Krugman’s blog, 7/26/15

July 27, 2015

There were four posts yesterday.  The first was “A Note on Medicare Costs:”

Medicare is about to turn 50, and while it has brought immense benefits, it has also cost a lot of money. Why? Is it the general rise in health care spending, or some specific government-related inability to limit outlays?

Well, there’s a simple answer from the Centers for Medicare and Medicaid historical expenditure data, which among other things offers a comparison between Medicare spending per beneficiary and premiums on private health insurance. Medicare has expanded the range of things it covers, so what you want is the “common benefits” comparison that adjusts for this. And what it shows is that except during a brief period in the 1990s, as HMOs spread, cost growth has consistently been slower in Medicare than in the private sector.

Centers for Medicare and Medicaid Services

Yesterday’s second post was “Thorstein Veblen in Brooklyn (Trivial):”

I went to another Celebrate Brooklyn concert in Prospect Park last night, and had a very good time — although the usual close-up seating where you can really see the performers was given over to a throng of standing dancers, and while I may be a wannabe hipster I’m not going that far. But anyway, music aside, one thing I enjoy about these events is crowd-watching, which varies a lot by performer. Lucius was a real all-ages, all-subcultures crowd, ranging from enthusiastic teenagers to fairly sedate but equally enthusiastic senior citizens. Sylvan Esso was very hipster — which is fine; de gustibus non whatever.

I did, however, find myself wondering a bit about the economics. I’m perfectly OK with topknots and tattoos, but obviously a lot of employers won’t be. So where do all these people work? They can’t all be baristas …

But that, surely, is part of the point. Probably not an original observation, but surely one main goal of personal styling is to make it clear that the person so styled is not, in fact, part of the workaday bourgeois world, that he or she doesn’t work at a 9-5 office job during the week and put on trendy attire for the weekend. It has to be a cultural version of Veblen’s conspicuous consumption, where the point is not to display your wealth but instead to display your indie cred.

Again, I’m fine with it — and the scene is producing a lot of music I really like, so it’s all good. But sometimes I just can’t turn off my inner econonerd.

The third post yesterday was “The Disappearing Entitlements Crisis:”

A few years back elite policy discourse in the United States was totally dominated by the supposed entitlements crisis. Serious people all assured each other that history’s greatest menace was the threat posed by the unstoppable growth of Medicaremedicaidandsocialsecurity, which could only be tamed by dismantling the legacy of the New Deal and the Great Society, while of course cutting top marginal tax rates.

A few of us argued, however, not just that it was foolish to worry about long-run budget issues in a time of depression and zero interest rates, but that the long run fiscal problems weren’t really that intractable. I used to say that all we needed were death panels and sales taxes — that if we got serious about cost control on health care, the rise in entitlement spending due to an aging population would shrink to a level that could be covered by moderate increases in revenue, meaning that no fundamental dismantling of the welfare state was necessary.

Sure enough, health spending began moderating after the passage of the ACA — and as Bruce Webb points out, if you believe the reports of the Social Security and Medicare trustees, we’re basically already there.

In 2009 the Trustees projected a gigantic rise in Medicare spending, which was obviously unsupportable (although Social Security never looked like a big problem).

The view from 2009
The view from 2009

But in the most recent report most of that projected rise has gone away.

The view from 2015
The view from 2015

Bear in mind that the current US budget deficit is below the level at which the debt/GDP ratio can be stabilized, in other words poses no problem. Looking forward, population aging will expand that deficit by a few percent of GDP, but that’s well within the range that could be closed with moderate tax hikes, cuts in pointless military spending, etc.. Nor is there a big rush: nothing terrible will happen if we don’t immediately decide how we’ll pay for projected benefits in the year 2050.

The truth is that there never was an entitlements crisis. But now there isn’t even an excuse for pretending that such a crisis exists. I know that a large part of the commentariat is professionally and personally invested in fiscal crisis rhetoric — admitting that it’s no longer relevant would suggest that they have, all along, been silly rather than Serious. But next time you see someone solemnly intoning that we must destroy Medicare to save it, remember that there is no there there.

Yesterday’s last post was “Tattoos, Incompetence, and the Heritage Foundation:”

Henry Farrell — who recently said some very interesting things about Very Serious People — writes me about my musings on hipster style, and refers me to a review of a book on codes of the underworld. The book notes that tattoos and such play a role as signals of criminal identity, which work precisely because they make it hard to participate in non-criminal society.

But there’s more: criminals actively cultivate a reputation for incompetence at non-criminal business, designed to reassure both their colleagues and the victims of their extortion that they won’t break their implicit contracts by going legit. And the author, Diego Gambetta, adds a wonderful parallel: according to his account, Italian academics, who do a lot of horse-trading in appointments etc., cultivate a reputation for incompetence at actual research, again designed to reassure those with whom one deals:

“Being incompetent and displaying it,” he writes, “conveys the message I will not run away, for I have no strong legs to run anywhere else. In a corrupt academic market, being good at and interested in one’s own research, by contrast, signal a potential for a career independent of corrupt reciprocity…. In the Italian academic world, the kakistrocrats are those who best assure others by displaying, through lack of competence and lack of interest in research, that they will comply with the pacts.”

And this immediately makes me think of one of the mysteries of economic “debate” in America, namely the preference of the right not just for hacks but for incompetent hacks. Here’s what I wrote:

I suspect that the incompetence is actually desirable at some level — a smart hack might turn honest, or something,

But let me hasten to add that I am not intending to engage in slander here. I would never, never suggest that Brooklyn hipsters are anything like Heritage Foundation economists.

Blow and Krugman

July 27, 2015

In “At Sarah Bland’s Funeral, Celebration and Defiance” Mr. Blow says mourners praised the life of the young woman, whose death leaves unanswered questions.  In “Zombies Against Medicare” Prof. Krugman says arguments that have already been shown to be false are still used by conservatives to attack a program that has done rather well.  Here’s Mr. Blow:

Funerals are often predictably somber — a cloistering and culminating of grief and pain. Not Sandra Bland’s funeral. (Everyone called her Sandy, by the way.) Sandy’s was simultaneously celebratory and defiant.

Bland was the 28-year-old Illinois woman arrested after a traffic stop in Texas who died in a county jail. Her funeral was held Saturday at DuPage African Methodist Episcopal Church in Lisle, Ill., just outside Chicago.

Bland’s casket was white. Many in the family wore white. The pastor wore a white ministerial robe. This was not to be a dark day. The joyous music of the choir seemed to vibrate everything in the building. Bland’s mother, Geneva Reed-Veal, danced every time the choir sang. One of Bland’s cousins performed a praise dance, a choreographed dance set to religious music.

There were whimpers and tears, to be sure, but there was also laughter and praise. As the church’s pastor, James F. Miller, put it: “This is not a moment of defeat; this is a moment of victory.” He continued: “We’re not funeralizing a martyr or a victim; we’re celebrating a hero!” The crowd erupted.

Over a few days leading up to the funeral I interviewed a few of Bland’s fellow church members and friends. They described a complex person — in other words, a person — who had recently come into her own, realizing her life’s purpose (social justice), a person who to them appeared determined, settled and happy. None of them believe she committed suicide, or that it was even possible.

What I did hear during those interviews and during the funeral itself were words and phrases like these used to describe Bland: “Fearless.” “Activist.” “Life of the party, in a good way.” “Vibrant and full of life.” “Passionate.” “A strong woman; a strong black woman.”

It was abundantly clear to me that the people who knew and loved her loved her fierce-ly and loved her fierce-ness.

That was not to say that Bland didn’t have her ups and downs the way many young people do. But rather, she wasn’t afraid to admit it and wanted to use her testimony to help others. I spoke to a woman with whom Bland was working to start a women’s empowerment forum online, who said that Bland told her that she wanted to share her travails because “it takes a lot of will and resilience when you’re going downhill to stop yourself.”

The Rev. Theresa Dear, who spoke to me on the family’s behalf, said that sure, Sandy was a “mouthy person” and that she could imagine her “raising you know what” in her Texas jail cell.

But, like Bland’s other friends, Dear described this in ways that seemed less acerbic than courageous, less Sister Souljah than Sojourner Truth.

As Dear put it: “Everybody in their lives needs a Sandy Bland posture, a Sandy Bland voice.”

Bland didn’t demur and knuckle under. Some have criticized her for her stance during the traffic stop, suggesting that if she had behaved differently, with more respect for the officer, she might have avoided arrest.

Maybe. But, it must always be remembered that the parameters of “respectable behavior” are both raced and gendered. The needle moves to differing positions for different people. That is, I believe, one of the reasons that this minor traffic stop so quickly escalated.

How dare a woman not present as a damsel? How dare a black person not bow in obsequiousness?

The officer’s irritation seemed to build in direct response to Bland’s unwavering defiance. She refused to break, crumble and cry. She refused to express fear. She challenged his authority, his character and his expression of masculinity.

Now, it is clear to me that Bland’s allies are girding themselves to fight for her life and her legacy. As her mother said in a fiery speech during the funeral: “I’m going to take today and relax. I’m going to take tomorrow and relax. But Monday, it’s on!”

There are so many unanswered questions in this case and so many things that don’t, on their face, make sense. The public wants answers, but more importantly, the family needs answers. As her mother said, “I’m the mama, and I still don’t know what happened to my baby!”

The pastor extolled those gathered to “go online and shut down the Justice Department’s website, asking for a federal investigation.” Indeed, Senator Dick Durbin and Representative Bill Foster both said at the funeral that they’d each sent letters to Attorney General Loretta Lynch requesting such an investigation.

And both Bland’s mother and Pastor Miller took swipes at the media’s portrayal of Sandy.

Miller demanded that responsible media stop showing images of Bland’s scarred body, “lining your pockets with the blood of our child!” As Miller said, “You have stepped on the cat’s tail.”

Then he seemed to, for comedic and theatrical purposes, catch himself, musing out loud, “They want me to sit down because I’m going to get us in trouble.”

But he quickly followed: “I was born black in America; I was born in trouble.” The mourners signaled their agreement.

Now here’s Prof. Krugman:

Medicare turns 50 this week, and it has been a very good half-century. Before the program went into effect, Ronald Reagan warned that it would destroy American freedom; it didn’t, as far as anyone can tell. What it did do was provide a huge improvement in financial security for seniors and their families, and in many cases it has literally been a lifesaver as well.

But the right has never abandoned its dream of killing the program. So it’s really no surprise that Jeb Bush recently declared that while he wants to let those already on Medicare keep their benefits, “We need to figure out a way to phase out this program for others.”

What is somewhat surprising, however, is the argument he chose to use, which might have sounded plausible five years ago, but now looks completely out of touch. In this, as in other spheres, Mr. Bush often seems like a Rip Van Winkle who slept through everything that has happened since he left the governor’s office — after all, he’s still boasting about Florida’s housing-bubble boom.

Actually, before I get to Mr. Bush’s argument, I guess I need to acknowledge that a Bush spokesman claims that the candidate wasn’t actually calling for an end to Medicare, he was just talking about things like raising the age of eligibility. There are two things to say about this claim. First, it’s clearly false: in context, Mr. Bush was obviously talking about converting Medicare into a voucher system, along the lines proposed by Paul Ryan.

And second, while raising the Medicare age has long been a favorite idea of Washington’s Very Serious People, a couple of years ago the Congressional Budget Office did a careful study and discovered that it would hardly save any money. That is, at this point raising the Medicare age is a zombie idea, which should have been killed by analysis and evidence, but is still out there eating some people’s brains.

But then, Mr. Bush’s real argument, as opposed to his campaign’s lame attempt at a rewrite, is just a bigger zombie.

The real reason conservatives want to do away with Medicare has always been political: It’s the very idea of the government providing a universal safety net that they hate, and they hate it even more when such programs are successful. But when they make their case to the public they usually shy away from making their real case, and have even, incredibly, sometimes posed as the program’s defenders against liberals and their death panels.

What Medicare’s would-be killers usually argue, instead, is that the program as we know it is unaffordable — that we must destroy the system in order to save it, that, as Mr. Bush put it, we must “move to a new system that allows [seniors] to have something — because they’re not going to have anything.” And the new system they usually advocate is, as I said, vouchers that can be applied to the purchase of private insurance.

The underlying premise here is that Medicare as we know it is incapable of controlling costs, that only the only way to keep health care affordable going forward is to rely on the magic of privatization.

Now, this was always a dubious claim. It’s true that for most of Medicare’s history its spending has grown faster than the economy as a whole — but this is true of health spending in general. In fact, Medicare costs per beneficiary have consistently grown more slowly than private insurance premiums, suggesting that Medicare is, if anything, better than private insurers at cost control. Furthermore, other wealthy countries with government-provided health insurance spend much less than we do, again suggesting that Medicare-type programs can indeed control costs.

Still, conservatives scoffed at the cost-control measures included in the Affordable Care Act, insisting that nothing short of privatization would work.

And then a funny thing happened: the act’s passage was immediately followed by an unprecedented pause in Medicare cost growth. Indeed, Medicare spending keeps coming in ever further below expectations, to an extent that has revolutionized our views about the sustainability of the program and of government spending as a whole.

Right now is, in other words, a very odd time to be going on about the impossibility of preserving Medicare, a program whose finances will be strained by an aging population but no longer look disastrous. One can only guess that Mr. Bush is unaware of all this, that he’s living inside the conservative information bubble, whose impervious shield blocks all positive news about health reform.

Meanwhile, what the rest of us need to know is that Medicare at 50 still looks very good. It needs to keep working on costs, it will need some additional resources, but it looks eminently sustainable. The only real threat it faces is that of attack by right-wing zombies.

Remove the earnings cap.

Krugman’s blog, 7/24 and 7/25/15

July 26, 2015

There was one post on Friday, and two yesterday.  Friday’s post was “Fire Phasers:”

Jeb Bush doesn’t just want Americans to work more hours; he also wants to “phase out” Medicare, or so he told a Koch brothers backed group. What he’s talking about, presumably, is a Paul Ryan-type conversion of Medicare into a voucher system.

Fact-checking organizations please note, by the way. The next time Democrats say that Republicans want to destroy Medicare, and Republicans start screaming that this is a lie, remember that when talking to their own people like Jeb themselves call what they’re proposing a plan to, yes, end Medicare.

What’s interesting, in a way, is the persistence of conservative belief that one must destroy Medicare in order to save it. The original idea behind voucherization was that Medicare as we know it, a single-payer system of government insurance, simply could not act to control costs — that giving people vouchers to buy private insurance was the only way to limit spending. There was much sneering and scoffing at the approach embodied in the Affordable Care Act, which sought to pursue cost-saving measures within a Medicare program that retained its guarantee of essential care.

But we’re now five years into the attempt to control costs that way — and what we’ve seen is a spectacular slowdown in the growth of health costs, with the historical upward trend in Medicare costs, in particular, brought to a complete standstill. How much credit should go to the ACA? Nobody really knows. But the whole premise behind voucherization has never looked worse, and the case that universal health insurance is affordable has never looked better.

It’s amazing, isn’t it? Who could have imagined that conservatives would keep proposing the exact same policy despite strong evidence that they were wrong about the facts? Oh, wait.

The first post yesterday was “The Old Man and the CPI:”

I don’t watch financial news, but CNBC was on in the gym, so I was treated to a long ad from Ron Paul, who wants you to buy his video explaining the coming crisis brought on by loose money. And I found myself thinking about the remarkable fact that there really are people who will buy that video.

After all, Ron Paul has been making the same prediction year after year — in fact, he’s been making this prediction at least since 1981!— and has been wrong year after year. It’s hard to think of a doctrine that has been as thoroughly refuted by events as goldbug economics. For a while gold prices did go up, although not for the reasons the goldbugs thought, but now even that has gone into reverse. So why would anyone pay money for this guy’s analysis?

Of course, we know why: it’s the Bernie Madoff effect, a.k.a. affinity fraud. People believed Madoff because he was their kind of guy, never mind the implausibility of his claims; they believe Ron Paul for the same reason. True, there’s no reason to suppose that Paul is deliberately misleading his market – he probably believes his own nonsense. But in terms of the underlying dynamics that makes no difference.

So who are the people who feel a deep affinity with a crotchety crank? Um, crotchety white guys feeling cranky. The whiteness is, I believe, an important part of the story, as I’ll explain in a minute.

The basic mindset of the kind of people who pay Ron Paul for his economic advice is pretty clear: they’ve made some money over the course of their lives, they believe that all of it reflects their own virtue, and they think they know from that experience what it takes to create wealth. They hear that the Fed is printing money, and it sounds to them like a violation of both the laws of economics and morality — and they surely think of it as a plot to take away their completely earned gains and give them to Those People (hence the whiteness issue).

You can try as hard as you like to tell such people that monetary policy is mainly a technical problem, that the Fed isn’t giving money away, and that predictions of runaway inflation have been utterly wrong; it will make no difference. You can point out that they would have done a much better job of investing if they had listened to theMIT gang; sorry, we’re just not their kind of people.

I’d say it’s sad, but I find it hard to feel much sympathy for the marks of this particular scam. Then again, that’s probably why they will never, ever listen to what I have to say.

Prof. Krugman is much too polite to mention Charlie Pierce’s “Paul Rule,” which is that any member of the Paul family can make sense for 5 minutes, but that at 5:00:01 something will be said that makes you wonder if the speaker is from the Dagobah system.  Yesterday’s second post was “Uber and the New Liberal Consensus:”

You might not have thought that a taxi service would move onto center stage in our great political debates. But Uber actually is looking like a surprisingly important political issue. Why?

Well, Uber actually brings two things to the taxi market. One is the smartphone revolution, letting you tap a screen instead of standing out in the rain waving your arm, and cursing the guy who darts out half a block from you and snags the cab you were trying to hail.

The other is the company whose workers supposedly are free contractors, not employees, exempting the company from most of the regulations designed to protect employee interests. And it’s the second aspect that brings us into divisive politics.

On one side, Republicans are eager to dismantle as many worker protections as they can. So from their point of view Uber’s not-our-problem approach to workers would be desirable independent of the technology.

On the other side, we’re recently seen the emergence of the “new liberal consensus“, which argues (based on a lot of evidence) that wages are much less rigidly determined by supply and demand than previously thought, and that public policy can and should nudge employers into paying more. If that’s your policy plan, you really don’t want to see employers undermine it by declaring that they aren’t really employers.

It’s surely possible to separate these two issues, to promote the use of new technology without prejudicing the interests of workers. But progressives need to work on doing that, and not let themselves get painted as enemies of innovation.

Krugman’s blog, 7/23/15

July 24, 2015

There were three posts yesterday.  The first was “The Village, the Base, and St. John:”

So, over the weekend we were told that our pass the popcorn moment — I mean, our long national nightmare — was over: Donald Trump would implode now that he had dared to question John McCain’s heroism.

But lo and behold, he’s still hanging on to front-runner status for the Republican nomination. How is that possible?

The short answer, surely, is that the inside-the-Beltway crowd — not for the first time — confused its own perceptions with those of actual voters.

Inside the Village, McCain is a sacred figure; he is still, after all these years of being a conventional ideologue, perceived as being McCain the Maverick; he is still seen as a wise man on national security despite his warmongering; he’s virtually a constant presence on the Sunday talk shows. So the villagers expected everyone to recoil in horror when Trump ridiculed his war record — you’re only supposed to do that to Democrats.

But the Republican base really doesn’t care very much. Whatever they may say, its members don’t really care about military heroism — it’s not just the treatment of John Kerry, think about how little they seemed to care when we finally did get Osama. And they really, really don’t care about some old guy who lost an election.

Trump surely hurt himself a bit with his McCain attack, but he still embodies the base’s id in a way the Village doesn’t seem to understand.

Yesterday’s second post was “SPQR And All That:”

It’s been a rough few weeks, so I’ve been taking refuge in the past: I brought Adrian Goldsworthy’s The Fall of Carthage along on recent travels. And I found it revelatory; it shook some views I’ve long held about history.

You see, I have or had a pretty firm, cynical but I thought well-grounded model of pre-industrial civilization. All pre-industrial societies, I thought, were Malthusian, with the bulk of the population living at the edge of subsistence. The fruits of civilization went only to a small elite, 5 or 10 percent of the population at most, which essentially lived on resources extorted from the peasantry. For everyone else, it didn’t matter who ruled or how; politics, national or cultural concerns, whatever, were internal squabbles among the extractive classes.

This model still seems to me to be pretty good for the Roman Empire. But at least as Goldsworthy describes it, the Roman Republic at the time of the Punic Wars was something very different. It beat Carthage not so much through military prowess as through social solidarity: not only had Rome managed to assimilate many peoples and turn them into citizens or very loyal allies, it seems to have inspired strong commitment from a large fraction of the population. This gave it a huge advantage over Carthage in terms of military manpower, and also the durability that allowed it to absorb terrible defeats and keep on fighting.

Are there any other examples in history like this? And how did they do it? What was special about the Roman political and/or social system that produced this kind of solidarity?

Of course, it didn’t last — the very conquests made possible by thevirtus of the Republic eventually produced vast latifundia worked by slaves and undermined all the old values; Rome became a more or less standard preindustrial empire. But it wasn’t always. Why?

Yesterday’s last post was “The Essential Obstfeld:”

Olivier Blanchard, who has to have been one of the most influential chief economists ever at the IMF, is retiring; Maury Obstfeld will be his replacement. Intellectually, there’s a lot of continuity: one New Keynesian MIT PhD I know very well replaced with another New Keynesian MIT PhD with whom I co-authored a text now in 10th edition. Still, I hope people are interested in Maury’s contributions to economics. And it seems to me that there are two papers in particular that are very relevant.

First is his work on self-fulfilling currency crises. The early currency-crisis literature, which I founded back in 1979, was about countries trying to peg their currency while following policies that would ultimately make that peg unsustainable; the question then became when speculators would force the inevitable. Maury, however, inspired by the ERM crisis of 1992-3, argued that crises could come out of a clear blue sky — that countries could face a speculative attack that would force them off a peg that would otherwise have been indefinitely sustainable.

By the way, I was at first very skeptical of this argument. But the events of the Asian crisis a few years later convinced me that I was wrong and Maury was right. And here’s the thing: the Obstfeld approach seems highly relevant to the troubles of eurozone countries, and also helps explain why Mario Draghi’s “whatever it takes” worked so well.

Second was his work with Ken Rogoff on open-economy macro, basically bringing New Keynesian modeling to floating exchange rates. One really important aspect of this work, as it turned out, was that in building a bridge to the classic literature here, O-R considered the effects of fiscal as well as monetary policy. As a result, those of us who were well versed in open-economy macroeconomics were fully prepared when issues of fiscal stimulus arose, and didn’t fall into the traps of incomprehension we saw from so many domestic-economy macro types.

There is, of course, much more in the Obstfeld canon. But those two seminal papers seem to me to illustrate why he’s so perfect for this job, and why one can expect Maury to give very good advice, whether policymakers take it or not.

Brooks, Cohen and Krugman

July 24, 2015

It’s too sweet for words.  Bobo is considering “The Minimum Wage Muddle.”  He babbles that mandates for better pay will certainly help some people, but hurt some, too.  The most terse comment came in the form of a question from “Ian MacFarlane” from Philadelphia:  “Could you, Mr, Brooks, live on the minimum wage?”  I’d pay good money to watch him try for a month…  In “Algeria’s Invisible Arab” Mr. Cohen says conflict is illuminated as the nameless murder victim of Camus’s “The Stranger” becomes a human being in a new novel.  In “The M.I.T. Crowd” Prof. Krugman says M.I.T.-trained economists have gained dominance in policy positions and policy discourse.  Here’s Bobo:

Once upon a time there was a near consensus among economists that raising the minimum wage was a bad idea. The market is really good at setting prices on things, whether it is apples or labor. If you raise the price on a worker, employers will hire fewer and you’ll end up hurting the people you meant to help.

Then in 1993 the economists David Card and Alan Krueger looked at fast-food restaurants in New Jersey and Pennsylvania and found that raising the minimum wage gave people more income without hurting employment. A series of studies in Britain buttressed these findings.

Today, raising the minimum wage is the central piece of the progressive economic agenda. President Obama and Hillary Clinton champion it. Cities and states across the country have been moving to raise minimum wages to as high as $15 an hour — including New York State just this week.

Some of my Democratic friends are arguing that forcing businesses to raise their minimum wage will not only help low-wage workers; it will actually boost profits, because companies will better retain workers. Some economists have reported that there is no longer any evidence that raising wages will cost jobs.

Unfortunately, that last claim is inaccurate. There are in fact many studies on each side of the issue. David Neumark of the University of California, Irvine and William Wascher of the Federal Reserve have done their own studies and point to dozens of others showing significant job losses.

Recently, Michael Wither and Jeffrey Clemens of the University of California, San Diego looked at data from the 2007 federal minimum-wage hike and found that it reduced the national employment-to-population ratio by 0.7 percentage points (which is actually a lot), and led to a six percentage point decrease in the likelihood that a low-wage worker would have a job.

Because low-wage workers get less work experience under a higher minimum-wage regime, they are less likely to transition to higher-wage jobs down the road. Wither and Clemens found that two years later, workers’ chances of making $1,500 a month was reduced by five percentage points.

Many economists have pointed out that as a poverty-fighting measure the minimum wage is horribly targeted. A 2010 study by Joseph Sabia and Richard Burkhauser found that only 11.3 percent of workers who would benefit from raising the wage to $9.50 an hour would come from poor households. An earlier study by Sabia found that single mothers’ employment dropped 6 percent for every 10 percent increase in the minimum wage.

A study by Thomas MaCurdy of Stanford built on the fact that there are as many individuals in high-income families making the minimum wage (teenagers) as in low-income families. MaCurdy found that the costs of raising the wage are passed on to consumers in the form of higher prices. Minimum-wage workers often work at places that disproportionately serve people down the income scale. So raising the minimum wage is like a regressive consumption tax paid for by the poor to subsidize the wages of workers who are often middle class.

What we have, in sum, is a very complicated situation. If we do raise the minimum wage a lot of people will clearly benefit and a lot of people will clearly be hurt. The most objective and broadest bits of evidence provoke ambivalence. One survey of economists by the University of Chicago found that 59 percent believed that a rise to $9 an hour would make it “noticeably harder” for poor people to find work. But a slight majority also thought the hike would be worthwhile for those in jobs. A study by the Congressional Budget Office found that a hike to $10.10 might lift 900,000 out of poverty but cost roughly 500,000 jobs.

My own guess is the economists will never be able to give us a dispositive answer about who is hurt or helped. Economists have their biases and reality is too granular. It depends on what region a worker is in, whether a particular job can be easily done by a machine, what the mind-set of his or her employer is.

The best reasonable guess is that a gradual hike in high-cost cities like Seattle or New York will probably not produce massive dislocation. But raising the wage to $15 in rural New York will cause large disruptions and job losses.

The key intellectual upshot is that, despite what some people want you to believe, the laws of economic gravity have not been suspended. You can’t impose costs on some without trade-offs for others. You can’t intervene in the market without unintended consequences. And here’s a haunting fact that seems to make sense: Raising the minimum wage will produce winners among job holders from all backgrounds, but it will disproportionately punish those with the lowest skills, who are least likely to be able to justify higher employment costs.

Which will surely be proved out as NYC raises the minimum wage for fast food workers…  As if Bobo gave a crap about such peons.  Here’s Mr. Cohen:

At the core of any conflict lies invisibility. The enemy cannot be seen, at least not if seeing betokens the start of understanding. The other is there, a menacing and ineffaceable presence, but is invisible in his or her human dimensions.

Demonization blocks any glimmer of shared humanity or sympathy. Only when the nameless foe becomes a man or a woman confronted with the puzzle of life does the path to understanding begin to open. No gun was turned to plowshare without some form, however tentative, of mutual recognition.

This question of invisibility is the starting point of Kamel Daoud’s remarkable first novel, “The Meursault Investigation.” His core idea is of startling ingenuity. Daoud, an Algerian journalist, takes Albert Camus’s classic novel, “The Stranger” — or more precisely the “majestically nonchalant” murder of an Arab at the heart of it — and turns that Arab into a human being rather than the voiceless, characterless, nameless object of a “philosophical crime” by a Frenchman called Meursault on an Algiers beach 20 years before the culmination of Algeria’s brutal war of independence.

By inverting the perspective, and turning the anonymous Arab into a young man named Musa Uld el-Assas rather than someone “replaceable by a thousand others of his kind, or by a crow, even,” Daoud shifts the focus from the absurdity of Meursault’s act in the giddying sunlight to the blindness of the colonial mind-set.

The issue is no longer Meursault’s devastating honesty about the human condition — he does not love, he does not pretend, he does not believe in God, he does not mourn his dead mother, he does not judge, he does not repress desire, he does not regret anything, he does not hide from life’s farce or shrink from death’s finality — but the blood he has spattered on the sand with five gunshots into young Musa.

Daoud’s device is to treat the fictional murder committed by Meursault in 1942 as a real event and create a narrator named Harun who is the younger brother of the dead Musa, a flailing chronicler of irreparable loss. Harun cannot get over how Musa has been blotted out: “My brother’s name was Musa. He had a name. But he’ll remain ‘the Arab’ forever.” He was “capable of parting the sea, and yet he died in insignificance.” Daoud writes that the French “watched us — us Arabs — in silence, as if we were nothing but stones or dead trees.”

Musa is invisible even in death. If he had been named, Harun reflects, perhaps their mother would have received a pension. Perhaps life would not have consisted of an unrequited attempt to find the body, locate the murderer, understand the crime — even avenge it somehow.

The Arabs are sullen. They wait. Harun’s reflection on the demise of French Algeria is devastating: “I didn’t even fight in the War of Liberation. I knew it was won in advance, from the moment when a member of my family was killed because somebody felt lethargic from too much sun.”

At the moment of liberation, or just after it, Harun kills a Frenchman, Joseph Larquais: “The Frenchman had been erased with the same meticulousness applied to the Arab on the beach twenty years earlier.” But this reciprocal murder, committed without conviction in the blinding night rather than the blinding heat, brings no real respite — from the fury Harun feels toward his relentless mother who wants him to be his lost brother, or from the quandary of the Algerian condition.

Independence will only bring disappointment. Algeria drifts toward the suffocating stranglehold of religion that Daoud, like Camus, deplores. Vineyards are uprooted because of Islam’s strictures. Harun laments that his one ephemeral love, Meriem, embodies a woman who has “disappeared in this country today: free, brash, disobedient, aware of their body as a gift, not as a sin or a shame.” His words recall Meursault’s dismissal of all the priest’s entreaties before his execution: “None of his certainties was worth one hair on the head of the woman I loved.”

Religion, for Daoud’s hero, is “public transportation I never use.” Who is God to give lessons? After all, “I alone pay the electric bills, I alone will be eaten by worms in the end. So get lost!”

Of course, an imam from a Salafist group has issued a fatwa for Daoud to be put to death. The author, in turn, has called the absence of alternatives to Islamism “the philosophical disaster of the Arab world.” Much more such honesty is needed.

Daoud’s novel has sometimes been portrayed as a rebuke to the pied-noir Frenchman Camus. But there is more that binds their protagonists than separates them — a shared loathing of hypocrisy, shallowness, simplification and falsification. Each, from his different perspective, renders the world visible — the only path to understanding for Arab and Jew, for American and Iranian, for all the world’s “strangers” unseen by each other.

Now here’s Prof. Krugman:

Goodbye, Chicago boys. Hello, M.I.T. gang.

If you don’t know what I’m talking about, the term “Chicago boys” was originally used to refer to Latin American economists, trained at the University of Chicago, who took radical free-market ideology back to their home countries. The influence of these economists was part of a broader phenomenon: The 1970s and 1980s were an era of ascendancy for laissez-faire economic ideas and the Chicago school, which promoted those ideas.

But that was a long time ago. Now a different school is in the ascendant, and deservedly so.

It’s actually surprising how little media attention has been given to the dominance of M.I.T.-trained economists in policy positions and policy discourse. But it’s quite remarkable. Ben Bernanke has an M.I.T. Ph.D.; so do Mario Draghi, the president of the European Central Bank, and Olivier Blanchard, the enormously influential chief economist of the International Monetary Fund. Mr. Blanchard is retiring, but his replacement, Maurice Obstfeld, is another M.I.T. guy — and another student of Stanley Fischer, who taught at M.I.T. for many years and is now the Fed’s vice chairman.

These are just the most prominent examples. M.I.T.-trained economists, especially Ph.D.s from the 1970s, play an outsized role at policy institutions and in policy discussion across the Western world. And yes, I’m part of the same gang.

So what distinguishes M.I.T. economics, and why does it matter? To answer that question, you need to go back to the 1970s, when all the people I’ve just named went to graduate school.

At the time, the big issue was the combination of high unemployment with high inflation. The coming of stagflation was a big win for Milton Friedman, who had predicted exactly that outcome if the government tried to keep unemployment too low for too long; it was widely seen, rightly or (mostly) wrongly, as proof that markets get it right and the government should just stay out of the way.

Or to put it another way, many economists responded to stagflation by turning their backs on Keynesian economics and its call for government action to fight recessions.

At M.I.T., however, Keynes never went away. To be sure, stagflation showed that there were limits to what policy can do. But students continued to learn about the imperfections of markets and the role that monetary and fiscal policy can play in boosting a depressed economy.

And the M.I.T. students of the 1970s enlarged on those insights in their later work. Mr. Blanchard, for example, showed how small deviations from perfect rationality can have large economic consequences; Mr. Obstfeld showed that currency markets can sometimes experience self-fulfilling panic.

This open-minded, pragmatic approach was overwhelmingly vindicated after crisis struck in 2008. Chicago-school types warned incessantly that responding to the crisis by printing money and running deficits would lead to 70s-type stagflation, with soaring inflation and interest rates. But M.I.T. types predicted, correctly, that inflation and interest rates would stay low in a depressed economy, and that attempts to slash deficits too soon would deepen the slump.

The truth, although nobody will believe it, is that the economic analysis some of us learned at M.I.T. way back when has worked very, very well for the past seven years.

But has the intellectual success of M.I.T. economics led to comparable policy success? Unfortunately, the answer is no.

True, there have been some important monetary successes. The Fed, led by Mr. Bernanke, ignored right-wing pressure and threats — Rick Perry, as governor of Texas, went so far as to accuse him of treason — and pursued an aggressively expansionary policy that helped limit the damage from the financial crisis. In Europe, Mr. Draghi’s activism has been crucial to calming financial markets, probably saving the euro from collapse.

On other fronts, however, the M.I.T. gang’s good advice has been ignored. The I.M.F.’s research department, under Mr. Blanchard’s leadership, has done authoritative work on the effects of fiscal policy, demonstrating beyond any reasonable doubt that slashing spending in a depressed economy is a terrible mistake, and that attempts to reduce high levels of debt via austerity are self-defeating. But European politicians have slashed spending and demanded crippling austerity from debtors anyway.

Meanwhile, in the United States, Republicans have responded to the utter failure of free-market orthodoxy and the remarkably successful predictions of much-hated Keynesians by digging in even deeper, determined to learn nothing from experience.

In other words, being right isn’t necessarily enough to change the world. But it’s still better to be right than to be wrong, and M.I.T.-style economics, with its pragmatic openness to evidence, has been very right indeed.

Krugman’s blog, 7/22/15

July 23, 2015

There were two posts yesterday.  The first was “The Half-Lives of Others (Wonkish):”

What about Ireland? That’s what some people have been asking me; they’re under the impression that Ireland is a success story for austerity, and that this success is somehow a refutation of the broadly Keynesian account of the economy I’ve been giving. So I guess some clarification is in order.

As it happens, Simon Wren-Lewis has recently taken this very question on, and in a way I don’t have much to add. But maybe it will help to say more or less the same thing, but differently.

First of all, Ireland is a success only in a relative sense. Yes, it has done better than Greece, but it suffered a prolonged, very severe slump. It is growing again, finally — but that doesn’t undo the reality of a large price paid to get to this point.

Still, it is growing, and fairly fast at this point. Isn’t this something that wasn’t supposed to happen? Actually, no. If you apply a textbook Keynesian model – literally, the one in the best-selling international text, which happens to be Krugman, Melitz, and Obstfeld – it tells a story that looks a lot like Irish experience.

That textbook model can be described with the three equations shown, in which all variables are shown as deviations from their long-run equilibrium. First, the output gap y is determined via a multiplier effect by the structural budget balance B and the level of net exports NX. Second, net exports are determined by the real exchange rate; if we take the nominal exchange rate as given (e.g., if you’re on the euro), and also take foreign prices as given, this is determined by the domestic price level p. Finally, we have a rudimentary Phillips curve, in which the rate of inflation depends on the output gap.

Taken together, these imply the fourth equation, which shows how output self-corrects over time. In words: if the economy is depressed, it will experience deflation, perhaps absolute but in any case relative to its trading partners; this will gradually improve competitiveness, causing next exports to rise and the economy to converge back to normal. The rate of convergence will depend on three parameters: the multiplier, the sensitivity of the trade balance to the real exchange rate, and the sensitivity of inflation to the output gap.

I’ve written down some plausible guesses about these three parameters; they imply that the process of internal devaluation will, left to itself, correct 22.5 percent of an output gap over the course of a year. Alternatively, they imply that the half-life of a deviation of output from potential will be a little over three years.

But, you say, we’re more than 5 years into the euro crisis. Shouldn’t it be mostly gone? No, because austerity wasn’t put into effect all at once. Instead, countries faced several years of fiscal consolidation before there was a pause that permitted growth to resume.

The figure shows a hypothetical example that is meant as a sort of stylized Ireland. I assume that a fiscal tightening equal to 6 percent of potential GDP takes place over the course of three years; the cyclically adjusted balance then stabilizes, with no further tightening. What you see is a large economic downturn as long as the screws are being tightened, but a significant recovery once this stops. Again, this is just standard Keynesian open-economy macro: over time a depressed economy gains competitiveness, so that in the long run recovery happens. But in the long run …

Yesterday’s second post was “Annoying Euro Apologetics:”

Are there good arguments against the proposition that the creation of the euro was an epic mistake? Maybe. But the arguments I’ve been hearing lately are really bad. And they’re also deeply annoying.

One argument I keep seeing is that economist critics like myself don’t understand that the euro was a political and strategic project, not merely a matter of economic costs and benefits. Yes, I’m a dumb uncouth economist, completely unaware of the role of politics and international strategy in policy decisions, who never heard of the European project and its origins in the effort to put Europe’s legacy of war behind it, not to mention strengthen democracy in the Cold War.

Well, actually I do know all about that. The point, however, is that while the European project has at every stage combined economic objectives with broader political goals – it’s about peace and democracy through integration and prosperity – the project can’t be expected to work unless the economic measures are a good idea in and of themselves, or at least a non-catastrophic idea. What happened in the march to the euro was that European elites, in love with the symbolism of a single currency, closed their minds to warnings that currency union – unlike the removal of trade barriers – was at best ambiguous in its economic logic, and arguably, even ex ante, a very bad idea indeed.

An alternative argument, which we’re hearing from depressed European economies like Finland, is that the short-term costs of inflexibility are outweighed by the supposedly huge gains from greater integration. But where’s the evidence for these huge gains? In this article, they’re said to be demonstrated by Finland’s strong growth before the recent crisis. But is it plausible to give credit for the Nokia boom to the single currency?

Well, the chart shows a comparison I find interesting, between Finland and its neighbor Sweden, where a referendum in 2003 rejected euro membership. (I remember that vote: Swedish friends who shared my worries about the euro phoned me in the middle of the night to celebrate.) For both countries I use 1989 as a baseline; that was the year before the great Scandinavian slump of the 1990s, brought on by runaway banks and a huge housing bubble.

Total economy database

After that slump, Finland experienced a long stretch of solid economic growth. But so did Sweden, and it’s hard to see any real difference in their degrees of success. There’s certainly nothing there to indicate that euro membership was crucial to growth. Since 2008, on the other hand, Sweden has – despite bobbling its monetary policy – done much better.

As I said, maybe there are good arguments against the proposition that the euro was a mistake. But pointing out that politics matters, and economies grow, doesn’t cut it; these aren’t the factoids you’re looking for.

Blow and Kristof

July 23, 2015

In “Questions About the Sandra Bland Case” Mr. Blow says that when there are lapses in logic in what people think would be reasonable explanations, suspicion spreads.  In “Starvation as a Product of War” Mr. Kristof says there’s a looming famine in South Sudan. What’s needed most isn’t food, but an end to the civil war.  Here’s Mr. Blow:

I have so many questions about the case in which Sandra Bland was arrested in a small Texas town and died in police custody. These are questions that ought to be easy to answer, questions that I suspect many others may share. Here are just some of my areas of inquiry.

1. On the video released by the Texas Department of Public Safety of Bland’s traffic stop, the arresting officer, Brian Encinia, tells her that the reason for her stop is that she “failed to signal a lane change.” The officer returns to his car, then approaches Bland’s vehicle a second time. He remarks to Bland, “You seem very irritated.” Bland responds, “I am. I really am.” She continues, “I was getting out of your way. You were speeding up, tailing me, so I move over, and you stop me. So, yeah, I am a little bit irritated.”

Was Bland simply trying to move out of the way of a police vehicle?

The video shows the officer’s car accelerating behind Bland’s and passing a sign indicating a speed limit of 20 miles per hour. How fast was the officer closing the distance on Bland before she changed lanes? Was it completely reasonable for her to attempt to move out of his way?

2. The officer, while standing at the closed driver’s side door, asks Bland to extinguish her cigarette. As soon as she refuses, he demands that she exit the vehicle. Was the demand to exit because of the refusal? If so, what statute in Texas — or anywhere in America! — stipulates that a citizen can’t smoke during a traffic stop?

3. According to Encinia’s signed affidavit, Bland was “removed from the car” and “placed in handcuffs for officer safety.” The reason for the arrest is unclear to me. At one point, Encinia says, “You were getting a warning until now you’re going to jail.” So, what was the arrest for at that point? Failure to comply? Later in the video, Encinia says, “You’re going to jail for resisting arrest.” If that was the reason, why wasn’t Bland charged with resisting arrest? The affidavit reads, “Bland was placed under arrest for Assault on Public Servant.”

Encinia’s instructions to Bland are a jumble of confusion. After she is handcuffed, he points for her to “come read” the “warning” ticket, then immediately pulls back on her arm, preventing her from moving in the direction that he pointed, now demanding that she “stay right here.” He then commands Bland to “stop moving,” although, as she points out, “You keep moving me!” What was she supposed to do?

4. According to Encinia’s affidavit, at some point after being handcuffed, “Bland began swinging her elbows at me and then kicked my right leg in the shin.” On the dashcam video, a commotion happens out of view of the camera, with Bland complaining that she is being hurt — “You’re about to break my wrist!” and “You knocked my head in the ground; I got epilepsy!” Encinia and another officer insist that Bland stop moving. Encinia can be heard to say, “You are yanking around! When you pull away from me, you are resisting arrest!” (Neither the dashcam video nor a video taken by a bystander shows a discernible kick.)

When Encinia re-enters the frame of the dashcam, he explains to a female officer: “She started yanking away, then kicked me, so I took her straight to the ground.” The female officer points to Encinia’s leg as she says: “Yeah, and there you got it right there.”

Encinia says, “One thing for sure, it’s on video.” Only, it isn’t. Why exactly was Bland walked out of the frame of view of the dashcam for the arrest procedure?

5. The initial video posted by Texas authorities also has a number of visual glitches — vanishing cars, looping sequences — but no apparent audio glitches.

The director of “Selma,” Ava DuVernay, tweeted: “I edit footage for a living. But anyone can see that this official video has been cut. Read/watch. Why?” She included a link to a post pointing out the discrepancies in the video.

According to NBC News:

“Tom Vinger, a spokesman for the Department of Public Safety, blamed a ‘technical issue during posting.’ He said that the department was working to correct the video.”

What kinds of “technical difficulties” were these? Why wouldn’t the audio also have glitches? (Authorities have now released a new, slightly shorter video.)

6. Texas authorities say that, while in the Waller County jail cell, Bland used a trash bag from a trash can in the cell to hang herself. Is it standard procedure to have trash cans with trash bags in jail cells? Is the can secured to the floor? If not, couldn’t it be used by an inmate to hurt herself, or other inmates or jail staff?

According to a report on Wednesday by The Houston Chronicle:

“Bland disclosed on a form at the jail that she previously had attempted suicide over that past year, although she also indicated she was not feeling suicidal at the time of her arrest, according to officials who attended the Tuesday meeting with local and state leaders investigating the case.” Shouldn’t they have known it was a suicide risk?

The Bureau of Justice Statistics points out that suicide is the No. 1 cause of non-illness-related deaths in local jails (although blacks are least likely to commit those suicides), and between 2000 and 2011 about half of those suicides “occurred within the first week of admission.”

Why weren’t more precautions taken, like, oh, I don’t know, removing any suicide risks from the cell?

7. Houston’s Channel 2 aired “exclusive video from inside the Waller County jail cell where Sandra Bland was found dead.” In the video, a trash can — a very large one — is clearly visible. But, strangely, it appears to have a trash bag in it. If Bland used the trash bag to hang herself, where did the one in the can come from? Did they replace it? Why would the jail staff do that?

8. NBC News’ John Yang also toured the cell, and in his video he says that “things are really the same as it was that morning” when officers found Bland’s body, including food (“Dinner Untouched” was the language used in title of the video on and a Bible on the bed opened to Psalms. (That Bible appears to be closed in the Channel 2 video. Who opened it between the two videos?).

And what page is the Bible opened to in the NBC video? It is open to Psalm 119 and at the top of the page are verses 109-110: “Though I constantly take my life in my hands, I will not forget your law. The wicked have set a snare for me, but I have not strayed from your precepts.” Eerie. Or, convenient.

Also in the Channel 2 video, there are orange shoes on the floor by the bed. In the NBC video, they are gone. Who moved them? Why? Where are they?

Yang says of the trash bag in the can: “Around her neck, they say, was a trash bag, an extra trash bag from this receptacle.” So what gives here? “Extra trash bag”? Was there more than one trash bag in the cell or had that one been replaced?

(It is also worth noting that the video shows what appears to be a rope holding a shower curtain.)

Isn’t this an active investigation? Shouldn’t that cell be treated like a crime scene? Why are reporters allowed to wander through it? Who all has been in it?

Maybe there are innocent and convincing answers to all these questions, and others. I hope so. People need things to make sense. When there are lapses in logic in what people think would be reasonable explanations, suspicion spreads.

Now here’s Mr. Kristof, writing from Aweil, South Sudan:

One gauge of the famine looming in South Sudan is that people are simply collapsing from hunger.

As I was driving into this city, a woman was lying inert on the road. She was Nyanjok Garang, and she said she hadn’t eaten for three days. She had set out to look for work, maybe washing clothes, in hopes of keeping her two children alive. After a day of fruitless walking she had collapsed.

“My children are hungry,” she said. “I’m hungry. There’s not even a cent left to buy bread.” Her husband is a soldier in the government forces fighting in South Sudan’s civil war, but she doesn’t even know if he is still alive. So she left her children with a neighbor and set out in hopes of finding work — “and then I blacked out.”

A horrific famine enveloped what is now South Sudan in 1988, and there are some signs that this year could see a repeat. As in 1988, weather has led to poor harvests on top of civil war that has made it difficult to plant crops and move food around the country.

President Obama will be focusing on the South Sudan civil war in his trip starting Thursday night to Kenya and Ethiopia, both neighbors to South Sudan. The war is not only a military crisis but also ahumanitarian catastrophe, which makes it all the more important to step up efforts to bring about peace.

You might think that what’s needed to end a famine is food. Actually, what’s essential above all is an international push of intensive diplomacy and targeted sanctions to reach a compromise peace deal and end the civil war. Yes, Obama has plenty on his plate already, but no other country has the leverage America does. And in peace, South Sudan can care for itself. But as long as the war continues, South Sudanese will face starvation — especially women and girls.

The gender dynamics of hunger are obvious: In Aweil, the hospital ward is full of skeletal women and girls, looking like concentration camp survivors. That’s because (as in many places around the world) when food is insufficient, families allocate it to men and boys, and women and girls disproportionately starve.

One 15-year-old girl in the hospital, Rebecca Athian, was so malnourished that her bones pushed through her skin and she had a measure of anemia (a hemoglobin level of 3) that in the West is pretty much unheard-of. Yet the hospital was now forced to discharge her to make way for new patients.

Rebecca has already lost two siblings in the last year, and although the causes of death were never fully determined, it’s a good guess that they were malnutrition-related. Her mother would like to marry Rebecca off, because it would then be her husband’s duty to feed her and keep her alive. But she says Rebecca has been raped, so men are unwilling to marry her.

The United Nations says 4.6 million people in South Sudan — more than one-third of the population — are “severely food insecure,” and the situation will deteriorate in the coming months because the next major harvest won’t come until October or November. Until then, there is nothing to eat.

“It is the first time we’ve seen so many cases like this,” said Dr. Dut Pioth, the acting director of the hospital. “It’s going to be like what we saw in 1988.”

Dr. Dut was 11 years old during that famine, and he remembers some relatives starving to death. His family fled to Khartoum, where he thrived in school and attended medical school. But he is frustrated because what patients often need now isn’t so much medical care, but rather food and peace.

To see starving children is particularly wrenching. They show no emotions: They do not cry or smile or frown, but simply gaze blankly, their bodies unwilling to waste a calorie on emotion when every iota of energy must go to keep major organs functioning.

It’s striking that this area of South Sudan is not directly affected by fighting; it’s calm here. But the hunger is still war-related, for the conflict is keeping food and supplies out. The road from the capital, Juba, has been blocked by fighting, and disputes with Sudan have closed the border to the north. So this area is cut off, prices are skyrocketing, jobs are disappearing, and ordinary workers can’t afford to buy food.

The only certainty is that it will get worse in the coming months, and the women and girls who die will be war casualties. “Those who are dying of gunshots,” Dr. Dut notes, “are fewer than those who are dying of hunger.”

Friedman and Bruni

July 22, 2015

In “Backing Up Our Wager With Iran” TMOW says we can do things to increase the odds that our bet against Iran getting a bomb pays off.  Mr. Bruni has a question in “To Trump or Not to Trump” — as Donald Trump becomes bigger, we become smaller. How should we size him up?  Here’s TMOW:

From the minute Iran detected that the U.S. was unwilling to use its overwhelming military force to curtail Tehran’s nuclear program — and that dates back to the George W. Bush administration, which would neither accept Iran’s right to a nuclear fuel cycle nor structure a military or diplomatic option to stop it — no perfect deal overwhelmingly favorable to America and its allies was ever going to emerge from negotiations with Iran. The balance of power became too equal.

But there are degrees of imperfect, and the diplomatic option structured by the Obama team — if properly implemented and augmented by muscular diplomacy — serves core American interests better than any options I hear coming from the deal’s critics: It prevents Iran from producing the fissile material to break out with a nuclear weapon for 15 years and creates a context that could empower the more pragmatic forces inside Iran over time — at the price of constraining, but not eliminating, Iran’s nuclear infrastructure and sanctions relief that will strengthen Tehran as a regional power.

Supporting this deal doesn’t make you Neville Chamberlain; opposing it doesn’t make you Dr. Strangelove. Both sides have legitimate arguments. But having studied them, I believe America’s interests are best served now by focusing on how to get the best out of this deal and cushion the worst, rather than scuttling it. That would be a mistake that would isolate us, not Iran, and limit our choices to going to war or tolerating an Iran much closer to nuclear breakout, without any observers or curbs on the ground, and with crumbling sanctions.

“The nuclear agreement is a deal, not a grand bargain,” argued the Wilson Center’s Robert Litwak, author of “Iran’s Nuclear Chess.” “Obama and Iran’s supreme leader Khamenei are each making a tacit bet. Obama is defending the deal in transactional terms (that it addresses a discrete urgent challenge), but betting that it will empower Iran’s moderate faction and put the country on a more favorable societal trajectory. Khamenei is making the opposite bet — that the regime can benefit from the transactional nature of the agreement (sanctions relief) and forestall the deal’s potentially transformational implications to preserve Iran’s revolutionary deep state.”

We can, though, do things to increase the odds that the bet goes our way: 1. Don’t let this deal become the Obamacare of arms control, where all the energy goes into the negotiation but then the implementing tools — in this case the verification technologies — don’t work. President Obama should appoint a respected military figure to oversee every aspect of implementing this deal.

2. Congress should pass a resolution authorizing this and future presidents to use force to prevent Iran from ever becoming a nuclear weapons state. Iran must know now that the U.S. president is authorized to destroy — without warning or negotiation — any attempt by Tehran to build a bomb.

3. Focus on the Iranian people. The celebrations of this deal in Iran tell us that “the Iranian people want to be South Korea, not North Korea,” notesKarim Sadjadpour, Iran expert at the Carnegie Endowment. We should reach out to them in every way — visas, exchanges and scholarships — to strengthen their voices. Visiting Iran taught me that Iranians have had enough Islamic fundamentalism to know they want less of it and they’ve had enough democracy to know they want more of it. (Iran’s hard-line Revolutionary Guards know this well, which is why they are still trying to persuade Iran’s supreme leader to reject this deal and its opening to the world.)

4. Avoid a black-and-white view of the Middle East. The idea that Iran is everywhere our enemy and the Sunni Arabs our allies is a mistake. Saudi Arabia’s leadership has been a steadfast U.S. ally in the Cold War; many Saudis are pro-American. But the Saudi leadership’s ruling bargain is toxic: It says to the Saudi people that the al-Saud tribe gets to rule and in return the Saudi Wahhabi religious establishment gets billions of dollars to transform the face of Sunni Islam from an open and modernizing faith to a puritanical, anti-women, anti-Shiite, anti-pluralistic one. The Saudis have lost control of this puritanical-Salafist transformation of Islam, and it has mutated into the ideology that inspired the 9/11 hijackers — 15 of 19 of whom were Saudis — and the Islamic State.

Iran aided the U.S. in toppling the Taliban regime in Afghanistan, and, at the same time, Tehran, and its cat’s paw, Hezbollah, have propped up the Syrian regime while it has perpetrated a genocide against its own people, mostly Syrian Sunnis. We need to confront Iran’s regional behavior when it contradicts our interests, but align with it when it comports with our interests. We want to balance the autocratic Sunnis and Shiites, not promote either. Neither share our values.

Finally, when it comes to the Middle East broadly, we need to contain, amplify and innovate: Contain the most aggressive forces there, amplify any leaders or people building decency there, and innovate on energy like crazy to keep prices low, reduce oil money to bad actors and reduce our exposure to a region that is going to be in turmoil for a long, long, long time.

Gee, Tommy — can the class think of anything that might have exacerbated that turmoil?  Something that happened during the last administration?  A show of hands, please…  Here’s Mr. Bruni:

Bob Kerrey served in the Senate with John McCain, is also a Vietnam veteran and has run for president, so he has been asked incessantly over recent days to appear on television and weigh in on Donald Trump’s vile besmirching of McCain’s military record.

He accepted only one of those invitations, from a friend. Otherwise he mostly stayed mum, lest he abet Trump’s ultimate goal, which is to turn his name into a news media mantra: Trump, Trump, Trump.

But on the phone on Tuesday, Kerrey’s frustration — no, let’s call it disgust — boiled over, and he, too, talked about Trump, Trump, Trump. I recount our conversation because I think Kerrey speaks for most Americans and because his comments capture what a conundrum many of us face.

If we discuss Trump, as I’ve done in several columns, we reward his bad and transcendently self-serving behavior, no matter how negative our assessments of him or how many larger truths we engage.

If we don’t discuss him, we ignore something real, in a fashion that’s irresponsible.

By something real, I mean the fact that Trump has measurable support, at least for now. In a nationwide ABC News/Washington Post poll of Republicans and Republican-leaning independents that was released Monday, he was in the lead for the party’s presidential nomination, the favorite of 24 percent of respondents. The next closest contenders were Scott Walker (13 percent) and Jeb Bush (12).

And yet.

“This is not a national primary,” Kerrey said, noting that Trump’s 24 percent has dubious predictive power for a consequential handful of individual contests in early states that aren’t exactly mirrors of America. “So who the hell cares what his numbers are nationally?”

“He’s not going to do that well in Iowa,” Kerrey continued. “There’s nothing about Trump that indicates that the evangelical community there is going to embrace him. And does anyone seriously think he has the kind of ground organization in New Hampshire to turn people out to vote?”

“He’s got no ground game,” Kerrey continued. “It’s all up in Donald’s head! Everything’s in Donald’s head. It’s the political version of ‘Being John Malkovich.’ ”

“The people running the networks know this,” he added, sighing. But they deliberately play it down as they seize almost every opportunity — including the McCain insult — to Trump anew and to Trump ad nauseam.

Kerrey groaned. “They’ve got a good sideshow going: ‘Are veterans offended?’ ‘Donald, are you going to apologize?’ For insulting McCain? He’s been insulted by better than Trump.”

Television has succumbed to the mantra more than other media, because it in particular thrives on theater, which Trump provides in excess. But those of us at newspapers and websites have definitely done our part, uncertain of the best approach.

The Huffington Post’s answer was to relegate Trump coverage to its entertainment section, explaining that he’s putting on a show, not running a serious campaign. So it was there that readers found a story about Trump’s latest attention-getting prank: During a televised rally on Tuesday, he ratcheted up his continuing feud with Senator Lindsey Graham by publicly divulging Graham’s cellphone number.

But for all Trump’s antics and nonsense, he placed second to Bush in a New Hampshire poll late last month. In a more recent Iowa poll, he trailed only Walker.

Kerrey conceded: “I don’t think you can really ignore it. But you have to evaluate, with some expertise, what his odds of being the Republican nominee are. And they’re practically zero.”

“Yeah, 5,000 people showed up at your event,” he said. “I could get 5,000 people to show up at the bearded lady. He is, in his way, a freak show.”

Kerrey thinks that Trump is principally interested in promoting his brand and padding his net worth, even if he has perhaps suffered a few short-term setbacks because of companies’ severing ties with him.

I think that Trump has an ego as ravenous as they come, with dimensions remarkable even for the political arena, and that his presidential bid is a splendiferous buffet for it. Watch it sup. See it swell. Look now: It’s a marvelous blimp.

But is his engorgement our debasement?

“It is not good for American politics,” Kerrey said.

I noted that some of his fellow Democrats were reveling in Trump, who was causing the Republican Party grief.

“I’m not putting my partisan hat on,” Kerrey said. “I’m putting my American hat on and saying: I want us to elect a great leader. And it’s going to be difficult as it is, because the money spent will be in the billions. It’s going to be hard enough to keep our balance and select a great leader even without this clown.”

I’d advise investing heavily in popcorn futures.  The Republican debates are coming…

Krugman’s blog, 7/20/15

July 21, 2015

There was one post yesterday, “Undebasing the Dollar:”

Remember when the likes of Paul Ryan accused Ben Bernanke of printing too much money, solemnly intoning that “There is nothing more insidious that a country can do to its citizens than debase its currency”? A big part of the justification for this fear-mongering was that commodity prices were rising sharply from their 2009 low, which the usual suspects claimed was a harbinger of rising overall inflation.

So, look at what’s been happening to commodity prices, including gold, recently.

Does this mean that deflation looms? Is it time to demand that Janet Yellen roll the printing presses?

I mean, it could be that the inflation hawks have learned their lesson, that they realize that volatile commodity prices aren’t a very good guide to policy, and that it makes sense to focus on core inflation. But I’ve seen no sign of a rethink.

Or it could be that inflation phobia is deep pure and simple, and no evidence will shake the state of perm-fear.

Solo Bobo

July 21, 2015

In “Dustin Yellin’s Modern Community-Building” Bobo gurgles that a New York artist draws together artists, physicists and others into a uniquely modern collective of creativity.  Bobo neglects to mention a few facts, so we’ll call on the comment from “Ellen” in Williamsburg:  “He is very connected and from an extremely wealthy family.  He picked up that warehouse for almost $4 million dollars… cash, like any drop-out could, if only they had the gumption…”  She supplied a link to this story, which Bobo neglected to cite.  Here he is:

When Dustin Yellin was 17 he dropped out of high school. The school was filled with jocks and cheerleaders and he clearly didn’t fit in. Plus he wasn’t intellectually engaged.

He hitchhiked around New Zealand and returned to Colorado. He became an apprentice to an eccentric physicist who believed he could get free energy from space and who performed experiments on Yellin involving crystals, baths of saline solution and hallucinogenic drugs.

When he was 18 Yellin hatched a plan. He would go to New York, become a successful artist and create a place where painters, scientists, writers, billionaires and other cool people could gather to try to change the world. Yellin turns 40 this week, and that’s more or less what he’s done.

Yellin is a successful artist with a staff of 23 and a studio in Red Hook, Brooklyn. Four years ago he threw the vast bulk of his money (and more) into buying a large brick warehouse that was built as the Pioneer Iron Works in 1866. The building now hosts, well, a little bit of everything.

Artists from as far away as France, Israel and South Korea work there in residencies averaging three or four months. There are also a magazine, a radio station, a recording studio, a film editing room and spaces for scientists working on everything from nanotechnology, astrophysics and virtual-reality software to 3-D printing. The building has a cathedral-like exhibition space, a bookstore, classrooms for adults and neighborhood school kids, and lecture programs featuring Nobel Prize-winning physicists and other notables.

Yellin calls it a “museum of process.” You can walk through the structure and see different kinds of people doing their art, or just hanging out. The first time I went, a few months ago, a band was playing, hundreds of intimidatingly hip young people — part model, part geek — were talking, looking at sculpture or playing with their kids in the lush gardens off to the side. It was like a modern version of Andy Warhol’s Factory, with microbrews, web designers, quantum mechanics and consilience.

Yellin did this outside the system. He came to New York, completely ignorant of the canon of art history. The city was his education. He’d meet someone at a bar who’d recommend Dostoyevsky’s “The Idiot.” Elsewhere he picked up Joseph Cornell and Hieronymus Bosch, who are influential in his work.

Yellin started experimenting with layers of resin and found he could draw in three dimensions. Worried that the resin was too toxic, he switched to glass. He takes up to 50 sheets of glass, up to six feet high, and stacks them together. Between the sheets he inserts hundreds of little pictures, drawings and images clipped out of magazines, art books and the like — Inca masks, soldiers, pictures of old machines.

The effect is a colorful, complex, three-dimensional landscape of the unconscious, what the critic Kenneth Goldsmith called a “pop-up utopia.” The works are instantly beautiful and absorbingly complicated.

Most fascinating about Yellin is his style of community-building. He’s a product of the highly distracted Internet age. During the day he bounces between his studio and the Pioneer Works Center next door, multitasking among sculptures, planning a lecture series or helping edit the magazine. He says he’s a problematic boyfriend because he’s there till midnight. His studio is a physical manifestation of his mental thrill-seeking and pluralistic attention — there are literally thousands of little images of everything under the sun. “I don’t worry about inspiration as much as system overload,” he says.

And yet he has brought everything into some sort of cohesion. His sculptures often have the coherent shape of the human figure, but viewers can examine a different part of the figure and then move in any direction to create their own sequence of meanings.

Pioneer Works is a social sculpture that works the same way. It is a cohesive physical community but informal and pluralistic. It is not siloed along disciplinary lines like a university. On the contrary, artists, scientists and writers are jammed together, encouraged to borrow one another’s methodologies in pursuit of a project that is both individual and common — finding the hidden order of things.

Yellin’s community seeks to be an interdisciplinary Jane Jacobs ballet: hundreds of bodies in different fields going about their own business interminglingly. I wouldn’t want it to replace the university (the danger of dilettantism is real), but the creative pyrotechnics are inspiring.

The only question is whether Yellin will be able to enjoy what he’s built. He’s created a new institution and brought his life to a coherent point — hard things to do in a scattered era. But he can’t sit still long enough to have patient conversations with the geniuses he’s gathered. He’s racing off to the next thrill, a creator too restless to fully savor his living creation.


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