Archive for the ‘Mondays suck because of the Putz’ Category

The Pasty Little Putz and Krugman

September 12, 2011

The Pasty Little Putz has extruded a thing called “The President’s Do-Over” in which he whines about the first-term agenda that should have been.  Listen, you asshole, if the Obama administration had done EXACTLY and PRECISELY what you’re setting forth you still would have excoriated him and his administration.  Prof. Krugman addresses “An Impeccable Disaster,” and says the moralizers, who hate the idea of letting nations off the hook for alleged fiscal sins, are sending the euro over the edge.  Here’s the Putz:

A week after President Obama took the oath of office, Alice Rivlin, budget chief to President Bill Clinton, testified before a Congress that was about to consider sweeping stimulus legislation. In her remarks, Rivlin voiced her support for a swift and substantial federal intervention to prop up the sagging economy. But she offered lawmakers three warnings as well.

The first warning was about the design of the stimulus. The ideal anti-recession package, Rivlin told Congress, would include aid to state governments, extended unemployment benefits, money for genuinely “shovel ready” projects and a payroll tax holiday. But she urged Congress to resist the temptation to combine these kinds of short-term recession-fighting measures with a larger and more costly investment in energy, education and infrastructure. Trying to rush a long-term spending package through in an atmosphere of crisis, she cautioned, would only guarantee that its contents would be poorly designed, and much of its spending wasted.

The second warning was about setting expectations. Given the nature of the financial crisis and the nasty overhang of debt it left behind, any recovery would probably be slow even with a stimulus bill. Policy makers “should be skeptical of all forecasts,” she told Congress, “and especially conscious of the risk that things may continue to go worse than expected.”

The third warning was about how to handle the problem of deficits, which already shadowed the stimulus debate. “We do not have the luxury of waiting until the economy recovers before taking actions to bring down projected future deficits,” Rivlin said. Instead, she urged Congress to take action “this year” on entitlement spending, and to prioritize Medicare reforms over a more comprehensive health care overhaul.

With these three warnings, Rivlin anticipated everything that the Obama White House and the Democratic Congress would do wrong over the next two years.

First, instead of passing a targeted antirecession package, Congressional Democrats crammed the stimulus bill with spending on everything from Head Start and Pell Grants to high-speed rail and renewable-energy projects. The hope was that the legislation would do more than just kickstart a recovery: It would lay a new foundation for the economy, with an electric car in every garage and a Solyndra solar panel on every roof. The result, predictably, was a bill that looked less like a temporary exercise in crisis management and more like the Democratic Party’s permanent wish list.

Second, instead of emphasizing the severity of the recession, the White House offered sunny — and, as it turned out, wildly mistaken — projections about how swiftly the stimulus would bring down the unemployment rate. Even once it became clear that the recovery wasn’t happening nearly as quickly as promised, the administration stuck to its Pollyannaish script, sending the president and the vice president out on an embarrassing “recovery summer” tour in 2010 and repeatedly projecting economic growth that failed to materialize.

Finally, instead of pivoting from the Recovery Act to deficits and entitlement reform, the Democratic majority spent all of its post-stimulus political capital trying to push both a costly new health care entitlement and a cap-and-trade bill through Congress. Both policies were advertised, intermittently, as deficit reduction, but neither came close to addressing the real long-term drivers of the nation’s debt. And they left Congressional Democrats to campaign for re-election in 2010 as the custodians of record deficits as well as sky-high unemployment.

Now, nearly three years after Rivlin’s warnings went unheeded, President Obama has groped his way to an agenda that looks more like what she originally recommended. His speech to Congress last week suggested that he intends to campaign for re-election on what should have been the blueprint for his first four years in office: a short-term stimulus highlighted by a payroll tax cut, a medium-term push to overhaul the tax code and a plan for long-term entitlement reform.

To Republicans, this agenda holds out the possibility that a second Obama term might feature more opportunities for compromise and common ground. But to voters pondering whether to make that second term happen, it amounts to a request for a presidential do-over — a tacit admission that the White House’s first-term agenda has been less than successful, and a plea for a second chance to get things right.

If the answer to that plea turns out to be “no,” then President Obama’s political epitaph should be taken from the Victorian verse of Dante Gabriel Rossetti:

“Look in my face; my name is Might-have-been; I am also called No-more, Too-late, Farewell.”

Schmuck.  Here’s Prof. Krugman:

On Thursday Jean-Claude Trichet, the president of the European Central Bank or E.C.B. — Europe’s equivalent to Ben Bernanke — lost his sang-froid. In response to a question about whether the E.C.B. is becoming a “bad bank” thanks to its purchases of troubled nations’ debt, Mr. Trichet, his voice rising, insisted that his institution has performed “impeccably, impeccably!” as a guardian of price stability.

Indeed it has. And that’s why the euro is now at risk of collapse.

Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What’s under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area’s G.D.P., so the common European currency itself is under existential threat.

And all indications are that European leaders are unwilling even to acknowledge the nature of that threat, let alone deal with it effectively.

I’ve complained a lot about the “fiscalization” of economic discourse here in America, the way in which a premature focus on budget deficits turned Washington’s attention away from the ongoing jobs disaster. But we’re not unique in that respect, and in fact the Europeans have been much, much worse.

Listen to many European leaders — especially, but by no means only, the Germans — and you’d think that their continent’s troubles are a simple morality tale of debt and punishment: Governments borrowed too much, now they’re paying the price, and fiscal austerity is the only answer.

Yet this story applies, if at all, to Greece and nobody else. Spain in particular had a budget surplus and low debt before the 2008 financial crisis; its fiscal record, one might say, was impeccable. And while it was hit hard by the collapse of its housing boom, it’s still a relatively low-debt country, and it’s hard to make the case that the underlying fiscal condition of Spain’s government is worse than that of, say, Britain’s government.

So why is Spain — along with Italy, which has higher debt but smaller deficits — in so much trouble? The answer is that these countries are facing something very much like a bank run, except that the run is on their governments rather than, or more accurately as well as, their financial institutions.

Here’s how such a run works: Investors, for whatever reason, fear that a country will default on its debt. This makes them unwilling to buy the country’s bonds, or at least not unless offered a very high interest rate. And the fact that the country must roll its debt over at high interest rates worsens its fiscal prospects, making default more likely, so that the crisis of confidence becomes a self-fulfilling prophecy. And as it does, it becomes a banking crisis as well, since a country’s banks are normally heavily invested in government debt.

Now, a country with its own currency, like Britain, can short-circuit this process: if necessary, the Bank of England can step in to buy government debt with newly created money. This might lead to inflation (although even that is doubtful when the economy is depressed), but inflation poses a much smaller threat to investors than outright default. Spain and Italy, however, have adopted the euro and no longer have their own currencies. As a result, the threat of a self-fulfilling crisis is very real — and interest rates on Spanish and Italian debt are more than twice the rate on British debt.

Which brings us back to the impeccable E.C.B.

What Mr. Trichet and his colleagues should be doing right now is buying up Spanish and Italian debt — that is, doing what these countries would be doing for themselves if they still had their own currencies. In fact, the E.C.B. started doing just that a few weeks ago, and produced a temporary respite for those nations. But the E.C.B. immediately found itself under severe pressure from the moralizers, who hate the idea of letting countries off the hook for their alleged fiscal sins. And the perception that the moralizers will block any further rescue actions has set off a renewed market panic.

Adding to the problem is the E.C.B.’s obsession with maintaining its “impeccable” record on price stability: at a time when Europe desperately needs a strong recovery, and modest inflation would actually be helpful, the bank has instead been tightening money, trying to head off inflation risks that exist only in its imagination.

And now it’s all coming to a head. We’re not talking about a crisis that will unfold over a year or two; this thing could come apart in a matter of days. And if it does, the whole world will suffer.

So will the E.C.B. do what needs to be done — lend freely and cut rates? Or will European leaders remain too focused on punishing debtors to save themselves? The whole world is watching.

 

The Pasty Little Putz and Krugman

September 5, 2011

The Putz says “It’s Still the 9/11 Era,” and he has a question:  Are we better off than we were 10 years ago?  Prof. Krugman, in “The Fatal Distraction,” says by obsessing over deficits, Washington has been making the real problem — mass unemployment — much worse.  Here’s the Putz:

Osama bin Laden is dead. So is Saddam Hussein, and Abu Musab al-Zarqawi, and too many Qaeda No. 3’s to count. Khalid Shaikh Mohammed is awaiting his military tribunal. George W. Bush is home on the ranch, Dick Cheney is on book tour, and even Gen. David Petraeus is a general no more, having traded in his stars for a civilian position atop the Central Intelligence Agency.

But 10 years to the week after the twin towers fell, we are still living in the 9/11 era. The names and faces are different, the White House has changed hands, and the country has turned its gaze from our distant wars to the economic crisis on the home front. But American foreign policy is still defined by the choices our leaders made while ground zero smoldered, and the objectives they set. Our approach to the world was fundamentally altered by 9/11, and nothing that’s happened since has undone that transformation.

Part of this transformation was tactical: a shift from a criminal justice approach to counterterrorism that emphasized investigations, arrests and successful prosecutions, to a wartime approach that emphasized detention, interrogation and assassination. The other part was strategic: a decision that America’s national security required promoting democracy across the Muslim world — by force of arms, if necessary — rather than accepting the kind of stability that various dictators had promised to supply.

Taken together, these two shifts gave us the Bush administration’s most controversial policies, from Guantánamo Bay and “extraordinary rendition” to the invasion of Iraq and the nation-building effort that followed. Some of those policies were walked back in the second Bush term. (The waterboard vanished from our interrogation repertoire, and there were no further wars of choice.) But the overall transformation endured.

It has endured under Barack Obama as well, his campaign promises notwithstanding. We are still fighting a war on terrorist groups, complete with the indefinite detention, drone attacks and covert warfare that infuriated civil libertarians during the Bush presidency. Meanwhile, Obama’s first term has featured an expanded nation-building effort in Afghanistan, a regime-change operation in Libya, a possibly permanent military footprint in Iraq — and the gradual adoption, amid the ferment of the Arab Spring, of Bush’s freedom agenda rhetoric as well.

The question is whether this continuity is evidence of success or an example of the stay-the-course bias to which all governments are prone. Here it’s worth asking a version of Ronald Reagan’s famous question: Are we better off than we were 10 years ago?

The case for answering yes is strongest on the counterterrorism front, where our shadow war has clearly diminished our enemies’ capacity to do us harm in ways that our pre-9/11 efforts never did.

There are significant moral costs to a policy that depends on routinized assassination and detention without trial. But 10 years without a major attack, the death of Osama bin Laden and the steady degradation of Al Qaeda and its affiliates are not achievements to be taken lightly. The United States will always be vulnerable to terrorists, but in the decade since we were blindsided by Mohammed Atta’s team of hijackers, our spies and SEALs and interrogators have dramatically improved our odds.

On the strategic front, though, it is extremely difficult to argue that America’s geopolitical position is stronger today than it was 10 years ago.

Some of this weakening was inevitable: Our extraordinary post-cold-war dominance couldn’t last forever, and the rise of rival powers is a phenomenon to be managed rather than resisted. But our post-9/11 attempts to transform the Muslim world have cost trillions of dollars and thousands of lives, and won us — well, what? A liberated Iraq that’s more in Iran’s sphere of influence than ours, an Afghan war in which American casualties keep rising, an Arab Spring that threatens to encircle Israel with enemies, a Middle East where our list of reliable allies grows thin …

This list doesn’t account for various counterfactuals (how much worse off we might be with Saddam Hussein in power, for instance). Nor does it account for democracy promotion’s long-term benefits.

But after 10 years of conflict, we aren’t exactly in short-term territory anymore. And pointing out that things could have been worse doesn’t change the fact that our post-9/11 grand strategy has been associated with a steady erosion of America’s position in the world.

In this context, the fact that President Obama has kept the United States enmeshed in occupations and interventions across the Muslim world isn’t evidence that our strategy is working. It’s a sign that he doesn’t know how to get us out.

In my Aug. 22 column, I should have said that the Texas-Mexico border is 1,250 miles, not 1,969 miles. Also, Texas’s black eighth graders were tied with their peers in Massachusetts for best score on the 2009 National Assessment of Educational Progress math exam. They did not beat all other states.

Facts…  Such prickly things…  Here’s Prof. Krugman:

Friday brought two numbers that should have everyone in Washington saying, “My God, what have we done?”

One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10-year U.S. bonds, almost as low as this rate has ever gone. Taken together, these numbers almost scream that the inside-the-Beltway crowd has been worrying about the wrong things, and inflicting grievous harm as a result.

Ever since the acute phase of the financial crisis ended, policy discussion in Washington has been dominated not by unemployment, but by the alleged dangers posed by budget deficits. Pundits and media organizations insisted that the biggest risk facing America was the threat that investors would pull the plug on U.S. debt. For example, in May 2009 The Wall Street Journal declared that the “bond vigilantes” were “returning with a vengeance,” telling readers that the Obama administration’s “epic spending spree” would send interest rates soaring.

The interest rate when that editorial was published was 3.7 percent. As of Friday, as I’ve already mentioned, it was only 2 percent.

I don’t mean to dismiss concerns about the long-run U.S. budget picture. If you look at fiscal prospects over, say, the next 20 years, they are indeed deeply worrying, largely because of rising health-care costs. But the experience of the past two years has overwhelmingly confirmed what some of us tried to argue from the beginning: The deficits we’re running right now — deficits we should be running, because deficit spending helps support a depressed economy — are no threat at all.

And by obsessing over a nonexistent threat, Washington has been making the real problem — mass unemployment, which is eating away at the foundations of our nation — much worse.

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.

And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.

O.K., I know what the usual suspects will say — namely, that fears of regulation and higher taxes are holding businesses back. But this is just a right-wing fantasy. Multiple surveys have shown that lack of demand — a lack that is being exacerbated by government cutbacks — is the overwhelming problem businesses face, with regulation and taxes barely even in the picture.

For example, when McClatchy Newspapers recently canvassed a random selection of small-business owners to find out what was hurting them, not a single one complained about regulation of his or her industry, and few complained much about taxes. And did I mention that profits after taxes, as a share of national income, are at record levels?

So short-run deficits aren’t a problem; lack of demand is, and spending cuts are making things much worse. Maybe it’s time to change course?

Which brings me to President Obama’s planned speech on the economy.

I find it useful to think in terms of three questions: What should we be doing to create jobs? What will Republicans in Congress agree to? And given that political reality, what should the president propose?

The answer to the first question is that we should have a lot of job-creating spending on the part of the federal government, largely in the form of much-needed spending to repair and upgrade the nation’s infrastructure. Oh, and we need more aid to state and local governments, so that they can stop laying off schoolteachers.

But what will Republicans agree to? That’s easy: nothing. They will oppose anything Mr. Obama proposes, even if it would clearly help the economy — or maybe I should say, especially if it would help the economy, since high unemployment helps them politically.

This reality makes the third question — what the president should propose — hard to answer, since nothing he proposes will actually happen anytime soon. So I’m personally prepared to cut Mr. Obama a lot of slack on the specifics of his proposal, as long as it’s big and bold. For what he mostly needs to do now is to change the conversation — to get Washington talking again about jobs and how the government can help create them.

For the sake of the nation, and especially for millions of unemployed Americans who see little prospect of finding another job, I hope he pulls it off.

Not likely.

Oh Cripes, the Putz is Solo

August 22, 2011

Oh, gawd, Prof. Krugman is off so The Pasty Little Putz is flying solo.  He’s feeling his oats.  He seems to think he’s found the Republican Savior.  In “Messing With Texas” he lectures us that Rick Perry’s opponents can’t beat him by turning the race into a referendum on his state.  Honey, we won’t have to, although the statistics are tempting (27% of Texans without health insurance).  He condemns himself with his own words (secession anyone?  Medicare and Social Security are Ponzi schemes?)  Here’s the Putz:

Gov. Rick Perry of Texas hasn’t lost an election in 10 tries. Among his vanquished opponents, this streak has inspired not only the usual mix of resentment and respect, but a touch of supernatural awe. “Running against Perry,” one of them told Texas Monthly, “is like running against God.”

Perry’s 2012 rivals can’t afford to entertain such thoughts. If either Mitt Romney or Barack Obama hopes to snap the Texas governor’s winning streak, the election will need to become a referendum on Perry himself, in all his heat-packing, secession-contemplating glory. If it becomes a referendum on his home state instead, Perry’s 11th campaign will probably turn out like all the others.

Perry’s critics don’t like to admit this. After he launched his campaign with an extended brag about Texas job creation, there was a rush to cut Texas down to size — to dismiss the Lone Star economic miracle as a mirage conjured by population growth, petro-dollars and low-paying McJobs.

But the more the Internet’s hive mind worked through the data, the weaker this critique looked. Yes, Texas’s growing population has contributed to the job boom, but the boom has driven population growth as well. The influx of people has been too extraordinary to just be chalked up to, say, snowbirds seeking 105-degree retirements. More likely, thousands of Americans have responded to hard times in their home states by moving to Texas in search of work.

As the policy blogger Matthias Shapiro pointed out in an exhaustive analysis, the jobs they’re finding aren’t unusually low-paying: the state’s median hourly wage is close to the national average, and since the recession started, Texan wages have increased at the sixth-fastest pace in the country. Nor are the jobs confined to the oil and gas industries: “Take the energy sector completely out of the equation,” Shapiro noted, “and Texas is still growing faster than any other state.”

On Friday, in a Bloomberg Television interview, Education Secretary Arne Duncan tried to open up another anti-Texan front, saying he feels “very, very badly for the children” in Texas’s supposedly underfinanced public schools. But here, too, the evidence doesn’t back up Duncan’s criticism. Texas does have higher high school dropout rates than the average American state. But then again, Texas isn’t an average state: it’s an enormous melting pot that shares a porous, 1,969-mile border with Mexico. Once you control for demographics and compare like with like, the Texan educational record looks much more impressive.

When a 2009 McKinsey study contrasted Perry’s home state to the similarly sized and situated California, it found that Texas students were “one to two years of learning ahead of California students of the same age, even though Texas has less income per capita and spends less per pupil than California.”

When it comes to minority achievement, Texas looks even better: On the 2009 National Assessment of Educational Progress math exam, black eighth graders in Texas outscored black eighth graders in every other state.

To be sure, the Texas model doesn’t always impress. (Twenty-seven percent of Texans lack health insurance, for instance, compared with 21 percent of Californians.) But Perry can credibly claim that his state delivers on conservative governance’s two most important promises: a private sector that creates jobs at a remarkable clip, and a public sector that seems to get more for the taxpayers’ money than many more profligate state governments.

The question is whether Perry himself deserves any of the credit. Here his critics become much more persuasive. When Perry became governor, taxes were already low, regulations were light, and test scores were on their way up. He didn’t create the zoning rules that keep Texas real estate affordable, or the strict lending requirements that minimized the state’s housing bubble. Over all, the Texas model looks like something he inherited rather than a system he built.

This means that unlike many of his fellow Republican governors, from Mitch Daniels to Chris Christie to Scott Walker — or a Democratic governor like Andrew Cuomo, for that matter — Perry can’t claim to have battled entrenched interest groups, or stemmed a flood tide of red ink. Instead, many of his policy forays have been boondoggles or train wrecks, from the failed attempt to build a $175 billion Trans-Texas Corridor (the kind of project conservatives would mock mercilessly if a Democrat proposed it) to an ill-designed 2006 tax reform that’s undercut the state’s finances.

But of course none of those reforming governors are currently in the race against him. Instead Perry faces an unloved Republican front-runner, with a weakened incumbent president waiting in the wings.

Which bring us back to that 10-election winning streak. Maybe God really is on Rick Perry’s side. Or maybe Perry just knows how to pick his opponents.

Or maybe, just maybe, Texas is, well, Texas…

The Pasty Little Putz and Krugman

August 15, 2011

The Pasty Little Putz is praying for a Republican savior, and he think’s he hears “Chris Christie’s Cue.”  He believes that yes, Republicans can do better than a Romney-Perry slugfest (with Michelle Bachmann as spoiler).  And he’s praying for Christie to saddle up and ride to the rescue.  Must suck to be you, Putz.  Prof. Krugman, in “The Texas Umiracle,” says Rick Perry will likely campaign on claims of an economic miracle in Texas, but the miracle is a myth.  You call it a myth, I’ll call it a bald-face lie.  Here’s The Putz:

This has been a clarifying week for the 2012 election. Thursday’s Republican debate reminded everyone why Mitt Romney is the front-runner, as his rivals left the former Massachusetts governor more or less untouched. Saturday’s Ames straw poll disposed of Tim Pawlenty, who not so long ago seemed positioned to give Romney a real challenge. Instead, that challenge will probably come from Rick Perry, whose entrance into the race promises to set up a Romney-Perry slugfest for the nomination, with Michele Bachmann playing spoiler.

Romney and Perry will be competing to face possibly the weakest incumbent since Jimmy Carter, with the world in turmoil and the economy adrift. Six months ago, it still seemed as if Republican primary voters might be choosing a sacrificial lamb to run against Barack Obama. Now it looks as if they might be choosing the next president.

This should inspire Republicans to return, yet again, to the question that has dogged their party’s field all year. Is this really the best we can do?

The answer is no. No one doubts Romney’s intelligence or competence, but he has managed to run for president for almost five years without taking a single courageous or even remotely interesting position. The thinking person’s case for Romney, murmured by many of his backers, amounts to this: Vote for Mitt, you know he doesn’t believe a word he says.

But his phoniness would remain a weakness even if he won the presidency. He’s a born compromiser pretending to be a hard-liner, and the hard-liners know it — which means he would enter the Oval Office with conservative knives already sharpened and ready for his back.

Rick Perry has many of the qualities that Romney seems to lack: backbone, core convictions, a killer instinct and a primal understanding of the right-wing electorate. He also has the better story. Where Romney has to run away from his Massachusetts health care bill and downplay his years as a downsizing artist at Bain Capital, Perry can spend the campaign reminding voters that almost half of the new jobs in Obama’s presidency were created on his watch in Texas.

What Perry doesn’t have, though, is the kind of moderate facade that Americans look for in their presidents. He’s the conservative id made flesh, with none of the postpartisan/uniter-not-a-divider spirit that successful national politicians usually cultivate.

Imagine if the Democratic Party nominated a combination of Al Franken and Nancy Pelosi for the presidency, and you have a sense of the kind of gamble Republicans would be taking with Perry. And even if that gamble worked, little in his record suggests that he’s prepared to preside over a polarized country, or negotiate his way through a divided Washington.

Maybe Perry has hidden subtleties; maybe Romney has hidden convictions. But if this is a 1970s moment for America and the world, the Republican front-runners look more like John Connally and Gerald Ford than Ronald Reagan or Margaret Thatcher.

So whose door should Republicans be knocking on instead? Unless Mitch Daniels changes his mind or Jeb Bush changes his last name, the only compelling possibility remaining is Gov. Chris Christie of New Jersey.

Of course Christie has ruled out running. (So had Perry, not so long ago.) Of course it would be an epic gamble on his part, since a loss would mark the end of his Garden State career. Of course Christie has obvious weaknesses: the brevity of his gubernatorial experience, the fact that he’s more moderate than his party’s base, the fact that it’s been a hundred years since America elected a president with his avoirdupois.

But the looming Romney-Perry showdown throws Christie’s strengths into sharp relief. Unlike the unloved Romney, Christie has a huge cheering section among movement conservatives, who love his combative style enough to forgive his ideological deviations. Unlike Perry, he’s campaigned and governed outside the Republican Party’s Sun Belt strongholds. Unlike both, he embodies the kind of voter who swings elections in America — not a Mormon businessman or a cowboy-booted Texan, but a Catholic with middle-class roots born one state over from the Rust Belt.

Moreover, serving as the budget-cutting Republican governor of a Democratic state is a far, far better preparation for what awaits the next president than either Perry’s small-government idyll or Romney’s permanent campaign. In his brief New Jersey tenure, Christie has accomplished more, against more determined opposition, amid more media scrutiny and with more resilient poll numbers than almost any Great Recession politician.

Six months ago, the best argument for a Christie campaign was that the Republican Party needed him. That wasn’t nearly enough to justify the risk. But if the country needs him? Then it might be worth considering.

The country needs Chris Christie like I need a colostomy and a quadruple bypass and bunions.  Here’s Prof. Krugman:

As expected, Rick Perry, the governor of Texas, has announced that he is running for president. And we already know what his campaign will be about: faith in miracles.

Some of these miracles will involve things that you’re liable to read in the Bible. But if he wins the Republican nomination, his campaign will probably center on a more secular theme: the alleged economic miracle in Texas, which, it’s often asserted, sailed through the Great Recession almost unscathed thanks to conservative economic policies. And Mr. Perry will claim that he can restore prosperity to America by applying the same policies at a national level.

So what you need to know is that the Texas miracle is a myth, and more broadly that Texan experience offers no useful lessons on how to restore national full employment.

It’s true that Texas entered recession a bit later than the rest of America, mainly because the state’s still energy-heavy economy was buoyed by high oil prices through the first half of 2008. Also, Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending.

Despite all that, however, from mid-2008 onward unemployment soared in Texas, just as it did almost everywhere else.

In June 2011, the Texas unemployment rate was 8.2 percent. That was less than unemployment in collapsed-bubble states like California and Florida, but it was slightly higher than the unemployment rate in New York, and significantly higher than the rate in Massachusetts. By the way, one in four Texans lacks health insurance, the highest proportion in the nation, thanks largely to the state’s small-government approach. Meanwhile, Massachusetts has near-universal coverage thanks to health reform very similar to the “job-killing” Affordable Care Act.

So where does the notion of a Texas miracle come from? Mainly from widespread misunderstanding of the economic effects of population growth.

For this much is true about Texas: It has, for many decades, had much faster population growth than the rest of America — about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.

And just to be clear, there’s nothing wrong with a low cost of living. In particular, there’s a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right.

But what does population growth have to do with job growth? Well, the high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — almost 10 percent of Texan workers earn the minimum wage or less, well above the national average — and these low wages give corporations an incentive to move production to the Lone Star State.

So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population — and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed.

If this picture doesn’t look very much like the glowing portrait Texas boosters like to paint, there’s a reason: the glowing portrait is false.

Still, does Texas job growth point the way to faster job growth in the nation as a whole? No.

What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state.

In fact, at a national level lower wages would almost certainly lead to fewer jobs — because they would leave working Americans even less able to cope with the overhang of debt left behind by the housing bubble, an overhang that is at the heart of our economic problem.

So when Mr. Perry presents himself as the candidate who knows how to create jobs, don’t believe him. His prescriptions for job creation would work about as well in practice as his prayer-based attempt to end Texas’s crippling drought.

 

The Pasty Little Putz and Krugman

August 8, 2011

In “Waiting For a Landslide” the Putz ‘splains to us how dreams of a final victory are downgrading our politics.  Prof. Krugman, in “Credibility, Chutzpah and Debt,” says America’s a mess, but Standard & Poor’s has no right to judge.  Here’s The Putz:

In 1955, a political scientist named V. O. Key published an essay entitled “A Theory of Critical Elections.” He argued that realignments in American politics are usually punctuated by transformative elections, in which the old order suddenly gives way and a new majority emerges in its place.

This “realignment theory” was embraced by many scholars because it fit the historical record so well. Every 30 to 40 years, it seemed, the American political order had decisively turned over: in 1800, when Thomas Jefferson’s Democratic-Republicans trounced John Adams’s Federalists; in 1828, when the Democratic-Republicans split into the Democrats and the Whigs; and then on down through Abraham Lincoln’s 1860 victory, William McKinley’s 1896 consolidation of a Republican majority, and the emergence of Franklin Roosevelt’s New Deal coalition.

But what made sense to the political scientists of the past has become a trap for the politicians of the present. One reason American policy-making has become “less stable, less effective, and less predictable” — in the words of the downgrade that Standard & Poor’s handed to the United States on Friday night — is the enduring influence of V. O. Key’s theory, and the seductive dream of realignment that it conjured up.

This dream has hovered over national leaders from Richard Nixon and Ronald Reagan to Bill Clinton and Newt Gingrich. But it has loomed larger in the last decade, as our politics have grown more polarized and our country has suffered through a series of dislocations and disasters. Events like 9/11 and the Great Recession have persuaded partisans on both sides that a dramatic realignment is imminent; the breadth of the ideological divide has convinced them that it’s necessary.

Thus the conservative hope that the war on terror would decisively tilt American politics to the right, and the liberal assumption that the 2008 financial crisis had unmade the Reagan coalition forever. Thus Karl Rove’s famous goal of a permanent (or at least “durable”) Republican majority and Rahm Emanuel’s promise that the Obama White House wouldn’t let a “crisis go to waste.” Thus the assumption, on the left and right alike, that every presidential election is the most important in our lifetime — except for the next one, which will be more important still.

Like most commentators, I’ve indulged in these kinds of sentiments myself. American politics really is riven by fundamental divisions. Our recent elections have had dramatic consequences. It will make a tremendous difference whether the next enduring majority owes more to Barack Obama’s liberalism, Tea Party conservatism, or some other worldview still.

But there’s no guarantee that such a majority will be established in time to walk the country backward from the fiscal cliff. And in the meantime, our leaders have a responsibility that transcends their ideological differences: the responsibility to work with one another to keep the country solvent.

The dream of realignment has become the enemy of such compromises. It inspires politicians to claim sweeping mandates from highly contingent victories: think of Dick Cheney insisting on another round of deficit-financed tax cuts in 2003 because “we won the midterm elections” and “this is our due,” or the near-identical rebukes that President Obama delivered to Eric Cantor (“Elections have consequences — and Eric, I won”) and to John McCain (“the election’s over”) during the debates over the stimulus and health care.

The losers, meanwhile, wax intransigent, while hoping for a realignment of their own. After all, why cut a deal today if tomorrow you might overthrow your rivals permanently? Better to just say “no” flat out, as the Bush-era Democrats did with Social Security reform and the Republicans did with health care, and hope that the next election will deliver you the once-in-a-generation victory.

This is how some Republicans are thinking today, as they crow about “the Obama downgrade” and imagine all they can accomplish in a Mitt Romney administration. Or a Paul Ryan administration, for that matter: Many conservatives are eager to see their party’s leading champion of entitlement reform enter the race, the better to make 2012 feel like a true hinge-of-history moment, a decisive choice between social democracy and free-market capitalism.

In reality, the next election may be no more transformative than 2008 turned out to be. The next Republican president may find himself as hemmed in and frustrated as President Obama has become. Meanwhile, America will still have a credit rating to fix, and a deficit to close.

None of this means that our parties need to give up their deep convictions, their grand plans, or their hopes of winning an enduring mandate.

But in the wake of the weekend’s downgrade, we need them to govern as though that final victory might never quite arrive.

Here’s Prof. Krugman:

To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.

Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.

America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.

Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.

So these people are now pronouncing on the creditworthiness of the United States of America?

Wait, it gets better. Before downgrading U.S. debt, S.& P. sent a preliminary draft of its press release to the U.S. Treasury. Officials there quickly spotted a $2 trillion error in S.& P.’s calculations. And the error was the kind of thing any budget expert should have gotten right. After discussion, S.& P. conceded that it was wrong — and downgraded America anyway, after removing some of the economic analysis from its report.

As I’ll explain in a minute, such budget estimates shouldn’t be given much weight in any case. But the episode hardly inspires confidence in S.& P.’s judgment.

More broadly, the rating agencies have never given us any reason to take their judgments about national solvency seriously. It’s true that defaulting nations were generally downgraded before the event. But in such cases the rating agencies were just following the markets, which had already turned on these problem debtors.

And in those rare cases where rating agencies have downgraded countries that, like America now, still had the confidence of investors, they have consistently been wrong. Consider, in particular, the case of Japan, which S.& P. downgraded back in 2002. Well, nine years later Japan is still able to borrow freely and cheaply. As of Friday, in fact, the interest rate on Japanese 10-year bonds was just 1 percent.

So there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust.

And yet America does have big problems.

These problems have very little to do with short-term or even medium-term budget arithmetic. The U.S. government is having no trouble borrowing to cover its current deficit. It’s true that we’re building up debt, on which we’ll eventually have to pay interest. But if you actually do the math, instead of intoning big numbers in your best Dr. Evil voice, you discover that even very large deficits over the next few years will have remarkably little impact on U.S. fiscal sustainability.

No, what makes America look unreliable isn’t budget math, it’s politics. And please, let’s not have the usual declarations that both sides are at fault. Our problems are almost entirely one-sided — specifically, they’re caused by the rise of an extremist right that is prepared to create repeated crises rather than give an inch on its demands.

The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.

So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.

The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

 

The Pasty Little Putz and Krugman

July 25, 2011

The Pasty Little Putz is forced to address “A Right-Wing Monster,” and he has a question:  What does the right-wing ideology of the Norwegian man charged with mass murder mean for European politics?  He also reminds us that Al Gore is fat.  Prof. Krugman, in “Messing With Medicare,” says it’s actually good that the “Grand Bargain” is apparently dead, because what President Obama offered to the Republicans was a very bad deal for America.  Here’s The Putz:

For many years, a quiz entitled “Al Gore or the Unabomber?” circulated on conservative Web sites. The quiz juxtaposed passages from the former vice president’s eco-manifesto “Earth in the Balance” with quotes from Theodore Kaczynski’s critiques of industrial civilization and asked the reader to guess which writer was which.

Was it the bearded hermit who hailed “isolated pockets of resistance fighters” for struggling against modern society’s “assault on the earth”? No, that would be the former vice president. Was it Kaczynski, the mathematics Ph.D. turned mad bomber, who complained about the “destructive” impact of bringing a child into “the hugely consumptionist way of life so common in the industrial world”? No, Gore again.

Enterprising left-wing bloggers have already begun to play a similar game with Anders Behring Breivik, the Norwegian man who apparently justified last week’s mass murder of helpless teenage campers with a 1,500-page “compendium” calling for a right-wing revolution against Europe’s ruling class. Judging by the manifesto’s contents, Breivik has roughly the same relationship to the cultural right that Kaczynski had to certain strains of environmentalism. The darkest aspects of his ideology belong strictly to the neo-fascist fringe. But many of his beliefs and arguments echo the rhetoric of mainstream cultural conservatives, in Europe and America alike.

Despite what the Norwegian authorities suggested over the weekend, those beliefs probably aren’t a form of Christian fundamentalism. Breivik’s writings bear no resemblance to the theology of a Jerry Falwell or an Oral Roberts, and his nominal Christianity (“I guess I’m not an excessively religious man,” he writes at one point) seems to be more of an expression of European identity politics and anti-Islamic chauvinism than any genuine religious fervor.

But it’s fair to call Breivik a right-winger. As Commentary Magazine editor John Podhoretz put it, the Norwegian killer is “exactly the kind of psychotic ideologue of the right so many in this country instantly assumed Jared Loughner, the schizophrenic who shot Rep. Gabrielle Giffords” to be. His compendium quotes repeatedly from conservative writers on both sides of the Atlantic, and it’s filled with attacks on familiar right-wing targets: Secularism and political correctness; the European Union and the sexual revolution; radical Islam and the academic left.

Indeed, stripped of their context, some of his critiques of multiculturalism and immigration resemble arguments that have been advanced, not just by Europe’s far-right parties, but by mainstream conservative leaders such as David Cameron in Britain, Angela Merkel in Germany and Nicolas Sarkozy in France.

This means that last week’s tragedy is also a political opportunity for Europe’s left-of-center politicians, should they choose to respond to Breivik’s rampage the way President Bill Clinton responded to the 1995 Oklahoma City bombing.

Timothy McVeigh’s connections to Republican politics were several degrees short of tangential, but Clinton successfully linked the heartland terrorist to talk radio and the government shutdown, implying that McVeigh’s crime was part of a broader story of antigovernment conservatism run amok. Judging by Breivik’s manifesto, the Continent’s left-wing parties won’t have to work nearly that hard to connect the Norwegian’s act of terrorism to Europe’s broader rightward turn.

How should European conservatives react? Not with the pretense that there’s somehow no connection whatsoever between Breivik’s extremism and the broader continental right. While his crimes should be denounced and disowned, their ideological pedigree has to be admitted.

But this doesn’t mean that conservatives need to surrender their convictions. The horror in Norway no more discredits Merkel’s views on Muslim assimilation than Ted Kaczynski’s bombs discredited Al Gore’s views on the dark side of industrialization. On the big picture, Europe’s cultural conservatives are right: Mass immigration really has left the Continent more divided than enriched, Islam and liberal democracy have not yet proven natural bedfellows and the dream of a postnational, postpatriotic European Union governed by a benevolent ruling elite looks more like a folly every day.

For decades, Europe’s governing classes insisted that only racists worried about immigration, only bigots doubted the success of multiculturalism and only fascists cared about national identity. Now that a true far-right radical has perpetrated a terrible atrocity, it will be easy to return to those comforting illusions.

But extremists only grow stronger when a political system pretends that problems don’t exist. Conservatives on both sides of the Atlantic have an obligation to acknowledge that Anders Behring Breivik is a distinctively right-wing kind of monster. But they also have an obligation to the realities that this monster’s terrible atrocity threatens to obscure.

Here’s Prof. Krugman:

At the time of writing, President Obama’s hoped-for “Grand Bargain” with Republicans is apparently dead. And I say good riddance. I’m no more eager than other rational people (a category that fails to include many Congressional Republicans) to see what happens if the debt limit isn’t raised. But what the president was offering to the G.O.P., especially on Medicare, was a very bad deal for America.

Specifically, according to many reports, the president offered both means-testing of Medicare benefits and a rise in the age of Medicare eligibility. The first would be bad policy; the second would be terrible policy. And it would almost surely be terrible politics, too.

The crucial thing to remember, when we talk about Medicare, is that our goal isn’t, or at least shouldn’t be, defined in terms of some arbitrary number. Our goal should be, instead, to give Americans the health care they need at a price the country can afford. And throwing Americans in their mid-60s off Medicare moves us away from that goal, not toward it.

For Medicare, with all its flaws, works better than private insurance. It has less bureaucracy and, hence, lower administrative costs than private insurers. It has been more successful in controlling costs. While Medicare expenses per beneficiary have soared over the past 40 years, they’ve risen significantly less than private insurance premiums. And since Medicare-type systems in other advanced countries have much lower costs than the uniquely privatized U.S. system, there’s good reason to believe that Medicare reform can do a lot to control costs in the future.

In that case, you may ask, why didn’t the 2010 health care reform simply extend Medicare to cover everyone? The answer, of course, is political realism. Most health reformers I know would have supported Medicare for all if they had considered it politically feasible. But given the power of the insurance lobby and the knee-jerk opposition of many politicians to any expansion of government, they settled for what they thought they could actually get: near-universal coverage through a system of regulation and subsidies.

It is, however, one thing to accept a second-best system insuring those who currently lack coverage. Throwing millions of Americans off Medicare and pushing them into the arms of private insurers is another story.

Also, did I mention that Republicans are doing all they can to undermine health care reform — they even tried to undermine it as part of the debt negotiations — and may eventually succeed? If they do, many of those losing Medicare coverage would find themselves unable to replace it.

So raising the Medicare age is a terrible idea. Means-testing — reducing benefits for wealthier Americans — isn’t equally bad, but it’s still poor policy.

It’s true that Medicare expenses could be reduced by requiring high-income Americans to pay higher premiums, higher co-payments, etc. But why not simply raise taxes on high incomes instead? This would have the great virtue of not adding another layer of bureaucracy by requiring that Medicare establish financial status before paying medical bills.

But, you may say, raising taxes would reduce incentives to work and create wealth. Well, so would means-testing: As conservative economists love to point out in other contexts — for example, when criticizing programs like food stamps — benefits that fall as your income rises in effect raise your marginal tax rate. It doesn’t matter whether the government raises your taxes by $1,000 when your income rises or cuts your benefits by the same amount; either way, it reduces the fraction of your additional earnings that you get to keep.

So what’s the difference between means-testing Medicare and raising taxes? Well, the truly rich would prefer means-testing, since they would end up sacrificing no more than the merely well-off. But everyone else should prefer a tax-based solution.

So why is the president embracing these bad policy ideas? In a forthcoming article in The New York Review of Books, the veteran journalist Elizabeth Drew suggests that members of the White House political team saw the 2010 election as a referendum on government spending and that they believe that cutting spending is the way to win next year.

If so, I would respectfully suggest that they are out of their minds. Remember death panels? The G.O.P.’s most potent political weapon last year — the weapon that caused a large swing in the votes of older Americans — was the claim that Mr. Obama was cutting Medicare. Why give Republicans a chance to do it all over again?

Of course, it’s possible that the reason the president is offering to undermine Medicare is that he genuinely believes that this would be a good idea. And that possibility, I have to say, is what really scares me.

 

The Pasty Little Putz and Krugman

July 11, 2011

The Pasty Little Putz is going to ‘splain “The Method to Their Madness,” and tells us that there are reasons why the Republican Party has its heels dug in on the debt ceiling.  Prof. Krugman, in “No, We Can’t? Or Won’t?”, says our failure to create jobs is a choice rationalized by an ever-shifting set of excuses.  Here’s The Putz:

The Republican Party’s strategy in the debt-ceiling negotiations has baffled centrists and vindicated liberals. For months, the party’s leaders have repeatedly turned down deals that would cut spending significantly because their members won’t compromise on taxes. To moderates, this intransigence is inexplicable: Are they crazy? To the left, it’s all-too-predictable: See, we told you they were crazy!

But there is a method to the Republicans’ madness, and it rests on four things they know (or at least sense) about the deficit debate that the rest of the political class often ignores.

Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.

The not-so-secret secret is that the White House has given ground on purpose. Just as Republicans want to use the debt ceiling to make the president live with bigger spending cuts than he would otherwise support, Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.

Why? Because the more conservative-seeming the final deal, the better for the president’s re-election effort. In that environment, Republicans have every incentive to push and keep pushing. Since any deal they cut will be used as an election-year prop in 2012, they need to make sure the president actually earns his budget-cutting bona fides.

Tax increases are lurking just over the horizon. The White House hasn’t made spending concessions just because the president wants to campaign as a deficit cutter next year. It has made concessions because it knows that taxes are already scheduled to go up when the Bush-era tax rates expire at the end of 2012.

If Obama gains a second term, Congressional Republicans will have to choose between a deal that lets the top rate go back to 39 percent (a $700 billion tax increase over 10 years) or no deal at all (a $3.8 trillion tax increase). Obviously, this dilemma won’t exist if President Mitt Romney occupies 1600 Pennsylvania Avenue. But Obama’s re-election is the more likely scenario, meaning that any deal struck this summer comes with a very large asterisk attached: *Includes tax increases to be named later.

Bipartisan budget deals usually deliver fewer spending cuts than they promise. The grand bargains of the past haven’t been as bad for conservatives as right-wing mythology sometimes makes them out to be. As a share of G.D.P., federal spending fell faster in the decade after George H. W. Bush broke his “read my lips, no new taxes” pledge and cut a deficit deal with Congressional Democrats than it did during the Reagan era.

But in absolute terms, no bipartisan bargain in the last three decades has delivered anywhere near the spending reductions that it promised. (As The Washington Examiner’s Philip Klein notes, by 1995 actual spending was $58 billion higher than it was projected to be when Bush the Elder and the Democrats reached their 1990 agreement.) Bipartisan tax increases, by contrast, always seem to happen as scheduled.

The long-term deck is stacked in favor of tax increases. For decades, the tug-of-war between left and right has kept government’s share of the economy nearly constant, around 19 percent of G.D.P. But in what you might call the revenge of Lyndon Johnson, the ballooning cost of Medicare is poised to tilt the debate decisively toward liberalism.

For now, tax increases and entitlement cuts are equally unpopular. But with every passing year, the constituency for letting Medicare grow as scheduled gets bigger and bigger, and the clout of working-age taxpayers diminishes. Already, even a relatively radical proposal like Paul Ryan’s budget seems compelled to exempt current retirees from its Medicare reforms. Imagine how the landscape will look in a decade.

These are the realities driving Republican intransigence. Past experience, present politics and future trends all suggest that conservatives should be aiming for the nearly perfect in the current negotiation, rather than the merely good.

But this logic also cuts both ways. Precisely because conservatives have a window of opportunity that they may not have again, there’s also a strong case to be made for striking the biggest possible deal — even if that deal requires concessions that a smaller deal does not.

At the moment, Republicans seem to be moving toward a smaller, purer bargain. Depending on what’s being offered, that may be the right course. But self-described “constitutional conservatives” should remember that Mr. Madison’s ingenious system doesn’t just require compromise. Sometimes it rewards it as well.

Now here’s Prof. Krugman, who actually knows what he’s talking about:

If you were shocked by Friday’s job report, if you thought we were doing well and were taken aback by the bad news, you haven’t been paying attention. The fact is, the United States economy has been stuck in a rut for a year and a half.

Yet a destructive passivity has overtaken our discourse. Turn on your TV and you’ll see some self-satisfied pundit declaring that nothing much can be done about the economy’s short-run problems (reminder: this “short run” is now in its fourth year), that we should focus on the long run instead.

This gets things exactly wrong. The truth is that creating jobs in a depressed economy is something government could and should be doing. Yes, there are huge political obstacles to action — notably, the fact that the House is controlled by a party that benefits from the economy’s weakness. But political gridlock should not be conflated with economic reality.

Our failure to create jobs is a choice, not a necessity — a choice rationalized by an ever-shifting set of excuses.

Excuse No. 1: Just around the corner, there’s a rainbow in the sky.

Remember “green shoots”? Remember the “summer of recovery”? Policy makers keep declaring that the economy is on the mend — and Lucy keeps snatching the football away. Yet these delusions of recovery have been an excuse for doing nothing as the jobs crisis festers.

Excuse No. 2: Fear the bond market.

Two years ago The Wall Street Journal declared that interest rates on United States debt would soon soar unless Washington stopped trying to fight the economic slump. Ever since, warnings about the imminent attack of the “bond vigilantes” have been used to attack any spending on job creation.

But basic economics said that rates would stay low as long as the economy was depressed — and basic economics was right. The interest rate on 10-year bonds was 3.7 percent when The Wall Street Journal issued that warning; at the end of last week it was 3.03 percent.

How have the usual suspects responded? By inventing their own reality. Last week, Representative Paul Ryan, the man behind the G.O.P. plan to dismantle Medicare, declared that we must slash government spending to “take pressure off the interest rates” — the same pressure, I suppose, that has pushed those rates to near-record lows.

Excuse No. 3: It’s the workers’ fault.

Unemployment soared during the financial crisis and its aftermath. So it seems bizarre to argue that the real problem lies with the workers — that the millions of Americans who were working four years ago but aren’t working now somehow lack the skills the economy needs.

Yet that’s what you hear from many pundits these days: high unemployment is “structural,” they say, and requires long-term solutions (which means, in practice, doing nothing).

Well, if there really was a mismatch between the workers we have and the workers we need, workers who do have the right skills, and are therefore able to find jobs, should be getting big wage increases. They aren’t. In fact, average wages actually fell last month.

Excuse No. 4: We tried to stimulate the economy, and it didn’t work.

Everybody knows that President Obama tried to stimulate the economy with a huge increase in government spending, and that it didn’t work. But what everyone knows is wrong.

Think about it: Where are the big public works projects? Where are the armies of government workers? There are actually half a million fewer government employees now than there were when Mr. Obama took office.

So what happened to the stimulus? Much of it consisted of tax cuts, not spending. Most of the rest consisted either of aid to distressed families or aid to hard-pressed state and local governments. This aid may have mitigated the slump, but it wasn’t the kind of job-creation program we could and should have had. This isn’t 20-20 hindsight: some of us warned from the beginning that tax cuts would be ineffective and that the proposed spending was woefully inadequate. And so it proved.

It’s also worth noting that in another area where government could make a big difference — help for troubled homeowners — almost nothing has been done. The Obama administration’s program of mortgage relief has gone nowhere: of $46 billion allotted to help families stay in their homes, less than $2 billion has actually been spent.

So let’s summarize: The economy isn’t fixing itself. Nor are there real obstacles to government action: both the bond vigilantes and structural unemployment exist only in the imaginations of pundits. And if stimulus seems to have failed, it’s because it was never actually tried.

Listening to what supposedly serious people say about the economy, you’d think the problem was “no, we can’t.” But the reality is “no, we won’t.” And every pundit who reinforces that destructive passivity is part of the problem.

 

The Pasty Little Putz and Krugman

July 4, 2011

Oh, sweet baby Jesus on a tricycle…  The Pasty Little Putz has decided to give us a lecture on marriage.  In “More Perfect Unions” he gurgles about how he’s sure gay marriages will start to redefine the institution, for everyone.  He’s SUCH an asshole.  Prof. Krugman, in “Corporate Cash Con,” writes of tax cuts, tax holidays and trickle-down.  Here’s that poisonous little asshole the Putz:

In 44 states, the future of gay marriage still depends on legislatures, governors and voters — and eventually, perhaps, Supreme Court Justice Anthony Kennedy. But in New York, as in five states before it, gay marriage’s future is in the hands of gay couples themselves.

Over the decades ahead, their choices will gradually transform gay marriage from an idea into a culture: they’ll determine the social expectations associated with gay wedlock, the gay marriage and divorce rates, the differences and similarities between gay and lesbian unions, the way marriage interacts with gay parenting, and much more besides.

They’ll also help determine gay marriage’s impact on the broader culture of matrimony in America.

One possibility is that gay marriage will end up being a force for marital conservatism, among gays and straights alike. In this vision, the norms of heterosexual marriage will be the template for homosexual wedlock. Once equipped with marriage’s “entitlements and entanglements,” Jonathan Rauch predicted in his book “Gay Marriage: Why It Is Good for Gays, Good for Straights, and Good for America,” “same-sex relationships will continue to move toward both durability and exclusivity.” At the same time, the example of gay couples taking vows will strengthen “marriage’s status as the gold standard for committed relationships.”

At the other end of the spectrum from Rauch’s gay conservatism are the liberationists, who hope that gay marriage will help knock marriage off its cultural pedestal altogether. To liberationists, a gay rights movement that ends up reaffirming a “gold standard” for relationships will have failed in its deeper mission — which Columbia law professor Katherine M. Franke recently summarized in a Times Op-Ed article as the quest for “greater freedom than can be found in the one-size-fits-all rules of marriage.”

That’s the kind of argument that makes social conservatives worry about polygamy (and worse). But liberationism has been gradually marginalized in the gay community over the last two decades, and gay conservatism seems to have largely carried the day. The desire to be included in an existing institution has proved stronger than the desire to eliminate every institutional constraint.

Still, there’s a third vision that’s worth pondering — neither conservative nor liberationist, but a little bit of both. This vision embraces the institution of marriage, rather than seeking to overthrow it. But it also hints that the example of same-sex unions might partially transform marriage from within, creating greater institutional flexibility — particularly sexual flexibility — for straight and gay spouses alike.

This idea is most prominently associated with Dan Savage, the prolific author, activist and sex columnist who was profiled in Sunday’s Times Magazine. Savage is strongly pro-marriage, but he thinks the institution is weighed down by unrealistic cultural expectations about monogamy. Better, he suggests, to define marriage simply as a pact of mutual love and care, and leave all the other rules to be negotiated depending on the couple.

In “The Commitment,” his memoir about wedding his longtime boyfriend, Savage described the way his own union has successfully made room for occasional infidelity. “Far from undermining the stable home we’ve built for our child,” he writes, “the controlled way in which we manage our desire for outside sexual contact has made our home more stable.”

The trouble is that straight culture already experimented with exactly this kind of model, with disastrous results.

Forty years ago, Savage’s perspective temporarily took upper-middle-class America by storm. In the mid-1970s, only 51 percent of well-educated Americans agreed that adultery was always wrong. But far from being strengthened by this outbreak of realism, their marriages went on to dissolve in record numbers.

This trend eventually reversed itself. Heterosexual marriage has had a tough few decades, but its one success story is the declining divorce rate among the upper middle class. This decline, tellingly, has gone hand in hand with steadily rising disapproval of adultery.

There’s a lesson here. Institutions tend to be strongest when they make significant moral demands, and weaker when they pre-emptively accommodate themselves to human nature.

Critics of gay marriage see this as one of the great dangers in severing the link between marriage and the two realities — gender difference and procreation — that it originally evolved to address. A successful marital culture depends not only on a general ideal of love and commitment, but on specific promises, exclusions and taboos. And the less specific and more inclusive an institution becomes, the more likely people are to approach it casually, if they enter it at all.

In courts and now legislatures, this has been a losing argument. But as gay New Yorkers ponder what they want their marriages to mean, they should consider one of its implications: The hardest promises to keep are often the ones that keep people together.

What a moron…  To say nothing of being a poisonous little puffed-up moralist.  He needs to STFU and mind his own business.  Here’s Prof. Krugman:

Watching the evolution of economic discussion in Washington over the past couple of years has been a disheartening experience. Month by month, the discourse has gotten more primitive; with stunning speed, the lessons of the 2008 financial crisis have been forgotten, and the very ideas that got us into the crisis — regulation is always bad, what’s good for the bankers is good for America, tax cuts are the universal elixir — have regained their hold.

And now trickle-down economics — specifically, the idea that anything that increases corporate profits is good for the economy — is making a comeback.

On the face of it, this seems bizarre. Over the last two years profits have soared while employment has remained disastrously high. Why should anyone believe that handing even more money to corporations, no strings attached, would lead to faster job creation?

Nonetheless, trickle-down is clearly on the ascendant — and even some Democrats are buying into it. What am I talking about? Consider first the arguments Republicans are using to defend outrageous tax loopholes. How can people simultaneously demand savage cuts in Medicare and Medicaid and defend special tax breaks favoring hedge fund managers and owners of corporate jets?

Well, here’s what a spokesman for Eric Cantor, the House majority leader, told Greg Sargent of The Washington Post: “You can’t help the wage earner by taxing the wage payer offering a job.” He went on to imply, disingenuously, that the tax breaks at issue mainly help small businesses (they’re actually mainly for big corporations). But the basic argument was that anything that leaves more money in the hands of corporations will mean more jobs. That is, it’s pure trickle-down.

And then there’s the repatriation issue.

U.S. corporations are supposed to pay taxes on the profits of their overseas subsidiaries — but only when those profits are transferred back to the parent company. Now there’s a move afoot — driven, of course, by a major lobbying campaign — to offer an amnesty under which companies could move funds back while paying hardly any taxes. And even some Democrats are supporting this idea, claiming that it would create jobs.

As opponents of this plan point out, we’ve already seen this movie: A similar tax holiday was offered in 2004, with a similar sales pitch. And it was a total failure. Companies did indeed take advantage of the amnesty to move a lot of money back to the United States. But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock — pretty much everything except increasing investment and creating jobs. Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.

What the tax holiday did do, however, was give big corporations a chance to avoid paying taxes, because they would eventually have repatriated, and paid taxes on, much of the money they brought in under the amnesty. And it also gave these companies an incentive to move even more jobs overseas, since they now know that there’s a good chance that they’ll be able to bring overseas profits home nearly tax-free under future amnesties.

Yet as I said, there’s a push for a repeat of this disastrous performance. And this time around the circumstances are even worse. Think about it: How can anyone imagine that lack of corporate cash is what’s holding back recovery in America right now? After all, it’s widely understood that corporations are already sitting on large amounts of cash that they aren’t investing in their own businesses.

In fact, that idle cash has become a major conservative talking point, with right-wingers claiming that businesses are failing to invest because of political uncertainty. That’s almost surely false: the evidence strongly says that the real reason businesses are sitting on cash is lack of consumer demand. In any case, if corporations already have plenty of cash they’re not using, why would giving them a tax break that adds to this pile of cash do anything to accelerate recovery?

It wouldn’t, of course; claims that a corporate tax holiday would create jobs, or that ending the tax break for corporate jets would destroy jobs, are nonsense.

So here’s what you should answer to anyone defending big giveaways to corporations: Lack of corporate cash is not the problem facing America. Big business already has the money it needs to expand; what it lacks is a reason to expand with consumers still on the ropes and the government slashing spending.

What our economy needs is direct job creation by the government and mortgage-debt relief for stressed consumers. What it very much does not need is a transfer of billions of dollars to corporations that have no intention of hiring anyone except more lobbyists.

 

Just The Pasty Little Putz

June 27, 2011

Prof. Krugman is off today, so it’s just The Pasty Little Putz.  In “160 Million and Counting” he gurgles about abortion and the tragedy of the world’s missing women.  Here he is:

In 1990, the economist Amartya Sen published an essay in The New York Review of Books with a bombshell title: “More Than 100 Million Women Are Missing.” His subject was the wildly off-kilter sex ratios in India, China and elsewhere in the developing world. To explain the numbers, Sen invoked the “neglect” of third-world women, citing disparities in health care, nutrition and education. He also noted that under China’s one-child policy, “some evidence exists of female infanticide.”

The essay did not mention abortion.

Twenty years later, the number of “missing” women has risen to more than 160 million, and a journalist named Mara Hvistendahl has given us a much more complete picture of what’s happened. Her book is called “Unnatural Selection: Choosing Boys Over Girls, and the Consequences of a World Full of Men.” As the title suggests, Hvistendahl argues that most of the missing females weren’t victims of neglect. They were selected out of existence, by ultrasound technology and second-trimester abortion.

The spread of sex-selective abortion is often framed as a simple case of modern science being abused by patriarchal, misogynistic cultures. Patriarchy is certainly part of the story, but as Hvistendahl points out, the reality is more complicated — and more depressing.

Thus far, female empowerment often seems to have led to more sex selection, not less. In many communities, she writes, “women use their increased autonomy to select for sons,” because male offspring bring higher social status. In countries like India, sex selection began in “the urban, well-educated stratum of society,” before spreading down the income ladder.

Moreover, Western governments and philanthropic institutions have their fingerprints all over the story of the world’s missing women.

From the 1950s onward, Asian countries that legalized and then promoted abortion did so with vocal, deep-pocketed American support. Digging into the archives of groups like the Rockefeller Foundation and the International Planned Parenthood Federation, Hvistendahl depicts an unlikely alliance between Republican cold warriors worried that population growth would fuel the spread of Communism and left-wing scientists and activists who believed that abortion was necessary for both “the needs of women” and “the future prosperity — or maybe survival — of mankind,” as the Planned Parenthood federation’s medical director put it in 1976.

For many of these antipopulation campaigners, sex selection was a feature rather than a bug, since a society with fewer girls was guaranteed to reproduce itself at lower rates.

Hvistendahl’s book is filled with unsettling scenes, from abandoned female fetuses littering an Indian hospital to the signs in Chinese villages at the height of the one-child policy’s enforcement. (“You can beat it out! You can make it fall out! You can abort it! But you cannot give birth to it!”) The most disturbing passages, though, are the ones that depict self-consciously progressive Westerners persuading themselves that fewer girls might be exactly what the teeming societies of the third world needed.

Over all, “Unnatural Selection” reads like a great historical detective story, and it’s written with the sense of moral urgency that usually accompanies the revelation of some enormous crime.

But what kind of crime? This is the question that haunts Hvistendahl’s book, and the broader debate over the vanished 160 million.

The scale of that number evokes the genocidal horrors of the 20th century. But notwithstanding the depredations of the Chinese politburo, most of the abortions were (and continue to be) uncoerced. The American establishment helped create the problem, but now it’s metastasizing on its own: the population-control movement is a shadow of its former self, yet sex selection has spread inexorably with access to abortion, and sex ratios are out of balance from Central Asia to the Balkans to Asian-American communities in the United States.

This places many Western liberals, Hvistendahl included, in a distinctly uncomfortable position. Their own premises insist that the unborn aren’t human beings yet, and that the right to an abortion is nearly absolute. A self-proclaimed agnostic about when life begins, Hvistendahl insists that she hasn’t written “a book about death and killing.” But this leaves her struggling to define a victim for the crime that she’s uncovered.

It’s society at large, she argues, citing evidence that gender-imbalanced countries tend to be violent and unstable. It’s the women in those countries, she adds, pointing out that skewed sex ratios are associated with increased prostitution and sex trafficking.

These are important points. But the sense of outrage that pervades her story seems to have been inspired by the missing girls themselves, not the consequences of their absence.

Here the anti-abortion side has it easier. We can say outright what’s implied on every page of “Unnatural Selection,” even if the author can’t quite bring herself around.

The tragedy of the world’s 160 million missing girls isn’t that they’re “missing.” The tragedy is that they’re dead.

 

The Pasty Little Putz and Krugman

June 13, 2011

In “The Online Looking Glass” The Pasty Little Putz informs us that the Anthony Weiner story is really about narcissism.  Prof. Krugman says “Medicare Saves Money,” and that it should cover more people, not fewer.  Talk about a voice crying in the wilderness…  Here’s The Putz:

In every time and place, people have associated new technologies with moral decline. “Men think that it is essential that the Nation have commerce,” Henry David Thoreau griped in 1854, “and export ice, and talk through a telegraph, and ride thirty miles an hour … but whether we should live like baboons or like men, is a little uncertain.” Similar anxieties have greeted most subsequent inventions, from the automobile to the iPhone: We’re always teetering on the brink of baboondom, always one technological leap away from forfeiting our humanity.

Sometimes, though, the pessimists are right to worry. Technology really does affect character. Cultures do change from era to era, sometimes for the worse. Particular vices can be encouraged by particular innovations, and thrive in the new worlds that they create.

In the sad case of Representative Anthony Weiner’s virtual adultery, the Internet era’s defining vice has been thrown into sharp relief. It isn’t lust or smut or infidelity, though online life encourages all three. It’s a desperate, adolescent narcissism.

The idea that modern America is in thrall to self-regard dates back to the 1970s, when writers like Tom Wolfe and Christopher Lasch famously critiqued the excesses of what Wolfe dubbed the “me decade.” But a growing body of research suggests that American self-involvement is actually reaching an apogee in the age of Facebook and Twitter. According to a variety of sociologists (San Diego State’s Jean Twenge, Notre Dame’s Christian Smith, and others), younger Americans are more self-absorbed, less empathetic and hungrier for approbation than earlier generations — and these trends seem to have accelerated as Internet culture has ripened. The rituals of social media, it seems, make status-seekers and exhibitionists of us all.

At 46, Weiner isn’t technically a member of Generation Facebook, but he’s clearly a well-habituated creature of the online social world. The fact that he used the Internet’s freedoms to violate his marriage vows isn’t particularly noteworthy. That’s just the usual Spitzer-Schwarzenegger routine performed on a virtual plane. What’s more striking is the form his dalliances took — not a private surrender to lust or ardor, but a pathetic quest for quasipublic validation.

In all the tweets and transcripts that have leaked to date, there’s no sign that Weiner was particularly interested in the women he communicated with — not as human beings, certainly, but not really even as lust objects either. His “partners” existed less to titillate him than to hold up mirrors to his own vanity: whether the congressman was tweeting photos of his upper body or bragging about what lurked below, his focus was always squarely on himself. If Bill Clinton was seduced by a flash of Monica Lewinsky’s thong, Weiner seems to have been led into temptation primarily by the desire to boast about his own endowments.

In this sense, his tweeted chest shots are more telling than the explicitly pornographic photos that followed. There was a time when fame and influence were supposed to liberate men from such adolescent insecurity. When Henry Kissinger boasted about power being the ultimate aphrodisiac, the whole point was that he didn’t have to worry about his pecs and glutes while, say, wooing the former Bond girl Jill St. John.

Not so in the age of social media. In a culture increasingly defined by what Christine Rosen describes as the “constant demands to collect (friends and status), and perform (by marketing ourselves),” just being a United States congressman isn’t enough. You have to hit the House gym and look good coming out of the shower, and then find a Twitter follower who’s willing to tell you just “how big” you really are.

Writing in the late ’70s, Lasch distinguished modern narcissism from old-fashioned egotism. The contemporary narcissist, he wrote, differs “from an earlier type of American individualist” in “the tenuous quality of his selfhood.” Despite “his occasional illusions of omnipotence, the narcissist depends on others to validate his self-esteem.” His innate insecurity can only be overcome “by seeing his ‘grandiose self’ reflected in the attentions of others, or by attaching himself to those who radiate celebrity, power and charisma.”

This is a depressingly accurate anticipation of both the relationship between Weiner and his female “followers,” and the broader “look at me! look at meeeee!” culture of online social media, in which nearly all of us participate to some degree or another.

Facebook and Twitter did not forge the culture of narcissism. But they serve as a hall of mirrors in which it flourishes as never before — a “vast virtual gallery,” as Rosen has written, whose self-portraits mainly testify to “the timeless human desire for attention.”

And as Anthony Weiner just found out, it’s very easy to get lost in there.

Here’s Prof. Krugman:

Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.

And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.

Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.

And here’s what you need to know: Medicare actually saves money — a lot of money — compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.

The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.

But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.

By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.

And then there’s the international evidence. The United States has the most privatized health care system in the advanced world; it also has, by far, the most expensive care, without gaining any clear advantage in quality for all that spending. Health is one area in which the public sector consistently does a better job than the private sector at controlling costs.

Indeed, as the economist (and former Reagan adviser) Bruce Bartlett points out, high U.S. private spending on health care, compared with spending in other advanced countries, just about wipes out any benefit we might receive from our relatively low tax burden. So where’s the gain from pushing seniors out of an admittedly expensive system, Medicare, into even more expensive private health insurance?

Wait, it gets worse. Not every 65- or 66-year-old denied Medicare would be able to get private coverage — in fact, many would find themselves uninsured. So what would these seniors do?

Well, as the health economists Austin Frakt and Aaron Carroll document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.

O.K., the obvious question: If Medicare is so much better than private insurance, why didn’t the Affordable Care Act simply extend Medicare to cover everyone? The answer, of course, was interest-group politics: realistically, given the insurance industry’s power, Medicare for all wasn’t going to pass, so advocates of universal coverage, myself included, were willing to settle for half a loaf. But the fact that it seemed politically necessary to accept a second-best solution for younger Americans is no reason to start dismantling the superior system we already have for those 65 and over.

Now, none of what I have said should be taken as a reason to be complacent about rising health care costs. Both Medicare and private insurance will be unsustainable unless there are major cost-control efforts — the kinds of efforts that are actually in the Affordable Care Act, and which Republicans demagogued with cries of “death panels.”

The point, however, is that privatizing health insurance for seniors, which is what Mr. Lieberman is in effect proposing — and which is the essence of the G.O.P. plan — hurts rather than helps the cause of cost control. If we really want to hold down costs, we should be seeking to offer Medicare-type programs to as many Americans as possible.

What a surprise — that poisonous toad Lieberman parroting the GOP party line…  That son of a bitch should have been drummed out of the caucus the instant he endorsed McCain.  I’m sure the fact that his wife is up to her eyebrows in Big Pharma had NOTHING to do with his plan…


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