Archive for the ‘Krugman’ Category

Krugman, solo

September 29, 2014

Mr. Blow is off today.  In “Our Invisible Rich” Prof. Krugman says they have become so wealthy that most Americans can’t imagine how much they’re worth.  Here he is:

Half a century ago, a classic essay in The New Yorker titled “Our Invisible Poor” took on the then-prevalent myth that America was an affluent society with only a few “pockets of poverty.” For many, the facts about poverty came as a revelation, and Dwight Macdonald’s article arguably did more than any other piece of advocacy to prepare the ground for Lyndon Johnson’s War on Poverty.

I don’t think the poor are invisible today, even though you sometimes hear assertions that they aren’t really living in poverty — hey, some of them have Xboxes! Instead, these days it’s the rich who are invisible.

But wait — isn’t half our TV programming devoted to breathless portrayal of the real or imagined lifestyles of the rich and fatuous? Yes, but that’s celebrity culture, and it doesn’t mean that the public has a good sense either of who the rich are or of how much money they make. In fact, most Americans have no idea just how unequal our society has become.

The latest piece of evidence to that effect is a survey asking people in various countries how much they thought top executives of major companies make relative to unskilled workers. In the United States the median respondent believed that chief executives make about 30 times as much as their employees, which was roughly true in the 1960s — but since then the gap has soared, so that today chief executives earn something like 300 times as much as ordinary workers.

So Americans have no idea how much the Masters of the Universe are paid, a finding very much in line with evidence that Americans vastly underestimate the concentration of wealth at the top.

Is this just a reflection of the innumeracy of hoi polloi? No — the supposedly well informed often seem comparably out of touch. Until the Occupy movement turned the “1 percent” into a catchphrase, it was all too common to hear prominent pundits and politicians speak about inequality as if it were mainly about college graduates versus the less educated, or the top fifth of the population versus the bottom 80 percent.

And even the 1 percent is too broad a category; the really big gains have gone to an even tinier elite. For example, recent estimates indicate not only that the wealth of the top percent has surged relative to everyone else — rising from 25 percent of total wealth in 1973 to 40 percent now — but that the great bulk of that rise has taken place among the top 0.1 percent, the richest one-thousandth of Americans.

So how can people be unaware of this development, or at least unaware of its scale? The main answer, I’d suggest, is that the truly rich are so removed from ordinary people’s lives that we never see what they have. We may notice, and feel aggrieved about, college kids driving luxury cars; but we don’t see private equity managers commuting by helicopter to their immense mansions in the Hamptons. The commanding heights of our economy are invisible because they’re lost in the clouds.

The exceptions are celebrities, who live their lives in public. And defenses of extreme inequality almost always invoke the examples of movie and sports stars. But celebrities make up only a tiny fraction of the wealthy, and even the biggest stars earn far less than the financial barons who really dominate the upper strata. For example, according to Forbes, Robert Downey Jr. is the highest-paid actor in America, making $75 million last year. According to the same publication, in 2013 the top 25 hedge fund managers took home, on average, almost a billion dollars each.

Does the invisibility of the very rich matter? Politically, it matters a lot. Pundits sometimes wonder why American voters don’t care more about inequality; part of the answer is that they don’t realize how extreme it is. And defenders of the superrich take advantage of that ignorance. When the Heritage Foundation tells us that the top 10 percent of filers are cruelly burdened, because they pay 68 percent of income taxes, it’s hoping that you won’t notice that word “income” — other taxes, such as the payroll tax, are far less progressive. But it’s also hoping you don’t know that the top 10 percent receive almost half of all income and own 75 percent of the nation’s wealth, which makes their burden seem a lot less disproportionate.

Most Americans say, if asked, that inequality is too high and something should be done about it — there is overwhelming support for higher minimum wages, and a majority favors higher taxes at the top. But at least so far confronting extreme inequality hasn’t been an election-winning issue. Maybe that would be true even if Americans knew the facts about our new Gilded Age. But we don’t know that. Today’s political balance rests on a foundation of ignorance, in which the public has no idea what our society is really like.

Brooks and Krugman

September 26, 2014

In “The Good Order” Bobo gurgles that the arduous work of imposing order is critical to success in any realm, from the international state system to one’s own mind.  “MetroJournalist” from the metropolitan NY area wins the internets today with this comment:  “Mr. Brooks, you forgot to mention that every morning, TPTB at The New York Times, wake up, have coffee, go to their desks and fail to understand that there are some columnists who need to be replaced by people who have something worthier to write about.”  I do so hope that Bobo reads the comments…  Prof. Krugman has questions about “The Show-Off Society:”  Has there been an explosion of elite ostentation? If so, does it reflect moral decline, or a change in circumstances?  Here’s Bobo:

When she was writing, Maya Angelou would get up every morning at 5:30 and have coffee at 6. At 6:30, she would go off to a hotel room she kept — a small modest room with nothing but a bed, desk, Bible, dictionary, deck of cards and bottle of sherry. She would arrive at the room at 7 a.m. and write until 12:30 p.m. or 2 o’clock.

John Cheever would get up, put on his only suit, ride the elevator in his apartment building down to a storage room in the basement. Then he’d take off his suit and sit in his boxers and write until noon. Then he’d put the suit back on and ride upstairs to lunch.

Anthony Trollope would arrive at his writing table at 5:30 each morning. His servant would bring him the same cup of coffee at the same time. He would write 250 words every 15 minutes for two and a half hours every day. If he finished a novel without writing his daily 2,500 words, he would immediately start a new novel to complete his word allotment.

I was reminded of these routines by a book called “Daily Rituals: How Artists Work,” compiled by Mason Currey.

The vignettes remind you how hard creative people work. Most dedicate their whole life to work. “I cannot imagine life without work as really comfortable,” Sigmund Freud wrote.

But you’re primarily struck by the fact that creative people organize their lives according to repetitive, disciplined routines. They think like artists but work like accountants. “I know that to sustain these true moments of insight, one has to be highly disciplined, lead a disciplined life,” Henry Miller declared.

“Routine, in an intelligent man, is a sign of ambition,” W.H. Auden observed.

Auden checked his watch constantly, making sure each task filled no more than its allotted moment. “A modern stoic,” he argued, “knows that the surest way to discipline passion is to discipline time; decide what you want or ought to do during the day, then always do it at exactly the same moment every day, and passion will give you no trouble.”

People who lead routine, anal-retentive lives have a bad reputation in our culture. But life is paradoxical. In situation after situation, this pattern recurs: order and discipline are the prerequisites for creativity and daring.

This is true on so many levels. Children need emotional and physical order so they can go off and explore. A parent’s main job is to provide daily predictability and emotional security.

Communities need order to thrive and cooperate since where there is chaos and disorder there is distrust and withdrawal. The main job of local leaders is to provide the basic infrastructure of security: roads, police, honest judges and orderly schools.

The world needs order, too, a set of assumed norms and routines that all nations adhere to. You can’t have freedom, trust, democracy and self-determination when thugs like Vladimir Putin of Russia are rampaging across borders and monsters like the Islamic State are killing innocents.

The world’s superpower has a hard and unpleasant duty. The United States is obligated to organize coalitions to impose rule of law — to beat back the wolves and maintain that order.

Building and maintaining order — whether artistic, political or global — seems elementary, but it’s surprisingly hard. Writers have to go to amazing lengths to impose order on their own unruly minds — going off to basement storage rooms. W. Somerset Maugham refused to work in a room with a view. He liked facing a bare wall. It requires toughness of mind and rigid discipline to properly serve your own work.

Preserving world order is even harder. President Obama showed that kind of toughness in his United Nations address this week (you knew I was going to make this leap). It was one of the finest speeches of his presidency.

During his public life, Obama has hit the high notes of poetic romance — his 2008 campaign. He has also hit some prosaic notes of caution, realism and inaction. But this speech blended the two tones. It put tough-minded realism at the service of a high calling.

The speech was about defending the world order against enemies like ISIS and Putin. Breaking with past emphasis, he acknowledged that sometimes you have to use military might to fight off a military threat. He acknowledged that power-hungry thugs aren’t appeased if you try to show them how nonthreatening and reasonable you are. Obama cast off his cloak of reluctance and more aggressively championed democracy than he has recently. He was direct and forthright.

We’ll see what action comes behind the words. But the larger point is that the order of global civilization, like the order in a poet’s mind, is something that has to be fought and imposed every day. The best life is a series of daring excursions from a secure and orderly base.

I wonder if Bobo reads books on creativity in hopes of learning how to be less of a hack…  Here’s Prof. Krugman:

Liberals talk about circumstances; conservatives talk about character.

This intellectual divide is most obvious when the subject is the persistence of poverty in a wealthy nation. Liberals focus on the stagnation of real wages and the disappearance of jobs offering middle-class incomes, as well as the constant insecurity that comes with not having reliable jobs or assets. For conservatives, however, it’s all about not trying hard enough. The House speaker, John Boehner, says that people have gotten the idea that they “really don’t have to work.” Mitt Romney chides lower-income Americans as being unwilling to “take personal responsibility.” Even as he declares that he really does care about the poor, Representative Paul Ryan attributes persistent poverty to lack of “productive habits.”

Let us, however, be fair: some conservatives are willing to censure the rich, too. Running through much recent conservative writing is the theme that America’s elite has also fallen down on the job, that it has lost the seriousness and restraint of an earlier era. Peggy Noonan writes about our “decadent elites,” who make jokes about how they are profiting at the expense of the little people. Charles Murray, whose book “Coming Apart” is mainly about the alleged decay of values among the white working class, also denounces the “unseemliness” of the very rich, with their lavish lifestyles and gigantic houses.

But has there really been an explosion of elite ostentation? And, if there has, does it reflect moral decline, or a change in circumstances?

I’ve just reread a remarkable article titled “How top executives live,” originally published in Fortune in 1955 and reprinted a couple of years ago. It’s a portrait of America’s business elite two generations ago, and it turns out that the lives of an earlier generation’s elite were, indeed, far more restrained, more seemly if you like, than those of today’s Masters of the Universe.

“The executive’s home today,” the article tells us, “is likely to be unpretentious and relatively small — perhaps seven rooms and two and a half baths.” The top executive owns two cars and “gets along with one or two servants.” Life is restrained in other ways, too: “Extramarital relations in the top American business world are not important enough to discuss.” Actually, I’m sure there was plenty of hanky-panky, but people didn’t flaunt it. The elite of 1955 at least pretended to set a good example of responsible behavior.

But before you lament the decline in standards, there’s something you should know: In celebrating America’s sober, modest business elite, Fortune described this sobriety and modesty as something new. It contrasted the modest houses and motorboats of 1955 with the mansions and yachts of an earlier generation. And why had the elite moved away from the ostentation of the past? Because it could no longer afford to live that way. The large yacht, Fortune tells us, “has foundered in the sea of progressive taxation.”

But that sea has since receded. Giant yachts and enormous houses have made a comeback. In fact, in places like Greenwich, Conn., some of the “outsize mansions” Fortune described as relics of the past have been replaced with even bigger mansions.

And there’s no mystery about what happened to the good-old days of elite restraint. Just follow the money. Extreme income inequality and low taxes at the top are back. For example, in 1955 the 400 highest-earning Americans paid more than half their incomes in federal taxes, but these days that figure is less than a fifth. And the return of lightly taxed great wealth has, inevitably, brought a return to Gilded Age ostentation.

Is there any chance that moral exhortations, appeals to set a better example, might induce the wealthy to stop showing off so much? No.

It’s not just that people who can afford to live large tend to do just that. As Thorstein Veblen told us long ago, in a highly unequal society the wealthy feel obliged to engage in “conspicuous consumption,” spending in highly visible ways to demonstrate their wealth. And modern social science confirms his insight. For example, researchers at the Federal Reserve have shown that people living in highly unequal neighborhoods are more likely to buy luxury cars than those living in more homogeneous settings. Pretty clearly, high inequality brings a perceived need to spend money in ways that signal status.

The point is that while chiding the rich for their vulgarity may not be as offensive as lecturing the poor on their moral failings, it’s just as futile. Human nature being what it is, it’s silly to expect humility from a highly privileged elite. So if you think our society needs more humility, you should support policies that would reduce the elite’s privileges.

Krugman, solo

September 22, 2014

Prof. Krugman has the place to himself today, since Mr. Blow had a long piece yesterday.  In “Those Lazy Jobless” he says Republicans are still at it, blaming the victims of a depressed economy.  Here he is:

Last week John Boehner, the speaker of the House, explained to an audience at the American Enterprise Institute what’s holding back employment in America: laziness. People, he said, have “this idea” that “I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around.” Holy 47 percent, Batman!

It’s hardly the first time a prominent conservative has said something along these lines. Ever since a financial crisis plunged us into recession it has been a nonstop refrain on the right that the unemployed aren’t trying hard enough, that they are taking it easy thanks to generous unemployment benefits, which are constantly characterized as “paying people not to work.” And the urge to blame the victims of a depressed economy has proved impervious to logic and evidence.

But it’s still amazing — and revealing — to hear this line being repeated now. For the blame-the-victim crowd has gotten everything it wanted: Benefits, especially for the long-term unemployed, have been slashed or eliminated. So now we have rants against the bums on welfare when they aren’t bums — they never were — and there’s no welfare. Why?

First things first: I don’t know how many people realize just how successful the campaign against any kind of relief for those who can’t find jobs has been. But it’s a striking picture. The job market has improved lately, but there are still almost three million Americans who have been out of work for more than six months, the usual maximum duration of unemployment insurance. That’s nearly three times the pre-recession total. Yet extended benefits for the long-term unemployed have been eliminated — and in some states the duration of benefits has been slashed even further.

The result is that most of the unemployed have been cut off. Only 26 percent of jobless Americans are receiving any kind of unemployment benefit, the lowest level in many decades. The total value of unemployment benefits is less than 0.25 percent of G.D.P., half what it was in 2003, when the unemployment rate was roughly the same as it is now. It’s not hyperbole to say that America has abandoned its out-of-work citizens.

Strange to say, this outbreak of anti-compassionate conservatism hasn’t produced a job surge. In fact, the whole proposition that cruelty is the key to prosperity hasn’t been faring too well lately. Last week Nathan Deal, the Republican governor of Georgia, complained that many states with Republican governors have seen a rise in unemployment and suggested that the feds were cooking the books. But maybe the right’s preferred policies don’t work?

That is, however, a topic for another column. My question for today is instead one of psychology and politics: Why is there so much animus against the unemployed, such a strong conviction that they’re getting away with something, at a time when they’re actually being treated with unprecedented harshness?

Now, as anyone who has studied British policy during the Irish famine knows, self-righteous cruelty toward the victims of disaster, especially when the disaster goes on for an extended period, is common in history. Still, Republicans haven’t always been like this. In the 1930s they denounced the New Deal and called for free-market solutions — but when Alf Landon accepted the 1936 presidential nomination, he also emphasized the “plain duty” of “caring for the unemployed until recovery is attained.” Can you imagine hearing anything similar from today’s G.O.P.?

Is it race? That’s always a hypothesis worth considering in American politics. It’s true that most of the unemployed are white, and they make up an even larger share of those receiving unemployment benefits. But conservatives may not know this, treating the unemployed as part of a vaguely defined, dark-skinned crowd of “takers.”

My guess, however, is that it’s mainly about the closed information loop of the modern right. In a nation where the Republican base gets what it thinks are facts from Fox News and Rush Limbaugh, where the party’s elite gets what it imagines to be policy analysis from the American Enterprise Institute or the Heritage Foundation, the right lives in its own intellectual universe, aware of neither the reality of unemployment nor what life is like for the jobless. You might think that personal experience — almost everyone has acquaintances or relatives who can’t find work — would still break through, but apparently not.

Whatever the explanation, Mr. Boehner was clearly saying what he and everyone around him really thinks, what they say to each other when they don’t expect others to hear. Some conservatives have been trying to reinvent their image, professing sympathy for the less fortunate. But what their party really believes is that if you’re poor or unemployed, it’s your own fault.

Brooks and Krugman

September 19, 2014

Oh, gawd…  Bobo has a question in “Startling Adult Friendships:”  How would you spend $500 million? He’s got a few ideas.  In the comments “Claus Gehner” from Seattle and Munich had this to say:  “Mr. Brooks’ editorials of late have been a bit – how shall I put it – weird. This one ascends to new heights of weirdness.”  Bobo’s obviously going through some prolonged midlife crisis.  I just wish he’d keep it to himself.  Prof. Krugman, in “Errors and Emissions,” says fighting climate change could be cheaper and easier than almost anyone imagines if we wouldn’t give in to the despair.  Here, dear sweet Baby Jesus help us, is Bobo:

Somebody recently asked me what I would do if I had $500 million to give away. My first thought was that I’d become a moderate version of the Koch brothers. I’d pay for independent candidates to run against Democratic or Republican members of Congress who veered too far into their party’s fever swamps.

But then I realized that if I really had that money, I’d want to affect a smaller number of people in a more personal and profound way. The big, established charities are already fighting disease and poverty as best they can, so in search of new directions I thought, oddly, of friendship.

Ancient writers from Aristotle to Cicero to Montaigne described friendship as the pre-eminent human institution. You can go without marriage, or justice, or honor, but friendship is indispensable to life. Each friendship, they continued, has positive social effects. Lovers face each other, but friends stand side-by-side, facing the world — often working on its behalf. Aristotle suggested that friendship is the cornerstone of society. Montaigne thought that it spreads universal warmth.

These writers probably romanticized friendship. One senses that they didn’t know how to have real conversations with the women in their lives, so they poured their whole emotional lives into male friendships. But I do think they were right in pointing out that friendship is a personal relationship that has radiating social and political benefits.

In the first place, friendship helps people make better judgments. So much of deep friendship is thinking through problems together: what job to take; whom to marry. Friendship allows you to see your own life but with a second sympathetic self.

Second, friends usually bring out better versions of each other. People feel unguarded and fluid with their close friends. If you’re hanging around with a friend, smarter and funnier thoughts tend to come burbling out.

Finally, people behave better if they know their friends are observing. Friendship is based, in part, on common tastes and interests, but it is also based on mutual admiration and reciprocity. People tend to want to live up to their friends’ high regard. People don’t have close friendships in any hope of selfish gain, but simply for the pleasure itself of feeling known and respected.

It’s also true that friendship is not in great shape in America today. In 1985, people tended to have about three really close friends, according to the General Social Survey. By 2004, according to research done at Duke University and the University of Arizona, they were reporting they had only two close confidants. The number of people who say they have no close confidants at all has tripled over that time.

People seem to have a harder time building friendships across class lines. As society becomes more unequal and segmented, invitations come to people on the basis of their job status. Middle-aged people have particular problems nurturing friendships and building new ones. They are so busy with work and kids that friendship gets squeezed out.

So, in the fantasy world in which I have $500 million, I’d try to set up places that would cultivate friendships. I know a lot of people who have been involved in fellowship programs. They made friends that ended up utterly transforming their lives. I’d try to take those sorts of networking programs and make them less career oriented and more profound.

To do that, you have to get people out of their normal hunting grounds where their guard is up. You also probably want to give them challenging activities to do together. Nothing inspires friendship like selflessness and cooperation in moments of difficulty. You also want to give them moments when they can share confidences, about big ideas and small worries.

So I envision a string of adult camps or retreat centers (my oldest friendships were formed at summer camp, so I think in those terms). Groups of 20 or 30 would be brought together from all social and demographic groups, and secluded for two weeks. They’d prepare and clean up all their meals together, and eating the meals would go on for a while. In the morning, they would read about and discuss big topics. In the afternoons, they’d play sports, take hikes and build something complicated together. At night, there’d be a bar and music.

You couldn’t build a close friendship in that time, but you could plant the seeds for one. As with good fellowship programs, alumni networks would grow spontaneously over time.

People these days are flocking to conferences, ideas festivals and cruises that are really about building friendships, even if they don’t admit it explicitly. The goal of these intensity retreats would be to spark bonds between disparate individuals who, in the outside world, would be completely unlikely to know each other. The benefits of that social bridging, while unplannable, would ripple out in ways long and far-reaching.

It’s sad to think that Bobo can’t think of another way to form friendships other than what sounds very much like a reeducation camp for people like him…  Here’s Prof. Krugman:

This just in: Saving the planet would be cheap; it might even be free. But will anyone believe the good news?

I’ve just been reading two new reports on the economics of fighting climate change: a big study by a blue-ribbon international group, the New Climate Economy Project, and a working paper from the International Monetary Fund. Both claim that strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth. This may sound too good to be true, but it isn’t. These are serious, careful analyses.

But you know that such assessments will be met with claims that it’s impossible to break the link between economic growth and ever-rising emissions of greenhouse gases, a position I think of as “climate despair.” The most dangerous proponents of climate despair are on the anti-environmentalist right. But they receive aid and comfort from other groups, including some on the left, who have their own reasons for getting it wrong.

Where is the new optimism about climate change and growth coming from? It has long been clear that a well-thought-out strategy of emissions control, in particular one that puts a price on carbon via either an emissions tax or a cap-and-trade scheme, would cost much less than the usual suspects want you to think. But the economics of climate protection look even better now than they did a few years ago.

On one side, there has been dramatic progress in renewable energy technology, with the costs of solar power, in particular, plunging, down by half just since 2010. Renewables have their limitations — basically, the sun doesn’t always shine, and the wind doesn’t always blow — but if you think that an economy getting a lot of its power from wind farms and solar panels is a hippie fantasy, you’re the one out of touch with reality.

On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the I.M.F. paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity.

And thanks to these co-benefits, the paper argues, one argument often made against carbon pricing — that it’s not worth doing unless we can get a global agreement — is wrong. Even without an international agreement, there are ample reasons to take action against the climate threat.

But back to the main point: It’s easier to slash emissions than seemed possible even a few years ago, and reduced emissions would produce large benefits in the short-to-medium run. So saving the planet would be cheap and maybe even come free.

Enter the prophets of climate despair, who wave away all this analysis and declare that the only way to limit carbon emissions is to bring an end to economic growth.

You mostly hear this from people on the right, who normally say that free-market economies are endlessly flexible and creative. But when you propose putting a price on carbon, suddenly they insist that industry will be completely incapable of adapting to changed incentives. Why, it’s almost as if they’re looking for excuses to avoid confronting climate change, and, in particular, to avoid anything that hurts fossil-fuel interests, no matter how beneficial to everyone else.

But climate despair produces some odd bedfellows: Koch-fueled insistence that emission limits would kill economic growth is echoed by some who see this as an argument not against climate action, but against growth. You can find this attitude in the mostly European “degrowth” movement, or in American groups like the Post Carbon Institute; I’ve encountered claims that saving the planet requires an end to growth at left-leaning meetings on “rethinking economics.” To be fair, anti-growth environmentalism is a marginal position even on the left, but it’s widespread enough to call out nonetheless.

And you sometimes see hard scientists making arguments along the same lines, largely (I think) because they don’t understand what economic growth means. They think of it as a crude, physical thing, a matter simply of producing more stuff, and don’t take into account the many choices — about what to consume, about which technologies to use — that go into producing a dollar’s worth of G.D.P.

So here’s what you need to know: Climate despair is all wrong. The idea that economic growth and climate action are incompatible may sound hardheaded and realistic, but it’s actually a fuzzy-minded misconception. If we ever get past the special interests and ideology that have blocked action to save the planet, we’ll find that it’s cheaper and easier than almost anyone imagines.

Blow and Krugman

September 15, 2014

In “Ray Rice and His Rage” Mr. Blow says domestic violence is a societal scourge that must be constantly called out and constantly condemned.  In “How to Get It Wrong” Prof. Krugman says economists were worse than economics and policy makers were worse still.  Here’s Mr. Blow:

The sordid Ray Rice scandal has opened a much-needed dialogue about domestic violence.

In February Rice and Janay Palmer, then his fiancée and now his wife, had an altercation at an Atlantic City casino that left Palmer unconscious. A tape surfaced of Rice dragging Palmer’s limp body from the elevator, hovering over her. At no point does he appear to attend to her, appear shocked at what he has done to her or appear to have much concern for her at all.

He doesn’t even pull down her skirt.

The next month a grand jury indicted Rice on a charge of third-degree aggravated assault.

The Baltimore Ravens’ coach, John Harbaugh, stood by Rice, saying, “He will be part of our team,” and continuing:

“He’s a person of character. The thing that’s really important is to be able to support the person without condoning the action. He makes a mistake. There’s no justifying what happened. When you drink too much in public, those kind of things happen.”

Whatever one may think of Rice’s character, “those kind of things” don’t just “happen.” That is too casual a dismissal of a very serious issue.

In May Rice was accepted into a pretrial diversion program that allowed him to avoid prosecution. A couple of days later Rice held a news conference with his wife by his side. He apologized to his coaches, his fans and “everyone who was affected by this situation that me and my wife were in.” He did not, however, use that opportunity to publicly apologize to his wife, although he thanked her for loving him “where I was weak and building up where I was strong.” He said that he and his wife had been in therapy and that the therapy had been helpful.

He even attempted to defend himself using the most unfortunate of metaphors: “One thing I can say is that sometimes in life, you will fail. But I won’t call myself a failure. Failure is not getting knocked down; it’s not getting back up.”

His wife said at the news conference: “I do deeply regret the role I played in the incident that night.” It was a line that caused many to cringe. It is hard to feel anything but sadness for her.

The N.F.L. suspended Rice for a measly two games. The nation was outraged, but the league defended its decision. But then another tape was made public showing Rice and Palmer in the elevator, with him punching her in the face and knocking her unconscious. Now the N.F.L. and the Ravens were embarrassed, and their callous lack of concern for the abuse of an intimate partner was laid bare. The Ravens released Rice, and the N.F.L. suspended him indefinitely.

Now, there are many issues here.

How was Rice able to avoid trial on the original charge? Why did it take the second tape for the N.F.L. to act more forcefully in the case? Did anyone at the N.F.L. see the second tape before it was made public? Could anyone have if he’d tried harder to find it? It seems that there were multiple failures here.

But, in a way, those are secondary to the issue of the abuse itself and why people stay in relationships with abusers.

It is a couple’s decision — individually and jointly — whether a union is salvageable and worth the effort to save it. But too often, victims of abuse feel that they have no choice. They can end up staying with an abuser for myriad complex reasons, many of which are regrettable. Often, they just feel trapped. Staying doesn’t excuse the abuse itself, and it can actually embolden the abuser.

We must treat intimate partner violence for what it is: a societal scourge that must be constantly called out and constantly condemned.

According to the Centers for Disease Control and Prevention, “More than one-third of women in the United States (35.6 percent, or approximately 42.4 million) have experienced rape, physical violence and/or stalking by an intimate partner at some point in their lifetime,” and nearly one in three women have experienced physical violence by an intimate partner. To put some of this in percentage terms, 30.3 percent of women in the United States have been “slapped, pushed, or shoved by an intimate partner” in their lifetime.

This is, of course, not just a United States issue. As the United Nations makes clear, “Violence against women is a universal phenomenon.” According to the U.N., “Up to seven in 10 women around the world experience physical and/or sexual violence at some point in their lifetime,” and “603 million women live in countries where domestic violence is not yet considered a crime.”

If there is anything to be optimistic about, it is this: According to a Department of Justice report issued in April, “The rate of domestic violence declined 63 percent, from 13.5 victimizations per 1,000 persons age 12 or older in 1994 to 5.0 per 1,000 in 2012.”

We can push these numbers even lower, but first we need people like Rice, the Ravens and those in the N.F.L. to behave more honorably than they have in this case.

Now here’s Prof. Krugman:

Last week I participated in a conference organized by Rethinking Economics, a student-run group hoping to promote, you guessed it, a rethinking of economics. And Mammon knows that economics needs rethinking in the wake of a disastrous crisis, a crisis that was neither predicted nor prevented.

It seems to me, however, that it’s important to realize that the enormous intellectual failure of recent years took place at several levels. Clearly, economics as a discipline went badly astray in the years — actually decades — leading up to the crisis. But the failings of economics were greatly aggravated by the sins of economists, who far too often let partisanship or personal self-aggrandizement trump their professionalism. Last but not least, economic policy makers systematically chose to hear only what they wanted to hear. And it is this multilevel failure — not the inadequacy of economics alone — that accounts for the terrible performance of Western economies since 2008.

In what sense did economics go astray? Hardly anyone predicted the 2008 crisis, but that in itself is arguably excusable in a complicated world. More damning was the widespread conviction among economists that such a crisis couldn’t happen. Underlying this complacency was the dominance of an idealized vision of capitalism, in which individuals are always rational and markets always function perfectly.

Now, idealized models have a useful role to play in economics (and indeed in any discipline), as ways to clarify your thinking. But starting in the 1980s it became harder and harder to publish anything questioning these idealized models in major journals. Economists trying to take account of imperfect reality faced what Harvard’s Kenneth Rogoff, hardly a radical figure (and someone I’ve sparred with) once called “new neoclassical repression.” And it should go without saying that assuming away irrationality and market failure meant assuming away the very possibility of the kind of catastrophe that overtook the developed world six years ago.

Still, many applied economists retained a more realistic vision of the world, and textbook macroeconomics, while it didn’t predict the crisis, did a pretty good job of predicting how things would play out in the aftermath. Low interest rates in the face of big budget deficits, low inflation in the face of a rapidly growing money supply, and sharp economic contraction in countries imposing fiscal austerity came as surprises to the talking heads on TV, but they were just what the basic models predicted under the conditions that prevailed postcrisis.

But while economic models didn’t perform all that badly after the crisis, all too many influential economists did — refusing to acknowledge error, letting naked partisanship trump analysis, or both. “Hey, I claimed that another depression wasn’t possible, but I wasn’t wrong, it’s all because businesses are reacting to the future failure of Obamacare.”

You might say that this is just human nature, and it’s true that while the most shocking intellectual malfeasance has come from conservative economists, some economists on the left have also seemed more interested in defending their turf and sniping at professional rivals than in getting it right. Still, this bad behavior has come as a shock, especially to those who thought we were having a real conversation.

But would it have mattered if economists had behaved better? Or would people in power have done the same thing regardless?

If you imagine that policy makers have spent the past five or six years in thrall to economic orthodoxy, you’ve been misled. On the contrary, key decision makers have been highly receptive to innovative, unorthodox economic ideas — ideas that also happen to be wrong but which offered excuses to do what these decision makers wanted to do anyway.

The great majority of policy-oriented economists believe that increasing government spending in a depressed economy creates jobs, and that slashing it destroys jobs — but European leaders and U.S. Republicans decided to believe the handful of economists asserting the opposite. Neither theory nor history justifies panic over current levels of government debt, but politicians decided to panic anyway, citing unvetted (and, it turned out, flawed) research as justification.

I’m not saying either that economics is in good shape or that its flaws don’t matter. It isn’t, they do, and I’m all for rethinking and reforming a field.

The big problem with economic policy is not, however, that conventional economics doesn’t tell us what to do. In fact, the world would be in much better shape than it is if real-world policy had reflected the lessons of Econ 101. If we’ve made a hash of things — and we have — the fault lies not in our textbooks, but in ourselves.

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.

Blow and Krugman

September 8, 2014

In “Crime, Bias and Statistics” Mr. Blow says a new report by the Sentencing Project lays bare the systemic effects of racial distortion.  Prof. Krugman says “Scots, What the Heck?” and outlines the very bad economics of independence.  Here’s Mr. Blow:

Discussions of the relationship between blacks and the criminal justice system in this country too often grind to a halt as people slink down into their silos and arm themselves with their best rhetorical weapons — racial bias on one side and statistics in which minorities, particularly blacks, are overrepresented as criminals on the other.

What I find too often overlooked in this war of words is the intersection between the two positions, meaning the degree to which bias informs the statistics and vice versa.

The troubling association — in fact, overassociation — of blacks with criminality directly affects the way we think about both crime and blacks as a whole.

A damning report released by the Sentencing Project last week lays bare the bias and the interconnecting systemic structures that reinforce it and disproportionately affect African-Americans.

This is the kind of report that one really wants to publish in its totality, for its conclusion is such a powerful condemnation of the perversity of racial oppression. But alas, this being a newspaper column, that’s not possible. Still, allow me to present many of their findings:

• “Whites are more punitive than blacks and Hispanics even though they experience less crime.”

• “White Americans overestimate the proportion of crime committed by people of color and associate people of color with criminality. For example, white respondents in a 2010 survey overestimated the actual share of burglaries, illegal drug sales and juvenile crime committed by African-Americans by 20 percent to 30 percent.”

• “White Americans who associate crime with blacks and Latinos are more likely to support punitive policies — including capital punishment and mandatory minimum sentencing — than whites with weaker racial associations of crime.”

This association of crime with blacks has been noted by others. Lisa Bloom, in her book “Suspicion Nation,” points out: “While whites can and do commit a great deal of minor and major crimes, the race as a whole is never tainted by those acts. But when blacks violate the law, all members of the race are considered suspect.”

She further says: “The standard assumption that criminals are black and blacks are criminals is so prevalent that in one study, 60 percent of viewers who viewed a crime story with no picture of the perpetrator falsely recalled seeing one, and of those, 70 percent believed he was African-American. When we think about crime, we ‘see black,’ even when it’s not present at all.”

As the Sentencing Project report makes clear, the entire government and media machinery is complicit in the distortion.

According to the report:

• “Whether acting on their own implicit biases or bowing to political exigency, policy makers have fused crime and race in their policy initiatives and statements. They have crafted harsh sentencing laws that impact all Americans and disproportionately incarcerate people of color.”

• “Many media outlets reinforce the public’s racial misconceptions about crime by presenting African-Americans and Latinos differently than whites — both quantitatively and qualitatively. Television news programs and newspapers overrepresent racial minorities as crime suspects and whites as crime victims.”

• “Disparities in police stops, in prosecutorial charging, and in bail and sentencing decisions reveal that implicit racial bias has penetrated all corners of the criminal justice system.”

The effects of these perceptions and policies have been absolutely devastating for society in general and black people in particular. According to the report:

• “By increasing support for punitive policies, racial perceptions of crime have made sentencing more severe for all Americans. The United States now has the world’s highest imprisonment rate, with one in nine prisoners serving life sentences. Racial perceptions of crime, combined with other factors, have led to the disparate punishment of people of color. Although blacks and Latinos together comprise just 30 percent of the general population, they account for 58 percent of the prison population.”

• “By increasing the scale of criminal sanctions and disproportionately directing penalties toward people of color, racial perceptions of crime have been counterproductive for public safety. Racial minorities’ perceptions of unfairness in the criminal justice system have dampened cooperation with police work and impeded criminal trials. In 2013, over two-thirds of African-Americans saw the criminal justice system as biased against blacks, in contrast to one-quarter of whites. Crime policies that disproportionately target people of color can increase crime rates by concentrating the effects of criminal labeling and collateral consequences on racial minorities and by fostering a sense of legal immunity among whites.”

There is no way in this country to discuss crime statistics without including in that discussion the myriad ways in which those statistics are informed and influenced by the systemic effects of racial distortion.

Individual behavior is not the only component of the numbers; bias is the other.

Mr. Blow is another voice crying in the wilderness.  Here’s Prof. Krugman:

Next week Scotland will hold a referendum on whether to leave the United Kingdom. And polling suggests that support for independence has surged over the past few months, largely because pro-independence campaigners have managed to reduce the “fear factor” — that is, concern about the economic risks of going it alone. At this point the outcome looks like a tossup.

Well, I have a message for the Scots: Be afraid, be very afraid. The risks of going it alone are huge. You may think that Scotland can become another Canada, but it’s all too likely that it would end up becoming Spain without the sunshine.

Comparing Scotland with Canada seems, at first, pretty reasonable. After all, Canada, like Scotland, is a relatively small economy that does most of its trade with a much larger neighbor. Also like Scotland, it is politically to the left of that giant neighbor. And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt and what looks like a major housing bubble) and has successfully pursued policies well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation.

Does Canada pay any price for independence? Probably. Labor productivity is only about three-quarters as high as it is in the United States, and some of the gap may reflect the small size of the Canadian market (yes, we have a free-trade agreement, but a lot of evidence shows that borders discourage trade all the same). Still, you can argue that Canada is doing O.K.

But Canada has its own currency, which means that its government can’t run out of money, that it can bail out its own banks if necessary, and more. An independent Scotland wouldn’t. And that makes a huge difference.

Could Scotland have its own currency? Maybe, although Scotland’s economy is even more tightly integrated with that of the rest of Britain than Canada’s is with the United States, so that trying to maintain a separate currency would be hard. It’s a moot point, however: The Scottish independence movement has been very clear that it intends to keep the pound as the national currency. And the combination of political independence with a shared currency is a recipe for disaster. Which is where the cautionary tale of Spain comes in.

If Spain and the other countries that gave up their own currencies to adopt the euro were part of a true federal system, with shared institutions of government, the recent economic history of Spain would have looked a lot like that of Florida. Both economies experienced a huge housing boom between 2000 and 2007. Both saw that boom turn into a spectacular bust. Both suffered a sharp downturn as a result of that bust. In both places the slump meant a plunge in tax receipts and a surge in spending on unemployment benefits and other forms of aid.

Then, however, the paths diverged. In Florida’s case, most of the fiscal burden of the slump fell not on the local government but on Washington, which continued to pay for the state’s Social Security and Medicare benefits, as well as for much of the increased aid to the unemployed. There were large losses on housing loans, and many Florida banks failed, but many of the losses fell on federal lending agencies, while bank depositors were protected by federal insurance. You get the picture. In effect, Florida received large-scale aid in its time of distress.

Spain, by contrast, bore all the costs of the housing bust on its own. The result was a fiscal crisis, made much worse by fears of a banking crisis that the Spanish government would be unable to manage, because it might literally run out of cash. Spanish borrowing costs soared, and the government was forced into brutal austerity measures. The result was a horrific depression — including youth unemployment above 50 percent — from which Spain has barely begun to recover.

And it wasn’t just Spain, it was all of southern Europe and more. Even euro-area countries with sound finances, like Finland and the Netherlands, have suffered deep and prolonged slumps.

In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area. And an independent Scotland using Britain’s pound would be in even worse shape than euro countries, which at least have some say in how the European Central Bank is run.

I find it mind-boggling that Scotland would consider going down this path after all that has happened in the last few years. If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled.

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.

Blow and Krugman

September 1, 2014

In “Obama and the Warmongers” Mr. Blow points out that the president’s deliberative approach to the ISIS threat may be drowned out by the chants for blood.  May be?  Absolutely has been, is being, and will be.  Prof. Krugman, in “The Medicare Miracle,” says after all the talk about how providing health care to the uninsured would be unaffordable and unsustainable, it turns out that it isn’t hard at all.  Here’s Mr. Blow:

We seem to be drifting inexorably toward escalating our fight with the Islamic State in Iraq and Syria, or ISIS, as the Obama administration mulls whether to extend its “limited” bombing campaign into Syria.

Part of the reasoning is alarm at the speed and efficiency with which ISIS — a militant group President Obama described as “barbaric” — has made gains in northern Iraq and has been able to wash back and forth across the Syrian border. Part is because of the group’s ghastly beheading of the American journalist James Foley — which Michael Morell, a former deputy director of the C.I.A., called “ISIS’s first terrorist attack against the United States” — and threats to behead another.

But another part of the equation is the tremendous political pressure coming from the screeching of war hawks and an anxious and frightened public, weighted most heavily among Republicans and exacerbated by the right-wing media machine.

In fact, when the president tried to tamp down some of the momentum around more swift and expansive military action by indicating that he had not decided how best to move forward militarily in Syria, if at all, what Politico called an “inartful phrase” caught fire in conservative circles. When responding to questions, the president said, “We don’t have a strategy yet.”

His aide insisted that the phrase was only about how to move forward in Syria, not against ISIS as a whole, but the latter was exactly the impression conservatives moved quickly to portray.

It was a way of continuing to yoke Obama with the ill effects of a war started by his predecessor and the chaos it created in that region of the world.

In fact, if you listen to Fox News you might even believe that Obama is responsible for the creation of ISIS.

A few months ago, the Fox News host Judge Jeanine Pirro told her viewers that “you need to be afraid” because of Obama’s fecklessness in dealing with ISIS, adding this nugget:

“And the head of this band of savages is a man named Abu al-Baghdadi — the new Osama bin Laden — a man released by Obama in 2009 who started ISIS a year later.”

That would be extremely troubling, if true. But the fact-checking operation PolitiFact rated it “false,” saying:

“The Defense Department said that the man now known as Baghdadi was released in 2004. The evidence that Baghdadi was still in custody in 2009 appears to be the recollection of an Army colonel who said Baghdadi’s ‘face is very familiar.’

“Even if the colonel is right, Baghdadi was not set free; he was handed over to the Iraqis who released him some time later. But, more important, the legal contract between the United States and Iraq that guaranteed that the United States would give up custody of virtually every detainee was signed during the Bush administration.”

Fox, facts; oil, water.

But the disturbing reality is that the scare tactics are working. In July, a Pew Research Center report found that most Americans thought the United States didn’t have a responsibility to respond to the violence in Iraq.

According to a Pew Research Center report issued last week, however: “Following the beheading of American journalist James Foley, two-thirds of the public (67 percent) cite ISIS as a major threat to the United States.”

The report said that 91 percent of Tea Party Republicans described ISIS as a “major threat” as opposed to 65 percent of Democrats and 63 percent of independents.

The report also said:

“Half of the sample was asked about ISIS and the other half was asked about the broader threat of ‘Islamic extremist groups like Al Qaeda,’ which registered similar concern (71 percent major threat, 19 percent minor threat, 6 percent not a threat). Democrats were more likely to see global climate change than ISIS as a major threat.

Americans were thrilled by our decision to exit Iraq when we did, but support for that decision is dropping. In October 2011, Gallup asked poll respondents if they approved or disapproved of Obama’s decision that year to “withdraw nearly all United States troops from Iraq.” Seventy-five percent said they approved. In June of this year, the approval rate had fallen to 61 percent.

Yet 57 percent still believe that it was a mistake to send troops to fight in Iraq in the first place.

Now, Republicans are beginning to pull out the big gun — 9/11 — to further scare the public into supporting more action. Senator Lindsey Graham has said on Fox News that we must act to “stop another 9/11,” possibly a larger one, and Representative Ileana Ros-Lehtinen has warned, “Sadly, we’re getting back to a pre-9/11 mentality, and that’s very dangerous.”

Fear is in the air. The president is trying to take a deliberative approach, but he may be drowned out by the drums of war and the chants for blood.

Now here’s Prof. Krugman:

So, what do you think about those Medicare numbers? What, you haven’t heard about them? Well, they haven’t been front-page news. But something remarkable has been happening on the health-spending front, and it should (but probably won’t) transform a lot of our political debate.

The story so far: We’ve all seen projections of giant federal deficits over the next few decades, and there’s a whole industry devoted to issuing dire warnings about the budget and demanding cuts in Socialsecuritymedicareandmedicaid. Policy wonks have long known, however, that there’s no such program, and that health care, rather than retirement, was driving those scary projections. Why? Because, historically, health spending has grown much faster than G.D.P., and it was assumed that this trend would continue.

But a funny thing has happened: Health spending has slowed sharply, and it’s already well below projections made just a few years ago. The falloff has been especially pronounced in Medicare, which is spending $1,000 less per beneficiary than the Congressional Budget Office projected just four years ago.

This is a really big deal, in at least three ways.

First, our supposed fiscal crisis has been postponed, perhaps indefinitely. The federal government is still running deficits, but they’re way down. True, the red ink is still likely to swell again in a few years, if only because more baby boomers will retire and start collecting benefits; but, these days, projections of federal debt as a percentage of G.D.P. show it creeping up rather than soaring. We’ll probably have to raise more revenue eventually, but the long-term fiscal gap now looks much more manageable than the deficit scolds would have you believe.

Second, the slowdown in Medicare helps refute one common explanation of the health-cost slowdown: that it’s mainly the product of a depressed economy, and that spending will surge again once the economy recovers. That could explain low private spending, but Medicare is a government program, and shouldn’t be affected by the recession. In other words, the good news on health costs is for real.

But what accounts for this good news? The third big implication of the Medicare cost miracle is that everything the usual suspects have been saying about fiscal responsibility is wrong.

For years, pundits have accused President Obama of failing to take on entitlement spending. These accusations always involved magical thinking on the politics, assuming that Mr. Obama could somehow get Republicans to negotiate in good faith if only he really wanted to. But they also implicitly dismissed as worthless all the cost-control measures included in the Affordable Care Act. Inside the Beltway, cost control apparently isn’t considered real unless it involves slashing benefits. One pundit went so far as to say, after the Obama administration rejected proposals to raise the eligibility age for Medicare, “America gets the shaft.”

It turns out, however, that raising the Medicare age would hardly save any money. Meanwhile, Medicare is spending much less than expected, and those Obamacare cost-saving measures are at least part of the story. The conventional wisdom on what is and isn’t serious is completely wrong.

While we’re on the subject of health costs, there are two other stories you should know about.

One involves the supposed savings from running Medicare through for-profit insurance companies. That’s the way the drug benefit works, and conservatives love to point out that this benefit has ended up costing much less than projected, which they claim proves that privatization is the way to go. But the budget office has a new report on this issue, and it finds that privatization had nothing to do with it. Instead, Medicare Part D is costing less than expected partly because enrollment has been low and partly because an absence of new blockbuster drugs has led to an overall slowdown in pharmaceutical spending.

The other involves the “sticker shock” that opponents of health reform have been predicting for years. Bulletin: It’s still not happening. Over all, health insurance premiums seem likely to rise only modestly next year, and they are on track to be flat or even falling in several states, including Connecticut and Arkansas.

What’s the moral here? For years, pundits and politicians have insisted that guaranteed health care is an impossible dream, even though every other advanced country has it. Covering the uninsured was supposed to be unaffordable; Medicare as we know it was supposed to be unsustainable. But it turns out that incremental steps to improve incentives and reduce costs can achieve a lot, and covering the uninsured isn’t hard at all.

When it comes to ensuring that Americans have access to health care, the message of the data is simple: Yes, we can.

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.


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