Brooks and Krugman

In “The Second Wave” Bobo informs us that the meltdown of the gun control bill won’t have an overt political effect on the Republican Party. He’s convinced that immigration, rather, is where it’s at.  Prof. Krugman has a question in “The Excel Depression:”  Did a coding error basically destroy the economies of the Western world? You be the judge.  Here’s Bobo:

Liberals are furious, but the gun issue will not significantly damage the Republican Party. Sure, it looks bad to oppose background checks, which have overwhelming popular support. Sure, the Republican position will further taint the party’s image in places like the suburbs of Philadelphia and Northern Virginia. Sure, the party looks extreme when it can’t accept a bill sponsored by the conservative Senator Joe Manchin and the very conservative Senator Pat Toomey.

But, let’s face it, the gun issue has its own unique dynamic, which is that the people who oppose gun limits vote on this issue while the people who support them do not.

Moreover, Democrats never made a compelling case that the bill would have been effective, that it would have directly prevented future Sandy Hooks or lowered the murder rate nationwide. Even many of the bill’s supporters were lukewarm about its contents.

The main reason the gun issue won’t significantly harm Republicans is that it doesn’t play into the core debate that will shape the future of the party. The issue that does that is immigration. The near-term future of American politics will be determined by who wins the immigration debate.

In the months since the election, a rift has opened between the Republicans you might call first-wave revolutionaries and those you might call second-wave revolutionaries. The first-wave revolutionaries (the party’s Congressional leaders) think of themselves as very conservative. They ejected the remaining moderates from their ranks. They sympathize with the Tea Party. They are loyal to Fox News and support a radical restructuring of the government.

These first-wave revolutionaries haven’t softened their conservatism, but they are trying to adjust it to win majority support. They are trying to find policies to boost social mobility, so Republicans look less like the party of the rich. They are swinging behind immigration reform, believing that Hispanics won’t even listen to Republicans until they put that issue in the rearview mirror.

The second-wave revolutionaries — like Rand Paul (on some issues), Jim DeMint, Ted Cruz and some of the cutting-edge talk radio jocks — see the first-wave revolutionaries as a bunch of incompetent establishmentarians. They speak of the Bush-Cheney administration as if it were some sort of liberal Republican regime run by Nelson Rockefeller and Jacob Javits. They argue that Republicans have lost elections recently because the party has been led by big-spending, mushy moderates like John McCain and Mitt Romney and managed by out-of-touch elitists like Karl Rove and Reince Priebus.

The second wavers are much more tactically aggressive, favoring filibusters and such when possible. What the party needs now, they argue, is an ultra-Goldwaterite insurgency that topples the “establishment,” ditches immigration reform and wins Hispanic votes by appealing to the evangelicals among them and offering them economic liberty.

The first and second wavers are just beginning their immigration clash. A few weeks ago, I would have thought the pro-immigration forces had gigantic advantages, but now it is hard to be sure.

The immigration fight will be pitting a cohesive insurgent opposition force against a fragile coalition of bipartisan proponents who have to ambivalently defend a sprawling piece of compromise legislation. We’ve seen this kind of fight before. Things usually don’t end up well for the proponents.

Whether it’s guns or immigration, it is easy to imagine that the underlying political landscape, which prevented progress in the past, has changed. But when you actually try to pass something, you often discover the underlying landscape has not changed. The immigration fight of 2013 might bear an eerie similarity to the fight of 2007.

The arguments that might persuade Republicans to support immigration reform are all on the table. They came on election night 2012. The arguments against are only just now unfolding.

It is just a fact that the big short-term beneficiaries of this law are not generally Republicans: the 11 million who are living in the shadows; the high-tech entrepreneurs who will get more skilled labor. The short-term losers, meanwhile, are often Republicans: the white working-class people who will face a new group of labor-market competition when they try to get jobs in retail; the taxpayers who, at least in the short term, will have to pay some additional costs.

In the past, Republican politicians have had trouble saying no to the latest and most radical insurgency. Even if they know immigration reform is eventually good for their party, lawmakers may figure that opposing it is immediately necessary for themselves.

It would be great if Republicans can hash out their differences over a concrete policy matter, especially immigration, which touches conservatism’s competing values. But if the insurgent right defeats immigration reform, that will be a sign that the party’s self-marginalization will continue. The revolution devours its own.

Here’s Prof. Krugman:

In this age of information, math errors can lead to disaster. NASA’s Mars Orbiter crashed because engineers forgot to convert to metric measurements; JPMorgan Chase’s “London Whale” venture went bad in part because modelers divided by a sum instead of an average. So, did an Excel coding error destroy the economies of the Western world?

The story so far: At the beginning of 2010, two Harvard economists, Carmen Reinhart and Kenneth Rogoff, circulated a paper, “Growth in a Time of Debt,” that purported to identify a critical “threshold,” a tipping point, for government indebtedness. Once debt exceeds 90 percent of gross domestic product, they claimed, economic growth drops off sharply.

Ms. Reinhart and Mr. Rogoff had credibility thanks to a widely admired earlier book on the history of financial crises, and their timing was impeccable. The paper came out just after Greece went into crisis and played right into the desire of many officials to “pivot” from stimulus to austerity. As a result, the paper instantly became famous; it was, and is, surely the most influential economic analysis of recent years.

In fact, Reinhart-Rogoff quickly achieved almost sacred status among self-proclaimed guardians of fiscal responsibility; their tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact. For example, a Washington Post editorial earlier this year warned against any relaxation on the deficit front, because we are “dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.” Notice the phrasing: “economists,” not “some economists,” let alone “some economists, vigorously disputed by other economists with equally good credentials,” which was the reality.

For the truth is that Reinhart-Rogoff faced substantial criticism from the start, and the controversy grew over time. As soon as the paper was released, many economists pointed out that a negative correlation between debt and economic performance need not mean that high debt causes low growth. It could just as easily be the other way around, with poor economic performance leading to high debt. Indeed, that’s obviously the case for Japan, which went deep into debt only after its growth collapsed in the early 1990s.

Over time, another problem emerged: Other researchers, using seemingly comparable data on debt and growth, couldn’t replicate the Reinhart-Rogoff results. They typically found some correlation between high debt and slow growth — but nothing that looked like a tipping point at 90 percent or, indeed, any particular level of debt.

Finally, Ms. Reinhart and Mr. Rogoff allowed researchers at the University of Massachusetts to look at their original spreadsheet — and the mystery of the irreproducible results was solved. First, they omitted some data; second, they used unusual and highly questionable statistical procedures; and finally, yes, they made an Excel coding error. Correct these oddities and errors, and you get what other researchers have found: some correlation between high debt and slow growth, with no indication of which is causing which, but no sign at all of that 90 percent “threshold.”

In response, Ms. Reinhart and Mr. Rogoff have acknowledged the coding error, defended their other decisions and claimed that they never asserted that debt necessarily causes slow growth. That’s a bit disingenuous because they repeatedly insinuated that proposition even if they avoided saying it outright. But, in any case, what really matters isn’t what they meant to say, it’s how their work was read: Austerity enthusiasts trumpeted that supposed 90 percent tipping point as a proven fact and a reason to slash government spending even in the face of mass unemployment.

So the Reinhart-Rogoff fiasco needs to be seen in the broader context of austerity mania: the obviously intense desire of policy makers, politicians and pundits across the Western world to turn their backs on the unemployed and instead use the economic crisis as an excuse to slash social programs.

What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses. For three years, the turn to austerity has been presented not as a choice but as a necessity. Economic research, austerity advocates insisted, showed that terrible things happen once debt exceeds 90 percent of G.D.P. But “economic research” showed no such thing; a couple of economists made that assertion, while many others disagreed. Policy makers abandoned the unemployed and turned to austerity because they wanted to, not because they had to.

So will toppling Reinhart-Rogoff from its pedestal change anything? I’d like to think so. But I predict that the usual suspects will just find another dubious piece of economic analysis to canonize, and the depression will go on and on.

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