Blow and Krugman

In “The End of American Idealism” Mr. Blow says social injustice, income inequality and perpetual warfare eat away at the national spirit.  Prof. Krugman, in “When Fallacies Collide,” says two Republicans offer dueling nonsense on trade and jobs.  Here’s Mr. Blow:

Sometimes it’s hard to shake the uneasy feeling that we are witnessing the dissolution of an idea that was once America.

The country is still a military superpower and an economic and innovation powerhouse, but so many of our institutions are proving to be either fundamentally flawed or deeply broken.

This thought kept creeping into my mind as I watched Thursday’s Republican presidential debate in Detroit. It seemed to me the zenith of a carnival of absurdity, as the candidates descended into what appeared to be a penis measuring contest.

I kept thinking with dread, “One of these men might actually be the next president” — either the demagogue from New York, the political arsonist from Texas or the empty suit from Florida. (I see no path for the governor from Ohio.)

In another political season, liberals might greet such a prospect with glee. But this is not that season.

On the Democratic side, the leading candidate is a hawkish political shape shifter, too cozy with big money, whose use of a private email server has led to an F.B.I. investigation, and who most Americans don’t trust.

(Around two-thirds of Americans don’t trust either party’s front-runner.)

Her lone opponent is a self-described democratic socialist who seeks to cram sweeping generational changes — hinged on massive systemic disruptions and significant tax hikes — into a presidential term. And he says that he will be able to do this with the help of a political revolution, one that has yet to materialize at the polls.

One of these people will be the next president of the United States.

And this is the country of which they will take the helm:

We are a country stuck in perpetual warfare that is now confronting the threat of the Islamic State terrorist group. The Republican candidates have proposed the most outlandish approaches to that threat, including everything from war crimes such as torture and killing terror suspects’ families to carpet bombing in the Middle East until we can see whether “sand can glow in the dark.”

Our government is broken. We have a legislative branch that increasingly sees its role as resistance rather than action. There is an opening on the Supreme Court that Republican leaders in the Senate, in a breathtaking and unprecedented move, are saying they won’t let this duly elected president fill.

The appointment may fall to the next president.

But that same Supreme Court has ruled that money is speech, swinging the door wide open to allow to the ultrawealthy to have nearly unlimited influence on the electoral process.

No wonder a 2014 study found that America has effectively transformed into an oligarchy instead of a democracy.

And yet, that is an idea that most Americans are pathologically incapable of processing. We suffer from a blithe glacialism, occasionally cursing the winds that carry our demise, but mostly hoping against hope and pretending that evidence of things seen and felt is either faulty or fleeting. It is not.

We have millions of undocumented immigrants in this country, but comprehensive immigration reform remains a thing we bicker about but never move on.

Our infrastructure is in shambles, but in a country where the bridges are crumbling, Republican candidates are obsessed about building a border wall. The city of Flint was poisoned as officials sought to pinch pennies.

Global warming continues unabated, most likely intensifying the severity of extreme weather — from droughts to hurricanes to blizzards — and yet last month the Supreme Court temporarily blocked the Obama administration’s rules to limit greenhouse gas emissions from power plants.

Our educational system, from pre-K to college, serves the wealthy relatively well, but leaves far too many without access, underprepared or drowning in debt.

We are plagued by gun violence and mass shootings and yet no one is moving forward on meaningful solutions.

America’s middle class is shrinking. According to a December Pew Research Center report: “Fully 49 percent of U.S. aggregate income went to upper-income households in 2014, up from 29 percent in 1970. The share accruing to middle-income households was 43 percent in 2014, down substantially from 62 percent in 1970.

Our criminal justice system has made a mockery of the concept of equal justice with its racially skewed pattern of mass incarceration. Not only is the United States “the world’s leader in incarceration with 2.2 million people currently in the nation’s prisons or jails — a 500 percent increase over the past thirty years,” according to the Sentencing Project, but the group also points out:

“More than 60 percent of the people in prison are now racial and ethnic minorities. For black males in their thirties, 1 in every 10 is in prison or jail on any given day. These trends have been intensified by the disproportionate impact of the ‘war on drugs,’ in which two-thirds of all persons in prison for drug offenses are people of color.”

The list of woe is a mile long.

There is palpable discontent in this country among those who feel left out and left behind in the bounty of America’s prosperity.

How long can the center hold? How long can the illusion be sustained? How long before we start to call this the post-American idealism era?

Now here’s Prof. Krugman:

The formal debates among the Republicans who would be president have exceeded all expectations. Even the most hardened cynics couldn’t have imagined that the candidates would sink so low, and stay so focused on personal insults. Yet last week, offstage, there was in effect a real debate about economic policy between Donald Trump and Mitt Romney, who is trying to block his nomination.

Unfortunately, both men are talking nonsense. Are you surprised?

The starting point for this debate is Mr. Trump’s deviation from free-market orthodoxy on international trade. Attacks on immigrants are still the central theme of the Republican front-runner’s campaign, but he has opened a second front on trade deficits, which he asserts are being caused by the currency manipulation of other countries, especially China. This manipulation, he says, is “robbing Americans of billions of dollars of capital and millions of jobs.”

His solution is “countervailing duties” — basically tariffs — similar to those we routinely impose when foreign countries are found to be subsidizing exports in violation of trade agreements.

Mr. Romney claims to be aghast. In his stop-Trump speech last week he warned that if The Donald became president America would “sink into prolonged recession.” Why? The only specific reason he gave was that those duties would “instigate a trade war and that would raise prices for consumers, kill our export jobs and lead entrepreneurs and businesses of all stripes to flee America.”

This is pretty funny if you remember anything about the 2012 campaign. Back then, in accepting Mr. Trump’s endorsement, Mr. Romney praised the businessman (who was already a well-known “birther”) as someone with an “extraordinary ability to understand how our economy works.” But wait, it gets better: at the time, Mr. Romney was saying almost exactly the same things Mr. Trump is saying now. He promised to — you guessed it — declare China a currency manipulator, while attacking President Obama for failing to do so. And he brushed off concerns about starting a trade war, declaring that one was already underway: “It’s a silent one, and they’re winning.”

More important than Mr. Romney’s awkward history here, however, is the fact that his economic analysis is all wrong. Protectionism can do real harm, making economies less efficient and reducing long-run growth. But it doesn’t cause recessions.

Why not? Doesn’t a trade war reduce employment in export industries? Yes, and it also increases employment in industries that compete with imports. In fact, a worldwide trade war would, by definition, reduce imports by exactly the same amount that it reduces exports. There’s no reason to assume that the net effect on employment would be strongly negative.

But didn’t protectionism cause the Great Depression? No, it didn’t —protectionism was a result of the Depression, not its cause. By the way, if you want an example of a policy that really did have a lot to do with the Great Depression’s spread, that would be the gold standard — which Ted Cruz wants to restore.

So Mr. Romney is talking nonsense. But so is Mr. Trump.

Five years ago the Trump complaint that Chinese currency manipulation was costing U.S. jobs had some validity — in fact, serious economists weremaking the same point. But these days China is in big trouble, and is trying to keep the value of its currency up, not down: foreign exchange reserves are plunging in the face of huge capital flight, to the tune of a trillion dollars over the past year.

Nor is China alone. All around the world, capital is fleeing troubled economies — including, by the way, the euro area, which these days tends to run bigger trade surpluses than China. And much of that flight capital is heading for the United States, pushing up the dollar and making our industries less competitive. It’s a real problem; U.S. economic fundamentals are fairly strong, but we risk, in effect, importing economic weakness from the rest of the world. But it’s not a problem we can address by lashing out at foreigners we falsely imagine are winning at our expense.

What can we do to fight imported economic weakness? That’s a big subject, but one thing is for sure: given the pressures from abroad, and the worrying strength of the dollar, the Federal Reserve really, really needs to hold off on raising interest rates. Did I mention that Mr. Trump wants to see rates rise? Not only that, but he’s a full-on conspiracy theorist, declaring that Janet Yellen, the Fed’s chairperson, is keeping interest rates down as a favor to President Obama, who “wants to be out playing golf a year from now.”

So there you have it. The good news is that there was a real policy debate going on within the G.O.P. last week. The bad news is that it was junk economics on both sides.


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