Archive for the ‘Krugman’ Category

Krugman, solo

July 21, 2014

Mr. Blow is off today, so Prof. Krugman has the floor solo.  In “The Fiscal Fizzle” he says the deficit scolds are still going at it, even though the whole panic turned out to be a false alarm.  Here he is:

For much of the past five years readers of the political and economic news were left in little doubt that budget deficits and rising debt were the most important issue facing America. Serious people constantly issued dire warnings that the United States risked turning into another Greece any day now. President Obama appointed a special, bipartisan commission to propose solutions to the alleged fiscal crisis, and spent much of his first term trying to negotiate a Grand Bargain on the budget with Republicans.

That bargain never happened, because Republicans refused to consider any deal that raised taxes. Nonetheless, debt and deficits have faded from the news. And there’s a good reason for that disappearing act: The whole thing turns out to have been a false alarm.

I’m not sure whether most readers realize just how thoroughly the great fiscal panic has fizzled — and the deficit scolds are, of course, still scolding. They’re even trying to spin the latest long-term projections from the Congressional Budget Office — which are distinctly non-alarming — as somehow a confirmation of their earlier scare tactics. So this seems like a good time to offer an update on the debt disaster that wasn’t.

About those projections: The budget office predicts that this year’s federal deficit will be just 2.8 percent of G.D.P., down from 9.8 percent in 2009. It’s true that the fact that we’re still running a deficit means federal debt in dollar terms continues to grow — but the economy is growing too, so the budget office expects the crucial ratio of debt to G.D.P. to remain more or less flat for the next decade.

Things are expected to deteriorate after that, mainly because of the impact of an aging population on Medicare and Social Security. But there has been a dramatic slowdown in the growth of health care costs, which used to play a big role in frightening budget scenarios. As a result, despite aging, debt in 2039 — a quarter-century from now! — is projected to be no higher, as a percentage of G.D.P., than the debt America had at the end of World War II, or that Britain had for much of the 20th century. Oh, and the budget office now expects interest rates to remain fairly low, not much higher than the economy’s rate of growth. This in turn weakens, indeed almost eliminates, the risk of a debt spiral, in which the cost of servicing debt drives debt even higher.

Still, rising debt isn’t good. So what would it take to avoid any rise in the debt ratio? Surprisingly little. The budget office estimates that stabilizing the ratio of debt to G.D.P. at its current level would require spending cuts and/or tax hikes of 1.2 percent of G.D.P. if we started now, or 1.5 percent of G.D.P. if we waited until 2020. Politically, that would be hard given total Republican opposition to anything a Democratic president might propose, but in economic terms it would be no big deal, and wouldn’t require any fundamental change in our major social programs.

In short, the debt apocalypse has been called off.

Wait — what about the risk of a crisis of confidence? There have been many warnings that such a crisis was imminent, some of them coupled with surprisingly frank admissions of disappointment that it hadn’t happened yet. For example, Alan Greenspan warned of the “Greece analogy,” and declared that it was “regrettable” that U.S. interest rates and inflation hadn’t yet soared.

But that was more than four years ago, and both inflation and interest rates remain low. Maybe the United States, which among other things borrows in its own currency and therefore can’t run out of cash, isn’t much like Greece after all.

In fact, even within Europe the severity of the debt crisis diminished rapidly once the European Central Bank began doing its job, making it clear that it would do “whatever it takes” to avoid cash crises in nations that have given up their own currencies and adopted the euro. Did you know that Italy, which remains deep in debt and suffers much more from the burden of an aging population than we do, can now borrow long term at an interest rate of only 2.78 percent? Did you know that France, which is the subject of constant negative reporting, pays only 1.57 percent?

So we don’t have a debt crisis, and never did. Why did everyone important seem to think otherwise?

To be fair, there has been some real good news about the long-run fiscal prospect, mainly from health care. But it’s hard to escape the sense that debt panic was promoted because it served a political purpose — that many people were pushing the notion of a debt crisis as a way to attack Social Security and Medicare. And they did immense damage along the way, diverting the nation’s attention from its real problems — crippling unemployment, deteriorating infrastructure and more — for years on end.

Cohen and Krugman

July 18, 2014

Mr. Cohen says “Germany Is Weltmeister” and that Germany is different. It does not believe in quick fixes. Its World Cup team and its society reflect that.  In “Addicted to Inflation” Prof. Krugman says the right is obsessed with the claim that runaway inflation is either happening or about to happen.  Here’s Mr. Cohen:

A new nation won the World Cup. It was the first victory for a unified Germany, or a reunified Germany if you prefer. That country was more than a generation in the making. Germans do not believe in quick fixes.

Formal reunification occurred on Oct. 3, 1990, a few months after the previous 1-0 German victory over Argentina in a World Cup final, an ugly affair in Rome. But it has taken a quarter-century, and untold billions, to knit the post-Cold War nation together. When I lived in Berlin between 1998 and 2001, it was not just the countless cranes hovering over the city that told of a work in progress. It was the different mind-sets of Ossi and Wessi, Easterners and Westerners eyeing each other with resentment.

No matter, Germany had decided. It would pay the price to achieve reunification. It would work on the problem. It would move in the appointed direction, come what may.

This fine World Cup winning team was also the fruit of long-term planning. Over the past dozen years, the Deutscher Fussball-Bund (DFB), or German Football Association, has invested a fortune in new facilities, identifying youthful talent, nurturing that talent and ushering it to the national level. Two young players who emerged from that system, André Schürrle of Chelsea and Mario Götze of Bayern Munich, combined to conjure the beautiful goal that clinched victory.

It had been preceded by the 7-1 demolition of the hosts, Brazil, in the semi-final. Seldom has a soccer match so resembled an execution. It was not only Germans who felt the need to look away. Domination is not the modern German way. Brazilian agony was too explicit not to cringe.

BBC commentators could not resist the clichés. Germany was “clinical.” It was “efficient.” People tweeted, “Don’t mention the score.” With Germany there is always something unmentionable that rhymes with war. It is not easy to be German. But in that difficulty, as this team suggested, there lie strengths. Everything about this team, from its talent to its ethics, was admirable. The right team does not always win. In this case it did.

Germany, I said, does not believe in quick fixes. It is worth repeating because it is an idea that sets the country apart in an age where a quick killing, tomorrow’s share price, instant gratification and short-termism are the norm. Germans on the whole think what the rest of the world builds is flimsy. Anyone who has felt the weight of a German window, or the satisfying hermetic clunk of one closing, knows they have a point. The German time frame is longer.

Why Germany differs in this may be debated. Having plumbed the depths of destruction and evil, having understood the depravity into which a “civilized” country may descend, Germany had to rebuild from the “Stunde Null,” or “Zero Hour,” of 1945. It had to hoist itself up step by step; and it had to build into its reconstituted self the guarantees that ensured no relapse was possible. This took planning. It took persistence. It involved prudence. Even before all this the first German unity of 1871 came only after centuries of strife at the European crossroads. Geborgenheit is an untranslatable German word but no less important for that. It means roughly warmth, home, trust and security, everything that is so precious in part because it may go up in smoke.

Perhaps German success is the result of the immensity of past German failure. I think that has something to do with it, even a lot. Whatever its roots, German success is important and instructive.

If you talk to business leaders of the German Mittelstand, the small and medium-sized companies at the heart of the country’s economy, you are transported to another world. You sit in stark boardrooms, so devoid of indulgence they resemble classrooms, with unassuming people leading billion-dollar companies, and they speak of loyalty, 10-year plans, prudence and quality. If one word induces a look of horror, it is debt. The notion of making money with money, of financial engineering rather than engineering itself, is alien.

Joachim Löw, the German coach, spoke before the final of the careful building of his youthful side: “We can play on top of the world for a good few years yet, with some young players coming in to reinforce the team.” Inevitably, the idea of Germany “on top of the world” for a long time conjured up images the phrase would not evoke for another country. Even a victory dance by members of the German team turned into a national debate because it was seen by some as unseemly mocking of the gaucho Argentine. The president of the DFB apologized.

Germany is now soccer’s “Weltmeister,” a composite word composed of “world” and “master.” It deserves the honor. Its society has much to teach others. But restraint will be its watchword.

Now here’s Prof. Krugman:

The first step toward recovery is admitting that you have a problem. That goes for political movements as well as individuals. So I have some advice for so-called reform conservatives trying to rebuild the intellectual vitality of the right: You need to start by facing up to the fact that your movement is in the grip of some uncontrollable urges. In particular, it’s addicted to inflation — not the thing itself, but the claim that runaway inflation is either happening or about to happen.

To see what I’m talking about, consider a scene that played out the other day on CNBC.

Rick Santelli, one of the network’s stars, is best known for a rant against debt relief that arguably gave birth to the Tea Party. On this occasion, however, he was ranting about another of his favorite subjects, the allegedly inflationary policies of the Federal Reserve. And his colleague Steve Liesman had had enough. “It’s impossible for you to have been more wrong,” Mr. Liesman declared, and he went on to detail the wrong predictions: “The higher interest rates never came, the inability of the U.S. to sell bonds never happened, the dollar never crashed, Rick. There isn’t a single one that’s worked for you.”

You could say the same thing about many people. I’ve had conversations with investors bemused by the failure of the dollar to crash and inflation to soar, because “all the experts” said that was going to happen. And that is indeed what you might have imagined if your notion of expertise was what you saw on CNBC, on The Wall Street Journal’s editorial page, or in Forbes.

And this has been going on for a long time — at least since early 2009. Yet despite being consistently wrong for more than five years, these “experts” never consider the possibility that there might be something amiss with their economic framework, let alone that Ben Bernanke, Janet Yellen or, for that matter, yours truly might have been right to dismiss their warnings.

At best, the inflation-is-coming crowd admits that it hasn’t happened yet, but attributes the delay to unforeseeable circumstances. Thus, in recent Congressional testimony, Lawrence Kudlow, also of CNBC, warned about “excess money and a devalued dollar.” However, “Miraculously, both actual and expected inflation indicators have stayed low.” It’s not something wrong with my model. It’s a miracle!

At worst, inflationistas resort to conspiracy theories: Inflation is already high, but the government is covering it up. The sources purporting to document this cover-up were thoroughly debunked years ago; among other things, private indicators of inflation like the Billion Prices Index (derived from Internet prices) basically confirm the official numbers. Furthermore, inflation conspiracy theorists have faced well-deserved ridicule even from fellow conservatives. Yet the conspiracy theory keeps resurfacing. It has, predictably, been rolled out to defend Mr. Santelli.

All of this is very frustrating to those reform conservatives. If you ask what new ideas they have to offer, they often mention “market monetarism,” which translates under current circumstances to the notion that the Fed should be doing more, not less.

One member of the group, Josh Barro — who is now at The Times — has gone so far as to call market monetarism “the shining success of the conservative reform movement.” But this idea has achieved no traction at all with the rest of American conservatism, which is still obsessed with the phantom menace of runaway inflation.

And the roots of inflation addiction run deep. Reformers like to minimize the influence of libertarian fantasies — fantasies that invariably involve the notion that inflationary disaster looms unless we return to gold — on today’s conservative leaders. But to do that, you have to dismiss what these leaders have actually said. If, for example, people accuse Representative Paul Ryan, chairman of the House Budget Committee, of believing that he’s living in an Ayn Rand novel, that’s because in 2009 he said that we are “living in an Ayn Rand novel.

More generally, modern American conservatism is deeply opposed to any form of government activism, and while monetary policy is sometimes treated as a technocratic affair, the truth is that printing dollars to fight a slump, or even to stabilize some broader definition of the money supply, is indeed an activist policy.

The point, then, is that inflation addiction is telling us something about the intellectual state of one side of our great national divide. The right’s obsessive focus on a problem we don’t have, its refusal to reconsider its premises despite overwhelming practical failure, tells you that we aren’t actually having any kind of rational debate. And that, in turn, bodes ill not just for would-be reformers, but for the nation.

Blow and Krugman

July 14, 2014

In ” ‘The Buck Stops With Me’ ” Mr. Blow has a question.  He says the president has taken responsibility for the country’s problems many times. Have Republicans?  Jeez, Mr. Blow, the question is enough to make a cat laugh.  Prof. Krugman, in “Obamacare Fails to Fail,” says the Affordable Care Act’s huge success is largely slipping under the radar.  Here’s Mr. Blow:

In trying to lay the blame for the border crisis on the White House’s doorstep, House Speaker John Boehner exploded at a press conference on Thursday, saying of the president:

“He’s been president for five and a half years! When is he going to take responsibility for something?”

The suggestion in the question — that the president doesn’t take responsibility for anything — is so outrageously untrue that it demands strong rebuttal.

President Obama hasn’t taken all the blame Republicans have ascribed to him, nor should he have. But he has often been quick to take responsibility.

In 2009, after the administration came under fire for A.I.G. executives’ receiving bonuses after the bailout, Obama said on the lawn of the White House:

“Ultimately I’m responsible. I’m the president of the United States. We’ve got a big mess that we’re having to clean up. Nobody here drafted those contracts. Nobody here was responsible for supervising A.I.G. and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in. We are responsible, though. The buck stops with me.”

After the failed bombing plot on Christmas Day in 2009 by a young Nigerian man with plastic explosives sewn into his underwear, the president took responsibility for intelligence lapses, saying the next month:

“Moreover, I am less interested in passing out blame than I am in learning from and correcting these mistakes to make us safer. For ultimately, the buck stops with me.”

In a 2011 interview with CNN’s Wolf Blitzer, the president took responsibility for the economy and the rate at which it was being repaired, saying:

“Well, here’s what I remember, is that when I came into office, I knew I was going to have a big mess to clean up and, frankly, the mess has been bigger than I think a lot of people anticipated at the time. We have made steady progress on these fronts, but we’re not making progress fast enough.

“And what I continue to believe is that ultimately the buck stops with me. I’m going to be accountable. I think people understand that a lot of these problems were decades in the making. People understand that this financial crisis was the worst since the Great Depression. But, ultimately, they say, look, he’s the president, we think he has good intentions, but we’re impatient and we want to see things move faster.”

(It should be noted that this president has produced 45 straight months of job growth, and the June jobs report released this month was particularly strong.)

In an interview in the 2012 election cycle, the president reiterated his philosophy about presidential responsibility in response to a question about Mitt Romney’s relationship to Bain Capital:

“Well, here’s what I know, we were just talking about responsibility, and as president of the United States, it’s pretty clear to me that I’m responsible for folks who are working in the federal government and, you know, Harry Truman said the buck stops with you.”

In a 2013 interview with CNN’s Chris Cuomo, the president said he was accountable for Washington gridlock:

“Well, look, ultimately, the buck stops with me. And so any time we are not moving forward on things that should be simple, I get frustrated.”

In an interview with MSNBC’s Chuck Todd after the health care rollout, the president took responsibility for the problems rather than simply pin them on Kathleen Sebelius, then the health and human services secretary, saying: “My priority right now is to get it fixed. … Ultimately, the buck stops with me. I’m the president. This is my team. If it is not working, it is my job to get it fixed.”

(The site is now fixed, the law is working, and according to a Gallup report issued Thursday the uninsured rate has dropped to “the lowest quarterly average recorded since Gallup and Healthways began tracking the percentage of uninsured Americans in 2008.”)

This president is a habitual blame-taker. This is the anti-George W. Bush. The fess-upper in chief. He is the antidote to the eight previous years of obfuscation, fault-dodging and flat-out denial.

This is one of the traits that made Obama an attractive candidate, and it is one of his best traits as a president.

But taking his share of responsibility does not mean he must acquiesce to his opponents and absolve them of guilt, particularly not an intransigent Congress that would rather do nothing than something, particularly not Republican leaders who envision opportunity in opposition. The president has a duty to himself and the country to call them out for the part they play in our problems.

The real question, Mr. Boehner, is not when the president will take personal responsibility for something. He has. Many times. The real question is, When will you?

How about never.  Does never work for you, Mr. Blow?  Because that’s when it will happen.  Here’s Prof. Krugman:

How many Americans know how health reform is going? For that matter, how many people in the news media are following the positive developments?

I suspect that the answer to the first question is “Not many,” while the answer to the second is “Possibly even fewer,” for reasons I’ll get to later. And if I’m right, it’s a remarkable thing — an immense policy success is improving the lives of millions of Americans, but it’s largely slipping under the radar.

How is that possible? Think relentless negativity without accountability. The Affordable Care Act has faced nonstop attacks from partisans and right-wing media, with mainstream news also tending to harp on the act’s troubles. Many of the attacks have involved predictions of disaster, none of which have come true. But absence of disaster doesn’t make a compelling headline, and the people who falsely predicted doom just keep coming back with dire new warnings.

Consider, in particular, the impact of Obamacare on the number of Americans without health insurance. The initial debacle of the federal website produced much glee on the right and many negative reports from the mainstream press as well; at the beginning of 2014, many reports confidently asserted that first-year enrollments would fall far short of White House projections.

Then came the remarkable late surge in enrollment. Did the pessimists face tough questions about why they got it so wrong? Of course not. Instead, the same people just came out with a mix of conspiracy theories and new predictions of doom. The administration was “cooking the books,” said Senator John Barrasso of Wyoming; people who signed up wouldn’t actually pay their premiums, declared an array of “experts”; more people were losing insurance than gaining it, declared Senator Ted Cruz of Texas.

But the great majority of those who signed up did indeed pay up, and we now have multiple independent surveys — from Gallup, the Urban Institute and the Commonwealth Fund — all showing a sharp reduction in the number of uninsured Americans since last fall.

I’ve been seeing some claims on the right that the dramatic reduction in the number of uninsured was caused by economic recovery, not health reform (so now conservatives are praising the Obama economy?). But that’s pretty lame, and also demonstrably wrong.

For one thing, the decline is too sharp to be explained by what is at best a modest improvement in the employment picture. For another, that Urban Institute survey shows a striking difference between the experience in states that expanded Medicaid — which are also, in general, states that have done their best to make health care reform work — and those that refused to let the federal government cover their poor. Sure enough, the decline in uninsured residents has been three times as large in Medicaid-expansion states as in Medicaid-expansion rejecters. It’s not the economy; it’s the policy, stupid.

What about the cost? Last year there were many claims about “rate shock” from soaring insurance premiums. But last month the Department of Health and Human Services reported that among those receiving federal subsidies — the great majority of those signing up — the average net premium was only $82 a month.

Yes, there are losers from Obamacare. If you’re young, healthy, and affluent enough that you don’t qualify for a subsidy (and don’t get insurance from your employer), your premium probably did rise. And if you’re rich enough to pay the extra taxes that finance those subsidies, you have taken a financial hit. But it’s telling that even reform’s opponents aren’t trying to highlight these stories. Instead, they keep looking for older, sicker, middle-class victims, and keep failing to find them.

Oh, and according to Commonwealth, the overwhelming majority of the newly insured, including 74 percent of Republicans, are satisfied with their coverage.

You might ask why, if health reform is going so well, it continues to poll badly. It’s crucial, I’d argue, to realize that Obamacare, by design, by and large doesn’t affect Americans who already have good insurance. As a result, many peoples’ views are shaped by the mainly negative coverage in the news media. Still, the latest tracking survey from the Kaiser Family Foundation shows that a rising number of Americans are hearing about reform from family and friends, which means that they’re starting to hear from the program’s beneficiaries.

And as I suggested earlier, people in the media — especially elite pundits — may be the last to hear the good news, simply because they’re in a socioeconomic bracket in which people generally have good coverage.

For the less fortunate, however, the Affordable Care Act has already made a big positive difference. The usual suspects will keep crying failure, but the truth is that health reform is — gasp! — working.

Brooks, Cohen and Krugman

July 11, 2014

Bobo has a question in “Baseball or Soccer?”  He asks if your life more like a baseball game or a soccer match, and says you might be surprised.  “Jack Chicago” from Chicago wasn’t surprised.  In his comment he said “I find myself ill-prepared for another trite ‘life as a sport analogy’. The entire column is simplistic and lacking in any depth.”  In “Fat Britain” Mr. Cohen says once we’ve found our lunch our instinct is to avoid becoming someone else’s.  Prof. Krugman asks “Who Wants a Depression?”  He considers “sadomonetarism,” the interests of the 0.01 percent and the politicization of economics.  Here’s Bobo:

Is life more like baseball, or is it more like soccer?

Baseball is a team sport, but it is basically an accumulation of individual activities. Throwing a strike, hitting a line drive or fielding a grounder is primarily an individual achievement. The team that performs the most individual tasks well will probably win the game.

Soccer is not like that. In soccer, almost no task, except the penalty kick and a few others, is intrinsically individual. Soccer, as Simon Critchley pointed out recently in The New York Review of Books, is a game about occupying and controlling space. If you get the ball and your teammates have run the right formations, and structured the space around you, you’ll have three or four options on where to distribute it. If the defenders have structured their formations to control the space, then you will have no options. Even the act of touching the ball is not primarily defined by the man who is touching it; it is defined by the context created by all the other players.

As Critchley writes, “Soccer is a collective game, a team game, and everyone has to play the part which has been assigned to them, which means they have to understand it spatially, positionally and intelligently and make it effective.” Brazil wasn’t clobbered by Germany this week because the quality of the individual players was so much worse. They got slaughtered because they did a pathetic job of controlling space. A German player would touch the ball, even close to the Brazilian goal, and he had ample room to make the kill.

Most of us spend our days thinking we are playing baseball, but we are really playing soccer. We think we individually choose what career path to take, whom to socialize with, what views to hold. But, in fact, those decisions are shaped by the networks of people around us more than we dare recognize.

This influence happens through at least three avenues. First there is contagion. People absorb memes, ideas and behaviors from each other the way they catch a cold. As Nicholas Christakis and others have shown, if your friends are obese, you’re likely to be obese. If your neighbors play fair, you are likely to play fair. We all live within distinct moral ecologies. The overall environment influences what we think of as normal behavior without being much aware of it.

Then there is the structure of your network. There is by now a vast body of research on how differently people behave depending on the structure of the social networks. People with vast numbers of acquaintances have more job opportunities than people with fewer but deeper friendships. Most organizations have structural holes, gaps between two departments or disciplines. If you happen to be in an undeveloped structural hole where you can link two departments, your career is likely to take off.

Innovation is hugely shaped by the structure of an industry at any moment. Individuals in Silicon Valley are creative now because of the fluid structure of failure and recovery. Broadway was incredibly creative in the 1940s and 1950s because it was a fluid industry in which casual acquaintances ended up collaborating.

Since then, studies show, theater social networks have rigidified, and, even if you collaborate with an ideal partner, you are not as likely to be as creative as you would have been when the global environment was more fertile.

Finally, there is the power of the extended mind. There is also a developed body of research on how much our very consciousness is shaped by the people around us. Let me simplify it with a classic observation: Each close friend you have brings out a version of yourself that you could not bring out on your own. When your close friend dies, you are not only losing the friend, you are losing the version of your personality that he or she elicited.

Once we acknowledge that, in life, we are playing soccer, not baseball, a few things become clear. First, awareness of the landscape of reality is the highest form of wisdom. It’s not raw computational power that matters most; it’s having a sensitive attunement to the widest environment, feeling where the flow of events is going. Genius is in practice perceiving more than the conscious reasoning.

Second, predictive models will be less useful. Baseball is wonderful for sabermetricians. In each at bat there is a limited range of possible outcomes. Activities like soccer are not as easily renderable statistically, because the relevant spatial structures are harder to quantify. Even the estimable statistician Nate Silver of FiveThirtyEight gave Brazil a 65 percent chance of beating Germany.

Finally, Critchley notes that soccer is like a 90-minute anxiety dream — one of those frustrating dreams when you’re trying to get somewhere but something is always in the way. This is yet another way soccer is like life.

Now here’s Mr. Cohen:

Britain is fat, unacceptably fat — fatter than ever before. There is no escaping this development. Turn on the radio and chances are some new report on obesity will be the subject of debate, with handwringing over the “Americanization” of Britain, and hectoring BBC-style questioning as to what can be done.

A recent report in the Lancet medical journal found that 67 percent of men and 57 percent of women in the United Kingdom are either overweight or obese. This put Britain at the top of the supersized league table among big European countries (the likes of Malta and Iceland outdid it). More than a quarter of children are overweight or obese.

The causes are scarcely different from elsewhere in a fattening world: cheap availability of calorie-dense food (burgers, fries, chips, sodas); “food deserts” in poor areas where healthy fare is hard to find and expensive; sedentary lives spent seated in front of the computer or sprawled on the couch with “Game of Thrones” blaring; too much sugar, fat and fructose; broken or weakened families where children forage in the fridge for prepared meals and snack all day rather than gathering for a family meal; speeded-up societies that breed bored, stressed, impulsive and compulsive behavior, including binge eating and constant eating.

As Tony Goldstone, a consultant endocrinologist at London’s Hammersmith Hospital put it to me: “In the developed world we don’t eat because we are hungry.” We eat because everywhere we look there’s a superabundance of food and we’re hardwired through evolution to keep our body weight up.

The effects, as elsewhere, include a sharp increase in diabetes. Since 1996 the number of people diagnosed with diabetes in Britain has more than doubled to about three million. It is estimated that by 2025 there will be some five million diabetics. Direct and indirect health costs related to spreading obesity range into the billions of dollars.

The new social divide sees the skinny affluent at their Knightsbridge gym raving about their personal trainer and favorite farmers’ market, and the pot-bellied poor guzzling kebabs and fries. The counterintuitive association of poverty and obesity is an indicator of how much the world has changed. Survival is still an instinct but it is no longer an issue. More people today are overweight than malnourished.

Goldstone said he comes away from obesity conferences feeling gloomy. Telling fat people to get thin through dieting is, he suggests, like “telling an asthmatic to breathe more.” Cognitive control cedes to the force of instinct. “Who says that the will can overcome biology when biology trained us to get food when scarce?” Goldstone said. “We evolved to prefer foods high in fat and sugar because they contain the calories we need to reproduce.”

Our urges are out of sync with our environment. The environment has changed. Urges have not. Our instinct is to eat and rest. We have no instinct to stop eating and be active. We eat to survive and then want to rest because we may need energy to flee some wild beast. Once we’ve found our lunch, our instinct is to avoid being someone else’s.

It may not seem like lying on a couch is part of our survival gene but it is. David Haslam, the chairman of Britain’s National Obesity Forum, told me: “It is in our interest to eat and be lazy. Put people in an environment like the current one that promotes eating and laziness and they will oblige.” It’s their genetic inclination.

So I’m gloomy too. I eat more in the hours before I have to write a column. My instinct is then to rest. I cannot because I have to write. My impulse is then to eat again as a way, for a moment, not to write. This only augments the desire to rest. If deadlines did not exist I’d be enormous. Everyone these days plays such mental games, their instincts and environment at war with each other.

This does not mean there is nothing to be done about fat Britain or fat America. Exercise can be encouraged in big and small ways (promoting use of bikes, making sure hotels no longer hide the stairs). Make restaurant chains post calorie information. Improve labeling (Goldstone, a diabetic, told me he often can’t work out from current labels how many carbohydrates a product contains). Oblige supermarkets to move sweets from the checkouts, as Tesco has agreed to do. Get healthy food into schools and poor areas. Haslam told me about an experiment at a Morrisons supermarket where cardboard avatars of a diabetes consultant, a midwife or a doctor pointed to healthy foods. The results were positive. And, for those who can afford it, there’s bariatric surgery.

Nonetheless, the world will get fatter for the foreseeable future because humans in their ingenuity have created a near-perfect environment for the propagation of fatness.

Now here’s Prof. Krugman:

One unhappy lesson we’ve learned in recent years is that economics is a far more political subject than we liked to imagine. Well, duh, you may say. But, before the financial crisis, many economists — even, to some extent, yours truly — believed that there was a fairly broad professional consensus on some important issues.

This was especially true of monetary policy. It’s not that many years since the administration of George W. Bush declared that one lesson from the 2001 recession and the recovery that followed was that “aggressive monetary policy can make a recession shorter and milder.” Surely, then, we’d have a bipartisan consensus in favor of even more aggressive monetary policy to fight the far worse slump of 2007 to 2009. Right?

Well, no. I’ve written a number of times about the phenomenon of “sadomonetarism,” the constant demand that the Federal Reserve and other central banks stop trying to boost employment and raise interest rates instead, regardless of circumstances. I’ve suggested that the persistence of this phenomenon has a lot to do with ideology, which, in turn, has a lot to do with class interests. And I still think that’s true.

But I now think that class interests also operate through a cruder, more direct channel. Quite simply, easy-money policies, while they may help the economy as a whole, are directly detrimental to people who get a lot of their income from bonds and other interest-paying assets — and this mainly means the very wealthy, in particular the top 0.01 percent.

The story so far: For more than five years, the Fed has faced harsh criticism from a coalition of economists, pundits, politicians and financial-industry moguls warning that it is “debasing the dollar” and setting the stage for runaway inflation. You might have thought that the continuing failure of the predicted inflation to materialize would cause at least a few second thoughts, but you’d be wrong. Some of the critics have come up with new rationales for unchanging policy demands — it’s about inflation! no, it’s about financial stability! — but most have simply continued to repeat the same warnings.

Who are these always-wrong, never-in-doubt critics? With no exceptions I can think of, they come from the right side of the political spectrum. But why should right-wing sentiments go hand in hand with inflation paranoia? One answer is that using monetary policy to fight slumps is a form of government activism. And conservatives don’t want to legitimize the notion that government action can ever have positive effects, because once you start down that path you might end up endorsing things like government-guaranteed health insurance.

But there’s also a much more direct reason for those defending the interests of the wealthy to complain about easy money: The wealthy derive an important part of their income from interest on bonds, and low-rate policies have greatly reduced this income.

Complaints about low interest rates are usually framed in terms of the harm being done to retired Americans living on the interest from their CDs. But the interest receipts of older Americans go mainly to a small and relatively affluent minority. In 2012, the average older American with interest income received more than $3,000, but half the group received $255 or less. The really big losers from low interest rates are the truly wealthy — not even the 1 percent, but the 0.1 percent or even the 0.01 percent. Back in 2007, before the slump, the average member of the 0.01 percent received $3 million (in 2012 dollars) in interest. By 2011, that had fallen to $1.3 million — a loss equivalent to almost 9 percent of the group’s 2007 income.

That’s a lot, and it surely explains a lot of the hysteria over Fed policy. The rich are even more likely than most people to believe that what’s good for them is good for America — and their wealth and the influence it buys ensure that there are always plenty of supposed experts eager to find justifications for this attitude. Hence sadomonetarism.

Which brings me back to the politicization of economics.

Before the financial crisis, many central bankers and economists were, it’s now clear, living in a fantasy world, imagining themselves to be technocrats insulated from the political fray. After all, their job was to steer the economy between the shoals of inflation and depression, and who could object to that?

It turns out, however, that using monetary policy to fight depression, while in the interest of the vast majority of Americans, isn’t in the interest of a small, wealthy minority. And, as a result, monetary policy is as bound up in class and ideological conflict as tax policy.

The truth is that in a society as unequal and polarized as ours has become, almost everything is political. Get used to it.

Blow and Krugman

July 7, 2014

In “Ramparts Against Republicans” Mr. Blow says with the plutocrats betting on the G.O.P., Democrats will need to marshal their forces.  In “Beliefs, Facts and Money” Prof. Krugman outlines how Republicans ignore the evidence and cling to that old-time economic religion.  Here’s Mr. Blow:

Republicans believe that they have a chance of taking control of the Senate in November. And they do.

Who will win control is at the moment basically a tossup, but Republicans get the nod by narrow statistical margins.

Republicans need to pick up just six seats to gain control of the chamber. Thirty-six seats are open, and nearly two-thirds are currently held by Democrats. That means Democrats are playing defense in a political climate poisoned by Republican intransigence that has made much of the public sour on Washington in general. And it doesn’t help that the president’s approval rating remains underwater.

As The Los Angeles Times pointed out Friday: “Of the dozen or so most competitive races, virtually all are for seats held by Democrats. Of those, seven are in states that President Obama lost in 2012: Alaska, Arkansas, Louisiana, Montana, North Carolina, South Dakota and West Virginia.”

According to the Cook Report, “Republicans are on track to pick up between four and six seats; it is more likely than not that the number will be at the higher end of — and may exceed — that range.”

The New York Times’s current Senate forecast from The Upshot puts it this way: “According to our statistical election-forecasting machine, it’s a tossup. The Republicans have about a 54 percent chance of gaining a majority.”

Last month, Nate Silver at FiveThirtyEight.com said: “It’s almost certain that Republicans are going to gain seats. The question is whether they’ll net the six pickups necessary to win control of the Senate.” But he continued: “If asked to place a bet at even odds, we’d take a Republican Senate.”

And big-money conservatives are flooding the zone with cash to ensure victory.

Lauren Windsor reported last month in The Nation that Charles and David Koch held their annual summer seminar for “a gang of the world’s richest people,” and, according to a source who attended the conference, “the explicit goal was to raise $500 million to take the Senate in the 2014 midterms and another $500 million ‘to make sure Hillary Clinton is never president.’”

This continues a disturbing trend in which the wealthy tilt right in the fight against the rest. According to a report last month from the Center for Responsive Politics, “So far this cycle, the top 20 deep-pocketed contributors to the joint committees are all giving to conservatives. In contrast, during the 2012 cycle four of the top five donors to [joint fund-raising committees] were giving to Democrats.”

The plutocrats are flexing their muscle and placing their bets: Republicans for the win!

For one thing, it would signal a reward for obstruction, so a government that already has nearly ground to a halt could become even more resistant to action. This could mean another lost year for us as a nation, as Congress whiles away the time in anticipation of a changing of the guard in 2016.

Or, a Congress completely controlled by Republicans could feel a need to put some points on the board, so to speak, redoubling investigative queries into conservative crusades like the Benghazi attacks and scheduling votes on, and possibly even passing, a raft of bills that stoke conservative passions, like limits on abortion.

According to The Daily Independent, a newspaper in Ashland, Ky., Senator Mitch McConnell, while speaking at a national Right to Life Convention in Louisville last month, told the crowd that if Republicans gained control of the Senate, they would schedule a vote on legislation to outlaw abortions after 20 weeks.

To that point, The New York Times’s Jackie Calmes reported last week: “With their Senate majority at stake in November, Democrats and allied groups are now stepping up an aggressive push to woo single women — young and old, highly educated and working class, never married, and divorced or widowed.”

On the heels of the Supreme Court’s ruling in the Hobby Lobby case, and the court’s temporary order in the Wheaton College case, this might be smart politics. Both decisions limited women’s rights relating to contraceptive coverage, and both were attacked in strongly worded dissents by female justices, Justice Ruth Bader Ginsburg (Notorious R.B.G., as the Internet has crowned her) writing on the former and Justice Sonia Sotomayor on the latter.

But Democrats can’t lean on a single demographic. The corporatists, oligarchs and plutocrats are working in concert. Liberals must marshal all their constituent groups to do the same. Everyone must vote.

Here’s Prof. Krugman:

On Sunday The Times published an article by the political scientist Brendan Nyhan about a troubling aspect of the current American scene — the stark partisan divide over issues that should be simply factual, like whether the planet is warming or evolution happened. It’s common to attribute such divisions to ignorance, but as Mr. Nyhan points out, the divide is actually worse among those who are seemingly better informed about the issues.

The problem, in other words, isn’t ignorance; it’s wishful thinking. Confronted with a conflict between evidence and what they want to believe for political and/or religious reasons, many people reject the evidence. And knowing more about the issues widens the divide, because the well informed have a clearer view of which evidence they need to reject to sustain their belief system.

As you might guess, after reading Mr. Nyhan I found myself thinking about the similar state of affairs when it comes to economics, monetary economics in particular.

Some background: On the eve of the Great Recession, many conservative pundits and commentators — and quite a few economists — had a worldview that combined faith in free markets with disdain for government. Such people were briefly rocked back on their heels by the revelation that the “bubbleheads” who warned about housing were right, and the further revelation that unregulated financial markets are dangerously unstable. But they quickly rallied, declaring that the financial crisis was somehow the fault of liberals — and that the great danger now facing the economy came not from the crisis but from the efforts of policy makers to limit the damage.

Above all, there were many dire warnings about the evils of “printing money.” For example, in May 2009 an editorial in The Wall Street Journal warned that both interest rates and inflation were set to surge “now that Congress and the Federal Reserve have flooded the world with dollars.” In 2010 a virtual Who’s Who of conservative economists and pundits sent an open letter to Ben Bernanke warning that his policies risked “currency debasement and inflation.” Prominent politicians like Representative Paul Ryan joined the chorus.

Reality, however, declined to cooperate. Although the Fed continued on its expansionary course — its balance sheet has grown to more than $4 trillion, up fivefold since the start of the crisis — inflation stayed low. For the most part, the funds the Fed injected into the economy simply piled up either in bank reserves or in cash holdings by individuals — which was exactly what economists on the other side of the divide had predicted would happen.

Needless to say, it’s not the first time a politically appealing economic doctrine has been proved wrong by events. So those who got it wrong went back to the drawing board, right? Hahahahaha.

In fact, hardly any of the people who predicted runaway inflation have acknowledged that they were wrong, and that the error suggests something amiss with their approach. Some have offered lame excuses; some, following in the footsteps of climate-change deniers, have gone down the conspiracy-theory rabbit hole, claiming that we really do have soaring inflation, but the government is lying about the numbers (and by the way, we’re not talking about random bloggers or something; we’re talking about famous Harvard professors). Mainly, though, the currency-debasement crowd just keeps repeating the same lines, ignoring its utter failure in prognostication.

You might wonder why monetary theory gets treated like evolution or climate change. Isn’t the question of how to manage the money supply a technical issue, not a matter of theological doctrine?

Well, it turns out that money is indeed a kind of theological issue. Many on the right are hostile to any kind of government activism, seeing it as the thin edge of the wedge — if you concede that the Fed can sometimes help the economy by creating “fiat money,” the next thing you know liberals will confiscate your wealth and give it to the 47 percent. Also, let’s not forget that quite a few influential conservatives, including Mr. Ryan, draw their inspiration from Ayn Rand novels in which the gold standard takes on essentially sacred status.

And if you look at the internal dynamics of the Republican Party, it’s obvious that the currency-debasement, return-to-gold faction has been gaining strength even as its predictions keep failing.

Can anything reverse this descent into dogma? A few conservative intellectuals have been trying to persuade their movement to embrace monetary activism, but they’re ever more marginalized. And that’s just what Mr. Nyhan’s article would lead us to expect. When faith — including faith-based economics — meets evidence, evidence doesn’t stand a chance.

Brooks, Cohen and Krugman

July 4, 2014

Bobo’s given us “Social Science Palooza IV” in which he says most social science confirms the blindingly obvious. He offers eight examples where it doesn’t.  Apparently he’s found a site that serves up social science factoids every day…  Mr. Cohen considers a “Lawless Holy Land” and says absent a two-state peace agreement, revenge killings will win out over law. This is the future for Israel and Palestine.  Prof. Krugman, in “Build We Won’t,” explains why America gave up on the future and caved on investing in building and maintaining our highways.  Here’s Bobo:

A day without social science is like a day without sunshine. Fortunately, every morning Kevin Lewis of National Affairs magazine gathers recent social science findings and emails them out to the masses. You can go to the National Affairs website to see and sign up for his work, but, in the meantime, here are some recent interesting findings:

Working moms sometimes raise smarter students. Caitlin McPherran Lombardi and Rebekah Levine Coley studied the children of mothers who work and those of mothers who don’t. They found the children of working mothers were just as ready for school as other children. Furthermore, among families where the father’s income was lower, the children of working mothers demonstrated higher cognitive skills and fewer conduct problems than the children of nonworking mothers. As with all this work, no one study is dispositive, but here is some more support for the idea that mothers who work are not hurting their kids.

The office is often a more relaxing place than the home. Sarah Damaske, Joshua Smyth and Matthew Zawadzki found that people are more likely to have lower values of the stress hormone cortisol when they are at work than when at home. Maybe that’s because parenting small kids is so demanding. But, on the contrary: Having children around was correlated with less relative stress at home.

Hearts and minds may be a myth. Armies fighting counterinsurgency campaigns spend a lot of effort trying to win over the hearts and minds of the local populations. But Raphael Cohen looked at polling data from Vietnam, Iraq and Afghanistan and found that public opinion is a poor predictor of strategic victory. Public opinion is not that malleable, and its swings are more an effect than a cause. That is, counterinsurgency armies get more popular as they win victories; they don’t get popular and then use that popularity to win.

Attractive children attract less empathy than unattractive children. Robert Fisher and Yu Ma studied how much help children received from unrelated adults when they were experiencing difficulties. People perceive that attractive children are more socially competent and, therefore, are less likely to help them, as long as the need is not severe. So, if you are creating an ad to get people to donate to your hospital or charity, you might avoid child models who are winners in the looks department.

Too much talent can be as bad as too little talent. Most people assume there is a linear relationship between talent and team performance. But Roderick Swaab and others studied team performance in basketball and found that more talent is better up to a point — after which more talent just means worse teamwork and ultimately worse performance. In baseball, more talent did lead to better team performance straight up the line, but in activities like basketball, which require more intra-team coordination, too much talent can tear apart teamwork.

Title IX has produced some unintended consequences. Phoebe Clarke and Ian Ayres studied the effect of sports on social outcomes. They found that a 10 percentage point increase in state level female sports participation generated a 5 or 6 percentage point rise in the rate of female secularism, a 5 point rise in the proportion of women who are mothers and a 6 point rise in the percentage who are single mothers. It could be that sports participation is correlated with greater independence from traditional institutions, with good and bad effects.

Moral stories don’t necessarily make more moral children. Kang Lee, Victoria Talwar and others studied the effectiveness of classic moral stories in promoting honesty among 3- to 7-year-olds. They found stories like “Pinocchio” and “The Boy Who Cried Wolf” failed to reduce lying in children. However, the story of “George Washington and the Cherry Tree” significantly increased truth-telling. Stories that emphasized the bad effects of lying had no effect, but stories that emphasized the good effects of telling the truth did have an effect.

Good fences make good neighbors. When ethnic groups clash, we usually try to encourage peace by integrating them. Let them get to know one another or perform a joint activity. This may be the wrong approach. Alex Rutherford, Dion Harmon and others studied ethnically diverse areas and came to a different conclusion. Peace is not the result of integrated coexistence. It is the result of well-defined geographic and political boundaries. For example, Switzerland is an ethnically diverse place, but mountains and lakes clearly define each group’s spot. Even in the former Yugoslavia, amid widespread ethnic violence, peace prevailed where there were clear boundaries.

Most social science research confirms the blindingly obvious. But sometimes it reveals things nobody had thought of, or suggests that the things we thought were true are actually false.

That’s a message for you, federal appropriators.

I guess we’ve all noticed that as the Republicans get crazier and crazier and crazier Bobo writes less and less and less about politics…  Here’s Mr. Cohen:

“Israel is a state of law and everyone is obligated to act in accordance with the law,” the Israeli prime minister, Benjamin Netanyahu, said after the abduction and murder of a Palestinian teenager shot in an apparent revenge attack for the killing last month of three Israeli teenagers in the West Bank.

He called the killing of Muhammad Abu Khdeir in East Jerusalem “abominable.” President Mahmoud Abbas of the Palestinian Authority has denounced the murder of the three Israelis, one of them also an American citizen, in the strongest terms.

What to make of this latest flare-up in the blood feud of Arab and Jew in the Holy Land, beyond revulsion at the senseless loss of four teenagers’ lives? What to make of the hand-wringing of the very leaders who have just chosen to toss nine months of American attempts at diplomatic mediation into the garbage and now reap the fruits of their fecklessness?

Sometimes words, any words, appear unseemly because the perpetuators of the conflict relish the attention they receive — all the verbal contortions of would-be peacemakers who insist, in their quaint doggedness, that reason can win out over revenge and biblical revelation.

Still, it must be said that Israel, a state of laws within the pre-1967 lines, is not a state of law beyond them in the occupied West Bank, where Israeli dominion over millions of Palestinians, now almost a half-century old, involves routine coercion, humiliation and abuse to which most Israelis have grown increasingly oblivious.

What goes on beyond a long-forgotten Green Line tends only to impinge on Israeli consciousness when violence flares. Otherwise it is over the wall or barrier (choose the word that suits your politics) in places best not dwelled upon.

But those places come back to haunt Israelis, as the vile killings of Eyal Yifrach, Naftali Fraenkel and Gilad Shaar demonstrate. Netanyahu, without producing evidence, has blamed Hamas for the murders. The sweeping Israeli response in the West Bank has already seen at least six Palestinians killed, about 400 Palestinians arrested, and much of the territory placed in lockdown. Reprisals have extended to Gaza. Palestinian militants there have fired rockets and mortar rounds into southern Israel in response.

This is not what happens in a state of laws. Beyond the Green Line lies a lawless Israeli enterprise profoundly corrosive, over time, to the noble Zionist dream of a democracy governed by laws.

All four killings took place in territory occupied or annexed by Israel since 1967. Here the law has taken second place to the Messianic claims of religious nationalists who believe Jews have a God-given right to all the land between the Mediterranean and the Jordan River. Their view has held sway, even if it is not the view of a majority of Israelis.

No democracy can be immune to running an undemocratic system of oppression in territory under its control. To have citizens on one side of an invisible line and subjects without rights on the other side of that line does not work. A democracy needs borders; Israel’s slither into military rule for Palestinians in occupied areas where there is no consent of the governed.

As for the Palestinian Authority, so-called, it is weak, and the Palestinian national movement still riven with division beneath a “unity government” that cannot even pay salaries in Gaza.

This situation may be sustainable because power lies overwhelmingly with Israel. But it is sustainable only at the cost of the violence now flaring. This is the future. Absent a two-state peace agreement, revenge will win out over law. Violence is not an aberration. It is the logical consequence of an aberrational order susceptible to lynch mobs, whether Arabs or Jews.

Most Israelis and Palestinians want peace. They do not want their children dying this way. But their leaders are small figures seeking only short-term tactical gain.

A French friend forwarded to me the recent newsletter of a French violinist, Mathilde Vittu, who has been teaching music in the West Bank. She writes of watching Palestinian children emerging from her lessons, violins on their backs, being surrounded by Israeli soldiers trying to provoke them. She goes to Gaza and observes the “double imprisonment” constituted by Israel and “the rules of Hamas.”

In a makeshift conservatory, partially destroyed, hit by power cuts in the midst of Bach piano solos, she speaks of her “indescribable emotion” at a magical final concert where she is thanked “for liberating us for an evening through music.”

One very talented violinist, aged 14, tells her he plans to stop playing after his exam to become a “martyr” after the death of his best friend in the West Bank. She is deeply troubled; then locals tell her lots of kids in Gaza have that ambition at 14, only to think better of it.

Yifrach, Khdeir, Fraenkel, Shaar: Will their deaths serve any purpose? I doubt it.

And now here’s Prof. Krugman:

You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.

And the appropriate policy response was simple, too: Fill that hole in demand. In particular, the aftermath of the bursting bubble was (and still is) a very good time to invest in infrastructure. In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.

But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending. Adjusted for inflation and population growth, public expenditures on construction have fallen more than 20 percent since early 2008. In policy terms, this represents an almost surreally awful wrong turn; we’ve managed to weaken the economy in the short run even as we undermine its prospects for the long run. Well played!

And it’s about to get even worse. The federal highway trust fund, which pays for a large part of American road construction and maintenance, is almost exhausted. Unless Congress agrees to top up the fund somehow, road work all across the country will have to be scaled back just a few weeks from now. If this were to happen, it would quickly cost us hundreds of thousands of jobs, which might derail the employment recovery that finally seems to be gaining steam. And it would also reduce long-run economic potential.

How did things go so wrong? As with so many of our problems, the answer is the combined effect of rigid ideology and scorched-earth political tactics. The highway fund crisis is just one example of a much broader problem.

So, about the highway fund: Road spending is traditionally paid for via dedicated taxes on fuel. The federal trust fund, in particular, gets its money from the federal gasoline tax. In recent years, however, revenue from the gas tax has consistently fallen short of needs. That’s mainly because the tax rate, at 18.4 cents per gallon, hasn’t changed since 1993, even as the overall level of prices has risen more than 60 percent.

It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax, even aside from the need to pay for road work. But even if we aren’t ready to do that right now — if, say, we want to avoid raising taxes until the economy is stronger — we don’t have to stop building and repairing roads. Congress can and has topped up the highway trust fund from general revenue. In fact, it has thrown $54 billion into the hat since 2008. Why not do it again?

But no. We can’t simply write a check to the highway fund, we’re told, because that would increase the deficit. And deficits are evil, at least when there’s a Democrat in the White House, even if the government can borrow at incredibly low interest rates. And we can’t raise gas taxes because that would be a tax increase, and tax increases are even more evil than deficits. So our roads must be allowed to fall into disrepair.

If this sounds crazy, that’s because it is. But similar logic lies behind the overall plunge in public investment. Most such investment is carried out by state and local governments, which generally must run balanced budgets and saw revenue decline after the housing bust. But the federal government could have supported public investment through deficit-financed grants, and states themselves could have raised more revenue (which some but not all did). The collapse of public investment was, therefore, a political choice.

What’s useful about the looming highway crisis is that it illustrates just how self-destructive that political choice has become. It’s one thing to block green investment, or high-speed rail, or even school construction. I’m for such things, but many on the right aren’t. But everyone from progressive think tanks to the United States Chamber of Commerce thinks we need good roads. Yet the combination of anti-tax ideology and deficit hysteria (itself mostly whipped up in an attempt to bully President Obama into spending cuts) means that we’re letting our highways, and our future, erode away.

Krugman, solo

June 30, 2014

Mr. Blow is off today.  In “Charlatans, Cranks and Kansas” Prof. Krugman says the state’s economy is in terrible shape after huge income-tax cuts — another case of big money selling bad ideas.  Here he is:

Two years ago Kansas embarked on a remarkable fiscal experiment: It sharply slashed income taxes without any clear idea of what would replace the lost revenue. Sam Brownback, the governor, proposed the legislation — in percentage terms, the largest tax cut in one year any state has ever enacted — in close consultation with the economist Arthur Laffer. And Mr. Brownback predicted that the cuts would jump-start an economic boom — “Look out, Texas,” he proclaimed.

But Kansas isn’t booming — in fact, its economy is lagging both neighboring states and America as a whole. Meanwhile, the state’s budget has plunged deep into deficit, provoking a Moody’s downgrade of its debt.

There’s an important lesson here — but it’s not what you think. Yes, the Kansas debacle shows that tax cuts don’t have magical powers, but we already knew that. The real lesson from Kansas is the enduring power of bad ideas, as long as those ideas serve the interests of the right people.

Why, after all, should anyone believe at this late date in supply-side economics, which claims that tax cuts boost the economy so much that they largely if not entirely pay for themselves? The doctrine crashed and burned two decades ago, when just about everyone on the right — after claiming, speciously, that the economy’s performance under Ronald Reagan validated their doctrine — went on to predict that Bill Clinton’s tax hike on the wealthy would cause a recession if not an outright depression. What actually happened was a spectacular economic expansion.

Nor is it just liberals who have long considered supply-side economics and those promoting it to have been discredited by experience. In 1998, in the first edition of his best-selling economics textbook, Harvard’s N. Gregory Mankiw — very much a Republican, and later chairman of George W. Bush’s Council of Economic Advisers — famously wrote about the damage done by “charlatans and cranks.” In particular, he highlighted the role of “a small group of economists” who “advised presidential candidate Ronald Reagan that an across-the-board cut in income tax rates would raise tax revenue.” Chief among that “small group” was none other than Art Laffer.

And it’s not as if supply-siders later redeemed themselves. On the contrary, they’ve been as ludicrously wrong in recent years as they were in the 1990s. For example, five years have passed since Mr. Laffer warned Americans that “we can expect rapidly rising prices and much, much higher interest rates over the next four or five years.” Just about everyone in his camp agreed. But what we got instead was low inflation and record-low interest rates.

So how did the charlatans and cranks end up dictating policy in Kansas, and to a more limited extent in other states? Follow the money.

For the Brownback tax cuts didn’t emerge out of thin air. They closely followed a blueprint laid out by the American Legislative Exchange Council, or ALEC, which has also supported a series of economic studies purporting to show that tax cuts for corporations and the wealthy will promote rapid economic growth. The studies are embarrassingly bad, and the council’s Board of Scholars — which includes both Mr. Laffer and Stephen Moore of the Heritage Foundation — doesn’t exactly shout credibility. But it’s good enough for antigovernment work.

And what is ALEC? It’s a secretive group, financed by major corporations, that drafts model legislation for conservative state-level politicians. Ed Pilkington of The Guardian, who acquired a number of leaked ALEC documents, describes it as “almost a dating service between politicians at the state level, local elected politicians, and many of America’s biggest companies.” And most of ALEC’s efforts are directed, not surprisingly, at privatization, deregulation, and tax cuts for corporations and the wealthy.

And I do mean for the wealthy. While ALEC supports big income-tax cuts, it calls for increases in the sales tax — which fall most heavily on lower-income households — and reductions in tax-based support for working households. So its agenda involves cutting taxes at the top while actually increasing taxes at the bottom, as well as cutting social services.

But how can you justify enriching the already wealthy while making life harder for those struggling to get by? The answer is, you need an economic theory claiming that such a policy is the key to prosperity for all. So supply-side economics fills a need backed by lots of money, and the fact that it keeps failing doesn’t matter.

And the Kansas debacle won’t matter either. Oh, it will briefly give states considering similar policies pause. But the effect won’t last long, because faith in tax-cut magic isn’t about evidence; it’s about finding reasons to give powerful interests what they want.

Brooks and Krugman

June 27, 2014

In “The Spiritual Recession” Bobo gurgles that we will dishonor American heritage if we remain indifferent to the triumphs and failures of the global democratic project.  In the comments “gemli” from Boston ends a longer comment with this:  “If there is a spiritual recession, it was brought about by the same forces of cynical fundamentalist greed that created the economic recession. Were it not for the people who occupied Wall Street, we might have forgotten what democracy looked like.”  In “The Incompetence Dogma” Prof. Krugman says but Obamacare wasn’t supposed to work! What were all those cries of impending disaster about?  Here’s Bobo:

For the past few centuries, the Western world has witnessed a contest of historic visions. On the one side was the dream of the beautiful collective. Human progress was a one-way march toward socialism. People would liberate themselves from religion, hierarchy and oppression. They would build a new kind of society where equality would be the rule, where rational planning would replace cruel competition.

On the other side was the dream of universal democracy. Human progress was seen as a one-way march toward democratic capitalism. Societies would be held together by shared biblical morality. They would be invigorated by economic competition. They would be guided by a democratic state, where power was in the hands of the masses and dispersed through checks and balances.

These two historic visions had amazing appeal. Millions of people dedicated their lives to socialism or communism. The democratic gospel was just an idea, but it shaped American history. The founders believed that they were writing a Constitution for a nation that would herald a new order of the ages. Walt Whitman wrote an essay called “Democratic Vistas” defining the nation’s spiritual mission, while Lincoln celebrated the last, best hope of earth.

In the 1930s, the radical Leon Samson explained that Americans never went in big for socialism because they already had a creed, which made them happy, gave them work and made history meaningful. “Every concept in socialism has its substitutive counter-concept in Americanism,” Samson wrote, “and that is why the socialist argument falls so fruitlessly on the American ear. … The American does not want to listen to socialism because he thinks he already has it.”

The Cold War settled this contest of historic visions. Democracy won. You would think the gospel of democracy would be triumphant. But, as Mark Lilla writes in an essay called “The Truth About Our Libertarian Age” in The New Republic, the post-Cold War era hasn’t meant the triumph of one ideology; it destroyed the tendency to rely upon big historic visions of any sort. Lilla argues that we have slid into a debauched libertarianism. Nobody envisions the large sweep of events; we just go our own separate ways making individual choices.

He’s a bit right about that. When the U.S. was a weak nation, Americans dedicated themselves to proving to the world that democracy could last. When the U.S. became a superpower, Americans felt responsible for creating a global order that would nurture the spread of democracy. But now the nation is tired, distrustful, divided and withdrawing. Democratic vistas give way to laissez-faire fatalism: History has no shape. The dream of universal democracy seems naïve. National interest matters most.

Lilla’s piece both describes and unfortunately exemplifies the current mood. He argues that the notion of history as a march toward universal democracy is a pipe dream. Arab nations are not going to be democratic anytime soon. The world is an aviary of different systems — autocracy, mercantile despotism — and always will be. Instead of worrying about spreading democracy, we’d be better off trying to make theocracies less beastly.

Such is life in a spiritual recession. Americans have lost faith in their own gospel. This loss of faith is ruinous from any practical standpoint. The faith bound diverse Americans, reducing polarization. The faith gave elites a sense of historic responsibility and helped them resist the money and corruption that always licked at the political system.

Without the vibrant faith, there is no spiritual counterweight to rampant materialism. Without the faith, the left has grown strangely callous and withdrawing in the face of genocide around the world. The right adopts a zero-sum mentality about immigration and a pinched attitude about foreign affairs.

Without the faith, leaders grow small; they have no sacred purpose to align themselves with. Young people get fired up by the thought of solar panels in Africa but seem much less engaged in the task of spreading political dignity and humane self-government.

Meanwhile, the country grows strangely indifferent to democratic heroes. Decades ago, everyone knew about Sakharov. But how many raised a fuss over the systematic persecution of democratic activists and Christians across the Middle East?

The democratic gospel was both lofty and realistic. It had a high historic mission, but it was based on the idea that biblical morality is necessary precisely because people are selfish and shortsighted, capitalism is necessary because economies are too complicated to understand and plan; democracy is necessary because concentrated power is always dangerous, no matter how seductive it seems in the short term.

Sure there have been setbacks. But if America isn’t a champion of universal democracy, what is the country for? A great inheritance is being squandered; a 200-year-old language is being left by the side of the road.

Yeah, Bobo — let’s go cram “democracy” down another country’s throat.  It’s worked so very, very, very well in the past…  Here’s Prof. Krugman:

Have you been following the news about Obamacare? The Affordable Care Act has receded from the front page, but information about how it’s going keeps coming in — and almost all the news is good. Indeed, health reform has been on a roll ever since March, when it became clear that enrollment would surpass expectations despite the teething problems of the federal website.

What’s interesting about this success story is that it has been accompanied at every step by cries of impending disaster. At this point, by my reckoning, the enemies of health reform are 0 for 6. That is, they made at least six distinct predictions about how Obamacare would fail — every one of which turned out to be wrong.

“To err is human,” wrote Seneca. “To persist is diabolical.” Everyone makes incorrect predictions. But to be that consistently, grossly wrong takes special effort. So what’s this all about?

Many readers won’t be surprised by the answer: It’s about politics and ideology, not analysis. But while this observation isn’t particularly startling, it’s worth pointing out just how completely ideology has trumped evidence in the health policy debate.

And I’m not just talking about the politicians; I’m talking about the wonks. It’s remarkable how many supposed experts on health care made claims about Obamacare that were clearly unsupportable. For example, remember “rate shock”? Last fall, when we got our first information about insurance premiums, conservative health care analysts raced to claim that consumers were facing a huge increase in their expenses. It was obvious, even at the time, that these claims were misleading; we now know that the great majority of Americans buying insurance through the new exchanges are getting coverage quite cheaply.

Or remember claims that young people wouldn’t sign up, so that Obamacare would experience a “death spiral” of surging costs and shrinking enrollment? It’s not happening: a new survey by Gallup finds both that a lot of people have gained insurance through the program and that the age mix of the new enrollees looks pretty good.

What was especially odd about the incessant predictions of health-reform disaster was that we already knew, or should have known, that a program along the lines of the Affordable Care Act was likely to work. Obamacare was closely modeled on Romneycare, which has been working in Massachusetts since 2006, and it bears a strong family resemblance to successful systems abroad, for example in Switzerland. Why should the system have been unworkable for America?

But a firm conviction that the government can’t do anything useful — a dogmatic belief in public-sector incompetence — is now a central part of American conservatism, and the incompetence dogma has evidently made rational analysis of policy issues impossible.

It wasn’t always thus. If you go back two decades, to the last great fight over health reform, conservatives seem to have been relatively clearheaded about the policy prospects, albeit deeply cynical. For example, William Kristol’s famous 1993 memo urging Republicans to kill the Clinton health plan warned explicitly that Clintoncare, if implemented, might well be perceived as successful, which would, in turn, “strike a punishing blow against Republican claims to defend the middle class by restraining government.” So it was crucial to make sure that reform never happened. In effect, Mr. Kristol was telling insiders that tales of government incompetence are something you peddle to voters to get them to support tax cuts and deregulation, not something you necessarily believe yourself.

But that was before conservatives had fully retreated into their own intellectual universe. Fox News didn’t exist yet; policy analysts at right-wing think tanks had often begun their careers in relatively nonpolitical jobs. It was still possible to entertain the notion that reality wasn’t what you wanted it to be.

It’s different now. It’s hard to think of anyone on the American right who even considered the possibility that Obamacare might work, or at any rate who was willing to admit that possibility in public. Instead, even the supposed experts kept peddling improbable tales of looming disaster long after their chance of actually stopping health reform was past, and they peddled these tales not just to the rubes but to each other.

And let’s be clear: While it has been funny watching the right-wing cling to its delusions about health reform, it’s also scary. After all, these people retain considerable ability to engage in policy mischief, and one of these days they may regain the White House. And you really, really don’t want people who reject facts they don’t like in that position. I mean, they might do unthinkable things, like starting a war for no good reason. Oh, wait.

Blow and Krugman

June 23, 2014

In “The Frustration Doctrine” Mr. Blow says the many Americans who are disgusted with Washington should speak up instead of marginalizing themselves by not voting.  Amen.  Twice.  Prof. Krugman has a question in “The Big Green Test:”  Are conservatives willing to settle for “second best” solutions for global warming?  Here’s Mr. Blow:

Americans’ confidence in American leadership is flagging to such a degree that it poses a critical threat to our democracy, particularly as moneyed interests seek to manipulate the malaise and stir policy and politician away from principle and toward profit.

President Obama’s approval ratings remain underwater, and an NBC News/Wall Street Journal poll released last week found that his numbers have gotten even worse on foreign policy. As NBC put it:

“The percentage of Americans approving of President Barack Obama’s handling of foreign policy issues has dropped to the lowest level of his presidency as he faces multiple overseas challenges, including in Iraq.”

Furthermore, in the bad-news column for the administration and the country, a majority in the Journal poll felt that, for the remainder of his presidency, the president would not be able to lead and “get the job done,” whatever getting the job done meant to the individuals answering.

It was not clear if these respondents held this view because of the obstacles of Congressional obstruction, the premature hyperventilating about the 2016 cycle or if they believed there was something personally lacking in the president.

Whatever the case, assigning a president to lame-duck status more than two years before his term ends is probably not good for the psyche of a nation.

Congress doesn’t fare better. Confidence in the legislature is actually much lower. According to a Gallup poll released last week, confidence in Congress has dropped to a historic low with only 7 percent of respondents saying they have a “great deal” or “quite a lot” of confidence in the institution.

In fact, the Gallup poll, conducted early this month, found that less than a third of Americans have a “great deal” or “quite a lot” of confidence in the Supreme Court, and various other institutions, including public schools, banks, the criminal justice system, organized labor and big business.

Only three groups broke the 50 percent confidence mark: the military, the police and small businesses.

The NBC News/Wall Street Journal poll last week also found that nearly two-thirds of Americans continue to believe that the country is headed in the wrong direction.

As many Americans, particularly those in the middle, throw up their hands in disgust and walk away in dismay, hyperpartisans — particularly conservatives — exert more influence.

According to a Pew Research Center report issued this month, while there are more moderates than consistent liberals or conservatives, those moderates are the least likely to be politically active. The ambivalent middle appears to be the cradle of apathy.

And while the consistently liberal are more likely to do things like volunteer for a candidate or a campaign, consistent conservatives are much more likely than liberals to vote.

This behavioral imbalance is only amplified by donors, who are exerting more influence on the parties and candidates by distributing more cash. And almost all of the biggest donors are now giving to Republican joint fund-raising committees (J.F.C.’s).

According to a report issued this month by the Center for Responsive Politics:

“This year, there’s been a clear shift in the profile of J.F.C. contributors, with Republicans topping the list of the heftiest donors. So far this cycle, the top 20 deep-pocketed contributors to the joint committees are all giving to conservatives. In contrast, during the 2012 cycle four of the top five donors to J.F.C.’s were giving to Democrats.”

Big money flooding our politics is what the Supreme Court’s Citizens United v. F.E.C. and McCutcheon v. F.E.C. rulings have wrought.

That’s why, earlier this month, the Senate held a debate in the Judiciary Committee on a constitutional amendment proposed by a Democrat that was a direct response to the Supreme Court decisions.

Then there are the enormous and profound voter suppression efforts sweeping many parts of the country, particularly the South, and disproportionately disenfranchising people of color, as a new report from the Center for American Progress and the Southern Elections Foundation points out.

There is a concerted effort to confuse, obfuscate and disenfranchise — to push more people away from the process, so that those who remain have more influence.

We can’t afford to get frustrated and check out. We have to ask ourselves: Is frustration part of the plan? Is your exasperation an entree to your marginalization? And, if your vote isn’t valuable, why are so many working so hard to take it away?

Don’t let your frustration become your foil; wield it like a sword. Vote.

Not that it will really do any good, no matter who’s elected.  They’ll still be controlled by big money and lobbyists…  Here’s Prof. Krugman:

On Sunday Henry Paulson, the former Treasury secretary and a lifelong Republican, had an Op-Ed article about climate policy in The New York Times. In the article, he declared that man-made climate change is “the challenge of our time,” and called for a national tax on carbon emissions to encourage conservation and the adoption of green technologies. Considering the prevalence of climate denial within today’s G.O.P., and the absolute opposition to any kind of tax increase, this was a brave stand to take.

But not nearly brave enough. Emissions taxes are the Economics 101 solution to pollution problems; every economist I know would start cheering wildly if Congress voted in a clean, across-the-board carbon tax. But that isn’t going to happen in the foreseeable future. A carbon tax may be the best thing we could do, but we won’t actually do it.

Yet there are a number of second-best things (in the technical sense, as I’ll explain shortly) that we’re either doing already or might do soon. And the question for Mr. Paulson and other conservatives who consider themselves environmentalists is whether they’re willing to accept second-best answers, and in particular whether they’re willing to accept second-best answers implemented by the other party. If they aren’t, their supposed environmentalism is an empty gesture.

Let me give some examples of what I’m talking about.

First, consider rules like fuel efficiency standards, or “net metering” mandates requiring that utilities buy back the electricity generated by homeowners’ solar panels. Any economics student can tell you that such rules are inefficient compared with the clean incentives provided by an emissions tax. But we don’t have an emissions tax, and fuel efficiency rules and net metering reduce greenhouse gas emissions. So a question for conservative environmentalists: Do you support the continuation of such mandates, or are you with the business groups (spearheaded by the Koch brothers) campaigning to eliminate them and impose fees on home solar installations?

Second, consider government support for clean energy via subsidies and loan guarantees. Again, if we had an appropriately high emissions tax such support might not be necessary (there would be a case for investment promotion even then, but never mind). But we don’t have such a tax. So the question is, Are you O.K. with things like loan guarantees for solar plants, even though we know that some loans will go bad, Solyndra-style?

Finally, what about the Environmental Protection Agency’s proposal that it use its regulatory authority to impose large reductions in emissions from power plants? The agency is eager to pursue market-friendly solutions to the extent it can — basically by imposing emissions limits on states, while encouraging states or groups of states to create cap-and-trade systems that effectively put a price on carbon. But this will nonetheless be a partial approach that addresses only one source of greenhouse gas emissions. Are you willing to support this partial approach?

By the way: Readers well versed in economics will recognize that I’m talking about what is technically known as the “theory of the second best.” According to this theory, distortions in one market — in this case, the fact that there are large social costs to carbon emissions, but individuals and firms don’t pay a price for emitting carbon — can justify government intervention in other, related markets. Second-best arguments have a dubious reputation in economics, because the right policy is always to eliminate the primary distortion, if you can. But sometimes you can’t, and this is one of those times.

Which brings me back to Mr. Paulson. In his Op-Ed he likens the climate crisis to the financial crisis he helped confront in 2008. Unfortunately, it’s not a very good analogy: In the financial crisis he could credibly argue that disaster was only days away, while the climate catastrophe will unfold over many decades.

So let me suggest a different analogy, one that he probably won’t like. In policy terms, climate action — if it happens at all — will probably look like health reform. That is, it will be an awkward compromise dictated in part by the need to appease special interests, not the clean, simple solution you would have implemented if you could have started from scratch. It will be the subject of intense partisanship, relying overwhelmingly on support from just one party, and will be the subject of constant, hysterical attacks. And it will, if we’re lucky, nonetheless do the job.

Did I mention that health reform is clearly working, despite its flaws?

The question for Mr. Paulson and those of similar views is whether they’re willing to go along with that kind of imperfection. If they are, welcome aboard.

Brooks and Krugman

June 20, 2014

Bobo sees analogies…  He’s penned “In the Land of Mass Graves” in which he tells us Rwanda’s remarkable recovery from the 1994 genocide provides clues to a path forward in Iraq.  In the comments “Phil Quin” from Wellington had this to say:  “Judging by the quality, originality and depth of his insights about Rwanda, Mr. Brooks’ column is the product of no more than an hours’ wading through Google News results.”  So, pretty typical for Bobo.  Prof. Krugman, in “Veterans and Zombies,” says the health care scandal at Veterans Affairs is real, but it’s being hyped out of proportion in an attempt to block reform of the larger national system.  Here’s Bobo:

Just over two decades ago, Rwanda was swept up in a murderous wave of ethnic violence that was as bad or worse as anything happening today in Iraq and Syria. The conflict was between a historically dominant ethnic minority and a historically oppressed majority, as in Iraq. Yet, today, Rwanda is a relatively successful country.

Economic growth has been hovering at about 8 percent a year for the past few years. Since 1994, per capita income has almost tripled. Mortality for children under 5 is down by two-thirds. Malaria-related deaths are down 85 percent. Most amazingly, people who 20 years ago were literally murdering each other’s family members are now living together in the same villages.

So the question of the day is: Does Rwanda’s rebound offer any lessons about how other nations might recover from this sort of murderous sectarian violence, even nations racked by the different sort of Sunni-Shiite violence we’re seeing in the Middle East?

Well, one possible lesson from Rwanda is that sectarian bloodletting is not a mass hysteria. It’s not an organic mania that sweeps over society like a plague. Instead, murderous sectarian violence is a top-down phenomenon produced within a specific political context.

People don’t usually go off decapitating each other or committing mass murder just because they hate people in another group. These things happen because soul-dead political leaders are in a struggle for power and use ethnic violence as a tool in that struggle.

If you can sideline those leaders or get the politics functioning, you can reduce the violence dramatically. These situations are gruesome, but they are not hopeless.

A few important things happened in Rwanda:

First, the government established a monopoly of force. In Rwanda, this happened because Paul Kagame won a decisive military victory over his Hutu rivals. He set up a strongman regime that was somewhat enlightened at first but which has grown increasingly repressive over time. He abuses human rights and rules by fear. Those of us who champion democracy might hope that freedom, pluralism and democracy can replace chaos. But the best hope may be along Korean lines, an authoritarian government that softens over time.

Second, the regime, while autocratic, earned some legitimacy. Kagame brought some Hutus into the government, though experts seem to disagree on how much power Hutus actually possess. He also publicly embraced the Singaporean style of autocracy, which has produced tangible economic progress.

This governing style can be extremely paternalistic. It is no longer officially permitted to identify people by their tribal markers (everybody knows anyway). Plastic bags are illegal. The civil service is closely monitored for corruption. In sum, Rwanda is a lousy place to be a journalist because of limits on expression, but the quality of life for the average citizen is improving rapidly.

Third, power has been decentralized. If Iraq survives, it will probably be as a loose federation, with the national government controlling the foreign policy and the army, but the ethnic regions dominating the parts of government that touch people day to day. Rwanda hasn’t gone that far, but it has made some moves in a federalist direction. Local leaders often follow a tradition of imihigo — in which they publicly vow to meet certain concrete performance goals within, say, three years: building a certain number of schools or staffing a certain number of health centers. If they don’t meet the goals, they are humiliated and presumably replaced. The process emphasizes local accountability.

Fourth, new constituencies were enfranchised. After the genocide, Rwanda’s population was up to 70 percent female. The men were either dead or in exile. Women have been given much more prominent roles in the judiciary and the Parliament. Automatically this creates a constituency for the new political order.

Fifth, the atrocities were acknowledged. No post-trauma society has done this perfectly. Rwanda prosecuted the worst killers slowly (almost every pre-civil-war judge was dead). The local trial process was widely criticized. The judicial process has lately been used to target political opponents. But it does seem necessary, if a nation is to move on, to set up a legal process to name what just happened and to mete out justice to the monstrous.

The Iraqi state is much weaker than the Rwandan one, but, even so, this quick survey underlines the wisdom of the approach the Obama administration is gesturing toward in Iraq: Use limited military force to weaken those who are trying to bring in violence from outside; focus most on the political; round up a regional coalition that will pressure Iraqi elites in this post-election moment to form an inclusive new government.

Iraq is looking into an abyss, but the good news is that if you get the political elites behaving decently, you can avoid the worst. Grimly, there’s cause for hope.

Also in the comments “gemli” from Boston has concerns:  “Why do I get the feeling that Mr. Brooks is giving us a heads-up about some New World Order that his conservative friends are cooking up? This is the second column in a few weeks (“The Autocracy Challenge” is the other) in which he finds something positive to say about autocratic governments. It also highlights some of his favorite themes, namely obedience to Just Authority, paternalism, and decentralized government. He even sees times when an authoritarian government like Korea’s might be just the ticket.”  Here’s Prof. Krugman:

You’ve surely heard about the scandal at the Department of Veterans Affairs. A number of veterans found themselves waiting a long time for care, some of them died before they were seen, and some of the agency’s employees falsified records to cover up the extent of the problem. It’s a real scandal; some heads have already rolled, but there’s surely more to clean up.

But the goings-on at Veterans Affairs shouldn’t cause us to lose sight of a much bigger scandal: the almost surreal inefficiency and injustice of the American health care system as a whole. And it’s important to understand that the Veterans Affairs scandal, while real, is being hyped out of proportion by people whose real goal is to block reform of the larger system.

The essential, undeniable fact about American health care is how incredibly expensive it is — twice as costly per capita as the French system, two-and-a-half times as expensive as the British system. You might expect all that money to buy results, but the United States actually ranks low on basic measures of performance; we have low life expectancy and high infant mortality, and despite all that spending many people can’t get health care when they need it. What’s more, Americans seem to realize that they’re getting a bad deal: Surveys show a much smaller percentage of the population satisfied with the health system in America than in other countries.

And, in America, medical costs often cause financial distress to an extent that doesn’t happen in any other advanced nation.

How and why does health care in the United States manage to perform so badly? There have been many studies of the issue, identifying factors that range from high administrative costs, to high drug prices, to excessive testing. The details are fairly complicated, but if you had to identify a common theme behind America’s poor performance, it would be that we suffer from an excess of money-driven medicine. Vast amounts of costly paperwork are generated by for-profit insurers always looking for ways to deny payment; high spending on procedures of dubious medical efficacy is driven by the efforts of for-profit hospitals and providers to generate more revenue; high drug costs are driven by pharmaceutical companies who spend more on advertising and marketing than they do on research.

Other advanced countries don’t suffer from comparable problems because private gain is less of an issue. Outside the U.S., the government generally provides health insurance directly, or ensures that it’s available from tightly regulated nonprofit insurers; often, many hospitals are publicly owned, and many doctors are public employees.

As you might guess, conservatives don’t like the observation that American health care performs worse than other countries’ systems because it relies too much on the private sector and the profit motive. So whenever someone points out the obvious, there is a chorus of denial, of attempts to claim that America does, too, offer better care. It turns out, however, that such claims invariably end up relying on zombie arguments — that is, arguments that have been proved wrong, should be dead, but keep shambling along because they serve a political purpose.

Which brings us to veterans’ care. The system run by the Department of Veterans Affairs is not like the rest of American health care. It is, if you like, an island of socialized medicine, a miniature version of Britain’s National Health Service, in a privatized sea. And until the scandal broke, all indications were that it worked very well, providing high-quality care at low cost.

No wonder, then, that right-wingers have seized on the scandal, viewing it as — to quote Dr. Ben Carson, a rising conservative star — “a gift from God.”

So here’s what you need to know: It’s still true that Veterans Affairs provides excellent care, at low cost. Those waiting lists arise partly because so many veterans want care, but Congress has provided neither clear guidelines on who is entitled to coverage, nor sufficient resources to cover all applicants. And, yes, some officials appear to have responded to incentives to reduce waiting times by falsifying data.

Yet, on average, veterans don’t appear to wait longer for care than other Americans. And does anyone doubt that many Americans have died while waiting for approval from private insurers?

A scandal is a scandal, and wrongdoing must be punished. But beware of people trying to use the veterans’ care scandal to derail health reform.

And here’s the thing: Health reform is working. Too many Americans still lack good insurance, and hence lack access to health care and protection from high medical costs — but not as many as last year, and next year should be better still. Health costs are still far too high, but their growth has slowed dramatically. We’re moving in the right direction, and we shouldn’t let the zombies get in our way.


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