Archive for the ‘Krugman’ Category

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.

Blow and Krugman

August 25, 2014

In “A Funeral in Ferguson” Mr. Blow reminds us that nobody should know what it feels like to bury a child as the whole world watches. But that is what Michael Brown’s parents must do.   In “Wrong Way Nation” Prof. Krugman says the Sunbelt may be growing in population, but it’s not because of pro-business and pro-wealthy policies and higher wages.   Here’s Mr. Blow:

Two weeks after the killing of Michael Brown, we have become painfully familiar with his parents through their public appearances and television interviews, their faces drawn, their sorrow apparent.

Brown’s mother, Lesley McSpadden, constantly dabbing tears from her face, sparing in her responses, but powerfully articulating her agony with the words she chooses. Brown’s father, Michael Brown Sr., with shaved head and full beard, a large man often clad in a T-shirt emblazoned with the phrase “No Justice, No Peace” and a baby picture of his son. The senior Brown is stoic, resolute in his speech, but even in the power of his presence there is the certainness that a hollow space has been made.

On Monday, they are scheduled to bury their boy as the whole world watches.

No one should know what that feels like.

Whatever one may feel about the contours of this case — about what led Officer Darren Wilson to shoot the teenager, about the relationship of the police to people of color, about the protests and unrest that followed, about the militarized police response to the unrest, about the quality of the investigations and the level of confidence people have in them, about the perverse sense of theater emerging from the rhythms of the days under the glare of media lights — we can all, in our shared humanity, feel for parents who lose a child.

As a parent myself, I can’t fathom the ache and inextinguishable anguish that must accompany such a loss.

Losing any loved one is painful, but losing a child — particularly in such a violent way and particularly a young child — must be exceedingly painful. It also upsets the order of things. Children should outlive you. That’s the way it’s supposed to be, the way the world and life would have it. But, in a moment, the world stops making sense.

I don’t think anyone can be properly prepared to deal with the news of such a thing. In an interview with CNN’s Anderson Cooper on Thursday, the mother recounted, with tears streaming down her face, the feeling of getting the call that her son had been shot, before getting to the scene:

“Before even getting there, somebody call you on the phone and tell you something like that, and you miles away. It’s terrible.”

The father recounted the excruciating wait once he and the mother arrived on the scene and how upsetting it all was:

“We couldn’t even see him. They wouldn’t even let us go see him. They just left him out there, four and a half hours, with no answers. Wouldn’t nobody tell us nothing.”

It’s hard to imagine a more painful scenario and the grief it must carry.

And that grief can last for a very long time.

A 2008 study published in The Journal of Family Psychology found that, understandably, the death of a child can have “long-term effects on the lives of parents,” including “more depressive symptoms, poorer well-being, and more health problems.” Even that, to me, feels like an understatement. I am always in awe at the strength displayed by parents who lose a child and are immediately thrust into the public eye because their children cease to simply be children but graduate into being a cause.

Yet, too many people have had to endure a similar grief, if often under different circumstances. According to ChildDeathReview.org, in 2010, 45,068 children ages 0 to 19 died in the United States. Two-thirds died of natural causes. Another 8,684 died of unintentional injuries like car accidents and drowning. But 2,808 died as result of homicide, including 1,790 by firearm.

And when the person being shot is shot not by one of the bad guys (people all parents teach children to avoid as best they can) but by one of the people we as a society count as one of the good guys (police officers sworn to protect and serve) there are obviously going to be questions that need answering.

Whenever I see parents like these, standing and speaking in the wake of tragedy, I find myself studying their faces, imagining — hoping, really — that if I were them, I, too, would be this strong, that I, too, would fight on my child’s behalf, for justice and against the besmirchment of his or her memory. But something in me whispers that it’s a lie, that I would be overcome and inconsolable, that so much of me would die with my child that not enough of me would be left to carry on.

So the least I think all of us can do, in consoling solidarity, is to join them in paying our last respects. At 10 a.m. Central time on Monday, when the funeral is scheduled to begin, take a moment to think of them, to commiserate with two grieving parents, knowing they are in a position that none of us would want to be in.

Now here’s Prof. Krugman:

Gov. Rick Perry of Texas is running for president again. What are his chances? Will he once again become a punch line? I have absolutely no idea. This isn’t a horse-race column.

What I’d like to do, instead, is take advantage of Mr. Perry’s ambitions to talk about one of my favorite subjects: interregional differences in economic and population growth.

You see, while Mr. Perry’s hard-line stances and religiosity may be selling points for the Republican Party’s base, his national appeal, if any, will have to rest on claims that he knows how to create prosperity. And it’s true that Texas has had faster job growth than the rest of the country. So have other Sunbelt states with conservative governments. The question, however, is why.

The answer from the right is, of course, that it’s all about avoiding regulations that interfere with business and keeping taxes on rich people low, thereby encouraging job creators to do their thing. But it turns out that there are big problems with this story, quite aside from the habit economists pushing this line have of getting their facts wrong.

To see the problems, let’s tell a tale of three cities.

One of these cities is the place those of us who live in its orbit tend to call simply “the city.” And, these days, it’s a place that’s doing pretty well on a number of fronts. But despite the inflow of immigrants and hipsters, enough people are still moving out of greater New York — a metropolitan area that, according to the Census, extends into Pennsylvania on one side and Connecticut on the other — that its overall population rose less than 5 percent between 2000 and 2012. Over the same period, greater Atlanta’s population grew almost 27 percent, and greater Houston’s grew almost 30 percent. America’s center of gravity is shifting south and west. But why?

Is it, as people like Mr. Perry assert, because pro-business, pro-wealthy policies like those he favors mean opportunity for everyone? If that were the case, we’d expect all those job opportunities to cause rising wages in the Sunbelt, wages that attract ambitious people away from moribund blue states.

It turns out, however, that wages in the places within the United States attracting the most migrants are typically lower than in the places those migrants come from, suggesting that the places Americans are leaving actually have higher productivity and more job opportunities than the places they’re going. The average job in greater Houston pays 12 percent less than the average job in greater New York; the average job in greater Atlanta pays 22 percent less.

So why are people moving to these relatively low-wage areas? Because living there is cheaper, basically because of housing. According to the Bureau of Economic Analysis, rents (including the equivalent rent involved in buying a house) in metropolitan New York are about 60 percent higher than in Houston, 70 percent higher than in Atlanta.

In other words, what the facts really suggest is that Americans are being pushed out of the Northeast (and, more recently, California) by high housing costs rather than pulled out by superior economic performance in the Sunbelt.

But why are housing prices in New York or California so high? Population density and geography are part of the answer. For example, Los Angeles, which pioneered the kind of sprawl now epitomized by Atlanta, has run out of room and become a surprisingly dense metropolis. However, as Harvard’s Edward Glaeser and others have emphasized, high housing prices in slow-growing states also owe a lot to policies that sharply limit construction. Limits on building height in the cities, zoning that blocks denser development in the suburbs and other policies constrict housing on both coasts; meanwhile, looser regulation in the South has kept the supply of housing elastic and the cost of living low.

So conservative complaints about excess regulation and intrusive government aren’t entirely wrong, but the secret of Sunbelt growth isn’t being nice to corporations and the 1 percent; it’s not getting in the way of middle- and working-class housing supply.

And this, in turn, means that the growth of the Sunbelt isn’t the kind of success story conservatives would have us believe. Yes, Americans are moving to places like Texas, but, in a fundamental sense, they’re moving the wrong way, leaving local economies where their productivity is high for destinations where it’s lower. And the way to make the country richer is to encourage them to move back, by making housing in dense, high-wage metropolitan areas more affordable.

So Rick Perry doesn’t know the secrets of job creation, or even of regional growth. It would be great to see the real key — affordable housing — become a national issue. But I don’t think Democrats are willing to nominate Mayor Bill de Blasio for president just yet.

Cohen and Krugman

August 22, 2014

It’s a good day today — Bobo is off.  In “Patient No. 9413″ Mr. Cohen addresses bipolar illness and the mystery, shrouded in taboo, that preceded it.  Prof. Krugman takes a look at “Hawks Crying Wolf” and has a question:  What is it about crying “Inflation!” that makes it so appealing that people keep doing it despite having been wrong again and again?  Here’s Mr. Cohen:

My mother was a woman hollowed out like a tree struck by lightning. I wanted to know why.

Ever since her first suicide attempt, in 1978, when I was 22, I had been trying to fill in gaps. She was gone much of the time in my early childhood, and when she returned nobody spoke about the absence.

I learned much later that she had suffered acute depression after my younger sister’s birth in 1957. She was in hospitals and sanitariums being shot full of insulin — a treatment then in vogue for severe mental disorder — and electricity. The resulting spasms, seizures, convulsions and comas were supposed to jar her from her “puerperal psychosis,” the term then used in England for postpartum depression.

In 1958, my mother was admitted to the Holloway Sanatorium, the sprawling Victorian Gothic fantasy of a 19th-century tycoon, Thomas Holloway, who amassed a fortune through the sale of dubious medicinal concoctions. The sanitarium, opened in 1885, was a great heap of gabled redbrick buildings, topped by a tower rising 145 feet into the damp air of Surrey.

Run initially as a private institution, the Holloway Sanatorium became a mental hospital within Britain’s National Health Service after World War II. It was not closed until 1981. Many of its records and casebooks were burned. The gutted building became a setting for horror movies. Directors could not believe their luck. It is now a gated community of luxury homes.

Some records were preserved at the Surrey History Center. In the faint hope that a trace remained of my mother, I wrote to inquire. My parents had never spoken in any detail of her first depression. A letter came back a few weeks later. References to June Bernice Cohen had been located in the admissions register and in ward reports from July 1958.

These showed that “she was patient number 9413, was admitted on 25th July 1958 and discharged on 12th September 1958.” The ward reports for most of August and September had vanished. I applied under Britain’s Freedom of Information Act to see the records.

My re-encounter with my mother involved painstaking negotiation with an archivist. At last I was presented with the weighty register for female patients. Entries are written with fountain pen in cursive script. In columns across the page my mother is identified. “Name: June Bernice COHEN. Ref Number: 9413. Age: 29. Marital Status: Married. Religion: JEW.”

I stared at her age — so young — and at the capitalized entry under religion: “JEW.” The noun form has a weight the adjective, Jewish, lacks. It seems loaded with a monosyllabic distaste, which was redoubled by the strange use of the uppercase. June was not religious. She is the youngest on the page. She is also the only non-Christian.

The first ward notes on my mother read, “History of depression in varying degrees since birth of second child, now fourteen months old. Husband is engaged in medical research. Patient has some private psychotherapy and also modified insulin treatment at St. Mary’s last month, being discharged July 8th. On admission she was depressed, tearful and withdrawn.”

The doctor examining my mother was struck by how “her tension increased remarkably on mention of latest child.” I ran my fingers over the page and paused at “JEW.” I wanted to take a soothing poultice to her face.

On July 28, 1958, my mother was visited by a Dr. Storey. He “confirms diagnosis of post-puerperal depression and advises Electro-Convulsive Therapy (ECT), which patient and husband are now willing to accept.”

She first underwent electroshock treatment on July 30, 1958. I see my slight young mother with metal plates on either side of her head, flattening her dark curls, her heart racing as her skull is enclosed in a high-voltage carapace. I can almost taste the material wedged in her over-salivating mouth for her to bite on as the current passes.

The treatment was repeated a second time, on Aug. 1, 1958. That was one day before my third birthday. So, at last, that is where she was.

I now have some facts to anchor memory, fragments to fill absence. My mother, who recovered sufficiently to be stable, if fragile, for about 15 years through my childhood and adolescence, would suffer from manic depression, or bipolar disorder, through the latter third of her life. She died in 1999 at the age of 69. The ravages of this condition I observed; the onset of her mental instability I only felt.

The hidden hurts most. Mental illness is still too clouded in taboo. It took me a long time to find where my mother disappeared to. Knowledge in itself resolves nothing, but it helps.

Acceptance — it comes down to that. This is how I came to this point, and to this place, by this looping road, from such anguish, and I am still alive and full of hope.

Now here’s Prof. Krugman:

According to a recent report in The Times, there is dissent at the Fed: “An increasingly vocal minority of Federal Reserve officials want the central bank to retreat more quickly” from its easy-money policies, which they warn run the risk of causing inflation. And this debate, we are told, is likely to dominate the big economic symposium currently underway in Jackson Hole, Wyo.

That may well be the case. But there’s something you should know: That “vocal minority” has been warning about soaring inflation more or less nonstop for six years. And the persistence of that obsession seems, to me, to be a more interesting and important story than the fact that the usual suspects are saying the usual things.

Before I try to explain the inflation obsession, let’s talk about how striking that obsession really is.

The Times article singles out for special mention Charles Plosser of the Philadelphia Fed, who is, indeed, warning about inflation risks. But you should know that he warned about the danger of rising inflation in 2008. He warned about it in 2009. He did the same in 2010, 2011, 2012 and 2013. He was wrong each time, but, undaunted, he’s now doing it again.

And this record isn’t unusual. With very few exceptions, officials and economists who issued dire warnings about inflation years ago are still issuing more or less identical warnings today. Narayana Kocherlakota, president of the Minneapolis Fed, is the only prominent counterexample I can think of.

Now, everyone who has been in the economics business any length of time, myself very much included, has made some incorrect predictions. If you haven’t, you’re playing it too safe. The inflation hawks, however, show no sign of learning from their mistakes. Where is the soul-searching, the attempt to understand how they could have been so wrong?

The point is that when you see people clinging to a view of the world in the teeth of the evidence, failing to reconsider their beliefs despite repeated prediction failures, you have to suspect that there are ulterior motives involved. So the interesting question is: What is it about crying “Inflation!” that makes it so appealing that people keep doing it despite having been wrong again and again?

Well, when economic myths persist, the explanation usually lies in politics — and, in particular, in class interests. There is not a shred of evidence that cutting tax rates on the wealthy boosts the economy, but there’s no mystery about why leading Republicans like Representative Paul Ryan keep claiming that lower taxes on the rich are the secret to growth. Claims that we face an imminent fiscal crisis, that America will turn into Greece any day now, similarly serve a useful purpose for those seeking to dismantle social programs.

At first sight, claims that easy money will cause disaster even in a depressed economy seem different, because the class interests are far less clear. Yes, low interest rates mean low long-term returns for bondholders (who are generally wealthy), but they also mean short-term capital gains for those same bondholders.

But while easy money may in principle have mixed effects on the fortunes (literally) of the wealthy, in practice demands for tighter money despite high unemployment always come from the right. Eight decades ago, Friedrich Hayek warned against any attempt to mitigate the Great Depression via “the creation of artificial demand”; three years ago, Mr. Ryan all but accused Ben Bernanke, the Fed chairman at the time, of seeking to “debase” the dollar. Inflation obsession is as closely associated with conservative politics as demands for lower taxes on capital gains.

It’s less clear why. But faith in the inability of government to do anything positive is a central tenet of the conservative creed. Carving out an exception for monetary policy — “Government is always the problem, not the solution, unless we’re talking about the Fed cutting interest rates to fight unemployment” — may just be too subtle a distinction to draw in an era when Republican politicians draw their economic ideas from Ayn Rand novels.

Which brings me back to the Fed, and the question of when to end easy-money policies.

Even monetary doves like Janet Yellen, the Fed chairwoman, generally acknowledge that there will come a time to take the pedal off the metal. And maybe that time isn’t far off — official unemployment has fallen sharply, although wages are still going nowhere and inflation is still subdued.

But the last people you want to ask about appropriate policy are people who have been warning about inflation year after year. Not only have they been consistently wrong, they’ve staked out a position that, whether they know it or not, is essentially political rather than based on analysis. They should be listened to politely — good manners are always a virtue — then ignored.

Blow and Krugman

August 18, 2014

In “Frustration in Ferguson” Mr. Blow says beneath the protests over the killing of Michael Brown are deep layers of injustice.  In “Why We Fight Wars” Prof. Krugman says conquest doesn’t pay, but political leaders don’t seem to care.  Here’s Mr. Blow:

The response to the killing of the unarmed teenager Michael Brown — whom his family called the “gentle giant” — by the Ferguson, Mo., police officer Darren Wilson — who was described by his police chief as “a gentle, quiet man” and “a gentleman” — has been anything but genteel.

There have been passionate but peaceful protests to be sure, but there has also been some violence and looting. Police forces in the town responded with an outlandish military-like presence more befitting Baghdad than suburban Missouri.

There were armored vehicles, flash grenades and a seemingly endless supply of tear gas — much of it Pentagon trickle-down. There were even officers perched atop vehicles, in camouflage and body armor, pointing weapons in the direction of peaceful protesters.

Let me be clear here: Pointing a gun at an innocent person is an act of violence and provocation.

Americans were aghast at the images, and condemnation was swift and bipartisan. The governor put the state’s Highway Patrol in charge of security. Tensions seemed to subside, for a day.

But then on Friday, when releasing the name of the officer who did the shooting, the police chief also released details and images of a robbery purporting to show Brown stealing cigars from a local convenience store and pushing a store employee in the process.

The implication seemed to be that Wilson was looking for the person who committed the convenience store crime when he encountered Brown. But, later in the day, the chief said Wilson didn’t know Brown was a robbery suspect when they encountered each other.

Something seemed off. The police chief’s decision to release the details of the robbery and the images — without releasing an image of Wilson — struck many as perfidious. In a strongly worded statement, Brown’s family and attorneys accused the chief of attempting to assassinate the character of the dead teen.

Some also deemed it an attempt at distraction from the central issue: An officer shot an unarmed teenager who witnesses claim had raised his hands in surrender when at least some of the shots were fired, which the family and its attorneys called “a brutal assassination of his person in broad daylight.”

The Justice Department is even investigating whether Brown’s civil rights were violated. This would include the excessive use of force. As the department makes clear, this “does not require that any racial, religious, or other discriminatory motive existed.”

It’s impossible to truly know the chief’s motives for his decision to release the robbery information at the same time as the officer’s name, but the effect was clear: That night, a fragile peace was shattered. There was more looting, although peaceful protesters struggled heroically to block the violent ones.

On Saturday, the governor issued a midnight curfew for the town. A small band of protesters defied it and some were arrested.

The community is struggling to find its way back to normalcy, but it would behoove us to dig a bit deeper into the underlying frustrations that cause a place like Ferguson to erupt in the first place and explore the untenable nature of our normal.

Yes, there are the disturbingly repetitive and eerily similar circumstances of many cases of unarmed black people being killed by police officers. This reinforces black people’s beliefs — supportable by actual data — that blacks are treated less fairly by the police.

But I submit that this is bigger than that. The frustration we see in Ferguson is about not only the present act of perceived injustice but also the calcifying system of inequity — economic, educational, judicial — drawn largely along racial lines.

In 1951, Langston Hughes began his poem “Harlem” with a question: “What happens to a dream deferred?” Today, I must ask: What happens when one desists from dreaming, when the very exercise feels futile?

The discussion about issues in the black community too often revolves around a false choice: systemic racial bias or poor personal choices. In fact, these factors are interwoven like the fingers of clasped hands. People make choices within the context of their circumstances and those circumstances are affected — sometimes severely — by bias.

These biases do material damage as well as help breed a sense of disenfranchisement and despair, which in turn can have a depressive effect on aspiration and motivation. This all feeds back on itself.

If we want to truly address the root of the unrest in Ferguson, we have to ask ourselves how we can break this cycle.

Otherwise, Hughes’s last words of “Harlem,” referring to the dream deferred, will continue to be prophetic: “does it explode?”

Now here’s Prof. Krugman:

A century has passed since the start of World War I, which many people at the time declared was “the war to end all wars.” Unfortunately, wars just kept happening. And with the headlines from Ukraine getting scarier by the day, this seems like a good time to ask why.

Once upon a time wars were fought for fun and profit; when Rome overran Asia Minor or Spain conquered Peru, it was all about the gold and silver. And that kind of thing still happens. In influential research sponsored by the World Bank, the Oxford economist Paul Collier has shown that the best predictor of civil war, which is all too common in poor countries, is the availability of lootable resources like diamonds. Whatever other reasons rebels cite for their actions seem to be mainly after-the-fact rationalizations. War in the preindustrial world was and still is more like a contest among crime families over who gets to control the rackets than a fight over principles.

If you’re a modern, wealthy nation, however, war — even easy, victorious war — doesn’t pay. And this has been true for a long time. In his famous 1910 book “The Great Illusion,” the British journalist Norman Angell argued that “military power is socially and economically futile.” As he pointed out, in an interdependent world (which already existed in the age of steamships, railroads, and the telegraph), war would necessarily inflict severe economic harm even on the victor. Furthermore, it’s very hard to extract golden eggs from sophisticated economies without killing the goose in the process.

We might add that modern war is very, very expensive. For example, by any estimate the eventual costs (including things like veterans’ care) of the Iraq war will end up being well over $1 trillion, that is, many times Iraq’s entire G.D.P.

So the thesis of “The Great Illusion” was right: Modern nations can’t enrich themselves by waging war. Yet wars keep happening. Why?

One answer is that leaders may not understand the arithmetic. Angell, by the way, often gets a bum rap from people who think that he was predicting an end to war. Actually, the purpose of his book was to debunk atavistic notions of wealth through conquest, which were still widespread in his time. And delusions of easy winnings still happen. It’s only a guess, but it seems likely that Vladimir Putin thought that he could overthrow Ukraine’s government, or at least seize a large chunk of its territory, on the cheap — a bit of deniable aid to the rebels, and it would fall into his lap.

And for that matter, remember when the Bush administration predicted that overthrowing Saddam and installing a new government would cost only $50 billion or $60 billion?

The larger problem, however, is that governments all too often gain politically from war, even if the war in question makes no sense in terms of national interests.

Recently Justin Fox of the Harvard Business Review suggested that the roots of the Ukraine crisis may lie in the faltering performance of the Russian economy. As he noted, Mr. Putin’s hold on power partly reflects a long run of rapid economic growth. But Russian growth has been sputtering — and you could argue that the Putin regime needed a distraction.

Similar arguments have been made about other wars that otherwise seem senseless, like Argentina’s invasion of the Falkland Islands in 1982, which is often attributed to the then-ruling junta’s desire to distract the public from an economic debacle. (To be fair, some scholars are highly critical of this claim.)

And the fact is that nations almost always rally around their leaders in times of war, no matter how foolish the war or how awful the leaders. Argentina’s junta briefly became extremely popular during the Falklands war. For a time, the “war on terror” took President George W. Bush’s approval to dizzying heights, and Iraq probably won him the 2004 election. True to form, Mr. Putin’s approval ratings have soared since the Ukraine crisis began.

No doubt it’s an oversimplification to say that the confrontation in Ukraine is all about shoring up an authoritarian regime that is stumbling on other fronts. But there’s surely some truth to that story — and that raises some scary prospects for the future.

Most immediately, we have to worry about escalation in Ukraine. All-out war would be hugely against Russia’s interests — but Mr. Putin may feel that letting the rebellion collapse would be an unacceptable loss of face.

And if authoritarian regimes without deep legitimacy are tempted to rattle sabers when they can no longer deliver good performance, think about the incentives China’s rulers will face if and when that nation’s economic miracle comes to an end — something many economists believe will happen soon.

Starting a war is a very bad idea. But it keeps happening anyway.

Brooks and Krugman

August 15, 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Which brings me to Europe’s woes.

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

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

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

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

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

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


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