence analysts, who are furious over the way their work was abused, have given us a far more complete picture of how America went to war.... Bush sought to convey an impression about the Iraqi threat that was not supported by actual intelligence reports.... [T]here was never any evidence linking Saddam Hussein to Al Qaeda; yet administration officials repeatedly suggested the existence of a link. Supposed evidence of an active Iraqi nuclear program was thoroughly debunked by the administration's own experts; yet administration officials continued to cite that evidence....

[S]ome commentators have suggested that Mr. Bush should be let off the hook as long as there is some interpretation of his prewar statements that is technically true. Really?... Bush's speeches gave the nation a misleading impression about the case for war, close textual analysis showing that he didn't literally say what he seemed to be saying is no excuse. On the contrary, it suggests that he knew that his case couldn't stand close scrutiny....

Other commentators suggest that Mr. Bush may have sincerely believed, despite the lack of evidence, that Saddam was working with Osama and developing nuclear weapons. Actually, that's unlikely: why did he use such evasive wording if he didn't know that he was improving on the truth?... [W]hy are so many people making excuses for Mr. Bush and his officials? Part of the answer... is raw partisanship.... [S]uppose that a politician -- or a journalist -- admits to himself that Mr. Bush bamboozled the nation into war.... [Y]ou have a moral obligation to demand accountability... in the face of a country not yet ready to believe that its leaders have exploited 9/11 for political gain. It's a scary prospect.

Impeach George W. Bush. Impeach him now. Impeach Richard Cheney too.

Posted by DeLong at 12:15 PM | Comments (0) | TrackBack

From the Wayback Machine...


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The Theory of Moral Sentiments Or, an Essay Towards an Analysis of the Principles, by Which Men Naturally Judge Concerning... by Adam Smith ...List Price: $30.00

Great Buy: Buy Theory of Moral Sentiments with Sex and the City - The Complete Third Season today! Buy Together Today $64.88. Buy both now!

UPDATE: Teresa Nielsen Hayden has a more systematic view. She points out that "For some while now Amazon has been recommending Sex and the City--The Complete Third Season! as the obvious complement to all the works of H. W. Fowler, who as you know Bob is the author of the cranky and magisterial Dictionary of Modern English Usage. You can buy the two together for just $47.83..."

Originally posted on June 11, 2002.

Posted by DeLong at 12:03 PM | Comments (0) | TrackBack

Yes, I Will Be in the Office on Wednesday

"Before Thanksgiving" turns out to be a REALLY BIG focal point--both for promises to me and, more important, for promises by me to others.

Posted by DeLong at 12:01 PM | Comments (0) | TrackBack

Divergent Views on the Coming Dollar Crisis

I've finally gotten straight my views on the split within the community of economists on the likelihood of the dollar crisis. And Aaron Edlin wanted to publish it in the Economists' Voice. Highly, highly recommended (by me at least):

Divergent Views on the Coming Dollar Crisis: J. Bradford DeLong, U.C. Berkeley: Is the U.S. vulnerable to a full-blown dollar crisis? Why are international finance economists scared and jittery, but domestically-oriented macroeconomists much less concerned?

SUGGESTED CITATION: J. Bradford DeLong (2005) "Divergent Views on the Coming Dollar Crisis", The Economists' Voice: Vol. 2: No. 5, Article 1. http://www.bepress.com/ev/vol2/iss5/art1

Posted by DeLong at 12:00 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (National Review Edition)

Daniel Gross finds National Review beyond belief:

Daniel Gross: November 20, 2005 - November 26, 2005 Archives : KOOL-AID WATCH In a recent National Review column, John Tamny rips into liberals and Republican moderates for their failure to drink adequate amounts of the supply-side Kool-Aid.

Despite clear evidence that the marginal rate cuts of the 1920s, 1960s, and 1980s (not to mention the 2003 tax cuts) led to higher revenues, Sen. George Voinovich (R., Ohio) recently said that "contrary to what some of my colleagues believe, tax cuts do not pay for themselves."

Imagine the audacity to state plainly the obvious. Hmm. Lets see what other weak-kneed, economically illiterate, growth-hating yutz has recently put forth the astonishing heresy that tax cuts don't pay for themselves. Oh, how about N. Gregory Mankiw.

Money quote: "the dynamic effect of a a cut in capital income taxes on government revenue is only 50 percent of the static effect. That is, one half of a capital tax cut pays for itself."

Note that even this applies only (a) on taxes on capital income (the offset for taxes on labor income are calculated to be much smaller) and (b) only in the long run of more than two generations from now--in the short run of the net quarter century the offset is much smaller).

Posted by DeLong at 11:42 AM | Comments (0) | TrackBack

November 21, 2005

Rob Stavins Makes a Little Joke

Rob Stavins writes, at http://www.env-econ.net/stavins/Column_5.pdf:

[W]hen President Bush withdrew the United States [from Kyoto] in 2001... he missed an opportunity to propose a sound alternative, but his opposition was hardly new or unique. In 1997, Senator John Kerry joined with his Senate colleagues in... warning [against] reliance on targets for industrialized countries alone.... [T]he Kyoto Protocol is too little, too fast....

[But a] credible international approach is required... [that should have] three key elements.

First, both industrialized and developing countries must have serious responsibilities.... There needs to be a mechanism for developing countries to take on commitments once their per capita GDP has reached agreed levels. In the short run, developing nations must board the global climate agreement train, but cannot be expected to pay for their tickets. A well structured international emissions trading program, combined with targets for developing countries that become more stringent as they become wealthier, can do the job cost-effectively and fairly.

Second, long-term targets are required for this long-term problem.... [M]ore ambitious long-term targets [need to] be put in place now, to motivate needed technological change....

The third key element is to work through the market... [to] keep down costs of emissions reductions in the short term and bring them down even lower in the long term through technological change.... [T]radeable permits can reduce costs by as much as 75 percent by financing more climate-friendly development paths in poor countries while sparing rich countries the most wrenching and least politically realistic adjustments....

[T]he United States can place itself where it ought to be — in a position of international leadership — on this global issue...

Rob is, of course, making a joke. The chances are infinitesimal that the clown show headed by George W. Bush will assume an international leadership role on global warming.

Posted by DeLong at 08:34 PM | Comments (0) | TrackBack

Is There Any Scale at Which GM Is Profitable?

Can GM "slim down" and become profitable? Or not?

Economist.com: FOR years General Motors (GM) was the undisputed titan of the world’s car industry.... Now... holed below the water-line, sinking slowly by the bow to the sound of loud shocks and bangs.... The chief executive on the bridge, Rick Wagoner, can rush around and bark orders, but to little effect.

On Monday November 21st... shed 30,000 employees from its key North American operations... shut down 12 plants... cut production capacity by another 1m vehicles, having already cut roughly that amount since 2002....

Exactly how and why things have gone so wrong is a matter of debate. Certainly, the situation was dire 13 years ago.... Jack Smith... signed on Mr Wagoner, then barely 40, as one of his top lieutenants. The new management closed plants, cut the workforce, sold lacklustre component operations and seemingly restored much of the company’s former lustre. By the boom years of the mid-1990s, GM was again rolling up record profits.

Yet, despite a few exceptional years, sales continued to decline.... GM concentrated more on finance and marketing than designing and making cars.... GM paid a lot of attention to the development of its newest, full-sized sport-utility vehicles (SUVs), which will arrive in the showrooms early in 2006. But even the company’s bullish “car tsar”, the vice-chairman, Bob Lutz, admits that the potential market for these vehicles has declined dramatically with higher oil prices....

But products are only part of the problem at GM.... The huge cutbacks of the 1990s saddled GM with nearly three retirees for every active worker.... Then there is the worsening situation at Delphi.... Not everything has gone wrong on Mr Wagoner’s watch.... European operations... Brazil... South Korea’s Daewoo... China....

Mr Wagoner has other schemes... sell off a large stake in the company’s profitable finance subsidiary, General Motors Acceptance Corp. Trying to predict his remaining options has become something of a parlour game in Detroit circles.... GM’s options are steadily diminishing and its still sizeable financial resources are being drained away at a frightening rate. At the current pace, it may not have the momentum to reach a safe port.

I think that GM's biggest problems come from the imbalances in corporate governance that the loading of pension and retiree health benefits onto the auto manufacturing business has created. I see no way of avoiding bankruptcy--not unless the price of oil drops down to $15 a barrel and demand for SUVs revives.

Posted by DeLong at 08:33 PM | Comments (0) | TrackBack

Mughal Decline, Climate Change, and Britain's Industrial Ascent: An Integrated Perspective on India's 18th and 19th Century Deindustrialization

David Clingingsmith and Jeffrey Williamson write about relative industrial decline in post-Mughal India:

Mughal Decline, Climate Change, and Britain's Industrial Ascent: An Integrated Perspective on India's 18th and 19th Century Deindustrialization: NBER Working Paper No. 11730: Abstract: India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. India underwent secular deindustrialization as a consequence. While India produced about 25 percent of world industrial output in 1750, this figure had fallen to only 2 percent by 1900. We ask how much of India's deindustrialization was due to local supply-side forces -- such as political fragmentation in the 18th century and rising incidence of drought between the early 18th and 19th century, and how much to world price shocks. We use an open, three-sector neo-Ricardian model to organize our thinking about the relative role played by domestic and foreign forces. A newly compiled database of relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors back to 1765. Whether Indian deindustrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery.

Add this to the pile...

Posted by DeLong at 08:33 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (Economist Edition)

Henry Farrell watches as the downward quality spiral of the Economist continues:

Crooked Timber: The Economist's Lexington starts an article (behind paywall) on whether Bush lied with a piece of self-justificatory hackishness.

The Democrats risk painting themselves as either opportunists (who turn against a war when it goes badly) or buffoons (too dim to question faulty intelligence when it mattered). They also risk exacerbating their biggest weakness... their reputation for being soft on terrorism and feeble on national security. So who is getting the best of the argument? Mr Bush starts with one big advantage: the charge that he knew all along that Iraq possessed no weapons of mass destruction seems to be a farrago of nonsense. Nobody has yet produced any solid evidence for this. Sure, Mr Bush made mistakes, but they seem to have been honest ones made for defensible reasons. He genuinely believed that Saddam Hussein possessed WMD's--as did most of the world's security services. And he was not alone in thinking that, after September 11th, America should never again err on the side of complacency. More than 100 Democrats in Congress voted to authorise the war. But being right and being seen to be right are different things. Mr Bush may not have consciously lied, but, egged on by Mr Cheney and Donald Rumsfeld, he made dreadful miscalculations.

The issue, as the Economist's journalists know bloody well, isn't whether the Bush administration believed at one point that there were weapons of mass destruction in Iraq. It's whether or not the Bush administration mendaciously manipulated intelligence to make the public case for their beliefs. The critics mentioned in the piece aren't making "the charge that [Bush] knew all along that Iraq possessed no weapons of mass destruction." I'm not aware of anyone apart from a few crackpots who are. They're making the case that the Republican administration deliberately suppressed information that didn't support its case, and presented highly dubious information as providing a slam-dunk case for imminent war. In other words, the administration stitched up a regime that turned out not actually to have weapons of mass destruction, let alone an active nuclear programme, through spin, lies and use of "evidence" that they knew at the time to be dubious. I'd like to see Lexington explain exactly how the claims of al-Qaeda links, the aluminium tubes presentation, the yellowcake claims and so on were "honest [mistakes] made for defensible reasons." But of course he does no such thing -- instead he attacks his very own, custom designed straw man in an attempt to disassociate the heap of political trouble that Bush is now in from the fact that the Bush administration undoubtedly lied in the run-up to the war. Shoddy, shoddy stuff.

Nobody wants to pay for a news magazine that demonstrates really lousy judgment. At the most callous and crass of profit-and-loss considerations, now is the time for the Economist to be differentiating itself from the editorial page of the Wall Street Journal--not imitating it. At the substantive level, the reputational capital that Lexington is now burning will be very, very hard to rebuild.

Posted by DeLong at 08:32 PM | Comments (0) | TrackBack

Worst President Ever?

Michael Froomkin asks:

Worst President Ever? :


Nice sticker. But is it true?

Nominations for Presidents even worse than GWB -- if any -- are now open.

I have come around to the view that GWB is substantially worse than Nixon. And also Jefferson. But is he worse than Andrew Johnson? Than US Grant? Andrew Johnson had some principles, but they were pretty bad ones on the whole. Grant was a great general but an unabashedly awful President. And there are surely some obscurely bad Presidents that I've neglected?

Or, I suppose, this could perhaps be no more than another example of the middle-aged propensity for the jeremiad...

I believe that U.S. Grant was clearly a better president than George W. Bush. With Andrew Johnson it's a toss-up. And I think it's clear that James Buchanan was worse than George W. Bush.

Third-worst president ever.

Posted by DeLong at 08:32 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars?

One of the most offensive of Bush administration lies has been the repeated claim that America's commanders on the ground in Iraq say they have enough troops:

Charging RINO: Going to the Source : Time reports that Senator John Warner, the chairman of the Armed Services committee, along with the ranking committee Democrat Carl Levin and Senator Mark Dayton of Minnesota, sat down with 10 battalion commanders from Iraq, officers "chosen for their experience on the battlefield rather than in the political arena."A Warner spokesman said the chairman "wanted the view from men who had been on the tip of the spear, and we got it." Time adds that two sources familiar with the meeting reported that "the commanders said that they not only needed more manpower but also had repeatedly asked for it." Because of the low number of troops, the commanders reportedly told the senators, "they have to 'leapfrog' around Iraq to keep insurgents from returning to towns that have been cleared out."If Time's sources are accurate, this could be very important. While folks have been saying for months that there are not enough troops on the ground, if battalion commanders are saying they can't accomplish the mission because of insufficient manpower, steps need to be taken.

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

Posted by DeLong at 08:31 PM | Comments (0) | TrackBack

The Volokh Operation Needs Quality Control

Kieran Healy reports on the Neo-McCarthyite Volokh Conspiracy:

Crooked Timber: Over at Volokh, Todd Zywicki says,

Scott Adams now has a blog, known apprpriately enough as Dilbert Blog.... I also see that Mr. Adams has also already had the misfortune to cross paths with the blogosphere's most infamous Lysenkoist. Welcome to the blogosphere, Mr. Adams.

The link goes to Adams's version of a spat he (Adams) has been having with PZ Myers, of Pharyngula.... [W]hat I really want to know is, under what description of reality does PZ Myers (a biology professor at the University of Minnesota at Morris, and tireless rebutter of creationist and Intelligent Design arguments) qualify as a Lysenkoist, let alone the "blogosphere's most infamous Lysenkoist"? Does Todd have evidence that Myers fakes his scientific research? That he believes that species can be changed through hybridization and grafting? That he thinks genetics is a bourgeois pseudoscience? Or maybe Todd is suggesting that any scientist with left-leaning political views is, ipso facto some kind of fraud, and Myers is our most prominent example?...

The last is what I put my money on.

Posted by DeLong at 08:31 PM | Comments (0) | TrackBack

Why Are We Not Already in Recession?

Mark Thoma reads John Fernald and Bharat Trehan, who are thinking about why the recent oil price runup hasn't done more damage to the macroeconomy:

Economist's View: Why Hasn't the Jump in Oil Prices Led to a Recession? : by John Fernald and Bharat Trehan: Oil prices have increased substantially over the last several years. When oil price increases of this magnitude occurred during the 1970s, they were associated with severe recessions. Why hasn't that happened this time around?....

An intuitive way to think about the initial effects of an increase in the price of imported oil on the economy is to consider it as a tax on domestic users. In 2004, the U.S. imported almost 5 billion barrels of energy-related petroleum products, amounting to about two-thirds of domestic petroleum use.... For each $10/barrel increase in oil prices, the United States pays an effective "tax" of about $50 billion (5 billion barrels times $10), or 0.4% of GDP.

This is not the same thing as saying that GDP will fall by 0.4%.... [F]oreign oil producers... would... purchase goods from other countries... goods made in the U.S... will help support U.S. GDP....


[T]he experience of the 1970s suggests that oil shocks have a substantial effect.... Figure 1... shows that high oil prices have frequently coincided with recessions.... Hamilton (1983, 1996, 2003) has argued forcefully that the oil shocks were responsible for these recessions.... [H]e argues that... a fall in oil prices is unlikely to boost the economy in the same way that an increase can drag it down.... [O]il price increases that simply reverse previous price decreases are unlikely to have a significant effect... record an oil shock only if the... price of oil is higher than it has been over the past three years.


Figure 2 plots oil price shocks according to this recommendation. The spikes line up closely with recessions.... Moreover, the statistical evidence is not necessarily as strong as Figure 2 might suggest.... Guerrieri (2005) finds that a 50% increase in the price of oil starting in the first quarter of 2004 causes output to fall about 0.4% below what it would otherwise be in the long run (assuming that the Fed conducts policy using the well-known Taylor rule). The effects are likely to have been larger in the 1970s, when the economy was more energy-intensive....

It has also been suggested that the latest jump in oil prices has not had the usual effect on the economy because the price of oil has jumped for different reasons.... [M]uch of the run-up in oil prices in the past few years seems to reflect the endogenous response of prices to the strength of global demand. The source of this higher demand turns out to be important. If the higher prices were the result of higher U.S. demand, then there would be little reason to fear a recession. It is hard to believe that the "tax" imposed by the oil price increase would exceed the increase in income that was the cause of the higher oil demand.

But if the increase in demand originates abroad... high oil prices which reflected rapid growth in China would have the same direct impact on the U.S. as a price increase engineered by OPEC...

Posted by DeLong at 08:30 PM | Comments (0) | TrackBack

Trevon Logan Shows Up in the NBER Working Paper Series

The core of Trevon Logan's excellent dissertation is now out in working paper form:

The Transformation of Hunger: The Demand for Calories Past and Present by Trevon D. Logan: NBER Working Paper No. 11754.

Abstract: According to conventional income measures, nineteenth century American and British industrial workers were two to four times as wealthy as poor people in developing countries today. Surprisingly, however, today's poor are less hungry than yesterday's wealthy industrial workers. I estimate the demand for calories of American and British industrial workers using the 1888 Cost of Living Survey and find that the estimated calorie elasticities for both American and British households are greater than calorie elasticity estimates for households in present day developing countries. The results are robust to measurement error, unreported food consumption, and indirect estimation bias. This finding implies substantial nutritional improvements among the poor in the twentieth century. Using the Engel curve implied by the historical calorie elasticities, I derive new income estimates for developing countries which yield income estimates that are six to ten times greater than those derived using purchasing power parity or GDP deflators.

Posted by DeLong at 08:27 PM | Comments (0) | TrackBack

Assaying the Global "Savings Glut"...

Menzie Chinn and Hiro Ito argue against Bernanke's "global savings glut" hypothesis:

Current Account Balances, Financial Development and Institutions: Assaying the World "Savings Glut" : Menzie D. Chinn, Hiro Ito: NBER Working Paper No. 11761

Abstract: We investigate the medium-term determinants of the current account using a model that controls for factors related to institutional development, with a goal of informing the recent debate over the existence and relevance of the "savings glut." The economic environmental factors that we consider are the degree of financial openness and the extent of legal development. We find that for industrial countries, the government budget balance is an important determinant of the current account balance; the budget balance coefficient is 0.21 in a specification controlling for institutional variables. More interestingly, our empirical findings are not consistent with the argument that the more developed financial markets are, the less saving a country undertakes. We find that this posited relationship is applicable only for countries with highly developed legal systems and open financial markets. For less developed countries and emerging market countries we usually find the reverse correlation; greater financial development leads to higher savings. Furthermore, there is no evidence of "excess domestic saving" in the Asian emerging market countries; rather they seem to have suffered from depressed investment in the wake of the 1997 financial crises. We also find evidence that the more developed equity markets are, the more likely countries are to run current account deficits.

I agree with them. "Global investment deficiency" makes more sense.

Posted by DeLong at 08:19 PM | Comments (0) | TrackBack

The Modern Republican Party

Republican: the party for people who don't like Black people:

Voter ID memo stirs tension | ajc.com: The chief sponsor of Georgia's voter identification law told the Justice Department that if black people in her district "are not paid to vote, they don't go to the polls," and that if fewer blacks vote as a result of the new law, it is only because it would end such voting fraud.

The newly released Justice Department memo... says that despite Republican assurances the law would not disenfranchise elderly, poor and black voters, Susan Laccetti Meyers, the staff adviser for the Georgia House of Representatives, told the Justice Department "the Legislature did not conduct any statistical analysis of the effect of the photo ID requirement on minority voters." It cites analyses showing that, in fact, the effects of the law — which will require Georgians seeking to vote to present a driver's license or an identification card for which they must pay — could fall disproportionately on blacks. It concludes that the state had failed to show the law would not weaken minority voting strength, and recommends that the attorney general's office formally object to it.

However, Attorney General Alberto Gonzales in August approved the law.... Georgia Democrats... said the law is the most blatant evidence that Georgia's election laws should remain under federal scrutiny, as required by the 1965 Voting Rights Act, despite attempts by Georgia Republicans to free the state from federal oversight.... State Rep. Stan Watson (D-Decatur), chairman of the Legislative Black Caucus, said reports that the politically appointed leadership of the Justice Department overruled its staff and approved the voter ID law "bears out that the law would hamper blacks, other people of color and the elderly in voting."....

The memo, leaked to The Washington Post, went on to state: "Rep. Burmeister said that if there are fewer black voters because of this bill, it will only be because there is less opportunity for fraud. She said that when black voters in her black precincts are not paid to vote, they do not go to the polls." Burmeister said Thursday that the memo's record of what she said "was more accurate than not," but added: "That sounds pretty harsh. I don't remember saying those exact words."...

The memo also states that in defending the Georgia law, Burmeister claimed the voter IDs would not be as difficult to obtain as critics claim because Gov. Sonny Perdue "had passed legislation to mandate a [state Department of Driver Services] office in every county and that individuals can obtain state IDs in Kroger grocery stores." "Neither statement is correct," the memo concludes.

Perdue spokeswoman Heather Hedrick said Thursday that memo's claims that the voter ID law would adversely affect minority voting doesn't change the governor's support for the measure....

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

Posted by DeLong at 08:17 PM | Comments (0) | TrackBack

Daniel W. Drezner Gets Shrill

He notices that his past support of the Republican Party has done nothing but give a little bit of cover to people who don't care about anything he cares about. It's not much fun realizing how big a dupe you have been:

danieldrezner.com :: Daniel W. Drezner :: I guess I'm extinct then....: I have long recognized that that the Republican party has become a less friendly place over the years for a libertarian who nonetheless wants the government to function well in its limited capacity.

However, I think over the past few years we've gone from "unfriendly" to "pretty damn hostile"" Andrew Sullivan and Matthew Yglesias, in their inimitable ways, suggest that I can't find a single Republican congressman who wants the things I want.

Yglesias first:

There are no moderate Republicans. If there were moderate Republicans, those would be members of the Republican Party who had moderate views on policy questions. A person with moderate views on policy questions would have been regularly defecting from the extremist-led leadership in such years as 2001, 2002, 2003, and 2005 as the aforementioned leadership pushed crazy bill after crazy bill throgh the congress. But there aren't any Republican members of the House of Representatives who fit that description. What you saw this afternoon were vulnerable Republicans running scared from an increasingly unpopular GOP leadership.

Well, I actually kind of like certain "extremist" Republican positions, such as drilling in ANWR, proposing school vouchers, and cutting budgets.

The thing is, I also like stem cell research and oppose dumb-ass Constitutional amendments banning gay marriage. And, as Sullivan points out, I'm dreaming of a null set:

In theory, it should be possible for a Republican to be both socially moderate, fiscally conservative, and dedicated to the fight against Islamo-fascism. That's, broadly speaking, my position. But one reason I feel no real connection to today's GOP is that there are almost no people in that position in the party as it now stands. The most reliable fiscal conservative, Tom Coburn, is a rabid gay-hater and a theocon. It's simply a fact that, as a RedState blogger points out, not a single Republican Senator who opposed the Federal Marriage Amendment voted for the Coburn Amendment, and not a single Republican Senator who co-sponsored the latest stem cell research bill voted for the Coburn Amendment. The kind of conservatism I believe in no longer really exists in the Congress of the United States.... McCain is the best we've got, and God bless him. But it's also undeniable that he has deep suspicions of economic freedom, and often sees the need for government to intervene in all sorts of areas - steroids in sports, for example, - where government, in my view, has no role whatever. Does that mean that social inclusives and fiscal conservatives should despair? I hope not. There are glimmers of hope among fiscally conservative Democrats. A McCain-led GOP would be vastly preferable to a Bush-led one. But these are dark days for individual freedom and fiscal sanity in America, and it's no use pretending otherwise.

Sounds pretty despairing to me. Especially when Republican representatives start accusing decorated veterans of "cowardice".

Posted by DeLong at 08:16 PM | Comments (0) | TrackBack

PGL Reads More Dreck from National Review

PGL at Angry Bear pounds his head against the wall at the stupidity of National Review:

Angry Bear: John Tamny remains confused....

Despite clear evidence that the marginal rate cuts of the 1920s, 1960s, and 1980s (not to mention the 2003 tax cuts) led to higher revenues, Sen. George Voinovich (R., Ohio) recently said that "contrary to what some of my colleagues believe, tax cuts do not pay for themselves."... Lloyd Bentsen... in 1980... argued for marginal tax-rate cuts for their ability to improve "the productivity performance of the economy over the long term." Republicans should intuitively take to Bentsen's past reasoning...

PGL is right. It is breathtaking:

  1. There is no evidence that the marginal rate cuts of the 1920s, 1960s, 1980s, and 2003 "led to higher revenues." Revenue would have been higher had thos tax cuts not been passed. Larry Lindsey's Growth Experiment pegs the supply-side revenue replacement at 1/3 of the lost revenue--and I think Larry's study is too optimistic.
  2. It is pathetic for Tamny and the National Review crowd to be taking Lloyd Bentsen's name in vain. Bentsen's position was constant: (a) Broaden the base. (b) Lower the rates. And (c) balance the budget. To pretend that Bentsen would have been behind a program of (a) narrow the base, (b) lower the rates, and (c) unbalance the budget--are Tamny and company that stupid, or do they just think their subscribers are that stupid?

Posted by DeLong at 08:15 PM | Comments (0) | TrackBack

Progress Toward Further Dimensions of Yet More Intense Shrill Bush-Hatred

Robert Moomaw directs us to the extremely sharp-eyed James Fallows, whose shrill screeds of Bush-hatred redefine the genre:

The Blog | James Fallows: What Bush Isn't Addressing on Iraq | The Huffington Post : It would be nice if, even once, the Bush administration addressed the strongest version of the case against its Iraq-and-terrorism policy, rather than relying on bromides ("fight them there, so we don't have to fight them here") and knocking down straw men ("some say Iraqis don't deserve freedom...").... On available evidence, the President himself has not grasped the essential criticism of moving against Iraq when he did: that a war in Iraq undercut the broader and longer term war against Islamic terrorism. Not in one speech, not in one interview or off-hand remark, not in one insider account of White House deliberation has there been the slightest indication that President Bush recognizes this concept sufficiently to offer a rebuttal to it.

Someone who does recognize that distinction is Donald Rumsfeld, who raised exactly this concern... that the United States might be creating terrorists even faster than it was killing them.... Paul Wolfowitz's answer would also be fascinating to hear -- but he is off to other projects now.... As for an answer from Dick Cheney, dream on. So when the President decided on Friday to "respond to the critics" of his Iraq policy, naturally he did nothing of the kind. For the record, here are the three biggest, most obvious points not even addressed in his speech:

1) Everybody was not, in fact, working from the same misleading information. The administration's line about WMD these days is: OK, we might have been wrong -- but everybody was wrong.... [A]t the time, [however,] Administration officials were most emphasically NOT saying "hey, we're all operating in the dark here." The implied message of every briefing for reporters, every speech to the public, and every background session with legislators, was: If you knew what we knew, then you'd be as alarmed as we are. That was the message of Dick Cheney's statement that "there can be no doubt" that Iraq "now" had weapons of mass destruction, of Condi Rice's warning about the mushroom cloud, and of Colin Powell's presentation to the UN....

2) To say that Saddam Hussein might have been a threat is not to say that we had to invade when we did. The Administration had two responses when asked in 2003 "what's the rush?"... the troops were in place, they couldn't wait forever, soon it would be hot.... This obviously is a "Guns of August" style of reasoning: the trains are moving toward the front, so we might as well start World War I. The other response was: we've waited 12 years, why wait any more? The answer to that was, first, that Iraq was now crawling with weapons inspectors... and, second, that beginning a war could touch off a lot of messy complications left out of the optimistic war scenarios.

This is the crucial point: Every aspect about managing occupied Iraq could have turned out better with more time... line up Arabic-speaking or Islamic allies... get adequate U.S. troops on the scene... protecting the power system, the hospitals... the public infrastructure....

3) As for managing Iraq after the fall of Baghdad, there is no shared blame at all. The Bush Administration owns every aspect of this disastrously bungled situation. The failure to stop the looting; the deliberately low-ball on the number of occupying troops; the rash decision to disband the Iraqi army; the inattention to how quickly American "liberators" would become "occupiers"; the lassitude about recruiting or training enough Arabic speakers or getting serious about developing an Iraqi force -- on these and a dozen other familiar points, the Administration cannot possibly say, "Hey, everybody was wrong." These were the decisions of Bush, Cheney, Rumsfeld, Rice, in many cases bulldozing or ignoring contrary views from within the military and other parts of the government. Or, I guess the reality is: the Administration could "possibly" say this. They just couldn't say it honestly.

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

Posted by DeLong at 08:13 PM | Comments (0) | TrackBack

Paul Krugman Keeps on Writing About Health Insurance

Here is today's installment:

A Private Obsession - New York Times : By PAUL KRUGMAN: "Lots of things in life are complicated." So declared Michael Leavitt, the secretary of health and human services, in response to the mass confusion as registration for the new Medicare drug benefit began. But the complexity of the program - which has reduced some retirees to tears as they try to make what may be life-or-death decisions - is far greater than necessary.

One reason the drug benefit is so confusing is that older Americans can't simply sign up with Medicare, as they can for other benefits. They must, instead, choose from a baffling array of plans offered by private middlemen. Why?

Here's a parallel. Earlier this year Senator Rick Santorum introduced a bill that would have forced the National Weather Service to limit the weather information directly available to the public. Although he didn't say so explicitly, he wanted the service to funnel that information through private forecasters instead.

Mr. Santorum's bill didn't go anywhere. But it was a classic attempt to force gratuitous privatization: involving private corporations in the delivery of public services even when those corporations have no useful role to play.

The Medicare drug benefit is an example of gratuitous privatization on a grand scale.

Here's some background: the elderly have long been offered a choice between standard Medicare, in which the government pays medical bills directly, and plans in which the government pays a middleman, like an H.M.O., to deliver health care. The theory was that the private sector would find innovative ways to lower costs while providing better care.

The theory was wrong. A number of studies have found that managed-care plans, which have much higher administrative costs than government-managed Medicare, end up costing the system money, not saving it.

But privatization, once promoted as a way to save money, has become a goal in itself. The 2003 bill that established the prescription drug benefit also locked in large subsidies for managed care.

And on drug coverage, the 2003 bill went even further: rather than merely subsidizing private plans, it made them mandatory. To receive the drug benefit, one must sign up with a plan offered by a private company. As people are discovering, the result is a deeply confusing system because the competing private plans differ in ways that are very hard to assess.

The peculiar structure of the drug benefit, with its huge gap in coverage - the famous "doughnut hole" I wrote about last week - adds to the confusion. Many better-off retirees have relied on Medigap policies to cover gaps in traditional Medicare, including prescription drugs. But that straightforward approach, which would make it relatively easy to compare drug plans, can't be used to fill the doughnut hole because Medigap policies are no longer allowed to cover drugs.

The only way to get some coverage in the gap is as part of a package in which you pay extra - a lot extra - to one of the private drug plans delivering the basic benefit. And because this coverage is bundled with other aspects of the plans, it's very difficult to figure out which plans offer the best deal.

But confusion isn't the only, or even the main, reason why the privatization of drug benefits is bad for America. The real problem is that we'll end up spending too much and getting too little.

Everything we know about health economics indicates that private drug plans will have much higher administrative costs than would have been incurred if Medicare had administered the benefit directly.

It's also clear that the private plans will spend large sums on marketing rather than on medicine. I have nothing against Don Shula, the former head coach of the Miami Dolphins, who is promoting a drug plan offered by Humana. But do we really want people choosing drug plans based on which one hires the most persuasive celebrity?

Last but not least, competing private drug plans will have less clout in negotiating lower drug prices than Medicare as a whole would have. And the law explicitly forbids Medicare from intervening to help the private plans negotiate better deals.

Last week I explained that the Medicare drug bill was devised by people who don't believe in a positive role for government. An insistence on gratuitous privatization is a byproduct of the same ideology. And the result of that ideology is a piece of legislation so bad it's almost surreal.

Posted by DeLong at 08:11 PM | Comments (0) | TrackBack

Privatization of Public Utilities: Water in Argentina

Alex Tabarrok reads the JPE and finds Galiani, Gertler and Schargrodsky's excellent study of Argentine water privatization:

Marginal Revolution: Water of Life

While most countries are committed to increasing access to safe water and thereby reducing child mortality, there is little consensus on how to actually improve water services. One important proposal under discussion is whether to privatize water provision. In the 1990s Argentina embarked on one of the largest privatization campaigns in the world, including the privatization of local water companies covering approximately 30 percent of the country’s municipalities. Using the variation in ownership of water provision across time and space generated by the privatization process, we find that child mortality fell 8 percent in the areas that privatized their water services and that the effect was largest (26 percent) in the poorest areas. We check the robustness of these estimates using cause-specific mortality. While privatization is associated with significant reductions in deaths from infectious and parasitic diseases, it is uncorrelated with deaths from causes unrelated to water conditions.

That is the abstract to a very important paper, "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," by Sebastian Galiani, Paul Gertler and Ernesto Schargrodsky.... In theory, water services are not an easy thing to privatize well because of natural monopoly problems and because some of the benefits of clean water are externalities. In practice, however, governments in developing countries do such a poor job at providing water that there are large potential gains to privatization even given such problems.

Posted by DeLong at 08:09 PM | Comments (0) | TrackBack

Does Manufacturing Matter?

Menzie Chinn says that it does. When the U.S. current account deficit shrinks, it will have to shrink accompanied by an increase in manufacturing employment, because manufactures are the easiest goods to export and also are substitutes for imports. Manufacturing employment has gotten hammered to an unbelievable degree in the Bush era:


Posted by DeLong at 08:08 PM | Comments (0) | TrackBack

Worse Than You Can Imagine

The Bush administration is not only worse than you imagine even after taking account of the fact that it is worse than you imagine, it is worse than you can conceivably imagine:

Issuing Contracts, Ex-Convict Took Bribes in Iraq, U.S. Says - New York Times : By JAMES GLANZ: A North Carolina man who was charged yesterday with accepting kickbacks and bribes as a comptroller and financial officer for the American occupation authority in Iraq was hired despite having served prison time for felony fraud in the 1990's. The job gave the man, Robert J. Stein, control over $82 million in cash earmarked for Iraqi rebuilding projects.

Along with a web of other conspirators who have not yet been named, Mr. Stein and his wife received "bribes, kickbacks and gratuities amounting to at least $200,000 per month" to steer lucrative construction contracts to companies run by another American, Philip H. Bloom, an affidavit outlining the criminal complaint says. Mr. Stein's wife, who was not named, has not been charged with wrongdoing in the case; Mr. Bloom was charged with a range of crimes on Wednesday. In the staccato language of the affidavit, filed in Federal District Court in the District of Columbia, Mr. Stein, 50, was charged with wire fraud, conspiracy, interstate transportation of stolen property and conspiracy to commit money laundering.

But the list of charges does little justice to the astonishing brazenness of the accusations described in the complaint, including a wire transfer of a $140,000 bribe, arranged by Mr. Bloom, to buy real estate for Mr. Stein in North Carolina. The affidavit also says that $65,762.63 was spent to buy cars for Mr. Stein and his wife (he bought a Chevrolet; she a Toyota), $44,471 for home improvements and $48,073 for jewelry, out of $258,000 sent directly to the Bragg Mutual Federal Credit Union into accounts controlled by the Steins.

Mr. Stein's wife even used $7,151.58 of the money for a "towing service," the complaint says. Much of this money was intended for Iraqi construction projects like building a new police academy in the ancient city of Babylon and rehabilitating the library in Karbala, the southern city that is among the holiest sites for Shiite Muslims.

After Mr. Stein awarded contracts for this work to Mr. Bloom, who eventually received at least $3.5 million himself, according to the complaint, the work often was not performed or was done shoddily, the prosecutors say. Mr. Stein was arrested in North Carolina on Monday, the Justice Department said in a statement. He appeared in court on Tuesday, represented by Jane Pearce, an assistant federal public defender in North Carolina's Eastern District, said Elizabeth Luck, a spokeswoman for the office. The Eastern District includes Fayetteville, where Mr. Stein is listed as a homeowner.

Beyond confirming Mr. Stein's appearance in court, "we do not comment on pending litigation in this office," Ms. Luck said, adding that she could not say whether Mr. Stein planned to retain a private lawyer. Little is known about Mr. Stein except that he served in the Army and was convicted in federal court in 1996 for "access device fraud," a felony. Court papers show he was sentenced to eight months in prison and ordered to pay $45,339.25 in restitution.

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

Posted by DeLong at 08:07 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars?

George W. Bush gets something right:

Eric Umansky: Sing it, Brother : "What bothers me is when people are irresponsibly using their positions and playing politics. That's exactly what is taking place in America."

Well said, Mr. President.

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

Posted by DeLong at 08:06 PM | Comments (0) | TrackBack

Civic Virtue

The right to vote: your most important right:

THE RELIABLE SOURCE: Ken Starr may have bailed on the Beltway for the sun and surf of Malibu, where he's dean of the Pepperdine law school... but he left his electoral heart in the Old Dominion.Starr showed up with his wife at a Fairfax County polling site Sunday to vote early as an absentee but was turned away when his name was not found on the rolls. Officials say the former Bill Clinton nemesis lost his Virginia registration by responding affirmatively to a change-of-address query earlier this year. Records show that Starr has not yet registered to vote in California, more than a year after moving there.

Posted by DeLong at 08:05 PM | Comments (0) | TrackBack


Nathan Newman has a convincing argument that Alito should not be confirmed: that he is an enemy of liberty, democracy, and good government:

NathanNewman.org: [F]orget Roe--that's just confirmation of what everyone suspected, and I continue to believe (along with Ruth Bader Ginsburg) that Roe was not particularly helpful to abortion rights in the long-term. But what is most striking about Alito's statement is this line:

In college, I developed a deep interest in constitutional law, motivated in large part by disagreement with Warren Court decisions, particularly in the areas of criminal procedure, the Establishment Clause, and reapportionment.


For the non-lawyers out there, Alito meant he was against the Supreme Court decisions requiring that all state legislative districts be designed to guarantee "one person, one vote."... [T]he reapportionment cases--Baker v. Carr and Reynolds v. Syms--dealt with a problem that democratic voting inherently could not correct, namely the lack of real democracy in most state legislatures. In Tennessee for example, the state had drawn up voting districts back in 1901 and had refused to redraw the district lines since then, meaning that all urban growth had been packed into a few districts where those voters were denied equal political power to voters in other districts with fewer voters and thus far more power per voter.

UPDATE: My father was taking a class taught by legal process honcho H.L.A. Henry Hart when one of the reapportionment cases came down. He says that Hart went berserk in the classroom: since the U.S. Constitution included a radical departure from one-person one-vote--the Senate--how could the Supremes, as a matter of legal process, dare say that states could not do (as part of their own internal politics) what the federal government had done (as part of its internal politics)? That it was unjust for Tennessee's government to be dominated by rural voting interests was, to Hart, beside the point: the business of the Supreme Court was to say what the law is, not to establish justice.

In addition to legal process folks, originalists have an enormous problem with the reapportionment cases. Ask Jemmy Madison whether state legislative and congressional districts should have to be drawn to include equal populations, and he would think you insane. The Constitution guarantees a republican form of government, he would say, not a mob-rule democracy. If the legislature of Tennessee wants to discount urban voters 75%, he would say, it has a perfect right to do so.

But I haven't read recently about any originalists (save Alito) saying that the reapportionment cases were wrongly decided. Perhaps they are recognizing that a written constitution for a common-law judicial system is a strange, subtle, and wondrous thing.

Posted by DeLong at 08:05 PM | Comments (0) | TrackBack

Crush That Mortgage Interest Deduction!

Writing from his huge villa on the hillside (three miles northwest of my 3400 square foot villa in the canyon) Hal Varian endorses the Tax Reform Commission's attempt to cut back on the home mortgage deduction. He is, of course, right:

Economic Scene: Certainly the panel's least popular suggestion is to limit the mortgage interest deduction. Under current law, homeowners can deduct interest on mortgages of up to $1.1 million... the panel proposed that this cap be significantly reduced and that the deduction be replaced with a 15 percent tax credit.

A change of this sort would probably have a significant impact on housing values.... But many economists would argue that the panel's proposal does not go far enough.... The truth of the matter is that housing is highly subsidized in this country and we would probably be better off if the tax treatment of housing were brought more into line with that of other assets. How is housing subsidized? Let me count the ways... the mortgage interest deduction... the deduction for property taxes... the capital gains exclusion... the deduction for points on mortgage loans... the deduction of up to $100,000 on home equity loans... home office deductions... homeowners are not taxed on the implicit rent they receive from their housing investment....

An excessive subsidy on one asset means that less will be invested in other assets. The money put into building those huge villas on the hillside could have been put into factories, office buildings and schools.... Given the huge subsidies to housing, it is likely that we as a country have overinvested in this area....

[T]his is unlikely to happen anytime soon.... The housing tax subsidy has been built into housing prices... cutting back could lead to painful capital losses on home values. If you give a lollipop to a baby, it may make him smile, but you will pay dearly for that smile if you try to take the candy away...

Posted by DeLong at 08:03 PM | Comments (0) | TrackBack

Kevin Drum, Hornswogglee

Kevin Drum gets hornswoggled. He writes:

The Washington Monthly: LET THE SELLER BEWARE.... Jonah Goldberg is taking some abuse for pointing out today in his maiden column for the LA Times that FDR lied about World War II. I don't think that defending Jonah will become a regular feature here, but there's actually nothing much objectionable about saying this. FDR, after all, was a pretty consummate smooth talker...

Ah. But Jonah Goldberg doesn't say that FDR lied about World War II. Jonah Goldberg says:

Los Angeles Times: Clare Boothe Luce... insisted that FDR "lied us into war."... Luce wasn't slandering Franklin Delano Roosevelt. Indeed, the evidence that FDR lied is far greater than the evidence that Bush did...

Yes, FDR wanted desperately to convince America to rearm, and to aid the allies. He was eager to fight Hitler to the last Briton, and to use American economic pressure to convince Japan to end its attempt to conquer China.

But Jonah Goldberg's claim that FDR "lied us into war"? That's a lie. America's war in the Pacific began when Admiral Nagumo's warplanes attacked Pearl Harbor. America's war in Europe began when Hitler declared war on the United States.

Save your powder, Kevin. The interesting thing for you to write about is not Jonah Goldberg's lies about FDR, but Jonah Goldberg's "Yeah. Bush lied. So what?"

Posted by DeLong at 08:02 PM | Comments (0) | TrackBack

History of Economic Thought

Steven Guess's Wednesday evening class on Marxism rolls toward its conclusion. I know he put a lot of work into preparing it last spring. I'll have to chase him down and ask him how it went:

Marxism/Communism: A Survey and Analysis: Contact: steveng@berkeley.edu. Faculty Sponsor: [Gerard] Roland. Course Website: http://debatemarx.blogspot.com Marxism is often discussed but rarely objectively described. This class will introduce students to Marxist ideology, and explore modern challenges to Centrally Planned Economies in the post-Soviet era. It will also compare theoretical Marxism with historical Communism. Finally, students will be encouraged to challenge the course facilitator and Marxist/Capitalist ideas during the semester.

Steven's Pub: The Final Paper for The Decal: This is the list of topics students can choose from for the final paper in my Marxism Decal.

  1. Write a Letter to Wal-Mart CEO H. Lee Scott . In your letter, address the issues of Outsourcing, Low Wages, Unionization, and local community disruption (feel free to throw in anything else you'd like too).
  2. Respond to the statement "The Soviet Union was an unforeseen consequence of Marxist ideology rather than a perversion of Marxist principles."
  3. Look up Cuban statistics on health, productivity, education, and other standards of living. You may wish to consult the CIA World Fact Book and the United Nations website. Did the centralization of economic production result in a better society? Offer some analysis as to why, or why not. Be sure to define what you mean by "better society."
  4. Respond to the statement "Marxism is an Unproven Proposition that is mostly theoretical"
  5. Go to the American Communist Party website. Analyze their page "Why YOU should join the Communist Party" http://www.cpusa.org/article/archive/11/ Address the following questions in your analysis:
    1. Will Communism solve the three problems outlined by the Party?
    2. Is Communism the best way to solve these problems?
    3. In what way do these ambitions relate to the Principles of Communism, as expressed by Engels?
  6. If exploitation in America is increasing, inequality is rising, and capitalism thriving, why is the union movement in decline? And secondly, if the union movement is in decline, does that mean Marx's vision for Communism in America impossible? Be sure to put some general time frame in your ideas.
  7. Respond to the statement "Europe has both private property, and social equality. Therefore, capitalism can be reformed and it is not necessary to adopt a socialist state to achieve a better society."
  8. Analyze the Democratic Party platform. http://www.democrats.org/agenda.html Should a Communist vote Democrat, or should they boycott the Democratic party and vote for more substantial change? Contrast the issue of "lesser of two evils" and "standing on principle."

Posted by DeLong at 08:01 PM | Comments (0) | TrackBack

The Community College Dean Tries to Stop the Cycle of Abuse

The Community College Dean writes lasciate ogni speranza:

Confessions of a Community College Dean: Ask the Administrator: Stopping the Cycle of Abuse: At the risk of alienating my entire readership and everybody with whom I work, I’d strongly advise against targeting a career as a college history professor.... The job market for history professors is dreadful, and has been for a generation. In fact, you can strike the word ‘history’ from that sentence and replace it with any liberal-arts discipline without invalidating the meaning. It’s absurdly difficult to find full-time work on which you could make an adult wage.... The length of training for college professors is dysfunctional, archaic, and abusive. Ph.D.’s in liberal arts disciplines usually take about 7 years... [during which] you will live on a pauper’s income... that’s 7 fewer years during which you were building up equity in a house, stashing away money for retirement, and generally enjoying life. (The cost of income foregone is what economists call ‘opportunity costs.’ Most academics try very hard to repress this knowledge, since it’s profoundly depressing.)... A more life-friendly option that would still allow you to teach in a college would be to get the high school teaching gig, use tuition remission to get a Master’s degree in history while you’re working there, and then sign on as an adjunct....

I know that one of the first commandments of academia is Thou Shalt Reproduce Thy Own, but I can’t in good conscience.... I don’t know what I would have done differently. Had I not moved to the state in which I went to grad school, I wouldn’t have met The Wife, and my life would be unimaginably different. My career path has been idiosyncratic enough that to generalize from it would be silly, so I won’t. But I certainly don’t recommend this to anyone who could imagine himself happy any other way. The chain of abuse has to stop.

Economics is very different. First of all, Economics Departments appear to have made a conscious collective decision (I still can't figure out how) to downsize their graduate programs in the 1970s--to accept smaller numbers of teaching assistants and larger class sizes in order not to be churning out Ph.D.s for which academic jobs would be absent. Then the explosion of business schools created a large additional demand for economists. Then the expansion of world finance created a host of other jobs--in the Federal Reserve, at the IMF, in private-sector banks--that economists could fill. Plus there's the fact that deans appeal to all kinds of social-solidarity and other motives to discourage professors in other disciplines from bargaining hard for higher salaries and fishing for outside offers. In Economics, by contrast, responsiveness to market forces is a moral imperative.

I remember noticing back in 1980 that the economists applying for assistant professorships in Social Studies were 26 and had written drafts of two articles, while the historians were 35 and had published two books...

Posted by DeLong at 08:00 PM | Comments (0) | TrackBack

Vernor Vinge

Charlie Stross is happy:

Charlie Stross: What did I discover but a bound manuscript copy of "Rainbows End" by Vernor Vinge, and a request for promotional quotes?

I could do that! How about:

  1. I have not yet been sent a bound ms. copy, but I am sure that Vernor Vinge's Rainbow's End is the finest space opera ever written!
  2. When confronted by a new science fiction novel written by Vernor Vinge, all sophonts immediately down tools and read it from cover to cover--twice.
  3. Nothing could do more to increase the well-being of science fiction fans than the mass cloning of Vernor Vinge. As it is, we all have to wait painfully long periods of time between novels.
  4. If I had a bound ms. copy of Vernor Vinge's Rainbow's End, I would have something much better to do than to type out promotional quotes.

Posted by DeLong at 07:59 PM | Comments (0) | TrackBack

Donald Rumsfeld Sez: Iraq? War? Who, Me?

Noah Schachtman observes Donald Rumsfeld whispering that he never really wanted to attack Iraq, and that responsibility for America's massive strategic defeat lies on people like Feith, Wolfowitz--and George W. Bush:

Defense Tech: Rummy Backing off from Iraq?: This article from Sunday's Washington Post Magazine is the second major attempt I've seen in the last few months to separate Donald Rumsfeld from the Iraq war.... The idea, basically, is that Rummy was more fixated on modernizing the military than invading any country. Iraq just happened to be the country that the President wanted to wack.

Rumsfeld portrayed the memo as a warning blast, an attempt to do "everything humanly possible to prepare" Bush for the awful responsibility that had settled onto his presidential shoulders -- and his shoulders alone. For there comes a point when even the secretary of defense must realize that "it's not your decision or even your recommendation," Rumsfeld reflected with Woodward. By which he meant the Iraq war wasn't Don Rumsfeld's decision or recommendation.

As if to underline the point, Rumsfeld also told Woodward that he couldn't recall a moment, in all the months of planning for the war, when Bush asked whether his defense secretary favored the invasion. Nor did Rumsfeld ever volunteer his opinion.... "After considerable time with the top-ranking civilian and military leaders of the Pentagon, a new picture of Donald Rumsfeld has emerged for me, and I now believe something that I would have thought preposterous before: There are no 'Rumsfeld wars,'" Thomas P.M. Barnett wrote in July's Esquire.

Of course, he's integral to how the Pentagon has conducted these operations.... But they're not his wars, and they never were. And in that, critics of the war might have something. The rationales behind the Iraq war belonged to the departing neocons Wolfowitz and Feith.... And of course the president.

But if that's true, then what was Rummy doing in the White House on February 11, 1998? That's the day he and six other conservatives pleaded with then-National Security Advisor Sandy Berger to go after Iraq. Or a few days earlier, when he signed an open letter to President Clinton which said: "The only acceptable strategy is one that eliminates the possibility that Iraq will be able to use or threaten to use weapons of mass destruction. In the near term, this means a willingness to undertake military action as diplomacy is clearly failing. In the long term, it means removing Saddam Hussein and his regime from power. That now needs to become the aim of American foreign policy."

For that matter, what was the Secretary of Defense thinking on September 11, 2001? "Rumsfeld was saying that we needed to bomb Iraq," [Richard] Clarke said to [60 Minutes' Leslie] Stahl. "And we all said ... no, no. Al-Qaeda is in Afghanistan. We need to bomb Afghanistan. And Rumsfeld said there aren't any good targets in Afghanistan. And there are lots of good targets in Iraq. I said, 'Well, there are lots of good targets in lots of places, but Iraq had nothing to do with it.'"

Rumsfeld may not like how this war is turning out. But he's been for it for a long time. And no amount of after-the-fact spin is going to change that.

Posted by DeLong at 07:58 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars? ("Imminent Threat" Edition)

Firedoglake says that the only reason that Bush didn't call Saddam Hussein an "imminent threat" was because "imminent" has too many syllables:

firedoglake: Define "Imminent": The new GOP meme, as repeated by White House marionette Chris Wallace on Fox News Sunday this morning, is that "The President never said Saddam posed an imminent threat." (You can watch it at Crooks & Liars.)

I'm guessing Chris pinched this off the daily Fox News "official opinion" crib sheet and didn't actually do much research into the claim himself, because that is just some remarkable revisionist history. Sadly Jay Rockefeller was ill-prepared to answer the charge, so mindful of being ever-helpful, we present this little historical refresher:

"Well, of course he is.” -- White House Communications Director Dan Bartlett responding to the question: “Is Saddam an imminent threat to U.S. interests, either in that part of the world or to Americans right here at home?”, 1/26/03

"No terrorist state poses a greater or more immediate threat to the security of our people and the stability of the world than the regime of Saddam Hussein in Iraq." -- Secretary of Defense Donald Rumsfeld, 9/19/02

"Absolutely." -- White House spokesman Ari Fleischer answering whether Iraq was an "imminent threat," 5/7/03

"This is about imminent threat." -- White House spokesman Scott McClellan, 2/10/03....

"The world is also uniting to answer the unique and urgent threat posed by Iraq whose dictator has already used weapons of mass destruction to kill thousands." -- President Bush, 11/23/02

"There are many dangers in the world, the threat from Iraq stands alone because it gathers the most serious dangers of our age in one place. Iraq could decide on any given day to provide a biological or chemical weapon to a terrorist group or individual terrorists." -- President Bush, 10/7/02

"The Iraqi regime is a threat of unique urgency." President Bush, 10/2/02

You're right. He didn't use the specific word "imminent."

Too many syllables.

Posted by DeLong at 07:57 PM | Comments (0) | TrackBack


Somebody else who sees the new Pride and Prejudice as "Brontefied":

The New Yorker: The Critics: The Current Cinema: “Pride and Prejudice” by ANTHONY LANE: What has happened is perfectly clear: Jane Austen has been Brontëfied. In the book, Lady Catherine appears in daylight, “too early in the morning for visitors.” The film has rightly kept the hint of social insolence but switched the hour, so that the dramatic may be shaded and inked into melodrama. The question is not whether the director was justified in that transmutation but whether he had the choice; whether any of us, as moviemakers, viewers, or readers, retain the ability—-not so much the scholarly equipment as the imaginative clairvoyance—-to see Austen clearly. Maybe we are doomed to view her through the smoked glass of the intervening centuries, during which the spirit of romance, and the role of the body within it, have evolved out of all recognition. Why, when Lizzie accompanies her aunt and uncle to the Peak District of England, should the film take care to set her silent upon a peak, her dress and tresses stirring in the wind, if not to drop the clanging hint that Mr. Darcy is less an icy gentleman of means than a britches-busting Heathcliff in the making?

The hint becomes a yodel toward the end, as Matthew Macfadyen strides grimly through a wet meadow, at some ungodly hour, with Keira Knightley squarely in his sights. He has donned a long coat, which sways fetchingly in the mist; obviously it was copied from a Human League video of the nineteen-eighties.... For her part, Knightley has been crisp and quick throughout-—more girl than woman than seems fit, perhaps, and a boyish girl to boot, but ready and able to hold her own in any rally of wits. Now, like the queen in “Aliens,” she extends her famous underbite and gets down to business.... Any resemblance to scenes and characters created by Miss Austen is, of course, entirely coincidental.

Posted by DeLong at 07:56 PM | Comments (0) | TrackBack

Pulp Fiction

Damn you, Stephen King! Damn you!

Highly recommended:

Stephen King (2005), The Colorado Kid (New York: Hard Case Crime: 0843955848).


Posted by DeLong at 07:55 PM | Comments (0) | TrackBack

Pay No Attention to the Memo Behind the Curtain!

This is very bad for Judge Alito. Not only did he tell Ed Meese that he believes very strongly in the legal position that Roe v. Wade was wrongly decided, but he tells Dianne Feinstein that he didn't mean what he told Meese--that he was just telling a powerful person who controlled a job he wanted what he thought that powerful person wanted to hear.

Ezra Klein writes:

Ezra Klein: Any Questions?: Well, this should pretty much end debate on Alito's true leanings:

Judge Samuel A. Alito Jr., President Bush's Supreme Court nominee, wrote that "the Constitution does not protect a right to an abortion" in a 1985 document obtained by The Washington Times. "I personally believe very strongly" in this legal position, Mr. Alito wrote on his application to become deputy assistant to Attorney General Edwin I. Meese III.[...]

"It has been an honor and source of personal satisfaction for me to serve in the office of the Solicitor General during President Reagan's administration and to help to advance legal positions in which I personally believe very strongly," he wrote.

"I am particularly proud of my contributions in recent cases in which the government has argued in the Supreme Court that racial and ethnic quotas should not be allowed and that the Constitution does not protect a right to an abortion."

UPDATE: Judge Alito tells Senator Dianne Feinstein not to take the memo seriously: back in 1985, Alito says, he was simply saying what he thought would please a powerful person who controlled a job he very much wanted to have:

CNN.com - Feinstein: Alito backs away from memo - Nov 15, 2005: "What [Alito] said was, 'It was different then. I was an advocate seeking a job. It was a political job,'" the California Democrat said. She said Alito said 1985 was a "very different" time, when he was an advocate for the Reagan administration. As a judge for 15 years, he looks at legal matters differently. "I don't give heed to my personal views. What I do is I interpret the law,'" she said, quoting the 55-year-old judge from New Jersey.

Posted by DeLong at 07:54 PM | Comments (0) | TrackBack

Yglesias's Unified Theory of Bushism

Matthew Yglesias proposes a unified theory of Bush domestic policy:

TPMCafe || Domestic Policy By Idiots: Ordinary political movements take one of two stances on the idea of launching a big, expensive new program to have the government deliver some services. Either they favor such endeavors, or else they oppose them. The Bush Republicans have chosen a third way -- they don't favor this sort of thing, but they implement it anyway in search of political gains and ways of funneling money toward their financial supporters. The result is disaster. Keep in mind that these poor policy outcomes aren't really mistakes or the much-cited "incompetence." It's malice. As during the post-Katrina recovery, the fear is that if you design a program well, people will like it, and support for the dread "big government" will grow. New programs must be poorly designed in order to "prove" that such things don't work.

Posted by DeLong at 07:53 PM | Comments (0) | TrackBack

Tax Reform Books

Joel Slemrod on right-wing tax books:

'The Fairtax Book' and 'Flat Tax Revolution': Almost everyone agrees that our tax system could be a lot better - simpler, fairer and less of a drag on the economy.... These two new books, both coming from the right, suggest that merely reforming the current system is too timid. The correct policy medicine, the authors say, is to junk the income tax entirely and replace it with a consumption tax with a single tax rate for all Americans.

In "The FairTax Book," the syndicated radio host Neal Boortz and Representative John Linder, Republican of Georgia, claim that replacing all federal taxes - income, payroll and estate taxes - with a national sales tax would increase the average household's purchasing power by about 20 percent, end the need for the I.R.S. and turn April 15 into just another spring day. "Once the FairTax takes effect," they declare, "you'll be receiving 100 percent of every paycheck, with no withholding of federal income taxes, Social Security taxes or Medicare taxes - and you'll be paying just about the same price for T-shirts and other consumer goods and services that you were paying before the FairTax."

For a book that claims in its introduction to be "about honesty," this statement falls far short.... The honest truth is that replacing the current tax system with any system that raises the same amount of revenue (as Boortz and Linder claim their plan does) may make us better off, but only by redirecting our resources away from dealing with complex filing requirements and improving our incentives to work, save and innovate - not by creating the kind of free-lunch miracle suggested here. As for "saying goodbye" to the I.R.S., the authors' plan does so only by passing the responsibility for tax collection to the states. And what a responsibility it would be....

There's one more problem. Moving to a national sales tax would drastically shift the tax burden away from high-income families and toward low-income families....

Steve Forbes is also pushing a tax plan, one he claims would "free America" from "the tyranny of the federal tax code."... Under the flat tax, there would be no deduction for mortgage interest, state and local taxes or charitable contributions. A 17 percent rate would apply to all taxable income, whether the taxpayer is Bill Gates, Steve Forbes or the mechanic who fixes their cars. Investment income would not be taxed at all under the individual tax, which by itself benefits predominantly higher-income taxpayers. The flat tax would indeed represent a significant simplification over the current system. (On the book's cover, Forbes is shown brandishing a postcard printed with "The Steve Forbes Flat Tax Form" - though, to be fair, the current 1040EZ would fit on the same card.) And cleaning up the tax base would, on balance, allow the economy to operate more efficiently and reduce the extent to which one's tax burden depended on arguably irrelevant factors such as whether one rented or owned a home. These benefits, however, have nothing to do with having a single tax rate. In fact, one of the architects of the flat tax, Robert E. Hall of Stanford University, now favors a plan, known as the X-Tax, that would apply a graduated rate structure to this simplified tax base.

Aspects of the flat tax deserve serious consideration. Unfortunately, Forbes's book does not provide it. Instead, like "The FairTax Book," it promises a free lunch. "Everyone" gets a tax cut under his plan. To guarantee that sound-bite feature, he would give people the choice of computing taxes under the flat tax or staying with the old tax system. That stunning concession guarantees that the nine million words of the current tax code and regulations would not go away after all but would be expanded by hundreds of thousands of new words laying out the flat tax rules and, inevitably, the new rules governing the consequences of going back and forth between the two systems. And then there's the hundreds of billions of dollars that Forbes's plan would add to the deficit. Forbes says that his plan will stimulate the economy so much that the apparent revenue shortfall doesn't materialize. If only this were true. Serious analyses suggest that a flat tax would be good for the economy, but would not produce the economic nirvana needed to close the huge revenue gap....

Tax reform deserves objective analysis of the sort these books do not provide. Fortunately, the president's tax reform panel has done a much better job.... Both the proposals they outline simplify the tax base, though they retain a reduced mortgage interest break (in the form of a flat credit rather than an itemized deduction, which reduces the tilting of the benefits toward wealthier taxpayers). Both retain a graduated personal rate structure and try to maintain the current distribution of the tax burden.

Contemplation of radical tax alternatives is exhilarating, and could help to avoid the kind of loophole-to-loophole combat that tax war veterans recall from 1986, the last time we made wholesale changes in the system. But much progress toward these goals - including eliminating the need for most Americans to file tax returns - can be made within the basic framework of the current system. These books, to use the language on the jacket of "Flat Tax Revolution," are calls to join a crusade. We'd be better off just starting a conversation.

Posted by DeLong at 07:19 PM | Comments (0) | TrackBack

Matt Drudge Goes Into Opposition

Pam Spaulding of Pandagon writes:

Pandagon: 'Bush rarely speaks to father, family is split': Get the Drudge siren going... Insight Mag is reporting (via... Drudge - and I'm not linking to him) that [George W. Bush] isn't getting on well with Poppy these days, and that it really is a bunker mentality at the White House.... I think about it -- this guy is running the country and has access to nukes, for god's sake.

President Bush feels betrayed by several of his most senior aides and advisors and has severely restricted access to the Oval Office, INSIGHT magazine claims in a new report.

The president's reclusiveness in the face of relentless public scrutiny of the U.S.-led war in Iraq and White House leaks regarding CIA operative Valerie Plame has become so extreme that Mr. Bush has also reduced contact with his father, former President George H.W. Bush, administration sources said on the condition of anonymity.

"The atmosphere in the Oval Office has become unbearable," a source said. "Even the family is split."

INSIGHT: Sources close to the White House say that Mr. Bush has become isolated and feels betrayed by key officials in the wake of plunging domestic support, the continued insurgency in Iraq and the CIA-leak investigation that has resulted in the indictment and resignation of Lewis %u201CScooter%u201D Libby, Vice President Dick Cheney%u2019s former chief of staff.

The sources said Mr. Bush maintains daily contact with only four people... first lady Laura Bush, his mother, Barbara Bush, Secretary of State Condoleezza Rice and Undersecretary of State Karen Hughes. The sources also say that Mr. Bush has stopped talking with his father, except on family occasions.

Maybe Poppy's finally told the little guy that the current administration has f*ed up U.S. relations with half... the globe.... After all, Poppy's had to help the poor bastard out all his life, and what does he have to show for it -- a son that is a dangerous, unstable dunce -- and everyone knows it.

Someday, I want to find somebody who can tell me why George H.W. Bush thought it a good idea to give his rolodex and his political base to his eldest son.

Posted by DeLong at 07:17 PM | Comments (0) | TrackBack

I'm Sad to See That Douglas Holtz-Eakin is leaving the Congressional Budget Office

He has done a very good job--both at the CBO and earlier at the CEA.

I do wish that David Rosenbaum could have written the real story: the story is that under Doug the CBO produced a lot of highly credible and useful information to assist Congress in making its decisions. It's not that Doug was a "thorn in the side" of the Bush administration. Reality was the "thorn in the side."

Director of Congressional Budget Office to Leave - New York Times: Douglas J. Holtz-Eakin, a former White House economist who has often been a thorn in the side of the Bush administration since he became director of the nonpartisan Congressional Budget Office nearly three years ago, announced on Monday that he planned to leave at the end of the year.

In a message to the budget office staff, Mr. Holtz-Eakin, 47, said he would join the staff of the Council on Foreign Relations here.... Mr. Holtz-Eakin is the most recent in a series to irritate Republican Congressional leaders by refusing to adopt a party line. Within weeks of his appointment by Republican leaders in early 2003, Mr. Holtz-Eakin declared, to their dismay, that Mr. Bush's tax and spending plans would do little or nothing to stimulate long-term economic growth. Subsequently, the budget office released a report that found that Mr. Bush's tax cuts were heavily skewed in favor of the wealthiest Americans. Mr. Holtz-Eakin rejected Republican demands that budget forecasts take account of strengthened economic activity from tax cuts without analyzing the drag caused by increased spending.

Under his direction, the budget office often took issue with the political goals of Republicans. It raised doubts about proposals to partly privatize the Social Security system, concluded that abolishing estate taxes would reduce charitable contributions and calculated that allowing same-sex marriages would slightly increase federal revenues. Donald B. Marron, the deputy director, will become the acting director of the budget office until Congressional leaders choose a replacement for Mr. Holtz-Eakin.

Posted by DeLong at 07:15 PM | Comments (0) | TrackBack

"I Didn't Mislead: You Misfollowed"

Eschaton finds that Tom Toles writes:

Eschaton : heh-indeedy

Posted by DeLong at 07:14 PM | Comments (0) | TrackBack

November 16, 2005

Problem Set 5: Econ 101b: Fall 2005

The fall 2005 problem set 5.

Posted by DeLong at 12:04 PM

November 14, 2005

The Power of Narrative

Two years ago Patrick Nielsen Hayden wrote:

Electrolite: Light of reason. : Light of reason. Arthur Silber is one of the blog world's authentic voices: a free-market capitalist, Ayn Rand-quoting libertarian who is't awed by power or transported by dreams of Middle Eastern empire. An inconvenient voice, if you will.... [T]his liberal holds Arthur Silber in high regard.... Consider hitting his tip jar. We need more Arthur Silbers, definitely not fewer.

Now it looks as though Arthur Silber is back at http://powerofnarrative.blogspot.com. Go read what he has to say--and do hit the tip jar.

Posted by DeLong at 01:09 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (When Is Mosul Not Mosul? Department)

Unqualified Offerings spots Condi Rice both visiting and not-visiting Mosul:

Unqualified Offerings: First sentence of the NYT report on Condoleezza Rice's travels:

MOSUL, Iraq The U.S. secretary of state, Condoleezza Rice, made a surprise stop Friday in this violent, Sunni-dominated city in northern Iraq, declaring that it had recently become a success story for the strategy of using Iraqi forces to quell the insurgency.

Ninth sentence, same article:

A month ago, four State Department security officers were killed in Mosul by a roadside bomb, and the city, Iraq's third largest, was not deemed safe enough for her to visit.

How can we send the Secretary of State to Mosul and not send her to Mosul at the same time? By using our advanced super-science. Also, "Mosul" in the first sentence really means Camp Courage, "a heavily fortified military base north of the Tigris River, surrounding an old palace of Saddam Hussein's on the city's northern outskirts," and not Mosul, a "violent, Sunni-dominated city in northern Iraq" at all. But close enough for government (public relations) work!

And close enough for the New York Times as well.

Posted by DeLong at 01:08 PM

Google as a Post-Von Neumann Architecture

Highly recommended:

Edge: TURING'S CATHEDRAL by George Dyson: Exactly sixty years ago, at the Institute for Advanced Study in Princeton, New Jersey, mathematician John von Neumann began seeking funding to build a machine that would do this at electronic speeds. "I am sure that the projected device, or rather the species of devices of which it is to be the first representative, is so radically new that many of its uses will become clear only after it has been put into operation."... "Uses which are likely to be the most important are by definition those which we do not recognize at present because they are farthest removed from our present sphere."... When the machine finally became operational in 1951, it had 5 kilobytes of random-access memory: a 32 x 32 x 40 matrix of binary digits, stored as a flickering pattern of electrical charge, shifting from millisecond to millisecond on the surface of 40 cathode-ray tubes.

The codes that inoculated this empty universe were based upon the architectural principal that a pair of 5-bit coordinates could uniquely identify a memory location containing a string of 40 bits. These 40 bits could include not only data (numbers that mean things) but executable instructions (numbers that do things) — including instructions to transfer control to another location and do something else. By breaking the distinction between numbers that mean things and numbers that do things, von Neumann unleashed the power of the stored-program computer, and our universe would never be the same.... From an initial nucleus of 4 x 10^4 bits changing state at kilocycle speed, the von Neumann's archetype has proliferated to individual matrices of more than 10^9 bits, running at speeds of more than 10^9 cycles per second, interconnected by an extended address matrix encompassing up to 10^9 remote hosts....

In the early 1950s, when mean time between memory failure was measured in minutes, no one imagined that a system depending on every bit being in exactly the right place at exactly the right time could be scaled up by a factor of 10^13 in size, and down by a factor of 10^6 in time.... Fifty years later, thanks to solid state micro-electronics, the von Neumann matrix is going strong. The problem has shifted from how to achieve reliable results using sloppy hardware, to how to achieve reliable results using sloppy code. The von Neumann architecture is here to stay....

As organisms, we possess two outstanding repositories of information: the information conveyed by our genes, and the information stored in our brains.... He considered the second example in his posthumously-published The Computer and the Brain: "The message-system used in the nervous system... is of an essentially statistical character," he explained. "In other words, what matters are not the precise positions of definite markers, digits, but the statistical characteristics of their occurrence... a radically different system of notation from the ones we are familiar with in ordinary arithmetics and mathematics... Clearly, other traits of the (statistical) message could also be used: indeed, the frequency referred to is a property of a single train of pulses whereas every one of the relevant nerves consists of a large number of fibers, each of which transmits numerous trains of pulses. It is, therefore, perfectly plausible that certain (statistical) relationships between such trains of pulses should also transmit information.... Whatever language the central nervous system is using, it is characterized by less logical and arithmetical depth than what we are normally used to [and] must structurally be essentially different from those languages to which our common experience refers."...

In a digital computer... everything depends not only on precise instructions, but on HERE, THERE, and WHEN being exactly defined. It is almost incomprehensible that programs amounting to millions of lines of code, written by teams of hundreds of people, are able to go out into the computational universe and function as well as they do given that one bit in the wrong place (or the wrong time) can bring the process to a halt.

Biology has taken a completely different approach. There is no von Neumann address matrix, just a molecular soup, and the instructions say simply "DO THIS with the next copy of THAT which comes along." The results are far more robust. There is no unforgiving central address authority, and no unforgiving central clock. This ability to take general, organized advantage of local, haphazard processes is exactly the ability that (so far) has distinguished information processing in living organisms from information processing by digital computers....

[T]emplate-based addressing did not catch on widely until Google (and brethren) came along. Google is building a new, content-addressable layer overlying the von Neumann matrix underneath.... We call this a "search engine".... However, once the digital universe is thoroughly mapped, and initialized by us searching for meaningful things and following meaningful paths, it will inevitably be colonized by codes that will start doing things with the results. Once a system of template-based-addressing is in place, the door is opened to code that can interact directly with other code....

My visit to Google? Despite the whimsical furniture and other toys, I felt I was entering a 14th-century cathedral — not in the 14th century but in the 12th century, while it was being built. Everyone was busy carving one stone here and another stone there, with some invisible architect getting everything to fit. The mood was playful, yet there was a palpable reverence in the air. "We are not scanning all those books to be read by people," explained one of my hosts after my talk. "We are scanning them to be read by an AI."...

Posted by DeLong at 01:07 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars?

Carol Leonnig and Jim VandeHei state the obvious: if Libby is not insane, his perjury is intended to protect Cheney in some way:

Libby May Have Tried to Mask Cheney's Role: In the opening days of the CIA leak investigation in early October 2003, FBI agents... had something that law enforcement officials would later describe as their "guidebook"... the daily, diary-like notes compiled by I. Lewis "Scooter" Libby....

The investigators had much of this information before they sat down with Libby on Oct. 14, 2003, and first heard from him what prosecutors now allege was a demonstrably false version.... Libby said that, when he told other reporters about the CIA operative and her marriage to Iraq war critic Joseph C. Wilson IV, he believed he had first learned the information from Tim Russert of NBC News and was merely passing along journalistic hearsay.... In the aftermath of Libby's recent five-count indictment, this curious sequence raises a question of motives that hangs over the investigation: Why would an experienced lawyer and government official such as Libby leave himself so exposed to prosecutor Patrick J. Fitzgerald? Libby... gave a false story... even though he knew investigators had his notes, and presumably knew that several of his White House colleagues had already provided testimony and documentary evidence that would undercut his own story....

The vice president is shown by the indictment to be aware of and interested in Plame and her CIA status long before her cover was blown.... White House aides privately wonder whether Libby was seeking to protect Cheney from political embarrassment. One of them noted with resignation, "Obviously, the indictment speaks for itself."...

[T]o Libby's defenders, the timing of Libby's alleged lies supports his claims of innocence. They say it would be supremely illogical for an intelligent and highly experienced lawyer to mislead the FBI or grand jury if he knew the jurors had evidence that would expose his falsehoods. Libby, they say, is guilty of nothing more than a foggy memory and recollections that differ, however dramatically, from those of several witnesses in the nearly two-year-old investigation....

Libby... during his first FBI interview... said he believed that he first learned about Plame on July 10 or July 11, 2003, in a conversation with Russert. ... Libby did not seek to deny that he had learned about the Plame link from Cheney -- as revealed by Libby's own notes -- but simply said it had slipped his mind that the vice president was an earlier source of the information than Russert, lawyers familiar with the case said.... Fleischer reportedly told investigators that, at a lunch on Monday, July 7, Libby told him that Wilson's wife worked at the CIA and confided that the information was not widely known. Fitzgerald, in announcing the indictment two weeks ago, called attention to this conversation with Fleischer to show how improbable he regarded Libby's account: "What's important about that is that Mr. Libby . . . was telling Mr. Fleischer something on Monday that he claims to have learned on Thursday."... Fitzgerald got all the reporters' testimony that he had sought. Russert, Time magazine reporter Matthew Cooper and Judith Miller of the New York Times all testified about their conversations with Libby. All contradicted Libby.

Posted by DeLong at 01:04 PM | Comments (0) | TrackBack

Paul Krugman Talks to Campus Progress

They say:

CampusProgress.org | Five Minutes With: Paul Krugman: Q: What prompted you to write your November 4th column “Defending Imperial Nudity?”....

A: We finally reached a point where a lot of people are starting to acknowledge the obvious, which is that we were deliberately hyped into war, and a lot of defenses are coming up. People are still trying to pretend that nothing happened and it all made sense, and I felt that it was time to find a way to play how ridiculous that is.

Q: I get the feeling that we’re living in a really good political satire.

A: Yeah, or a really tawdry political novel. If you tried to make this stuff up, nobody would dare – they’d say that it’s ridiculous.

Q: You’ve written economics textbooks before. If you had to imagine writing another textbook thirty years from now characterizing economic policy under various presidents, how would you talk about the Bush administration?

A: Well, the answer is that there is no policy. What’s interesting about it is that there’s no sign that anybody’s actually thinking about “well, how do we run this economy?” Everything becomes an excuse to do pre-set things instead of an actual response to an event or a real problem. So, the idea was “we’re going to cut taxes on capital income, as opposed to earned income” and whatever happened became a reason to do that....

Q: Having been a strong proponent of globalization whose enthusiasm on the subject seems to have waned a bit, can you talk about where you stand now and how you think it might be most productive for students who work on this issue to talk about it?

A: If you aren’t a little bit tortured about globalization, you’re not paying attention. I got into economics nearly 30 years ago, in grad school. At the time, development was too depressing as a field – there were no success stories. The club of rich countries had closed in the late 1880s, and there really was no way forward. The very good news is that there has been a lot of upward movement in select parts of the third world. All of that is based on exports, on the opportunities presented by globalization. You can’t be against globalization in general if you support third world countries making their way up in the world.

The downside is that there have by no means been success stories across the board. On the one side, you clearly have some of the most vulnerable people in our own society that have been paying the price, and a lot of developing countries have been following the advice from Washington on globalization, and things have gone very badly. It’s a very mixed picture. What I want to hear is not “let’s rally against globalization,” but “let’s try to fix it.” It’s easy enough to say, but where’s the political constituency for that? Anyone who thinks of globalization as a great unambiguous evil hasn’t been paying attention. Anyone who thinks it’s a total good hasn’t been following things that have been happening in places like Argentina.

Q: I recently got good health insurance for the first time in a while, and I can safely say how what a relief it is. Clearly the US lags well behind other industrialized nations in terms of our numbers of uninsured. Can we make the move to universal coverage?

A: There are two questions there: one is economics, one is politics. The economics is really straight forward. Some kind of national health insurance financed out of a mandatory premium on all wages, a tax, however you want to do it – is clearly the dominant system. The US system is a patchwork with big gaps in it, Medicare, Medicaid, employer based coverage, it’s a mess. It’s the wonder of the world. We get worse results at greater cost than anyone else. We have enormous bureaucracy and administrative expenses basically because private insurers and lots of other players in the system are spending lots of money trying not to cover people.

Now, politics, the trouble is, how do you do that? How do we achieve some approximation to a national healthcare system, given the political realities? The funny thing is, happy majorities in the American public, according to polls, favor guaranteed healthcare for everybody, so we’re not talking about something where the public is against the idea. What we’re talking about is a very powerful set of interests and a very powerful set of ideologues in Washington, who have managed to intimidate the politicians. That’s a really hard thing to get through....

Q: Obviously journalism isn’t your only or even your primary job. It seems like that lets you be more independent and more risk taking.

A: Very much so. There was a long period, from September 2001 until early 2004 when I felt like I was really alone among prominent commentators in saying “hey, we’re being lied to, these people are not defending us, they’re lying to us a lot.” I think had I been worried about a journalistic career, about “will the Times keep me?” I would have been much more inhibited. But, the fact is, if the Times had given into pressure and gotten rid of me, my life actually would have improved in a lot of ways. Personally, it would be easier. Still, I don’t think it would be good if every op-ed columnist was like me. Journalism is a craft and there are things I can’t do. I can’t do investigative reporting, I can’t play Carl Bernstein....

Posted by DeLong at 12:38 PM | Comments (0) | TrackBack

The Latest Word on High European Unemployment

Olivier Blanchard's latest on European unemployment:

Olivier Blanchard (2005), European Unemployment: The Evolution of Facts and Ideas (Cambridge: NBER Working Paper No. 11750): Abstract: In the 1970s, European unemployment started increasing. It increased further in the 1980s, to reach a plateau in the 1990s. It is still high today, although the average unemployment rate hides a high degree of heterogeneity across countries. The focus of researchers and policy makers was initially on the role of shocks. As unemployment remained high, the focus has progressively shifted to institutions. This paper reviews the interaction of facts and theories, and gives a tentative assessment of what we know and what we still do not know.

6 Do We Know Enough to Give Advice?

At the end of this tour, one may ask whether we know enough to give advice to policy makers about how to reduce unemployment. I believe we do—-with the proper degree of humility. In this last section, I summarize what I think we know and we do not know.

6.1 A General Story Line

Going back over the last thirty years, there is little question that the initial increase in unemployment in Europe was primarily due to adverse and largely common shocks, from oil price increases to the slowdown in productivity growth. There is not much question that different institutions led to di®erent initial outcomes. Whether collective bargaining led to a decrease in the growth of bargained wages, whether inflation could be used to reduce real wage growth, all played a central role in determining the size of the increase in unemployment.... [T]he increase in unemployment led, in most countries, to changes in institutions as most governments tried to limit the increase in unemployment through employment protection, and to reduce the pain of unemployment through more generous unemployment insurance.... [S]ince the early 1980s, because of financial pressure and intellectual arguments, most governments have partly reversed the initial change in institutions. But this reversal has been partial, and sometimes perverse. The different paths chosen may well explain the differences in unemployment rates across European countries today.... The role of shocks and the interaction with collective bargaining emphasized by initial theories, the role of capital accumulation and insider effects emphasized by the theories focusing on persistence, the role of specific institutions clarified by flow-bargaining models, all explain important aspects of the evolution of European unemployment.

6.2 Which Institutions?

It is one thing to say that labor market institutions matter, and another to know exactly which ones and how. Humility is needed here, and there is no better reminder than the comparison between Portugal and Spain. Both experienced revolutions and wage explosions in the 1970s (the Portuguese labor share reached 100% in the mid 1970s...); both have, at least on the surface, rather similar institutions, including high employment protection. Yet, Spanish unemployment has been very high, exceeding 20% in the mid–1990s, whereas Portuguese unemployment has remained low, with a high of 8.6% in the mid–1980s, and a decrease thereafter.... [T]he history of the last thirty years is a series of love affairs with sometimes sad endings, first with Germany and German–like institutions—-until unemployment started increasing there in the 1990s... -—then with the United Kingdom and the Thatcher–Blair reforms, then with Ireland and the Netherlands and the role of national agreements, and now with the Scandinavian countries, especially Denmark, and its concept of “flexisecurity”....

We know much more about the incentive aspects of unemployment insurance on search intensity and unemployment duration, be it the length and time shape of unemployment benefits, or the form of conditionality or training programs.... We know more about the effects of decreasing social contributions on low wages.... We know more about the effects of employment protection, and the effects on the labor market of introducing temporary contracts at the margin while keeping employment protection the same for most workers.... [A] large consensus-—right or wrong—-has emerged: It holds that modern economies need to constantly reallocate resources, including labor, from old to new products, from bad to good firms. At the same time, workers value security and insurance against major adverse professional events, job loss in particular. While there is a trade-of between efficiency and insurance, the experience of the successful European countries suggests it need not be very steep. What is important in essence is to protect workers, not jobs. This means providing unemployment insurance, generous in level, but conditional on the willingness of the unemployed to train for and accept jobs if available. This means employment protection, but in the form of financial costs to firms to make them internalize the social costs of unemployment, including unemployment insurance, rather than through a complex administrative and judicial process. This means dealing with the need to decrease the cost of low skilled labor through lower social contributions paid by firms at the low wage end, and the need to make work attractive to low skill workers through a negative income tax rather than a minimum wage.

These measures are probably all desirable. If they were to be implemented, would they be enough to eliminate the European problem? I see at least two reasons to worry.

6.3 Collective Bargaining and Trust

The first worry is that these reforms deal only with a subset of the institutions that govern the labor market. An early theme of the research on European unemployment was the importance of collective bargaining. And it is a fact that some of the successful countries, the Scandinavian countries in particular, have very different structures of collective bargaining from, say, France or Italy, with much more of an emphasis on national, trilateral, discussions and negotiations between unions, business representatives, and the state.

This raises two questions. First whether countries such as France or Italy need to also modify the structure of collective bargaining. Second whether, even if they did, the results would be the same as in Sweden or Denmark.... [V]arious measures of trust, from strike intensity in the 1960s to survey measures of trust between firms and workers, [can] explain a substantial fraction of differences in unemployment across European countries. Even if these findings reflect causality from lack of trust to unemployment, it is just a start. The question is whether trust can be created....

6.4 Low Inflation, the Natural and the Actual Rate of Unemployment

Since 2000, European unemployment has been associated with roughly constant inflation. This would suggest that the current high unemployment rate reflects a high natural unemployment rate, rather than a large deviation of the actual unemployment rate above the natural rate. This is indeed the assumption which justifies the focus on inflation by the European Central Bank: Maintaining constant inflation is then equivalent to maintaining unemployment close to its natural rate; this natural rate can only be reduced by labor market reforms, and this is not the responsability of the central bank.

One may however question this assumption. Inflation in the EU15 is now running under 2%, and close to 0% in countries such as Germany. At these low inflation rates, it is not implausible that nominal rigidities matter more, that workers for example are reluctant to accept nominal wage cuts—-a hypothesis explored, for example, by Akerlof et al (1996). In such an environment, it may be that an unemployment rate above the natural rate may lead to low rather than declining inflation. Put another way, it may be that, in fact, an expansion of demand might decrease unemployment without leading to steadily higher inflation. The experience of Spain, where unemployment has steadily decreased without major labor market reforms and without an increase in inflation, can be read in this light.

Another, conceptually different, argument for a more expansionary monetary policy, is that institutional reforms encounter less opposition when economies are growing and unemployment is decreasing.... This argument is an old one (Blanchard et al (1985) already argued for such a “two-handed” approach in Europe) but is still relevant today. One issue however is whether, in fact, growth and the decrease in unemployment do not alleviate the political need for reform, and thus delay rather than encourage reforms. The experience of the late 1990s in Europe, where a cyclical expansion often delayed reforms, is not reassuring in that respect. Developing this last point would take us to the political economy of labor market reform, and this should be the topic of another survey.

Posted by DeLong at 12:38 PM | Comments (0) | TrackBack

More Dingbat Kabuki

Interesting. Is John Snow finally standing on two legs?

Reuters AlertNet - Chalabi stirs Iraq war controversy on U.S. visit : U.S. officials said Chalabi came to Washington at this time because he was invited by Treasury Secretary John Snow. But Snow is traveling in India all week.

Posted by DeLong at 12:30 PM | Comments (0) | TrackBack

Cheney Is All Alone

Gary Farber notes that even John "Death Squads Buried Their Victims Under My Airport" Negroponte won't support Dick "Waterboarding" Cheney:

Amygdala: WHEN EVEN NEGROPONTE WON'T SPEAK UP FOR TORTURE, you know that brave Vice-President Cheney is leading a truly heroic charge for the need to torture.

At a secret briefing for U.S. Senators on Oct. 26, Director of National Intelligence John Negroponte was pointedly neutral on Vice President Dick Cheney's Capitol Hill lobbying on to have the CIA exempted from legislation banning mistreatment of detainees, a senior U.S. intelligence official tells TIME. "It's above my pay grade," the spymaster said, then artfully dodged another question about whether the harsher interrogation tactics Cheney wants the agency to be free to use actually produce valuable intelligence.

Posted by DeLong at 12:29 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars?

The Moderate Voice writes:

The Moderate Voice - Washington Post Says Bush Speech Not Quite Accurate: [I]t contends President George Bush's speech contained a fundamental inaccuracy that some are sure to dismiss as a slight oversight and others will insist represents falsification.... The Post writes:

President Bush and his national security adviser have answered critics of the Iraq war in recent days with a two-pronged argument: that Congress saw the same intelligence the administration did before the war, and that independent commissions have determined that the administration did not misrepresent the intelligence.

Neither assertion is wholly accurate.... Bush and his aides had access to much more voluminous intelligence information than did lawmakers, who were dependent on the administration to provide the material. And the commissions cited by officials... were not authorized to determine whether the administration exaggerated or distorted those conclusions.

To repeat what we've said in many posts here: this administration's biggest problem is its credibility. Stories such as this mean his speech will (once again) be welcomed by always-loyal partisan supporters, immediately seized upon by partisan foes -- and will be yet ANOTHER nail in the coffin for GWB & Co in terms of independent voters or even some of the more conservative Democrats that voted for him and the GOP....

If the White House intent is to indeed go on the offensive against war critics (read that: Democrats, in particular), turning once again to the power-enhancement via division playbook, it may not work this time. Convincing arguments are not arguments that can be shot down in a mere newspaper story -- and this Post story will not be welcome news for the White House.... Add to that White House Press Secretary Scott McClellan's war with the White House press corps and it looks more like more than ever Bush is going to try to get through the next three years by rallying his base.

And expanding his number of political enemies.

It's considerably worse than that. The Bush administration's recent embrace of Chalabi tells us that they are lining up on the side of the deceivers. As Jack Fairweather of the Telegraph wrote a year and a half ago:

Telegraph | News | Chalabi stands by faulty intelligence that toppled Saddam's regime : Mr Chalabi, by far the most effective anti-Saddam lobbyist in Washington, shrugged off charges that he had deliberately misled US intelligence. "We are heroes in error," he told the Telegraph in Baghdad. "As far as we're concerned we've been entirely successful. That tyrant Saddam is gone and the Americans are in Baghdad. What was said before is not important. The Bush administration is looking for a scapegoat. We're ready to fall on our swords if he wants."

Few members of even the Bush base will stand for this.

Posted by DeLong at 12:23 PM | Comments (0) | TrackBack

Harry's Place Reads the Tehran Times

Harry's Place reads the Tehran Times and remembers Noam Chomsky's disingenuous characterization of Robert Faurisson:

Harry's Place: Has Noam Chomsky ever recanted what he wrote in 1980...?

[I]s it true that Faurisson is an anti-Semite or a neo-Nazi? As noted earlier, I do not know his work very well. But from what I have read -- largely as a result of the nature of the attacks on him -- I find no evidence to support either conclusion. Nor do I find credible evidence in the material that I have read concerning him, either in the public record or in private correspondence. As far as I can determine, he is a relatively apolitical liberal of some sort.

As Harry finds Faurisson himself being interviewed by the Tehran TImes:

Interview with Faurisson:

Q: As you know the UN General Assembly on Tuesday (November 1) passed a resolution designating January 27 as an international day of commemoration of the Jewish and other victims of the Holocaust. What is your view on the decision at this time?

Faurisson: For many years now I have been telling my acquaintances in the Muslim world that the Jews and the Zionists want to impose the religion of the alleged "Holocaust" of the Jews on the whole world. It is normal that Jews and Zionists should seek to foist such an imposture on us, for it is the sword and the shield of the Jews in general and of the Jewish State in particular. It is also normal that the Jews and the Zionists should have got the UN to submit to their will to power and so decree that every year the six billion people who inhabit the Earth shall be reminded of the "Holocaust". The Muslim world has been awakening from its too long torpor for only a few years. It ought to have listened to the revisionists long ago and denounced out loud the sham of an alleged German project to exterminate the Jews, the alleged Nazi gas chambers and the alleged six million Jewish victims.

Q: The Holocaust is (claimed) alleged to have happened in Europe so why is its commemoration being set by an international body like the UN?

Faurisson: Allow me to tell you that your question tends to prove that you haven't understood the warnings given by the revisionists. Whenever I, for my part, told Muslims: "Be revisionists! Support the revisionists! Try to understand that it's in your interest to do so", they would respond saying: "All that doesn't concern us. It's a matter between Europeans or Westerners, Jews or Christians. It happened in Europe." For me, such an answer was discouraging but I would come charging back saying: "Open your eyes! What makes for the strength of the Jewish State is the political support, rooted in supposedly ethical grounds, that it enjoys in the entire Western world, where people feel sorry for the Jews because they believe that, during the Second World War, the Germans sought to exterminate them physically, in particular in the alleged gas chambers (not to be confused with the cremation ovens, which did actually exist and about which there was positively nothing criminal).... [T]he citizens of all those Western countries, swamped with Jewish propaganda as they are, believe the "Holocaust" lie and, as long as they believe it, will feel bound to support the Jews and to supply the Jewish State and the Jewish Army with ever more money and arms. The more those in the West believe in the "Holocaust", the more Muslims they will kill and cause to be killed in Palestine, in Afghanistan, in Iraq or elsewhere.... The Jews do not tolerate any questioning of the "Holocaust". Against the revisionists they use physical violence and judicial repression because, on the level of historical and scientific argumentation, they have been defeated hands down by the revisionists. We have been able to expose their lies, one by one. Therefore Jews and Zionists seek refuge in violence and intimidation. They treat revisionists like Palestinians...

Posted by DeLong at 12:11 PM | Comments (0) | TrackBack

Why Oh Why Are We Ruled by These Liars?

Wonkette finds George W. Bush delivering an unbelievable straight line:

History Is Written By the Mission Accomplishers - Wonkette : In a Veteran's Day speech today, Bush came out with the administration's official policy on criticizing the war in Iraq: "While it's perfectly legitimate to criticize my decision or the conduct of the war, it is deeply irresponsible to rewrite the history of how that war began."

Yes. It is. Impeach George W. Bush. Impeach Richard Cheney. Do it now.

Posted by DeLong at 12:07 PM | Comments (0) | TrackBack

Creeping Closer and Closer to the International Financial Crisis Red Zone

This isn't "news"--it's not surprising at all. But it is disappointing.

September Trade Gap Set Record: By VIKAS BAJAJ: The United States trade deficit widened by a surprisingly large 11 percent in September, reflecting both a surge in energy imports after Hurricane Katrina and a steep drop in airplane exports because of a strike, the government reported yesterday. The trade gap with China also set a record. The United States imported $66.1 billion more in goods and services than it exported in the month, breaking the record of $60.4 billion set in February, the Commerce Department reported. The trade deficit in the first nine months of the year totaled $529.8 billion, about 18 percent higher than in the first nine months of 2004. That figure itself was up 21 percent over the period in 2003.... "One-third of the widening of the deficit is the oil bill, and aircraft sales explains most of the rest," said Carl Weinberg, chief global economist at High Frequency Economics, a research firm....

"Only with very weak U.S. growth or a major drop in the U.S. dollar will the trade deficit improve on a sustained basis," said Ethan Harris, chief United States economist for Lehman Brothers. "The reason you need these dramatic movements is that the U.S. has, according to almost every study, an incredible appetite for imports."... "If the Chinese abandon our Treasury market, we would see an enormous jump in interest rates," Mr. Harris said, "and, of course, if we stop buying their products their economy is going to go into recession."

The Chinese government reported yesterday that its October trade surplus with the rest of the world jumped to a record $12 billion in October. It had a total trade surplus of $80.4 billion for the first 10 months of the year, 2.5 times the figure for the period last year....

The time we have to get the U.S. trade account unwedged is limited. We don't know how long we have before we enter the webzone, but we have a year less than we had last November.

Posted by DeLong at 12:05 PM | Comments (0) | TrackBack

Eloi, Eloi, Lama Sabachthani?

Gary Farber takes time away from his plan for Global Internet Domination to direct us to the cage match between Phillip "Republic of Heaven" Pullman and C.S. (Jack) "Aslan the Jesus" Lewis:

Amygdala: PULLMAN VS. LEWIS GRUDGEMATCH. Phillip Pullman again lights into C.S. Lewis in an Observer interview/story. The Beeb covers it, with lots of reader comments.

For Pullman, who is an avowed atheist and a critic of Lewis, that is bad news. 'If the Disney Corporation wants to market this film as a great Christian story, they'll just have to tell lies about it,' Pullman told The Observer.

Pullman believes that Lewis's books portray a version of Christianity that relies on martial combat, outdated fears of sexuality and women, and also portrays a religion that looks a lot like Islam in unashamedly racist terms.

'It's not the presence of Christian doctrine I object to so much as the absence of Christian virtue. The highest virtue, we have on the authority of the New Testament itself, is love, and yet you find not a trace of that in the books,' he said.

The Narnia books, Pullman said, contained '...a peevish blend of racist, misogynistic and reactionary prejudice; but of love, of Christian charity, [there is] not a trace'...

Certainly that is not the view of Disney. Film executives are eagerly anticipating repeating the success last year of Mel Gibson's Jesus biopic The Passion of The Christ, which was shunned by mainstream studios and then picked up by the evangelical churches.

At one level, Pullman is wrong: there's plenty of love in Narnia.

At a second level, Pullman is right: there is very little of: "love your enemies: do good to them that persecute you" in Narnia. More important, I think, is that The Lion, the Witch, and the Wardrobe fails as a Christian allegory: Aslan is not Jesus--at the narrative climax of TLTWATW, Aslan "dies" knowing that it's a trick to destroy the power of the White Witch, while (in the Synoptic Gospels at least) Jesus dies thinking that he has been forsaken.

And at a third level, Pullman is once again wrong: "Christianity" is not just the Synoptic Gospels--it is also the Gospel of John, where Jesus has and knows he has power over the grave; it is the Apocalypse with the human-sized locusts with the stings of scorpions and the faces of women; it is the Knights Templar, and the Crusades, and John Calvin's view that God's attitude toward (most of) us is like the potter's attitude toward the pot that doesn't measure up. What Pullman is saying is not that Narnia is un-Christian, but that Narnia is a kind of Christian that he (and I) do not like very much.

Posted by DeLong at 11:51 AM | Comments (0) | TrackBack

The Deadly Doughnut - New York Times

Tyler Cowen recommends Paul Krugman on the Medicare Drug Benefit:

The Deadly Doughnut - New York Times: Soon millions of Americans will learn that doughnuts are bad for your health. And if we're lucky, Americans will also learn a bigger lesson: politicians who don't believe in a positive role for government shouldn't be allowed to design new government programs. Before we turn to the larger issue, let's look at how the Medicare drug benefit will work over the course of next year.

At first, the benefit will look like a normal insurance plan, with a deductible and co-payments.

But if your cumulative drug expenses reach $2,250, a very strange thing will happen: you'll suddenly be on your own. The Medicare benefit won't kick in again unless your costs reach $5,100. This gap in coverage has come to be known as the "doughnut hole."... [I]f you are a retiree and spend $2,000 on drugs next year, Medicare will cover 66 percent of your expenses. But if you spend $5,000 - which means that you're much more likely to need help paying those expenses - Medicare will cover only 30 percent of your bills.... How will people respond when their out-of-pocket costs surge? The Health Affairs article argues... that it's likely "some beneficiaries will cut back even essential medications while in the doughnut hole." In other words, this doughnut will make some people sick, and for some people it will be deadly.

The smart thing to do, for those who could afford it, would be to buy supplemental insurance that would cover the doughnut hole. But guess what: the bill that established the drug benefit specifically prohibits you from buying insurance to cover the gap. That's why many retirees who already have prescription drug insurance are being advised not to sign up for the Medicare benefit.

If all of this makes the drug bill sound like a disaster, bear in mind that I've touched on only one of the bill's awful features. There are many others, like the clause that prohibits Medicare from using its clout to negotiate lower drug prices. Why is this bill so bad?

The probable answer is that the Republican Congressional leaders who rammed the bill through in 2003 weren't actually trying to protect retired Americans against the risk of high drug expenses. In fact, they're fundamentally hostile to the idea of social insurance, of public programs that reduce private risk. Their purpose was purely political: to be able to say that President Bush had honored his 2000 campaign promise to provide prescription drug coverage by passing a drug bill, any drug bill.

Once you recognize that the drug benefit is a purely political exercise that wasn't supposed to serve its ostensible purpose, the absurdities in the program make sense. For example, the bill offers generous coverage to people with low drug costs, who have the least need for help, so lots of people will get small checks in the mail and think they're being treated well.... Can the drug bill be fixed? Yes, but not by current management. It's hard to believe that either the current Congressional leadership or the Mayberry Machiavellis in the White House would do any better on a second pass. We won't have a drug benefit that works until we have politicians who want it to work.

I've been looking for something good and short on how the Center for Medicare and Medicaid Services is going to try to make this drug benefit work. It's not at all clear to me that they can.

Posted by DeLong at 11:48 AM | Comments (0) | TrackBack

Inbox, November 9, 2005

In today's inbox--November 9, 2005--we have:

Yes, George R.R. Martin's A Feast for Crows is excellent. But it is one of the middle books of a series. Finishing this book reminds me why I have sworn an oath not to read any more series-in-progress: much better to wait to begin the first book of a series until you are certain that the very last book of the series has been... staked and encoffined.

Posted by DeLong at 09:52 AM | Comments (0) | TrackBack

November 10, 2005

Why Iraq Has No Army

Jim Fallows writes:

The Atlantic Online | December 2005 | Why Iraq Has No Army | James Fallows: When Saddam Hussein fell, the Iraqi people gained freedom. What they didn't get was public order.... This summer an average of ten Iraqi policemen or soldiers were killed each day. It is true, as U.S. officials often point out, that the violence is confined mainly to four of Iraq's eighteen provinces. But these four provinces contain the nation's capital and just under half its people.

The crucial need to improve security and order in Iraq puts the United States in an impossible position. It can't honorably leave Iraq—-as opposed to simply evacuating Saigon-style—-so long as its military must provide most of the manpower, weaponry, intelligence systems, and strategies being used against the insurgency. But it can't sensibly stay when the very presence of its troops is a worsening irritant.... Early in the occupation American officials acted as if the emergence of an Iraqi force would be a natural process. "In less than six months we have gone from zero Iraqis providing security to their country to close to a hundred thousand Iraqis," Donald Rumsfeld said in October of 2003. "Indeed, the progress has been so swift that ... it will not be long before [Iraqi security forces] will be the largest and outnumber the U.S. forces, and it shouldn't be too long thereafter that they will outnumber all coalition forces combined."...

But most assessments from outside the administration have been far more downbeat than Rumsfeld's.... [I]f American troops disappeared tomorrow, Iraq would have essentially no independent security force.... The moment when Iraqis can lift much of the burden from American troops is not yet in sight. Understanding whether this situation might improve requires understanding what the problems have been so far.

Over the summer and fall I asked a large number of people why Iraq in effect still had no army, and what, realistically, the United States could expect in the future.... What I heard amounted to this: The United States has recently figured out a better approach to training Iraqi troops. Early this year it began putting more money, and more of its best people, on the job. As a result, more Iraqi units are operating effectively, and fewer are collapsing or deserting under pressure....

How the Iraq story turns out will not be known for years, but based on what is now knowable, the bleak prospect today is the culmination of a drama's first three acts. The first act involves neglect and delusion.... The second act involves a tentative approach to a rapidly worsening challenge during the occupation's second year. We are now in the third act, in which Americans and Iraqis are correcting earlier mistakes but too slowly and too late....

There is no single comprehensive explanation for what went wrong. After the tension leading up to the war and the brilliant, brief victory, political and even military leaders seemed to lose interest, or at least intensity. "Once Baghdad was taken, Tommy Franks checked out," Victor O'Reilly, who has written extensively about the U.S. military, told me. "He seemed to be thinking mainly about his book." Several people I spoke with volunteered this view of Franks, who was the centcom commander during the war. (Franks did not respond to interview requests, including those sent through his commercially minded Web site, TommyFranks.com.) In retrospect the looting was the most significant act of the first six months after the war. It degraded daily life, especially in Baghdad, and it made the task of restoring order all the more difficult for the U.S. or Iraqi forces that would eventually undertake it. But at the time neither political nor military leaders treated it as urgent. Weeks went by before U.S. troops effectively intervened....

Throughout the occupation, but most of all in these early months, training suffered from a "B Team" problem. Before the fighting there was a huge glamour gap in the Pentagon between people working on so-called Phase III—-the "kinetic" stage, the currently fashionable term for what used to be called "combat"—-and those consigned to thinking about Phase IV, postwar reconstruction. The gap persisted after Baghdad fell. Nearly every military official I spoke with said that formal and informal incentives within the military made training Iraqi forces seem like second-tier work.... But of course that didn't happen. "I couldn't believe that we weren't ready for the occupation," Terence Daly, a retired Army colonel who learned the tactics of counterinsurgency in Vietnam, told me. "I was horrified when I saw the looting and the American inaction afterward. If I were an Iraqi, it would have shown me these people are not serious."...

Language remained a profound and constant problem. One of the surprises in asking about training Iraqi troops was how often it led to comparisons with Vietnam. Probably because everything about the Vietnam War took longer to develop, "Vietnamization" was a more thought-through, developed strategy than "Iraqization" has had a chance to be. A notable difference is that Americans chosen for training assignments in Vietnam were often given four to six months of language instruction. That was too little to produce any real competence, but enough to provide useful rudiments that most Americans in Iraq don't have.... Every manual on counterinsurgency emphasizes the need for long-term personal relations. "We should put out a call for however many officers and NCOs we need," Daly says, "and give them six months of basic Arabic. In the course of this training we could find the ones suited to serve there for five years....

At the end of June 2004 Ambassador Bremer went home.... The first U.S. ambassador to postwar Iraq, John D. Negroponte, was sworn in as Bremer left. And a new American Army general arrived to supervise the training of Iraqis: Dave Petraeus, who had just received his third star.... Petraeus, who holds a Ph.D. from Princeton, had led the 101st Airborne during its drive on Mosul in 2003 and is one of the military's golden boys.... By all accounts Petraeus and Negroponte did a lot to make up for lost time in the training program.... More emphasis was put on embedding U.S. advisers with Iraqi units.... Negroponte used his discretion to shift $2 billion from other reconstruction projects to the training effort. "That will be seen as quite a courageous move, and one that paid big dividends," Petraeus told me....

Ethnic tensions divide Iraq, and they divide the new army. "Thinking that we could go in and produce a unified Iraqi army is like thinking you could go into the South after the Civil War and create an army of blacks and whites fighting side by side," Robert Pape, of the University of Chicago, told me....

What is needed for an honorable departure is, at a minimum, a country that will not go to war with itself, and citizens who will not turn to large-scale murder. This requires Iraqi security forces that are working on a couple of levels: a national army strong enough to deter militias from any region and loyal enough to the new Iraq to resist becoming the tool of any faction; policemen who are sufficiently competent, brave, and honest to keep civilians safe....

The U.S. military does everything in Iraq worse and slower than it could if it solved its language problems. It is unbelievable that American fighting ranks have so little help. Soon after Pearl Harbor the U.S. military launched major Japanese-language training institutes at universities and was screening draftees to find the most promising students. America has made no comparable effort to teach Arabic. Nearly three years after the invasion of Iraq the typical company of 150 or so U.S. soldiers gets by with one or two Arabic-speakers. T. X. Hammes says that U.S. forces and trainers in Iraq should have about 22,000 interpreters, but they have nowhere near that many. Some 600,000 Americans can speak Arabic. Hammes has proposed offering huge cash bonuses to attract the needed numbers to Iraq....

[I]f the United States is serious about getting out of Iraq, it will need to re-consider its defense spending and operations rather than leaving them to a combination of inertia, Rumsfeld-led plans for "transformation," and emergency stopgaps. It will need to spend money for interpreters.... It will need to make majors and colonels sit through language classes.... It will need to commit air, logistics, medical, and intelligence services to Iraq—-and understand that this is a commitment for years, not a temporary measure. It will need to decide that there are weapons systems it does not require and commitments it cannot afford if it is to support the ones that are crucial. And it will need to make these decisions in a matter of months, not years—-before it is too late.

America's hopes today for an orderly exit from Iraq depend completely on the emergence of a viable Iraqi security force. There is no indication that such a force is about to emerge. As a matter of unavoidable logic, the United States must therefore choose one of two difficult alternatives: It can make the serious changes—-including certain commitments to remain in Iraq for many years—-that would be necessary to bring an Iraqi army to maturity. Or it can face the stark fact that it has no orderly way out of Iraq, and prepare accordingly.

Posted by DeLong at 12:00 PM | Comments (0) | TrackBack

Day of the Catalogs

Today's mail consisted of nine catalogs. Nine. Not a scrap of other mail. Nine catalogs.

Do we really look like people who would pay $99 for a sheaf of wheat?

(Don't answer that.)

Posted by DeLong at 12:00 PM | Comments (0) | TrackBack

The Nelson Report Is Shrill

Josh Micah Marshall reports that the Nelson Report is really shrill. It is calling for the impeachment of George W. Bush:

Talking Points Memo: by Joshua Micah Marshall: November 06, 2005 - November 12, 2005 Archives: A snippet out of this evening's Nelson Report ...

Scandals.... on the torture scandal part of the ongoing psychodrama called America, the political theme is that the Republican Leadership continues to trip all over itself, contradicting each other, insulting each other, and generally looking like incompetent fools. This is almost too much for the Democrats, who can hardly believe what they see unfolding, and who thus, so far, remain in something of a comic stupor, pending an organized, coherent attack.

But things are happening, and Senate Dems are coalescing around efforts to force real hearings on the misuse of Iraq war intel, and the torture scandal...even as the Republicans flounder between trying to deny everything, while simultaneously excusing or explaining it away. Latest example...former Republican Senate Majority Leader Trent Lott, whom, you will recall, was forced to resign for insensitive racial remarks, is clearly revenging himself with comments that it was a fellow Republican who leaked the "CIA torture" story to the Washington Post last week.

On the larger topic, law and morality...the ethic of being an American leader, and its betrayal by the Bush Administration...the NY Times today details last year's CIA Inspector General's classified report that Bush Administration torture directives carried out by the Agency "might violate some provisions of the International Convention Against Torture..." and remember we warned last night that the CIA pros have it out for the White House....

We checked with a highly informed/involved former State Department source. His comments: "...in 1988 when John Whitehead signed the Convention in New York, and then later, when we ratified it, we enacted domestic laws where necessary to make it 'the law of the land'... we had this to say to the UN, copy to the Senate:

Torture is prohibited by law throughout the United States. It is categorically denounced as a matter of policy and as a tool of state authority. Every act constituting torture under the Convention constitutes a criminal offense under the law of the United States. No official of the government, federal, state or local, civilian or military, is authorized to commit or to instruct anyone else to commit torture. Nor may any official condone or tolerate torture in any form. No exceptional circumstances may be invoked as a justification of torture. US law contains no provision permitting otherwise prohibited acts of torture or other cruel, inhuman or degrading treatment or punishment to be employed on grounds of exigent circumstances....

Hummm....sounds like a pretty solid case for an impeachment proceeding, were there anything resembling either a sense or shame, or national ethics, in the Leadership of the House of Representatives and Senate. Something to be argued out in the 2006 Congressional campaigns?

They've brought us very, very low.

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

Posted by DeLong at 12:00 PM | Comments (0) | TrackBack

November 09, 2005


My father clashes with Larry Lessig over GooglePrint:

IPcentral Weblog: Wednesday Morning Fights: DeLong vs. Lessig: Larry Lessig objects to my characterization of his characterization of Causby, and its connection to the Google Print program. At the end of the entry, though, he comments on an area in which we are in partial agreement, and that is worth re-emphasizing:

But there is one great and true part to DeLong's email. As he writes,

Causby was entitled only to the decline in his property value, not to a share of the gains from the air age.

Truly, if there is a principle here, that should be it. The baseline is the value of the property BEFORE the new technology. Does the new technology reduce THAT value. Put differently, would authors and publishers be worse off with Google Print than they were before Google Print?

To ask that question is to answer it -- of course the authors and publishers are better off with Google Print.

Are they as well off as they could be, if the law gives them the power to extort from the innovator some payment for his innovation?

To ask that question is to understand why this case has been filed: Like Valenti with the Betamax, the publishers and Authors Guild simply want to tax the value created by Google Print. They are not complaining about any "decline in [their] property value" caused by Google Print. They are instead racing to claim the value that ancient law is said to give to them, despite the harm that claim produces for "progress."

This is indeed the crucial distinction. But I don't think Lessig is fair to either Valenti or the authors; they have genuine and legitimate concerns about the impact of the new technologies on their existing values.

Would they like to hold the new technologies for ransom? Probably. There is certainly grounds for suspicion in a recent oped co-authored by Pat Schroeder. And I agree with Lessig that such ransom should not be permitted, as the Supreme Court specifically noted in the Sony case. But to refuse to allow ransom does not mean that the legitimate interests can be ignored.

In the case of Google Print, the publishers legitimate concerns include two problems:

1) A digital copy of each book goes to the participating library, and the only restriction is that it abide by copyright law. There can be no guarantee that the library will impose security akin to that adopted by Google.

2) The law has no doctrine that allows Google to be special. So what Google is allowed to do, others can do. The authors and publishers can legtimately object to having a huge burden of policing imposed on them. In our internal PFF debates, I am the Google-symp -- but I have not come up with a way to solve these problems.

Nonetheless, as I said in another, longer recent discussion of these issues: "So the bottom line is -- and must be -- that when technological change occurs, we as a society will not automatically assign the value created by the new technology to existing property holders.

I tend to put on my right-wing public-choice hat here, and side with GooglePrint. The private beneficiaries from assigning too much of the value of innovation to the dead hand of old property rights are concentrated. The private beneficiaries of assigning too little of the value are diffuse. In a public-choice world ruled by lobbyists, there will be strong pressures on legislation and law to overprotect existing property. And it is the duty of intellectuals seeking the sweet spot to push back--to be an anti-lobbyist lobby.

Posted by DeLong at 02:58 PM | Comments (0) | TrackBack

Problem Set 8: Econ 101b: Fall 2005

The fall 2005 problem set 8.

Due in lecture on November 16.

Posted by DeLong at 02:56 PM

Problem Set 7: Econ 101b: Fall 2005

The fall 2005 problem set 7.

Due in lecture on November 9.

Posted by DeLong at 02:56 PM

Connecting to JSTOR

To read the extra readings on JSTOR from a computer outside the berkeley.edu domain, you may have to set up your web browser to use Berkeley's proxy server service:

UC Berkeley Library Proxy Server Service: Proxy Server Setup Instructions

Posted by DeLong at 02:56 PM

Problem Set 6: Econ 101b: Fall 2005

The fall 2005 problem set 6.

Due in lecture on November 2.

Posted by DeLong at 02:54 PM

Syllabus Part II: Economics 101b Fall 2005

Economics 101b Fall 2005

Syllabus Part II

October 14, 17: Japan's Decade-Long Slump

Readings: Paul Krugman, “Japan’s Liquidity Trap” http://web.mit.edu/krugman/www/japtrap2.html
Adam Posen, “Macroeconomic Mistake, Not Structural Stagnation” http://www.iie.com/publications/chapters_preview/35/1iie2628.pdf
Adam Posen, “Recognizing a Mistake: Not Blaming a Model” http://www.iie.com/publications/chapters_preview/35/6iie2628.pdf

October 19, 21, 24: Europe's High Unemployment

Readings: Olivier Blanchard and Lawrence Summers (1986), "Hysteresis and the European Unemployment Problem" http://papers.nber.org/papers/w1950
Olivier Blanchard and Justin Wolfers (1999), "Shocks and Institutions in European Unemployment" http://papers.nber.org/papers/w7282
Olivier Blanchard (2004), "The Economic Future of Europe" http://papers.nber.org/papers/w7282

October 26, 28, 31: America's "New Economy"

Readings: Alan Blinder and Janet Yellen (2001), The Fabulous Decade: Macroeconomic Lessons from the 1990s (New York: Century Foundation)
William Nordhaus (2004), "The Story of a Bubble" http://www.nybooks.com/articles/16878

November 2, (no class on the 4th), 7, 9: Emerging Market Financial Crises:

Readings: Michael Mussa (2002), Argentina and the Fund: From Triumph to Tragedy http://bookstore.iie.com/merchant.mvc?Screen=PROD&Product_Code=343
Morris Goldstein (1998), The East Asian Financial Crisis http://bookstore.iie.com/merchant.mvc?Screen=PROD&Product_Code=22

November 14, 16: America's Current Macroeconomic Dilemma

Readings: Lecture notes to be issued...

Posted by DeLong at 02:54 PM

Problem Set 5: Econ 101b: Fall 2005

The fall 2005 problem set 5.

Posted by DeLong at 02:54 PM

The Virtues of Single-Payer Health Care

Paul Krugman writes about the virtues of single-payer:

Pride, Prejudice, Insurance - New York Times: Employment-based health insurance is the only serious source of coverage for Americans too young to receive Medicare and insufficiently destitute to receive Medicaid, but it's an institution in decline. Between 2000 and 2004 the number of Americans under 65 rose by 10 million. Yet the number of nonelderly Americans covered by employment-based insurance fell by 4.9 million.

The funny thing is that the solution - national health insurance, available to everyone - is obvious. But to see the obvious we'll have to overcome pride - the unwarranted belief that America has nothing to learn from other countries - and prejudice - the equally unwarranted belief, driven by ideology, that private insurance is more efficient than public insurance.

Let's start with the fact that America's health care system spends more, for worse results, than that of any other advanced country. In 2002 the United States spent $5,267 per person on health care. Canada spent $2,931; Germany spent $2,817; Britain spent only $2,160. Yet the United States has lower life expectancy and higher infant mortality than any of these countries. But don't people in other countries sometimes find it hard to get medical treatment? Yes, sometimes - but so do Americans. No, Virginia, many Americans can't count on ready access to high-quality medical care.... Americans are far more likely than others to forgo treatment because they can't afford it. Forty percent of the Americans surveyed failed to fill a prescription because of cost. A third were deterred by cost from seeing a doctor when sick or from getting recommended tests or follow-up.

Why does American medicine cost so much yet achieve so little?... The U.S. system is much more bureaucratic... because private insurers and other players work hard at trying not to pay for medical care. And our fragmented system is unable to bargain... for lower prices. Taiwan, which moved 10 years ago from a U.S.-style system to a Canadian-style single-payer system, offers an object lesson in the economic advantages of universal coverage. In 1995 less than 60 percent of Taiwan's residents had health insurance; by 2001 the number was 97 percent. Yet... this huge expansion in coverage came virtually free: it led to little if any increase in overall health care spending beyond normal growth due to rising population and incomes.... The economic and moral case for health care reform in America, reform that would make us less different from other advanced countries, is overwhelming. One of these days we'll realize that our semiprivatized system isn't just unfair, it's far less efficient than a straightforward system of guaranteed health insurance.

Posted by DeLong at 02:53 PM | Comments (0) | TrackBack

Gene Sperling's New Book, "The Pro-Growth Progressive"

Gene Sperling writes about his excellent new book: Gene Sperling (2005), The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity (New York: Simon and Schuster: 0743237536) http://www.amazon.com/exec/obidos/asin/0743237536/braddelong00.:

TPMCafe || The Pro-Growth Progressive: I felt frustrated by the view - often from both sides - that there was an inherent conflict between promoting progressive values and being hard-headed about the power of markets incentives, the law of unintended consequences and the inevitability of globalization.

What do I mean by progressive?.... A belief in economic dignity for those who take responsibility... the opportunity for upward mobility... life's outcome should not be determined by the accident of your birth.... [W]e best promote the three values above when we seek policies that are focused on both raising the tide and lifting all boats.... [An] agenda that focuses on personal savings and wealth creation, as well as a laying a foundation for private sector growth, can be completely consistent with progressive values if we make our test not only whether we are raising the tide, but lifting all boats. I push hard for progressives to champion an expansive Universal 401 K and a Flat Tax Incentive where everyone gets a 30% refundable credit for savings.... Democrats need to not only have these policies on the shelf - we need to move them to the front of our policy agenda if we are to show Americans we not only a party that is there for you when your down, but a party that wants to see you reach your highest economic aspirations.

[T]he reigning conservative assumption that all expansions of government are anti-growth and interfere with markets is just as unfounded.... [T]here are a host of powerful public policies that because they flow directly to workers... are progressive, pro-growth and in no way interfere with markets or restrict employers. The EITC.... A quality 0-5 education program.... Yes, it is an expansion of government, but how exactly is that anti-growth?...

[T]here was nothing I struggled with and agonized about more than the sections on a new progressive compact on globalization. These are the most difficult issues we face... while our nation benefits enormously from the innovation, low-prices and competition that open markets bring... we still have little means to prevent or cope with the unacceptable degree of economic devastation this openness brings for some workers and families both here and abroad.... [T]hose seeking to restrict trade too often have no vision of the future, while those pressing for open markets have no vision for the present.... [P]rogressives on both sides of the trade debate should be more open in recognizing the exaggerations and flaws in their arguments.... I do support the labor standards we put in the Jordan Free Trade agreement, [but] progressives have to understand that poor nations often see our approach as punitive, and that we should be looking for to add to labor standards a broader array of tools from positive partnerships and incentives....

I realize that by standing by President Clinton's effort... I... have perfectly positioned myself to draw fire from all sides....

While many of us may agree that President Bush has been the worst fiscal President in our nation's history, I imagine there will be more lively disagreement on where progressives should go from here....

I eagerly await the discussion to come and thank the excellent array of commentators that Josh has pulled together for this book forum for agreeing to participate.

Posted by DeLong at 02:52 PM | Comments (0) | TrackBack

Robert Samuelson Is an Unhappy Camper

Robert Samuelson has been driven mad by all the budget phonies he sees in government:

Fiscal Phonies: The scramble by congressional Republicans and White House officials to show they're serious about dealing with the budget... most Republicans are phonies. So are most Democrats. The resulting "debates" are less about controlling the budget than about trying to embarrass the other side....

What have Republicans actually done? Last week the Senate Budget Committee endorsed spending "cuts" of $39 billion. That covers five years when total federal spending is projected at $13.8 trillion. So the "cuts" amount to a mere 0.3 percent -- one-third of one percent -- of projected spending.... Republicans also pledge to cut taxes by $70 billion from 2006 to 2010. The overall effect would be a slight rise in deficits....

There's a basic mismatch between the existing taxes and existing spending commitments. Neither party yet faces this candidly, because the only way to solve it is either to raise taxes or cut benefits.... Practical politicians like to confer benefits and tax cuts, not withdraw them. They don't like the discipline of inflicting pain (taxes) to distribute gain (benefits).

As Samuelson says, people are mad when you raise their taxes and mad when you cut (or slow the growth of) their benefits. So what's the plus side of fiscal responsibility? The plus side is:

  1. The happiness that comes from knowing that you have done the right thing.
  2. The applause of sophisticated members of the press who laud you for doing the right thing.
  3. The votes of those in the electorate who value good public service, as they learn from the press about how you have done the right thing.

And here Samuelson is part of the problem, for Samuelson tries to weaken the plus side to budget virtue. He's anxious to minimize the fiscal accomplishment of Bill Clinton and his team:

Democrats embrace class rhetoric and a self-serving mythology -- only they are "responsible"... Bill Clinton... those surpluses resulted largely from events beyond his control: the huge tax windfall of the tech and stock market booms, and the end of the Cold War, prompting much lower defense spending...

Clinton was lucky, yes. But Clinton was also good. The federal budget in 1992 had a deficit of 4.7% of GDP, projected to grow to a deficit of 5.2% of GDP by 2000. In actual fact we had a surplus of 2.4% in 2000--a swing of 7.6 percentage points roughly relative to expectations. Of this swing, approximately 2.0% was due to a booming economy, perhaps an additional 1.0% to the high value of capital gains taxes paid in 2000 because of the high value of the stock market, about 3.5% to the effects of the Clinton 1993 deficit-reduction package, and 1.0% to the additional post-1992 effects of the 1990 Bush-Mitchell-Foley deficit reduction package that had not yet been enacted as of the end of 1992.

Until Samuelson can screw his courage to the sticking point and praise--yes, praise--politicians who do take effective steps to balance the budget (even if they also have good luck), he has no standing to lament that his calls for budget balance are so pathetically ineffective. Journalists who don't praise good policies are part of the problem, not part of the solution.

Posted by DeLong at 02:50 PM | Comments (0) | TrackBack

Were There Really That Many Vases?

Wonkette reminds us of the sacking of the Iraqi museums, and of the days when Donald Rumsfeld was busily turning the astounding operational victory of the 3rd Infantry Division into America's biggest strategic defeat since the days of General McClellan:

Iraq Finally Conquers Vase Overcrowding Crisis - Wonkette: The Washington Post today reports that Iraq's cultural treasures looted after the fall of Baghdad are unlikely to resurface. Of 14,000 lost items, 5,500 have been recovered. Antiquarians and other fusty, book-learning types despair at the loss of these objects, but we just recall the jocularity with which Donald Rumsfeld met the looting: "My goodness," he asked, "were there that many vases?" Well, not so much any more.

DoD News: DoD News Briefing - Secretary Rumsfeld and Gen. Myers:

Q: Mr. Secretary, you spoke of the television pictures that went around the world earlier of Iraqis welcoming U.S. forces with open arms. But now television pictures are showing looting and other signs of lawlessness. Are you, sir, concerned that what's being reported from the region as anarchy in Baghdad and other cities might wash away the goodwill the United States has built? And, are U.S. troops capable of or inclined to be police forces in Iraq?

Rumsfeld: Well, I think the way to think about that is that if you go from a repressive regime that has -- it's a police state, where people are murdered and imprisoned by the tens of thousands -- and then you go to something other than that -- a liberated Iraq -- that you go through a transition period. And in every country, in my adult lifetime, that's had the wonderful opportunity to do that, to move from a repressed dictatorial regime to something that's freer, we've seen in that transition period there is untidiness, and there's no question but that that's not anyone's choice.

On the other hand, if you think of those pictures, very often the pictures are pictures of people going into the symbols of the regime -- into the palaces, into the boats, and into the Ba'ath Party headquarters, and into the places that have been part of that repression. And, while no one condones looting, on the other hand, one can understand the pent-up feelings that may result from decades of repression and people who have had members of their family killed by that regime, for them to be taking their feelings out on that regime.

With respect to the second part of your question, we do feel an obligation to assist in providing security, and the coalition forces are doing that. They're patrolling in various cities. Where they see looting, they're stopping it, and they will be doing so. The second step, of course, is to not do that on a permanent basis but, rather, to find Iraqis who can assist in providing police support in those cities and various types of stabilizing and security assistance, and we're in the process of doing that.

Q: How quickly do you hope to do that? Isn't that a pressing problem?

Rumsfeld: Wait. Wait. But in answer to your -- direct answer to your question are we concerned that this would offset it, the feeling of liberation -- suggests that, "Gee, maybe they were better off repressed." And I don't think there's anyone in any of those pictures, or any human being who's not free, who wouldn't prefer to be free, and recognize that you pass through a transition period like this and accept it as part of the price of getting from a repressed regime to freedom.

Myers: Charlie, another point, I think, to make is that it's uneven throughout the country. In the south, where we've been for some time, where the clerics have been speaking out against looting and for civil order, where some of the Iraqis citizens themselves are saying let's don't loot, and that sort of thing, that actually the situation is pretty good. In Umm Qasr it's in good shape. In Basra, looting has been going down over time as we track it. So as we go up from the south, it's getting better and better for obvious reasons. So --

Rumsfeld: Let me say one other thing. The images you are seeing on television you are seeing over, and over, and over, and it's the same picture of some person walking out of some building with a vase, and you see it 20 times, and you think, "My goodness, were there that many vases?" (Laughter.) "Is it possible that there were that many vases in the whole country?"

Posted by DeLong at 02:50 PM | Comments (0) | TrackBack

The New York Times Shies at the Jump

The New York Times editorial board is finally shrill--albeit five years too late. But they shy at the jump. If they believe what the body of their editorial says, the last line should call for Bush's resignation or impeachment:

President Bush's Walkabout - New York Times: After President Bush's disastrous visit to Latin America, it's unnerving to realize that his presidency still has more than three years to run. An administration with no agenda and no competence would be hard enough to live with on the domestic front. But the rest of the world simply can't afford an American government this bad for that long.

Bush... could barely summon the energy to chat with the 33 other leaders there, almost all of whom would be considered friendly... under normal circumstances. He and his delegation failed to get even a minimally face-saving outcome at the collapsed trade talks.... [W]hen... Bush first ran for president, he bragged about his understanding of Latin America, his ability to speak Spanish and his friendship with Mexico. But he also made fun of Al Gore for believing that nation-building was a job for the United States military....

Bush could certainly afford to replace some of his top advisers. But the central problem is not Karl Rove or Treasury Secretary John Snow or even Donald Rumsfeld, the defense secretary. It is President Bush himself....

Bush has never demonstrated the capacity for... a comeback. Nevertheless, every American has a stake in hoping that he can surprise us.

The place to begin is with Dick Cheney.... This is truly a remarkable set of priorities: his former chief aide was indicted, Mr. Cheney's back is against the wall, and he's declared war on the Geneva Conventions....

Bush... could do what other presidents have done to vice presidents: keep him too busy attending funerals and acting as the chairman of studies to do more harm. Mr. Bush would still have to turn his administration around, but it would at least send a signal to the nation and the world that he was in charge, and the next three years might not be as dreadful as they threaten to be right now.

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

Posted by DeLong at 02:50 PM | Comments (0) | TrackBack

Gary Wills's Nixon Agonistes

This past weekend I read Garry Wills's Nixon Agonistes for... the third... or is it the fourth... time in my life. Each time I read it I feel that I have learned--and been reminded of--an enormous amount. But I also have a very hard time putting what I have learned into words: this is not a "one big thing" kind of book, for Garry Wills knows many, many things.

So let me just do two things below the fold. First, let me give you John Leonard's original review of Nixon Agonistes. Second, let me give you extensive quotes from one of Wills's many magnificent set-pieces: in this case, the long twilight struggle between Richard M. Nixon and Dwight D. Eisenhower.

Here's the review:

Books of the Times: Mr. Nixon as the Last Liberal. By John Leonard: Garry Wills (1970), Nixon Agonistes: The Crisis of the Self-Made Man (New York: Mariner Books: 0618134328) http://www.amazon.com/exec/obidos/asin/0618134328/braddelong00

Before plunging into a synopsis of Garry Wills's astonishing book, one must give some account of Mr. Wills. To say that he is a contributing editor at Esquire, a syndicated newspaper columnist and the author of "The Second Civil War" is inadequate. "The Second Civil War" was about America's racial agony. In his newspaper column, Mr. Wills has opposed our role in Vietnam and Attorney General John N. Mitchell's role in Washington. His contributions to Esquire include a dissection of Spiro Agnew. And yet this same Mr. Wills took his Ph.D. at Yale in classics, is the author of a book on G. K. Chesterton and has written regularly over the past decade for William F. Buckley Jr.'s conservative journal, National Review. Only by keeping these apparently contradictory impulses and interests in mind is the reader likely to be prepared for "Nixon Agonistes," which reads like a combination of H. L. Mencken, John Locke and Albert Camus.

Mr. Wills achieves the not inconsiderable feat of making Richard Nixon a sympathetic--even tragic--figure, while at the same time being appalled by him. But superb as it is, his "psycho-biography" of Mr. Nixon is merely prelude to a provocative essay on political theory. "All our liberal values track back to a mystique of the earner," says Mr. Wills, whether the "market" is personal (self-regulation leads to individual success) or economic (those Joneses we've got to keep up with) or academic (ideas fighting it out for the allegiance of young minds) or political (if the system works, the best policies and people win).

But we have learned in the nineteen-sixties that not everybody can "make it," and that many of those who do are injured, diminished. That the "race" is never won because it never ends. That the promulgators of ideas have to take the responsibility for their consequences. That the best policies and people don't necessarily win. "Belief in the competitive triumph of excellence," says Mr. Wills, "was bound to be shaken." We must abandon the "market" mentality," the "earning mystique" and the "race metaphor," and find some substitute.

How does Mr. Nixon fit into this analysis? For Mr. Wills, Mr. Nixon is the last liberal, the embodiment of the self-made man, who has been diminished by his making it, the "least 'authentic' man alive, the late mover, tester of responses, submissive to the discipline of consent.' A survivor. There is one Nixon only, though there seem to be new ones all the time--he will try to be what people want. He lacks the stamp of place or personality because the Market is death to style, and he is the Market's servant.... Nixon does not exist outside his role, apart from politics: take his clothes off, he would be invisible."

Harsh words. Mr. Wills comes to them after traveling with Mr. Nixon's campaign entourage, after visiting Whittier (which is "heavy with moral perspiring"), after interviews and much pondering of "Six Crises." He seems both angry and sad at what the Market has done to the man, and he is not any kinder to Mr. Nixon's competitors than to Mr. Nixon himself. Of Nelson Rockefeller, for instance, he writes: "First-generation millionaires tend to give us libraries. The second and third generations think they should give us themselves. Naturally, some people want to look this gift horse in the mouth--which may be the reason Rockefeller keeps his teeth on display."

In fact, one is tempted to quote constantly from "Nixon Agonistes" because Mr. Wills writes with a scalpel, to wound in Technicolor, drawing on literary sources both apposite and various. The reporter in him is as eager for the revealing detail as the theorist in him is eager for the abstraction. His analyses of the thinking of Arthur Schlesinger Jr., Daniel Patrick Moynihan, Richard Hofstadter and others are marvelous critical essays in their own right. Mr. Nixon's relationship with "President Eisenhower--which "was like a Calvinist's relation to God, or Ahab's to the whale--awe and fascination soured with fear and a desire to supplant; along with a knowledge, nonetheless, that whatever nobility one may aspire to will come from the attention of the "Great One"--gets considerable attention, to more effect than any other account I've seen.

Finally, there is the question of what to substitute for the Market. Mr. Wills is a little vague on this, talking about "community." Not power to the community, but the building of communities that are social structures with their own identities and interests, instead of markets of individuals and ideas. He is talking in a sense about our souls, and he doesn't know how to save them. But he sees them being lost daily in his country, a nation of Nixons, of Whittiers, "undefended by coherent taste," at the mercy of our past "without quite possessing it." His book is a stunning attempt to possess that past, that we may all of us escape it.

And here's the set-piece:

The leader of [Nixon's] own [California] delegation [to the 1952 Republican National Convention], Earl Warren, had aimed at the presidency four years earlier, but only reached the second spot [on the ticket].... This year he still had a chance, if Taft could tie up Eisenhower.... Nixon was pledged to [Warren], his state's favorite son, and he kept the letter of the pledge. But... he did something no senator had tried in California--sent out a questionaire asking 23,000 California voters who their first choice for President would be.... The result... was a clear majority for Eisenhower.... As the [California] train rolled into Chicago and Warren was given his favorite-son reception, there was a notable absence.... Nixon had left the train at a suburban stop....

[The] Warren people's resentment... sought out newsmen and suggested they check these private moneys collected in [Nixon's] name.... There had been warnings.... A newsman in Washington asked Nixon about the fund on Sunday. Monday, three other reporters checked facts.... Thursday [September 18, 1952] it broke, the New York Post had a story with the headline: SECRET RICH MEN'S TRUST FUND KEEPS NIXON IN STYLE FAR BEYOND HIS SALARY. The story did not justify that sensational summary, and neither did the subsequent investigation. The fund was public, independently audited, earmarked for campaign expenses, and collected in small donations over two years by known Nixon campaign backers. It was neither illegal nor unethical. And the press soon discovered that the Democratic nominee, Adlai Stevenson, had similar funds, only larger in their amount and looser in their administration. Why, then was so much made of Nixon's fund and so little of Stevenson's?

Nixon's offical explanation, at the time, was his standard charge: the commies were behind it all.... "You folks know the work that I did investigating Communists... the Communists and the left-wingers have been fighting me with every possible smear.... I was warned that if I continued to attack the Communists in this government tahey would continue to smear me.... They started it yesterday. They have tried to say that I had taken $16,000 for my personal use." The they is conveniently vague throughout. They... published the charge... the antecedent is... "the Communists in this government."... The explanation is beautifully lucid and inclusive (if a little unspecific about the machinery that makes the nation's press perform the communists' bidding)....

Behind this funny explanation, there are scattered but clear indications, in [Nixon's Six Crises], of the true story, a sad one.... Nixon asks why his own statement of the "basic facts" about the fund received so little attention. His ansewr ignores the conspiratorial explanation [he had] given eight pages earlier, and supplies four reasons.... [Last," "the big-name, influential Washington reporters cover the presidential candidates while the less-known reporters are assigned to the vice presidential candidates."

This last reason, the real one... we ask why that should matter. The answer, in Nixon's own words, is that his own press release "got lost in the welter... over whether General Eisenhower would or would not choose to find a new running mate." That was the news on Eisenhower's train.... [T]he Nixon fund was a big story because Eisenhower, by his silence and hints and uneasiness, made it one. For no other reason.

It was natural for Eisenhower to acquiesce in a staff decision to drop Nixon. That staff had presented him with Nixon in the first place.... As the fund story broke, Nixon wondered where Ike stood. Thursday went by, and Friday. No word.... [T]he very thing that had mad Nixon good "for balance" made him unpalatable... [in Republican] Establishment eyes. He was there to draw in the yokels... no one would feel compuction at his loss: Ike was too valuable a property to be risked with anyone who migh thurt him. This was the attitude on Eisenhower's train....

The machinery of execution made itself visible Saturday morning, when the New York Herald Tribune... asked for Nixon's resignation from the ticket. It was, Nixon realized, an order... Despite his studied deference toward Eisenhower, Nixon [in Six Crises] makes it clear that he was not dense: "The publishers and other top officials of the Tribune had very close relations with Eisenhower and" (for which read, I mean) "with som eof his most influential supporters. I assumed that the Tribune would not have taken this position editorially unless it also represented the thinking of the people around Eisenhower. And, as I thought more about it, it occurred to me" (the little light bulb above a cartoon character's head--Nixon must play this role straight) "that this might well be read as" (obviously had to be) "the view of Eisenhower himself, for I had not heard from him since the trouble began, two days before."...

Saturday... with newsmen plaguing him for his decision,[Nixon] had to brace himself for defiance of the Establishment.... He asked Chotiner and Rogers to get the ultimatum spelled out... from Ike's inner circle.... They got no direct answer. But the indirect command was growing more insistent.... Eisenhower had finally spoken too, off the record. The newsmen on his train had taken a poll that came out forty-to-two for dumping Nixon... the newsmen's opinion [was] that Ike might be stalling to arrange a whitewash job for Nixon. Ike did not like such talk; it questioned not only Nixon's honesty but his.... [Eisenhower said:] "Nixon has got to be clean as a hound's tooth."...

By Saturday night, then, the issue was clear: knuckle under, or defy the closest thing modern America has had to a poiltical saint. Nixon, here as in all his crises, claims the decision was made on purely selfless grounds: he was thinking of Ike's own welfare--switching men in mid-campaign might make the General unpopular. (This is like worrying that the Milky Way might go out.)...

But Nixon does not feel obliged to present his friends as men crippled by nobility. Chotiner... plays straight man [in Six Crises,] saying all the "natural" things Nixon is too lofty for: "How stupid can they be? If these damned amateurs around Eisenhower just had the sense they were born with...." Not even good old Murray, though, blunt fellow as he is, can be described in this book as attacking the Big Man himself--just the little men around him.... Nixon himself would never dream of questioning his leader: "What had happened during the past week had not ashaken my faith in Eisenhower. If... he appeared to be indecisive, I put the blame not on him but on his lack of experience in political warfare... equally inexperienced associates."...

By five o'clock Sunday morning, he had set himself on a course... he would not resign.... Dewey called.... Nixon must plead his case before the people. If the rsponse was big enough, he could stay. And... Dewey... meant the impossible--near unanimity.... It is no wonder that Nixon--or, rather, "some of the members of my staff"--felt wary of this offer.... The whole plan... started with the presumption that Nixon was through, and with feigned generosity gave him a chance to climb back onto the ticket.... It was a brilliant way of forcing resignation on a man who was determined not to resign....

[Nixon] knew this contest was not what it appeared--Nixon against the press, or the Democrats, or the people. It was Nixon against Ike--a contest that, as Stevenson woul dlearn twice over, no one can expect to win. Candidates simply do not get 90 percent victories... and Nixon was being told to produce that figure or get lost.... Eisenhower had been presented... as... a purgative honesty meant to remedy corruption. The very fact that this arbiter of morals was silent... was an implied judgment against [Nixon]....

Nixon asked Eisenhower if he meant to endorse him. The response was put in a particularly galling way: "If I issue a statement now backing you up, in effect people will accuse me of condoning wrongdoing" Ike knew, and Nixon knew he knew, that the results of a vast survey of Nixon's affairs would be available in a matter of hours.... Fifty lawyers and accountants [had] worked on a round-the-clock basis.... No wrongdoing would be found. The objective evidence would soon be in Eisenhower's hands. But he refused to make his own judgment.... He wanted the people, who could not know as much as he did, to decide whether Nixon was honest, and he would follow them....

[Nixon] tried to strike a bargain: if Eisenhower was satisfied with the TV broadcast, would he at that point make a decision to endorse Nixon?... But Ike was not making bargains: he said he would need three or four days... for the popular reaction to be accurately gauged--uring which time, Nixon would... be stalled... his campaign tour all too noticeably suspended. Nixon finally blew: "There comes a time when you have to piss or get off the pot!" But Seraphim piss not, neither Cherubim. The great Cherub sat blithely there, enthroned on his high pot. Nixon sculpts and prettifies the unyielding refusal: "One of Eisenhower's most notable characteristics is that he is not a man to be rushed on important decisions."...

Tuesday, after a mere four hours of sleep, [Nixon] kept at his outline resolutely... [W]ith less than an hour [to go].... Dewey on the phone again, with a last demand: "There has been a meeting of all of Eisenhower's top advisers. They have asked me to tell you that it is their opinion that at the conclusion of the broadcast tonight you should submit your resignation."... Nixon asked if that was the word from the General's own mouth. Dewey answered that [he]... would not have [been] commissioned... to make such a call [if not].... (But, as usual, Ike was well protected: afterward he could write, "Just before the broadcast Governor Dewey telephoned him from New York reporting the conviction of some of my supporters there"--two can play at that "some of the staff" game--"that he soul dresign, which the young Senator later said he had feared represented my views." Poor Senator, so fearful, so young, so avuncularly cared for in this restrospective benediction. Those who have called Nixon a master of duplicity should contrast his account... with the smoothed-over version in Eisenhower's book....

One of the criticisms made of Nixon's television speech [that night] is that the hoarse voice and hurt face, hovering on the edge of tears, were either histrionic or (if unfeigned) disproportionate and "tasteless." But no one who knows the full story can suspect Nixon of acting, or blame him... it would be like blaming a recently flayed man for "indecent exposure."...

Stewart Alsop, in his useful little book Nixon and Rockefeller, quotes... one who watched Eisenhower's reactions throughout [Nixon's braodcast].... [Eisenhower's] entourage, predominantly opposed to Nixon, was touched... some wept openly. But Eisenhower was calm, tapping a yellow pad with his pencil, ready to jot down comments.... [T]he tapping stopped twice. Nixon... issued a challenge: the other candidates must have something to fear, unless they followed his example [of detailed financial disclosure]. He devoted much of his half hour to this challenge, dictating terms to his accusers....

Eisenhower stopped tapping with his pencil--jabbed it, instead, down into the yellow pad--when Nixon said any candidate who did not reveal his finances must hace something to hide. Of course, Nixon did not mention Eisenhower.... But the overall force... could not be missed. All candidates, he was arguing, should act as he had. That meant Eisenhower too.... After this all the candidates did make their statements.

There were reasons why it was inconvenient for Eisenhower... e.g., the special tax decision on earnings from his Crusade in Europe. Besides, as Alsop delicately puts it, "the military rarely get into the habit of making charitable contributions."...

Yet an even defter stroke followed. Dewey had been vague on how the speech would be judged.... The real decision would be made by the General, assessing news reaction. Nixon would be left to play games with his switchboard and his mail, unable to vindicate himself if Eisenhower decided the show had not cleared him.

But when it came time... [Nixon] said: "I am submitting to the Republican National Committee tonight... the decision it is theirs to make.... Wire and write the Republican National Committee whether you think I should stay... whatever their decision is, I will abide by it."... The General stabbed again, pencil into pad.... Nixon had always been a party man.... Now, by a cool disarming maneuver, Nixon was taking the matter away from the Eastern Establishment and putting it into the hands of men sympathetic to the regulars to grassroots workers--people who respond in a partisan way to partisan attacks... peole most vulnerable to the planned schmalz and hominess of the Checkers [the dog] reference, people with small debts of their own and Republican cloth coats. If the decision was theirs to make... it was not Ikke's. It is no wonder that, while others in Cleveland wept, the man who had directed OVERLORD... made an angry stab. He knew... he was outflanked. Alsop's informant said: "Before that, I'd always liked and admired Ike, of course, but I'd often wondered how smart he really was. After that, I knew Ike got what Dick was getting at right away."...


Eisenhower's own first comment was to [Party] Chairman Arthur Summerfield, about the $75,000 [spent buying TV time]: "Well, Arthur, you got your money's worth."... After praising Nixon for courage, Ike added that he had not made up his mind.... "It is obvious that I have to have something more than one single presentation, necessarily limited to thirty minutes, the time allowed Senator Nixon." But if Eisenhower... could not make up his mind after watching the TV show, then how could anyone in the public do so? There is only one explanation.... Ike as determined not to let Nixon take the decision out of his hands.... Eisenhower read... his telegram to Nixon, which shows the real thrust of his remarks: "While technically no decision rests with me, you and I know the realities of the situation require a pronouncement which the public considers decisive." (Or: Get your National Committee support, and see how far it carries you without me.) "My personal decision is going to be based on personal conclusions." (Or: I won't judge you by the reaction to your talk--which is what he had promised he would do.) "I would most appreciate it if you can fly to see me at once." (Or: Here, Rover.) "Tomorrow evening I will be at Wheeling, W. Va." (Or: Tomorrow you will be at Wheeling, W. Va.) Not only was Eisenhower reasserting the personal jurisdiction Nixon had challenged; he wanted a public dramatization of the lines of authority.... Nixon could not submit... [yet] he could not go further in public defiance either. He gave in. Rose Woods took down his dictated telegram of resignation.... He addressed it to the National Committee!... Chotiner... tore off the top sheet.... Rose said she could not have sent it anyway....

Chotiner... persuaded him... [that if] he just resumed his interrupted campaign schedule, the General would have to back down. The wave of public response was already seismic.... Chotiner set terms [to Summerfeld]: Nixon will not come unless he is sure of a welcoming endorsement.... This was, of course, a demand that Eisenhower back down on the stated purpose of the summons.... Eisenhower, realistic about cutting his losses... let Summerfeld give Nixon's camp the proper assurances.... Ike was at the [Wheeling] airport, to throw his arm around him and call him "my boy"--looking gracious, kind, and generous.... The only thing that could resolve the crisis--Ike's blue-eyed smile of benediction--had been bestowed.

But they did not forget the night when they touched swords. There would never be any trust between them. And Nixon had begun a tutelage that would gall him and breed resentment through years of friction and slights....


Nixon had to live for years as the acolyte to a living miracle of popularity... praise the light that shown indifferently on just and unjust, but never (or rarely) on him. He rose in Miami, to accept his on nomination, and asked that he might win in another man's name: "Let's win this one for Ike!"

That Pat O'Brien line was excised from the acceptance speech as printed in the new edition of Six Crises. Such delicate touches... occur regularly.... The balance threatens to swing decisively one way, but always tilts back in time.

  • Ike seemed cold when Nixon met him (but of course wasn't): "Despite his great capacity for friendliness, he also had a quality of reserve which, at least subconsciously, tended to make a visitor feel like a junior officer coming in to see the commanding General."

  • Ike seemed to disown Nixon (but of course didn't): "The impression I got was that he was really trying to tell me he wanted me off the ticket when, in 1956, he said Nixon shoul 'chart his own course'.... 'That's not what he meant at all', said [Len] Hall. He declared that I was judging Eisenhower's statements which should be applied to a political sophisticate." This implies, of course, that...

  • Ike seemed unsophisticated (but of course wasn't): "He would sometimes make what would seem to be completely outlandish and politically naive remarks, just to test them, perhaps even believing in some of them momentarily."

  • Ike seemed to neglect Nixon's advice (but of course didn't)...

  • Ike seemed not to be supporting Nixon's 1960 campaign (but of course was)...

  • Ike seemed... to be selfishly calculating (but of course wasn't)...

  • Ike even looked slippery (but of course was not really)...

Of such careful tightrope-walking Nixon made a political career....


What... is one to make of [Eisenhower's] famous meanderings at press conferences? They were a proof of Eisenhower's sense of priorities.... He went into each session with certain things clearly in mind--things he was determined to say, and the way they should be said; things he was determined not to say, and ways to circle around them. And he got the job done. The rest was fluff and flutter.... Eisenhower revealed his conscious strategy... during the... Quemoy-Matsu crisis. His press secretary... advised him to take a no-comment.... "'Don't worry, Jim', I told him as we went out the door. 'If that question comes up, I'll just confuse them'." An example... occurred in 1952.... Senator William Jenner... had called Ike's old friend... General Marshall a traitor. Journalist Murray Kempton, trying to put Eisenhower on the spot.... Eisenhower... no one should even mention such false charges. he seemed almost to swoon with pious detestation--yet he was careful not to mention Jenner. All the onus of slander was shifted to the journalist for raising such a question. After the conference, Ike grinned and shook hands with Kempton, making him realize what a skilled performance this was.

Eisenhower's relations with Nixon cannot be estimated until we realize that his remarks, his silences were, on key matters, conscious and chosen.... The "hounds tooth" remark might have looked like a slip at the time.... At each of the next two points where Nixon was scheduled to step up... Ike "let slip" a sentence that helped drag him down.... 1956... Eisenhower fed the "Dump Nixon" movement with his "chart your own course" remark... 1960, when Eisenhower was asked what what decisions of the administration Nixon was responsible for. Nixon had to spend precious minutes in his first debate with Kennedy trying to explain away the answer Ike gave: "If you give me a week, I might think of one. I don't remember." Nixon could only argue lamely that the words were "probably facetious" (quite a card, that Ike). He spent many years paying for the secret victory he had won in the Checkers episode....

James Reston wrote, during Nixon's last year in office with Eisenhower, that the Vice President watched football games while the President was making his decisions on a summit metting. Eisenhower simply was not interested in Nixon's view of things....


Eisenhower's periodic deflations of Nixon did not arise from mere vindictiveness. It seems clear from his actions, and from things he told many intimates, that he did not consider Nixon a statesman.... Eisenhower has been recorded... remarking that Nixon did not grow or mature in office; that he was not presidential timber; that he had no roots; that he was "too political".

That last phrase... best sums up Ike's attitude.... The one thing Eisenhower regularly entrusted to Nixon was housekeeping work in the Republican Party... campaigning for every Republican in Ameirca in the off years.... If Eisenhower needed Right-Wing support, Nixon was dispatched to round it up.... It was especially true when the White House had to deal with Joseph McCarthy....

Nixon did not want to attacxck McCarthy openly.... But [Eisenhower's] staff knew there would be little impact if a liberal Republican attacked Joe. The denunciation had to come from the right, so Eisenhower himself gave Nixon the job.... When a select committee of the Senate was appointed... Nixon chose its personnel and... "arranged McCarthy's humiliation by appointing hanging judges." Roy Cohn listed Nixon among the severest critics of McCarthy to show up for his funeral.

NIxon realixed that these were dirty missions.... His complaint was that Eisenhower did not seem to... value the man who could accomplish them.... Nixon, not understanding Eisenhower's standards, thought he could ingratiate himself by doing all the regime's dirty work. He thought this was the way to rise. All it did was convince Ike that he was not made for higher things. His one chance of growing in the president's esteem might have come from a refusal to run such errands....

Posted by DeLong at 02:45 PM | Comments (0) | TrackBack

California Election Proposition

Ezra KIein votes against all California ballot propositions except 79 and 80. I disagree with him on 80: I vote against it.

Ezra Klein: Endorsements Squared: For all you Californians (and particularly Angelenos) bewildered by next week's ballot measures and elections, The LA Weekly is swooping in with a cape and a pen (a pen of TRUTH) to give you a hand.... [I] couldn't find a single recommendation to disagree with...

LA Weekly: News: We Endorse: State ballot measures.

Proposition 73: Abortion notification. NO: If your teenage daughter gets pregnant and is about to have an abortion, don’t you want her to tell you? Don’t you want the physician who is going to perform the procedure to tell you, at least 48 hours before it takes place? Of course you do. But let’s take it further. You don’t want her to get pregnant in the first place. You don’t want her having sex. You and she talk about this kind of thing, and that’s great. So shouldn’t you vote for the “Parent’s Right to Know and Child Protection Initiative”? No, because you and your daughter don’t need it. But girls who can’t talk to their parents, for whatever reason, still need to be able to talk to their doctors about their bodies without worrying that their family will find out and pressure them into bearing a child against their will. Good parent-child communication is essential, but it can’t be legislated.

Proposition 74: Teacher probationary period, also known as tenure. NO: A probationary period for a new hire might not be a bad idea, just to make sure the employee didn’t forget to include something important on the résumé, like “raving lunatic.” Thirty days sounds about right. Unless you’re a teacher, in which case we’ll make it — whoa! Two years! Okay, they’re with kids every day, so let’s play it safe. But to encourage more good people to become teachers, maybe we should change it to — yikes! Five years of job insecurity? That’s what Proposition 74 would do, because Governor Schwarzenegger knows that when schools are underfunded and overcrowded, it’s got to be because we just make it too easy for people to become underpaid teachers. He’s wrong on this one, just like he is with the other ballot initiatives he’s pushing.

Proposition 75: Public worker union dues restrictions. NO: In 1998 Californians rejected a ballot measure that would have blocked unions from spending an employee’s dues money to campaign for candidates or lobby for legislation that labor leaders believe is important. Now we have this one, which is pretty much the same except that it applies only to public employees. These workers currently can opt out of paying their union to do political lobbying and campaigning. Under Proposition 75, they would have to opt in — giving the edge to corporations that do not, after all, give their shareholders the power to opt out of having their investment used for anti-labor lobbying.

Proposition 76: State budget reform. NO: The state budget is a mess. Proposition 76 would make it messier, by giving the governor extraordinary executive powers to cut spending, even under a budget that is already approved and signed into law. And the Legislature would be unable to stop him. It would also permit the governor to roll back Proposition 98, a 1988 voter-approved constitutional amendment that guarantees a spending floor for public schools. This isn’t the way to go.

Proposition 77: Redistricting. NO: The Democrats and the Republicans divvy legislative and congressional seats between them to guarantee each other safe territory at election time. Only a handful of districts are ever really up for grabs, meaning the real decisions are made not by the full electorate in the general election, but by primary voters when they choose their nominee. Or even earlier, when party bosses anoint their candidates. In addition to the lack of choice, voters get districts drawn in the shapes of various circus animals. So why not break up this insiders’ game by giving line-drawing duties to a panel of nonpartisan, pure-as-the-driven-snow superheroes, also known as retired judges? Several reasons. Under this plan, the district boundaries would be set only after national parties spend millions, perhaps billions, to persuade voters to adopt (or reject) a proposal for district lines. Then the court hearings. Then back to the judges to try again, even though they already submitted their best effort. Some repair work is needed on districting, but this isn’t it. Back to the drawing board.

Proposition 78: Prescription drug discounts, pharmaceutical industry version. NO: Hey! This would allow drug companies to give some people discounts on costly prescription drugs, if they felt like it! That would be so very nice of them! The only purpose of this proposition is to cancel more generous Proposition 79.

Proposition 79: Prescription drug discounts, consumer version. YES: Like 78, this one gives California the clout to negotiate deep drug discounts with the big pharmaceutical companies. The difference is that this one reaches far more low-income people who need prescription drugs. It also carries an enforcement stick that in effect locks drug companies out of the discount program if they don’t come through with the best prices.

Proposition 80: Electricity re-regulation. YES: This would finally throw in the towel on the disaster that was the state Legislature’s 1996 energy deregulation program. You know — rolling blackouts, a sudden scarcity of power. There would be some negative consequences, like limiting the options that many institutional electricity purchasers still have when deciding when to buy and how much to pay. But consumers would once again be protected from wild market fluctuations. The measure also requires major steps forward on renewable energy programs.

I disagree with Ezra on Prop. 80: Severin Borenstein is against Prop. 80, and I listen to him:

Borenstein says though the structure of the energy market could use some improvements, Proposition 80 is not the way to make them.... "I would analogize it to the Food and Drug Administration putting on the ballot whether they should okay a certain drug as safe and effective, putting out all the studies and saying 'you decide,' to the voters." Borenstein says 80 includes three largely disconnected ideas.

  1. End consumer choice of power provider.
  2. Curtail the practice of charging different rates for energy at different times of day during different weather conditions.
  3. Require the state to get 20% of its energy from renewable sources by 2010.

(2) is definitely pernicious. (1) and (3) I don't know enough of to have an informed opinion about--so I'll borrow Severin's.

Posted by DeLong at 02:45 PM | Comments (0) | TrackBack

Gordon's Notes: Going down, coming up: The Economist and Newsweek

Gordon's Notes wonders whether the Economist is still worth reading:

Gordon's Notes: Going down, coming up: The Economist and Newsweek: The Economist describes Libby's perjury as a "technicality". That regurgitation of Bush propaganda wouldn't mean much if it was an isolated incident, but it's part of a four year pattern.... They are in decline now. On the other hand, I happened to read Newsweek's Libby/Cheney coverage on an airplane. I've not read Newsweek since I was a child.... This article... put Libby's behavior into a convincingly romantic context of the 'honorable soldier against the apocalypse, making a kind of sense of a claustrophobic world of fear, loyalty and self-delusion. The Atlantic is another magazine that's come up in the world. It may well be time for me to swap the Economist for Newsweek and the Atlantic...

Posted by DeLong at 02:45 PM | Comments (0) | TrackBack

John Dean on Scooter Libby as Perjury Firewall

John Dean on Scooter Libby as Cheney's perjury firewall:

FindLaw's Writ - Dean: A Cheney-Libby Conspiracy, Or Worse? Reading Between the Lines of the Libby Indictment: Having read the indictment against Libby, I am inclined to believe more will be issued. In fact, I will be stunned if no one else is indicted.... Libby's saga may be only Act Two in a three-act play. And in my view, the person who should be tossing and turning at night, in anticipation of the last act, is the Vice President of the United States, Richard B. Cheney.... Typically, federal criminal indictments are absolutely bare bones. Just enough to inform a defendant of the charges against him. For example, the United States Attorney's Manual, which Fitzgerald said he was following, notes that under the Sixth Amendment an accused must "be informed of the nature and cause of the accusation." And Rule 7(c)(1) of the Federal Rules of Criminal Procedure requires that, "The indictment . . . be a plain, concise and definite written statement of the essential facts constituting the offense charged." That is all.

Federal prosecutors excel at these "plain, concise and definite" statement indictments - drawing on form books and institutional experience in drafting them. Thus, the typical federal indictment is the quintessence of pith: as short and to the point as the circumstances will permit. Again, Libby is charged with having perjured himself, made false statements, and obstructed justice by lying to FBI agents and the grand jury. A bare-bones indictment would address only these alleged crimes. But this indictment went much further - delving into a statute under which Libby is not charged.

Count One, paragraph 1(b) is particularly revealing. Its first sentence establishes that Libby had security clearances giving him access to classified information. Then 1(b) goes on to state: "As a person with such clearances, LIBBY was obligated by applicable laws and regulations, including Title 18, United States Code, Section 793, and Executive Order 12958 (as modified by Executive Order13292), not to disclose classified information to persons not authorized to receive such information, and otherwise to exercise proper care to safeguard classified information against unauthorized disclosure." (The section also goes on to stress that Libby executed, on January 23, 2001, an agreement indicating understanding that he was receiving classified information, the disclosure of which could bring penalties.) What is Title 18, United States Code, Section 793? It's the Espionage Act -- a broad, longstanding part of the criminal code. The Espionage Act criminalizes, among other things, the willful - or grossly negligent -- communication of national-defense related information that "the possessor has reason to believe could be used to the injury of the United States or to the advantage of any foreign nation." It also criminalizes conspiring to violate this anti-disclosure provision

But Libby isn't charged with espionage. He's charged with lying to our government and thereby obstructing justice. So what's going on? Why is Fitzgerald referencing the Espionage Act? The press conference added some clarity on this point. The Special Counsel was asked, "If Mr. Libby had testified truthfully, would he be being charged in this crime today?" His response was more oblique than most. In answering, he pointed out that "if national defense information which is involved because [of Plame's] affiliation with the CIA, whether or not she was covert, was classified, if that was intentionally transmitted, that would violate the statute known as Section 793, which is the Espionage Act."... But, as Fitzgerald also noted at his press conference, great care needs to be taken in applying the Espionage Act....

Finally, he added. "We have not charged him with [that] crime. I'm not making an allegation that he violated [the Espionage Act]. What I'm simply saying is one of the harms in obstruction is that you don't have a clear view of what should be done. And that's why people ought to walk in, go into the grand jury, you're going to take an oath, tell us the who, what, when, where and why -- straight." In short, because Libby has lied, and apparently stuck to his lie, Fitzgerald is unable to build a case against him or anyone else under Section 793, a provision which he is willing to invoke, albeit with care. And who is most vulnerable under the Espionage Act? Dick Cheney - as I will explain.

The Libby indictment asserts that "[o]n or about June 12, 2003 Libby was advised by the Vice President of the United States that Wilson's wife worked at the Central Intelligence Agency in the Counterproliferation Division. Libby understood that the Vice President had learned this information from the CIA." In short, Cheney provided the classified information to Libby - who then told the press. Anyone who works in national security matters knows that the Counterproliferation Division is part of the Directorate of Operations -- the covert side of the CIA, where most everything and everyone are classified.

According to Fitzgerald, Libby admits he learned the information from Cheney at the time specified in the indictment. But, according to Fitzgerald, Libby also maintained - in speaking to both FBI agents and the grand jury - that Cheney's disclosure played no role whatsoever in Libby's disclosure to the media. Or as Fitzgerald noted at his press conference, Libby said, "he had learned from the vice president earlier in June 2003 information about Wilson's wife, but he had forgotten it, and that when he learned the information from [the reporter] Mr. [Tim] Russert during this phone call he learned it as if it were new." So, in Fitzgerald's words, Libby's story was that when Libby "passed the information on to reporters Cooper and Miller late in the week, he passed it on thinking it was just information he received from reporters; that he told reporters that, in fact, he didn't even know if it were true. He was just passing gossip from one reporter to another at the long end of a chain of phone calls."

This story is, of course, a lie, but it was a clever one on Libby's part. It protects Cheney because it suggests that Cheney's disclosure to Libby was causally separate from Libby's later, potentially Espionage-Act-violating disclosure to the press. Thus, it also denies any possible conspiracy between Cheney and Libby. And it protects Libby himself - by suggesting that since he believed he was getting information from reporters, not indirectly from the CIA, he may not have had have the state of mind necessary to violate the Espionage Act. Thus, from the outset of the investigation, Libby has been Dick Cheney's firewall. And it appears that Fitzgerald is actively trying to penetrate that firewall.

It has been reported that Libby's attorney tried to work out a plea deal. But Fitzgerald insisted on jail time, so Libby refused to make a deal. It appears that only Libby, in addition to Cheney, knows what Cheney knew, and when he knew, and why he knew, and what he did with his knowledge. Fitzgerald has clearly thrown a stacked indictment at Libby, laying it on him as heavy as the law and propriety permits. He has taken one continuous false statement, out of several hours of interrogation, and made it into a five-count indictment. It appears he is trying to flip Libby - that is, to get him to testify against Cheney -- and not without good reason. Cheney is the big fish in this case.

Will Libby flip? Unlikely. Neither Cheney nor Libby (I believe) will be so foolish as to crack a deal. And Libby probably (and no doubt correctly) assumes that Cheney - a former boss with whom he has a close relationship -- will (at the right time and place) help Libby out, either with a pardon or financially, if necessary. Libby's goal, meanwhile, will be to stall going to trial as long as possible, so as not to hurt Republicans' showing in the 2006 elections. So if Libby can take the heat for a time, he and his former boss (and friend) may get through this. But should Republicans lose control of the Senate (where they are blocking all oversight of this administration), I predict Cheney will resign "for health reasons."

Posted by DeLong at 02:43 PM | Comments (0) | TrackBack

Choosing a Graduate School in Economics

A correspondent writes I should recommend Mike Moffatt to people interested in graduate school in economics. It's good advice:

Choosing a Graduate School in Economics: From my own experience and the experience of my friends who also study economics in the United States, I can give the following advice:

  1. Ask the professors who are writing you recommendation letters where they'd apply if they were in your position. They usually have a good idea of what schools you'll do well at and which ones you won't. You'll also have a better chance of getting into a school if the selection committee at that school knows and respects the person writing the letter. It helps immensely if your reference writer has friends on the selection committee at that school.
  2. Don't apply to just the highest ranked schools. This is one of the biggest mistakes you can make. If you're interested in studying time-series econometrics, apply to schools which have active researchers in that area. What's the point of going to a great theory school if you're not a theorist? Apply to as many schools as possible. I'd recommend applying to about 10. I've seen a lot of terrific students only apply to Chicago, Harvard, and Stanford then not get into any of them. Make sure you have some back up plans, or else you might lose a year of study.
  3. Talk to the graduate students at the school you're thinking about attending. They'll usually tell you how things really work in a department. Talking to professors isn't as useful, because they usually have a vested interest in you coming to their school, so they've been known to bend the truth a little on occasion. Whatever you do, don't contact any of the faculty unsolicited. They'll think you're annoying and they'll blacklist you immediately.
  4. If at all possible, I'd recommend going to a larger school. Smaller schools are good, but if one or two key professors leave they can be decimated. It helps if the school you are applying to has 3 or more active researchers in the area you are interested in, that way if one or two leave, you'll still have an advisor you can work with.

Posted by DeLong at 02:37 PM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (Jonathan Weisman, Please Stop Writing Edition)

The Washington Post's Jonathan Weisman takes another dive for his Republican masters.

Paul McLeary writes:

CJR Daily: Archives: [B]ack to the Post, where Weisman isn't done distorting by omission. Down toward the middle of the piece, the Post buries a major part of the story -- "a $70 billion tax cut that could come to a vote soon after the budget bill, more than wiping out the first bill's deficit reduction." (Emphasis ours.) With that, Weisman qualifies for the Buried Lede of the Week Award.

As Sam Rosenfeld noted on the American Prospect's "Tapped" blog this morning, "could it have hurt Jonathan Weisman to mention somewhere before the tenth paragraph of the piece (and less obliquely than in the passing reference he makes there) that there's a second component to the reconciliation package that's been artificially severed from the spending one, which will cut taxes for the wealthy by $70 billion? As Harry Reid and virtually every other Democrat has been saying ad infinitum during this debate: 'While the majority has divided its budget in a way that obscures its overall effect, nobody should be fooled. Viewed as a whole, budget reconciliation would increase the deficit by more than $30 billion.'"

Given that, the Post's headline for the piece, "Senate Passes Plan to Cut $35 Billion From Deficit"... gives the reader precisely the wrong impression. Someone forgot to warn the Post's copyeditors that the news -- and the headline -- were actually tucked into that tenth paragraph.

And Daniel Gross is equally annoyed:

Daniel Gross: October 30, 2005 - November 05, 2005 Archives: Writing in the Washington Post, Jonathan Weisman today gives Republicans in Congress way too much credit for finally addressing the issue of deficit spending.

The Senate approved sweeping deficit-reduction legislation last night that would save about $35 billion over the next five years by cutting federal spending on prescription drugs, agriculture supports and student loans, while clamping down on fraud in the Medicaid program. The measure would also open Alaska's Arctic National Wildlife Refuge to oil drilling, a long-sought goal of the oil industry that took a major step forward after years of political struggle. A bipartisan effort to strip the drilling provision narrowly failed. The Senate bill, which passed 52 to 47, is the first in nearly a decade to tackle the growth of entitlement spending, the part of the federal budget that rises automatically based on set formulas and population changes.

Sweeping? Tackling the growth of entitlement spending? Let's be clear what is being talked about here. Bear with me for a little elementary math. $35 billion in cuts over 5 years comes out to $7 billion per year. Here's the most recent take from the Office of Management and Budget on the budget for the currrent fiscal year and the outlook for the next several years. Scroll down to Table 5 on Page 19. There it is revealed that spending for Fiscal 2006 is estimated to be $2.613 trillion. For fiscal 2006 and the next four fiscal years, spending is set to total $13.975 trillion.

In this package of sweeping deficit reduction that tackles entitlement spending, Congress proposes to cut $35 billion out of some $13.975 trillion in spending over five years. Divide $13.975 trillion into $35 billion and you get: .0025447. In other words, Congress is proposing to cut spending over the next five years by one quarter of one percent.

Sweeping, baby.

Why Weisman's editors haven't fired him by this point is incomprehensible. It's in Weisman's short-run interest to shill for the Republican leadership--he would have a hard time getting his quotes for his stories if he didn't. It's not in his editors' interest--either short or long run--to employ him.

Posted by DeLong at 02:36 PM | Comments (0) | TrackBack

Thuds and Screams from Inside the Topkapi Palace

Capitol Blue is not always accurate, but always entertaining. A Tiny Revolution writes:

A Tiny Revolution: Let The Thinly-Sourced Rumor-Mongering Begin!: Would it be irresponsible to link to a Capitol Blue story simply because it bolsters my belief system, even though Capitol Blue has been egregiously wrong in the past?

It would be irresponsible not to:

An uncivil war rages inside the walls of the West Wing of the White House, a bitter, acrimonious war driven by a failed agenda, destroyed credibility, dwindling public support and a President who lapses into Alzheimer-like periods of incoherent babbling...

The war erupted into full-blown shout fests at Camp David this past weekend where decorum broke down in staff meetings and longtime aides threatened to quit unless Rove goes...

White House staff members say the White House is "like a wartime bunker" where shell-shocked aides hide from those who disagree with their actions and office pools speculate on how long certain senior aides will last.

Bush, whose obscenity-laced temper tantrums increase with each new setback and scandal, abruptly ended one Camp David meeting by telling everyone in the room to "go f--- yourselves" before he stalked out of the room.

Senior aides describe Bush as increasingly "edgy" or "nervous" or "unfocused." They say the President goes from apparent coherent thought one moment to aimless rambles about political enemies and those who are "out to get me."

"It's worse than the days when Ronald Reagan's Alzheimer's began setting in," one longtime GOP operative told me privately this week. "You don't know if he's going to be coherent from one moment to the next. What scares me is if he lapses into one of those fogs during a public appearance."

Today did see Scott McClellan direct press-delivered tacnukes against Karl Rove. Rove burned McClellan by sending him out to tell the press that Rove had nothing to do with the leaking of Valerie Plame Wilson's covert CIA identity--and now that this is well-known McClellan's credibility with journalists and his career are both over unless he can get Rove fired. No press secretary can survive if people think the rest of the White House regards him as a patsy to be fed lies.

Posted by DeLong at 02:35 PM | Comments (0) | TrackBack

Republican Radicalism

Henry Farrell at Crooked Timber writes about Jacob Hacker and Paul Pierson's Off Center:

Review of Off Center: The Republican Revolution and the Erosion of American Democracy. Jacob S. Hacker and Paul Pierson, Yale University Press 2005: Jacob Hacker and Paul Pierson have written a distinctly unusual book. Political scientists don't often write books that take sides in political arguments, and when they do, they usually don't do any better at it than common or garden pundits.... Off Center... is very clearly the work of people who have thought carefully and hard about how politics works.... They start by examining the conventional wisdom that American politics has strong centripetal forces, so that political parties have strong incentives towards moderation.... This political commonplace doesn't appear to be true any more, to the extent that it ever was. The Republicans have been transformed over the last twenty years from a loosely organized coalition in which moderates appeared to have the upper hand, to a party that is astonishingly well disciplined (by the standards of American political history) and dominated by right-wing radicals....

[W]hy hasn't the Republican party been punished by voters for its radicalism?... Hacker and Pierson's explanation has three main components. First, information: Voters are... vulnerable to "tailored disinformation."... Second, institutions: The Republican Party has been able to use its dominance of Senate, House and Presidency to set the agenda and to sideline opposition. Finally, networks: "New Power Brokers" like Tom DeLay have been able to assemble networks... rewarding and protecting loyalists while brutally punishing those who go off-message....

Hacker and Pierson can explain how the Republican party has succeeded in bringing through radical policy shifts that go against public preferences. Their analysis of the 2001 tax cuts, the Bush energy plan, and the Medicare drugs bill shows how highly objectionable policies can be crafted to fleece the public without raising much in the way of public opposition.... [A]ssiduous propaganda disguised the fiscal impact of the [tax] cuts.... Republican leaders made sure that they were sent to the floor for voting without opportunity for proper debate or for consideration of alternatives. "Sunsets," "phase-ins" and "time-bombs" were deployed to make the measures temporarily more palatable and to disguise their true costs and long term consequences. "Backlash insurance" provided protection to Republicans who signed onto the agenda...

Posted by DeLong at 02:32 PM | Comments (0) | TrackBack

Good Productivity News...

Somehow I missed this this morning. Mark Thoma catches it:

Economist's View: U.S. productivity was higher than expected in the third quarter at 4.1%...

Posted by DeLong at 02:29 PM | Comments (0) | TrackBack

Public Intellectuals

Tim Burke on Juan Cole:

Knowing: Juan Cole spoke here last night, courtesy of War News Radio, and I was fortunate enough to have dinner with him as well. I thought his talk was terrifically clear, informative and useful.... [T]he useful ordinariness of what Cole is doing: he’s providing a model of how scholars could and should engage the world.... What he does isn’t a substitute for his scholarship, but it makes his scholarly knowledge useful, even if you disagree with it. I get tired of the churlish spirit that seems to demand that the only experts worth having are the ones who happen to accord with one’s own views. I’d rather see most academics rise to the standard of public accessibility that Cole charts out as a basic attribute of their professionalism, and then worry about whose knowledge is most authoritative after we get to that point....

He’s a guy who knows a great many useful things about the modern political history of Iran and Iraq and has the scholarly discipline to organize what he knows in various ways, coupled with an ability and will to clearly communicate what he knows.... Cole knows less about subjects outside his specialized knowledge.... [E]ven within his specialization, of course, he has his pet readings and theories about what has happened and what will happen that collide squarely with the understandings of other specialists with equal experience in the region. What of it? That’s the challenge to any educated, critical-thinking person.... Gain information, gain perspective, use the tools you’ve got and if you need other tools, go get them....

One thing that Cole does contend, and I think he’s right to contend, is that many of the people who shaped the early American occupation of Iraq knew almost nothing about the political or social history of the place they were occupying, and more importantly, didn’t care to know.... A position that says there’s nothing to be gained by knowing the history that Cole knows, that it would have made no difference for American planners to understand the history of Shi’a Islam, or the political history of the Dawa Party, or the internal architecture of Hussein’s Ba’athist state, or any number of other topics, strikes me as an acutely self-defeating position, a cutting off of the nose to spite one’s face....

The curious thing about Cole’s account... is that it’s potentially very positive about the occupation.... [T]he United States actually did liberate some Iraqi communities, did make it possible for them to achieve democratic self-determination. It’s just that... the end result of democratic self-determination, at least in southern Iraq, may be a state that looks less like Morocco and more like Iran...

Posted by DeLong at 02:28 PM | Comments (0) | TrackBack

Health Care Reform Options

David Wessel on health care:

Capital: Angst about health-care costs drove the attempt by former President Clinton and Hillary Clinton to restructure the system.... Employers grew weary of picking up the tab not only for their own workers but for those without insurance or those covered by Medicaid and Medicare, which pay less than full cost. As they squeezed out inefficiencies, they cut their share of the cost of covering the uninsured. That forced up premiums for smaller employers. The number of uninsured grew and free care became harder to find. The government's costs, from the Medicaid program for the poor to emergency rooms at municipal hospitals, soared.

[A]ngst about health-care costs is back and could be a potent issue in the 2006 or 2008 elections. Now all we need is a workable solution. Two approaches are on the ascendant.

One is to prod Americans to be better health-care shoppers by making them spend more of their own money.... The notion is that people consume more health care than they need because it feels free, and there's something to that... discouraging Americans from unneeded trips to the emergency room is smart; discouraging them from teeth-cleaning, check-ups and blood-pressure monitoring isn't.... The other approach is to prod health-care providers to provide higher-quality care by paying them more for delivering it. Insurers, government and big health-care institutions are trying to devise quality measures -- from monitoring care of diabetics to evaluating surgical success -- as a step toward "paying for performance." Medicare's administrator, physician-economist Mark McClellan, is tweaking incentives in the giant government health-care-insurance program to the same end. This could give Americans more value for their health-care dollars, an unquestionably worthy goal, but whether it saves money is far from clear.... Incremental change appears to be the only practical option, but more than minor tweaks are needed. The cracks in the foundation are widening.

Posted by DeLong at 02:26 PM | Comments (0) | TrackBack

Alan Greenspan Warns to Congress

The report is:

Greenspan Warns Congress on Threat From Deficit: [Greenspan] issued some of his sternest warnings to Congress about the budget deficit, particularly as it relates to Social Security and rising health care costs. It is a subject he has highlighted in the past, but not as bluntly. "So long as health care costs continue to grow faster than the economy as a whole, as seems likely, federal spending on health and retirement programs would rise at a rate that risks placing the budget on an unsustainable trajectory," he said. "Specifically, large deficits will result in rising interest rates and an ever-growing ratio of debt service to G.D.P. Unless the situation is reversed, at some point these budget trends will cause serious economic disruptions."...

Translation: Health care costs are going to rise as a share of GDP. That means federal spending is going to rise as a share of GDP. Failing to bring the budget into effective balance over the long run will cause economic chaos. The conclusion is left as an exercise to the Congress: if you need to balance the budget and if spending is going to increase that means ______.

Posted by DeLong at 02:23 PM | Comments (0) | TrackBack

David Brin Has a Disturbing Idea...

Some--that is, Patrick Nielsen Hayden--postulate that since September 10, 2001 we have all been living in a Ken MacLeod or Charlie Stross novel. Now David Brin postulates that George W. Bush is Mary Sue.

It fits frighteningly well.

Posted by DeLong at 02:21 PM | Comments (0) | TrackBack

Gary Farber Is Shrill

He reads:

Amygdala: BACK TO THE FUTURE. "Iraqi Government Asks Hussein's Officers to Return to Military."

Comment? Who needs to comment?

Impeach George W. Bush. Impeach him now. Richard Cheney too.

Posted by DeLong at 02:17 PM | Comments (0) | TrackBack

More New Textbooks

Marty Olney down the hall got sent a free copy of:

R. Glenn Hubbard and Anthony P. O'Brien (2005), Microeconomics (New York: Prentice-Hall: 0130348260).

and is saying very good things about it.

Posted by DeLong at 02:15 PM | Comments (0) | TrackBack

The Decline of the American Union Movement

Tim Burke argues that strikes like that of Philadelphia's mass-transit workers are much more costly for the union movement as a whole than strikers realize:

The Union Label: [T]he proposition that Wal-Mart employees need collective representation that aggressively stands up for their interests strikes me as unquestionable. The only solution for predatory employment practices in cases where workers have few if any alternative sources of employment and woefully unfair terms of labor is unionization. You have to have a legally protected right to unionize or to bargain collectively in a free society, and some strikes or labor actions deserve the general endorsement of a public, even when those strikes inconvenience us....

Some strikes I simply can’t work up any support for. It’s hard for me, like almost everyone else in the Philadelphia area, to feel any real support or warmth for the striking mass transit workers who have crippled transportation this week. It doesn’t affect me personally [but]... this is a very public event... poorer Philadelphians who are dependent on bus transport and schoolchildren in the city who use vouchers to travel on public transportation to get to school.... A strike against a private business is one thing: in a way, you can usually just avoid engaging it altogether, work with some other business for the time being. This is different.

The union involved doesn’t seem to recognize the difference, and in failing to do so, neatly explains the eclipse of the modern labor movement in America. They’ve made no meaningful effort to speak to the public in advance of the strike, to prepare the ground, no attempt to explain or frame their actions in that arena. They’ve acted in a way that has huge public consequences with almost no sense of engagement.... Labor’s decline began in the United States... precisely because of a consistent inability to articulate its actions through an alliance with some larger general interest. That accelerated in the late 1970s and early 1980s; now many unions don’t even bother to try to pretend that the public consequences of their labor actions are worth more than a cursory address....

As long as unions seem as obsessed with bureaucratic over-regulation of workplace obligations as any middle-manager straight out of “The Office”, as eager to return all their members to some mediocre mean of on-the-job effort, or as uninterested in the long-term viability of the institutions for which they labor as stock-price obsessed CEOs, they’re going to turn off many potential members. Yes, these are all caricatures, exaggerated by the news media, but I suspect many people in their working lives have encountered a few vividly personal examples as well as telling public anecdotes...

Posted by DeLong at 02:12 PM | Comments (0) | TrackBack

November 07, 2005

In Today's Inbox (November 2, 2005)

In today's inbox--November 2, 2005--we have:


  • Si-Yeon Lee (2005), "Post-Crisis Restructuring and Corporate Governance in Korea" (Berkeley: Draft Orals Prospectus).
  • Konstantin Magin (2005), "Nanotechnology or Nanobubble?" (Berkeley: Draft).
  • Matthew Bernard (2005), "The Topic of Volatility: a Review of Shiller's Irrational Exuberance" (Berkeley: Draft).

Giovanni Federico goes straight to the top of the pile...

The buzz on Gene's book--at least the buzz that I've heard so far--is quite good...

Harold Davis has the very interesting idea of teaching introductory programming using Javascript as the sample programming language...

Lorentzen, McMilland Wacziarg (2005) say this:

Abstract: Analyzing a variety of cross-national and sub-national data, we argue that high adult mortality reduces economic growth by shortening time horizons. Higher adult mortality is associated with increased levels of risky behavior, higher fertility, and lower investment in physical and human capital. Furthermore, the feedback effect from economic prosperity to better health care implies that mortality could be the source of a poverty trap. In our regressions, adult mortality explains almost all of Africa's growth tragedy. Our analysis also underscores grim forecasts of the long-run economic impact of teh AIDS epidemic.

Posted by DeLong at 11:17 AM | Comments (0) | TrackBack

November 02, 2005

Eddie Lazear as CEA Chair?

Eddie Lazear would in all probability do a very good job as Chair of the President's Council of Economic Advisers:

FT.com / World / US - Economist leads the field to replace Bernanke at CEA: By Andrew Balls and Caroline Daniel: Edward Lazear, a member of President George W. Bush's advisory panel on federal tax reform, is a leading candidate to replace Ben Bernanke as chairman of the White House Council of Economic Advisers (CEA), current and former administration officials said yesterday. Mr Lazear, a Stanford University economist, would bring to the White House expertise on tax policy and in-depth knowledge of the panel's deliberations and proposals -- some of which will be highly controversial in Congress....

Mr Bernanke, who was last week nominated to replace Alan Greenspan as chairman of the Federal Reserve, is helping with the search for his successor, and Mr Lazear is a leading candidate among a small number of names. Mr Lazear, a professor of economics and human resources management at Stanford business school, is primarily known as a labour economist, but his long research record spreads over a range of microeconomic topics. He has strong conservative credentials as a fellow of the Hoover Institution, Stanford's right-leaning research institution. He earned his PhD in economics from Harvard University in 1974.

Last year the White House asked James Poterba, the other economist on the tax panel, if he was interested in the CEA job before Mr Bernanke was nominated. At the time Mr Poterba, a professor at the Massachusetts Institute of Technology, made it clear he was not interested in the position.

Posted by DeLong at 09:59 AM | Comments (0) | TrackBack

An Insult to Count Potemkin

To say that whatever is good about the Bush administration's public image is the result of the tireless construction of Potemkin villages by the press corps would be an insult to Count Potemkin.

Paul Krugman writes:

Ending the Fraudulence: Let me be frank: it has been a long political nightmare.... [W]e realized early on that this administration was cynical, dishonest and incompetent, but spent a long time unable to get others to see the obvious. For others - above all, of course, those Americans risking their lives in a war whose real rationale has never been explained - the nightmare has been all too concrete.... What do I mean by essential fraudulence? Basically, I mean the way an administration with an almost unbroken record of policy failure has nonetheless achieved political dominance through a carefully cultivated set of myths.

The record of policy failure is truly remarkable. It sometimes seems as if President Bush and Mr. Cheney are Midases in reverse: everything they touch - from Iraq reconstruction to hurricane relief, from prescription drug coverage to the pursuit of Osama - turns to crud. Even the few apparent successes turn out to contain failures at their core: for example, real G.D.P. may be up, but real wages are down.... [T]his administration's political triumphs have never been based on its real-world achievements... [but] on myths: the myth of presidential leadership, the ugly myth that the administration is patriotic while its critics are not. Take away those myths, and the administration has nothing left....

[T]he Bush administration has lost the myths that sustained its mojo, and with them much of its power to do harm. But the nightmare won't be fully over until... politicians... admit that they were misled... news media... face up to their role in allowing incompetents to pose as leaders and political apparatchiks to pose as patriots.... [T]he long nightmare won't really be over until journalists ask themselves: what did we know, when did we know it, and why didn't we tell the public?

Posted by DeLong at 09:59 AM | Comments (0) | TrackBack

Noah Schachtman Reports from Iraq

Noah Schachtman of the always-excellent DefenseTech is back from Iraq:

Defense Tech: Iraq Diary Archives: [T]hat day-and-a-smidge shift with "Team Mayhem," a U.S. Army bomb squad, winds up being pretty damn action-packed. Booby traps, smoking mortars, rooftop gunfire, suspected truck bombs, roadside explosives, and an idiosyncratic little robot named "Rainman" all figure prominently in the story, which appears in this month's Wired magazine. Mostly, though, the article is about the battle of wits that's being fought between high-tech U.S. military squads and low-tech insurgent bombers. Improvised explosives have become the deadliest threat to soldiers and civilians alike in Iraq. So the winner of this fight largely determines the fate of the counterinsurgency.

But getting a clear picture of this tangle has been tough; military bomb squads, or "explosive ordnance disposal" units, are ordinarily shrouded in secrecy, operating in shadows. This is one of the first times they've allowed a reporter in for an extended stay....

Noah goes on to say that morale among our soldiers is high:

[M]orale among these infantrymen and engineers and bomb-disposers was high. Shockingly high, given the fact that they didn’t buy the Bush administration’s rationales for the war. “Democracy? Here? Are you f---ing kidding me?” one sergeant laughed, as we drove near the Abu Ghraib prison.... He figures the place will collapse into civil war as soon as U.S. troops leave. But he’s glad he’s in Iraq, regardless. Mostly, because of the insurgents.

The guerrillas in Iraq have been brutal, killing way more innocent bystanders than American occupiers or Iraqi collaborators.... “It boggles my mind, how someone can go into a crowd of kids, and kill them all. I’ll never understand it. But that’s why I’m here,” said Staff Sgt. Mark Palmer, with the 717th Ordnance Disposal Company, an Army bomb squad.... U.S. troops are highly trained. So they’ll do what they’re ordered. But in order to feel good about their mission, they need a cause.... The insurgents have been only too happy to step collectively into the role of Dr. Doom.... Most of these GIs were ready to whoop ass, when they first get to Iraq. They’re part of America’s professional, increasingly-permanent military class. Which means they’ve been training for years to go to war – with precious few full-out battles to fight.... I’d say three in four of the GIs I spoke with were planning to reenlist. The new, fat bonuses are one reason, of course. But another is the sense that there are real-life psychopaths out there that need to be stopped. It may sound corny. It may sound dumb. But that’s what I saw.

No, it doesn't sound dumb. It sounds brave.

Posted by DeLong at 09:57 AM | Comments (0) | TrackBack

The Constitution-in-Exile Orders a Mojito

Bush Supreme Court nominee Sam Alioto on the right to possess machine guns:

Whiskey Bar: Casey as the Bat: Just call him "Machine Gun" Scalito:

What should be far more troubling to Senate Democrats, however, is Alito's 1996 dissent from a decision upholding the constitutionality of a federal law prohibiting the possession of machine guns. Applying the logic of the Constitution in Exile for all it's worth, Alito insisted that the private possession of machine guns was not an economic activity, and there was no empirical evidence that private gun possession increased violent crime in a way that substantially affected commerce -- therefore, Congress has no right to regulate it.

I genuinely don't understand how machine guns are not part of "economic activity." Wouldn't most people who use or threaten to use machine guns use them to get money--often through transactions that cross state lines?

I hope that wherever the Constitution-in-Exile is in exile, it is a warm, happy, peaceful friendly place. Because I want it to stay there for a long time.

Posted by DeLong at 09:55 AM | Comments (0) | TrackBack

Why Oh Why Can't We Have a Better Press Corps? (Budget Edition)

Sam Collender scolds the members of the press who want to please the Republican leadership by painting them as genuine deficit hawks. He writes:

BUDGET BATTLES: Apples And Oranges. By secollender@nationaljournal.com Stan Collender, http://NationalJournal.com © National Journal Group Inc. Tuesday, Nov. 1, 2005: A little plain talk and a few numbers are needed to correct the confusion congressional leaders are creating by comparing fiscal apples with budget oranges.... [T]he $35 billion in cuts have absolutely nothing to do with offsetting the substantial additional costs of Katrina.... [A]ny attempt to re-characterize reconciliation as being wholly related to Katrina is budget spin at its worst.

The additional $15 billion in mandatory spending changes the House is considering as part of reconciliation and the approximately $8 billion in across-the-board domestic appropriations cuts are the only additional reductions that can conceivably be considered to be Katrina offsets.... The $15 billion... would occur over five years. By contrast, about $50 billion of the Katrina spending is expected to happen in fiscal 2006 alone.... These figures contradict the impression congressional leaders have been trying to create over the past few weeks that they are moving mountains to make sure that Katrina does not add to the deficit and the federal debt....

Posted by DeLong at 09:55 AM | Comments (0) | TrackBack

The Go-To Guy on Tax Reform Is...

Bill Gale:


of the Brookings Institution is the go-to guy on tax reform.



UPDATE: John Irons says:

In case you can't get Bill on the phone, he was on a panel at the Center for American Progress last friday talking about tax reform. http://www.americanprogress.org/site/ apps/nl/content3.asp?c=biJRJ8OVF&b=593305&ct=1524525 or go to http://www.americanprogress.org/ and click on the events page and find the tax panel...

Posted by DeLong at 09:53 AM | Comments (0) | TrackBack

The End of (Firm-Sponsored Defined-Benefit) Pensions

Andrew Samwick views the private-firm defined-benefit pension-fund death spiral as both a Capitol Hill and a union bargaining failure:

Vox Baby: The End of Pensions: There is... no need for formal pension insurance.... Every defined benefit pension plan has the opportunity to invest in Treasuries... [can] match the duration of its fund to those of its obligations... [F]unding a pension plan... [needs only] the required annual contribution under the assumption that the pension plan sponsor were following the duration-matched Treasury investment strategy. The federal government shares the cost of this investment by allowing the pension fund to accumulate at the pre-tax rather than the post-tax return. (It also defers the employee's tax liability on compensation taken through a pension plan.)...

Any deviation from this funding strategy should be examined with suspicion. The biggest deviation is to invest... in equities.... This strategy is okay, as long as the pension fund is small relative to the firm's assets, so that the firm can make up the shortfall....

[W]e are learning that this isn't necessarily the case with a lot of the airline, steel, and auto companies. Almost by definition, it is not the case when a company approaches bankruptcy.The problem is nicely illustrated by this passage from Lowenstein's article:

G.M. and other industrial companies, along with their unions, have harshly attacked the Bush pension proposal, which would force many old-economy-type corporations to put more money into their pension funds just when their basic businesses are hurting.

Well, no kidding. The industrial companies and their unions that encouraged them have no one to blame but themselves for their current troubles. They used their pension funds as speculative investment vehicles, and the combination of low interest rates, sagging stock market values, and optimistic funding assumptions put them in this position. Who but their shareholders and workers should be asked to make those additional contributions?

The government has decided through ERISA that it will permit the investment of pension funds in equities and subject plan sponsors to a set of minimum funding rules and require them to purchase (vastly underpriced) PBGC insurance. This is a bad strategy, in my view, because of the numerous ways to game it, which Lowenstein's article discusses in good detail. It creates the appearance that someone else is responsible for these companies, and that may ultimately prove to be the reality, with the taxpayers being asked to step in to make up the shortfall.

I think Andrew misses an additional important aspect of the situation. When pension funds (and health benefit programs) become large relative to the size of the firm, the retired and the sick join the bondholders and the stockholders as claimants on the firm's cash flow, but the retired and the sick don't have any place in the firm's corporate governance structure, and claimants on a firm's cash flow should have a place somewhere.

UPDATE: Andrew Samwick http://voxbaby.blogspot.com/2005/11/place-somewhere.html politely reminds me that he talked about this last April at http://voxbaby.blogspot.com/2005/04/pensions-lost-in-translation.html.

Posted by DeLong at 09:52 AM | Comments (0) | TrackBack

"Covert" Operative

Mark Kleiman relays Matt Cooper:

Mark A. R. Kleiman: Rove told Cooper; Libby knew VWP was covert: Matt Cooper says that:

  1. He first learned about Valerie Plame Wilson from Karl Rove.
  2. Scooter Libby confirmed, not only that she worked at the CIA, but that she was covert.

Time Reporter Says He Learned Agent's Identity From Rove: Oct. 31 2005 — - One of the reporters at the center of the investigation into the leak of the identity of an undercover CIA officer says he first learned the agent's name from President Bush's top political advisor, Karl Rove. Time magazine reporter Matt Cooper also said today in an interview with "Good Morning America," that the vice president's chief of staff, I. Lewis "Scooter" Libby, confirmed to him that Ambassador Joseph Wilson's wife, Valerie Plame, was a covert CIA operative.

A grand jury charged Libby on Friday with five felonies alleging obstruction of justice, perjury to a grand jury and making false statements to FBI agents. If convicted, he could face a maximum of 30 years in prison and $1.25 million in fines.... Wilson has argued that the Bush administration revealed his wife's identity in order to silence his opposition to the war. "There is no question. I first learned about Valerie Plame working at the CIA from Karl Rove," Cooper said.

Libby has since claimed that he heard the Plame rumors from other reporters. Cooper disputed that version of events. "I don't remember it happening that way," he said. "I was taking notes at the time and I feel confident." If a trial goes ahead, Cooper said he would name Rove as his source of the information. "Before I spoke to Karl Rove I didn't know Mr. Wilson had a wife and that she had been involved in sending him to Africa."

Hat tip: Crooks and Liars. (John credits Susan at Booman Tribune, but I can't find the item there.)

I must say I do wonder why Scott McClellan is still around. Shouldn't Cooper--or one of the other journalists who knew--have found a way to signal McClellan in the fall of 2003 that he should not assert that Rove and Libby were uninvolved? Shouldn't Cheney--who knew everything worth knowing--have told Scott this isn't a place he wants to be? The fact that everybody has been viewing McClellan not as a member of the team but as a patsy to be hoodwinked must be unbearably humiliating.

Posted by DeLong at 09:51 AM | Comments (0) | TrackBack

The "Snows" of Kilimanjaro

Rising Hegemon is reduced to gibbering terror by their absence:


Posted by DeLong at 09:50 AM | Comments (0) | TrackBack

Talking About Tax Reform: A Missed Opportunity

Eddie Lazear and Jim Poterba have an interesting opening to their "pro tax reform" piece this morning:

A Golden Opportunity: By EDWARD P. LAZEAR and JAMES M. POTERBA: A tax system should generate the government's required revenue with as little economic distortion as possible, while distributing tax burdens fairly. It should not discourage work, saving or entrepreneurship more than is necessary, and it should not discourage individuals from acquiring the skills and education that will increase their productivity. It should not discourage investment, or favor investments in one asset over those in another. In short, an efficient tax system alters economic decision-making as little as possible.

If you poll economists and budget people about what is most wrong with our tax system, they will tell you that the thing that is most wrong is that it does not do the very first thing that Eddie and Jim mention: our tax system will not generate the government's required revenue. As America ages and as health care costs rise, the government is going to be spending a larger and larger share of GDP. The Republican leadership has no plans to close this funding gap, either by reducing planned spending or increasing taxes. That's the big thing wrong with America's tax system today. And that's the one thing Eddie and Jim don't talk about. This is too bad: it's a very big missed opportunity, a place where they could have educated the public, but did not.

However, they do say a great many smart things:

The more than 15,000 changes to the tax code in the last 19 years have undermined many achievements of the 1986 tax reform... targeted incentives, phase-out rules, phantom tax rates, and complex and sometimes inconsistent provisions... unable to understand the rules... five different definitions of "child"... 401(k)s, 403(b)s, 457 plans, 529s, IRAs, Roth IRAs, Coverdell saving accounts and Health Saving Accounts...

The Alternative Minimum Tax... a parallel tax structure.... The AMT is most likely to affect taxpayers with large families in states with high state and local tax burdens... many Americans in these states face impending and surreptitious tax hikes...

A substantial body of economic research suggests that tax wedges between the before-tax and the after-tax return on saving and investment are particularly detrimental to long-term economic growth. The current tax system taxes corporate income once at the corporate level and again at the investor level. The Treasury Department estimates that, on average, the total tax burden on a new corporate investment project is 24%. By comparison, investments in the non-corporate sector, which are taxed only once, face a 17% tax burden. Investments in owner-occupied housing, which yield untaxed returns in the form of implicit rental income, are untaxed....

The Tax Panel endorses two reform proposals.... The first is the Simplified Income Tax. It preserves the income tax framework but cuts marginal rates to 15%, 25% and 33%. It provides for a large amount of tax-free saving, consolidates credits, and rationalizes the system of business taxation. The second reform proposal, the Growth and Investment Tax, builds on the Simplified Income Tax system, and by allowing full expensing of capital, shifts the tax system toward a consumption tax base.... Treasury estimates that moving from the current structure to the Growth and Investment Tax would lower the average tax burden on all investment from 17% to 6%. This would encourage new investment and significantly increase productivity and wage growth...

Both proposals trim many of the deductions... [keeping] a deduction for charitable contributions in excess of 1% of taxable income... a 15% tax credit on interest for loans up to 125% of an area's median home price, computed using the FHA's loan limits.... tax[ing] employer-provided health insurance, but only on the amount of insurance valued at more than $11,500 for a married couple and $5,000 for a single individual....

Both plans eliminate the federal tax deduction for payments of state and local income and property taxes.... [But] these... deductions [would] be eroded [anyway] as the AMT expands its reach under the current tax system....

If reform proposals are dissected by politicians in an attempt to promote provisions that reduce their constituents' tax liabilities while excising those that increase constituents' tax liabilities, reform will inevitably fail. But if reform proposals are viewed instead as a collection of provisions that leave most families in a position not very different from their current one, while also shifting the tax system toward a structure that will promote long-term economic growth and reduce the burden of tax compliance, then these proposals can command broad popular support and even enthusiasm...

The tax reform proposals seem, at first glance, to (a) broaden the base by whomping the big deductions that are primarily used by the upper middle class to reduce their tax burdens; (b) lower tax rates, especially on savings; (c) simplify; and (d) shift the tax base from income to wage and salary income--i.e., moving toward a system in which taxation falls on labor and not on capital.

Parts (a), (b), and (c) are very good, but it's never been clear to me that (d) is fully thought out. Taxing capital income does two things: (i) it taxes thrift--moving wealth and purchasing power forward in time--and thus causes us collectively to miss opportunities for productive investment; and (ii) it taxes luck--those who happened to be in the right place at the right time, and wound up with large piles of money. Looking forward in time at my great-great-great grandchildren, I don't want their thrift taxed: I do want them to take advantage of all the opportunities for productive investment there are. But I do want their luck taxed: some of them will be lucky and some will not, and I will be happier if some of the fruits of the good luck of the some are redistributed to ther others via the tax system. It's not at all clear that Eddie and Jim have included this factor in their thinking.

Posted by DeLong at 09:49 AM | Comments (0) | TrackBack