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Sep 24 / Jonathan

The deficit made simple

The Incidental Economist:

How many wrongs make a right?

… If there is one thing I would love for all Americans to have in mind when evaluating politicians’ pronouncements about what we have done or should do with respect to government health spending it is this graph of projected federal revenue and spending as a percent of GDP, from the CBO:

spend-rev

Sep 15 / Jonathan

We are Unitarian Jihad

Greetings to the Imprisoned Citizens of the United States. We are Unitarian Jihad. There is only God, unless there is more than one God. The vote of our God subcommittee is 10-8 in favor of one God, with two abstentions. Brother Flaming Sword of Moderation noted the possibility of there being no God at all, and his objection was noted with love by the secretary.

Greetings to the Imprisoned Citizens of the United States! Too long has your attention been waylaid by the bright baubles of extremist thought. Too long have fundamentalist yahoos of all religions (except Buddhism — 14-5 vote, no abstentions, fundamentalism subcommittee) made your head hurt. Too long have you been buffeted by angry people who think that God talks to them. You have a right to your moderation! You have the power to be calm! We will use the IED of truth to explode the SUV of dogmatic expression!

People of the United States, why is everyone yelling at you??? Whatever happened to … you know, everything? Why is the news dominated by nutballs saying that the Ten Commandments have to be tattooed inside the eyelids of every American, or that Allah has told them to kill Americans in order to rid the world of Satan, or that Yahweh has instructed them to go live wherever they feel like, or that Shiva thinks bombing mosques is a great idea? Sister Immaculate Dagger of Peace notes for the record that we mean no disrespect to Jews, Muslims, Christians or Hindus. Referred back to the committee of the whole for further discussion.

We are Unitarian Jihad. We are everywhere. We have not been born again, nor have we sworn a blood oath. We do not think that God cares what we read, what we eat or whom we sleep with. Brother Neutron Bomb of Serenity notes for the record that he does not have a moral code but is nevertheless a good person, and Unexalted Leader Garrote of Forgiveness stipulates that Brother Neutron Bomb of Serenity is a good person, and this is to be reflected in the minutes.

Beware! Unless you people shut up and begin acting like grown-ups with brains enough to understand the difference between political belief and personal faith, the Unitarian Jihad will begin a series of terrorist-like actions. We will take over television studios, kidnap so-called commentators and broadcast calm, well-reasoned discussions of the issues of the day. We will not try for “balance” by hiring fruitcakes; we will try for balance by hiring non-ideologues who have carefully thought through the issues.

We are Unitarian Jihad. We will appear in public places and require people to shake hands with each other. (Sister Hand Grenade of Love suggested that we institute a terror regime of mandatory hugging, but her motion was not formally introduced because of lack of a quorum.) We will require all lobbyists, spokesmen and campaign managers to dress like trout in public. Televangelists will be forced to take jobs as Xerox repair specialists. Demagogues of all stripes will be required to read Proust out loud in prisons.

We are Unitarian Jihad, and our motto is: “Sincerity is not enough.” We have heard from enough sincere people to last a lifetime already. Just because you believe it’s true doesn’t make it true. Just because your motives are pure doesn’t mean you are not doing harm. Get a dog, or comfort someone in a nursing home, or just feed the birds in the park. Play basketball. Lighten up. The world is not out to get you, except in the sense that the world is out to get everyone.

Brother Gatling Gun of Patience notes that he’s pretty sure the world is out to get him because everyone laughs when he says he is a Unitarian. There were murmurs of assent around the room, and someone suggested that we buy some Congress members and really stick it to the Baptists. But this was deemed against Revolutionary Principles, and Brother Gatling Gun of Patience was remanded to the Sunday Flowers and Banners committee.

People of the United States! We are Unitarian Jihad! We can strike without warning. Pockets of reasonableness and harmony will appear as if from nowhere! Nice people will run the government again! There will be coffee and cookies in the Gandhi Room after the revolution. Startling new underground group spreads lack of panic! Citizens declare themselves “relatively unafraid” of threats of undeclared rationality. People can still go to France, terrorist leader says.

http://articles.sfgate.com/2005-04-08/entertainment/17367067_1_god-unitarian-jihad-serenity

Sep 15 / Jonathan

Habent PM

Australia and Julia Gillard, that is, three weeks after the election that resulted in neither major party having a majority. It’s a bit curious that we’re seeing negotiated coalition governments all over the place (well, Australia and the UK, anyway) under non-PR systems (Australia uses PR for their upper house, but IRV/AV and single-member districts for the lower house, which is the relevant one here).

John Quiggin is on the scene:

Habemus PM

The Australian election three weeks ago turned out about as close as possible. The two main parties (Labour and the permanent Liberal-National-Liberal National coalition) each ended up with 72 seats (out of 150) and almost exactly 50 per cent of the two-party preferred vote, the relevant measure of support in our preferential (=IRV/AV) system. That left six remaining seats: one Green, one non-coalition National, one leftish independent and three country independents, all formerly associated with the conservative National party). Because the Parliament has a Speaker, 76 supporters are required for a stable government.

Unsurprisingly, things took a while to sort themselves out. Because of postal voting and the need for recounts, the final determination of seats took more than a week. Then there was another week of haggling and jockeying. The Green MP declared for Labor first, followed by the leftish independent (Labor) and the dissident National (Coalition). No surprises there. That left the three country independents. It was expected they would move as a bloc, but in the end, one announced support for the Coalition, and the other two for Labor (the last of them spending half an our of explanation before finally stating what had been obvious from the moment his ally went that way). So, after 17 days, it was 76-74, and Julia Gillard retained the office she had snatched from Kevin Rudd only weeks before the election.

Overall, it was a startlingly good outcome. Any democratic system is going to have trouble when the vote is as close as this, but compared to the US in 2000, or Belgium/Holland right now, things went relatively smoothly. And, startlingly, to get the independents on board, Labor actually had to promise better government, rather than pork-barreling for those electorates fortunate enough to have a pivotal vote. By contrast, the Liberal leader Tony Abbott, came with an open chequebook and was rebuffed. It’s true that the effect will be to give much more favorable treatment to rural and regional areas in general, but the independents have a fair enough basis for the claim that these areas have been neglected (complex and competing calculations of the relative treatment of urban and rural areas are a staple of Australian policywonkery).

Even better, when the newly elected Senate takes its place (not until July 2011 thanks to the marvels of our electoral system) Labor’s dependence on the Greens will be enhanced by the existence of a Labor-Green majority in the Upper House. Going into the election, Labor had dumped the commitment to action on climate change that gave it victory in 2007 (how this happened is too depressing to relate. I think George Monbiot covered it a while back). But now, with the government dependent on Greens and greenish independents, the issue is back on the agenda.

It’s often said that a country gets the government it deserved. Going into the election, with two competing leaders who had seized power without any real popular support, and policy platforms derived entirely from particularly dimwitted focus groups, I wondered what we Australians had done to deserve this. Now, I wonder how we merited such good fortune. I only hope it will last.

Sep 12 / Jonathan

Fun With George Will

Dean Baker (of course):

Fun With George Will

The Washington Post likes to run columns that are chock full of mistakes so that readers can have fun picking them apart. That is why George Will’s columns appear twice a week. …

… Will’s conclusion that stimulus does not work is like seeing someone throw a few buckets of water on their burning house and then telling the first department not to waste time with their houses, because obviously water will not be effective against the fire. …

Aug 7 / Jonathan

Dirigible choices

As transport in the 1800s, balloons had a frustrating drawback: they were at the mercy of the wind. With the invention of lightweight engines, it became possible to direct the course of a balloon, a distinct improvement. The word “direct” comes from the Latin dirigere, to straighten, set straight, direct, guide. Thus “dirigible balloon”: a balloon that can be guided, or directed, by its pilot, instead of being passively directed by the breeze.

(And soon enough the adjective “dirigible” was nouned into a balloon.)

I’m not suggesting that the etymology of a word like “dirigible” is an authoritative guide to its meaning; it is not. Words grow up and leave home. Some make bad choices, but we love them anyway. So be it.

Still, etymology enriches our experience of our language, dirigible being a case in point. Thus Alban Joseph Zolly, Mr Zolly to us eighth-grade English students at Camp Zama in the early 1960s (I incant his full name in the slim hope that someone might someday search the web for his name and turn up this remembrance).

Dirigible/direct is part of a pattern that includes corrigible/correct, negligible/neglect, intelligible/intellect and eligible/elect, among a few others (when’s the last time you heard “erigible”?). We have legible, but “lect” survives only in works like lector, lectern, lecture. Patterns have a mysterious power to explain, though in a sense they only deepen the mystery.

Of the list, “eligible” caught my eye, I suppose because of my side interest in elections and voting. In English, perhaps especially American English, “elect” is highly associated with voting. But its meaning is rooted in the idea of “choose”, and a moment’s reflection will remind us that we still use it that way from time to time, and that the voting sense is a fairly obvious outgrowth of “choose”: we choose our leaders, representatives, whatever. But we still elect to do something, take elective courses, and the like. So to be “eligible” is to be capable of being chosen, or elected.

Aug 2 / Jonathan

NY Times: have more babies

Dean Baker. This is one of those persistent memes (forgive me) that wants constant swatting.

Wealthy Countries May Become Less Crowded and the NYT Wants Us to Be Scared

The NYT reported on new projections from the Population Reference Bureau showing continuing increases in population in the developing world and slow or negative growth in wealthy countries. Low birth rates in the wealthy countries are projected to lead to a rise in the ratio of retirees to workers. The NYT described this prospect as “sobering.”

There is no obvious reason that people in wealthy countries should be concerned about the prospect of a rising ratio of retirees to workers. This ratio has been increasing for a century. The projected increase in the elderly dependency ratio is largely offset by a decline in the number of dependent children. At the worst, the rise in the dependency ratio will offset some of the gains in wage growth associated with rising productivity, as has been the case in prior decades. So, it is not clear what the NYT wants readers to find “sobering” about this news.

The article also implied that a large jump in the share of GDP going to Social Security and Medicare is due to the aging of the population. Much of the cause of the projected increase in spending on these programs is the projected increase in per person health care costs. If per person health care costs in the United States fell to the levels in Germany or Canada, the share of GDP devoted to these programs in 2050 would be little different from what it is at present.

Aug 1 / Jonathan

Sandy Levinson on Matthew Yglesias on the filibuster

“The challenge of our time is figuring out if effective government is possible given the social, political, cultural, and economic realities we live under. The answer may well be no.”

Then what?

Matthew Yglesias on the filibuster

Matthew Yglesias has a fine post on the threat posed by the filibuster to the functioning of our political order. He concludes by suggesting, altogether plausibly, that if the Republicans were in fact to recapture all three branches of government in the 2012 election, then the first thing they would do would be to abolish the filibuster and thus deprive Democrats of the ability to torpedo whatever legislative programs they might have. It would, of course, serve Democratic Party interests to prevent a Republican government from achieving anything, especially with regard to the economy, that might win them votes. It will be typical Democratic blindness if they protect the filibuster while they in fact “control” the Senate only to see it eliminated once disciplined Republicans take over the Senate and can rely on a Republican President of the Senate (i.e., VP), to rule that the Senate is not a continuing body.

Each party has a vested interest in the destruction of a government headed by the other. This is exactly why James Madison hated parties. He wrongly believed that the Constitution would work to mitigate the ravages of “faction,” but he was wrong, not only because of the rise of political parties (by 1796 or, most certainly, by 1800), but also because of the displacement of the elites Madison had such faith in by “the people” who cared only about their own interests. Gordon Wood’s brilliant new Oxford history spells this out. I certainly don’t advocate returning to a Federalist elite politics, nor do I think they were simply devoted servants of “the public interest.” The challenge of our time is figuring out if effective government is possible given the social, political, cultural, and economic realities we live under. The answer may well be no. We simply have to hope for the best, but this may be the equivalent of hunkering down in New Orleans before Katrina and hoping against hope (or praying) that it will veer away at the last minute.

Jul 17 / Jonathan

Galbraith on the deficit

Jamie Galbraith again. Do me, and yourself, a favor and read his testimony to the Deficit Commission two weeks ago.

I’m tempted not to quote anything at all, but I’ll include his conclusion:

Most people assume that “bipartisan commissions” are designed to fail: they are given thorny (or even impossible) issues and told to make recommendations which Congress is free to ignore or reject. In many cases — yours is no exception — the goal is to defer recognition of the difficulties for as long as possible.

You are plainly not equipped by disposition or resources to take on the true cause of deficits now and in the future: the financial crisis. Recommendations based on CBO’s unrealistic budget and economic outlooks are destined to collapse in failure. Specifically, if cuts are proposed and enacted in Social Security and Medicare, they will hurt millions, weaken the economy, and the deficits will not decline. It’s a lose-lose proposition, with no gainers except a few predatory funds, insurance companies and such who would profit, for some time, from a chaotic private marketplace.

Thus the interesting twist in your situation is that the Republic would be better served by advancing no proposals at all.

…and beg you to read the whole thing for a wonderfully clear discussion of deficits and government spending.

Jul 13 / Jonathan

The dog went to the bathroom?

Geoff Pullum, of course.

Asterisks Justin’s dad says

A truly strange piece of euphemism came up in a UK newspaper interview with Justin Halpern, the creator of the hit Twitter page Shit My Dad Says:

One day we took the dog for a walk. My dad said: “Look at the dog’s asshole — you can tell from the dilation that the dog is about to shit” and the dog went to the bathroom. He was incredibly impressed by his prediction.

The dog went to the bathroom? Not exactly a case of like father like son, linguistically.

Keep in mind, Justin is the son of the man (a San Diegan) who said of Los Angeles: “It’s the epicenter of the asshole earthquake. They’d fuck you twice if they had another dick.”

We are talking about the dad who said (on being asked how he lost 20 pounds), “I drank bear piss and took up fencing. How the fuck you think? I exercised.”

The man who claims, “Look, we’re basically on earth to shit and fuck. So unless your job’s to help people shit or fuck, it’s not that important, so relax.”

This is not a man who would describe a doggie as going to the bathroom, is it?

Reading the piece was even stranger in a UK context, where the euphemism “going to the bathroom” is not at all common, since the room in question is not called the bathroom, it’s called the lavatory or the toilet (both of them being euphemisms too, of course). I assume that it was the architectural practice of having the WC in the room with the bathtub gave Americans their euphemism, while the British practice of having it in a separate very small room near the bathroom did not favor it, though I don’t intend to do any scatoarchitectolinguistic research on the matter.

The British publication of the interview gave rise to a few translation challenges. I have deasteriskified things for your reading convenience. In the newspaper (The Metro),

  • “Shit My Dad Says” was rendered as “S*** My Dad Says”;
  • “the dog is about to shit” was rendered as “the dog is about to s***”; and interestingly,
  • “asshole” was rendered as “a***hole”, which (if you count the asterisks) tells us that the British newspaper first translated the “ass” of Justin’s American English to “arse” and then did the asterisking out.

The Los Angeles Times couldn’t even get that close to the real title of the Twitter page; on this L.A. Times blog they called it “Stuff My Dad Says”.

Meanwhile, the book Justin has made from his Twitter site had to be titled Sh*t My Dad Says, which doesn’t match the name of the site, and the TV series made from it is called $#*! My Dad Says, which doesn’t match either the site or the book or the L.A. Times reference; it’s a wonder anyone ever finds any of these things.

The terror of printing the most basic of the earthy Germanic words for human excrement clearly continues unquelled. Except here, of course, because on Language Log we are linguists, and we don’t give a shit. We don’t believe simple Anglo-Saxon monosyllables will either sear your eyeballs or warp the moral fiber of the young.

Jul 13 / Jonathan

Baker on mindreading

…again. I hope you’re all reading Dean Baker as regularly as you read the papers (or listen to NPR).

Maybe Members of Congress Want to Cut Unemployment Benefits to Increase Unemployment

The Post yet again tells us that members of Congress are political philosophers, telling readers that: “Congress’s inaction [in approving an extension of unemployment benefits] has been accompanied by a growing sentiment among lawmakers that long-term unemployment benefits create a disincentive for the jobless to find work.”

How does the Post know what sentiments members of Congress have? Furthermore is there any reason to believe that their sentiments explain their votes on important issues?

Members of Congress get elected and re-elected by getting the support of powerful interest groups, not on their abilities as political philosophers. While the opponents of extending unemployment benefits may believe that they are bad policy, this is likely less relevant to the their votes than the political considerations behind this vote.

At the moment, the Republicans appear to have adopted a strategy of blocking anything that President Obama tries to do, with the idea that a bad economy will be good for them on Election Day. While the Post may not want to assert in a news story that this is the explanation for their opposition to extending unemployment benefits, it is certainly inappropriate to provide an alternative explanation for which it has zero evidence.

Jul 5 / Jonathan

More popovers

I’ve updated my (well, Bernard Clayton’s) classic popover recipe to include a no-eggyolk low-cholestrol variation, and a slick trick to get the same amount of batter in each cup on the first try.

Jul 1 / Jonathan

A quick note on theodicy

A quick note on theodicy | Andrew Brown

… No attempt to construct a rational calculus of suffering can succeed. …

Jun 28 / Jonathan

Robert Byrd crosses the bar

NPR’s Morning Edition concluded their remembrance of Robert Byrd with his reading of the end of Tennyson’s “Crossing the Bar”. The poem has never been one of my favorites, but it was a nice touch.

Sunset and evening star,
   And one clear call for me!
And may there be no moaning of the bar,
   When I put out to sea,

But such a tide as moving seems asleep,
   Too full for sound and foam,
When that which drew from out the boundless deep
   Turns again home.

Twilight and evening bell,
   And after that the dark!
And may there be no sadness of farewell,
   When I embark;

For tho’ from out our bourne of Time and Place
   The flood may bear me far,
I hope to see my Pilot face to face
   When I have crossed the bar

Jun 24 / Jonathan

Kids today…

This is an animated talk by Stanford’s Philip Zimbardo (if the name is familiar, it’s from the Stanford Prison Experiment) that “conveys how our individual perspectives of time affect our work, health and well-being. Time influences who we are as a person, how we view relationships and how we act in the world.”

The talk is intriguing, if arguable in places. The animation is wonderful. Try to watch it full-screen.

Jun 22 / Jonathan

What we want

From Juan Cole. As you can see from his title, this snippet is in the context of a longer McChrystal piece. But this is what jumped out at me.

Obama’s MacArthur Moment? McChrystal Disses Biden

… Obama has largely misunderstood the historical moment in the US. He appears to have thought that we wanted a broker, someone who could get everyone together and pull off a compromise that led to a deal among the parties. We don’t want that. We want Harry Truman. We want someone who will give them hell ….

Jun 22 / Jonathan

Cause and effect in the War on Terror

Glenn Greenwald.

Cause and effect in the War on Terror

American discussions about what causes Terrorists to do what they do are typically conducted by ignoring the Terrorist’s explanation for why he does what he does.  Yesterday, Faisal Shahzad pleaded guilty in a New York federal court to attempting to detonate a car bomb in Times Square, and this Pakistani-American Muslim explained why he transformed from a financial analyst living a law-abiding, middle-class American life into a Terrorist:

If the United States does not get out of Iraq, Afghanistan and other countries controlled by Muslims, he said, “we will be attacking U.S.,” adding that Americans “only care about their people, but they don’t care about the people elsewhere in the world when they die” . . . .

As soon as he was taken into custody May 3 at John F. Kennedy International Airport, onboard a flight to Dubai, the Pakistani-born Shahzad told agents that he was motivated by opposition to U.S. policy in the Muslim world, officials said.

“One of the first things he said was, ‘How would you feel if people attacked the United States? You are attacking a sovereign Pakistan’,” said one law enforcement official, who spoke on condition of anonymity because the interrogation reports are not public. “In the first two hours, he was talking about his desire to strike a blow against the United States for the cause.”

When the federal Judge presiding over his case asked him why he would be willing to kill civilians who have nothing to do with those actions, he replied:  “Well, the people select the government. We consider them all the same” (the same rationale used to justify the punishment of the people of Gaza for electing Hamas).  When the Judge interrupted him to ask whether that includes children who might have been killed by the bomb he planted and whether he first looked around to see if there were children nearby, Shahzad replied:

Well, the drone hits in Afghanistan and Iraq, they don’t see children, they don’t see anybody. They kill women, children, they kill everybody. It’s a war, and in war, they kill people. They’re killing all Muslims. . . .

I am part of the answer to the U.S. terrorizing the Muslim nations and the Muslim people.  And, on behalf of that, I’m avenging the attack.  Living in the United States, Americans only care about their own people, but they don’t care about the people elsewhere in the world when they die.

Those statements are consistent with a decade’s worth of emails and other private communications from Shahzad, as he railed with increasing fury against the wars in Afghanistan and Iraq, drone attacks, Israeli violence against Palestinians and Muslims generally, Guantanamo and torture, and asked:  “Can you tell me a way to save the oppressed? And a way to fight back when rockets are fired at us and Muslim blood flows?”

This proves only what it proves.  The issue here is causation, not justification.   The great contradiction of American foreign policy is that the very actions endlessly rationalized as necessary for combating Terrorism — invading, occupying and bombing other countries, limitless interference in the Muslim world, unconditional support for Israeli aggression, vast civil liberties abridgments such as torture, renditions, due-process-free imprisonments — are the very actions that fuel the anti-American hatred which, as the U.S. Government itself has long recognized, is what causes, fuels and exacerbates the Terrorism we’re ostensibly attempting to address.

It’s really quite simple:  if we continue to bring violence to that part of the world, then that part of the world — and those who sympathize with it — will continue to want to bring violence to the U.S.  Al Qaeda certainly recognizes that this is the case, as reflected in the statement it issued earlier this week citing the war in Afghanistan and support for Israel as its prime grievances against the U.S.  Whether that’s what actually motivates that group’s leaders is not the issue.  They are citing those policies because they know that those grievances resonate for many Muslims, who are willing to support radical groups and support or engage in violence only because they see it as retaliation or vengeance for the violence which the U.S. is continuously perpetrating in the Muslim world (speaking of which:  this week, WikiLeaks will release numerous classified documents relating to a U.S. air strike in Garani, Afghanistan that killed scores of civilians last year, while new documents reveal that substantial amounts of U.S. spending in Afghanistan end up in the hands of corrupt warlords and Taliban commanders).  Clearly, there are other factors (such as religious fanaticism) that drive some people to Terrorism, but for many, it is a causal reaction to what they perceive as unjust violence being brought to them by the United States.

Given all this, it should be anything but surprising that, as a new Pew poll reveals, there is a substantial drop in public support for both U.S. policies and Barack Obama personally in the Muslim world.  In many Muslim countries, perceptions of the U.S. — which improved significantly upon Obama’s election — have now plummeted back to Bush-era levels, while Obama’s personal approval ratings, while still substantially higher than Bush’s, are also declining, in some cases precipitously.  As Pew put it:

Roughly one year since Obama’s Cairo address, America’s image shows few signs of improving in the Muslim world, where opposition to key elements of U.S. foreign policy remains pervasive and many continue to perceive the U.S. as a potential military threat to their countries.

Gosh, where would they get that idea from?  People generally don’t like it when their countries are invaded, bombed and occupied, when they’re detained without charges by a foreign power, when their internal politics are manipulated, when they see images of dead women and children as the result of remote-controlled robots from the sky.  Some of them, after a breaking point is reached, get angry enough where they not only want to return the violence, but are willing to sacrifice their own lives to do so (just as was true for many Americans who enlisted after the one-day 9/11 attack).  It’s one thing to argue that we should continue to do these things for geopolitical gain even it means incurring Terrorist attacks (and the endless civil liberties abridgments they engender); as amoral as that is, at least that’s a cogent thought.  But to pretend that Terrorism simply occurs in a vacuum, that it’s mystifying why it happens, that it has nothing to do with U.S. actions in the Muslim world, requires intense self-delusion.  

How much more evidence is needed for that?

* * * * *

Three other brief points illustrated by this Shahzad conviction:  (1) yet again, civilian courts — i.e., real courts — provide far swifter and more certain punishment for Terrorists than do newly concocted military commissions; (2) Shahzad’s proclamation that he is a “Muslim soldier” fighting a “war” illustrates — yet again — that the way to fulfill the wishes of Terrorists (and promote their agenda) is to put them before a military commission or indefinitely detain them on the ground that they are “enemy combatants,” thus glorifying them as warriors rather than mere criminals (see this transcript of a federal judge denying shoe bomber Richard Reid’s deepest request to be treated as a “warrior” rather than a common criminal); and (3) the Supreme Court’s horrendous decision yesterday upholding the “material support” statute is, as David Cole explains, one of the most severe abridgments of First Amendment freedoms the Court has sanctified in a long time; this decision was justified by the need for courts to defer to executive and legislative branch determinations regarding “war,” proving once again that as long as this so-called “war” continues as a “war,” the abridgments on our core liberties will be as limitless as they are inevitable.  At some point, we might want to factor that in to the cost-benefit analysis of our state of perpetual war (for more on yesterday’s Supreme Court ruling, see my podcast discussion from February with Shane Kadidal of the Center for Constitutional Rights, counsel to the plaintiffs in this case, on the day the Court heard Oral Argument, regarding the issues that case entailed).

Jun 19 / Jonathan

The Facts Have A Well-Known Keynesian Bias

Paul Krugman:

The Facts Have A Well-Known Keynesian Bias

There are many things to say about Alan Greenspan’s op-ed yesterday, none of them complimentary. But what struck me is the passage highlighted by Tim Fernholz:

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

You know, some people might take the fact that what’s actually happening is exactly what people like me were saying would happen — namely, that deficits in the face of a liquidity trap don’t drive up interest rates and don’t cause inflation — lends credence to the Keynesian view. But no: Greenspan KNOWS that deficits do these terrible things, and finds it “regrettable” that they aren’t actually happening. The triumph of prejudices over the evidence is a wondrous thing to behold. Unfortunately, millions of workers will pay the price for that triumph.

via Brad DeLong

Jun 17 / Jonathan

US Energy Flows

Via Ezra Klein.

energyflowtrends.png

Jun 14 / Jonathan

Senate Moves to Keep 401(k) Fees Hidden

Just another reminder (not that you’ve forgotten) of who’s in charge here.

Senate Moves to Keep 401(k) Fees Hidden

Participants in 401(k) plans pay billions of dollars in fees — but most of them don’t know it. And the U.S. Senate apparently would like to keep it that way.

Jun 13 / Jonathan

Paul Krugman’s War on Austerity

More to the previous point. This is Stephen Gandel, writing for The Curious Capitalist at TIME.com.

Paul Krugman’s War on Austerity

At a time when most people are saying the path out of the financial crisis and European debt problem is for individuals and governments around the world to cut back, Paul Krugman wants us to spend, spend, spend.

 

So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why, then, are Very Serious People demanding immediate fiscal austerity?

 

The answer is, to reassure the markets — because the markets supposedly won’t believe in the willingness of governments to engage in long-run fiscal reform unless they inflict pointless pain right now. To repeat: the whole argument rests on the presumption that markets will turn on us unless we demonstrate a willingness to suffer, even though that suffering serves no purpose.

Krugman has of course been calling for additional stimulus spending for a while. So it may be easy to dismiss Krugman as a liberal who, despite his Nobel, is no longer in touch with economics. But he’s not the only one calling for more spending.

 

Besides Krugman, Martin Wolf of the Financial Times has been arguing against government cut backs in the wake of the economic slowdown as well.

 

This is all very well, many will respond, but what about the risks of a Greek-style meltdown? A year ago, I argued – in response to a vigorous public debate between the Harvard historian, Niall Ferguson, and the Nobel-laureate economist, Paul Krugman – that the rapid rise in US long-term interest rates was no more than a return to normal, after the panic. Subsequent developments strongly support this argument.

 

US government 10-year bond rates are a mere 3.2 per cent, down from 3.9 per cent on June 10 2009, Germany’s are 2.6 per cent, France’s 3 per cent and even the UK’s only 3.4 per cent. German rates are now where Japan’s were in early 1997, during the long slide from 7.9 per cent in 1990 to just above 1 per cent today. What about default risk? Markets seem to view that as close to zero. . . .

The question is whether such confidence will last. My guess – there is no certainty here – is that the US is more likely to be able to borrow for a long time, like Japan, than to be shut out of markets, like Greece, with the UK in-between.

 

The debate here is between about what we should care about more: The current state of the economy or a perception about the long-term state of the economy. Because right now it seems in our best interest to spend more money on jobs programs, extending unemployment benefits and other stimulus programs. The problem is that all of that additional spending along with the current roughly $1.5 trillion deficit is going to get us into trouble. Krugman comes down on the side of it is more important to worry about people suffering now. The Tea Partiers, and many economists, care more about what the spending now could to the welfare of our children.

The problem with this argument, as Wolf points out, is that the bond market doesn’t see the Armageddon that the Tea Partiers, gold hoarders and other see. The 10-year bond yield is at historic lows. Now you can make the argument that markets are irrational. Technology stocks and houses were not as safe as we thought. And that may be true about US bonds as well. And so to send this country further into debt just because there is currently some bullishness in the bond market is foolish. Here’s Tyler Cowen making that very point:

 

In the blogosphere, discussions of market constraints are too heavily influenced by interest rates, which also “measure” an ongoing flight to safety.  (U.S. rates have fallen of late, but does that mean our fiscal position has improved?  Hardly.)  . . . . The real interest is only one indicator of where fiscal policy is at.  The point that interest rates serve multiple functions, and don’t always communicate direct market information very well, comes from…John Maynard Keynes.  Let’s at least keep that possibility in mind.

Yes, the bond market should tell us everything. You have to believe it tells us something. National economies are very large. And they can turn around very quickly. It’s not like our own personal economics. Getting out of credit card debt is very tough. Our incomes down change very much, and our spending patterns are ingrained in who we are. The US economy does surprising things. Who knew that Clinton was going to be able to get us into a surplus situation. Who would have guess that Bush would have been able to screw that up so quickly. And what about the financial crisis. Economies are very hard to predict. Interest rates even more so. So policy makers should go with what they know. We don’t know what our current deficits will mean for our children or even interest rates a year from now. We do know that people are unemployed and suffering financially. I say go with that.