Archive for the ‘Krugman’ Category

Brooks and Krugman

October 17, 2014

In “The Case for Low Ideals” Bobo gurgles that the idealism of President Obama’s 2008 campaign seems foolish now, but idealism, a different kind, still has a place in American politics.  In the comments “Diana Moses” of Arlington, Mass. had this to say:  “I found myself trying to put my finger on why this column comes across to me as self-serving. I guess it sounds to me as though the writer is basically saying, “The system works for me, too bad if it doesn’t for you.” ”  Exactly.  It’s FYIGM.  Prof. Krugman, in “What Markets Will,” says the financial turmoil of the past few days, especially in Europe, has policy crusaders again sure that they know what the markets are asking for.  Here’s Bobo:

Let’s say you came of political age during Barack Obama’s 2008 campaign. Maybe you were swept up in the idealism. But now you’ve seen an election driven by hope give way to an election driven by fear. Partisans are afraid the other side might win. Candidates are pawns of the consultants because they’re afraid of themselves. Everybody’s afraid of the Ebola virus, ISIS and the fragile economy.

The politics of the last few years have made you disappointed, disillusioned and cynical. You look back at your earlier idealism as cotton candy.

Well, I’m here to make the case for political idealism.

I’m not making the case for the high idealism that surrounded that 2008 campaign. It was based on the idea that people are basically innocent and differences can be quickly transcended. It was based on the idea that society is easily malleable and it’s possible to have quick transformational change. It was based in the idea of a heroic savior (remember those “Hope” posters).

I’m here to make the case for low idealism. The low idealist rejects the politics of innocence. The low idealist recoils from any movement that promises “new beginnings,” tries to offer transcendent “bliss to be alive” moments or tries to fill people’s spiritual voids.

Low idealism begins with a sturdy and accurate view of human nature. We’re all a bit self-centered, self-interested and inclined to think we are nobler than we are. Montaigne wrote, “If others examined themselves attentively, as I do, they would find themselves, as I do, full of inanity and nonsense. Get rid of it I cannot without getting rid of myself.”

Low idealism continues with a realistic view of politics. Politics is slow drilling through hard boards. It is a series of messy compromises. The core functions of government are negative — putting out fires, arresting criminals, settling disputes — and much of what government does is the unromantic work of preventing bad situations from getting worse.

Politicians operate in a recalcitrant medium with incomplete information, bad options and no sleep. Government in good times is merely dull; when it is enthralling, times are usually bad.

So low idealism starts with a tone of sympathy. Anybody who works in this realm deserves compassion and gentle regard. The low idealist knows that rallies with anthems and roaring are just make-believe, but has warm affection for any politician who exhibits neighborliness, courtesy and the ability to listen. The low idealist understands that those who try to rise above the messy business of deal-making often turn into zealots and wind up sinking below it. On the other hand, this kind of idealist has a full heart for those who serve the practical work of legislating: James Baker and Ted Kennedy in the old days; Bob Corker and Ron Wyden today. Believing experience is the best mode of education, he favors the competent old hand to the naïve outsider.

The low idealist is more romantic about the past than about the future. Though governing is hard, there are some miracles of human creation that have been handed down to us. These include, first and foremost, the American Constitution, but also the institutions that function pretty well, like the Congressional Budget Office and the Federal Reserve. Her first job is to work with existing materials, magnify what’s best and incrementally reform what is worst.

The businessman might be enamored of disruptive change, but the low idealist abhors it in politics. The low idealist liked Obama’s vow to hit foreign policy singles and doubles day by day, so long as there is a large vision to give long-term direction.

The low idealist admires a different kind of leader; not the martyr or the passionate crusader or the righteous populist. He likes the resilient one, who maybe has been tainted by scandals and has learned from his self-inflicted wounds that his own worst enemy is himself.

He likes the person who speaks only after paying minute attention to the way things really are, and whose proposals are grounded in the low stability of the truth.

The low idealist lives most of her life at a deeper dimension than the realm of the political. She believes, as Samuel Johnson put it, that “The happiness of society depends on virtue” — not primarily material conditions. But, and this is what makes her an idealist, she believes that better laws can nurture virtue. Statecraft is soulcraft. Good tax policies can arouse energy and enterprise. Good social programs can encourage compassion and community service.

Low idealism starts with a warts-and-all mentality, but holds that people can be improved by their political relationships, so it ends up with something loftier and more inspiring that those faux idealists who think human beings are not a problem and politics is a mostly a matter of moving money around.

Of course Bobo’s crowd only wants it to move in one direction.  Welcome to the new Gilded Age.  Here’s Prof. Krugman:

In the Middle Ages, the call for a crusade to conquer the Holy Land was met with cries of “Deus vult!” — God wills it. But did the crusaders really know what God wanted? Given how the venture turned out, apparently not.

Now, that was a long time ago, and, in the areas I write about, invocations of God’s presumed will are rare. You do, however, see a lot of policy crusades, and these are often justified with implicit cries of “Mercatus vult!” — the market wills it. But do those invoking the will of the market really know what markets want? Again, apparently not.

And the financial turmoil of the past few days has widened the gap between what we’re told must be done to appease the market and what markets actually seem to be asking for.

To get more specific: We have been told repeatedly that governments must cease and desist from their efforts to mitigate economic pain, lest their excessive compassion be punished by the financial gods, but the markets themselves have never seemed to agree that these human sacrifices are actually necessary. Investors were supposed to be terrified by budget deficits, fearing that we were about to turn into Greece — Greece I tell you — but year after year, interest rates stayed low. The Fed’s efforts to boost the economy were supposed to backfire as markets reacted to the prospect of runaway inflation, but market measures of expected inflation similarly stayed low.

How have policy crusaders responded to the failure of their dire predictions? Mainly with denial, occasionally with exasperation. For example, Alan Greenspan once declared the failure of interest rates and inflation to spike “regrettable, because it is fostering a false sense of complacency.” But that was more than four years ago; maybe the sense of complacency wasn’t all that false?

All in all, it’s hard to escape the conclusion that people like Mr. Greenspan knew as much about what the market wanted as medieval crusaders knew about God’s plan — that is, nothing.

In fact, if you look closely, the real message from the market seems to be that we should be running bigger deficits and printing more money. And that message has gotten a lot stronger in the past few days.

I’m not mainly talking about plunging stock prices, although that’s surely telling us something (but as the late Paul Samuelson famously pointed out, stocks are not a reliable indicator of economic prospects: “Wall Street indexes predicted nine out of the last five recessions!”) Instead, I’m talking about interest rates, which are flashing warnings, not of fiscal crisis and inflation, but of depression and deflation.

Most obviously, interest rates on long-term U.S. government debt — the rates that the usual suspects keep telling us will shoot up any day now unless we slash spending — have fallen sharply. This tells us that markets aren’t worried about default, but that they are worried about persistent economic weakness, which will keep the Fed from raising the short-term interest rates it controls.

Interest rates on much European debt are even lower, because Europe’s economic outlook is so bad, and we’re not just talking about Germany. France is currently in conflict with the European Commission, which says that the projected French deficit is too big, but investors — who are still buying French bonds despite a 10-year interest rate of only 1.26 percent — are evidently much more worried about European stagnation than French default.

It’s also instructive to look at interest rates on “inflation-protected” or “index” bonds, which are telling us two things. First, markets are practically begging governments to borrow and spend, say on infrastructure; interest rates on index bonds are barely above zero, so that financing for roads, bridges, and sewers would be almost free. Second, the difference between interest rates on index and ordinary bonds tells us how much inflation the market expects, and it turns out that expected inflation has fallen sharply over the past few months, so that it’s now far below the Fed’s target. In effect, the market is saying that the Fed isn’t printing nearly enough money.

One question you might ask is why the market’s pro-spending, print-more-money message has suddenly gotten louder. My guess is that it’s mainly driven by events in Europe, where the slide into deflation and the growing public backlash against austerity have reached a tipping point. And it’s very reasonable to worry that Europe’s problems may spill over to the rest of us.

In any case, the next time you hear some talking head opining on what we must do to satisfy the markets, ask yourself, “How does he know?” For the truth is that when people talk about what markets demand, what they’re really doing is trying to bully us into doing what they themselves want.

Krugman, solo

October 13, 2014

Mr. Blow is off today, so Prof. Krugman has the place to himself.  In “Revenge of the Unforgiven” he says sometimes debt relief is in everybody’s interest, but policy makers only seem interested in moral indignation.  Here he is:

Stop me if you’ve heard this before: The world economy appears to be stumbling. For a while, things seemed to be looking up, and there was talk about green shoots of recovery. But now growth is stalling, and the specter of deflation looms.

If this story sounds familiar, it should; it has played out repeatedly since 2008. As in previous episodes, the worst news is coming from Europe, but this time there is also a clear slowdown in emerging markets — and there are even warning signs in the United States, despite pretty good job growth at the moment.

Why does this keep happening? After all, the events that brought on the Great Recession — the housing bust, the banking crisis — took place a long time ago. Why can’t we escape their legacy?

The proximate answer lies in a series of policy mistakes: Austerity when economies needed stimulus, paranoia about inflation when the real risk is deflation, and so on. But why do governments keep making these mistakes? In particular, why do they keep making the same mistakes, year after year?

The answer, I’d suggest, is an excess of virtue. Righteousness is killing the world economy.

What, after all, is our fundamental economic problem? A simplified but broadly correct account of what went wrong goes like this: In the years leading up to the Great Recession, we had an explosion of credit (mainly to the private sector). Old notions of prudence, for both lenders and borrowers, were cast aside; debt levels that would once have been considered deeply unsound became the norm.

Then the music stopped, the money stopped flowing, and everyone began trying to “deleverage,” to reduce the level of debt. For each individual, this was prudent. But my spending is your income and your spending is my income, so when everyone tries to pay down debt at the same time, you get a depressed economy.

So what can be done? Historically, the solution to high levels of debt has often involved writing off and forgiving much of that debt. Sometimes this happens explicitly: In the 1930s F.D.R. helped borrowers refinance with much cheaper mortgages, while in this crisis Iceland is outright canceling a significant part of the debt households ran up during the bubble years. More often, debt relief takes place implicitly, through “financial repression”: government policies hold interest rates down, while inflation erodes the real value of debt.

What’s striking about the past few years, however, is how little debt relief has actually taken place. Yes, there’s Iceland — but it’s tiny. Yes, Greek creditors took a significant “haircut” — but Greece is still a small player (and still hopelessly in debt). In major economies, very few debtors have received a break. And far from being inflated away, the burden of debt has been aggravated by falling inflation, which is running well below target in America and near zero in Europe.

Why are debtors receiving so little relief? As I said, it’s about righteousness — the sense that any kind of debt forgiveness would involve rewarding bad behavior. In America, the famous Rick Santelli rant that gave birth to the Tea Party wasn’t about taxes or spending — it was a furious denunciation of proposals to help troubled homeowners. In Europe, austerity policies have been driven less by economic analysis than by Germany’s moral indignation over the notion that irresponsible borrowers might not face the full consequences of their actions.

So the policy response to a crisis of excessive debt has, in effect, been a demand that debtors pay off their debts in full. What does history say about that strategy? That’s easy: It doesn’t work. Whatever progress debtors make through suffering and saving is more than offset through depression and deflation. That is, for example, what happened to Britain after World War I, when it tried to pay off its debt with huge budget surpluses while returning to the gold standard: Despite years of sacrifice, it made almost no progress in bringing down the ratio of debt to G.D.P.

And that’s what is happening now. A recent comprehensive report on debt is titled “Deleveraging, what deleveraging?”; despite private cutbacks and public austerity, debt levels are rising thanks to poor economic performance. And we are arguably no closer to escaping our debt trap than we were five years ago.

But it has been very hard to get either the policy elite or the public to understand that sometimes debt relief is in everyone’s interest. Instead, the response to poor economic performance has essentially been that the beatings will continue until morale improves.

Maybe, just maybe, bad news — say, a recession in Germany — will finally bring an end to this destructive reign of virtue. But don’t count on it.

Brooks and Krugman

October 10, 2014

Bobo is trying to convince us that “Money Matters Less.”  He has a question:  Remember all the talk about how Citizens United would give Republicans a spending advantage forevermore? He tells us that hasn’t happened.  Prof. Krugman, in “Secret Deficit Lovers,” says debt scolds hate good fiscal news so much that most Americans haven’t heard that the deficit plunge of the past several years continues.  Here’s Bobo:

I happened to be in the U.S. Capitol when the Citizens United decision came down four years ago. Democratic lawmakers greeted the decision with a mutually reinforcing mixture of fury and fear. The decision, everyone agreed, would unleash a tsunami of corporate and plutocratic money into politics, giving Republicans a huge spending advantage. “This is the end of our party,” wailed one Democrat, aware he was going a tad over the top.

Things haven’t worked out as expected. In 2012, Mitt Romney did not have a spending advantage over Barack Obama. According to the Center for Responsive Politics, very few publicly traded corporations made political donations.

During the 2012 campaign cycle, news articles began appearing in local papers reporting that it was sometimes Democratic groups who were making the most of the post-Citizens United landscape. The Center for Public Integrity looked at campaigns in 38 states in 2012. Democratic-leaning groups outspent Republicans by more than $8 million.

This year, the same sorts of articles are appearing. A Politico analysis in September found that the 15 top Democratic-aligned committees outraised the 15 top Republican ones by $164 million. Based on data from the Center for Responsive Politics, Democrats have more money than Republicans in most of the tightest Senate races: Colorado, Alaska, Arkansas, Georgia, Iowa, Louisiana, Minnesota, North Carolina, New Hampshire and Virginia.

Karl Rove has been shaking the Republican donor base, arguing that his groups are being outspent. A September study by his “super PAC,” American Crossroads, found that Democratic candidates have reserved $109 million in television advertising time before Election Day, while Republicans have reserved $85 million.

So was the furor about Citizens United misplaced? Will Democrats end up winning the political spending wars, thanks to their own plutocratic donor base?

Well, the situation is complicated. The first thing we know about the post-Citizens United era is that it has accelerated a pre-existing trend: Each year more money flows into campaigns. Spending this cycle is more than double what it was at this point in 2010 and four times higher than it was in early October 2006.

Second, the decision has not scared away small donors, as many feared. A study by Douglas M. Spencer and Abby K. Wood suggested that smaller donors were just as likely to be active after the decision as before.

Third, many of Democrats’ apparent advantages in spending this year are temporary. A major wave of Republican money is expected over the next few weeks. Democrats do have an advantage in the donations made to super PACs, which have to report their donors. But Republicans have an advantage in donations made to 501(c)(4) groups, which can keep the names of donors secret.

The final and most important effect of Citizens United is that it will reduce the influence of money on electoral outcomes. Yes, that’s right. Reduce.

Remember, money is quite important in local races, with unknown candidates.

But money is not that important in high-attention federal races. Every year we get more evidence suggesting that campaign spending does not lead to victory. In 2012 the Koch brothers spent huge amounts of money to pathetic effect. Rove’s American Crossroads dumped $117 million into the 2012 election. More than 90 percent of it was spent on candidates who ended up losing.

And money is really not important when both candidates are well-financed. After both candidates have hit a certain spending threshold, the additional TV commercials they might buy are just making the rubble bounce. The economist Steve Levitt has found that if you cut a campaign’s spending in half, and held everything else constant, then the candidate would only lose 1 percent of the popular vote. If you doubled a candidate’s spending, the candidate would only gain 1 percentage point. In other words, big swings in spending produce only small changes in the vote totals.

We’re now at a moment when a fire hose of money is trying to fill the same glasses of voters. That means every plausible Senate candidate and almost every plausible House candidate has more than enough money to get his or her message out. What matters more is the quality of that message and the national mood. If Democrats exceed expectations this year it will because of the reasons Ashley Parker and Nicholas Confessore identified in a recent Times article: because their message is better defined.

The upshot is that we should all relax about campaign spending. We should worry more about America’s rich. Some people who are really smart at making money are apparently really stupid at spending it. This year, the big spender is a hedge fund manager named Tom Steyer. He could have spent $42.7 million paying for kids to go to college. Instead he has spent that much money this year further enriching the people who own TV stations. What a waste.

And what a waste of oxygen and pixels Bobo is…  Here’s Prof. Krugman:

What if they balanced the budget and nobody knew or cared?

O.K., the federal budget hasn’t actually been balanced. But the Congressional Budget Office has tallied up the totals for fiscal 2014, which ran through the end of September, and reports that the deficit plunge of the past several years continues. You still hear politicians ranting about “trillion dollar deficits,” but last year’s deficit was less than half-a-trillion dollars — or, a more meaningful number, just 2.8 percent of G.D.P. — and it’s still falling.

So where are the ticker-tape parades? For that matter, where are the front-page news reports? After all, talk about the evils of deficits and the grave fiscal danger facing America dominated Washington for years. Shouldn’t we be making a big deal of the fact that the alleged crisis is over?

Well, we aren’t, and once you understand why, you also understand what fiscal hysteria was really about.

First, ordinary Americans aren’t celebrating the deficit’s decline because they don’t know about it.

That’s not mere speculation on my part. Earlier this year, YouGov polled Americans on fiscal issues, asking among other things whether the deficit had increased or declined since President Obama took office. (In case you’re wondering, the pollsters carefully explained the difference between annual deficits and the level of accumulated debt.) More than half of those polled said it had gone up, while only 19 percent correctly said that it had gone down.

Why doesn’t the public know better? Probably because of the way much of the news media report this and other issues, with bad news played up and good news downplayed if it’s reported at all.

This has been glaringly obvious in the case of health reform, where every problem with the Affordable Care Act has been the subject of headlines, while in right-wing media — and to some extent in mainstream news sources — favorable developments go unremarked. As a result, many people — even, in my experience, liberals — have the impression that the rollout of Obamacare has been a disaster, and have no idea that enrollment is above expectations, costs are lower than expected, and the number of Americans without insurance has dropped sharply. Surely something similar has happened on the budget deficit.

But what about people who pay a lot of attention to the budget, the self-proclaimed deficit hawks? (Some of us prefer to call them deficit scolds.) They’ve spent the past few years telling us that budget shortfalls are the most important issue facing the nation, that terrible things will happen unless we act to stem the flow of red ink. Are they expressing satisfaction over the fading of that threat?

Not a chance. Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.

All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs. A few years ago they almost managed to bully the nation into cutting Social Security and/or raising the Medicare eligibility age; they even had hopes of turning Medicare into an underfinanced voucher program. Now that window of opportunity is closing fast.

But isn’t the falling deficit just a short-term blip, with the long-run outlook as dire as ever? Actually, no. Falling deficits right now have a lot to do with a strengthening economy plus some of that “mindless austerity” the president condemned. But there has also been a dramatic slowdown in the growth of health spending — and if that continues, the long-run fiscal outlook is much better than anyone thought possible not long ago. Yes, current projections still show a rising ratio of debt to G.D.P. starting some years from now, and uncomfortable levels of debt a generation from now. But given all the clear and present dangers we face, it’s hard to see why dealing with that distant and uncertain prospect should be any kind of policy priority.

So let’s say goodbye to fiscal hysteria. I know that the deficit scolds are having a hard time letting go; they’re still trying to bring back the days when Bowles and Simpson bestrode the Beltway like colossi. But those days aren’t coming back, and we should be glad.

Krugman, solo

October 6, 2014

Mr. Blow is off today, so Prof. Krugman has the place to himself.  In “Voodoo Economics, the Next Generation” he says that Reagan-era black magic is making a comeback.  Here he is:

Even if Republicans take the Senate this year, gaining control of both houses of Congress, they won’t gain much in conventional terms: They’re already able to block legislation, and they still won’t be able to pass anything over the president’s veto. One thing they will be able to do, however, is impose their will on the Congressional Budget Office, heretofore a nonpartisan referee on policy proposals.

As a result, we may soon find ourselves in deep voodoo.

During his failed bid for the 1980 Republican presidential nomination George H. W. Bush famously described Ronald Reagan’s “supply side” doctrine — the claim that cutting taxes on high incomes would lead to spectacular economic growth, so that tax cuts would pay for themselves — as “voodoo economic policy.” Bush was right. Even the rapid recovery from the 1981-82 recession was driven by interest-rate cuts, not tax cuts. Still, for a time the voodoo faithful claimed vindication.

The 1990s, however, were bad news for voodoo. Conservatives confidently predicted economic disaster after Bill Clinton’s 1993 tax hike. What happened instead was a boom that surpassed the Reagan expansion in every dimension: G.D.P., jobs, wages and family incomes.

And while there was never any admission by the usual suspects that their god had failed, it’s noteworthy that the Bush II administration — never shy about selling its policies on false pretenses — didn’t try to justify its tax cuts with extravagant claims about their economic payoff. George W. Bush’s economists didn’t believe in supply-side hype, and more important, his political handlers believed that such hype would play badly with the public. And we should also note that the Bush-era Congressional Budget Office behaved well, sticking to its nonpartisan mandate.

But now it looks as if voodoo is making a comeback. At the state level, Republican governors — and Gov. Sam Brownback of Kansas, in particular — have been going all in on tax cuts despite troubled budgets, with confident assertions that growth will solve all problems. It’s not happening, and in Kansas a rebellion by moderates may deliver the state to Democrats. But the true believers show no sign of wavering.

Meanwhile, in Congress Paul Ryan, the chairman of the House Budget Committee, is dropping broad hints that after the election he and his colleagues will do what the Bushies never did, try to push the budget office into adopting “dynamic scoring,” that is, assuming a big economic payoff from tax cuts.

So why is this happening now? It’s not because voodoo economics has become any more credible. True, recovery from the 2007-9 recession has been sluggish, but it has actually been a bit faster than the typical recovery from financial crisis, despite unprecedented cuts in government spending and employment. In fact, the recovery in private-sector employment has been faster than it was during the “Bush boom” last decade. At the same time, researchers at the International Monetary Fund, surveying cross-country evidence, have found that redistribution of income from the affluent to the poor, which conservatives insist kills growth, actually seems to boost economies.

But facts won’t stop the voodoo comeback, for two main reasons.

First, voodoo economics has dominated the conservative movement for so long that it has become an inward-looking cult, whose members know what they know and are impervious to contrary evidence. Fifteen years ago leading Republicans may have been aware that the Clinton boom posed a problem for their ideology. Today someone like Senator Rand Paul can say: “When is the last time in our country we created millions of jobs? It was under Ronald Reagan.” Clinton who?

Second, the nature of the budget debate means that Republican leaders need to believe in the ways of magic. For years people like Mr. Ryan have posed as champions of fiscal discipline even while advocating huge tax cuts for wealthy individuals and corporations. They have also called for savage cuts in aid to the poor, but these have never been big enough to offset the revenue loss. So how can they make things add up?

Well, for years they have relied on magic asterisks — claims that they will make up for lost revenue by closing loopholes and slashing spending, details to follow. But this dodge has been losing effectiveness as the years go by and the specifics keep not coming. Inevitably, then, they’re feeling the pull of that old black magic — and if they take the Senate, they’ll be able to infuse voodoo into supposedly neutral analysis.

Would they actually do it? It would destroy the credibility of a very important institution, one that has served the country well. But have you seen any evidence that the modern conservative movement cares about such things?

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.


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