Krugman’s blog, 3/28 and 3/29

March 30, 2015

There were four posts on Saturday and two yesterday.  The first Saturday post was “Mild Winters and Crank Economics:”

Neil Irwin writes about migration patterns within the United States, and points out that they overwhelmingly reflect just two factors. Most important, people are moving to places with mild winters:

On top of this, they’re moving to places with cheap housing, although you need to allow for the fact that some places are cheap precisely because people are leaving.

As I pointed out the other day, this long-term movement toward the sun, in turn, probably has a lot to do with the gradual adjustment to air conditioning.

And as I also pointed out, the search for mild winters can lead to a lot of spurious correlations. With the exception of California — which has mild winters but also, now, has very high housing prices — America’s warm states are very conservative. And that’s not an accident: warm states were also slave states and members of the Confederacy, and a glance at any election map will tell you that in US politics the Civil War is far from over.

The point, then, is that these hot red states also tend to be low-minimum-wage, low-taxes-on-the-wealthy jurisdictions. And that opens the door to sloppy and/or mendacious claims that low wages and taxes are driving their growth.

This really shouldn’t even be controversial — I think it’s kind of obvious.

The second post on Saturday was “Unreal Keynesians:”

Brad DeLong points me to Lars Syll declaring that I am not a “real Keynesian”, because I use equilibrium models and don’t emphasize the instability of expectations.

One way to answer this is to point out that Keynes said a lot of things, not all consistent with each other. (The same is true for all of us.) Right at the beginning of the General Theory, Keynes explains the “principle of effective demand” with a little model of temporary equilibrium that takes expectations as given. If that kind of modeling is anti-Keynesian, the man himself must be excommunicated.

But surely we don’t want to do economics via textual analysis of the masters. The questions one should ask about any economic approach are whether it helps us understand what’s going on, and whether it provides useful guidance for decisions.

So I don’t care whether Hicksian IS-LM is Keynesian in the sense that Keynes himself would have approved of it, and neither should you. What you should ask is whether that approach has proved useful — and whether the critics have something better to offer.

And as I have often argued, these past 6 or 7 years have in fact been a triumph for IS-LM. Those of us using IS-LM made predictions about the quiescence of interest rates and inflation that were ridiculed by many on the right, but have been completely borne out in practice. We also predicted much bigger adverse effects from austerity than usual because of the zero lower bound, and that has also come true.

Now, what have those who declare themselves the true Keynesians had to offer? Has insisting that expectations are volatile and unpredictable been helpful in this context? Actually, if anything it lends support to believers in the confidence fairy. After all, if it’s all animal spirits, who are we to say they’re wrong?

Has declaring uncertainty to be unquantifiable, and mathematical modeling in any form foolish, been productive? Remember, that’s what the Austrians say too.

If you can show me any useful advice given by those sniping at me and other for our failure to be proper Keynesians, I’ll be happy to take it under consideration. If you can’t, then we’re just doing literary criticism here, and I’m not interested.

The third post on Saturday was “Privatization Memories:”

Dave Weigel has one of the more interesting Harry Reid retrospectives, focusing on his role in fighting back Bush’s attempt to privatize Social Security — and in particular on the way he forged an alliance with liberal bloggers.

I remember that episode very well, for several reasons. One was that I, too, was writing a lot, debunking one bad argument for privatization after another. It wasn’t the first time I had done that kind of thing, but this was different in two ways: it was really intense, and for once my side of the argument won the political fight.

It was also a formative period for my perceptions of how policy arguments actually play out in modern America. There are always three sides here: the right, which isn’t interested in facts or logic; the left (which isn’t very leftist in this country — they’re really center-left by anyone else’s standards); and self-proclaimed centrists, who have very little in the way of a constituency in the country at large but have a lot of influence inside the Beltway.

And what you learned early on in the Social Security debate was that centrists desperately want to believe that there is symmetry between the left and the right, that Democrats and Republicans are equally extreme in their own way. And this means that they are always looking for ways to say nice things about Republicans and their policy proposals, no matter how bad those proposals are. That’s how Paul Ryan ended up getting an award for fiscal responsibility.

So back in 2005, Bush was making a dubious claim coupled with a complete non sequitur. First, the claim that Social Security was in crisis; second, that privatization was the answer, even though it would do nothing at all to help the system’s finances. How could centrists say nice things about such a crude bait-and-switch?

Well, here’s Joe Klein in 2005:

I agree with Paul [Krugman] in that private accounts have nothing to do with solvency and solvency is the issue. I disagree with Paul because I think private accounts [are] a terrific policy and that in the information age, you’re going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads.

The Democrats have for the last 10 or 15 years blatantly, shamelessly demagogued this issue. They’ve offered nothing positive on Social Security or on Medicare or on Medicaid, and it’s time for them to compromise here.

Say what? To his credit, Klein later admitted that he was all wrong here. But the point is that what we saw here was the instinct to come up with something, anything, that would let centrists pretend symmetry between the parties.

Incidentally, about Democrats doing nothing about Medicare and Medicaid: it’s interesting to look at budget projections made around the time of the Social Security debate. Back then CBO projected that by fiscal 2014 Medicare spending would rise to $708 billion and Medicaid spending to $361 billion. The actual numbers for 2014 were 600 and 301, respectively, despite the Medicaid expansion under Obamacare. At least some of this unexpectedly low cost can be attributed to measures included in the Affordable Care Act. And strange to say, this was achieved without destroying or privatizing the programs.

But back to 2005: what Harry Reid realized was that it was time to stop courting the Very Serious People and instead make an alliance with the DFHs — which isn’t quite shorthand for Dirty Foolish Hippies — who, unlike the VSPs, were actually making sense on both the policy and the politics. It was an important turning point.

Saturday’s last post was “Air Conditioning and the Rise of the South:”

Just a short further note on this subject. (If you’re wondering why I’m doing posting so much on a Saturday, I’m housebound with a cold, so why not?)

First, there’s a real demographic turning point for the South circa 1960, as a steadily falling share of the total US population shifts to a sustained rise:

Second, this turning point coincides with the coming of widespread home air conditioning:

So when you ask why Sunbelt states have in general grown faster than those in the Northeasy, don’t credit Art Laffer; credit Willis Carrier.

Yesterday’s first post was “Talking Econoheads:”

A couple of events I was involved in are now online:

Piketty/Stiglitz/me talking inequality at the 92nd Street Y

Lots of people talking about economics for the New York Review of Books at Scandinavia House.

The last post yesterday was “Austerity, Big and Small:”

At this point it’s fairly common to look at the effects of austerity via cross-country scatterplots: one axis shows some measure of fiscal consolidation, while the other shows the change in GDP. Who started this practice? I think I did, here, although I’m happy to cede credit to someone else if I missed it.

There are problems with this approach: causation could run the other way, although given the extent to which austerity, in the eurozone at any rate, was driven by debt panic, those problems shouldn’t be too severe. Another issue, however, is concern that such cross-sectional pictures could be dominated by small outliers. Are we basing too much on Greece?

Well, I’ve been doing some class prep and decided to play around with bubble charts — scatterplots in which the size of the markers varies, in this case with PPP GDP. Here’s what the eurozone scatter looks like, using the IMF’s estimate of the change in the structural balance as a share of potential GDP:

There seem to be three insights from this picture. First, the case that austerity really does hurt a lot does not depend on Greece. If anything, Greek economic contraction seems to have been somewhat less than you might have expected given the extreme austerity.

Second, and relatedly, the apparent multiplier looks larger if you focus only on the bigger economies; a weighted regression has a coefficient of -1.6, versus -1.3 for the unweighted version.

Finally, all the attention given to Latvia looks a bit … odd.

Blow, Cohen and Krugman

March 30, 2015

In “The Beating of Floyd Dent” Mr. Blow says another horrifically violent incident furthers the perception that the police are more likely to use force against blacks.  Mr. Cohen says “Iran Matters Most” and that America cannot stop the Sunni-Shia schism in the Middle East or its violence. It’s a time for fierce realism.  Prof. Krugman, in “Imaginary Healthcare Horrors,” says the Affordable Care Act is costing taxpayers much less than expected, but that hasn’t deterred the prophets of disaster.  Here’s Mr. Blow:

“He was beating me upside the head,” Floyd Dent, a 57-year-old longtime autoworker told a gaggle of reporters last week, according to The Detroit Free Press. “I was trying to protect my face with my right arm. I heard one of them say, ‘Tase the M…F.’ ”

Dent was describing what he experienced in a horrifically violent dashboard camera video that shows Inkster, Mich., police officers pulling him over, dragging him from his car, punching him 16 times in the head and tasing him three times, while he lay bloody and struggling on the ground, before arresting him.

According to the website for a local NBC News affiliate: “Police said they first saw Dent’s car through binoculars while watching an area known to have drug activity. They followed Dent’s car and said he didn’t make a complete stop at a stop sign. Police said that when they turned on their flashing lights, Dent didn’t immediately pull over.”

Furthermore: “Police said they ordered Dent to put his hands up, but they could only see one. Police said Dent yelled ‘I’ll kill you’ at the officers. Dent’s attorney, Greg Rohl, said there’s no audio of the alleged threat.”

Finally: “Police said Dent refused to put his hands behind his back. Dent said he thought he was being choked to death and tried to pull the officers’ arms away from his throat. One of the officers said Dent bit him on the arm, and that’s why he started punching Dent. Police said the force was needed to restrain Dent. The officer who said he was bit did not seek medical attention or photograph the bite marks.”

According to The Free Press, “Police initially charged him with assault, resisting arrest and possession of cocaine, insisting they found cocaine beneath the passenger seat of his Cadillac. Dent says police planted the drugs at the time of his arrest. An Inkster district court judge, after reviewing the tape, tossed the assault and resisting charges, but Dent faces an April 1 hearing on the drug charge.”

Dent’s lawyer says the drugs were planted by the officer who punched him, William Melendez. And there is video that the lawyer claims backs up the allegation. As a reporter at the local NBC News affiliate describes it: “In the video, the officer seen throwing the punches, William Melendez, is seen pulling something from his pocket that looks like a plastic baggy with something inside it. Melendez testified in court police found a baggy of crack cocaine under the passenger seat of Dent’s car.”

It should be noted that, according to the local NBC News affiliate website, Dent said a blood test showed no drugs in his system.

It should also be noted that, according to The Free Press, Melendez, who federal investigators in 2003 said “was known on the street as ‘Robocop,’ ” “has been involved in 12 lawsuits related to his conduct as an officer over the years, including similar allegations in a civil rights suit now pending in federal court.”

Those lawsuits allege, “among other things, that he planted evidence, assaulted people in their homes, fabricated police reports and wrongly arrested people.”

Videos like the Dent footage further the perception, especially among African-Americans, that the police are more likely to use force — specifically deadly force — against blacks than whites.

A December CBS News poll found that 84 percent of blacks and 33 percent of whites believe that the police in most communities are more likely to use deadly force against blacks. Just 2 percent of whites, and 0 percent of blacks, believe the police are more likely to use such force against whites.

(Fifty-seven percent of whites and 10 percent of blacks said they thought race did not affect the use of deadly force.)

And it is important to register where the most recent cases are centered.

As Isabel Wilkerson, author of the monumental book “The Warmth of Other Suns,” put it in a January New York Times essay titled “When Will the North Face Its Racism?”: “High-profile cases of police brutality have recently come to be associated with the North rather than the South. And it is in the South that two recent cases of police shootings of unarmed black people resulted in more vigorous prosecution.”

She concluded: “If the events of the last year have taught us anything, it is that, as much progress has been made over the generations, the challenges of color and tribe were not locked away in another century or confined to a single region but persist as a national problem and require the commitment of the entire nation to resolve.”

So much about Dent’s case is troublesome, and so he has become the latest touchstone in our coalescing conversation about the intersection of police forces and communities of color, particularly in the parts of this country that African-Americans fled to in search of a better life.

Next up we have Mr. Cohen:

Do the Iran deal. Defeat the barbaric marauders of Islamic State. In the fragmenting mayhem of the Middle East, these must be the American and Western priorities.

They are objectives rooted in the strict Western interest. An Iranian nuclear accord lasting at least a decade that ring-fences a fiercely monitored and strictly limited enrichment program compatible only with civilian use is not an ideal outcome, but it is the best conceivable outcome of protracted talks that have already reversed the nuclear momentum in Iran and established a bridgehead between Washington and Tehran.

Any such agreement — and the deadline is imminent — must leave Iran a minimum of a year from any ‘‘break-out’’ to a bomb. The alternatives are far worse. Centrifuges and enrichment levels would resume their upward curve. War drums would beat again despite the fact that calls to attack Iran are an irresponsible invitation to disaster.

American or Israeli bombs on Persia (or both) would have all sorts of ghastly consequences, but the fundamental argument against such folly is that they would cause no more than a hiccup in Iran’s nuclear program before spurring it to renewed and unmonitored intensity. This would be war without purpose, or war on false pretenses. We’ve seen enough of that.

Iran is a hopeful and youthful society. Nurture the hope. Don’t imprison it. A deal lasting 10 years would condemn Iran and America to a working relationship over that period. I use the word ‘‘condemn’’ advisedly. It would not be pretty. In fact it would be ugly. There would be plenty of disagreements.

But jaw-jaw is better than war-war. Much can be achieved with nations that have fundamental ideological differences with the United States; look at the history of Chinese-American relations since they resumed in the 1970’s. During the next decade the Islamic Republic is likely to go through a leadership change. Its society is aspirational and Westward-looking. ‘‘Death to America’’ has become a tired refrain. What these elements will produce in terms of change is unpredictable, but the chance of positive developments is enhanced by contact and diminished by punitive estrangement of Tehran.

Would it be preferable that Iran not have the nuclear capacity it has acquired? Sure. Can there be absolute guarantees a deal would be honored? No. But diplomacy deals with the real world. The toughest, most important diplomacy is conducted with enemies. Opponents of an accord have offered no serious alternatives.

Only elementary knowledge of Iran is needed to know that sanctions will never bring this proud nation to its knees. It would rather starve than cave. What better assures Israel’s security, a decade of strict limitation and inspection of Iran’s nuclear program that prevents it making a bomb, or a war that delays the program a couple of years, locks in the most radical factions in Tehran, and intensifies Middle Eastern violence? It’s a no-brainer.

I like the current inconsistencies in President Obama’s Middle East policy. Some ask how it can make sense to pursue an Iran deal while backing Arab states, principally Sunni Saudi Arabia, in a campaign against Iranian-backed Houthi forces in Yemen. To which the answer is first that interests drive foreign policy, not the pursuit of consistency (Stalin was once the most effective of American allies); and second that America is making it clear to Iran, even before any possible deal, that it will not abandon its allies, including Egypt and the Saudis, just because a nuclear agreement has been reached. This is an important message. The United States will oppose Iran where its interests and those of its allies demand that, deal or no deal.

One area where American and Iranian interests broadly coincide is in defeating Islamic State, the latest expression of the metastasizing Salafi Islamist ideology of murderous hatred toward Western civilization that produced 9/11 and recent murderous rampages in Europe. Islamic State is also a Sunni revanchist movement in Iraq and Syria, directly opposed to Shia Iran. There is nothing uplifting about the overlap in American and Iranian interests, but that does not make it any the less important. Rolling back Islamic State requires at least tacit Iranian cooperation.

America cannot stop the Sunni-Shia schism in the Middle East that its invasion of Iraq exacerbated. It cannot rebuild the Sykes-Picot order, or the borders that went with it. It cannot reverse its failure to prevent the worst in Syria (which will forever blot Obama’s record), nor its failure, outside Tunisia, and particularly in Egypt, to nurture the hope of the Arab spring for more representative societies freed from the paralyzing (and mutually reinforcing) confrontation of dictatorship and Islamism. It cannot prevent the violence inherent in all these developments. Nor should it hide its eyes from the fact that this violence will last a generation at least.

This is not cause for despair but reason to concentrate, fiercely, on the two attainable objectives that matter most now.

Last but not least we have Prof. Krugman:

There’s a lot of fuzzy math in American politics, but Representative Pete Sessions of Texas, the chairman of the House Rules Committee, recently set a new standard when he declared the cost of Obamacare “unconscionable.” If you do “simple multiplication,” he insisted, you find that the coverage expansion is costing $5 million per recipient. But his calculation was a bit off — namely, by a factor of more than a thousand. The actual cost per newly insured American is about $4,000.

Now, everyone makes mistakes. But this wasn’t a forgivable error. Whatever your overall view of the Affordable Care Act, one indisputable fact is that it’s costing taxpayers much less than expected — about 20 percent less, according to the Congressional Budget Office. A senior member of Congress should know that, and he certainly has no business making speeches about an issue if he won’t bother to read budget office reports.

But that is, of course, how it’s been all along with Obamacare. Before the law went into effect, opponents predicted disaster on all levels. What has happened instead is that the law is working pretty well. So how have the prophets of disaster responded? By pretending that the bad things they said would happen have, in fact, happened.

Costs aren’t the only area where enemies of reform prefer to talk about imaginary disasters rather than real success stories. Remember, Obamacare was also supposed to be a huge job-killer. In 2011, the House even passed a bill called the Repealing the Job-Killing Health Care Law Act. Health reform, opponents declared, would cripple the economy and in particular cause businesses to force their employees into part-time work.

Well, Obamacare went into effect fully at the beginning of 2014 — and private-sector job growth actually accelerated, to a pace we haven’t seen since the Clinton years. Meanwhile, involuntary part-time employment — the number of workers who want full-time work but can’t get it — has dropped sharply. But the usual suspects talk as if their dire predictions came true. Obamacare, Jeb Bush declared a few weeks ago, is “the greatest job suppressor in the so-called recovery.”

Finally, there’s the never-ending hunt for snarks and boojums — for ordinary, hard-working Americans who have suffered hardship thanks to health reform. As we’ve just seen, Obamacare opponents by and large don’t do math (and they’re sorry when they try). But all they really need are a few sob stories, tales of sympathetic individuals who have been impoverished by some aspect of the law.

Remarkably, however, they haven’t been able to find those stories. Early last year, Americans for Prosperity, a Koch brothers-backed group, ran a series of ads featuring alleged Obamacare victims — but not one of those tales of woe stood up to scrutiny. More recently, Representative Cathy McMorris Rodgers of Washington State took to Facebook to ask for Obamacare horror stories. What she got instead was a torrent of testimonials from people whose lives have been improved, and in some cases saved, by health reform.

In reality, the only people hurt by health reform are Americans with very high incomes, who have seen their taxes go up, and a relatively small number of people who have seen their premiums rise because they’re young and healthy (so insurers previously saw them as good risks) and affluent (so they don’t qualify for subsidies). Neither group supplies suitable victims for attack ads.

In short, when it comes to the facts, the attack on health reform has come up empty-handed. But the public doesn’t know that. The good news about costs hasn’t made it through at all: According to a recent poll by Vox.com, only 5 percent of Americans know that Obamacare is costing less than predicted, while 42 percent think the government is spending more than expected.

And the favorable experiences of the roughly 16 million Americans who have gained insurance so far have had little effect on public perceptions. Partly that’s because the Affordable Care Act, by design, has had almost no effect on those who already had good health insurance: Before the act, a large majority of Americans were already covered by their employers, by Medicare or by Medicaid, and they have seen no change in their status.

At a deeper level, however, what we’re looking at here is the impact of post-truth politics. We live in an era in which politicians and the supposed experts who serve them never feel obliged to acknowledge uncomfortable facts, in which no argument is ever dropped, no matter how overwhelming the evidence that it’s wrong.

And the result is that imaginary disasters can overshadow real successes. Obamacare isn’t perfect, but it has dramatically improved the lives of millions. Someone should tell the voters.

Krugman’s blog, 3/27/15

March 28, 2015

There were two posts yesterday, a bit out of order.  The first post was “Friday Night Music: The Lone Bellow, Watch Over Us:”

Yes, I am aware that it’s Friday morning. But I have meetings followed by travel, and probably won’t be able to blog later. Normal service will resume tomorrow.

Meanwhile, I went to see TLB at the Bowery Ballroom Wednesday night:

And it was even better than I expected — you can watch performance videos, but (as with most of the bands I love!) they don’t capture what it’s really like in the room, with the audience very much part of the show. When they did this song, the person standing next to me (it’s all standing, preferably with beer in hand) burst out, “This is surreal — they can do anything!”

Yesterday’s second post was “Hidden Healthcare Horrors:”

One of the odder subplots of the health reform saga has been the almost pathetic efforts of Republicans to come up with Obamacare horror stories. You might think that given the complexity of the law and the almost unlimited resources of the propaganda machine, they’d be able to come up with someone to serve as the poster child of the law’s terrible effects on innocent Americans. As far as I know, however, we have yet to see a single credible example — all the characters featured in Koch brothers ads or GOP speeches have turned out to be potential beneficiaries of the Affordable Care Act, if only they were willing to look at their actual options.

So Cathy McMorris Rodgers went on Facebook to ask for Obamacare horror stories — and instead got an avalanche of testimonials from people who got essential insurance and care thanks to the ACA.

Why can’t the GOP find the horror stories it knows, just knows, must be out there? Matthew Yglesias gets at most of it by noting that Obamacare does, in fact, redistribute from the few to the many:

[O]ne of the main things it does is raise taxes rather dramatically on a pretty small number of high-income people in order to give subsidized health insurance policies to a substantially larger number of low-income people. Indeed, this is one of the main things Republicans don’t like about it!

But there’s a bit more to the story. Millionaires paying higher taxes aren’t the only people hurt, at least slightly, by the law. If you are a young. healthy person (especially if you’re male), living in a state that didn’t have community rating pre-ACA, you may have had a cheap policy that went up in price once the law went into effect; and if you’re affluent as well, you don’t receive subsidies. So there are victims out there.

The problem for the GOP is that they’re the wrong kind of victims. What Republicans want are struggling, salt of the earth regular Americans, preferably older and with expensive medical conditions — not healthy, well-paid guys in their 20s. But the profile of the ideal Obamacare victim matches, pretty much exactly, the profile of the kind of person Obamacare was designed to help.

And the inability of the GOP to come up with true horror stories is, in its own way, a demonstration that the law is working as intended.

Solo Collins

March 28, 2015

Mr. Nocera is off today, so Ms. Collins has the place to herself.  She has a “Ted Cruz Pop Quiz.”  She says we officially have a 2016 presidential candidate! She also asks how well do you know him?  Here she is:

The presidential race is on! And right now the official pack of contenders consists of … Ted Cruz.

Don’t panic. There will be others. Really, April is going to bring a veritable shower. But, right now, unless you count all the people who register to run for president on the Unknown ticket, and the anesthesiologist in Cleveland who declared his candidacy but forgot to tell his wife, Cruz is the only genuine, more-or-less serious, on-the-record candidate we’ve got. Attention must be paid.

Cruz, a freshman senator from Texas, is 44 with about two years of experience in elective office. (Barack Obama’s success seems to have given hope to the wrong people.) He announced his candidacy in a big speech to the students at Liberty University, a conservative evangelical school in Virginia.

It was a great setting — an auditorium full of fresh faces, all of them eager to support Ted Cruz and avoid a $10 fine the university levied for nonattendance.

The announcement was long on biography: Cruz tells his family story a lot, stressing the terrible obstacles overcome on the road to American success. As a public service, we are going to check to see whether you’ve been paying attention:

Ted Cruz was born in:

  • A) Cuba.

  • B) A manger somewhere south of Houston.

  • C) Canada.

Cruz is very close to his father, an evangelical pastor who has said that President Obama:

  • A) Is a lot like Fidel Castro.

  • B) Should be sent “back to Kenya.”

  • C) ”Seeks to destroy all concept of God.”

  • D) All of the above.

Cruz describes leaving home for college as a very difficult experience. (“He was alone and scared,” the presidential candidate told his audience at Liberty, speaking in the third person.) His traumatic voyage into higher education took place at:

  • A) An exchange student program in Ulan Bator.

  • B) A community college in a tough neighborhood in Toledo.

  • C) Princeton.

Cruz worked two jobs to get through college. This was partly for tuition and partly because:

  • A) He had lost $1,800 playing poker.

  • B) He wanted to give generous donations in the Sunday collection plate.

  • C) He was saving up to buy an embossed copy of the Constitution.

After college Cruz was lucky enough to get into Harvard Law School. Later, he recalled Harvard Law as a place with:

  • A) Enlightening classes.

  • B) Great poker games.

  • C) Communist professors.

After law school, Cruz’s struggles continued, and he:

  • A) Attempted to volunteer for the military but was rejected for poor vision. So he signed up instead for four years of missionary work in Papua New Guinea.

  • B) Taught in a low-income neighborhood in San Antonio while devoting his weekends to coaching midnight basketball at the Y.

  • C) Clerked for Supreme Court Chief Justice William Rehnquist, worked as a $695-an-hour appellate lawyer and nabbed an appointment as Texas solicitor general.

Cruz was a big music fan in his youth, but he claims he stopped liking rock after:

  • A) 9/11.

  • B) Led Zeppelin broke up.

  • C) Mick Jagger turned 70.

Cruz has been making the regular stops for a presidential hopeful. In Iowa, when a reporter asked him for a personal fact no one knows, he confided that he despises:

  • A) Avocados.

  • B) Alexander Hamilton and the influence of urban mercantilism in the post-Revolutionary era.

  • C) Everything Beyoncé has done since Destiny’s Child.

In New Hampshire, Cruz recently gave his apocalyptic speech about the way the Democrats are ruining the country. When he declaimed “The whole world is on fire!” he appeared to:

  • A) Levitate.

  • B) Scare a little girl.

  • C) Glow in the dark.

 

Here’s the answer key:  1C, 2D, 3C, 4A, 5C, 6C, 7A, 8A, 9B

I got them all right.  I wonder if that should alarm me…

Brooks, Cohen and Krugman

March 27, 2015

In “The Field Is Flat” Bobo tries to convince us of something.  He gurgles that many people think the Democrats have an advantage heading into 2016, but he says they don’t.  Keep on trying to convince yourself of that, Bobo, as you watch the 2016 Clown Car fill up with lunatic Teatards.  Mr. Cohen, in “Of Catfish Wars and Shooting Wars,” says graves in the life-giving rice paddies along the Mekong Delta suggest the Asian gift for acceptance.  In “Mornings in Blue America” Prof. Krugman tells us about when good news of solid job growth at both the national level and in states is a conservative nightmare.  Here’s Bobo, who should read Prof. Krugman today:

Like a lot of people who pay attention to such things, I had assumed that Democrats had a huge advantage going into next year’s presidential race. Democrats do really well among the growing demographic groups, like Hispanics, single people and the young. Republicans, meanwhile, do doing sensationally well with just about every shrinking group. If 67-year-old rural white men were the future of the electorate, the G.O.P. would be rolling.

But there’s a growing body of evidence to suggest that, in fact, Democrats do not enter this election with an advantage. There are a series of trends that may cancel out the Democratic gains with immigrants, singles and the like.

We first began to notice these counterforces in the high-immigrant red states that were supposed to start turning purple by now — places like Texas, Arizona and Georgia. New types of voters have, indeed, flooded into these places, but as Ronald Brownstein points out in The National Journal, since 1992 Democratic presidential nominees have averaged only 44.5 percent of the vote in Georgia, 43.7 percent of the vote in Arizona and a pathetic 40.4 percent of the vote in Texas.

Instead of turning pink or purple, these states have become more thoroughly Republican — from school board elections on up.

Nationally, three big things are happening to at least temporarily hold off the Democratic realignment. First, the aging of the electorate is partially canceling out the diversifying of the electorate. People tend to get more Republican as they get older, and they vote at higher rates. And older people are moving to crucial states. In Arizona, Obama won 63 percent of the young adults but only 29 percent of the oldsters.

This aging effect could have a big impact in the swing states of the Midwest, like Wisconsin, Ohio, Iowa, Michigan and Pennsylvania. These states have generally gone Democratic in presidential years, but it’s hard to miss the growing Republican strength at every other level. As Brownstein notes, Republicans have a 42-to-18 advantage in House seats in these states. They control the governorships in all but Pennsylvania. They control both statehouses in all these states save the Iowa Senate.

Second, Democrats continue to lose support among the white working class. In 2008, Barack Obama carried 40 percent of white voters with a high school degree. By 2012, that was down to 36 percent. As John B. Judis points out in a National Journal piece called “The Emerging Republican Advantage,” the tilt of the white working class to the G.O.P. has been even more pronounced in other races. In 2006, Democrats got 44 percent of the white-working-class vote in House races. By 2014, they got only 34 percent. In 2009, Republicans had a 20-seat advantage in House districts that were majority white working class. Today, they have a 125-seat advantage.

Most surprising, Democrats are now doing worse among college-educated voters. Obama won white college graduates in 2008, but he lost them to Mitt Romney in 2012. In Colorado, for example, Obama lost 8 points in his support from college-educated voters from 2008 to 2012.

White college grads are drifting away from Democrats down ballot, too. And, most significant, there are signs that Hispanic voters, at least in Sun Belt states, are getting more Republican as they move up the educational ladder.

Surveys and interviews give us some sense of what’s going on. Voters have a lot of economic anxieties. But they also have a template in their heads for what economic dynamism looks like.

That template does not include a big role for government. Polls show that faith in government is near all-time lows. In a Gallup survey, voters listed dysfunctional government as the nation’s No. 1 problem. In fact, American voters’ traditional distrust has morphed and hardened. They used to think it was bloated and ineffective. Now they think it is bloated and ineffective and rigged to help those who need it least.

When many of these voters think of economic dynamism, they think of places like Texas, the top job producer in the nation over the past decade, and, especially, places like Houston, a low-regulation, low-cost-of-living place. In places like Wisconsin, voters in the middle class private sector support candidates who cut state pensions and pass right-to-work laws, so that economic governance can be more Texas-style.

In short, economic philosophy is mitigating the effect of demographic change, at least for a little while longer. The political guru Charlie Cook asks: Will this be a “Time for a Change” election or will this be a “Changing American Demographics” election? I suspect it will be a “Time for a Change” election. The crucial swing voters will be white and Hispanic college graduates in suburban office parks. They are not into redistribution or that Senator Ted Cruz opened his campaign at Liberty University.

The 2016 campaign is starting on level ground.

This is wishful thinking and whistling past the graveyard.  Now here’s Mr. Cohen, writing from Than Binh, Vietnam:

I drove out through a watery landscape, the rice paddies shimmering, watermelon being planted in muddy fields. There were ducks on the canals, graves and shrines in the light green rice fields, the dead among the living, not hidden but recalled daily. Women in conical hats pushed bicycles over rickety wooden bridges. The breeze was warm, the viscous coffee sweet. Cafes set with hammocks, some advertising Wi-Fi, offered sugar cane juice pressed through small hand-cranked mills. Everything felt liquid, soft, fluid here in the Mekong Delta, an aqueous microclimate.

Yes, the dead among the living: four decades gone by since the war, the bombs and the napalm — twitchy young Americans at the other side of the world wondering what menace lurked in this lush vegetation. America mired in the mud of an unwinnable war.

Now, if anything, the Vietnamese wonder whether the United States military would protect them against the Chinese, if it ever came to that. The temporary enemy has become a partner of sorts against the eternal enemy. Annual trade between Vietnam and the United States has soared from a mere $220 million in 1994 to $29.6 billion in 2013.

The wars over, the Vietnamese did not want to dwell on them. They wanted to sow seeds of commerce rather than grievance. Asia could offer this lesson to other parts of the world where I have spent too much time. Vengeance and victimhood wither the soul. The life-giving rice growing around the dead is an image fecund with acceptance. Even the mud yields.

At its banks the lazy Mekong seems boundless. Business along the river has boomed. I watched with Huynh Khanh Chau, the vice general director of Asia Commerce Fisheries, as large blue plastic containers of live fish were unloaded from boats into a pipe system that swept them in a watery gush into a nearby factory. The fish are raised on nearby farms; aquaculture has become a big industry in the Mekong.

The name of the small-headed, fat-bodied fish is a matter of some dispute. It is catfish-like. So it has been called Vietnamese catfish. In the United States it is sometimes called “swai.” It has also been dubbed “basa” and in Europe is often referred to as “pangasius.” This has not been a mere lexicographical game. The “catfish wars” between the United States and Vietnam have been bitter.

The U.S. catfish industry initially pressed Congress to prohibit labeling “basa” as catfish. The first antidumping duties against “certain frozen fish fillets from Vietnam” went into effect in 2003. They have not been lifted. More recently, Vietnam has been angered by an attempt to reclassify “basa” as catfish, which could lead to stricter United States Department of Agriculture inspection standards. Where are Joseph Heller and “Catch-22” when you need them?

Huynh has no doubt this is a simple case of American protectionism. When it comes to catfish, Vietnam with its ideal climate and cheap labor is more competitive. Its fish tastes good — or at least just as good. Still, better catfish war than hot war.

His company has had to adjust. It’s exporting more to China, but the Chinese taste is only for large fillets. Europe likes medium-sized fillets. By contrast, the United States, ever the omnivore, “is a great market because it likes large, medium-sized and small fillets!”

Inside, the fish are killed by workers with a single throat-cutting thrust of the knife through the gill. Blood drips down a stainless-steel chute into a pool. The fish are cleaned. Another team of men in brown numbered uniforms does the initial filleting, knives sweeping in practiced incisions through the pale pink flesh to leave, in seconds, a carcass of head and bone. The men pile the fillets in blue trays and add a disc with their number; pay depends on productivity.

Now it is the turn of blue-uniformed women, whose work is more skilled. It is easy to tear the fillet. With precision and speed, they nip, they scrape, they flip, they excise — until every blemish is gone. The factory floor is a sea of young women and quicksilver knife movements. Fillets are then sorted by size and color, before freezing. From live fish to the frozen fillet ready to be boxed and exported to Western or Chinese supermarkets, no more than an hour elapses.

Outside, in a cafe, I met a worker, Nguyen Van Tu, from the adjacent Hung Ca fish factory and exporter. He said he works a 12-hour shift, six days a week, with one-hour lunch break, and two 20-minute pauses. He earns about $220 a month. Next time I eat a frozen fish fillet in New York or blackened catfish in Louisiana I’ll think of his smiling face, his low pay, flashing knives in female hands, fish wars versus shooting wars, the peace of the watery Delta, and those graves in the glistening rice paddies.

Now here’s Prof. Krugman:

Two impossible things happened to the U.S. economy over the course of the past year — or at least they were supposed to be impossible, according to the ideology that dominates half our political spectrum. First, remember how Obamacare was supposed to be a gigantic job killer? Well, in the first year of the Affordable Care Act’s full implementation, the U.S. economy as a whole added 3.3 million jobs — the biggest gain since the 1990s. Second, half a million of those jobs were added in California, which has taken the lead in job creation away from Texas.

Were President Obama’s policies the cause of national job growth? Did Jerry Brown — the tax-raising, Obamacare-embracing governor of California — engineer his state’s boom? No, and few liberals would claim otherwise. What we’ve been seeing at both the national and the state level is mainly a natural process of recovery as the economy finally starts to heal from the housing and debt bubbles of the Bush years.

But recent job growth, nonetheless, has big political implications — implications so disturbing to many on the right that they are in frantic denial, claiming that the recovery is somehow bogus. Why can’t they handle the good news? The answer actually comes on three levels: Obama Derangement Syndrome, or O.D.S.; Reaganolatry; and the confidence con.

Not much need be said about O.D.S. It is, by now, a fixed idea on the right that this president is both evil and incompetent, that everything touched by the atheist Islamic Marxist Kenyan Democrat — mostly that last item — must go terribly wrong. When good news arrives about the budget, or the economy, or Obamacare — which is, by the way, rapidly reducing the number of uninsured while costing much less than expected — it must be denied.

At a deeper level, modern conservative ideology utterly depends on the proposition that conservatives, and only they, possess the secret key to prosperity. As a result, you often have politicians on the right making claims like this one, from Senator Rand Paul: “When is the last time in our country we created millions of jobs? It was under Ronald Reagan.”

Actually, if creating “millions of jobs” means adding two million or more jobs in a given year, we’ve done that 13 times since Reagan left office: eight times under Bill Clinton, twice under George W. Bush, and three times, so far, under Barack Obama. But who’s counting?

Still, don’t liberals have similar delusions? Not really. The economy added 23 million jobs under Clinton, compared with 16 million under Reagan, but there’s nothing on the left comparable to the cult of the Blessed Ronald. That’s because liberals don’t need to claim that their policies will produce spectacular growth. All they need to claim is feasibility: that we can do things like, say, guaranteeing health insurance to everyone without killing the economy. Conservatives, on the other hand, want to block such things and, instead, to cut taxes on the rich and slash aid to the less fortunate. So they must claim both that liberal policies are job killers and that being nice to the rich is a magic elixir.

Which brings us to the last point: the confidence con.

One enduring puzzle of political economy is why business interests so often oppose policies to fight unemployment. After all, boosting the economy with expansionary monetary and fiscal policy is good for profits as well as wages, yet many wealthy individuals and business leaders demand tight money and austerity instead.

As a number of observers have pointed out, however, for big businesses to admit that government policies can create jobs would be to devalue one of their favorite political arguments — the claim that to achieve prosperity politicians must preserve business confidence, among other things, by refraining from any criticism of what businesspeople do.

In the case of the Obama economy, this kind of thinking led to what I like to call the “Ma! He’s looking at me funny!” theory of sluggish recovery. By this I mean the insistence that recovery wasn’t being held back by objective factors like spending cuts and debt overhang, but rather by the corporate elite’s hurt feelings after Mr. Obama suggested that some bankers behaved badly and some executives might be overpaid. Who knew that moguls and tycoons were such sensitive souls? In any case, however, that theory is unsustainable in the face of a recovery that has finally started to deliver big job gains, even if it should have happened sooner.

So, as I said at the beginning, the fact that we’re now seeing mornings in blue America — solid job growth both at the national level and in states that have defied the right’s tax-cutting, deregulatory orthodoxy — is a big problem for conservatives. Although they would never admit it, events have proved their most cherished beliefs wrong.

Krugman’s blog, 3/25/15

March 26, 2015

There were three posts yesterday.  The first was “Anti-Keynesian Delusions:”

I forgot to congratulate Mark Thoma on his tenth blogoversary, so let me do that now. It’s hard to imagine what current economic debate would look like without the incredible job Mark does in assembling and discussing the most important new work, every day; for sure it would be vastly impoverished. Live long and prosper, Mark.

Today Mark includes a link to one of his own columns, a characteristically polite and cool-headed response to the latest salvo from David K. Levine. Brad DeLong has also weighed in, less politely.

I’d like to weigh in with a more general piece of impoliteness, and note a strong empirical regularity in this whole area. Namely, whenever someone steps up to declare that Keynesian economics is logically and empirically flawed, has been proved wrong and refuted, you know what comes next: a series of logical and empirical howlers — crude errors of reasoning, assertions of fact that can be checked and rejected in a minute or two.

Levine doesn’t disappoint. Right at the beginning of the example he claims refutes Keynesian thinking, he says,

Now suppose that the phone guy suddenly decides he doesn’t like tattoos enough to be bothered building a phone.

OK, stop right there. That’s an adverse supply shock, and no Keynesian claims that demand-side policies can cure the economy from the effects of such shocks. If you have a harvest failure, deficit spending can’t put the crops back in the fields. But that’s not what happened to the world economy in 2008, or in 1930; productive capacity was unimpaired, as was the willingness to work, so what we were looking at was something quite different — a demand shock, according to most economists, and everything we’ve seen is consistent with this view.

Actually, it’s even funnier than that: as Nick Rowe points out, Levine has in effect made phones the medium of exchange, so that he’s actually modeling something like a contractionary monetary policy!

And by the way: if you want a simple, homely example of how demand shocks can happen and cause unemployment, there is the baby-sitting coop.

So it’s the usual.

Meanwhile, on the empirical side: Anti-Keynesians like Levine are actually anti-monetarists too, although they may not realize it; their whole beef is with the idea that demand shortfalls can ever be a problem, and that pumping up demand in any way, monetary or fiscal, can ever be helpful. And they invariably live under a strange delusion: that the empirical evidence supports their position. This was never really true, and in fact the opposite has been the case for more than 30 years.

I could give you a lot of direct evidence, but let me instead just cite a guy named Chris Sims, who I think got some kind of prize for statistical work on economic fluctuations. Here’s his prize lecture, in which he describes his results:

The effects of monetary policy identified this way were quite plausible: a monetary contraction raised interest rates, reduced output and investment, reduced the money stock, and slowly decreased prices … This pattern of results turned out to be robust in a great deal of subse- quent research by others that considered data from other countries and time periods and used a variety of other approaches

Here’s how I see it: by any normal set of intellectual criteria, this debate should have been over 25 years ago. The evidence that monetary shocks have real effects was and is overwhelming, and it’s very difficult to write down a model in which this is true but in which fiscal policy is never effective at least on some occasions. The spectacular success of liquidity-trap predictions these past 6 years is just icing on the cake.

To understand why anti-Keynesian delusions persist, then, we need to turn to other social sciences, and try to make sense of the sociological forces that keep these delusions alive.

Yesterday’s second post was “Eurobounce:”

A lot of the recent data coming in show a substantial acceleration in European growth. And you know what will be coming next: claims that this (a) vindicates austerity and (b) shows that there is no reason to worry about Japanification.

Time, then, for some prophylaxis.

First, on austerity: one of the truly amazing and depressing things about the whole fiscal policy debate is the apparent inability of large numbers of supposedly sophisticated commentators to appreciate the distinction between levels and rates of change. Maybe it would help to note that the US economy grew 10.8 percent — that’s right, 10.8 percent — in 1934, but nobody would claim that the Great Depression was over? Nah, it won’t help at all.

Still, for what it’s worth: think of Keynesian economics as asserting that

GDP = multiplier*government spending + other stuff

Then if we’re looking at growth

Change in GDP = multiplier*Change in government spending + change in other stuff

Now look at euro area fiscal policy, as estimated by the IMF:

There was a major tightening after the Greek crisis struck and Germany reverted to type, but there hasn’t been much further tightening recently. So there’s nothing especially troubling about a return to growth.

What about Japanification? There seems to be a widespread misperception that Japan spent its lost decade in a continual downward spiral, with never an uptick. Not so. There was, in fact, a return to growth in the mid-1990s that lasted until contractionary fiscal policy and a banking crisis led to recession, and another period of growth under Koizumi that, however, wasn’t enough to get Japan out of deflation:

You really don’t want to take a short-run rise in growth as a sign that secular stagnation is no longer a worry.

Right now, I’d argue that Europe is benefiting a lot from the weaker euro, which is coinciding with a de facto, if unacknowledged, pause in austerity. But the downdrafts — shrinking working-age population, a single currency in a distinctly non-optimum currency area, and the intellectual rigidity of too many policymakers — remain.

The last post yesterday was “Hook, Line, and Thinker (Trivial):”

Apropos of nothing much, the British magazine Prospect has done a poll to identify the world’s leading thinkers. Some very odd characters there.

A small complaint: if you’re going to use photos at all, maybe use photos from the past couple of years, not way back when?

Kristof and Collins

March 26, 2015

In “An Unsettling Complicity” Mr. Kristof points out that it’s not a coincidence that Angola is a center for malnutrition and child mortality as well as rampant corruption.  In “When Nancy Met Johnny” Ms. Collins asks a question:  When it comes to the ways of Washington, when should our elected representatives just make it happen?  Here’s Mr. Kristof, writing from Luanda, Angola:

There are parasites of all kinds in poor countries.

One variety is intestinal, the worms that afflict countless children. In a hospital here in Angola, nurses pointed to a little girl named Marcelina, who they said was at risk of dying from anemia caused by worms and malnutrition. She had so many worms she was spitting them up.

The other kind of parasite afflicting Angolan children is the crooked official, often working with Western executives. It’s not a coincidence that Angola is a center for both kinds of parasites.

“Much of the health care budget gets stolen,” Rafael Marques de Morais, an investigative journalist in Angola, told me. “The biggest problem in this country is corruption.”

When officials pocket health care funds, Marques de Morais noted, children suffer. Likewise, doctors and nurses sometimes take medicines from their clinics and sell them in the markets. At the first street stall I went to, I found donated Novartis anti-malaria medicine for sale — even though it was marked “not for retail sale.”

What unsettles me is the Western role in this corruption. Western oil companies and banks work closely with Angolan officials, enabling the kleptocracy, and the United States and other governments mostly avert their eyes from the corruption, repression and humanitarian catastrophe.

A generation ago, the United States supported a brutal warlord, Jonas Savimbi, in Angola’s civil war. He lost. Now, because of oil interests, we have allied ourselves with the corrupt and autocratic winner, President José Eduardo dos Santos, in a way that also will also be remembered with embarrassment.

Secretary of State John Kerry visited for two days last year, and, in December, he hailed “the great dividends of our partnership with Angola.” He and other officials have enveloped Angola in a big hug.

“Publicly, the U.S. is mute, or at most tepid, when it comes to the crushing state repression,” noted Leslie Lefkow of Human Rights Watch.

Tom Burgis of The Financial Times has a powerful new book, “The Looting Machine,” asserting that firms, including Goldman Sachs and Carlyle Group, backed an oil company called Cobalt in investing in oil operations in which Angolan officials secretly held stakes worth staggering sums.

Likewise, American oil companies like ExxonMobil, Chevron and ConocoPhillips are active in Angola. Groups like the One Campaign have pushed to require international oil companies to disclose sums paid to governments so that the money can be tracked — increasing the chance that it makes it into state coffers and not private pockets. Europe and Canada are requiring their companies to make these disclosures.

But the American Petroleum Institute is lobbying hard to water down disclosure requirements. The oil industry apparently seeks to sustain an opaque system that has allowed the Angolan president’s family to earn billions even as the country ranks No. 1 worldwide in child mortality rates.

American executives argue that it’s naïve to hold them to international standards when they’re competing with, say, Chinese companies, which excel at paying bribes. Chinese companies are everywhere in Angola; one Chinese executive estimated that 100,000 Chinese now work in the country. But, in this case, Europe and Canada are trying to raise standards. So let’s not be China!

The way to help children like Marcelina, or the 150,000 who die each year in Angola, is not just to hand out medicines. It’s to hold Angola’s leaders accountable so that they use oil money to buy deworming medicine and not $2,000-a-bottle Dom Pérignon. It’s to support those brave Angolans like Marques de Morais who are trying to improve governance.

Marques de Morais has tracked $3 billion accumulated by President dos Santos’s daughter, the $13 million refurbishment of the presidential palace, the Lexus LX 570 luxury S.U.V.’s given to each member of Parliament — all at a time when children aren’t consistently getting five-cent deworming pills.

I’m honored to be in the same profession as Marques de Morais. He went on trial Tuesday for criminal defamation and could face years in prison; if the United States wants to signal that it cares about corruption, Secretary Kerry could tweet his support and the American ambassador could invite Marques de Morais to a very public lunch.

The last time Marques de Morais was imprisoned, in the 1990s, he said he was released only when the United States ambassador to the United Nations at the time, Richard Holbrooke, visited Angola and insisted on seeing Marques de Morais — in prison if necessary. Angola hurriedly freed him.

In other words, we have influence, if we’re willing to use it. And when children are spitting up worms and a country ranks No. 1 in child mortality worldwide, let’s exercise that influence rather than remaining complicit.

Now here’s Ms. Collins:

Today, concerned citizens, we will consider when we want our elected representatives to just throw in the towel and get something done.

This comes up less often than you might think. On Wednesday, for instance, members of the House of Representatives had a choice between casting a meaningless “no” vote on a budget bill or supporting a plan that fails to do anything positive, including, um, add up.

The budget is not a real law so much as a blueprint of where the majority party stands. This year, the Republican majority in the House is in favor of putting a ton of new money into defense without actually paying for it. Plus cutting programs that help poor people, and ending Medicare as we know it for Americans now under 56.

Grab the picket signs, 55-year-olds. Once again, they’re out to get you.

The bill I’m thinking of is different. It’s a bipartisan plan cooked up by John Boehner and Nancy Pelosi. (Question: What do you imagine when you think of those two cooking? Macbeth or Cupcake Wars?)

The subject was another fiscal cliff. Next week, Medicare payments to doctors are scheduled to drop by 21 percent. The formula for reimbursement is all screwed up, and Congress is always having to put in a last-minute fix. But this bill does not just kick the can down the road. It actually solves the problem. It fixes the formula and pays for the solution by raising the cost of Medicare for the wealthiest recipients. Plus, it’s got money for community health clinics and the CHIP health care program for children.

Boehner and Pelosi kept their negotiations supersecret, but, when they unveiled their bill, the House members seemed pretty darned happy. The Rules Committee approved it on Wednesday with a voice vote, and much self-congratulations.

“Genuine bipartisanship.”

“A kumbaya moment.”

“This bill is not perfect.” (Lawmakers only call something “not perfect” when they’re seriously trying to resolve a problem. Otherwise, it’s the most wonderful and important piece of legislation in a decade, and it turns out they’re repealing Obamacare again.)

You know there’s a catch, right? Well, the Senate Democrats hate it.

They hate the fact that the children’s health program, which they’ve been working on extending for another four years, will be extended for only two. “The Democrats are going to stick together here,” Senator Sherrod Brown of Ohio, told The Times. “I don’t see how you say yes to doctors and no to 10 million children.”

And they hate that the bill includes the Hyde amendment, banning federal funding for abortions. This is a particularly sore point. “Our goal is to repeal Hyde,” said Dawn Laguens, the executive vice president of Planned Parenthood. “It’s bad for women; it hurts their health; it damages poor women, in particular, and this is an unnecessary compromise.”

Laguens is certainly right about the Hyde amendment being terrible, and you’d be shocked if she felt differently about the bill. Planned Parenthood’s job is to support women’s reproductive choices, not keep the Medicare program from being messed up.

But the Hyde amendment has been in appropriations for decades. It’s pretty much chiseled in stone. The pro-choice caucus in the House supports the health care bill, which the members have concluded makes no change in the status quo.

“I don’t like it,” grumbled Representative Alcee Hastings, a Florida Democrat, in the Rules Committee meeting. But, he told the group, if Louise Slaughter, the pro-choice caucus co-chair, was satisfied “and Nancy Pelosi is satisfied, then I guess I should shut up.”

Most of the Senate Democrats seem to have gone from declaring war to grumbling under their breath. You can understand why they’re miserable. Some of them have been working on these health issues for years, and all of a sudden they discover that Pelosi and Boehner have made a secret deal without giving them the least bit of input. It is yet another bruising wound in the greatest enmity in Washington, which is not Republicans versus Democrats but House members versus senators.

Also, there was that unfortunate situation last week when the Senate Democrats bottled up a bill to help the victims of human trafficking because they discovered a tiny clause expanding the rules against funding for abortion. It was a totally righteous battle, except for the part where the Democrats had failed to notice the language was in the bill until the last minute. But now everyone is dug in, and if the Boehner-Pelosi bill passes, the senators will be helping the doctors before they help the sex-trafficking victims.

So what would you do, people? I’d vote for throwing in the towel. When you’re in the minority, there’s a limit to how good any deal is going to look. Doing anything that’s a little bit more than desperate paddling is an achievement these days. The Senate ought to pass the bill. Just don’t call it a kumbaya moment.

Krugman’s blog, 3/24/15

March 25, 2015

There was one post yesterday, “Liberals, Conservatives, and Jobs:”

Just about everything I write evokes vituperative reactions from the usual suspects, but never so much as when I point out awkward facts. So there was a lot of mud-slinging when I pointed out last summer that California’s economy — which conservatives said was doomed by tax increases and generally liberal policies — was in fact experiencing an impressive recovery.

Well, the story continues:

To be fair, California has a larger labor force than Texas, so its rate of job growth is still somewhat lower. Still, this wasn’t supposed to happen.

Why does this sort of thing bother conservatives so much? Well, it’s an essential part of their belief structure that they have a secret sauce that lets them deliver job growth that liberals can’t. As Rand Paul declared,

When is the last time in our country we created millions of jobs? It was under Ronald Reagan …

Actually:

If creating “millions” of jobs means adding 2 million or more in a given year, then we did that in three of Jimmy Carter’s four years in office, and 13 times since Reagan left the White House — 8 times under Bill Clinton, twice under George W. Bush, and three times so far under Barack Obama. Actually, the only times we haven’t added millions of jobs under Democrats have been in the aftermath of severe shocks — the oil shock of 1979 and the financial crisis of 2008.

Am I claiming that Democratic presidents were responsible for all this job creation? No, not at all, nor do I need to. The point, instead, is that their policies didn’t prevent a lot of employment growth. That is, what you learn from both national experience and the California story is that you can raise taxes on the rich and expand access to health care without killing the economy.

Republicans, by contrast, need to claim that Reaganomics produced all the job growth of the 80s, just as they used to claim that Bush’s “ownership society” was responsible for any and all good news in the 2000s. That’s why they’re desperately trying to claim that the economic recovery now underway is an illusion.

They can’t handle the truth.

Friedman, solo

March 25, 2015

The Moustache of Wisdom has a question in “Look Before Leaping:”  What’s at stake in the nuclear deal with Iran?

I can think of many good reasons to go ahead with the nuclear deal with Iran, and I can think of just as many reasons not to. So, if you’re confused, let me see if I can confuse you even more.

The proposed deal to lift sanctions on Iran — in return for curbs on its bomb-making capabilities so that it would take at least a year for Tehran to make a weapon — has to be judged in its own right. I will be looking closely at the quality of the verification regime and the specificity of what happens if Iran cheats. But the deal also has to be judged in terms of how it fits with wider American strategic goals in the region, because a U.S.-Iran deal would be an earthquake that touches every corner of the Middle East. Not enough attention is being paid to the regional implications — particularly what happens if we strengthen Iran at a time when large parts of the Sunni Arab world are in meltdown.

The Obama team’s best argument for doing this deal with Iran is that, in time, it could be “transformational.” That is, the ending of sanctions could open Iran to the world and bring in enough fresh air — Iran has been deliberately isolated since 1979 by its ayatollahs and Revolutionary Guard Corps — to gradually move Iran from being a revolutionary state to a normal one, and one less inclined to threaten Israel. If one assumes that Iran already has the know-how and tools to build a nuclear weapon, changing the character of its regime is the only way it becomes less threatening.

The challenge to this argument, explains Karim Sadjadpour, a Middle East specialist at the Carnegie Endowment, is that while the Obama team wants to believe this deal could be “transformational,” Iran’s supreme leader, Ali Khamenei, “sees it as transactional” — Iran plugs its nose, does the deal, regains its strength and doubles-down on its longstanding revolutionary principles. But, then again, you never know. What starts out as transactional can end up being transformational in ways that no one can prevent or predict.

A second argument is that Iran is a real country and civilization, with competitive (if restricted) elections, educated women and a powerful military. Patching up the U.S.-Iran relationship could enable America to better manage and balance the Sunni Arab Taliban in Afghanistan, and counterbalance the Sunni jihadists, like those in the Islamic State, or ISIS, now controlling chunks of Iraq and Syria. The United States has relied heavily on Saudi Arabia, ever since Iran’s 1979 revolution, and while the Saudi ruling family and elites are aligned with America, there is a Saudi Wahhabi hard core that has funded the spread of the most puritanical, anti-pluralistic, anti-women form of Islam that has changed the character of Arab Islam and helped to foster mutations like ISIS. There were no Iranians involved in 9/11.

Then again, it was Iranian agents who made the most lethal improvised explosives in Iraq that killed many American troops there. And it was Iran that encouraged its Iraqi Shiite allies to reject any extended U.S. military presence in Iraq and to also overplay their hand in stripping power from Iraqi Sunnis, which is what helped to produce the ISIS counterreaction.

“In the fight against ISIS, Iran is both the arsonist and the fire brigade,” added Sadjadpour. To Saudi Arabia, he added, the rise of ISIS is attributable to the repression of Sunnis in Syria and Iraq by Iran and its Shiite clients. To Tehran, the rise of ISIS is attributable to the financial and ideological support of Saudi Arabia and its Gulf allies.

And they are both right, which is why America’s interests lie not with either the Saudis or the Iranian ideologues winning, but rather with balancing the two against each other until they get exhausted enough to stop prosecuting their ancient Shiite-Sunni, Persian-Arab feud.

Then again, if this nuclear deal with Iran is finalized, and sanctions lifted, much more Iranian oil will hit the global market, suppressing prices and benefiting global consumers. Then again, Iran would have billions of dollars more to spend on cyberwarfare, long-range ballistic missiles and projecting power across the Arab world, where its proxies already dominate four Arab capitals: Beirut, Baghdad, Damascus and Sana.

But, given the disarray in Yemen, Iraq and Syria, do we really care if Iran tries to play policeman there and is embroiled in endless struggles with Sunni militias?  For 10 years, it was America that was overstretched across Iraq and Afghanistan. Now it will be Iran’s turn. I feel terrible for the people who have to live in these places, and we certainly should use American air power to help prevent the chaos from spreading to islands of decency like Jordan, Lebanon and Kurdistan in Iraq. But managing the decline of the Arab state system is not a problem we should own. We’ve amply proved that we don’t know how.

So before you make up your mind on the Iran deal, ask how it affects Israel, the country most threatened by Iran. But also ask how it fits into a wider U.S. strategy aimed at quelling tensions in the Middle East with the least U.S. involvement necessary and the lowest oil prices possible.

I’m sure it will all sort itself out in just one more FU.  And by the way, Tommy, FU.

Krugman’s blog, 3/23/15

March 24, 2015

There were two posts yesterday.  The first was “The Loneliness of the Not-Crazy Conservative:”

A few minutes before class, and I’m thinking about the plight of not-crazy conservatives. I have macroeconomics in mind at the moment, but it’s not a unique issue.

If you think about policy in general, it involves two kinds of decisions: values and models, or what you want and what you believe. There aren’t totally independent, but people should be able to make a distinction. And in that space there is room for legitimate argument. You can, for example, want a strong welfare state that does a lot of redistribution, or not; meanwhile, there is a range of defensible views about, say, the effectiveness of monetary policy or the incentive effects of taxes.

But not all views about how the world works are defensible. And here’s the thing: in modern US politics, trying to side with people who want a smaller welfare state means siding with people who insist on believing things that aren’t true. Think of it as a matrix:

There have been people on the left who make claims about how the economy works that are radically at odds with the evidence — but it’s hard to find such people in America these days, and they certainly have no influence on the Democratic Party. On the other side, there are “reformicons” who try to more or less talk sense about the economy (more or less because market monetarism has big problems); but they are a tiny group of intellectuals with little influence on a Republican Party that gets its economics from Art Laffer and Ayn Rand.

The reformicons like to imagine that one day they’ll win over the party that reflects their values, and in the long run maybe that will happen. But for now, and my guess is for decades to come, they have no political home — unless they wake up and realize that they aren’t actually Republicans in the modern sense.

The second post yesterday was “Charlatans, Cranks, and Cooling:”

Branko Milanovic notes Lee Kwan Yew’s explanation of the success of Singapore and other Asian economies; partly Confucian culture, partly air conditioning. If you’ve ever tried to walk around Singapore, you know whereof he speaks.

The same factor plays a major role in explaining differential US regional growth, and thereby hangs a tale.

The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out response, because location decisions have a lot of inertia; few people would choose de novo to live in the old industrial towns of upstate New York, but the existing housing stock and the fact that people have family and social networks prevent quick abandonment. So to this day temperature is a good predictor of state population growth. I’ve taken the NOAA data and divided states into three groups by average temperature: Group I is colder than Rhode Island, Group III warmer than California:

Who’s in Group III? The full list:

Oklahoma
Arizona
Arkansas
South Carolina
Alabama
Mississippi
Georgia
Texas
Louisiana
Florida

These are places where summer would be really oppressive without air conditioning. (Actually, I find it oppressive with — in Texas, in particular, indoor spaces are freezing. But that’s another story.)

Now, these states have several things in common besides high temperatures. They’re all very conservative. And all of them that were states before the Civil War were slave states. These commonalities are, of course, all interrelated. Hot states had slaves because they were suitable for planation agriculture; and today’s red states are, pretty much, the slave states of 150 years ago.

Now, all of this raises some interesting problems for the assessment of economic policy. Because they’re politically conservative, hot states tend to have low minimum wages and low taxes on rich people. And someone who is careless, cynical, or both, could easily take the faster growth of these states as evidence that conservative economic policies work. That is, charlatans and cranks can, all too easily, end up claiming credit for economic and demographic trends that are actually the result of air conditioning.

Well, FSM knows that Georgia and South Carolina (states I’m familiar with) are chock full of cranks, charlatans, and lunatics.  Which is not cool at all…


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