Archive for the ‘Bobo’ Category

Brooks, Cohen and Nocera

September 16, 2014

In “Goodbye, Organization Man” Bobo actually whines that the global failure to address the Ebola epidemic stems from a much broader crisis in our culture of government.  In the comments “gemli” from Boston points out the following:  “Suddenly Mr. Brooks is outraged that the government he has helped submerge in the bathtub is incapable of mounting an effective, expensive, internationally coordinated effort to respond to disease outbreaks. You can’t rail against big government one day and complain that it’s not there when it’s needed the next.  Brooks has repeatedly advocated for big government to be replaced by grassroots volunteerism, or by a distributed gaggle of local government agencies. But when a virus is knocking at the door of his gated community, suddenly big government is looking a whole lot better.”  Mr. Cohen, in “The Great Unraveling,” sees a time of weakness and hatred, disorientation and doubt, when nobody can see what disaster looms.  In “Criminal Card Games” Mr. Nocera says in the wake of the recent Home Depot breach, you have to wonder if data theft has become a condition of modern life.  Here, FSM help us, is Bobo:

Imagine two cities. In City A, town leaders notice that every few weeks a house catches on fire. So they create a fire department — a group of professionals with prepositioned firefighting equipment and special expertise. In City B, town leaders don’t create a fire department. When there’s a fire, they hurriedly cobble together some people and equipment to fight it.

We are City B. We are particularly slow to build institutions to combat long-running problems.

The most obvious example is the fight against jihadism. We’ve been facing Islamist terror for several decades, now, but every time it erupts — in Lebanon, Nigeria, Sudan, Syria and beyond — leaders start from scratch and build some new ad hoc coalition to fight it.

The most egregious example is global health emergencies. Every few years, some significant epidemic strikes, and somebody suggests that we form a Medical Expeditionary Corps, a specialized organization that would help coordinate and execute the global response. Several years ago, then-Senator Bill Frist went so far as to prepare a bill proposing such a force. But, as always, nothing came of it.

The result, right now, is unnecessary deaths from the Ebola virus in Africa. Ebola is a recurring problem, yet the world seems unprepared. The response has been slow and uncoordinated.

The virus’s spread, once linear, is now exponential. As Michael Gerson pointed out in The Washington Post, the normal countermeasures — isolation, contact tracing — are rendered increasingly irrelevant by the rate of increase. Treatment centers open and are immediately filled to twice capacity as people die on the streets outside. An Oxford University forecast warns as many as 15 more countries are vulnerable to outbreaks. The president of Liberia, Ellen Johnson Sirleaf, warned: “At this rate, we will never break the transmission chain, and the virus will overwhelm us.”

The catastrophe extends beyond the disease. Economies are rocked as flights are canceled and outsiders flee. Ray Chambers, a philanthropist and U.N. special envoy focused on global health, points out the impact on health more broadly.  For example, people in the early stages of malaria show similar symptoms to Ebola and other diseases. Many hesitate to seek treatment fearing they’ll get sent to an Ebola isolation center. So death rates from malaria, pneumonia and other common diseases could rise, as further Ebola cases fail to be diagnosed.

The World Health Organization has recently come out with an action plan but lacks logistical capabilities. President Obama asked for a strategy, but that was two months ago and the government is only now coming up with a strong comprehensive plan. Up until now, aid has been scattershot. The Pentagon opened a 25-bed field hospital in Liberia. The U.S. donated five ambulances to Sierra Leone. Coordination has just not been there.

At root, this is a governance failure. The disease spreads fastest in places where the health care infrastructure is lacking or nonexistent. Liberia, for example, is being overrun while Ivory Coast has put in a series of policies to prevent an outbreak. The few doctors and nurses in the affected places have trouble acquiring the safety basics: gloves and body bags. More than 100, so far, have died fighting the outbreak.

But it’s not just a failure of governance in Africa. It’s a failure of governance around the world. I wonder if we are looking at the results of a cultural shift.

A few generations ago, people grew up in and were comfortable with big organizations — the army, corporations and agencies. They organized huge construction projects in the 1930s, gigantic industrial mobilization during World War II, highway construction and corporate growth during the 1950s. Institutional stewardship, the care and reform of big organizations, was more prestigious.

Now nobody wants to be an Organization Man. We like start-ups, disrupters and rebels. Creativity is honored more than the administrative execution. Post-Internet, many people assume that big problems can be solved by swarms of small, loosely networked nonprofits and social entrepreneurs. Big hierarchical organizations are dinosaurs.

The Ebola crisis is another example that shows that this is misguided. The big, stolid agencies — the health ministries, the infrastructure builders, the procurement agencies — are the bulwarks of the civil and global order. Public and nonprofit management, the stuff that gets derided as “overhead,” really matters. It’s as important to attract talent to health ministries as it is to spend money on specific medicines.

As recent books by Francis Fukuyama and Philip Howard have detailed, this is an era of general institutional decay. New, mobile institutions languish on the drawing broad, while old ones are not reformed and tended. Executives at public agencies are robbed of discretionary power. Their hands are bound by court judgments and regulations.

When the boring tasks of governance are not performed, infrastructures don’t get built. Then, when epidemics strike, people die.

Next up we have Mr. Cohen:

It was the time of unraveling. Long afterward, in the ruins, people asked: How could it happen?

It was a time of beheadings. With a left-handed sawing motion, against a desert backdrop, in bright sunlight, a Muslim with a British accent cut off the heads of two American journalists and a British aid worker. The jihadi seemed comfortable in his work, unhurried. His victims were broken. Terror is theater. Burning skyscrapers, severed heads: The terrorist takes movie images of unbearable lightness and gives them weight enough to embed themselves in the psyche.

It was a time of aggression. The leader of the largest nation on earth pronounced his country encircled, even humiliated. He annexed part of a neighboring country, the first such act in Europe since 1945, and stirred up a war on further land he coveted. His surrogates shot down a civilian passenger plane. The victims, many of them Europeans, were left to rot in the sun for days. He denied any part in the violence, like a puppeteer denying that his puppets’ movements have any connection to his. He invoked the law the better to trample on it. He invoked history the better to turn it into farce. He reminded humankind that the idiom fascism knows best is untruth so grotesque it begets unreason.

It was a time of breakup. The most successful union in history, forged on an island in the North Sea in 1707, headed toward possible dissolution — not because it had failed (refugees from across the seas still clamored to get into it), nor even because of new hatreds between its peoples. The northernmost citizens were bored. They were disgruntled. They were irked, in some insidious way, by the south and its moneyed capital, an emblem to them of globalization and inequality. They imagined they had to control their National Health Service in order to save it even though they already controlled it through devolution and might well have less money for its preservation (not that it was threatened in the first place) as an independent state. The fact that the currency, the debt, the revenue, the defense, the solvency and the European Union membership of such a newborn state were all in doubt did not appear to weigh much on a decision driven by emotion, by urges, by a longing to be heard in the modern cacophony — and to heck with the day after. If all else failed, oil would come to the rescue (unless somebody else owned it or it just ran out).

It was a time of weakness. The most powerful nation on earth was tired of far-flung wars, its will and treasury depleted by absence of victory. An ungrateful world could damn well police itself. The nation had bridges to build and education systems to fix. Civil wars between Arabs could fester. Enemies might even kill other enemies, a low-cost gain. Middle Eastern borders could fade; they were artificial colonial lines on a map. Shiite could battle Sunni, and Sunni Shiite, there was no stopping them. Like Europe’s decades-long religious wars, these wars had to run their course. The nation’s leader mockingly derided his own “wan, diffident, professorial” approach to the world, implying he was none of these things, even if he gave that appearance. He set objectives for which he had no plan. He made commitments he did not keep. In the way of the world these things were noticed. Enemies probed. Allies were neglected, until they were needed to face the decapitators who talked of a Caliphate and called themselves a state. Words like “strength” and “resolve” returned to the leader’s vocabulary. But the world was already adrift, unmoored by the retreat of its ordering power. The rule book had been ripped up.

It was a time of hatred. Anti-Semitic slogans were heard in the land that invented industrialized mass murder for Europe’s Jews. Frightened European Jews removed mezuzahs from their homes. Europe’s Muslims felt the ugly backlash from the depravity of the decapitators, who were adept at Facebooking their message. The fabric of society frayed. Democracy looked quaint or outmoded beside new authoritarianisms. Politicians, haunted by their incapacity, played on the fears of their populations, who were device-distracted or under device-driven stress. Dystopia was a vogue word, like utopia in the 20th century. The great rising nations of vast populations held the fate of the world in their hands but hardly seemed to care.

It was a time of fever. People in West Africa bled from the eyes.

It was a time of disorientation. Nobody connected the dots or read Kipling on life’s few certainties: “The Dog returns to his Vomit and the Sow returns to her Mire / And the burnt Fool’s bandaged finger goes wabbling back to the Fire.”

Until it was too late and people could see the Great Unraveling for what it was and what it had wrought.

Cripes.  He needs to take a pill…  Here’s Mr. Nocera:

What is it going to take to get serious about data breaches?

I ask this question in the wake of the recent Home Depot breach, in which the “bad guys” — presumably cybercriminals in Russia — apparently penetrated the company’s point of sale terminals and came away with an untold number of credit and debit card data. (Home Depot acknowledges that all 2,200 stores in the United States and Canada were likely hacked, but hasn’t yet revealed the number of cards from which data were stolen.)

This, of course, comes after the Target breach of late 2013, in which some 40 million people had their credit card information stolen. Which comes after the Global Payments breach of 2012 and the Sony breach of 2011. All of which come after the T.J. Maxx breach of 2007, in which 94 million credit and debit card records were stolen in an 18-month period.

That’s right: Seven years have passed between the huge T.J. Maxx breach and the huge Home Depot breach — and nothing has changed. Have we become resigned to the idea that, as a condition of modern life, our personal financial data will be hacked on a regular basis? It is sure starting to seem that way.

The Home Depot breach came to light in the usual way. On Sept. 2, a reporter named Brian Krebs, who specializes in cybercrime and operates the website Krebs on Security, broke the news to his readers. Krebs, who is as deeply sourced as any reporter in the country, almost always breaks the news of a new breach. He also reported that the “malware” had been doing its dirty work at Home Depot since April or May. And he discovered that millions of card numbers were being sold on a website called Rescator.cc, which Bloomberg Businessweek recently described as the “Amazon.com of the black market.”

(Interestingly, they are being sold in batches under the names “American Sanctions” and “European Sanction” — an apparent reference to the recent sanctions against Russia.)

The company — “always the last to know,” Krebs says — hastily pulled together some security experts who, sure enough, confirmed the breach. In this instance, Home Depot released a statement saying that it was investigating the breach on Sept. 3, the day after the Krebs report, and confirmed the breach on Sept. 8. As these things go, that’s lightning speed.

Of course, in its materials, the company insists that it cares deeply about its customers’ data and will stop at nothing to plug the leak. But the damage has already been done. Home Depot also claims that debit card P.I.N.’s were not stolen. There is little solace in that, however; the crooks use weak bank security to change the P.I.N., after which they can use it. Sure enough, Krebs’s banking sources have told him that they “are reporting a steep increase over the past few days in fraudulent A.T.M. withdrawals on customer accounts.”

Why the rash of breaches? “It’s easy money,” said Avivah Litan, a security expert at Gartner Inc. “The criminals are distributing this malware, so why not use it? It’s like winning the lottery.”

Kurt Baumgartner, a senior security researcher at Kaspersky Lab, noted that months before the attack on Home Depot began, the F.B.I. alerted retailers about being more vigilant about point-of-sale cyberattacks. The Wall Street Journal reported over the weekend that Home Depot had, in fact, begun the process of strengthening its systems. But it moved so slowly that the criminals had months to vacuum card data before being discovered. Meanwhile, Bloomberg Businessweek found two unnamed former Home Depot managers who claimed that they were told to “settle for ‘C-level security’ because ambitious upgrades would be costly and might disrupt the operation of critical business systems.”

For years, the banks and the retail industry have spent more time accusing each other of causing the problem than seeking a solution. By October 2015, the United States is supposed to move to a more secure card system, using a chip and P.I.N. instead of a magnetic stripe, as Europe did years ago. But even that won’t put an end to data breaches. It will make it harder and more expensive for criminals to crack, but not impossible.

Which is why the federal government needs to get involved. With the banks and retailers at loggerheads, only the government has the ability to force a solution — or at least make it painful enough for companies with lax security to improve.

As it turns out, there are plenty of congressional initiatives to crack down on companies with weak data security, including a bill that was filed in February and co-sponsored by Senators Ed Markey of Massachusetts and Richard Blumenthal of Connecticut. When I asked someone in Markey’s office whether the bill was getting any traction, she replied, “It’s 2014.”

Apparently, we’re on our own.

Brooks, Cohen and Krugman

September 12, 2014

In “The Reluctant Leader” Bobo says President Obama’s obvious reluctance about expanding the attack on ISIS may be his greatest asset.  Mr. Cohen, in “Auchtermuchty to England,” says it may not be a bad thing if the Scots go it alone. But it’s still uncertain whether an independent Scotland would cut it.  Apparently he hasn’t been reading what Prof. Krugman has had to say…  In “The Inflation Cult” Prof. Krugman says we’re still trying to figure out the persistence and power of the people who keep predicting runaway inflation.  Here’s Bobo:

Moses, famously, tried to get out of it. When God called on him to lead the Israelites, Moses threw up a flurry of reasons he was the wrong man for the job: I’m a nobody; I don’t speak well; I’m not brave.

But the job was thrust upon him. Though he displayed some of the traits you’d expect from a guy who would rather be back shepherding (passivity, whining), he became a great leader. He became the ultimate model for reluctant leadership.

The Bible is filled with reluctant leaders, people who did not choose power but were chosen for it — from David to Paul. The Bible makes it clear that leadership is unpredictable: That the most powerful people often don’t get to choose what they themselves will do. Circumstances thrust certain responsibilities upon them, and they have no choice but to take up their assignment.

History is full of reluctant leaders, too. President Obama is the most recent. He recently gave a speech on the need to move away from military force. He has tried to pivot away from the Middle East. He tried desperately to avoid the Syrian civil war.

But as he said in his Nobel Peace Prize lecture, “Evil does exist in the world.” No American president could allow a barbaric caliphate to establish itself in the middle of the Middle East.

Obama is compelled as a matter of responsibility to override his inclinations. He’s obligated to use force, to propel himself back into the Middle East, to work with rotten partners like the dysfunctional Iraqi Army and the two-faced leaders of Qatar. He’s compelled to provide functional assistance to the rancid Syrian regime by attacking its enemies.

The defining characteristic of a reluctant leader is that he is self-divided. He feels compelled to do things he’d rather not do. This self-division can come in negative and positive forms.

The unsuccessful reluctant leader isn’t really motivated to perform the tasks assigned to him. The three essential features of political leadership, Max Weber wrote, are passion, responsibility and judgment. The unsuccessful reluctant leader is passionless. His actions are halfhearted. Look at President Obama’s decision to surge troops into Afghanistan at the same instant he announced their withdrawal date. That’s a reluctant leader undercutting himself. If Obama approaches this campaign that way then he will withdraw as soon as the Iraqi government stumbles, or the Iraqi Army fails to defeat the Islamic State in Iraq and Syria on the ground.

The successful reluctant leader, on the other hand, is fervently motivated by his own conscience. He forces himself to embrace the fact that while this is not the destiny he would have chosen, it is his duty and he will follow it to the end.

This kind of reluctant leader has some advantages over a full-throated, unreluctant crusader. Unlike George W. Bush in 2003, he’s not carried away by righteous fervor. The successful reluctant leader can be selfless. He’s not doing the work because it’s the expression of his inner being. He’s just an instrument for the completion of a nasty job.

The reluctant leader can be realistic about goals. President Obama can be under no illusions that he is going to solve the Middle East’s fundamental problems, but at least he can degrade ISIS the way we degraded Al Qaeda. Sometimes just preventing something bad — like the fall of the Jordanian regime — is noble enough, even if negative victories don’t exactly get you in the history books.

The reluctant leader can be skeptical. There’s a reason President Obama didn’t want to get involved in this conflict. Our power to manage history in the region is limited. But sometimes a reluctant leader can make wise decisions precisely because he’s aware of his limitations. If you’re going to begin a military campaign in an Arab country, you probably want a leader who’d rather not do it.

The reluctant leader can be dogged. Sometimes when you’re engaged in an unpleasant task, you just put your head down and trudge relentlessly forward. You don’t have to worry about coming down from prewar euphoria because you never felt good about this anyway.

The reluctant leader can be collaborative. He didn’t want his task, so he’s eager to share it. The Arab world can fully trust that Obama doesn’t have any permanent designs on their region because the guy is dying to wash his hands of the whole place as soon as possible.

Everybody is weighing in on the strengths and weaknesses of the Obama strategy. But the strategy will change. The crucial factor is the man. This is the sternest test of Obama’s leadership skills since the early crises of his presidency. If he sticks to this self-assigned duty, and pursues it doggedly, he can be a successful reluctant leader. Sometimes the hardest victories are against yourself.

In the comments “ScottW” from Chapel Hill, NC had this to say:  “What we really need are more “reluctant columnists” who realize since they were so wrong about the Iraq war 11 years ago, they should put away their pens and not comment about the current situation.”  Oh, if only…  Now here’s Mr. Cohen, writing from Auchtermuchty, Scotland:

“Conservatives only come to Scotland to shoot grouse, do they not?”

That was the withering verdict of John Latham as he enjoyed a pint in the Cycle Tavern in Auchtermuchty. Locals say southerners have trouble with the name, which means uplands of the wild boar, flattening the guttural “chhh” to a “k” and failing to deploy “plenty of spittle.” Be that as it may, Latham’s dismissal of English Tories is near universal in Scotland, where just over four million voters will decide next week on whether to opt for independence and cast Great Britain into the dustbin of history.

The news would trend on Twitter. Great Britain has had a pretty good run since it was formed by the union of Scotland and England in 1707.

David Cameron, the British prime minister, is a Tory, of course. That is part of the problem. To Scots he is the spoon-fed “rich toff” from Central Casting who never knew the price of a loaf of bread. He’s the emblem of a money-oozing London that has lost touch with the rest of the country.

Scotland wants to do things another way. It sees itself as a Scandinavia-like bastion of social democracy in the making: Norway with whisky. That, at least, is the vision of Alex Salmond, the charismatic leader of the Scottish National Party. Whether an independent Scotland would have the money for comprehensive welfare is another question. Salmond is skirting that for now. A mist of vagueness hovers over how an independent Scotland would cut it. He has a new favorite line in these frenetic last days: “Team Scotland against Team Westminster.”

“Team Westminster,” it has to be said, is giving a convincing impression of panic as the Sept. 18 vote approaches. Several polls now show the referendum as too close to call. Cameron’s complacency over a comfortable “No” vote has vanished. The pound is slumping.

The Saltire, or Scottish flag, was abruptly hoisted over 10 Downing Street, the prime minister’s residence. Cameron zoomed up to Scotland to declare it’s not about “the effing Tories” but love of a country he would be “heartbroken” to lose. Ed Miliband, the opposition Labour leader, also discovered his inner Scotland. He hurtled north to deliver an impassioned appeal. Nick Clegg, Cameron’s Liberal Democrat sidekick in the coalition government, said something; just what nobody can remember. Gordon Brown, a Scot and former prime minister, was wheeled out to say maximum devolution of powers would begin on Sept. 19 if Scotland only sticks with Britain.

All of which has caused amusement in Auchtermuchty and beyond. “If we’re going to fail on our own, why are they so concerned?” said Stephanie Murphy, as she poured another pint. “Aye,” said Latham, “If they want us so bad, maybe we should go.” The sudden Westminster flurry smacks of too little, too late.

Still, going it alone is a risk. “I have a pension, I don’t want to lose it,” said Andrew Dewar. “You’ve got 16-year-old first-time voters watching ‘Braveheart’ and believing we’ll be fine. Salmond says we’ll be like Norway. Well, in Norway a pint costs nine pounds — so hopefully not!” Debbie Marton suggested that, “Maybe we could have a trial period!” That won’t happen: The decision will be binding.

Some Scots have not forgotten that the union of 1707 came about in part because Scotland was bankrupt, having embarked on a mad-cat scheme, now known as the “Darien Disaster,” in a Panamanian malarial swamp.

Scots poured money into the Darien Company believing the Panamanian outpost would turn the country into a giant of global trade. Instead, many met a quick death — as did the project.

My non-scientific survey of voters in St. Andrews, Auchtermuchty and Edinburgh found many people still undecided, torn between a heart that says “yes” and a mind that says “no.” They’d love to “set England afloat” but worry what would happen to pensions, the National Health Service, jobs, the currency and membership in the European Union. Latham, a wine salesman, is hesitant himself, but says, “It’s one of those wee chances in life you may just have to take.”

The truth is nobody knows the answers to all the questions because nobody thought it would come to this. Cameron and Salmond have both been reckless. Now there is an almost surreal quality to Great Britain’s possible demise.

I blame Cameron above all. His deluded rhetoric about possible withdrawal from the European Union, his lack of feel for ordinary people and his glib marketer’s patter over matters great and small have all smacked of little-England smugness — so Scots have every right to make England as little as it often acts. The union’s history is a great one. Its end would be sad. But Scotland has what it takes. The good sense and tolerance that marked the union would in the end prevail across the new border.

Now here’s Prof. Krugman:

Wish I’d said that! Earlier this week, Jesse Eisinger of ProPublica, writing on The Times’s DealBook blog, compared people who keep predicting runaway inflation to “true believers whose faith in a predicted apocalypse persists even after it fails to materialize.” Indeed.

Economic forecasters are often wrong. Me, too! If an economist never makes an incorrect prediction, he or she isn’t taking enough risks. But it’s less common for supposed experts to keep making the same wrong prediction year after year, never admitting or trying to explain their past errors. And the remarkable thing is that these always-wrong, never-in-doubt pundits continue to have large public and political influence.

There’s something happening here. What it is ain’t exactly clear. But as regular readers know, I’ve been trying to figure it out, because I think it’s important to understand the persistence and power of the inflation cult.

Whom are we talking about? Not just the shouting heads on CNBC, although they’re certainly part of it. Rick Santelli, famous for his 2009 Tea Party rant, also spent much of that year yelling that runaway inflation was coming. It wasn’t, but his line never changed. Just two months ago, he told viewers that the Federal Reserve is “preparing for hyperinflation.”

You might dismiss the likes of Mr. Santelli, saying that they’re basically in the entertainment business. But many investors didn’t get that memo. I’ve had money managers — that is, professional investors — tell me that the quiescence of inflation surprised them, because “all the experts” predicted that it would surge.

And it’s not as easy to dismiss the phenomenon of obsessive attachment to a failed economic doctrine when you see it in major political figures. In 2009, Representative Paul Ryan warned about “inflation’s looming shadow.” Did he reconsider when inflation stayed low? No, he kept warning, year after year, about the coming “debasement” of the dollar.

Wait, there’s more: You find the same Groundhog Day story when you look at the pronouncements of seemingly reputable economists. In May 2009, Allan Meltzer, a well-known monetary economist and historian of the Federal Reserve, had an Op-Ed article published in The Times warning that a sharp rise in inflation was imminent unless the Fed changed course. Over the next five years, Mr. Meltzer’s preferred measure of prices rose at an annual rate of only 1.6 percent, and his response was published in another op-ed article, this time in The Wall Street Journal. The title? “How the Fed Fuels the Coming Inflation.”

So what’s going on here?

I’ve written before about how the wealthy tend to oppose easy money, perceiving it as being against their interests. But that doesn’t explain the broad appeal of prophets whose prophecies keep failing.

Part of that appeal is clearly political; there’s a reason why Mr. Santelli yells about both inflation and how President Obama is giving money away to “losers,” why Mr. Ryan warns about both a debased currency and a government that redistributes from “makers” to “takers.” Inflation cultists almost always link the Fed’s policies to complaints about government spending. They’re completely wrong about the details — no, the Fed isn’t printing money to cover the budget deficit — but it’s true that governments whose debt is denominated in a currency they can issue have more fiscal flexibility, and hence more ability to maintain aid to those in need, than governments that don’t.

And anger against “takers” — anger that is very much tied up with ethnic and cultural divisions — runs deep. Many people, therefore, feel an affinity with those who rant about looming inflation; Mr. Santelli is their kind of guy. In an important sense, I’d argue, the persistence of the inflation cult is an example of the “affinity fraud” crucial to many swindles, in which investors trust a con man because he seems to be part of their tribe. In this case, the con men may be conning themselves as well as their followers, but that hardly matters.

This tribal interpretation of the inflation cult helps explain the sheer rage you encounter when pointing out that the promised hyperinflation is nowhere to be seen. It’s comparable to the reaction you get when pointing out that Obamacare seems to be working, and probably has the same roots.

But what about the economists who go along with the cult? They’re all conservatives, but aren’t they also professionals who put evidence above political convenience? Apparently not.

The persistence of the inflation cult is, therefore, an indicator of just how polarized our society has become, of how everything is political, even among those who are supposed to rise above such things. And that reality, unlike the supposed risk of runaway inflation, is something that should scare you.

Brooks and Krugman

September 5, 2014

In “The Body and the Spirit” Bobo is flailing around trying to understand the strong visceral responses to the executions of the American journalists James Foley and Steven Sotloff.  In the comments “gemli” from Boston reminds us of something:  “The only time conservatives vociferously defend life is when a woman wishes not to bring an unborn child into the world, or when someone wants to end their own suffering at a time of their choosing. It’s odd that conservatives defend life only when it’s a burden for others.”  Prof. Krugman, in “The Deflation Caucus,” asks a question:  What is it that makes a powerful faction in our body politic demand tight money even in a depressed, low-inflation economy?  Here’s Bobo:

Like everyone, I was revolted by the beheadings of the American journalists James Foley and Steven Sotloff. It wasn’t just that they had been killed — though that is horrendous enough — it was the monstrous way the deed was done.

I’ve been trying to understand why the act of beheading arouses this strong visceral response. Why does separating a head with a knife feel different from a shooting, or a bombing? Does this reaction contain some hidden intuitive wisdom, or is it just a blind prejudice?

First, a beheading feels different because it reveals something about the minds of the killers. The journalist Lance Morrow once wrote that “evil is often happiest when it operates in the autonomy of the gratuitous.” By going beneath even the minimal standards of modern civilization, the militants in the Islamic State in Iraq and Syria get to show contempt for us and our morality. They get to deny the slightest acknowledgment of our common humanity. They can take the bully’s maximum relish in their power over the weak and innocent. The purpose of terrorism is to terrorize, and ISIS means to show violence unbounded; ISIS will get inside our heads in the darkest way.

Second, a beheading reminds us of something disturbing in ourselves. We want to watch, and we don’t want to watch. Because of some warp in human nature, millions of people will go online to watch a beheading video though they might not even read about a simple shooting.

But the revulsion aroused by beheading is mostly a moral revulsion. A beheading feels like a defilement. It’s not just an injury or a crime. It is an indignity. A beheading is more like rape, castration or cannibalism. It is a defacement of something sacred that should be inviolable.

But what is this sacred thing that is being violated?

Well, the human body is sacred. Most of us understand, even if we don’t think about it, or have a vocabulary to talk about it these days, that the human body is not just a piece of meat or a bunch of neurons and cells. The human body has a different moral status than a cow’s body or a piece of broccoli.

We’re repulsed by a beheading because the body has a spiritual essence. The human head and body don’t just live and pass along genes. They paint, make ethical judgments, savor the beauty of a sunset and experience the transcendent. The body is material but surpasses the material. It’s spiritualized matter.

This infusion of the spiritual and the material is mysterious. Some Jews use the concept of tzimtzum, or “contraction,” to describe the mixing of the finite and the infinite. Christians have the larger concept of incarnation. Most of us, religious or secular, have some instinctive sense that there is a ghost infused in the machine. And because the human body is a transcendent temple it is worthy of respect. It is offensive to treat it the way you would treat an inanimate object. Even after a person is dead, the body still carries the residue of this presence and deserves dignified handling.

Because we have this instinctive sense, we feel elevated when we see behavior that fuses the physical and spiritual. We feel elevated when sex is not only physical pleasure but also communication and spiritual union. We feel elevated when we read about the Jewish rituals of tahara, when members of a synagogue tenderly wash the body of a congregant who has died. We feel repulsed — a little or a lot — when the body’s spiritual nature is gratuitously and intentionally insulted.

Our revulsion makes us different from the religious zealots who are prone to commit or celebrate acts like beheadings. The zealots often hew to a fringe of their faith that holds that the spirit and the body are at war with each other. They have a tendency to extreme asceticism, to seek to deny themselves pleasures of the living world, to celebrate the next world at the expense of this world, to oscillate between masochistic self-flagellation, when they think they have been sensual, and bouts of arrogant spiritual pride, when they convince themselves they have risen above the senses. It doesn’t matter to them what they do to their enemy’s body, because this physical reality is not important.

If ISIS is to be stopped, there will probably have to be some sort of political and military coalition. But, ultimately, the Islamists are a spiritual movement that will have to be surmounted by a superior version of Islam.

The truest version of each Abrahamic faith revels in the genuine goodness of creation. These are faiths that love the material world, especially the body. They’re faiths that understand that the high and the low yearn for each other, and that every human body has some piece of the eternal, even if you’re fighting against him.

Now here’s Prof. Krugman:

On Thursday, the European Central Bank announced a series of new steps it was taking in an effort to boost Europe’s economy. There was a whiff of desperation about the announcement, which was reassuring. Europe, which is doing worse than it did in the 1930s, is clearly in the grip of a deflationary vortex, and it’s good to know that the central bank understands that. But its epiphany may have come too late. It’s far from clear that the measures now on the table will be strong enough to reverse the downward spiral.

And there but for the grace of Bernanke go we. Things in the United States are far from O.K., but we seem (at least for now) to have steered clear of the kind of trap facing Europe. Why? One answer is that the Federal Reserve started doing the right thing years ago, buying trillions of dollars’ worth of bonds in order to avoid the situation its European counterpart now faces.

You can argue, and I would, that the Fed should have done even more. But Fed officials have faced fierce attacks all the way. Pundits, politicians and plutocrats have accused them, over and over again, of “debasing” the dollar, and warned that soaring inflation is just around the corner. The predicted surge in inflation has never arrived, but despite being wrong year after year, hardly any of the critics have admitted being wrong, or even changed their tune. And the question I’ve been trying to answer is why. What is it that makes a powerful faction in our body politic — call it the deflation caucus — demand tight money even in a depressed, low-inflation economy?

One thing is clear: Like so much else these days, monetary policy has become very much a partisan issue. It’s not just that talk of dollar debasement comes pretty much exclusively from the right of the political spectrum; inflation paranoia has, to a remarkable extent, become a matter of conservative political correctness, so that even economists who should know better have joined in the chorus. So we can focus the question further: Why do people on the right hate monetary expansion, even when it’s desperately needed?

One answer is the power of truthiness — Stephen Colbert’s justly famed term for things that aren’t true, but feel true to some people. “The Fed is printing money, printing money leads to inflation, and inflation is always a bad thing” is a triply untrue statement, but it feels true to a lot of people. And, yes, a tendency to prefer truthiness to more complicated truth is and pretty much always has been associated with political conservatism, and this tendency is especially strong in an era when leading politicians get their monetary theory from Ayn Rand novels.

Another answer is class interest. Inflation helps debtors and hurts creditors, deflation does the reverse. And the wealthy are much more likely than workers and the poor to be creditors, to have money in the bank and bonds in their portfolio rather than mortgages and credit-card balances outstanding. Back in the Gilded Age, the elite mobilized en masse to defeat William Jennings Bryan, who threatened to take the United States off the gold standard; campaign spending as a percentage of G.D.P. was far higher in 1896 than in any presidential election before or since. Are the wealthy similarly mobilized against easy-money policies today?

As far as I know, we don’t have rigorous evidence to that effect. There are certainly a lot of wealthy investors in the debasing-the-dollar crowd, but we don’t know for sure how representative they are — and you could argue that big investors should like the Fed’s expansionary policies, which have been very good for the stock market. But the wealthy may not trust that connection, in part because the inflationary ’70s were very bad for stocks. And we do know that the very wealthy are much more likely than the general public to consider budget deficits our biggest problem, even though fiscal austerity is probably bad for profits. So perceived class interest is probably also a key motivation for the deflation caucus.

A side note: Europe’s wealthy aren’t as wealthy or influential as their American counterparts, but creditor interests are nonetheless even more powerful than they are here because creditor nations, Germany in particular, have ended up dictating policy for the whole of Europe.

And the important thing to understand is that the dominance of creditor interests on both sides of the Atlantic, supported by false but viscerally appealing economic doctrines, has had tragic consequences. Our economies have been dragged down by the woes of debtors, who have been forced to slash spending. To avoid a deep, prolonged slump, we needed policies to offset this drag. What we got instead was an obsession with the evils of budget deficits and paranoia over inflation — and a slump that has gone on and on.

Brooks, Nocera and Bruni

September 2, 2014

In “The Revolt of the Weak” Bobo gurgles that this summer, the bad guys have looked energetic while the good guys have looked tired, putting the norms of civilization under threat.  Mr. Nocera has a question in “The Human Toll of Offshoring:”  What should we be doing to make globalization work for us instead of against us?  In “Obama’s Messy Words” Mr. Bruni says there’s inadequate urgency or reassurance in the president’s language, as Americans gaze with horror at events abroad.  Here’s Bobo:

The toughest part of governing is the effect on the mind of those who govern. As Henry Kissinger said, once you get in government you are not building up human capital; you are just spending it down. People in senior positions are simply too busy to learn fundamental new viewpoints. Their minds are locked within the ones they brought into power.

Then there is the problem of myopia. People at the top of government confront such a barrage of immediate small issues — from personnel to scheduling — that it is hard for them to step back and see the overall context in which they operate.

Finally, there is the problem of the bunker. People in power are hit with such an avalanche of criticism — much of it partisan and ill-informed — that they naturally build mental walls to protect themselves from abuse.

All of which makes it hard to govern now. We are not living in a moment of immediate concrete threat, but we are in a crisis of context.

The specific problems that make headlines right now are not cataclysmic. The venture by President Vladimir Putin of Russia into Ukraine, for all its thuggery, is not, in itself, a cataclysmic historical event. The civil war in Syria, for all its savagery, is not a problem that threatens the daily lives of those who live outside.

These problems are medium-size, but the underlying frameworks by which nations operate are being threatened in fairly devastating ways. That is to say, there are certain unconscious habits and norms of restraint that undergird civilization. These habits and norms are now being challenged by a coalition of the unsuccessful.

What we’re seeing around the world is a revolt of the weak. There are certain weak movements and nations, beset by internal contradictions, that can’t compete if they play by the normal rules of civilization. Therefore, they are conspiring to blow up the rule book.

The first example is Russia. Putin is poor in legitimacy. He is poor in his ability to deliver goods and dignity for his people. But he is rich in brazenness. He is rich in his ability to play by the lawlessness of the jungle, so he wants the whole world to operate by jungle rules.

There has been a norm, generally operating over the past few decades, or even centuries, that big, powerful nations don’t gobble up everything around them just because they can. But this is precisely the norm that Putin is brazenly crushing under foot. If Putinism can effectively tear down this norm, more and more we’ll live in a world in which brazenness is rewarded and self-restraint is punished.

Then there are the Islamist movements like the Islamic State in Iraq and Syria, or ISIS. This movement is poor in offering a lifestyle that most people find attractive. But it is strong in spiritual purity, so it wants to set off a series of religious wars and have the world organized by religious categories.

There has been a norm, developed gradually over the centuries, that politics is not a totalistic spiritual enterprise. Governments try to deliver order and economic benefits to people, but they do not organize their inner spiritual lives.

This is precisely the norm that ISIS and other jihadi groups are trying to destroy. If they succeed, then the Middle East will devolve into a 30 years war of faith against faith. Zealotry will be rewarded, and restraint will be punished.

Putin and ISIS are not threats to American national security, narrowly defined. They are threats to our civilizational order.

If you are caught up in that day-to-day business of government, you are likely to see how weak Putin and ISIS are. You are likely to conclude that you don’t need to do much, because these threats will inevitably succumb on their own to their internal contradictions. But their weakness is their driving power; they only need to tear things down, and, unconfronted, will do so.

People who conduct foreign policy live today under the shadow of the postwar era. People instinctively understand that just after World War II, Harry Truman, George Marshall, Dean Acheson and others did something remarkable. They stepped outside the immediate crush of events and constructed a context in which people would live for the next several decades.

Some of the problems they faced did not seem gigantic: how to prevent a Communist insurgency from taking over a semifailed government in Greece. But they understood that by projecting American power into Greece, they would be establishing certain norms and creating a framework for civilization.

Then, democratic self-confidence was high. Today, unfortunately, it is low. This summer, the bad guys have looked energetic while the good guys have looked tired. We’ll see at the NATO summit meeting in Wales this week if there’s a leader who can step outside the crush of events and explain how fundamental the threat to the rules of civilization now is.

Next up we have Mr. Nocera:

The subtitle of Beth Macy’s new book, “Factory Man” — “How One Furniture Maker Battled Offshoring, Stayed Local, and Helped Save an American Town” — gives every impression that it is going to be an upbeat read, a capitalistic feel-good story.

And, indeed, Macy, a former longtime reporter for The Roanoke Times in Virginia, doesn’t skimp on the story of a furniture baron named John Bassett III, her colorful main character, a Southern charmer with a fondness for quoting General Patton. After being pushed out of his family’s furniture company in (where else?) Bassett, Va., JBIII, as Macy calls him, buys into another, smaller company, Vaughan-Bassett, in the nearby town of Galax, right around the time that Chinese furniture manufacturers began to move seriously into the American furniture market with low-priced knockoffs of American furniture designs.

As furniture manufacturers all around him — including his family’s company — begin shuttering plants and start marketing and selling the Chinese imports, Bassett decides to fight back. Although he, too, has had to shrink his work force, he refuses to shut down his company, and he mobilizes others in the industry to charge the Chinese with dumping their goods on the market — that is, selling them below the cost of manufacturing them.

In 2005, the government did indeed conclude that the Chinese had been dumping furniture, and it put tariffs on Chinese furniture that helped make the Americans a little more competitive. Thanks to something called the Byrd amendment, some of the money from the Chinese went directly to Bassett’s company, which “invested $23 million in new plant equipment, put some in the employee profit-sharing plan, and used some of it to start a companywide free health clinic for families,” writes Macy. “The money saved upwards of 700 jobs in Galax, which, in turn, as some have argued, have saved the town.” Vaughan-Bassett has since become the largest wooden bedroom furniture maker in the country.

Surely, if they make a movie out of “Factory Man” — and I think there is a pretty decent chance they will — that will be the story line.

What is striking about Macy’s first book, though, is how little she does to make that made-for-the-movies plot stand out. Her wonderful central character notwithstanding, she’s really after something else: the effects of globalization on her little corner of the world, that is, the regions of North Carolina and Virginia where furniture making was once king. From her point of view, that story is anything but upbeat.

Nor does she miss the historic twist in her tale: as she notes early on, in the years after the Civil War, Southern entrepreneurs like Bassett’s grandfather capitalized on “cheap, hungry labor and all those tree-stocked hills” to shift furniture manufacturing from places like Grand Rapids, Mich., to the South, where it thrived for a century or more before the Chinese began doing the same thing to them.

But again and again, she comes back to the factories that have been closed, the jobs that have been lost. “Between 2002 and 2012, 63,300 American factories closed their doors and five million factory jobs went away,” she notes. She finds people who, having been laid off, do exactly what you would hope they might do: go to college and become well-paid knowledge workers.

But far more often she introduces us to people who have been displaced by the Chinese furniture manufacturers and can’t see a better future. It is especially difficult for people who have lost their jobs in what amount to company towns — where there really isn’t any other work to be had. She asks, “What good did it do to have access to cheap consumer goods if you had no money to buy them?”

She quotes the University of Oregon economist Bruce Blonigen, who tells her, “In reality, we shouldn’t be making bedroom furniture anymore in the United States. Shouldn’t we instead be trying to educate these workers’ kids to get them into high-skilled jobs and away from what’s basically an archaic industry?”

I happen to think Blonigen is right — that is exactly what we should be doing to make globalization work for us instead of against us. But I also find myself deeply sympathetic to Macy’s essential point, which is that globalization inflicts a great deal of suffering on millions of people, something the news media should do a better job of acknowledging and the government should do a better job of mitigating.

Toward the end of her book, Macy travels to Indonesia, where she talks to a factory executive. “What I do worry about every year is the future of the factory,” he tells her. “I worry that someone somewhere else, somewhere cheaper, will start to make furniture, and that will be that for us.”

It never ends.

I love the scorn directed at blue-collar workers by Blonigen (and agreed with by Mr. Nocera) — apparently if you work with your hands you’re not worth considering.  You should be in some pie-in-the-sky high tech job that doesn’t exist.  And now here’s Mr. Bruni:

There are things that you think and things that you say.

There’s what you reckon with privately and what you utter publicly.

There are discussions suitable for a lecture hall and those that befit the bully pulpit.

These sets overlap but aren’t the same. Has President Obama lost sight of that?

It’s a question fairly asked after his statement last week that “we don’t have a strategy yet” for dealing with Islamic extremists in Syria. Not having a strategy, at least a fixed, definitive one, is understandable. The options aren’t great, the answers aren’t easy and the stakes are enormous.

But announcing as much? It’s hard to see any percentage in that. It gives no comfort to Americans. It puts no fear in our enemies.

Just as curious was what Obama followed that up with.

Speaking at a fund-raiser on Friday, he told donors, “If you watch the nightly news, it feels like the world is falling apart.” He had that much right.

But it wasn’t the whole of his message. In a statement of the obvious, he also said, “The world has always been messy.” And he coupled that with a needless comparison, advising Americans to bear in mind that the rise of the Islamic State in Iraq and Syria, the rapacity of Putin, the bedlam in Libya and the rest of it were “not something that is comparable to the challenges we faced during the Cold War.”

Set aside the question of how germane the example of the Cold War is. When the gut-twisting image stuck in your head is of a masked madman holding a crude knife to the neck of an American on his knees in the desert, when you’re reading about crucifixions in the 21st century, when you’re hearing about women sold by jihadists as sex slaves, and when British leaders have just raised the threat level in their country to “severe,” the last thing that you want to be told is that it’s par for the historical course, all a matter of perspective and not so cosmically dire.

Where’s the reassurance — or the sense of urgency — in that?

And maybe the second-to-last thing that you want to be told is that technology and social media amplify peril in a new way and may be the reason you’re feeling especially on edge. Obama said something along those lines, too. It’s not the terror, folks. It’s the tweets.

Is the president consoling us — or himself? It’s as if he’s taken his interior monologue and wired it to speakers in the town square. And it’s rattling.

When he came along, many of us were fed up with misinformation and “Mission Accomplished” theatrics and bluster. America had paid a price for them in young lives.

And we were tired and leery of an oversimplified, Hollywood version of world affairs, of the Manichaean lexicon of “evil empire” and “axis of evil.” We longed for something less rash and more nuanced.

But there’s plenty of territory between the bloated and bellicose rhetoric of then and what Obama is giving us now. He’s adopted a strange language of self-effacement, with notes of defeatism, reminding us that “America, as the most powerful country on earth, still does not control everything”; that we must be content at times with singles and doubles in lieu of home runs; that not doing stupid stuff is its own accomplishment.

This is all true. It’s in tune with our awareness of our limits. And it reflects a prudent disinclination to repeat past mistakes and overreach.

But that doesn’t make it the right message for the world’s lone superpower (whether we like it or not) to articulate and disseminate. That doesn’t make it savvy, constructive P.R. And the low marks that Americans currently give the president, especially for foreign policy, suggest that it’s not exactly what we were after.

In The Washington Post on Sunday, Karen DeYoung and Dan Balz observed that while Obama’s no-strategy remark “may have had the virtue of candor,” it in no way projected “an image of presidential resolve or decisiveness at a time of international turmoil.”

And no matter what Obama ultimately elects to do, such an image is vital. But in its place are oratorical shrugs and an aura of hesitancy, even evasion, as he and John Kerry broadcast that the United States shouldn’t be expected to act on its own. Isn’t that better whispered to our allies and negotiated behind closed doors?

Echoing Hillary Clinton to some degree, Senator Dianne Feinstein just complained that Obama was perhaps “too cautious.”

Not in what he says, he’s not. Not when he draws and then erases red lines. Not with his recent adjectives.

“Messy” is my kitchen at the end of a long weekend. What’s happening in much of Syria and Iraq is monstrous.

Apparently next week Bruni will show up on Wednesday instead of Tuesday.

Brooks and Krugman

August 29, 2014

Bobo has one of his burning questions in “The Mental Virtues:”  How do you build character in front of your keyboard at work?  Well, Bobo, you could start by not playing Gunga Din to the Mole People.  Just a thought…  Prof. Krugman also has a question in “The Fall of France:”  Has President François Hollande doomed the European project as the disastrous consequences of austerity policies grow more obvious with each passing month?  Here’s Bobo:

We all know what makes for good character in soldiers. We’ve seen the movies about heroes who display courage, loyalty and coolness under fire. But what about somebody who sits in front of a keyboard all day? Is it possible to display and cultivate character if you are just an information age office jockey, alone with a memo or your computer?

Of course it is. Even if you are alone in your office, you are thinking. Thinking well under a barrage of information may be a different sort of moral challenge than fighting well under a hail of bullets, but it’s a character challenge nonetheless.

In their 2007 book, “Intellectual Virtues,” Robert C. Roberts of Baylor University and W. Jay Wood of Wheaton College list some of the cerebral virtues. We can all grade ourselves on how good we are at each of them.

First, there is love of learning. Some people are just more ardently curious than others, either by cultivation or by nature.

Second, there is courage. The obvious form of intellectual courage is the willingness to hold unpopular views. But the subtler form is knowing how much risk to take in jumping to conclusions. The reckless thinker takes a few pieces of information and leaps to some faraway conspiracy theory. The perfectionist, on the other hand, is unwilling to put anything out there except under ideal conditions for fear that she could be wrong. Intellectual courage is self-regulation, Roberts and Wood argue, knowing when to be daring and when to be cautious. The philosopher Thomas Kuhn pointed out that scientists often simply ignore facts that don’t fit with their existing paradigms, but an intellectually courageous person is willing to look at things that are surprisingly hard to look at.

Third, there is firmness. You don’t want to be a person who surrenders his beliefs at the slightest whiff of opposition. On the other hand, you don’t want to hold dogmatically to a belief against all evidence. The median point between flaccidity and rigidity is the virtue of firmness. The firm believer can build a steady worldview on solid timbers but still delight in new information. She can gracefully adjust the strength of her conviction to the strength of the evidence. Firmness is a quality of mental agility.

Fourth, there is humility, which is not letting your own desire for status get in the way of accuracy. The humble person fights against vanity and self-importance. He’s not writing those sentences people write to make themselves seem smart; he’s not thinking of himself much at all. The humble researcher doesn’t become arrogant toward his subject, assuming he has mastered it. Such a person is open to learning from anyone at any stage in life.

Fifth, there is autonomy. You don’t want to be a person who slavishly adopts whatever opinion your teacher or some author gives you. On the other hand, you don’t want to reject all guidance from people who know what they are talking about. Autonomy is the median of knowing when to bow to authority and when not to, when to follow a role model and when not to, when to adhere to tradition and when not to.

Finally, there is generosity. This virtue starts with the willingness to share knowledge and give others credit. But it also means hearing others as they would like to be heard, looking for what each person has to teach and not looking to triumphantly pounce upon their errors.

We all probably excel at some of these virtues and are deficient in others. But I’m struck by how much of the mainstream literature on decision-making treats the mind as some disembodied organ that can be programed like a computer.

In fact, the mind is embedded in human nature, and very often thinking well means pushing against the grain of our nature — against vanity, against laziness, against the desire for certainty, against the desire to avoid painful truths. Good thinking isn’t just adopting the right technique. It’s a moral enterprise and requires good character, the ability to go against our lesser impulses for the sake of our higher ones.

Montaigne once wrote that “We can be knowledgeable with other men’s knowledge, but we can’t be wise with other men’s wisdom.” That’s because wisdom isn’t a body of information. It’s the moral quality of knowing how to handle your own limitations. Warren Buffett made a similar point in his own sphere, “Investing is not a game where the guy with the 160 I.Q. beats the guy with the 130 I.Q. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble.”

Character tests are pervasive even in modern everyday life. It’s possible to be heroic if you’re just sitting alone in your office. It just doesn’t make for a good movie.

What a tool…  Here’s Prof. Krugman:

François Hollande, the president of France since 2012, coulda been a contender. He was elected on a promise to turn away from the austerity policies that killed Europe’s brief, inadequate economic recovery. Since the intellectual justification for these policies was weak and would soon collapse, he could have led a bloc of nations demanding a change of course. But it was not to be. Once in office, Mr. Hollande promptly folded, giving in completely to demands for even more austerity.

Let it not be said, however, that he is entirely spineless. Earlier this week, he took decisive action, but not, alas, on economic policy, although the disastrous consequences of European austerity grow more obvious with each passing month, and even Mario Draghi, the president of the European Central Bank, is calling for a change of course. No, all Mr. Hollande’s force was focused on purging members of his government daring to question his subservience to Berlin and Brussels.

It’s a remarkable spectacle. To fully appreciate it, however, you need to understand two things. First, Europe, as a whole, is in deep trouble. Second, however, within that overall pattern of disaster, France’s performance is much better than you would guess from news reports. France isn’t Greece; it isn’t even Italy. But it is letting itself be bullied as if it were a basket case.

On Europe: Like the United States, the euro area — the 18 countries that use the euro as a common currency — started to recover from the 2008 financial crisis midway through 2009. But after a debt crisis erupted in 2010, some European nations were forced, as a condition for loans, to make harsh spending cuts and raise taxes on working families. Meanwhile, Germany and other creditor countries did nothing to offset the downward pressure, and the European Central Bank, unlike the Federal Reserve or the Bank of England, didn’t take extraordinary measures to boost private spending. As a result, the European recovery stalled in 2011, and has never really resumed.

At this point, Europe is doing worse than it did at a comparable stage of the Great Depression. And even more bad news may lie ahead, as Europe shows every sign of sliding into a Japanese-style deflationary trap.

How does France fit into this picture? News reports consistently portray the French economy as a dysfunctional mess, crippled by high taxes and government regulation. So it comes as something of a shock when you look at the actual numbers, which don’t match that story at all. France hasn’t done well since 2008 — in particular, it has lagged Germany — but its overall G.D.P. growth has been much better than the European average, beating not only the troubled economies of southern Europe but creditor nations like the Netherlands. French job performance isn’t too bad. In fact, prime-aged adults are a lot more likely to be employed in France than in the United States.

Nor does France’s situation seem particularly fragile. It doesn’t have a large trade deficit, and it can borrow at historically low interest rates.

Why, then, does France get such bad press? It’s hard to escape the suspicion that it’s political: France has a big government and a generous welfare state, which free-market ideology says should lead to economic disaster. So disaster is what gets reported, even if it’s not what the numbers say.

And Mr. Hollande, even though he leads France’s Socialist Party, appears to believe this ideologically motivated bad-mouthing. Worse, he has fallen into a vicious circle in which austerity policies cause growth to stall, and this stalled growth is taken as evidence that France needs even more austerity.

It’s a very sad story, and not just for France.

Most immediately, Europe’s economy is in dire straits. Mr. Draghi, I believe, understands how bad things are. But there’s only so much the central bank can do, and, in any case, he has limited room for maneuvering unless elected leaders are willing to challenge hard-money, balanced-budget orthodoxy. Meanwhile, Germany is incorrigible. Its official response to the shake-up in France was a declaration that “there is no contradiction between consolidation and growth” — hey, never mind the experience of the past four years, we still believe that austerity is expansionary.

So Europe desperately needs the leader of a major economy — one that is not in terrible shape — to stand up and say that austerity is killing the Continent’s economic prospects. Mr. Hollande could and should have been that leader, but he isn’t.

And if the European economy continues to stagnate or worse, what will become of the European project — the long-term effort to secure peace and democracy through shared prosperity? In failing France, Mr. Hollande is also failing Europe as a whole — and nobody knows how bad it might get.

Brooks and Krugman

August 15, 2014

In “The Bacall Standard” Bobo says that with her steel spine, gutsy flirtation, and unmistakable presence, Lauren Bacall created a new film noir feminine ideal.  Prof. Krugman, in “The Forever Slump,” says the United States should learn from Europe’s experience of raising interest rates too soon.   Here’s Bobo:

“I believe the really good people would be reasonably successful in any circumstance,” the detective writer Raymond Chandler wrote in his notebook in 1949. If Shakespeare came back today, “he would have refused to die in a corner.”

Shakespeare, Chandler theorized, would have gone into the movie business and made its tired formulas fresh. He wouldn’t have cared about the vulgarity of Hollywood, Chandler thought, “because he would know that without some vulgarity there is no complete man. He would have hated refinement, as such, because it is always a withdrawal, a shrinking, and he was much too tough to shrink from anything.”

Chandler had a tough, urban sensibility, and he created his own vision of the complete modern man, especially in the image of his most famous character, Philip Marlowe. Every new type of hero is like a new word added to the common vocabulary. It gives people a new possibility to emulate and a new standard of excellence. Chandler succeeded in giving his era a compelling male ideal.

Chandler was not particularly kind to women, though. It was up to the director Howard Hawks and his star, Lauren Bacall — who died this week — to give that era a counterpart female ideal, a hero both tough and tender, urbane and fast-talking, but also vulnerable and amusing.

Vivian Rutledge, the lead female character in the movie version of Chandler’s “The Big Sleep,” is stuck in a classic film noir world. Every situation is confusing, shadowed and ambiguous. Every person is dappled with virtue and vice. Society rewards the wrong things, so the ruthless often get rich while the innocent get it in the neck.

The lead character, played by Bacall, emerges from an ambiguous past, but rises aristocratically above it. She has her foibles; she’s manipulative and spoiled. But she’s strong. She seems physically towering, with broad shoulders and a rich, mature voice that is astounding, given that Bacall was all of 20 years old when she made the picture.

She projects a hardened wisdom about the way the world works, and an ironic gaze. Her most outstanding feature is near perfect self-possession. She is composed and self-assured under stress. You get the sense that she has spent her life effortlessly wrapping men around her fingers. Her self-command must have seemed simultaneously masculine and feminine at the time.

The movie’s plot is famously incomprehensible. But you get to watch Vivian meet her equal. The badinage between Bacall’s Vivian and Humphrey Bogart’s Marlowe is a cross between swordplay and foreplay. (They were married during the drawn-out filming process.)

The heiress greets Marlowe with a put-down: “So you’re a private detective. I didn’t know they existed, except in books, or else they were greasy little men snooping around hotel corridors.”

But he’s self-sufficient enough to stand up to her. He wins her over with a series of small rejections. And he can match her verbal pyrotechnics. When she says she doesn’t like his manners, he comes straight back at her: “I’m not crazy about yours. … I don’t mind if you don’t like my manners. I don’t like them myself. They’re pretty bad. I grieve over them long winter evenings.”

A connoisseur of love games, she’s soon enjoying the competition. The verbal dueling becomes a way of testing each other’s composure and finally turns into pure come-on, which, of course, she leads. The most famous exchange in the movie is allegedly about horse racing:

Bacall: “Speaking of horses, I like to play them myself. But I like to see them work out a little first. See if they’re front-runners or come-from-behind. … I’d say you don’t like to be rated. You like to get out in front, open up a lead, take a little breather in the back stretch and then come home free.”

Bogart: “You’ve got a touch of class, but I don’t know how far you can go.”

Bacall: “A lot depends on who’s in the saddle.”

By the end, they are united by a moral sensibility. Both characters are constantly making character distinctions, identifying who’s legit and who’s not. The distinctions that matter in their world are not between rich and poor, or pure and impure; they are between those who are faithful to the code of their professions and those who aren’t; between those who are loyal and honest and those who are petty, snobbish and phony.

The feminine ideal in “The Big Sleep” is, of course, dated now. But what’s lasting is a way of being in a time of disillusion. At a cynical moment when many had come to distrust institutions, and when the world seemed incoherent, Bacall and Bogart created a non-self-righteous way to care about virtue. Their characters weren’t prissy or snobbish in the slightest. They were redeemed by their own honor code, which they kept up, cocktail after cocktail.

Bobo apparently couldn’t bring himself to mention the fact that Bacall was a life-long liberal…  Now here’s Prof. Krugman:

It’s hard to believe, but almost six years have passed since the fall of Lehman Brothers ushered in the worst economic crisis since the 1930s. Many people, myself included, would like to move on to other subjects. But we can’t, because the crisis is by no means over. Recovery is far from complete, and the wrong policies could still turn economic weakness into a more or less permanent depression.

In fact, that’s what seems to be happening in Europe as we speak. And the rest of us should learn from Europe’s experience.

Before I get to the latest bad news, let’s talk about the great policy argument that has raged for more than five years. It’s easy to get bogged down in the details, but basically it has been a debate between the too-muchers and the not-enoughers.

The too-muchers have warned incessantly that the things governments and central banks are doing to limit the depth of the slump are setting the stage for something even worse. Deficit spending, they suggested, could provoke a Greek-style crisis any day now — within two years, declared Alan Simpson and Erskine Bowles some three and a half years ago. Asset purchases by the Federal Reserve would “risk currency debasement and inflation,” declared a who’s who of Republican economists, investors, and pundits in a 2010 open letter to Ben Bernanke.

The not-enoughers — a group that includes yours truly — have argued all along that the clear and present danger is Japanification rather than Hellenization. That is, they have warned that inadequate fiscal stimulus and a premature turn to austerity could lead to a lost decade or more of economic depression, that the Fed should be doing even more to boost the economy, that deflation, not inflation, was the great risk facing the Western world.

To say the obvious, none of the predictions and warnings of the too-muchers have come to pass. America never experienced a Greek-type crisis of soaring borrowing costs. In fact, even within Europe the debt crisis largely faded away once the European Central Bank began doing its job as lender of last resort. Meanwhile, inflation has stayed low.

However, while the not-enoughers were right to dismiss warnings about interest rates and inflation, our concerns about actual deflation haven’t yet come to pass. This has provoked a fair bit of rethinking about the inflation process (if there has been any rethinking on the other side of this argument, I haven’t seen it), but not-enoughers continue to worry about the risks of a Japan-type quasi-permanent slump.

Which brings me to Europe’s woes.

On the whole, the too-muchers have had much more influence in Europe than in the United States, while the not-enoughers have had no influence at all. European officials eagerly embraced now-discredited doctrines that allegedly justified fiscal austerity even in depressed economies (although America has de facto done a lot of austerity, too, thanks to the sequester and cuts at the state and local level). And the European Central Bank, or E.C.B., not only failed to match the Fed’s asset purchases, it actually raised interest rates back in 2011 to head off the imaginary risk of inflation.

The E.C.B. reversed course when Europe slid back into recession, and, as I’ve already mentioned, under Mario Draghi’s leadership, it did a lot to alleviate the European debt crisis. But this wasn’t enough. The European economy did start growing again last year, but not enough to make more than a small dent in the unemployment rate.

And now growth has stalled, while inflation has fallen far below the E.C.B.’s target of 2 percent, and prices are actually falling in debtor nations. It’s really a dismal picture. Mr. Draghi & Co. need to do whatever they can to try to turn things around, but given the political and institutional constraints they face, Europe will arguably be lucky if all it experiences is one lost decade.

The good news is that things don’t look that dire in America, where job creation seems finally to have picked up and the threat of deflation has receded, at least for now. But all it would take is a few bad shocks and/or policy missteps to send us down the same path.

The good news is that Janet Yellen, the Fed chairwoman, understands the danger; she has made it clear that she would rather take the chance of a temporary rise in the inflation rate than risk hitting the brakes too soon, the way the E.C.B. did in 2011. The bad news is that she and her colleagues are under a lot of pressure to do the wrong thing from the too-muchers, who seem to have learned nothing from being wrong year after year, and are still agitating for higher rates.

There’s an old joke about the man who decides to cheer up, because things could be worse — and sure enough, things get worse. That’s more or less what happened to Europe, and we shouldn’t let it happen here.

Brooks, Nocera and Bruni

August 12, 2014

In “Clinton, Obama and Iraq” Bobo gurgles that Hillary Clinton’s muscular approach to foreign policy offers a wise contrast to President Obama’s excess of caution.  The word “Bush” appears nowhere…  In “From Sneakers to O’Bannon” Mr. Nocera explains how a sports marketer came to take on the N.C.A.A.  In “Hillary Clinton, Barbed and Bellicose” Mr. Bruni says it’s clear that she’s in the race. It’s just as clear that she’s in a bind.  Here’s Bobo:

Last week, Hillary Clinton had a fascinating interview with Jeffrey Goldberg of The Atlantic. The interview got immediate attention because of the way she discussed her differences with President Obama.

While admitting that no one will ever know who was right, Clinton argues that Obama might have done more to help the moderate opposition in Syria fight the regime of President Bashar al-Assad. “The failure to help build up a credible fighting force of the people who were the originators of the protests against Assad … left a big vacuum, which the jihadists have now filled,” she told Goldberg.

While showing lavish respect for the president’s intelligence and judgment, Clinton also made it clear that she’d be a more aggressive foreign policy leader. “Great nations need organizing principles, and ‘Don’t do stupid stuff’ is not an organizing principle,” she said, citing Obama’s famous phrase.

But the interview also illuminates the different flavors of Democratic thinking on foreign policy. We are now living in what we might as well admit is the Age of Iraq. The last four presidents have found themselves drawn into that nation because it epitomizes the core problem at the center of so many crises: the interaction between failing secular governance and radical Islam.

In her interview with Goldberg, Clinton likens the current moment to the Cold War. The U.S. confronts a diverse global movement, motivated by a hostile ideology: jihadism.

“Jihadist groups are governing territory. They will never stay there, though. They are driven to expand.” This jihadism shows up in many contexts, but whether in Gaza or Syria or Iraq, she says, “it is all one big threat.”

Clinton speaks as a Truman-Kennedy Democrat. She’s obviously much, much more multilateral than Republicans, but there’s a certain muscular tone, a certain assumption that there will be hostile ideologies that threaten America. There is also a grand strategic cast to her mind. The U.S. has to come up with an “overarching” strategy, she told Goldberg, to contain, deter and defeat anti-democratic foes.

She argues that harsh action is sometimes necessary. “I think Israel did what it had to do to respond to the rockets, “ she declared, embracing recent Israeli policy. “There’s no doubt in my mind that Hamas initiated this conflict. … So the ultimate responsibility has to rest on Hamas.”

This tone sometimes stands in tension with the approach President Obama articulated in his West Point speech in the spring, or in his interview with my colleague Thomas Friedman on Friday.

Obama has carefully not organized a large part of his foreign policy around a war against jihadism. The foreign policy vision he describes is, as you’d expect from a former law professor, built around reverence for certain procedures: compromise, inclusiveness, rules and norms. The threat he described in his West Point speech was a tactic, terrorism, not an ideology, jihadism. His main argument was against a means not an end: the efficacy of military action.

Obama is notably cautious, arguing that the U.S. errs when it tries to do too much. The cast of his mind is against intervention. Sometimes, when the situation demands it, he goes against his natural temperament (he told Friedman that he regrets not getting more involved in Libya), but it takes a mighty shove, and he is resistant all the way. In his West Point speech, he erected barriers to action. He argued, for example, that the U.S. could take direct action only when “there is near certainty of no civilian casualties.” (This is not a standard Franklin Roosevelt would have applied.)

Obama and Clinton represent different Democratic tendencies. In their descriptions of the current situation in Iraq, Clinton emphasizes that there cannot be inclusive politics unless the caliphate is seriously pushed back, while Obama argues that we will be unable to push back the caliphate unless the Iraqis themselves create inclusive politics. The Clinton language points toward some sort of intervention. Obama’s points away from it, though he may be forced by events into being more involved.

It will be fascinating to see how Clinton’s approach plays in Democratic primaries. (I’d bet she is going to get a more serious challenge than people now expect.) In practice, the Clinton approach strikes me as more sound, for the same reason that early intervention against cancer is safer than late-term surgery. In the Middle East, malevolent groups like the Islamic State in Iraq and Syria grow unless checked. Even in situations where our “friends” are dysfunctional, the world has to somehow check them, using a multitude of levers. Having done so little in Syria and Iraq for the past year, we can end the caliphate or we can stay out of Iraq, but we can’t do both.

If you don’t take steady, aggressive preventive action, of the sort that Clinton leans toward, then you end up compelled to take the sort of large risky action that Obama abhors.

Now here’s Mr. Nocera:

“When I first heard about the decision, I was speechless,” said Sonny Vaccaro. Speechless as in he never thought this day would come.

Vaccaro is the former sneaker marketer turned anti-N.C.A.A. crusader, and he was talking about Friday’s decision in the O’Bannon case — the one in which Judge Claudia Wilken ruled that the principle of amateurism is not a legal justification for business practices that violate the nation’s antitrust laws.

Though he is not a lawyer, Vaccaro is as responsible for the O’Bannon case as anyone. (Disclosure: One of the O’Bannon lawyers works for same law firm as my wife. She has no involvement in the case.)

Vaccaro first got the idea for the lawsuit in the late 1990s, around the time that ESPN bought Classic Sports Network for $175 million. ESPN Classic, as it was renamed, replays games from the past, many of which involve college teams. The players in those games have long since left college, yet they have no rights to their names and likenesses, just as had been the case when they were in school.

How, wondered Vaccaro, could that possibly be O.K.?

Vaccaro is probably best known for coming up with the idea of the “sneaker contract” during his heyday as a marketer for Nike. That’s a deal in which a college coach receives payment for having his team wear a particular brand of sneakers. In the 1980s, still with Nike, he took the idea a step further, paying a university to have all its athletes wear the same brand. There is not much question that Vaccaro helped fuel the commercialization of college sports. Though, as he likes to remind people, “the schools could have turned the money down. They never did.”

In 2007, Vaccaro quit his final job in the sneaker industry — he was at Reebok at the time — to devote his time to fighting the N.C.A.A., an organization he had come to loathe. He began going around the country making anti-N.C.A.A. speeches at universities. Five years ago, while in Washington to make a speech at Howard University, he had dinner with a lawyer friend and laid out his idea of bringing a lawsuit revolving around the names and likenesses of former college athletes. Before long, he was put in touch with Michael Hausfeld, a plaintiffs’ lawyer who was looking for a high-profile case to run with.

And one other thing: He found Ed O’Bannon, the former U.C.L.A. basketball star who became the lead plaintiff. Or, rather, O’Bannon called Vaccaro after seeing an avatar, clearly based on himself, in a video game, asking if he had any recourse. Vaccaro, in turn, put O’Bannon together with Hausfeld. And the rest, as they say, is history.

In the cool light of day, Judge Wilken’s decision does not appear likely to radically reshape college sports. The relief she granted the plaintiffs is likely to put some money into the pockets of athletes who play big-time football or men’s basketball. But it is certainly not going to make anybody rich, and the average fan won’t even notice the difference. It is not like the kind of change that took place when major league baseball players gained the right to become free agents in the 1970s. For instance, she ruled that players still won’t be able to endorse products for money. In so ruling, she bought into one of the N.C.A.A.’s core views — namely that college athletes need to be protected from “commercial exploitation.”

What is radical about her decision — and what could pave the way for further changes in other lawsuits — was her dismantling of the various rationales the N.C.A.A. has put forth over the years as its justification for insisting on amateurism as the bedrock of college athletics. Assuming her decision stands up on appeal, the N.C.A.A. will lose its ability to argue that amateurism is so noble an ideal that, in and of itself, it justifies anticompetitive behavior.

“Do I wish the decision had gone further?” Vaccaro said on Monday.  “Sure. It vindicated people like me, who have been voices in the wilderness for so long.”

“We have exposed them,” said Hausfeld.  “We have gotten rid of their implicit immunity from the antitrust laws.”

In March, another antitrust suit was filed against the N.C.A.A., by Jeffrey Kessler, a lawyer best known in the sports world for bringing the suit that gained free agency for professional football players.

 Kessler’s suit is much more ambitious than O’Bannon’s. He is arguing that the “matrix of restrictions” (as he put it to me) that prevent universities from deciding how to value and compensate players is anticompetitive and violates the antitrust laws.

Thus does O’Bannon now pass the baton to Kessler, as the N.C.A.A.’s critics begin the next leg of this race.

And last but not least here’s Mr. Bruni:

The other night, a prominent Democrat I know made the craziest statement.

“I don’t think Hillary’s going to run,” he proclaimed, silencing the room. He might as well have said that he’d just spotted Bigfoot pilfering rhubarb from the White House vegetable garden or that Arnold Schwarzenegger was in line to play Lear on Broadway. (“Cordelia, I’ll be baaaaack.”) He was humming some kind of loony tune.

His evidence?

“She seems tired,” he said, and that’s when all of us cracked up. Oh, yeah, she seems positively exhausted. That explains the juggernaut of a book tour, the CNN town hall and all the other interviews, including the doozy with The Atlantic’s Jeffrey Goldberg, which I’ll turn to in a bit. If there was nap time in there, I missed it.

Without yet becoming president, she has ascended to some level of saturation exposure that’s above and beyond omnipresent. At this point she’s practically ambient. Her “inevitability” may boil down to the fact that no one can imagine a political ecosystem — nay, a habitable environment! — without her. When it comes to the Clintons, we apparently have two choices. Put them on Rushmore, or put them back in the White House.

And yet.

She is walking a tightrope, and the challenge and peril of it become clearer all the time. The question isn’t whether she’s running: Of course she is, and the only newsworthy announcement down the road would be that she’s getting out of the race. The question is whether she can belittle Barack Obama as much as she must in order to win, but not so much that it plays as an act of sheer betrayal.

She needs the voters who elected him, twice, and who maintain affection for him. She also needs the voters in the throes of buyer’s remorse. Many of them jilted her for their romance with him and now see it as a heady but heedless affair. Can she exploit that, but in a high-minded, diplomatic fashion?

Not on the evidence of her blunt and condescending remarks to Goldberg, which were published over the weekend.

With Obama’s approval ratings sinking lower, especially in the realm of foreign policy, she reiterated that he’d made the wrong call in not arming Syrian rebels. This time around she also suggested that the jihadists of ISIS wouldn’t be so potent if we’d gone a different route.

But that wasn’t the surprise. Nor, really, were the words that she summoned — stronger than the president’s — to defend Israel’s military actions in Gaza.

The clincher was this withering assessment of Obama’s approach to the world: “Great nations need organizing principles, and ‘Don’t do stupid stuff’ is not an organizing principle.” A sagacious elder was rolling her eyes at a novice’s folly.

It wasn’t her only admonishment. “When you are hunkering down and pulling back, you’re not going to make any better decisions than when you were aggressively, belligerently putting yourself forward,” she said. “One issue is that we don’t even tell our own story very well these days.” That would presumably be the fault of the storyteller in chief.

Her welling dissent leaves her exposed on several fronts. If decisions made while she was still the secretary of state were flawed, is she blameless? Sure, her job, like any appointee’s, was to implement the chief executive’s vision, to follow his lead. But it was also to lobby and leave an imprint. Is she conceding that she didn’t do that effectively enough?

Her dissent also subjects her to the charge that has long dogged her: Everything is calculation and calibration. Obama’s down, so she’s suddenly and gratuitously blunt, dismissing his doctrine as more of a ditty.

Clinton is in a bind, because the president is indeed ripe for second-guessing, and because she is and has to be her own person, with differences of opinion that are surely genuine.

She must marvel at the strange turn of events. In the 2008 presidential campaign, she suffered for seeming too truculent in comparison with him, and he held her vote to authorize force in Iraq over her. Now she feels forced to make clear that she’s more truculent than he is, and his authorization of force in Iraq could have reverberations for his successor.

And she’s compelled to pledge a departure from the last six and a half years, because polls reveal a profound, stubborn discontent and pessimism in Americans. The soft bromides of “Hard Choices” aren’t going to do the trick. Is her barbed commentary in the Goldberg interview a better bet? Or can she find a bittersweet spot in between?

Although she’s always been a stickler for loyalty, her inevitability could hinge on how well she finesses disloyalty. It’s not going to be easy. But if you think it’ll dissuade her, have I got a Broadway play for you.

We need Clinton like a moose needs roller skates.  Count me among the ABC (Anybody But Clinton) folks.

Brooks and Krugman

August 8, 2014

Oh FSM help us, Bobo has produced another “think” piece.  As if…  In “Introspective or Narcissistic?” he gurgles that the answer to that question might be found in whether you keep a journal.  In the comments “ailun99″ from Wisconsin has a question:  “I’m wondering what makes Mr. Brooks feel like he has enough expertise on this topic to write this?”  Good question.  Prof. Krugman says “Inequality is a Drag,” and that the gap between the rich and poor in the United States has grown so wide that it is inflicting a lot of economic damage and makes a new case for trickle-up economics.  Here’s Bobo:

Some people like to keep a journal. Some people think it’s a bad idea.

People who keep a journal often see it as part of the process of self-understanding and personal growth. They don’t want insights and events to slip through their minds. They think with their fingers and have to write to process experiences and become aware of their feelings.

People who oppose journal-keeping fear it contributes to self-absorption and narcissism. C.S. Lewis, who kept a journal at times, feared that it just aggravated sadness and reinforced neurosis. Gen. George Marshall did not keep a diary during World War II because he thought it would lead to “self-deception or hesitation in reaching decisions.”

The question is: How do you succeed in being introspective without being self-absorbed?

Psychologists and others have given some thought to this question. The upshot of their work is that there seems to be a paradox at the heart of introspection. The self is something that can be seen more accurately from a distance than from close up. The more you can yank yourself away from your own intimacy with yourself, the more reliable your self-awareness is likely to be.

The problem is that the mind is vastly deep, complex and variable. As Immanuel Kant famously put it, “We can never, even by the strictest examination, get completely behind the secret springs of action.” At the same time, your self-worth and identity are at stake in every judgment you make about yourself.

This combination of unfathomability and “at stakeness” is a perfect breeding ground for self-deception, rationalization and motivated reasoning.

When people examine themselves from too close, they often end up ruminating or oversimplifying. Rumination is like that middle-of-the-night thinking — when the rest of the world is hidden by darkness and the mind descends into a spiral of endless reaction to itself. People have repetitive thoughts, but don’t take action. Depressed ruminators end up making themselves more depressed.

Oversimplifiers don’t really understand themselves, so they just invent an explanation to describe their own desires. People make checklists of what they want in a spouse and then usually marry a person who is nothing like their abstract criteria. Realtors know that the house many people buy often has nothing in common with the house they thought they wanted when they started shopping.

We are better self-perceivers if we can create distance and see the general contours of our emergent system selves — rather than trying to unpack constituent parts. This can be done in several ways.

First, you can distance yourself by time. A program called Critical Incident Stress Debriefing had victims of trauma write down their emotions right after the event. (The idea was they shouldn’t bottle up their feelings.) But people who did so suffered more post-traumatic stress and were more depressed in the ensuing weeks. Their intimate reflections impeded healing and froze the pain. But people who write about trauma later on can place a broader perspective on things. Their lives are improved by the exercise.

Second, we can achieve distance from self through language. We’re better at giving other people good advice than at giving ourselves good advice, so it’s smart, when trying to counsel yourself, to pretend you are somebody else. This can be done a bit even by thinking of yourself in the third person. Work by Ozlem Ayduk and Ethan Kross finds that people who view themselves from a self-distanced perspective are better at adaptive self-reflection than people who view themselves from a self-immersed perspective.

Finally, there is narrative. Timothy Wilson of the University of Virginia suggests in his book “Strangers to Ourselves” that we shouldn’t see ourselves as archaeologists, minutely studying each feeling and trying to dig deep into the unconscious. We should see ourselves as literary critics, putting each incident in the perspective of a longer life story. The narrative form is a more supple way of understanding human processes, even unconscious ones, than rationalistic analysis.

Wilson writes, “The point is that we should not analyze the information [about our feelings] in an overly deliberate, conscious manner, constantly making explicit lists of pluses and minuses. We should let our adaptive unconscious do the job of finding reliable feelings and then trust those feelings, even if we cannot explain them entirely.”

Think of one of those Chuck Close self-portraits. The face takes up the entire image. You can see every pore. Some people try to introspect like that. But others see themselves in broader landscapes, in the context of longer narratives about forgiveness, or redemption or setback and ascent. Maturity is moving from the close-up to the landscape, focusing less on your own supposed strengths and weaknesses and more on the sea of empathy in which you swim, which is the medium necessary for understanding others, one’s self, and survival.

My guess is that poor Bobo is going through a really tough midlife crisis.  I just wish he’d keep it to himself.  Here’s Prof. Krugman:

For more than three decades, almost everyone who matters in American politics has agreed that higher taxes on the rich and increased aid to the poor have hurt economic growth.

Liberals have generally viewed this as a trade-off worth making, arguing that it’s worth accepting some price in the form of lower G.D.P. to help fellow citizens in need. Conservatives, on the other hand, have advocated trickle-down economics, insisting that the best policy is to cut taxes on the rich, slash aid to the poor and count on a rising tide to raise all boats.

But there’s now growing evidence for a new view — namely, that the whole premise of this debate is wrong, that there isn’t actually any trade-off between equity and inefficiency. Why? It’s true that market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.

You might be tempted to dismiss this notion as wishful thinking, a sort of liberal equivalent of the right-wing fantasy that cutting taxes on the rich actually increases revenue. In fact, however, there is solid evidence, coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy.

Earlier this week, the new view about inequality and growth got a boost from Standard & Poor’s, the rating agency, which put out a report supporting the view that high inequality is a drag on growth. The agency was summarizing other people’s work, not doing research of its own, and you don’t need to take its judgment as gospel (remember its ludicrous downgrade of United States debt). What S.& P.’s imprimatur shows, however, is just how mainstream the new view of inequality has become. There is, at this point, no reason to believe that comforting the comfortable and afflicting the afflicted is good for growth, and good reason to believe the opposite.

Specifically, if you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth. Furthermore, income redistribution at the levels typical of advanced countries (with the United States doing much less than average) is “robustly associated with higher and more durable growth.” That is, there’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor less poor.

But how is that possible? Doesn’t taxing the rich and helping the poor reduce the incentive to make money? Well, yes, but incentives aren’t the only thing that matters for economic growth. Opportunity is also crucial. And extreme inequality deprives many people of the opportunity to fulfill their potential.

Think about it. Do talented children in low-income American families have the same chance to make use of their talent — to get the right education, to pursue the right career path — as those born higher up the ladder? Of course not. Moreover, this isn’t just unfair, it’s expensive. Extreme inequality means a waste of human resources.

And government programs that reduce inequality can make the nation as a whole richer, by reducing that waste.

Consider, for example, what we know about food stamps, perennially targeted by conservatives who claim that they reduce the incentive to work. The historical evidence does indeed suggest that making food stamps available somewhat reduces work effort, especially by single mothers. But it also suggests that Americans who had access to food stamps when they were children grew up to be healthier and more productive than those who didn’t, which means that they made a bigger economic contribution. The purpose of the food stamp program was to reduce misery, but it’s a good guess that the program was also good for American economic growth.

The same thing, I’d argue, will end up being true of Obamacare. Subsidized insurance will induce some people to reduce the number of hours they work, but it will also mean higher productivity from Americans who are finally getting the health care they need, not to mention making better use of their skills because they can change jobs without the fear of losing coverage. Over all, health reform will probably make us richer as well as more secure.

Will the new view of inequality change our political debate? It should. Being nice to the wealthy and cruel to the poor is not, it turns out, the key to economic growth. On the contrary, making our economy fairer would also make it richer. Goodbye, trickle-down; hello, trickle-up.

Brooks and Bruni

August 5, 2014

We’ve got just Bobo and Bruni this morning since Mr. Nocera is off, probably busy filling his water buckets for Big Energy.  Bobo has turned his eye to Africa.  In “The Battle of the Regimes” he babbles that with support, a new style of emerging market hero can lead African nations to a democratic rather than autocratic future.  In the comments “gemli” from Boston starts his comment with this:  “Another fractured fairy tale from David Brooks, in which he rewrites reality to suit his ideology. The bogey man in this one is the Authoritarian Regime, which starts out looking like China but morphs eerily into the U.S. government.”  In “Plato and the Promise of College” Mr. Bruni tells us that one summer school seeks social mobility and better citizens through the classics.  Here’s Bobo:

James Mwangi grew up on the slopes of the Aberdare Mountains in central Kenya. His father lost his life during the Mau Mau uprising against the colonial authorities. His mother raised seven children, making sure both the girls and the boys were well educated. Everybody in the family worked at a series of street businesses to pay the bills.

He made it to the University of Nairobi and became an accountant. The big Western banks were getting out of retail banking, figuring there was no money to be made catering to the poor. But, in 1993, Mwangi helped lead a small mutual aid organization, called Equity Building Society, into the vacuum.

The enterprise that became Equity Bank would give poor Kenyans access to bank accounts. Mwangi would cater to street vendors and small-scale farmers. At the time, according to a profile by Anver Versi in African Business Magazine, the firm had 27 employees and was losing about $58,000 a year.

Mwangi told the staff to emphasize customer care. He switched the firm’s emphasis from mortgage loans to small, targeted loans.

Kenyans got richer, the middle class boomed and Equity Bank surged. By 2011, Equity had 450 branches and a customer base of 8 million — nearly half of all bank accounts in the country. From 2000 to 2012, Equity’s pretax profit grew at an annual rate of 65 percent. In 2012, Mwangi was named the Ernst & Young World Entrepreneur of the Year.

Mwangi’s story is a rags-to-riches Horatio Alger tale. Mwangi has also become a celebrated representative of the new African entrepreneurial class, who now define the continent as much as famine, malaria and the old scourges.

But Mwangi’s story is something else. It’s a salvo in an ideological war. With Equity, Mwangi demonstrated that democratic capitalism really can serve the masses. Decentralized, bottom-up capitalism can be the basis of widespread growth, even in emerging markets.

That theory is under threat. Over the past few months, we’ve seen the beginning of a global battle of regimes, an intellectual contest between centralized authoritarian capitalism and decentralized liberal democratic capitalism.

On July 26, for example, Prime Minister Viktor Orban of Hungary gave a morbidly fascinating speech in which he argued that liberal capitalism’s day is done. The 2008 financial crisis revealed that decentralized liberal democracy leads to inequality, oligarchy, corruption and moral decline. When individuals are given maximum freedom, the strong end up stepping on the weak.

The future, he continued, belongs to illiberal regimes like China’s and Singapore’s — autocratic systems that put the interests of the community ahead of individual freedom; regimes that are organized for broad growth, not inequality.

Orban’s speech comes at a time when democracy is suffering a crisis of morale. Only 31 percent of Americans are “very satisfied” with their country’s direction, according to a 2013 Pew survey. Autocratic regimes — which feature populist economics, traditional social values, concentrated authority and hyped-up nationalism — are feeling confident and on the rise. Eighty-five percent of Chinese are very satisfied with their country’s course, according to the Pew survey.

It comes at a time when the battle of the regimes is playing out with special force in Africa. After the end of the Cold War, the number of African democracies shot upward. But many of those countries are now struggling politically (South Africa) or economically (Ghana). Meanwhile, authoritarian Rwanda is famously well managed.

China’s aggressive role in Africa is helping to support authoritarian tendencies across the continent, at least among the governing elites. Total Chinese trade with Africa has increased twentyfold since 2001. When Uganda was looking to hire a firm for an $8 billion rail expansion, only Chinese firms were invited to apply. Under Jacob Zuma, South Africa is trying to copy some Chinese features.

As Howard French, the author of “China’s Second Continent,” points out, China gives African authoritarians an investor who doesn’t ask too many questions. The centralized model represses unhappy minority groups. It gives local elites the illusion that if they concentrate power in their own hands they’ll be able to move decisively to lift their whole nation. (Every dictator thinks he’s Lee Kuan Yew.)

French notes that popular support for representative democracy runs deep in most African countries. But there have to be successful examples of capitalism for the masses. There have to be more Mwangis, a new style of emerging market hero, to renew faith in the system that makes such people possible.

President Obama is holding a summit meeting of African leaders in Washington this week. But U.S. influence on the continent is now pathetically small compared with the Chinese and Europeans. The joke among the attendees is that China invests money; America holds receptions.

But what happens in Africa will have global consequences in the battle of regimes. If African nations succumb to the delusion of autocracy, we’ll have Putins to deal with for decades to come.

Now here’s Mr. Bruni:

Kimberly Lantigua, 17, is an avid reader, but of a somewhat unusual oeuvre. Not long ago she worked her way through novels that spawned movies starring Meryl Streep, one of her favorite actresses. “The Devil Wears Prada” was a breeze. “Sophie’s Choice” is Kimberly’s unsummited Everest.

But for three weeks in July, she kept to a literary diet that focused on Plato, Aristotle, Thomas Hobbes and John Locke as she sat for several hours daily in a seminar at Columbia University titled “Freedom and Citizenship in Ancient, Modern and Contemporary Thought.”

On the morning when I dropped by, she and 14 other high school students between their junior and senior years were listening to their professor, Roosevelt Montás, discuss Jean-Jacques Rousseau’s treatise on “the social contract” and the balance of rights between an individual and a community.

Although the summer sun was shining like a cruel taunt outside the windows, the kids paid close attention, nodding and chiming in. There was no stealthy texting on smartphones. No fidgeting that I could see.

At a time when a lot of the talk about diminished social mobility in America is just that — talk, lip service, a wringing of hands rather than a springing into action — this seminar represents a bold exception, worthy of applause and emulation.

Most of the teenagers in the classroom with Kimberly — and most of another 15 in a separate section of the seminar — are minorities who were referred from the Double Discovery Center, a program in Upper Manhattan that couples undergraduate mentors from Columbia with New York City kids who hope to become the first in their families with college degrees.

This was the seminar’s sixth consecutive summer and the first in which the number of students rose to 30 from 15. The course intends to get them ready for higher education, and that isn’t unusual in and of itself. Many summer enrichment programs attempt as much.

But the distinction of this one and the reason it should be replicated is that it doesn’t focus on narrow disciplines, discrete skills, standardized tests. It doesn’t reduce learning to metrics or cast college as a bridge to a predetermined career.

It assumes that these kids, like any others, are hungry for big ideas. And it wagers that tugging them into sophisticated discussions will give them a fluency and confidence that could be the difference between merely getting to college and navigating it successfully, all the way to completion, which for poor kids is often the trickiest part of all.

Montás also wants for these kids what he wants for every college student (and what all of us should want for them as well). If the seminar is successful, he told me, they wind up seeing their place on a continuum that began millenniums ago, and they understand “their fundamental stake in our political debate.”

“They read the news differently,” he said. “They see themselves as political agents, able to participate.”

So as he toggled over the span of the seminar from the French Revolution to Obamacare, he wasn’t just connecting dots for them. He was rooting them in our noble, troubled democracy, and trying to turn them into enlightened caretakers of it.

For the course’s duration, thanks to funding from the Teagle Foundation and the Jack Miller Center, the kids live and eat free at Columbia. For Kimberly, who typically shares a two-bedroom apartment with her mother and five siblings, that was part of the lure. Another student, Mysterie Sylla, 17, told me that her time on campus was a reprieve from stints in foster care.

For every five kids in the seminar, there’s one teaching assistant, a Columbia undergraduate who will maintain contact with them over the next year and guide them through the college-application process. What a great model: Current college students who are blessed enough to be in the Ivy League extend a hand to would-be college students whose paths haven’t been easy.

The kids who completed Montás’s seminar in the summer of 2013 are bound this fall for a range of schools including Syracuse, Brandeis and, in three cases, Columbia itself.

Montás is the director of Columbia’s celebrated Core Curriculum, which requires freshmen and sophomores to dive into the Western canon. His summer seminar asks kids like Kimberly, who attends high school at the Manhattan Center for Science and Mathematics, to splash around in it.

She was intimidated only briefly by the texts. “Once Professor Montás walks you through them, they’re approachable,” she told me.

The proof was in her participation. I heard her pipe up repeatedly: about the meaning of liberty, about necessary checks on what she called our “innate thirst for total power.” Her voice was clear and strong.

I bet she wrestles Sophie to the ground soon enough. And I think that college could carry her far.

Brooks and Krugman

August 1, 2014

Bobo is busy playing “Let’s All Blame Teh Poors.”  In “The Character Factory” he has the unmitigated gall to say that antipoverty programs will continue to be ineffective until they integrate a robust understanding of character.  “Gemli” from Boston ends an extended comment with this:  “So the poor should not lament the outrageous income inequality, or fight to raise the pitiful minimum wage, but rather should learn to improve their character, accept their lot, and be the best darn hopeless drudges they can be.”  And tug the forelock when Bobo sweeps past on the way to his limo…  Prof. Krugman has a question in “Knowledge Isn’t Power:”  Why does ignorance rule in policy debates?  Here’s Bobo:

Nearly every parent on earth operates on the assumption that character matters a lot to the life outcomes of their children. Nearly every government antipoverty program operates on the assumption that it doesn’t.

Most Democratic antipoverty programs consist of transferring money, providing jobs or otherwise addressing the material deprivation of the poor. Most Republican antipoverty programs likewise consist of adjusting the economic incentives or regulatory barriers faced by the disadvantaged.

As Richard Reeves of the Brookings Institution pointed out recently in National Affairs, both orthodox progressive and conservative approaches treat individuals as if they were abstractions — as if they were part of a species of “hollow man” whose destiny is shaped by economic structures alone, and not by character and behavior.

It’s easy to understand why policy makers would skirt the issue of character. Nobody wants to be seen blaming the victim — spreading the calumny that the poor are that way because they don’t love their children enough, or don’t have good values. Furthermore, most sensible people wonder if government can do anything to alter character anyway.

The problem is that policies that ignore character and behavior have produced disappointing results. Social research over the last decade or so has reinforced the point that would have been self-evident in any other era — that if you can’t help people become more resilient, conscientious or prudent, then all the cash transfers in the world will not produce permanent benefits.

Walter Mischel’s famous marshmallow experiment demonstrated that delayed gratification skills learned by age 4 produce important benefits into adulthood. Carol Dweck’s work has shown that people who have a growth mind-set — who believe their basic qualities can be developed through hard work — do better than people who believe their basic talents are fixed and innate. Angela Duckworth has shown how important grit and perseverance are to lifetime outcomes. College students who report that they finish whatever they begin have higher grades than their peers, even ones with higher SATs. Spelling bee contestants who scored significantly higher on grit scores were 41 percent more likely to advance to later rounds than less resilient competitors.

Summarizing the research in this area, Reeves estimates that measures of drive and self-control influence academic achievement roughly as much as cognitive skills. Recent research has also shown that there are very different levels of self-control up and down the income scale. Poorer children grow up with more stress and more disruption, and these disadvantages produce effects on the brain. Researchers often use dull tests to see who can focus attention and stay on task. Children raised in the top income quintile were two-and-a-half times more likely to score well on these tests than students raised in the bottom quintile.

But these effects are reversible with the proper experiences.

People who have studied character development through the ages have generally found hectoring lectures don’t help. The superficial “character education” programs implanted into some schools of late haven’t done much either. Instead, sages over years have generally found at least four effective avenues to make it easier to climb. Government-supported programs can contribute in all realms.

First, habits. If you can change behavior you eventually change disposition. People who practice small acts of self-control find it easier to perform big acts in times of crisis. Quality preschools, K.I.P.P. schools and parenting coaches have produced lasting effects by encouraging young parents and students to observe basic etiquette and practice small but regular acts of self-restraint.

Second, opportunity. Maybe you can practice self-discipline through iron willpower. But most of us can only deny short-term pleasures because we see a realistic path between self-denial now and something better down the road. Young women who see affordable college prospects ahead are much less likely to become teen moms.

Third, exemplars. Character is not developed individually. It is instilled by communities and transmitted by elders. The centrist Democratic group Third Way suggests the government create a BoomerCorps. Every day 10,000 baby boomers turn 65, some of them could be recruited into an AmeriCorps-type program to help low-income families move up the mobility ladder.

Fourth, standards. People can only practice restraint after they have a certain definition of the sort of person they want to be. Research from Martin West of Harvard and others suggests that students at certain charter schools raise their own expectations for themselves, and judge themselves by more demanding criteria.

Character development is an idiosyncratic, mysterious process. But if families, communities and the government can envelop lives with attachments and institutions, then that might reduce the alienation and distrust that retards mobility and ruins dreams.

And maybe if people didn’t have to work 3 jobs to put food on the table and keep the lights on that might be easier, you poisonous turd.  Now here’s Prof. Krugman:

One of the best insults I’ve ever read came from Ezra Klein, who now is editor in chief of Vox.com. In 2007, he described Dick Armey, the former House majority leader, as “a stupid person’s idea of what a thoughtful person sounds like.”

It’s a funny line, which applies to quite a few public figures. Representative Paul Ryan, the chairman of the House Budget Committee, is a prime current example. But maybe the joke’s on us. After all, such people often dominate policy discourse. And what policy makers don’t know, or worse, what they think they know that isn’t so, can definitely hurt you.

What inspired these gloomy thoughts? Well, I’ve been looking at surveys from the Initiative on Global Markets, based at the University of Chicago. For two years, the initiative has been regularly polling a panel of leading economists, representing a wide spectrum of schools and political leanings, on questions that range from the economics of college athletes to the effectiveness of trade sanctions. It usually turns out that there is much less professional controversy about an issue than the cacophony in the news media might have led you to expect.

This was certainly true of the most recent poll, which asked whether the American Recovery and Reinvestment Act — the Obama “stimulus” — reduced unemployment. All but one of those who responded said that it did, a vote of 36 to 1. A follow-up question on whether the stimulus was worth it produced a slightly weaker but still overwhelming 25 to 2 consensus.

Leave aside for a moment the question of whether the panel is right in this case (although it is). Let me ask, instead, whether you knew that the pro-stimulus consensus among experts was this strong, or whether you even knew that such a consensus existed.

I guess it depends on where you get your economic news and analysis. But you certainly didn’t hear about that consensus on, say, CNBC — where one host was so astonished to hear yours truly arguing for higher spending to boost the economy that he described me as a “unicorn,” someone he could hardly believe existed.

More important, over the past several years policy makers across the Western world have pretty much ignored the professional consensus on government spending and everything else, placing their faith instead in doctrines most economists firmly reject.

As it happens, the odd man out — literally — in that poll on stimulus was Professor Alberto Alesina of Harvard. He has claimed that cuts in government spending are actually expansionary, but relatively few economists agree, pointing to work at the International Monetary Fund and elsewhere that seems to refute his claims. Nonetheless, back when European leaders were making their decisive and disastrous turn toward austerity, they brushed off warnings that slashing spending in depressed economies would deepen their depression. Instead, they listened to economists telling them what they wanted to hear. It was, as Bloomberg Businessweek put it, “Alesina’s hour.”

Am I saying that the professional consensus is always right? No. But when politicians pick and choose which experts — or, in many cases, “experts” — to believe, the odds are that they will choose badly. Moreover, experience shows that there is no accountability in such matters. Bear in mind that the American right is still taking its economic advice mainly from people who have spent many years wrongly predicting runaway inflation and a collapsing dollar.

All of which raises a troubling question: Are we as societies even capable of taking good policy advice?

Economists used to assert confidently that nothing like the Great Depression could happen again. After all, we know far more than our great-grandfathers did about the causes of and cures for slumps, so how could we fail to do better? When crises struck, however, much of what we’ve learned over the past 80 years was simply tossed aside.

The only piece of our system that seemed to have learned anything from history was the Federal Reserve, and the Fed’s actions under Ben Bernanke, continuing under Janet Yellen, are arguably the only reason we haven’t had a full replay of the Depression. (More recently, the European Central Bank under Mario Draghi, another place where expertise still retains a toehold, has pulled Europe back from the brink to which austerity brought it.) Sure enough, there are moves afoot in Congress to take away the Fed’s freedom of action. Not a single member of the Chicago experts panel thinks this would be a good idea, but we’ve seen how much that matters.

And macroeconomics, of course, isn’t the only challenge we face. In fact, it should be easy compared with many other issues that need to be addressed with specialized knowledge, above all climate change. So you really have to wonder whether and how we’ll avoid disaster.


Follow

Get every new post delivered to your Inbox.

Join 161 other followers