Krugman, solo

July 3, 2015

In “Europe’s Many Economic Disasters” Prof. Krugman tells us that economic failure extends far beyond Greece.  Here he is:

It’s depressing thinking about Greece these days, so let’s talk about something else, O.K.? Let’s talk, for starters, about Finland, which couldn’t be more different from that corrupt, irresponsible country to the south. Finland is a model European citizen; it has honest government, sound finances and a solid credit rating, which lets it borrow money at incredibly low interest rates.

It’s also in the eighth year of a slump that has cut real gross domestic product per capita by 10 percent and shows no sign of ending. In fact, if it weren’t for the nightmare in southern Europe, the troubles facing the Finnish economy might well be seen as an epic disaster.

And Finland isn’t alone. It’s part of an arc of economic decline that extends across northern Europe through Denmark — which isn’t on the euro, but is managing its money as if it were — to the Netherlands. All of these countries are, by the way, doing much worse than France, whose economy gets terrible press from journalists who hate its strong social safety net, but it has actually held up better than almost every other European nation except Germany.

And what about southern Europe outside Greece? European officials have been hyping the recovery in Spain, which did everything it was supposed to do and whose economy has finally started to grow again and even to create jobs. But success, European-style, means an unemployment rate that is still almost 23 percent and real income per capita that is still down 7 percent from its pre-crisis level. Portugal has also obediently implemented harsh austerity — and is 6 percent poorer than it used to be.

Why are there so many economic disasters in Europe? Actually, what’s striking at this point is how much the origin stories of European crises differ. Yes, the Greek government borrowed too much. But the Spanish government didn’t — Spain’s story is all about private lending and a housing bubble. And Finland’s story doesn’t involve debt at all. It is, instead, about weak demand for forest products, still a major national export, and the stumbles of Finnish manufacturing, in particular of its erstwhile national champion Nokia.

What all of these economies have in common, however, is that by joining the eurozone they put themselves into an economic straitjacket. Finland had a very severe economic crisis at the end of the 1980s — much worse, at the beginning, than what it’s going through now. But it was able to engineer a fairly quick recovery in large part by sharply devaluing its currency, making its exports more competitive. This time, unfortunately, it had no currency to devalue. And the same goes for Europe’s other trouble spots.

Does this mean that creating the euro was a mistake? Well, yes. But that’s not the same as saying that it should be eliminated now that it exists. The urgent thing now is to loosen that straitjacket. This would involve action on multiple fronts, from a unified system of bank guarantees to a willingness to offer debt relief for countries where debt is the problem. It would also involve creating a more favorable overall environment for countries trying to adjust to bad luck by renouncing excessive austerity and doing everything possible to raise Europe’s underlying inflation rate — currently below 1 percent — at least back up to the official target of 2 percent.

But there are many European officials and politicians who are opposed to anything and everything that might make the euro workable, who still believe that all would be well if everyone exhibited sufficient discipline. And that’s why there is even more at stake in Sunday’s Greek referendum than most observers realize.

One of the great risks if the Greek public votes yes — that is, votes to accept the demands of the creditors, and hence repudiates the Greek government’s position and probably brings the government down — is that it will empower and encourage the architects of European failure. The creditors will have demonstrated their strength, their ability to humiliate anyone who challenges demands for austerity without end. And they will continue to claim that imposing mass unemployment is the only responsible course of action.

What if Greece votes no? This will lead to scary, unknown terrain. Greece might well leave the euro, which would be hugely disruptive in the short run. But it will also offer Greece itself a chance for real recovery. And it will serve as a salutary shock to the complacency of Europe’s elites.

Or to put it a bit differently, it’s reasonable to fear the consequences of a “no” vote, because nobody knows what would come next. But you should be even more afraid of the consequences of a “yes,” because in that case we do know what comes next — more austerity, more disasters and eventually a crisis much worse than anything we’ve seen so far.

Krugman’s blog, 7/1/15

July 2, 2015

There was one post yesterday, “Geographical Notes on Puerto Rico:”

Greece isn’t the only debt crisis boiling over right now; there’s also Puerto Rico, which I was aware was brewing but wasn’t tracking carefully. I’ll probably have a fair bit to say about the PR crisis once I get back from my current trip, but meanwhile a few notes.

Clearly, Puerto Rico’s troubles run much deeper than government debt, and there has been a lot of discussion about its underlying economic weakness. However, not much of the discussion seems to ask what seems to me to be an obvious question: what, exactly, should an economy in Puerto Rico’s position be doing?

Puerto Rico does, of course, have warm winters and beaches. But so do a number of places, and it’s a much bigger and more populous place than its neighbors – with a much smaller ratio of coastline to area or population – and is hence not as well-placed to have a tourism-centered economy. Indeed, it has historically grown largely as a center for manufacturing, especially in pharma, encouraged by special tax breaks.

But why manufacture there? There are various ways to develop a competitive advantage in manufacturing. You can have a unique skill base, like much of Germany; you can have very low wages, like a number of emerging Asian economies; or you can have a logistical advantage due to being close to major markets, like a fair bit of what remains of US manufacturing or, these days, the export belt in northern Mexico.

Puerto Rico, however, has none of these. It doesn’t have a special skill complex. Its wages are low by mainland standards, but not that low (and as I’ll argue in a moment, can’t go that low). And while it’s close to the mainland as the crow flies, it’s fairly slow and expensive to ship things in and out. In a fundamental sense, it’s not that easy to see why there should be a sizable economy on that island in that location.

Now, you might argue that this is just an argument for big wage cuts. But Puerto Rico is part of the United States, and its residents are US citizens. This tends to put a floor under wages, in several ways. The New York Fed [http://www.newyorkfed.org/outreach-and-education/puerto-rico/2014/report-main.html] emphasizes the effects of the federal minimum wage and relatively generous federal safety-net programs (given low productivity) that may cause people to choose exit from the work force in the face of low wages. But even without that, the relative ease of emigration would tend to support wages.

Put it this way: if a region of the United States turns out to be a relatively bad location for production, we don’t expect the population to maintain itself by competing via ultra-low wages; we expect working-age residents to leave for more favorable places. That’s what you see in poor mainland states like West Virginia, which actually looks a fair bit like Puerto Rico in terms of low labor force participation, albeit not quite so much so. (Mississippi and Alabama also have low participation.)

And outmigration need not be such a terrible thing. There is much discussion of what’s wrong with Puerto Rico, but maybe we should, at least some of the time, just think of Puerto Rico as an ordinary region of the U.S.; at any given time, we expect some regions to be in relative and maybe even absolute decline, as the winds of technology and global trade shift. I wonder, in particular, whether Puerto Rico is suffering from the forces that seem to be leading to a general shortening of logistical chains and the “reshoring” of manufacturing to advanced economies.

Now, this can lead to problems of governance. Puerto Rico benefits a lot from federal programs, but it does have to pay for a lot of stuff itself, and emigration of workers undermines revenue while leaving many of the costs of serving the remaining population, notably the elderly, unchanged.

But I’d argue for paying a lot of attention to the non-specific forces affecting the island, and in particular the economic geography side. Puerto Rico may to an important extent just suffer from being a slightly hard to reach island in a time when corporations place a high premium on easy, just-in-time shipments.

Kristof and Collins

July 2, 2015

In “A Toddler’s Death in a Foxhole” Mr. Kristof says as long as the world allows Sudan’s savagery, civilians will die.  Ms. Collins has a “Fourth of July Quiz” and says Happy upcoming Independence Day! Let’s celebrate with a presidential primary quiz.  Here’s Mr. Kristof, who is in the Nuba Mountains, Sudan:

It’s not clear whether the Sudanese Air Force was trying to bomb the village of grass huts, or the girlshigh school next to it.

Hamida Osman, 23, simply knew that a Sukhoi fighter jet was roaring toward her village. She grabbed her only child, Safarina, 2, and jumped into the foxhole that the family had built for those frequent occasions when Sudan decides to bomb its people.

Inside the foxhole, Hamida used her own body to try to shield her daughter. They heard the sound of bombs whistling downward, and then there were two enormous explosions.

The next thing Hamida knew, she was covered with blood and had shrapnel wounds to her arms and legs. She looked down. A piece of shrapnel had taken away much of Safarina’s head.

Another day, another dead civilian. President Omar Hassan al-Bashir of Sudan, having committed crimes against humanity in South Sudan and Darfur, is now waging them with equal impunity in the Nuba Mountains in the far south of the country, and major nations are once more reacting mostly with indifference. With President Obama headed to East Africashortly, let’s hope he raises these atrocities and pushes for humanitarian access to the Nuba Mountains.

Limping from her injuries, Hamida showed me where the bombs had struck beside her now-incinerated hut.

“I don’t know what they’re trying to hit,” she said, “but they’re always dropping bombs on homes here.”

Sudan is deliberately bombing civilians and girls schools as part of its brutal counterinsurgency campaign against tens of thousands of armed rebels in the Nuba Mountains. The aim seems to be to terrorize the population and depopulate the area.

To keep out aid and eyewitnesses, Sudan bars visits by aid workers, diplomats and journalists. I slipped in through rebel lines without a visa, as I did on my three previous visits to the Nuba Mountains.

In the village of Endeh, schoolchildren gave me an impromptu lesson in the sounds I should listen for: the whoom-whoom of an Antonov bomber, the roar of a Sukhoi fighter, and the warbling of a bomb as it falls through the air. It was eerie: One moment they giggled as they mimicked the sounds, and the next moment they described how a bombing at their school had killed a teacher and three students.

The village rebuilt the school near caves used as shelter during bombings. When the children showed me the caves, I noticed a freshly shed snake skin, from a spitting cobra. The villagers gently explained to me that cobras are, on balance, less terrifying than bombs.

The bombs have fallen in Nuba for four years and they accelerated early this year. Nuba Reports, a monitoring organization, counted 1,764 bombs dropped between December and February, more than ever before in a three-month period.

This isn’t exactly the same as Sudan’s slaughter in Darfur, for that has involved militias burning villages. Here in the Nuba Mountains, the rebels keep out militias, so Sudan kills from the air with bombs, artillery shells and cluster munitions. President Bashir also blockades the area to keep out all food, medicine and supplies. Sudan even bombs trucks carrying food, and its denial of food and medicine probably kills more civilians than the bombings do directly.

The blockade of medicine is particularly infuriating. Only 5 to 10 percent of children in rebel-held areas get vaccinated, and one of the biggest measles outbreaks in Africa last year occurred in the Nuba Mountains.

Unicef and Gavi, the Vaccine Alliance, are reluctant to send in vaccines for fear of antagonizing the Sudanese government and losing access in other parts of Sudan. So parents see their children dying not only from shelling but also from measles.

Let’s demand humanitarian access — and if it is not granted, aid agencies should send in medicine anyway. It’s unconscionable to let children die because of diplomatic protocol.

There are precedents. In the late 1980s, Sudan similarly blocked aid to rebel-held areas in the south, and the Reagan and first Bush administrations worked with Unicef to start Operation Lifeline Sudan, sending in aid directly to needy areas. Today we need a new Operation Lifeline.

To his credit, President Obama has quietly provided food to the Nuba Mountains, thus averting starvation. It’s a model of what could also be done with medicine. But Obama overall has been weaker than the four previous presidents in standing up to Sudan.

As for Safarina’s killing, it’s unclear whether Sudan was aiming for her village or the girls school. It speaks volumes that Sudan regularly targets both villagers and schoolgirls.

It’s a brutal way to live, and in the case of children like Safarina, to die. And as long as world leaders and aid agencies acquiesce and Sudan pays no price for its savagery, nothing will change.

Now here’s Ms. Collins:

Happy upcoming Independence Day! Let’s celebrate with a presidential primary quiz.

1       Gov. Chris Christie of New Jersey is the latest Republican candidate for president. His slogan is:

  • “Telling it like it is.”
  • “Yelling it like it is.”
  • “Time for some traffic problems in Fort Lee.”
  • “I don’t need any stupid slogan. You got a problem with that?”

2       Gov. Bobby Jindal of Louisiana, the second latest Republican to announce he’s a presidential candidate:

  • Is known in New Orleans as “Les Bon Temps Bobby.”
  • Said he once participated in an exorcism.
  • Gave a thrilling Republican response to the State of the Union speech.
  • Is less popular in Louisiana than anybody but Barack Obama.

3       Jeb Bush told a gathering of wealthy Manhattan financiers that his most influential adviser on the Middle East was:

  • His brother George.
  • His brother Marvin.
  • The billionaire casino magnate Sheldon Adelson.
  • “A wealthy Manhattan financier I just had a great talk with in this very room.”

4       In one of her emails as secretary of state, Hillary Clinton:

  • Misspelled “Benghazi.”
  • Urged John Podesta to wear socks to bed.
  • Debated whether her playlist should include something from the Marvelettes.
  • Tutored an aide on how to use a fax.

5       Which of the following statements about Mike Huckabee is NOT true?

  • Hosted an infomercial promoting a cinnamon-heavy “Diabetes Solution Kit.”
  • Has trouble relating to people who don’t “order fried green tomatoes for an appetizer.”
  • Wrote a strange essay about rape and bondage 40 years ago, which he describes as a precursor to “Fifty Shades of Grey.”
  • Enjoyed frying squirrels in a popcorn popper as a college student

6       Senator Rand Paul of Kentucky:

  • Loves squirrels.
  • Once attempted to equate abortion rights to government support for low-flush toilets.
  • Is the son of guitar legend Les Paul.
  • Decorated his office like a scene from “Downton Abbey.”

7       Senator Ted Cruz of Texas once:

  • Put together a group of advisers who described early childhood education as a “Godless environment.”
  • Tweeted a picture of himself posing with what looked like a rug made from an endangered species.
  • Demanded the return of deep-fried foods to school cafeterias. (“It’s not about French fries; it’s about freedom.”)
  • Called for special supervision of S. military exercises this summer because of concerns that the soldiers might take over and confiscate everyone’s guns.

8       Rick Perry has a campaign theme song that goes: “Rick Perry supporter …

  • “… I love law and order.”
  • “… Let’s protect our border.”
  • “… Can you spare a quarter?”
  • “… Take your hands off my daughter.”

9       Gov. Scott Walker of Wisconsin:

  • Delivered his college valedictorian speech on women’s rights.
  • Got an across-the-board endorsement from the cast of “Duck Dynasty.”
  • Responded to a child’s question about global warming by saying that he is a former boy scout who “always thought maybe campsites should be cleaner.”
  • Responded to a child’s question about global warming by complaining about “gotcha” inquiries.

10     Which Democrat used part of the presidential announcement speech to call for adoption of the metric system?

  • Hillary Clinton
  • Bernie Sanders
  • Martin O’Malley
  • Lincoln Chafee

11     One candidate for president seemed sure that the mass murder of nine black people in a historic black church was an attack on religion. (“…What other rationale could there be?”) That was:

  • Carly Fiorina.
  • Ben Carson.
  • Rick Santorum.
  • Marco Rubio.

12     Donald Trump:

  • Showed his support for the American worker by having his line of ties manufactured in Kansas.
  • Has signed up to host a repackaged quiz show called “Who Wants to Be a Thousandaire?”
  • Is vowing to “Do for America what I did for Atlantic City.”
  • Says he has a secret plan to defeat ISIS but doesn’t “want the enemy to know what I’m doing.”

13     The first presidential primary debate, featuring the top 10 Republicans, will be in Ohio in August. It’s already causing controversy because:

  • Fox News, the broadcaster, wants to raise ratings by requiring the candidates to answer questions while suspended over the Grand Canyon.
  • The governor of Ohio might not make the cut.
  • Rand Paul has called for a more millennial-friendly “Twitter-off.”
  • Jeb Bush is insisting that all of his male relatives be permitted to pass him notes.

 

 

 

Now here’s the answer key, using A through D since she used bullets:

 

1A, 2B, 3A, 4B, 5C, 6B, 7B, 8B, 9C, 10D, 11C, 12D, 13B

Friedman and Bruni

July 1, 2015

In “A Good Bad Deal?” The Moustache of Wisdom says it’s too late for a great accord on limiting Iran’s nuclear program, but maybe not a worthwhile one.  Mr. Bruni, in “The Sunny Side of Greed,” asks are corporations as soulless and evil? He says not on the Confederate flag, same-sex marriage and a host of other recent issues.  Here’s TMOW:

Sometime after the 1973 war, I remember seeing a cartoon that showed President Anwar el-Sadat lying flat on his back in a boxing ring. The Israeli prime minister, Golda Meir, wearing boxing gloves, was standing over him, with Sadat saying to Meir something like, “I want the trophy, I want the prize money, I want the belt.”

I’ve been thinking of that cartoon a lot lately as I listen to Iran’s supreme leader, Ayatollah Ali Khamenei, lecturing the United States and its five great power partners on his terms for concluding a deal that would restrict Iran’s ability to develop a nuclear weapon for 10 to 15 years in return for lifting sanctions. But in that draft deal Khamenei has managed to preserve Iran’s basic nuclear infrastructure, albeit curbed, and has continually insisted that Iran will not allow international inspections of military sites suspected of harboring covert nuclear programs.

It’s still not clear if the last remaining obstacles to a deal will be resolved. But it is stunning to me how well the Iranians, sitting alone on their side of the table, have played a weak hand against the United States, Russia, China, France, Germany and Britain on their side of the table. When the time comes, I’m hiring Ali Khamenei to sell my house.

You’d never know that “Iran is the one hemorrhaging hundreds of billions of dollars due to sanctions, tens of billions because of fallen oil prices and billions sustaining the Assad regime in Syria,” said Karim Sadjadpour, an Iran expert at the Carnegie Endowment. And “it’s Ali Khamenei, not John Kerry, who presides over a population desperate to see sanctions relief.” Yet, for the past year every time there is a sticking point — like whether Iran should have to ship its enriched uranium out of the country or account for its previous nuclear bomb-making activities — it keeps feeling as if it’s always our side looking to accommodate Iran’s needs. I wish we had walked out just once. When you signal to the guy on the other side of the table that you’re not willing to either blow him up or blow him off — to get up and walk away — you reduce yourself to just an equal and get the best bad deal nonviolence can buy.

Diplomatic negotiations in the end always reflect the balance of power, notes the Johns Hopkins University foreign policy specialist Michael Mandelbaum, writing in The American Interest. “In the current negotiations … the United States is far stronger than Iran, yet it is the United States that has made major concessions. After beginning the negotiations by insisting that the Tehran regime relinquish all its suspect enrichment facilities and cease all its nuclear activities relevant to making a bomb, the Obama administration has ended by permitting Iran to keep virtually all of those facilities and continue some of those activities.”

How did this happen? “Part of the explanation may lie in Barack Obama’s personal faith in the transformative power of exposure to the global economy.” But, adds Mandelbaum, “Surely the main reason … is that, while there is a vast disparity in power between the two parties, the United States is not willing to use the ultimate form of power and the Iranian leaders know this.”

Before you denounce Obama as a wimp, remember that George W. Bush had eight years to address this problem — when it was smaller — with either military force or forceful diplomacy, and he blinked for eight years.

But is it still possible to get a good bad deal — one that, while it does not require Iran to dismantle its nuclear enrichment infrastructure, shrinks that infrastructure for the next 10 to 15 years so Iran can’t make a quick breakout to a bomb? A deal that also gives us a level of transparency to monitor that agreement and gives international inspectors timely intrusive access to anywhere in Iran we suspect covert nuclear activity? One that restricts Iran from significantly upgrading its enrichment capacity over the next decade, as the bipartisan group of experts convened by the Washington Institute for Near East Policy proposed last week?

Yes. A good bad deal along such lines is still possible — and that will depend on the details now being negotiated at this 11th hour. Such a deal would enable the president to say to a skeptical Congress and Israel that he has gotten the best bad deal that an empty holster can buy, and that it has bought time for a transformation in Iran that is better than starting a war whose fallout no one can foretell.

But beware: This deal could be as big, if not bigger, an earthquake in the Middle East as the U.S. invasions of Afghanistan and Iraq. And what both had in common is that we were totally unprepared to manage the aftershocks the morning after. The Arab world today has almost no geopolitical weight. Egypt is enfeebled, Saudi Arabia lacks the capacity to project power and Iraq is no more. An Iran that is unshackled from sanctions and gets an injection of over $100 billion in cash will be even more superior in power than all of its Arab neighbors. Therefore, the U.S. needs to take the lead in initiating a modus vivendi between Sunni Arabs and Persian Shiites and curb Iran’s belligerence toward Israel. If we can’t help defuse those conflicts, a good bad deal could very easily fuel a wider regional war.

Now here’s Mr. Bruni:

In the dire prophecies of science-fiction writers and the fevered warnings of left-wing activists, big corporations will soon rule the earth — or already do.

Fine with me.

They’ve been great on the issue of the Confederate flag. Almost immediately after the fatal shooting of nine black churchgoers in Charleston, S.C., several prominent corporate leaders, including the heads of Walmart and Sears, took steps to retire the banner as a public symbol of the South; others made impassioned calls for that.

And when Nikki Haley, the South Carolina governor, said that the Confederate flag at the State House should come down, she did so knowing that Boeing and BMW, two of the state’s major employers, had her back. In fact the state’s chamber of commerce had urged her and other politicians to see the light.

Eli Lilly, American Airlines, Intel and other corporations were crucial to the defeat or amendment of proposed “religious freedom” laws in Indiana, Arkansas and Arizona over the last year and a half. Their leaders weighed in against the measures, which licensed anti-gay discrimination, and put a special kind of pressure on politicians, who had to worry about losing investment and jobs if companies with operations in their states didn’t like what the government was doing.

And if it were up to corporations, we’d have the immigration reform we sorely need. Early last year, the United States Chamber of Commerce publicized a letter that urged Congress to act on “modernizing our immigration system.” It was signed by 246 enterprises large and small, including Apple, AT&T, Caterpillar, Facebook, Goldman Sachs, Google, McDonald’s, Marriott and Microsoft.

Are these companies acting in their own interests? Absolutely. They’re trying to make sure that laws and local customs don’t prevent them from attracting and retaining the best work force. They’re burnishing their brands in a manner that they hope will endear them to customers.

But those efforts, coupled with whatever genuine altruism and civic obligation some corporate leaders feel, have produced compelling recent examples of companies showing greater sensitivity to diversity, social justice and the changing tides of public sentiment than lawmakers often manage to.

Corporations aren’t paralyzed by partisan bickering. They’re not hostage to a few big donors, a few loud interest groups or some unyielding ideology.

“They’re ultimately more responsive to a broader group of voters — customers — than politicians are,” said Bradley Tusk, whose firm, Tusk Strategies, does consulting for both private corporations and public officials.

“If you’re a politician and all you care about is staying in office, you’re worried about a small group of voters in your district who vote in the primary,” he told me, referring to members of the House of Representatives. “If you’re a corporation, you need to be much more in sync with public opinion, because you’re appealing to people across the spectrum.”

And so, he added, “Ironically, a lot of corporations have to be far more democratic than democratically elected officials.”

Newsweek observed as much in a story published this week, noting that inclusiveness “may not be good politics in this day of polarization and micro-targeting, but it seems to be good business. And that is making the business community the sort of ‘big tent’ political force that neither major political party can claim to be.”

Major financial institutions were well ahead of Barack Obama, Hillary Clinton and other Democratic politicians when it came to same-sex marriage. The leaders of these banks and hedge funds lent their voices and considerable sums of money to its legalization in New York in 2011.

And Amazon, Starbucks, Nordstrom and other companies in Washington State worked to ensure passage of a marriage-equality referendum there back in November 2012.

Under the stewardship of Howard Schultz, Starbucks alone has been a paragon of corporate munificence and social consciousness in areas ranging from higher education to race relations. Back in 2011, Schultz used his corporate pulpit to bemoan congressional sclerosis and try to exert more cooperation among Democrats and Republicans on debt reduction; he succeeded in getting more than 100 other chief executives to pledge to withhold political donations until Congress made bipartisan progress.

Between 2010 and 2014, Unilever increased the fraction of materials it got from farms with sustainable practices to roughly one-half from less than one-fifth. And the software company Infor participated in a multimillion-dollar program to provide free tickets to “Selma” for American schoolchildren.

The list goes on. And while it doesn’t erase the damage that corporations wreak on the environment or their exploitation of workers paid too little, it does force you to admit that corporations aren’t always the bad guys. Sometimes the bottom line matches the common good, and they’re the agents of what’s practical, wise and even right.

Krugman’s blog, 6/29/15

June 30, 2015

There was one post yesterday, “The Awesome Gratuitousness of the Greek Crisis:”

Barry Eichengreen asks himself why his influential analysis, suggesting that the euro was irreversible now appears wrong. Surely in a direct, mechanical sense what we’re seeing is the process I warned about five years ago:

Think of it this way: the Greek government cannot announce a policy of leaving the euro — and I’m sure it has no intention of doing that. But at this point it’s all too easy to imagine a default on debt, triggering a crisis of confidence, which forces the government to impose a banking holiday — and at that point the logic of hanging on to the common currency come hell or high water becomes a lot less compelling.

But doesn’t the ultimate cause lie in wild irresponsibility on the part of the Greek government? I’ve been looking back at the numbers, readily available from the IMF, and what strikes me is how relatively mild Greek fiscal problems looked on the eve of crisis.

In 2007, Greece had public debt of slightly more than 100 percent of GDP — high, but not out of line with levels that many countries including, for example, the UK have carried for decades and even generations at a stretch. It had a budget deficit of about 7 percent of GDP. If we think that normal times involve 2 percent growth and 2 percent inflation, a deficit of 4 percent of GDP would be consistent with a stable debt/GDP ratio; so the fiscal gap was around 3 points, not trivial but hardly something that should have been impossible to close.

Now, the IMF says that the structural deficit was much larger — but this reflects its estimate that the Greek economy was operating 10 percent above capacity, which I don’t believe for a minute. (The problem here is the way standard methods for estimating potential output cause any large slump to propagate back into a reinterpretation of history, interpreting the past as an unsustainable boom.)

So yes, Greece was overspending, but not by all that much. It was over indebted, but again not by all that much. How did this turn into a catastrophe that among other things saw debt soar to 170 percent of GDP despite savage austerity?

The euro straitjacket, plus inadequately expansionary monetary policy within the eurozone, are the obvious culprits. But that, surely, is the deep question here. If Europe as currently organized can turn medium-sized fiscal failings into this kind of nightmare, the system is fundamentally unworkable.

Solo Bobo

June 30, 2015

I defy you to get through Bobo’s offering today without, as the kidz say, LOL.  In “The Next Culture War” he actually seems to believe that social conservatives are poised to heal broken pieces of society: and that they should do so rather than continuing to fight battles that are already over.  My cats are laughing…  In the comments “Bartleby T. Scrivener” from New York, NY points out the oh-so-obvious:  “Social conservatives are well-equipped to repair a society rendered atomized, unforgiving and inhospitable? Aren’t they the ones responsible for making our society atomized, unforgiving, and inhospitable?”  Here’s Bobo.  Put your coffee down, your keyboard doesn’t need it.

Christianity is in decline in the United States. The share of Americans who describe themselves as Christians and attend church is dropping. Evangelical voters make up a smaller share of the electorate. Members of the millennial generation are detaching themselves from religious institutions in droves.

Christianity’s gravest setbacks are in the realm of values. American culture is shifting away from orthodox Christian positions on homosexuality, premarital sex, contraception, out-of-wedlock childbearing, divorce and a range of other social issues. More and more Christians feel estranged from mainstream culture. They fear they will soon be treated as social pariahs, the moral equivalent of segregationists because of their adherence to scriptural teaching on gay marriage. They fear their colleges will be decertified, their religious institutions will lose their tax-exempt status, their religious liberty will come under greater assault.

The Supreme Court’s gay marriage decision landed like some sort of culminating body blow onto this beleaguered climate. Rod Dreher, author of the truly outstanding book “How Dante Can Save Your Life,” wrote an essay in Time in which he argued that it was time for Christians to strategically retreat into their own communities, where they could keep “the light of faith burning through the surrounding cultural darkness.”

He continued: “We have to accept that we really are living in a culturally post-Christian nation. The fundamental norms Christians have long been able to depend on no longer exist.”

Most Christian commentary has opted for another strategy: fight on. Several contributors to a symposium in the journal First Things about the court’s Obergefell decision last week called the ruling the Roe v. Wade of marriage. It must be resisted and resisted again. Robert P. George, probably the most brilliant social conservative theorist in the country, argued that just as Lincoln persistently rejected the Dred Scott decision, so “we must reject and resist an egregious act of judicial usurpation.”

These conservatives are enmeshed in a decades-long culture war that has been fought over issues arising from the sexual revolution. Most of the conservative commentators I’ve read over the past few days are resolved to keep fighting that war.

I am to the left of the people I have been describing on almost all of these social issues. But I hope they regard me as a friend and admirer. And from that vantage point, I would just ask them to consider a change in course.

Consider putting aside, in the current climate, the culture war oriented around the sexual revolution.

Put aside a culture war that has alienated large parts of three generations from any consideration of religion or belief. Put aside an effort that has been a communications disaster, reducing a rich, complex and beautiful faith into a public obsession with sex. Put aside a culture war that, at least over the near term, you are destined to lose.

Consider a different culture war, one just as central to your faith and far more powerful in its persuasive witness.

We live in a society plagued by formlessness and radical flux, in which bonds, social structures and commitments are strained and frayed. Millions of kids live in stressed and fluid living arrangements. Many communities have suffered a loss of social capital. Many young people grow up in a sexual and social environment rendered barbaric because there are no common norms. Many adults hunger for meaning and goodness, but lack a spiritual vocabulary to think things through.

Social conservatives could be the people who help reweave the sinews of society. They already subscribe to a faith built on selfless love. They can serve as examples of commitment. They are equipped with a vocabulary to distinguish right from wrong, what dignifies and what demeans. They already, but in private, tithe to the poor and nurture the lonely.

The defining face of social conservatism could be this: Those are the people who go into underprivileged areas and form organizations to help nurture stable families. Those are the people who build community institutions in places where they are sparse. Those are the people who can help us think about how economic joblessness and spiritual poverty reinforce each other. Those are the people who converse with us about the transcendent in everyday life.

This culture war is more Albert Schweitzer and Dorothy Day than Jerry Falwell and Franklin Graham; more Salvation Army than Moral Majority. It’s doing purposefully in public what social conservatives already do in private.

I don’t expect social conservatives to change their positions on sex, and of course fights about the definition of marriage are meant as efforts to reweave society. But the sexual revolution will not be undone anytime soon. The more practical struggle is to repair a society rendered atomized, unforgiving and inhospitable. Social conservatives are well equipped to repair this fabric, and to serve as messengers of love, dignity, commitment, communion and grace.

As an aside, I wonder why Bobo, who is Jewish, is so terribly worried about the state of Christianity.  Except, of course, that the Talibangelicals are his brothers and sisters in spirit…

Krugman’s blog, 6/27 and 6/28/15

June 29, 2015

There was one post on Saturday, and one yesterday.  Saturday’s post was “Europe’s Moment of Truth:”

Until now, every warning about an imminent breakup of the euro has proved wrong. Governments, whatever they said during the election, give in to the demands of the troika; meanwhile, the ECB steps in to calm the markets. This process has held the currency together, but it has also perpetuated deeply destructive austerity — don’t let a few quarters of modest growth in some debtors obscure the immense cost of five years of mass unemployment.

As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.

It seems to me that the troika — I think it’s time to stop the pretense that anything changed, and go back to the old name — expected, or at least hoped, that Greece would be a repeat of this story. Either Tsipras would do the usual thing, abandoning much of his coalition and probably being forced into alliance with the center-right, or the Syriza government would fall. And it might yet happen.

But at least as of right now Tsipras seems unwilling to fall on his sword. Instead, faced with a troika ultimatum, he has scheduled a referendum on whether to accept. This is leading to much hand-wringing and declarations that he’s being irresponsible, but he is, in fact, doing the right thing, for two reasons.

First, if it wins the referendum, the Greek government will be empowered by democratic legitimacy, which still, I think, matters in Europe. (And if it doesn’t, we need to know that, too.)

Second, until now Syriza has been in an awkward place politically, with voters both furious at ever-greater demands for austerity and unwilling to leave the euro. It has always been hard to see how these desires could be reconciled; it’s even harder now. The referendum will, in effect, ask voters to choose their priority, and give Tsipras a mandate to do what he must if the troika pushes it all the way.

If you ask me, it has been an act of monstrous folly on the part of the creditor governments and institutions to push it to this point. But they have, and I can’t at all blame Tsipras for turning to the voters, instead of turning on them.

Yesterday’s post was “Grisis:”

OK, this is real: Greek banks closed, capital controls imposed. Grexit isn’t a hard stretch from here — the much feared mother of all bank runs has already happened, which means that the cost-benefit analysis starting from here is much more favorable to euro exit than it ever was before.

Clearly, though, some decisions now have to wait on the referendum.

I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone — me included — the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that? Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not. But even so, devaluation couldn’t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places. Greece is not that different.

Second, the political implications of a yes vote would be deeply troubling. The troika clearly did a reverse Corleone — they made Tsipras an offer he can’t accept, and presumably did this knowingly. So the ultimatum was, in effect, a move to replace the Greek government. And even if you don’t like Syriza, that has to be disturbing for anyone who believes in European ideals.

A strange logistical note: I’m on semi-vacation this week, doing a bicycle trip in an undisclosed location. It’s only a semi-vacation because I didn’t negotiate any days off the column; I’ll be in tomorrow’s paper (hmm, I wonder what the subject is) and have worked the logistics so as to make Friday’s column doable too. I was planning to do little if any blogging, and will in any case do less than I might have otherwise given the events.

Blow and Krugman

June 29, 2015

In “My Murdered Cousin Had a Name” Mr. Blow tells us that for people who were both black and gay, obstacles were everywhere in years past.  In “Greece Over the Brink” Prof. Krugman says ever-harsher austerity has been a dead end, and those who demand more of it have been wrong every step of the way.  Here’s Mr. Blow:

Friday, for me, was a bit surreal. As America was celebrating the victory of marriage equality at the Supreme Court, it was also mourning black people in South Carolina murdered by a white supremacist.

All the while I thought about a cousin of mine who was murdered years ago. We grew up in the same segregated Louisiana hamlet of about a thousand people. Everyone said that he was gay (only they used pejoratives in place of that word) because of the way he carried himself and the fact that he didn’t date women or marry one.

However, he never addressed his sexuality in my presence. It was not a thing that in that time and place one proclaimed. Small, rural communities like ours maintained their own, unwritten Don’t Ask, Don’t Tell protocols. He simply lived by his own terms.

And yet, my cousin’s difference became more evident to me when he started to stop by the small upholstery shop down the street where one of my brothers was an apprentice and where I sometimes visited.

As I wrote in my memoir, “Fire Shut Up in My Bones”:

“Lawrence felt at ease coming to the shop and saying things there that he didn’t say elsewhere, the air always pregnant with a ‘maybe.’ Maybe he was flirting. Maybe not. If he went too far, maybe that would be okay. Maybe he was being mocked. Maybe he was being entertaining. Maybe, just maybe. He knew the things he was saying were dangerous, because just being himself was dangerous. He was operating outside the rules.”

Others like Lawrence hid more or lived in repression more.

“But not Lawrence. He wouldn’t pretend. He wouldn’t hide.”

In the book I called him Lawrence, but that was not his name. One of my mother’s only requests was that I change everyone’s names. She was expressly worried about publishing “Lawrence’s” name. I acquiesced.

You see, more than a decade after I remember him coming to the upholstery shop, he was found murdered — tied to a bed — in a neighboring town. The gossip was that his life had been taken because of the way he had lived it. To my knowledge, no one was ever charged with that murder. Such were the dangers of being both black and different.

In a 1984 interview, when my cousin and I both still lived in that small town, James Baldwin was asked about the roots of homophobia. He responded: “Terror, I suppose. Terror of the flesh.”

But when living black gayness, or any similar otherness, in America, that terror of flesh is doubled. You are on the margins of the margin.

For, you see, even in gayness, blackness is set apart. As Baldwin put it:

“A black gay person who is a sexual conundrum to society is already, long before the question of sexuality comes into it, menaced and marked because he’s black or she’s black. The sexual question comes after the question of color; it’s simply one more aspect of the danger in which all black people live.”

Baldwin concluded:

“The gay world as such is no more prepared to accept black people than anywhere else in society.”

My cousin’s life and death underscored this duality for me:

“Five years after Lawrence was tied to the bed and killed, Matthew Shepard, a young, white, openly gay man, was tied to a fence and killed in a small Wyoming city. While Lawrence’s death hardly made the local papers, Matthew’s provoked an international outcry. That discrepancy would haunt me.”

My cousin’s name was Larry, and he was kind and beautiful and brave and worthy. That name, more than ever, deserves to be written, spoken, celebrated, not because he was famous or because he lived a remarkable life. It deserves to be spoken because he did not. His anonymity gives his name all the more power, because he could have been anyone.

Larry lived a kind of amplified erasure: black and nonhetero-normative. And, he lived it as boldly as he could at a time when it was dangerous to do so and in a place where there was little support or protection.

I wish that Larry had survived to see a time when the country was fighting to affirm both parts of his identity, fighting to acknowledge that his black life mattered and his love life mattered. I wish he had lived to see more people come to understand the intersectionality of oppression — that racism and homophobia are born of the same beast.

I wish he could have lived to proudly proclaim his difference and have his halves reconciled.

I wish he had lived to see the day that society — and indeed the law — didn’t attempt to diminish a person’s dignity based on how they articulated the parameters of their attraction or lived the reality of their intimacy.

I wish he had lived to see a black president eulogize a black man killed and also advocate for the full and rich lives that L.G.B.T.Q. people live. I wish Larry had lived to see Friday.

Now here’s Prof. Krugman:

It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic.

But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start payingpensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

Greece should vote “no,” and the Greek government should be ready, if necessary, to leave the euro.

To understand why I say this, you need to realize that most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently. But Greece, without its own currency, didn’t have that option.

So have I just made the case for “Grexit” — Greek exit from the euro? Not necessarily. The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts. That’s why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed. All it asked for was, in effect, a standstill on further austerity.

But the troika was having none of it. It’s easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years.

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

But they shouldn’t, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done.

Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.

So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

Bruni and Collins

June 27, 2015

In “Our Weddings, Our Worth” Mr. Bruni says the Supreme Court didn’t rule just for marriage equality. It ruled for dignity and joyous lives.  Ms. Collins, in “Supremes Hit a High Note,” says in only a few days, the justices had laudable rulings on gay marriage, national health care and the Fair Housing Act.  Here’s Mr. Bruni:

How will the Supreme Court’s ruling on same-sex marriage alter the way Americans feel about the country, and how we feel about ourselves?

I can’t speak for everyone. But I can speak for this one 12-year-old boy.

He stands out among his siblings because he lacks their optimism about things, even their quickness to smile. He has a darkness that they don’t. He’s a worrier, a brooder. He’s also more self-conscious. He can’t get comfortable with himself.

And while this may be his wiring, it may also be something else. He has noticed that his heart beats faster not for girls but for other boys, and the sensation is as lonely and terrifying as it is intense.

He doesn’t know what to do about it. He’s sure he’ll be reviled for it, because he hears all of the bigoted jokes that people aren’t necessarily aware that they’re telling, all of the cruel asides that they don’t always realize that they’re muttering. He craves some assurance that he’ll be spared their disdain and disgust. But the world hasn’t given him any.

I can speak for a 16-year-old boy. He has a word for what he is — “gay” or “homosexual” or something worse, depending on who’s talking — but he doesn’t have answers for what that’s going to mean. At the mall one afternoon, he surreptitiously breaks away from his friends and steals into a bookstore. He’s looking for something to quiet the fear inside him.

He finds an examination of “being gay in America” that’s called “Alienated Affections.” The phrase rattles him. It sounds like a diagnosis or sinister prophecy. To understand it better, he riffles hurriedly through the pages, glancing over his shoulder repeatedly to make sure that no one’s watching, listening carefully for any approaching steps.

His nerve doesn’t last long; he manages to take in only a reference to drag queens, an explanation of bondage, an exploration of homoeroticism among prisoners.

These are his options? Feathers, chains or the chain gang?

The title of one chapter in particular catches his eye: “Beyond Gay or Gloomy: The Ordinary Miseries of Everyday Life.” Gloomy? Miseries?

He’s not sure he has the stomach for this, or the strength.

He closes the book, along with a bit of his heart.

I can speak for a 20-year-old college student. He has opened up to his family and to many friends about who he is, not because he possesses any particular courage but because being honest involves less strain, less effort, than keeping secrets and dreading their exposure. Also because he wants to meet men like him, develop crushes he can act on, even fall in love.

And so far, there’s been no terrible price. His family doesn’t wholly understand him, but they want and resolve to. For every friend who now keeps a distance, there’s another who draws closer.

He’s overwhelmed with relief.

But he wishes there were a way to be honest without wearing a tag, without being put in a category, without one adjective preceding all others when people describe him. Their tendency do so is a constant reminder that he’s not “normal.”

So are the laws of his land. It’s illegal in many places for two men or two women to have sex. It’s legal in most places for them to be fired because of who and how they love. Even the language in public discussions sends an ugly signal. People are congratulated for their “tolerance” of gays and lesbians.

He is someone to be tolerated.

And he is always having to explain, to one inquisitive person after another, that he didn’t choose this path, that it’s not a statement or a caprice, that he neither rues nor relishes it, that it’s just there: fundamental, foundational, forever. The ritual grinds him down.

I can speak for a 30-year-old man who owns and lives in a house in the suburbs with another man his age. They’re romantic partners. A couple. A white picket fence surrounds the yard behind their red brick colonial. It keeps the German shepherd from straying off.

But this fantasy has been edited, abridged. The man and his partner have never spoken of children, because that would involve special, intricate arrangements and because most people don’t really approve.

They have never hugged in the front yard, never kissed in front of a window, because what would the neighbors think? What would the neighbors do?

And while he thinks of these as minor adjustments, to the extent that he thinks of them at all, there’s a toll to such vigilance. It’s that old self-consciousness in a new form. And there’s a longing beneath it — to be appraised solely on the expanse and the limits of his talents, on the goodness he musters and the goodness he lacks. To be deemed and regarded as the equal of anybody else.

I can speak for a 45-year-old man who marvels gratefully at the changes all around him. Although he himself doesn’t plan to have kids — he has too little energy at this point, and is too set in his ways — he sees many gay and lesbian couples starting families. If they live in the right places, they pretty much blend in.

But there are still wrong places, and there’s still plenty of oxygen for religious extremists who brand people like him wretched, evil, godless. In some countries, these extremists do more than brand. They kill, and it’s a horrific thing to know and to see. In the man’s country, the extremists don’t go that far, and they’re increasingly a minority, but they’re undaunted, unabashed and too often indulged.

He wonders when he’ll see more cracks in that indulgence. It’s time.

In 2015, on the last Friday of a month fittingly associated with both weddings and gay pride, there’s something bigger than a crack. There’s a rupture.

Following a few extraordinary years during which one state after another legalized same-sex marriage, the Supreme Court rules that all states must do so, that the Constitution demands it, that it’s a matter of “equal dignity in the eyes of the law,” as Justice Anthony Kennedy writes.

I can speak for a 50-year-old man who expected this to happen but still can’t quite believe it, because it seemed impossible when he was young, because it seemed implausible even when he was a bit older, and because everything is different now, or will be.

Tomorrow’s 12-year-old won’t feel the foreboding that yesterday’s did. Tomorrow’s 16-year-old will be less likely to confront, sort through and reject so many sad stereotypes of what it means to be gay or lesbian.

There won’t be so many apologies and explanations for the 20-year-old, 30-year-old or 45-year-old, and there won’t be such a ready acceptance of limits. There won’t be the same limits, period.

And that’s because the Supreme Court’s decision wasn’t simply about weddings. It was about worth. From the highest of this nation’s perches, in the most authoritative of this nation’s voices, a majority of justices told a minority of Americans that they’re normal and that they belong — fully, joyously and with cake.

Now that I’ve stopped sniffling here’s Ms. Collins:

Wow, Supreme Court — what a week.

“The Supreme Court just upheld Obamacare yet again,” said Jeb Bush in a fund-raising shout-out. “This is the direct result of President Obama. He deliberately forced Obamacare on the American people in a partisan and toxic way.”

Whoever actually wrote Bush’s email did a brilliant job since it, a) manages to blame Barack Obama for a Supreme Court dominated by Republican appointees, and b) does sort of sound like the way Jeb Bush talks.

The ever-growing throng of Republican candidates for president were all in a fury over the Obamacare decision, but they divided a bit on gay marriage. Bush took the more moderate road, which involved trying to sound sad and then change the subject.

Once again, former Arkansas Gov. Mike Huckabee led the field in howling, demanding that the people “resist and reject judicial tyranny, not retreat.” Once again we will contemplate the fact that Huckabee used to be known as the tenderhearted Republican.

Donald Trump blamed Jeb Bush for the court’s gay rights decision, which is even more creative than Jeb Bush blaming Barack Obama for the one on health care. I believe Trump’s early line of reasoning goes like this: Jeb Bush as Florida governor helped get his brother the presidency during the Bush-Gore recounts; George Bush then nominated John Roberts to head the Supreme Court, and even though Roberts was on the dissenting side of the gay marriage decision, still.

Or it could have been something completely different. Really, it’s beside the point. Forget I ever brought it up.

“The only alternative left for the American people is to support an amendment to the U.S. Constitution to reaffirm the ability of the states to continue to define marriage,” said Wisconsin Gov. Scott Walker. There were a lot of calls for a constitutional amendment, which will happen at approximately the same time hell freezes over. The last time the nation managed to rally together and change the Constitution was in 1992, when the people looked deep into their hearts and decided to join hands and prohibit a Congress from raising its own salary.

The Roberts Supreme Court is on a roll. Gay marriage, national health care and a surprising vote of support for the Fair Housing Act, all in a couple of days. Great job, guys! We are totally over the fact that you destroyed the nation’s campaign finance laws, limited workers’ rights to challenge wage discrimination and women’s rights to control their bodies. And basically disemboweled a 50-year-old Voting Rights Act that Congress had renewed by increasingly large margins on four different occasions.

Stop. Trying to be nothing but positive today.

Everybody will remember this week for the gay marriage decision, but let’s talk about the Obamacare ruling. The court decided — in what opponents decried as a wild leap of judgment — that it was not going to strip millions of people of their health coverage and upend one of the most important pieces of legislation in modern history because of a four-word drafting error.

The Affordable Care Act has now been upheld twice by the Supreme Court. The American people, for their part, voted in 2008 to elect a president who promised to create a national right to health insurance coverage, and voted in 2012 to re-elect him over a candidate who promised to undo it.

After all that, not to mention about 60 failed attempts to repeal the act in Congress, Obamacare, for the first time, looks safe. “This is reality,” the president said on Thursday.

Ever since Theodore Roosevelt, our decision makers have pushed for a national health insurance program. Stuff always happened. Back in the 1970s, Representative Wilbur Mills, the super-powerful chairman of the Ways and Means Committee, thought he had President Gerald Ford “convinced on national health.” But Mills failed to get the bill out of committee due, he said much later, to the fact that he was drinking a half gallon of vodka a day and had hallucinations about buzzards chasing him.

Anyone who watched the disaster that health care created for the Clinton administration might have had reason to dodge the subject for another century. But Obama pushed the bill through, even when a great many members of his party were begging him to drop the whole thing and do something easier, about jobs or taxes, that would get more traction in the next election.

Also, give some credit to Nancy Pelosi. When things looked bleakest — after Ted Kennedy had died, and Republicans won his seat — Democrats started to backtrack, but Pelosi stood firm. “We’ll go through the gate. If the gate’s closed, we’ll go over the fence. If the fence is too high, we’ll pole vault in,” she said. “If that doesn’t work, we’ll parachute in. But we’re going to get health care reform passed for the American people.”

And darned if they didn’t.

Ahh, the taste of wingnut tears…  Delicious!  Even better with a side of toasted schadenfreude.

Krugman’s blog, 6/25/15

June 26, 2015

There were three posts yesterday.  The first was “Breaking Greece:”

I’ve been staying fairly quiet on Greece, not wanting to shout Grexit in a crowded theater. But given reports from the negotiations in Brussels, something must be said — namely, what do the creditors, and in particular the IMF, think they’re doing?

This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises. And the Greek government has agreed to what are actually fairly high surplus targets, especially given the fact that the budget would be inhuge primary surplus if the economy weren’t so depressed. But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy.

The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity.

Talk to IMF people and they will go on about the impossibility of dealing with Syriza, their annoyance at the grandstanding, and so on. But we’re not in high school here. And right now it’s the creditors, much more than the Greeks, who keep moving the goalposts. So what is happening? Is the goal to break Syriza? Is it to force Greece into a presumably disastrous default, to encourage the others?

At this point it’s time to stop talking about “Graccident”; if Grexit happens it will be because the creditors, or at least the IMF, wanted it to happen.

Yesterday’s second post was “Regicide Relief:”

Update: Just to put this out there, and let my 60s roots show: Hey, hey, ACA, how many lives did you save today?

King (v Burwell) is dead, 6-3. Whew. I’ve been tuned in toSCOTUSblog, sort of watching out of the corner of my eye — and it’s too early for a drink! The invaluable Charles Gaba seems to be having his own reaction:

No, you haven’t — reminding everyone of the incredible harm from a bad ruling surely played some role in the good news.

Importantly, the court didn’t even allow wiggle room for a future Tea Party president to decide to cut off the money.

A very big day.

The last post yesterday was “The Court and the Three Legged Stool:”

Still on a high over the Supreme Court ruling. One especially gratifying and praiseworthy feature of the majority opinion was that it explicitly invoked the logic of health reform to justify the “interpretive jiggery-pokery” (can this be made into a dance step?) that so infuriated Scalia. From the opinion:

The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner. Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation, but those requirements only work when combined with the coverage requirement and tax credits. It thus stands to reason that Congress meant for those provisions to apply in every State as well.

Yes! The Court (minus the three stooges) understood that the ACA is designed to work via the “three-legged stool” of guaranteed issue and community rating, the individual mandate, and subsidies. All three elements are needed to make it work, which is why it was obvious to anyone who paid any attention that the lawsuit was nonsense.

The thing is, a lot of people on the right have never grasped this logic, either because all they need to know is that Obamacare is eevil big government, or because of the Upton Sinclair principle of finding it difficult to understand something when your salary depends on your not understanding it. But the court majority did the basic policy analysis, which gratifies my inner wonk as well as my outer health reformer.


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