Archive for the ‘Another inspiration from Applebee’s salad bar’ Category

Brooks, Cohen and Krugman

March 6, 2015

In “The Temptation of Hillary” Bobo gurgles that the shift on the left from human capital progressivism to redistributionist progressivism is potent, damaging and based on a misinterpretation of the data.  (He REALLY should take the time to read Krugman…)  In the comments “Reality Based” from “flyover country” summed it up pretty succinctly:  “Oh, yes, another Republican attack on “redistribution”, from the party that has been redistributing wealth and income ruthlessly upward since Reagan. … Stay out of economics, David. You have no idea what you are talking about.”  In “Netanyahu’s Iran Thing” Mr. Cohen says the prime minister’s obsessive Iran demonization runs on hyperbole and selective history.  Prof. Krugman says “Pepperoni Turns Partisan,” and points out that the politics of Big Pizza resemble those of Big Coal or Big Tobacco and tell you a lot about what is happening to American governance in general.  Here’s Bobo:

Hillary Clinton’s record is more moderate than the Democratic primary voter today. So it was always likely that she would move left as the primary season approached. It’s now becoming clearer how she might do it. She might make a shift from what you might call human capital progressivism to redistributionist progressivism.

For many years, Democratic efforts to reduce inequality and lift middle-class wages were based on the theory that the key is to improve the skills of workers. Expand early education. Make college cheaper. Invest in worker training. Above all, increase the productivity of workers so they can compete.

But a growing number of populist progressives have been arguing that inequality is not mainly about education levels. They argue that trying to lift wages by improving skills is an “evasion.” It’s “whistling past the graveyard.”

The real problem, some of them say, is concentrated political power. The oligarchs have rigged the game so that workers get squeezed. Others say the problem is stagnation. It’s not that workers don’t have skills; the private economy isn’t generating jobs. Or it’s about corporate power. Without stronger unions shareholders reap all the gains.

People in this camp point out that inflation-adjusted wages for college grads have been flat for the past 14 years. Education apparently hasn’t lifted wages. The implication? Don’t focus on education for the bottom 99 percent. Focus on spreading wealth from the top. Don’t put human capital first. Put redistribution first.

Over the past few months a stream of Democratic thinkers and politicians, including natural Clinton allies, have moved from the human capital emphasis to the redistributionist emphasis. (It’s a matter of emphasis, not strictly either/or.) For Clinton herself, the appeal is obvious. The redistributionist agenda allows her to hit Wall Street and C.E.O.’s — all the targets that have become progressive bêtes noires.

Unfortunately, this rising theory is wrong on substance and damaging in its effects.

It is true that wages for college grads have been flat this century, and that is troubling. But this is not true of people with post-college degrees, who are doing nicely. Moreover, as Lawrence Katz of Harvard points out, the argument that college doesn’t pay is partly a product of a short-time horizon. Since 2000, the real incomes of the top 1 percent have declined slightly. If you limited your view to just those years, you’d conclude that there is no inequality problem, which is clearly not true.

On an individual level, getting more skills is the single best thing you can do to improve your wages. The economic rewards to education are at historic highs. Americans with a four-year college degree make 98 percent more per hour than people without one. The median college-educated worker will make half-a-million dollars more than a high-school-educated worker over a career after accounting for college costs. Research by Raj Chetty of Harvard and others suggests that having a really good teacher for only one year raises a child’s cumulative lifetime income by $80,000.

“What I find destructive,” says David Autor of the Massachusetts Institute of Technology, “is the message that if you don’t get into the top 1 percent then you’re out of the game. That’s deeply, deeply incorrect.”

Autor’s own research shows that skills differences are four times more important than concentration of wealth in driving inequality. If we could magically confiscate and redistribute the above-average income gains that have gone to the top 1 percent since 1979, that would produce $7,000 more per household per year for the bottom 99 percent. But if we could close the gap so that high-school-educated people had the skills of college-educated people, that would increase household income by $28,000 per year.

Focusing on human capital is not whistling past the graveyard. Worker productivity is the main arena. No redistributionist measure will have the same long-term effect as good early-childhood education and better community colleges, or increasing the share of men capable of joining the labor force.

The redistributionists seem to believe that modern capitalism is fundamentally broken. That growth has permanently stagnated. That productivity should no longer be the focus because it doesn’t lead to shared prosperity.

But their view is biased by temporary evidence from the recession. Right now, jobs are being created, wages are showing signs of life. Those who get more skills earn more money. Today’s economy has challenges, but the traditional rules still apply. Increasing worker productivity is the key. Increasing incentives to risk and invest is essential. Shifting people into low-productivity government jobs is not the answer.

It’s clear why Clinton might want to talk redistribution. On substantive policy grounds, it would be destructive to do so. And, in the general election, voters respond to the uplifting and the unifying, not the combative and divisive.

Again, Bobo, go read some Krugman.  You might learn something.  Here’s Mr. Cohen:

Let’s begin with Benjamin Netanyahu’s Iran logic. He portrays a rampaging Islamic Republic that “now dominates four Arab capitals, Baghdad, Damascus, Beirut and Sana,” a nation “gobbling” other countries on a “march of conquest, subjugation and terror.” Then, in the same speech, he describes Iran as “a very vulnerable regime” on the brink of folding.

Well, which is it?

The Israeli prime minister dismisses a possible nuclear accord, its details still unclear, as “a very bad deal” that “paves Iran’s path to the bomb.” He says just maintain the pressure and, as if by magic, “a much better deal” will materialize (thereby showing immense condescension toward the ministers of the six major powers who have been working on a doable deal that ring-fences Iran’s nuclear capacity so that it is compatible only with civilian use). Yet Netanyahu knows the first thing that will happen if talks collapse is that Russia and China will undermine the solidarity behind effective Iran sanctions.

So, where is the leverage to secure that “much better deal”?

Netanyahu lambastes the notion of a nuclear deal lasting 10 years (President Obama has suggested this is a minimum). He portrays that decade as a period in which, inevitably, Iran’s “voracious appetite for aggression grows with each passing year.” He thereby dismisses the more plausible notion that greater economic contact with the world and the gradual emergence of a young generation of Iranians drawn to the West — as well as the inevitable dimming of the ardor of Iran’s revolution — will attenuate such aggression.

With similar sleight of hand, he dances over the fact that military action — the solution implicit in Netanyahu’s demands for Iranian nuclear capitulation — would likely set back the Iranian program by a couple of years at most, while guaranteeing that Iran races for a bomb in the aftermath.

What better assures Israel’s security, a decade of strict limitation and inspection of Iran’s nuclear program that prevents it making a bomb, or a war that delays the program a couple of years, locks in the most radical factions in Tehran, and intensifies Middle Eastern violence? It’s a no-brainer.

No wonder Representative Nancy Pelosi, the Democratic Party’s House Leader, saw Netanyahu’s speech to Congress as an “insult to the intelligence of the United States.” Netanyahu’s “profound obligation” to speak of the Iranian threat to the Jewish people proved to be a glib opportunity for fear-mongering and evasion above all.

Netanyahu’s credibility is low. In 1993, in an Op-Ed article in The Times headlined “Peace in Our Time?” he compared the late Yitzhak Rabin to Chamberlain for the Oslo Accords. Rabin’s widow never forgave him. For more than a decade now, he has said Iran was on the brink of a bomb and threatened Israeli military action — and hoped his hyperbole would be forgotten. He called the 2013 interim agreement with Iran a “historic mistake”; the accord has proved a historic achievement that reversed Iran’s nuclear momentum.

Invoking Munich and appeasement is, it seems, Netanyahu’s flip reaction to any attempt at Middle Eastern diplomacy. Here, once again, before the Congress, was the by-now familiar analogy drawn between Iran and the Nazis. Its implication, of course, is that Obama, like the great Rabin, is some latter-day Chamberlain.

The kindest thing that can be said of Netanyahu’s attempt to equate Iran with the medieval barbarians of Islamic State, and to dismiss the fact that Iranian help today furthers America’s strategic priority of defeating those knife-wielding slayers, is that it was an implausible stretch. Of course Netanyahu mentioned the Persian viceroy Haman, who plotted to destroy the Jews, but not Cyrus of Persia, who ended the Babylonian exile of the Jews. The prime minister’s obsessive Iran demonization runs on selective history.

The Islamic Republic is repressive. It is hostile to Israel, underwrites Hezbollah and has sponsored terrorism. Its human rights record is abject. The regime is wedded to anti-Americanism (unlike the 80 million people of Iran, many of whom are drawn to America). But the most important diplomacy is conducted with enemies. Given Iran’s mastery of the nuclear fuel cycle, there is no better outcome for Israel and the world than the successful conclusion of the tough deal sought by Obama; one involving the intensive verification over an extended period of a much-reduced enrichment program that assures that Iran is kept at least one year away from any potential “breakout” to bomb manufacture.

One word did not appear in Netanyahu’s speech: Palestine. The statelessness of the Palestinians is the real long-term threat to Israel as a Jewish and democratic state. Iran has often been a cleverly manipulated distraction from this fact.

Among foreign leaders, nobody has been invited to address Congress more often than Netanyahu. He now stands equal at the top of the table along with Winston Churchill. Behind Netanyahu trail Nelson Mandela and Yitzhak Rabin. That’s a pretty devastating commentary on the state of contemporary American political culture and the very notion of leadership.

Discuss that with Orange John…  Now here’s Prof. Krugman:

If you want to know what a political party really stands for, follow the money. Pundits and the public are often deceived; remember when George W. Bush was a moderate, and Chris Christie a reasonable guy who could reach out to Democrats? Major donors, however, generally have a very good idea of what they are buying, so tracking their spending tells you a lot.

So what do contributions in the last election cycle say? The Democrats are, not too surprisingly, the party of Big Labor (or what’s left of it) and Big Law: unions and lawyers are the most pro-Democratic major interest groups. Republicans are the party of Big Energy and Big Food: they dominate contributions from extractive industries and agribusiness. And they are, in particular, the party of Big Pizza.

No, really. A recent Bloomberg report noted that major pizza companies have become intensely, aggressively partisan. Pizza Hut gives a remarkable 99 percent of its money to Republicans. Other industry players serve Democrats a somewhat larger slice of the pie (sorry, couldn’t help myself), but, over all, the politics of pizza these days resemble those of, say, coal or tobacco. And pizza partisanship tells you a lot about what is happening to American politics as a whole.

Why should pizza, of all things, be a divisive issue? The immediate answer is that it has been caught up in the nutrition wars. America’s body politic has gotten a lot heavier over the past half-century, and, while there is dispute about the causes, an unhealthy diet — fast food in particular — is surely a prime suspect. As Bloomberg notes, some parts of the food industry have responded to pressure from government agencies and food activists by trying to offer healthier options, but the pizza sector has chosen instead to take a stand for the right to add extra cheese.

The rhetoric of this fight is familiar. The pizza lobby portrays itself as the defender of personal choice and personal responsibility. It’s up to the consumer, so the argument goes, to decide what he or she wants to eat, and we don’t need a nanny state telling us what to do.

It’s an argument many people find persuasive, but it doesn’t hold up too well once you look at what’s actually at stake in the pizza disputes. Nobody is proposing a ban on pizza, or indeed any limitation on what informed adults should be allowed to eat. Instead, the fights involve things like labeling requirements — giving consumers the information to make informed choices — and the nutritional content of school lunches, that is, food decisions that aren’t made by responsible adults but are instead made on behalf of children.

Beyond that, anyone who has struggled with weight issues — which means, surely, the majority of American adults — knows that this is a domain where the easy rhetoric of “free to choose” rings hollow. Even if you know very well that you will soon regret that extra slice, it’s extremely hard to act on that knowledge. Nutrition, where increased choice can be a bad thing, because it all too often leads to bad choices despite the best of intentions, is one of those areas — like smoking — where there’s a lot to be said for a nanny state.

Oh, and diet isn’t purely a personal choice, either; obesity imposes large costs on the economy as a whole.

But you shouldn’t expect such arguments to gain much traction. For one thing, free-market fundamentalists don’t want to hear about qualifications to their doctrine. Also, with big corporations involved, the Upton Sinclair principle applies: It’s difficult to get a man to understand something when his salary depends on his not understanding it. And beyond all that, it turns out that nutritional partisanship taps into deeper cultural issues.

At one level, there is a clear correlation between lifestyles and partisan orientation: heavier states tend to vote Republican, and the G.O.P. lean is especially pronounced in what the Centers for Disease Control and Prevention call the “diabetes belt” of counties, mostly in the South, that suffer most from that particular health problem. Not coincidentally, officials from that region have led the pushback against efforts to make school lunches healthier.

At a still deeper level, health experts may say that we need to change how we eat, pointing to scientific evidence, but the Republican base doesn’t much like experts, science, or evidence. Debates about nutrition policy bring out a kind of venomous anger — much of it now directed at Michelle Obama, who has been championing school lunch reforms — that is all too familiar if you’ve been following the debate over climate change.

Pizza partisanship, then, sounds like a joke, but it isn’t. It is, instead, a case study in the toxic mix of big money, blind ideology, and popular prejudices that is making America ever less governable.

Mass market pizza sucks.  All of it.  If you’re not eating pizza from a local shop, made to order, you’re eating crap.

Brooks, Cohen and Nocera

March 3, 2015

In “Leaving and Cleaving” Bobo gurgles that instant communications technology has changed the nature of parting: a new level of self-discipline and sacrifice is required for a graceful split.  In the comments “Mary Askew” from Springfield, MA had this to say:  “David Brooks may know people who stalk and harass ex-lovers, friends, mentors. I don’t. And, I haven’t heard those issues discussed among my friends.  If he thinks about it, Brooks will drop the “We all know….” formula. It is, at best, a lazy rationalization for this column.”  Mr. Cohen, in “The Vast Realm of ‘If’,” says hypothetically speaking, one life is not enough. There is not enough time for all of our dreams.  In “How Warren Buffet Does It” Mr. Nocera tells us about going from “cigar butt” investing to the greatest conglomerate ever in 50 years.  Here’s Bobo:

So much of life is about leave-taking: moving from home to college, from love to love, from city to city and from life stage to life stage.

In earlier times, leaving was defined by distance, but now it is defined by silence. Everybody everywhere is just a text away, a phone call away. Relationships are often defined by the frequency and intensity of communication between two people.

The person moving on and changing a relationship no longer makes a one-time choice to physically go to another town. He makes a series of minute-by-minute decisions to not text, to not email or call, to turn intense communication into sporadic conversation or no communication. His name was once constant on his friend’s phone screen, but now it is rare and the void is a wound.

If you are like me you know a lot of relationships in which people haven’t managed this sort of transition well. Communication that was once honest and life-enhancing has become perverted — after a transition — by resentment, neediness or narcissism.

We all know men and women who stalk ex-lovers online; people who bombard a friend with emails even though that friendship has evidently cooled; mentors who resent their former protégés when their emails are no longer instantly returned; people who post faux glam pictures on Instagram so they can “win the breakup” against their ex.

Instant communication creates a new sort of challenge. How do you gracefully change your communication patterns when one person legitimately wants to step back or is entering another life phase?

The paradox is that the person doing the leaving controls the situation, but greater heroism is demanded of the one being left behind. The person left in the vapor trail is hurt and probably craves contact. It’s amazing how much pain there is when what was once intimate conversation turns into unnaturally casual banter, emotional distance or just a void.

The person left behind also probably thinks that the leaver is making a big mistake. She probably thinks that it’s stupid to leave or change the bond; that the other person is driven by selfishness, shortsightedness or popularity.

Yet if the whole transition is going to be managed with any dignity, the person being left has to swallow the pain and accept the decision.

The person being left has to grant the leaver the dignity of her own mind, has to respect her ability to make her own choices about how to live and whom to be close to (except in the most highly unusual circumstances). The person being left has to suppress vindictive flashes of resentment and be motivated by a steady wish for the other person’s ultimate good. Without accepting the idea that she deserved to be left, the person being left has to act in a way worthy of her best nature, to continue the sacrificial love that the leaver may not deserve and may never learn about.

That means not calling when you are not wanted. Not pleading for more intimacy or doing the other embarrassing things that wine, late nights and instant communications make possible.

Maybe that will mean the permanent end to what once was, in which case at least the one left behind has lost with grace. But maybe it will mean rebirth.

For example, to be around college students these days is to observe how many parents have failed to successfully start their child’s transition into adulthood.

The mistakes usually begin early in adolescence. The parents don’t create a space where the child can establish independence. They don’t create a context in which the child can be honest about what’s actually happening in his life. The child is forced to deceive in order to both lead a semi-independent life and also maintain parental love.

By college, both sides are to be pitied. By hanging on too tight, the parents have created exactly the separation they sought to avoid. The student, meanwhile, does not know if he is worthy of being treated as a dignified adult because his parents haven’t treated him that way. They are heading for a life of miscommunication.

But if the parents lay down sacrificially, accept the relationship their child defines, then it can reboot on an adult-to-adult basis. The hiddenness and deception is no longer necessary. Texts and emails can flow, not as before, but fluidly and sweetly.

Communications technology encourages us to express whatever is on our minds in that instant. It makes self-restraint harder. But sometimes healthy relationships require self-restraint and self-quieting, deference and respect (at the exact moments when those things are hardest to muster). So today a new kind of heroism is required. Feelings are hurt and angry words are at the ready. But they are held back. You can’t know the future, but at least you can walk into it as your best and highest self.

I wonder if Bobo is busy cyber-stalking his ex-wife, since he seems so sure that we ALL know someone who does that…  Here’s Mr. Cohen:

What happens only just happens; then inevitability is conferred upon it. Between the lived and the not-quite-lived lies the little word “if.” It’s a two-letter invitation to the vast realm of the hypothetical, the counterfactual, and all the various paths not taken over the course of a life.

When I lived in Brazil in the 1980s I would run along the beach from Leblon to Ipanema and back. After the workout, I’d always pay a couple of cents for coconut water. I liked to watch the way the beach-shack dude cupped the coconut in one hand and then, with three or four languorous but unerring swipes of his machete, opened up the top. He’d insert a straw. The iced water was always perfect.

I’d count his fingers. The blade never slipped. There were always 10.

Of course, if I’d thought of putting the coconut water in a bottle 30 years ago, marketing its health benefits, and selling it worldwide, I would not be writing this column today. It was too simple to think of that.

When I lived in Rome, before Brazil, I liked to watch the barmen ratcheting ground coffee into a receptacle, tapping the grains down, twisting the container into a socket, placing cups on a metal ledge-cum-filter beneath the coffee-yielding spouts, pouring milk with the requested dose of foam, and placing the various coffees on the counter. The quicksilver movements seemed all part of a single pirouette.

My then wife and I would travel from Rome to the Midwest, where she is from, and remark on the fact that it was near impossible to get a good coffee. She liked the idea of opening a coffee shop in the Twin Cities that would serve coffee as good as we’d become accustomed to drinking in Italy. Perhaps we could even grow the business across the United States!

Of course, if we’d done that in 1983, coffee aficionados might be speaking of St. Paul today the way they speak of Seattle. We’d be visiting our coffee shops in Chengdu and Glasgow. But it was too simple to do that.

Before Rome, when I lived in Brussels, I’d watch the chocolatiers down near the Grand Place apply their tongs (most useful and underrated of culinary implements!) to the cocoa-dusted truffles and place them, one by one, in small white boxes until the chocolates were arrayed in many-layered order, one temptation nestling against another.

It would have been easy enough, in 1980, to make those chocolates more widely available, and it did occur to me that they should be, but of course I did nothing about the thought. If I had, who knows?

When I was in Afghanistan in 1973, before all the trouble started, or rather at the moment the trouble started with the overthrow of the king, I should have brought back all those Afghan rugs, and perhaps picked up a few in Iran (in that one could drive across the country then without any problem or mention of nukes); and certainly I should have hung onto our VW Kombi called Pigpen, after the keyboardist of the Grateful Dead who died that year, but I did not imagine then what a vehicle like that, adorned with Afghan paintings, might go for on eBay today, or how the VW bus would one day be prized from Hay-on-Wye to Haight-Ashbury. I don’t even recall where in England I left Pigpen to die.

Hypothetically speaking, we need countless lives. There is not enough time. Or so it may seem. In the next one I will be a baker or a jeweler or a winemaker. I will make things. I will stay in one place.

Absent what might have been, I went on writing. In “The Debt to Pleasure,” the English novelist John Lanchester has this to say about my profession: “‘Your precipitate social decline cannot fail to alarm your well-wishers,’ I told my brother. ‘You started as a painter, then you became a sculptor, now you’re basically a sort of gardener. What next, Barry? Street-cleaner? Lavatory attendant? Journalism?”’

That is a little harsh on what happened in the absence of what might have.

There is beauty in our dreams of change, our constant what ifs. Days begin in the realm of solemn undertakings — to eat less, to exercise more, to work harder, or to go gentler. They end with wobbles into compromise, or collapses into indulgence, with the perennial solace of the prospect of another day. The good-intentions dinner, a salad with a couple of slivers of chicken, turns into a Burrito with cheese and avocado and salsa and chicken. That’s human.

It’s an illusion to think it would have been simple to change. We live lives that reflect our natures. Memory grows, a refuge, a solace, a repository so vast that what happened and what almost did begin to blur.

And now we get to Mr. Nocera:

Fifty years ago, a young investor named Warren Buffett took control of a failing textile company, Berkshire Hathaway. “I found myself … invested in a terrible business about which I knew very little,” Buffett relates in his annual letter to shareholders, which was released over the weekend. “I became the dog who caught the car.”

Buffett describes his approach in those days as “cigar butt” investing; buying shares of troubled companies with underpriced stocks was “like picking up a discarded cigar butt that had one puff remaining in it,” he writes. “Though the stub might be ugly and soggy, the puff would be free.” He continues: “Most of my gains in those early years … came from investments in mediocre companies that traded at bargain prices.”

But that approach had limits. It took Charlie Munger, the Los Angeles lawyer who has been his longtime sidekick, to show him that there was another way to win at the investing game: “Forget what you know about buying fair businesses at wonderful prices,” Munger told him. “Instead, buy wonderful businesses at fair prices.” Which is what Buffett’s been doing ever since.

He has done it in two ways. First — and this is what he is renowned for — he has bought stock in some of the great American companies of our time, stock that he has held not just for years, but for decades. Second, he has turned Berkshire Hathaway into a true conglomerate, which owns not just stocks but entire companies. Although Berkshire’s front office employs only 25 people, its companies have, in total, some 340,500 employees.

How successful has the Buffett-Munger approach been? In the 50 years since Buffett took over Berkshire, its stock has appreciated by 1,826,163 percent. That is an astounding number.

You would think, given Buffett’s success, that more people would try to emulate his approach to investing. It is not as if he hasn’t tried to explain how he does it. Every year, you can find a Buffett tutorial in his annual letter that the rest of us would do well to absorb — and practice.

In the current letter, for instance, he makes the case — which has been made many times before — that a diversified portfolio of stocks “that are bought over time and that are owned in a manner invoking only token fees and commissions” are less risky over the long term than other investment vehicles that are tied to the dollar. Clearly, that’s been his approach. He then goes on to bemoan the fact that too many investors — both little guys and investment professionals — do things that add risk: “Active trading, attempts to ‘time’ market movements, inadequate diversification, the payment of high and unnecessary fees … and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy.”

Another thing about Buffett is that he has never gotten caught up in fads. He only buys businesses that he understands and can predict where the business will be in a decade. He teaches this point in the current letter with a discussion of the conglomerates that sprung up in the 1960s and became the hot stocks of the moment. Jimmy Ling, who ran one such company, LTV, used to say that he looked for acquisitions where “2 plus 2 equals 5.”

LTV, as conceived by Ling, of course, ceased to exist decades ago (though the company would go through several transformations and bankruptcy court before shuttering its last vestige in 2002). “Never forget that 2 + 2 will always equal 4,” writes Buffett. “And when someone tells you how old-fashioned that math is — zip up your wallet, take a vacation and come back in a few years to buy stocks at cheap prices.”

If it’s really this simple, why don’t more people try to invest like Buffett? One reason, I think, is that sound investing — buying when others are selling, holding for the long term, avoiding the hot stocks — requires a stronger stomach than most people have. When a stock is plummeting, it takes a certain strength to buy even more instead of selling in a panic. Most of us lack the temperament required for smart investing. The fundamental equanimity required to be a great investor is a rare thing.

The second reason is that investing the Warren Buffett way is a lot more complicated than he makes it sound. Can you predict where a business will be in 10 years? Of course not. But he can — and does.

In a few months, the faithful will flock to Omaha to attend Berkshire’s annual meeting — “Woodstock for capitalists,” Buffett likes to call it. For six hours, Buffett and Munger will be on stage, before some 40,000 people, cracking wise, while making their investment decisions sound like simplicity itself.

But, in coming to pay their annual homage, the throngs will not be acknowledging the simplicity of Buffett’s approach, but the genius behind it.

Brooks and Krugman

February 20, 2015

Bobo has now decided that he’s the go-to expert on Islamic extremism.  He tells us that alienated young men will continue to be drawn to violent extremism unless and until we provide a compelling heroic alternative.  “Karen Garcia” from New Paltz, NY begins her comment with this:  “The only extremism we have to fear is that of the predatory ideologues who decided it would be a great idea to plunder and nation-build in Iraq and other middle Eastern regions. These same ideologues continue to roam free and grow rich, attaching themselves like leeches to such corrupt pols as Scott Walker and Jeb Bush. They want to keep the endless wars going, start new ones, and ensure that the most extreme wealth inequality in modern times continues.”  In “Cranking Up for 2016″ Prof. Krugman tells us that as any ambitious Republican must do, the early contenders in the presidential race are courting the charlatan caucus.  Here’s Bobo:

The struggle against Islamic extremism has been crippled by a failure of historical awareness and cultural understanding. From the very beginning, we have treated the problem of terrorism through the prism of our own assumptions and our own values. We have solipsistically assumed that people turn to extremism because they can’t get what we want, and fail to realize that they don’t want what we want, but want something they think is higher.

The latest example of this is the speech President Obama gave at this week’s Summit on Countering Violent Extremism. It was a bad speech, but its badness is no reflection on President Obama, for it was the same sort of bad speech that all American presidents have been giving for the past generation.

Religious extremism exists on three levels. It grows out of economic and political dysfunction. It is fueled by perverted spiritual ardor. It is organized by theological conviction. American presidents focus almost exclusively on the economic and political level because that’s what polite people in Western capitals are comfortable talking about.

At the summit meeting, President Obama gave the conventional materialistic explanation for what turns people into terrorists. Terrorism spreads, he argued, where people lack economic opportunity and good schools. The way to fight terror, he concluded, is with better job-training programs, more shared wealth, more open political regimes, and a general message of tolerance and pluralism.

In short, the president took his secular domestic agenda and projected it as a way to prevent young men from joining ISIS and chopping off heads.

But people don’t join ISIS, or the Islamic State, because they want better jobs with more benefits. ISIS is one of a long line of anti-Enlightenment movements, led by people who have contempt for the sort of materialistic, bourgeois goals that dominate our politics. These people don’t care if their earthly standard of living improves by a few percent a year. They’re disgusted by the pleasures we value, the pluralism we prize and the emphasis on happiness in this world, which we take as public life’s ultimate end.

They’re not doing it because they are sexually repressed. They are doing it because they think it will ennoble their souls and purify creation.

On Thursday, Mona El-Naggar of The Times profiled a young Egyptian man, named Islam Yaken, who grew up in a private school but ended up fighting for the Islamic State and kneeling proudly by a beheaded corpse in Syria.

He was marginalized by society. He seems to have rejected the whole calculus of what we call self-interest for the sake of an electrifying apocalyptic worldview and what he imagines to be some illimitable heroic destiny.

People who live according to the pure code of honor are not governed by the profit motive; they are governed by the thymotic urge, the quest for recognition. They seek the sort of glory that can be won only by showing strength in confrontation with death.

This heroic urge is combined, by Islamist extremists, with a vision of End Times, a culmination to history brought about by a climactic battle and the purification of the earth.

Extremism is a spiritual phenomenon, a desire for loftiness of spirit gone perverse. You can’t counter a heroic impulse with a mundane and bourgeois response. You can counter it only with a more compelling heroic vision. There will always be alienated young men fueled by spiritual ardor. Terrorism will be defeated only when they find a different fulfillment, even more bold and self-transcending.

In other times, nationalism has offered that compelling vision. We sometimes think of nationalism as a destructive force, and it can be. But nationalism tied to universal democracy has always been uplifting and ennobling. It has organized heroic lives in America, France, Britain and beyond.

Walt Whitman was inspired by the thought that his country was involved in a great project, “making a new history, a history of democracy, making old history a dwarf … inaugurating largeness, culminating time.” Lincoln committed himself to the sacred truth that his country represented the “last best hope” of mankind. Millions have been inspired by an American creed that, the late great historian Sacvan Bercovitch wrote, “has succeeded in uniting nationality and universality, civic and spiritual selfhood, sacred and secular history, the country’s past and paradise to be, in a single transcendent ideal.”

Young Arab men are not going to walk away from extremism because they can suddenly afford a Slurpee. They will walk away when they can devote themselves to a revived Egyptian nationalism, Lebanese nationalism, Syrian nationalism, some call to serve a cause that connects nationalism to dignity and democracy and transcends a lifetime.

Extremism isn’t mostly about Islam. It is about a yearning for righteousness rendered malevolent by apocalyptic theology. Muslim clerics can fix the theology. The rest of us can help redirect the spiritual ardor toward humane and productive ends.

It also might help if we stopped bombing the crap out of them, and droning various wedding parties…  Here’s Prof. Krugman:

Scott Walker, the governor of Wisconsin, is said to be a rising contender for the Republican presidential nomination. So, on Wednesday, he did what, these days, any ambitious Republican must, and pledged allegiance to charlatans and cranks.

For those unfamiliar with the phrase, “charlatans and cranks” is associated with N. Gregory Mankiw, a professor at Harvard who served for a time as George W. Bush’s chief economic adviser. In the first edition of his best-selling economics textbook, Mr. Mankiw used those words to ridicule “supply-siders” who promised that tax cuts would have such magic effects on the economy that deficits would go down, not up.

But, on Wednesday, Mr. Walker, in what was clearly a rite of passage into serious candidacy, spoke at a dinner at Manhattan’s “21” Club hosted by the three most prominent supply-siders: Art Laffer (he of the curve); Larry Kudlow of CNBC; and Stephen Moore, chief economist of the Heritage Foundation. Politico pointed out that Rick Perry, the former governor of Texas, attended a similar event last month. Clearly, to be a Republican contender you have to court the powerful charlatan caucus.

So a doctrine that even Republican economists consider dangerous nonsense has become party orthodoxy. And what makes this political triumph especially remarkable is that it comes just as the doctrine’s high priests have been setting new standards for utter, epic predictive failure.

I’m not talking about the fact that supply-siders didn’t see the crisis coming, although they didn’t. Mr. Moore published a 2004 book titled “Bullish on Bush,” asserting that the Bush agenda was creating a permanently stronger economy. Mr. Kudlow sneered at the “bubbleheads” asserting that inflated home prices were due for a crash. Still, you could argue that few economists of any stripe fully foresaw the coming disaster.

You can’t say the same, however, about postcrisis developments, where the people Mr. Walker was courting have spent years warning about the wrong things. “Get ready for inflation and higher interest rates” was the title of a June 2009 op-ed article in The Wall Street Journal by Mr. Laffer; what followed were the lowest inflation in two generations and the lowest interest rates in history. Mr. Kudlow and Mr. Moore both predicted 1970s-style stagflation.

To be fair, Mr. Kudlow and Mr. Laffer eventually admitted that they had been wrong. Neither has, however, given any indication of reconsidering his views, let alone conceding the possibility that the much-hated Keynesians, who have gotten most things right even as the supply-siders were getting everything wrong, might be on to something. Mr. Kudlow describes the failure of runaway inflation to materialize — something he has been predicting since 2008 — as “miraculous.”

Something else worth noting: as befits his position at Heritage, Mr. Moore likes to publish articles filled with lots of numbers. But his numbers are consistently wrong; they’re for the wrong years, or just plain not what the original sources say. And somehow these errors always run in the direction he wants.

So what does it say about the current state of the G.O.P. that discussion of economic policy is now monopolized by people who have been wrong about everything, have learned nothing from the experience, and can’t even get their numbers straight?

The answer, I’d suggest, runs deeper than economic doctrine. Across the board, the modern American right seems to have abandoned the idea that there is an objective reality out there, even if it’s not what your prejudices say should be happening. What are you going to believe, right-wing doctrine or your own lying eyes? These days, the doctrine wins.

Look at another issue, health reform. Before the Affordable Care Act went into effect, conservatives predicted disaster: health costs would soar, the deficit would explode, more people would lose insurance than gain it. They were wrong on all counts. But, in their rhetoric, even in the alleged facts (none of them true) people like Mr. Moore put in their articles, they simply ignore this reality. Reading them, you’d think that the dismal failure they wrongly predicted had actually happened.

Then there’s foreign policy. This week Jeb Bush tried to demonstrate his chops in that area, unveiling his team of expert advisers — who are, sure enough, the very people who insisted that the Iraqis would welcome us as liberators.

And don’t get me started on climate change.

Along with this denial of reality comes an absence of personal accountability. If anything, alleged experts seem to get points by showing that they’re willing to keep saying the same things no matter how embarrassingly wrong they’ve been in the past.

But let’s go back to those economic charlatans and cranks: Clearly, failure has only made them stronger, and now they are political kingmakers. Be very, very afraid.

Oh, I am…

Brooks and Krugman

December 19, 2014

In “The Union Future” Bobo has the gall to ask a question:  Do the people who have marched over the Brown and Garner cases have the stamina to force change?  In the comments “Claus Gehner” from Seattle and Munich had this to say:  “This is really quite an amazing column.  The title and first paragraph lead one to believe that Mr. Brooks, of all people, is intent on starting a serious conversation on how to address the horrific income and wealth inequality in the US, and the possible role of Labor Unions in that process.  But then, very quickly, Mr. Brooks reverts to character and concentrates on lambasting public sector unions, one of the favorite targets of some of the more odious GOP Governors. The little snipe, almost as an aside, at the Teachers Unions is just a warm up. He then has the audacity to blame the Police Unions for the racial tensions, which are really the remnants pervasive racism in the US in general.”  So it’s typical Bobo crap.  Prof. Krugman, in “Putin’s Bubble Bursts,” says the global plunge in oil prices and the falling ruble have wreaked havoc on the Russian economy. It’s been quite a comedown for the strongman.  Here’s Bobo:

Over the past decades, the case for enhancing union power has grown both stronger and weaker. On the one hand, as wages have stagnated while profits have soared, it does seem that there is something out of whack in the balance of power between labor and capital. Workers need some new way to collectively bargain for more money.

On the other hand, unions, and especially public-sector unions, have done a lot over the past decades to rigidify workplaces, especially government. Teachers’ unions have become the single biggest impediment to school reform. Police unions have become an impediment to police reform.

If you look at all the proposals that have been discussed since the cases of Michael Brown in Ferguson, Mo., and Eric Garner in New York, you find that somewhere or other around the country, police unions have opposed all of them:

GETTING RID OF BAD COPS A small percentage of cops commit most of the abuses. A study by WNYC News in New York found that, since 2009, 40 percent of the “resisting arrest” charges were filed by just 5 percent of New York Police Department officers. In other words, most officers rarely get in a confrontation that leads to that charge, but a few officers often get in violent confrontations.

But it’s very hard to remove the bad apples from the force. Trying to protect their members, unions have weakened accountability. The investigation process is softer on police than it would be on anyone else. In parts of the country, contract rules stipulate that officers get a 48-hour cooling-off period before having to respond to questions. They have access to the names and testimony of their accusers. They can be questioned only by one person at a time. They can’t be threatened with disciplinary action during questioning.

More seriously, cops who are punished can be reinstated through a secretive appeals process that favors job retention over public safety. In The Atlantic, Conor Friedersdorf has a riveting piece with egregious stories of cops who have returned to the force after clear incompetence. Hector Jimenez was an Oakland, Calif., cop who shot and killed an unarmed 20-year-old man in 2007. Seven months later, he killed another unarmed man, shooting him in the back three times while he ran away. The city paid damages. Jimenez was fired. But he appealed through his union and was reinstated with back pay.

CAMERAS There’s long been talk about equipping cops with wearable cameras. In Miami, Boston, and Wichita, Kan., city officials bandied about such plans, but the local unions moved to thwart them, arguing, in one case, that wearing cameras “will distract officers from their duties, and hamper their ability to act and react in dangerous situations.”

DEMILITARIZATION After riots in Ferguson, there was basically a national consensus that police don’t need mine-resistant, ambush-protected monster vehicles and military-style grenade launchers. But there’s support for the program in Washington among the defense industry and the unions. A union executive told Bloomberg News earlier this month that representatives from the Fraternal Order of Police reached out to “maybe 80 percent of senators and half the House” to defend the program. A representative of the International Union of Police Associations wrote in August after the shooting death of Brown, “I believe that law enforcement officers should have available to them any and all tools necessary to do their job and protect their community.”

STOP-AND-FRISK In New York, a court order mandated that there be federal oversight of the New York Police Department to monitor stop-and-frisk practices, a procedure that disproportionately affects minority men. The Patrolmen’s Benevolent Association moved to stall the ruling and questioned its impact. “We continue to have serious concerns about how these remedies will impact our members and the ability to do their jobs,” the president of the association said.

COMMUNITY RELATIONS In Philadelphia, a civilian oversight commission suggested that police officers apologize to citizens who complain of being mistreated. The local chief of the Fraternal Order of Police responded with a hysterical letter in March 2012 claiming that the commission was trying “to further weaken and demoralize the Philadelphia Police Department in a time of crisis with a significantly growing crime problem in this city. … Your group poses a direct threat to public safety in this city. A threat which should no longer be tolerated by our citizens or their government.”

We get mad at racism, but most government outrages have structural roots. The left doesn’t want to go after police unions because they’re unions. The right doesn’t want to because they represent law and order. Politicians of all stripes shy away because they are powerful.

Now we have a test case to see if the people who march about the Garner case have the stamina to force change. Legitimate union advocacy has become extreme because it has gone unchecked. Most cops do hard jobs well, but right now there’s a crisis of accountability.

Now here’s Prof. Krugman:

If you’re the type who finds macho posturing impressive, Vladimir Putin is your kind of guy. Sure enough, many American conservatives seem to have an embarrassing crush on the swaggering strongman. “That is what you call a leader,” enthused Rudy Giuliani, the former New York mayor, after Mr. Putin invaded Ukraine without debate or deliberation.

But Mr. Putin never had the resources to back his swagger. Russia has an economy roughly the same size as Brazil’s. And, as we’re now seeing, it’s highly vulnerable to financial crisis — a vulnerability that has a lot to do with the nature of the Putin regime.

For those who haven’t been keeping track: The ruble has been sliding gradually since August, when Mr. Putin openly committed Russian troops to the conflict in Ukraine. A few weeks ago, however, the slide turned into a plunge. Extreme measures, including a huge rise in interest rates and pressure on private companies to stop holding dollars, have done no more than stabilize the ruble far below its previous level. And all indications are that the Russian economy is heading for a nasty recession.

The proximate cause of Russia’s difficulties is, of course, the global plunge in oil prices, which, in turn, reflects factors — growing production from shale, weakening demand from China and other economies — that have nothing to do with Mr. Putin. And this was bound to inflict serious damage on an economy that, as I said, doesn’t have much besides oil that the rest of the world wants; the sanctions imposed on Russia over the Ukraine conflict have added to the damage.

But Russia’s difficulties are disproportionate to the size of the shock: While oil has indeed plunged, the ruble has plunged even more, and the damage to the Russian economy reaches far beyond the oil sector. Why?

Actually, it’s not a puzzle — and this is, in fact, a movie currency-crisis aficionados like yours truly have seen many times before: Argentina 2002, Indonesia 1998, Mexico 1995, Chile 1982, the list goes on. The kind of crisis Russia now faces is what you get when bad things happen to an economy made vulnerable by large-scale borrowing from abroad — specifically, large-scale borrowing by the private sector, with the debts denominated in foreign currency, not the currency of the debtor country.

In that situation, an adverse shock like a fall in exports can start a vicious downward spiral. When the nation’s currency falls, the balance sheets of local businesses — which have assets in rubles (or pesos or rupiah) but debts in dollars or euros — implode. This, in turn, inflicts severe damage on the domestic economy, undermining confidence and depressing the currency even more. And Russia fits the standard playbook.

Except for one thing. Usually, the way a country ends up with a lot of foreign debt is by running trade deficits, using borrowed funds to pay for imports. But Russia hasn’t run trade deficits. On the contrary, it has consistently run large trade surpluses, thanks to high oil prices. So why did it borrow so much money, and where did the money go?

Well, you can answer the second question by walking around Mayfair in London, or (to a lesser extent) Manhattan’s Upper East Side, especially in the evening, and observing the long rows of luxury residences with no lights on — residences owned, as the line goes, by Chinese princelings, Middle Eastern sheikhs, and Russian oligarchs. Basically, Russia’s elite has been accumulating assets outside the country — luxury real estate is only the most visible example — and the flip side of that accumulation has been rising debt at home.

Where does the elite get that kind of money? The answer, of course, is that Putin’s Russia is an extreme version of crony capitalism, indeed, a kleptocracy in which loyalists get to skim off vast sums for their personal use. It all looked sustainable as long as oil prices stayed high. But now the bubble has burst, and the very corruption that sustained the Putin regime has left Russia in dire straits.

How does it end? The standard response of a country in Russia’s situation is an International Monetary Fund program that includes emergency loans and forbearance from creditors in return for reform. Obviously that’s not going to happen here, and Russia will try to muddle through on its own, among other things with rules to prevent capital from fleeing the country — a classic case of locking the barn door after the oligarch is gone.

It’s quite a comedown for Mr. Putin. And his swaggering strongman act helped set the stage for the disaster. A more open, accountable regime — one that wouldn’t have impressed Mr. Giuliani so much — would have been less corrupt, would probably have run up less debt, and would have been better placed to ride out falling oil prices. Macho posturing, it turns out, makes for bad economies.

Brooks and Krugman

December 12, 2014

In “In Praise of Small Miracles” Bobo says behavioral economics has given us amazing new policy options to solve local and international problems.  It’s his usual crap, but the comments were so wonderful I couldn’t decide between “mike vogel” of NY, who said “David, there is much proof that yelling at someone has zero affect on his or her behavior. For example, did you ever read your column’s comments section?” and “Bob” from SE PA who said “Instead of writing the thoughtful and critical replies posted here, can we instead come to The New York Times and scream our criticism of David’s work from the hallway just outside his office? Under David’s theory, the quality of his work would then improve.”  Prof. Krugman has a question in “Mad as Hellas.”  He says Greece appears to be in crisis again. Will we learn the right lessons this time?  Here’s Bobo:

Most of us don’t save enough. When governments try to encourage saving, they usually enact big policies to increase the incentives. But, in Kenya, people were given a lockable metal box — a simple place to put their money. After one year, the people with metal boxes increased savings by so much that they had 66 percent more money available to pay for health emergencies. It would have taken a giant tax reform to produce a shift in behavior that large.

Too many people die in auto accidents. When governments try to reduce highway deaths, they generally increase safety regulations. But, also in Kenya, stickers were placed inside buses and vans urging passengers to scream at automobile drivers they saw driving dangerously.

The heckling discouraged dangerous driving by an awesome amount. Insurance claims involving injury or death fell to half of their previous levels.

These are examples of a new kind of policy-making that is sweeping the world. The old style was based on the notion that human beings are rational actors who respond in straightforward ways to incentives. The new style, which supplements but does not replace the old style, is based on the obvious point that human beings are not always rational actors. Sometimes we’re mentally lazy, or stressed, or we’re influenced by social pressure and unconscious biases. It’s possible to take advantage of these features to enact change.

For example, people hate losing things more than they like getting things, a phenomenon known as loss aversion. In some schools, teachers were offered a bonus at the end of their year if they could improve student performance. This kind of merit pay didn’t improve test scores. But, in other schools, teachers were given a bonus at the beginning of the year, which would effectively be taken away if their students didn’t improve. This loss-framed bonus had a big effect.

People are also guided by decision-making formats. The people who administer the ACT college admissions test used to allow students to send free score reports to three colleges. Many people thus applied to three colleges. But then the ACT folks changed the form so there were four lines where you could write down prospective colleges. That tiny change meant that many people applied to four colleges instead of three. Some got into more prestigious schools they wouldn’t have otherwise. This improved the expected earnings of low-income students by about $10,000.

The World Bank has just issued an amazingly good report called “Mind, Society and Behavior” on how the insights of behavioral economics can be applied to global development and global health. The report, written by a team led by Karla Hoff and Varun Gauri, lists many policies that have already been tried and points the way to many more.

Sugar cane farmers in India receive most of their income once a year, at harvest time. In the weeks before harvest, when they are poor and stressed, they score 10 points lower on I.Q. tests than in the weeks after. If you schedule fertilizer purchase decisions and their children’s school enrollment decisions during the weeks after harvest, they will make more farsighted choices than at other times of the year. This simple policy change is based on an understanding of how poverty depletes mental resources.

In Zambia, hairdressers were asked to sell female condoms to their clients. Some were offered financial incentives to do so, but these produced no results. In other salons, top condom sellers had a gold star placed next to their names on a poster that all could see. More than twice as many condoms were sold. This simple change was based on an understanding of the human desire for status and admiration.

The policies informed by behavioral economics are delicious because they show how cheap changes can produce big effects. Policy makers in this mode focus on discrete opportunities to exploit, not vast problems to solve.

This corrects for a bias in the way governments often work. They tend to gravitate toward the grand and the abstract. For example the United Nations is now replacing the Millennium Development Goals, which expire in 2015, with the Sustainable Development Goals.

“The Millennium Development Goals are concrete, measurable and have an end-date, so they could serve as a rallying point,” says Suprotik Basu, the chief executive of the MDG Health Alliance. “One good thing about the Sustainable Development Goals is that they’re being written through a bottom-up consensus process. But sometimes the search for consensus leads you higher and higher into the clouds. The jury is out on whether we will wind up with goals concrete enough to help ministers make decisions and decide priorities.”

Behavioral economics policies are beautiful because they are small and concrete but powerful. They remind us that when policies are rooted in actual human behavior and specific day-to-day circumstances, even governments can produce small miracles.

I want Bobo to start screaming at bad drivers.  As a Republican he’s sure to approve of gun possession, so when he gets shot he’ll be understanding.  Here’s Prof. Krugman:

The Greek fiscal crisis erupted five years ago, and its side effects continue to inflict immense damage on Europe and the world. But I’m not talking about the side effects you may have in mind — spillovers from Greece’s Great Depression-level slump, or financial contagion to other debtors. No, the truly disastrous effect of the Greek crisis was the way it distorted economic policy, as supposedly serious people around the world rushed to learn the wrong lessons.

Now Greece appears to be in crisis again. Will we learn the right lessons this time?

What happened last time, you may recall, was the exploitation of Greece’s woes to change the economic subject. Suddenly, we were supposed to obsess over budget deficits, even if borrowing costs were at historic lows, and slash government spending, even in the face of mass unemployment. Because if we didn’t, you see, we could turn into Greece any day now. “Greece stands as a warning of what happens to countries that lose their credibility,” intoned David Cameron, Britain’s prime minister, as he announced austerity policies in 2010. “We are on the same path as Greece,” declared Representative Paul Ryan, who was soon to become the chairman of the House Budget Committee, that same year.

In reality, Britain and the United States, which borrow in their own currencies, were and are nothing like Greece. If you thought otherwise in 2010, by now year after year of incredibly low interest rates and low inflation should have convinced you. And the experience of Greece and other European countries that were forced into harsh austerity measures should also have convinced you that slashing spending in a depressed economy is a really bad idea if you can avoid it. This is true even in the supposed success stories — Ireland, for example, is finally growing again, but it still has almost 11 percent unemployment, and twice that rate among young people.

And the devastation in Greece is awesome to behold. Some press reports I’ve seen seem to suggest that the country has been a malingerer, balking at the harsh measures its situation demands. In reality, it has made huge adjustments — slashing public employment and compensation, cutting back social programs, raising taxes. If you want a sense of the scale of austerity, it would be as if the United States had introduced spending cuts and tax increases amounting to more than $1 trillion a year. Meanwhile, wages in the private sector have plunged. Yet a quarter of the Greek labor force, and half its young, remain unemployed.

Meanwhile, the debt situation has if anything gotten worse, with the ratio of public debt to G.D.P. at a record high — mainly because of falling G.D.P., not rising debt — and with the emergence of a big private debt problem, thanks to deflation and depression. There are some positives; the economy is growing a bit, finally, largely thanks to a revival of tourism. But, over all, it has been many years of suffering for very little reward.

The remarkable thing, given all that, has been the willingness of the Greek public to take it, to accept the claims of the political establishment that the pain is necessary and will eventually lead to recovery. And the news that has roiled Europe these past few days is that the Greeks may have reached their limit. The details are complex, but basically the current government is trying a fairly desperate political maneuver to put off a general election. And, if it fails, the likely winner in that election is Syriza, a party of the left that has demanded a renegotiation of the austerity program, which could lead to a confrontation with Germany and exit from the euro.

The important point here is that it’s not just the Greeks who are mad as Hellas (their own name for their country) and aren’t going to take it anymore. Look at France, where Marine Le Pen, the leader of the anti-immigrant National Front, outpolls mainstream candidates of both right and left. Look at Italy, where about half of voters support radical parties like the Northern League and the Five-Star Movement. Look at Britain, where both anti-immigrant politicians and Scottish separatists are threatening the political order.

It would be a terrible thing if any of these groups — with the exception, surprisingly, of Syriza, which seems relatively benign — were to come to power. But there’s a reason they’re on the rise. This is what happens when an elite claims the right to rule based on its supposed expertise, its understanding of what must be done — then demonstrates both that it does not, in fact, know what it is doing, and that it is too ideologically rigid to learn from its mistakes.

I have no idea how events in Greece are about to turn out. But there’s a real lesson in its political turmoil that’s much more important than the false lesson too many took from its special fiscal woes.

Brooks and Krugman

December 5, 2014

Bobo thinks he’s on to something.  He has a question in “Why Elders Smile:”  Why do studies suggest that the happiest age group is people ages 82 to 85?  If you’re thinking that this sounds suspiciously like Bobo’ian psychobabble you’re right.  In the comments “Jack Chicago” from Chicago lays it out for us:  “This column is just a blend of psychobabble, generalizations and unsupported assertions. Mr Brooks’ broad and shallow approach to these columns is pretty thin stuff.”  Prof. Krugman, in “Democrats Against Reform,” says no, Obamacare wasn’t a mistake. Democrats should be celebrating that they did the right thing.  Here’s Bobo:

A few months ago, Ezekiel Emanuel had an essay in The Atlantic saying that, all things considered, he’d prefer to die around age 75. He argued that he’d rather clock out with all his powers intact than endure a sad, feeble decline.

The problem is that if Zeke dies at 75, he’ll likely be missing his happiest years. When researchers ask people to assess their own well-being, people in their 20s rate themselves highly. Then there’s a decline as people get sadder in middle age, bottoming out around age 50. But then happiness levels shoot up, so that old people are happier than young people. The people who rate themselves most highly are those ages 82 to 85.

Psychologists who study this now famous U-Curve tend to point out that old people are happier because of changes in the brain. For example, when you show people a crowd of faces, young people unconsciously tend to look at the threatening faces but older people’s attention gravitates toward the happy ones.

Older people are more relaxed, on average. They are spared some of the burden of thinking about the future. As a result, they get more pleasure out of present, ordinary activities.

My problem with a lot of the research on happiness in old age is that it is so deterministic. It treats the aging of the emotional life the way you might treat the aging of the body: as this biological, chemical and evolutionary process that happens to people.

I’d rather think that elder happiness is an accomplishment, not a condition, that people get better at living through effort, by mastering specific skills. I’d like to think that people get steadily better at handling life’s challenges. In middle age, they are confronted by stressful challenges they can’t control, like having teenage children. But, in old age, they have more control over the challenges they will tackle and they get even better at addressing them.

Aristotle teaches us that being a good person is not mainly about learning moral rules and following them. It is about performing social roles well — being a good parent or teacher or lawyer or friend.

It’s easy to think of some of the skills that some people get better at over time.

First, there’s bifocalism, the ability to see the same situation from multiple perspectives. Anthony Kronman of Yale Law School once wrote, “Anyone who has worn bifocal lenses knows that it takes time to learn to shift smoothly between perspectives and to combine them in a single field of vision. The same is true of deliberation. It is difficult to be compassionate, and often just as difficult to be detached, but what is most difficult of all is to be both at once.” Only with experience can a person learn to see a fraught situation both close up, with emotional intensity, and far away, with detached perspective.

Then there’s lightness, the ability to be at ease with the downsides of life. In their book, “Lighter as We Go,” Jimmie Holland and Mindy Greenstein (who is a friend from college) argue that while older people lose memory they also learn that most setbacks are not the end of the world. Anxiety is the biggest waste in life. If you know that you’ll recover, you can save time and get on with it sooner.

“The ability to grow lighter as we go is a form of wisdom that entails learning how not to sweat the small stuff,” Holland and Greenstein write, “learning how not to be too invested in particular outcomes.”

Then there is the ability to balance tensions. In “Practical Wisdom,” Barry Schwartz and Kenneth Sharpe argue that performing many social roles means balancing competing demands. A doctor has to be honest but also kind. A teacher has to instruct but also inspire. You can’t find the right balance in each context by memorizing a rule book. This form of wisdom can only be earned by acquiring a repertoire of similar experiences.

Finally, experienced heads have intuitive awareness of the landscape of reality, a feel for what other people are thinking and feeling, an instinct for how events will flow. In “The Wisdom Paradox,” Elkhonon Goldberg details the many ways the brain deteriorates with age: brain cells die, mental operations slow. But a lifetime of intellectual effort can lead to empathy and pattern awareness. “What I have lost with age in my capacity for hard mental work,” Goldberg writes, “I seem to have gained in my capacity for instantaneous, almost unfairly easy insight.”

It’s comforting to know that, for many, life gets happier with age. But it’s more useful to know how individuals get better at doing the things they do. The point of culture is to spread that wisdom from old to young; to put that thousand-year-heart in a still young body.

I’m willing to bet that Bobo hasn’t spent much time in a nursing home lately.  You know, the kind that the less-than-fabulously-wealthy can afford.  Not a barrel of laughs…  Now here’s Prof. Krugman:

It’s easy to understand why Republicans wish health reform had never happened, and are now hoping that the Supreme Court will abandon its principles and undermine the law. But it’s more puzzling — and disturbing — when Democrats like Charles Schumer, senator from New York, declare that the Obama administration’s signature achievement was a mistake.

In a minute I’ll take on Mr. Schumer’s recent remarks. But first, an update on Obamacare — not the politics, but the actual policy, which continues to rack up remarkable (and largely unreported) successes.

Earlier this week, the independent Urban Institute released new estimates of the number of Americans without health insurance, and the positive results of Obamacare’s first year are striking. Remember all those claims that more people would lose coverage than would gain it? Well, the institute finds a sharp drop in the number of uninsured adults, with more than 10 million people gaining coverage since last year. This is in line with what multiple other estimates show. The primary goal of health reform, to give Americans access to the health care they need, is very much on track.

And while some of the policies offered under Obamacare don’t offer as much protection as we might like, a huge majority of the newly insured are pleased with their coverage, according to a recent Gallup poll.

What about costs? There were many predictions of soaring premiums. But health reform’s efforts to create meaningful competition among insurers are working better than almost anyone (myself included) expected. Premiums for 2014 came in well below expectations, and independent estimates show a very modest increase — 4 percent or less — for average premiums in 2015.

In short, if you think of Obamacare as a policy intended to improve American lives, it’s going really well. Yet it has not, of course, been a political winner for Democrats. Which brings us to Mr. Schumer.

The Schumer critique — he certainly isn’t the first to say these things, but he is the most prominent Democrat to say them — calls health reform a mistake because it only benefits a minority of Americans, and that’s not enough to win elections. What President Obama should have done, claims Mr. Schumer, was focus on improving the economy as a whole.

This is deeply wrongheaded in at least three ways.

First, while it’s true that most Americans have insurance through Medicare, Medicaid, and employment-based coverage, that doesn’t mean that only the current uninsured benefit from a program that guarantees affordable care. Maybe you have good coverage now, but what happens if you’re fired, or your employer goes bust, or it cancels its insurance program? What if you want to change jobs for whatever reason, but can’t find a new job that comes with insurance?

The point is that the pre-Obamacare system put many Americans at the constant risk of going without insurance, many more than the number of uninsured at any given time, and limited freedom of employment for millions more. So health reform helps a much larger share of the population than those currently uninsured — and those beneficiaries have relatives and friends. This is not a policy targeted on a small minority.

Second, whenever someone says that Mr. Obama should have focused on the economy, my question is, what do you mean by that? Should he have tried for a bigger stimulus? I’d say yes, but that fight took place in the very first months of his administration, before the push for health reform got underway. After that, and especially after 2010, scorched-earth Republican opposition killed just about every economic policy he proposed. Do you think this would have been different without health reform? Seriously?

Look, economic management is about substance, not theater. Having the president walk around muttering “I’m focused on the economy” wouldn’t have accomplished anything. And I’ve never seen any plausible explanation of how abandoning health reform would have made any difference at all to the political possibilities for economic policy.

Finally, we need to ask, what is the purpose of winning elections? The answer, I hope, is to do good — not simply to set yourself up to win the next election. In 2009-10, Democrats had their first chance in a generation to do what we should have done three generations ago, and ensure adequate health care for all of our citizens. It would have been incredibly cynical not to have seized that opportunity, and Democrats should be celebrating the fact that they did the right thing.

And one related observation: If more Democrats had been willing to defend the best thing they’ve done in decades, rather than run away from their own achievement and implicitly concede that the smears against health reform were right, the politics of the issue might look very different today.

Brooks, Cohen and Nocera

November 25, 2014

Bobo just bursting to tell us all about “The Unifying Leader.”  He squeals that the only way for American political culture to change is for leaders to be more creative in their approach to collaboration.  In the comments “Susan Anderson” from Boston had this to say:  “Blame the victim much? You are better than this. Time to notice that your party is willing to sacrifice the whole country to condemn Obama, who did indeed make an effort to meet your party somewhere a long way towards your end of things. Even that wasn’t good enough for your move-the-goalposts party of selfishness, sociopathy, greed, and wealth, and against dealing with reality in a way that does not exploit to the detriment of not only us, but you and your descendants.”  Well, Susan, he did say that he wasn’t going to apportion blame.  I guess he knew where all the fingers would point…  Mr. Cohen says “Keep Pushing for an Iran Deal,” and that if you don’t like the idea of America at war with Islamic State and with Islamic State’s sworn enemy, Iran, double down on diplomacy.  In “Committed to Carbon Goals” Mr. Nocera says the chief executive of NRG Energy is making his company part of the solution.  Now, alas, here’s Bobo:

Over the past two weeks, President Obama and Republicans in Congress have taken their conflicts to another level. I’m not here to apportion blame, but it would be nice if, in the future, we evaluated presidential candidates on the basis of whether they are skilled at the art of collaboration.

When you look at other sectors of society, you see leaders who are geniuses at this. You can spot the collaborative leader because he’s rejected the heroic, solitary model of leadership. He doesn’t try to dominate his organization as its all-seeing visionary, leading idea generator and controlling intelligence.

Instead, he sees himself as a stage setter, as a person who makes it possible for the creativity in his organization to play itself out. The collaborative leader lessens the power distance between himself and everybody else. He believes that problems are too complex for one brain, but if he can create the right context and nudge a group process along, the team will come up with solutions.

Collaborative political leaders would look very different than the ones we’re used to. In the first place, they would do what they could to create a culture of cooperation, not competition. They’d evoke our shared national consciousness more than our partisan consciousness. They’d take the political people out of the policy meetings. Except in high campaign season, they’d reduce the moronically partisan tit-for-tat, which is the pointless fare of daily press briefings.

Second, a collaborative president would draw up what Jeffrey Walker, vice chairman of the MDG Health Alliance and co-author of “The Generosity Network,” calls Key Influencer Maps. This leader would acknowledge that we live in a system in which a proliferating number of groups have veto power over legislation. He would gather influencers into informal policy-making teams as each initiative was executed.

Third, a collaborative president would offer specific goals to each team, but he would not come up with clear visions. He might say the goal of the education team, say, was to reduce high school dropouts by 10 percent. But he would not tell the team how to get there.

Fourth, a collaborative president would see herself as an honest broker above policy-making process, not as a gladiator in it. In an essay posted on LinkedIn, Walker argues that collaborative organizations usually need a person at the top who “is widely trusted and capable of rallying the interested parties behind the unified effort.” To be an honest broker, a collaborative president would have to repress some of her own ideas in order to serve as referee, guide and nudge for the people she gathered.

Fifth, a collaborative president would tolerate mess. She would acknowledge that if you don’t give midlevel people the freedom to roam, you won’t attract creative people to those jobs. If you adopt a highly prescriptive set of workplace rules, then nobody can do anything bold.

So what if there are leaks to the press, and the policy process becomes semipublic? That’s a price worth paying in order to harvest diverse viewpoints and the fruits of creative disagreements.

Sixth, a collaborative leader embraces an oppositional mind-set. As Linda A. Hill and others argue in a Harvard Business Review essay called “Collective Genius,” successful collaborative groups resist tepid compromises; instead, they combine things that were once seen as mutually exclusive. A collaborative president might jam a mostly Democratic idea, federally financed preschool, and a mostly Republican idea, charter schools, into one proposal.

Seventh, a collaborative president would create a culture in which relationships are more important than one person’s touchy pride. There are going to be people who take cheap shots. The collaborative leader would swallow indignation and be tolerant of error in order to preserve relationships. She would have a merciful sense that every successful working bond is going to require moments of forgiveness.

The collaborative leader is willing to step back from the war posture of politics and be vulnerable. Trust is built when one leader is vulnerable to another and the opposing leader doesn’t take advantage of it to enhance his own power. Then that opposing leader is vulnerable back and the favor is returned. The collaborative leader understands the paradox; you have to take off the armor to build strong bonds.

Finally, the collaborative leader would exile those who consistently refuse to play by the rules. Psychologist David Rand of Yale finds that cooperation exists when people internalize small cooperative habits as their default response to situations. It only takes a few selfish and solitary grandstanders to undermine a culture of trust. Successful leaders have the guts marginalize radicals and nihilists who refuse to play by the rules of the institution (this would be helpful to leaders on Capitol Hill).

We can all think of technocratic reforms to make Washington work better. But, ultimately, it takes a different leadership model and a renewed appreciation for the art of collaboration.

You’ll notice that the name John Boehner appears nowhere in that piece of crap.  Here’s Mr. Cohen:

I wrote last May that “unreasonable optimism” surrounded nuclear talks between Iran and the major powers. Unreasonable pessimism should not surround the failure to reach an overall agreement and the decision to extend negotiations for seven months. Anwar Sadat, the former Egyptian president, believed 70 percent of the Israeli-Arab conflict was psychological. The same has been true of the American-Iranian confrontation at the heart of the standoff between Tehran and the West. A barrier has fallen through well over a year of discussions; a 35-year-old trauma has receded.

This immense achievement does not in itself assure success. Plenty of people want enmity preserved. Here are seven questions for the next seven months that may prove helpful:

Why is a deal still by far the best option? Because the alternatives are a continuation of the relentless buildup of Iranian nuclear capacity seen over the past decade or yet another American war in the Middle East that would do little to dent the program, lock in hard-liners for a generation and likely prompt an Iranian dash for a bomb, setting off a regional arms race. If you like the idea of the United States at war with the Sunni killers of Islamic State and at war with Islamic State’s sworn enemy, Shiite Iran, this scenario may hold appeal. If it looks like a nightmare, double down on diplomacy.

But doesn’t the extension of talks favor Iran? No. The interim agreement announced last year has proved effective. As Secretary of State John Kerry pointed out, Iran had about 200 kilograms of 20-percent-enriched uranium. Today, it has none. The number of operational centrifuges has been frozen. International inspections have been redoubled. Not for a decade had the pause button been hit in this way. Yes, Iran has received some sanctions relief, bringing in about $700 million a month, but that scarcely offsets plunging oil revenue.

Why is Israel’s call for complete dismantlement not the way to go? Because it is not achievable in the real world; the perfect cannot be the enemy of the good. Diplomacy is about tough compromise, not ideal outcomes. The nuclear know-how attained by Iran cannot be undone. The aim must be to ring fence for at least a decade a strictly monitored program, compatible only with peaceful use of nuclear power, where enrichment is kept below 5 percent. Iran, a signatory of the Nuclear Non-Proliferation Treaty, will not renounce the right set out in that treaty to “nuclear energy for peaceful purposes” at the behest of a nuclear-armed nonsignatory of that treaty, Israel. This is reality; deal with it. Iran’s nuclear program has the emotional resonance the nationalization of its oil had in the 1950s. That nationalization prompted a never-forgotten Anglo-American coup. Calls for dismantlement are seen in Iran through this prism. As Kerry’s negotiating partner, Iranian Foreign Minister Mohammad Javad Zarif, said, “You are doomed to failure” if you seek “a zero-sum game.” Setting impossible targets is code for favoring war.

What are the main dangers now to the negotiations? The Republican Congress, hard-liners in Tehran around Supreme Leader Ayatollah Ali Khamenei, and Israeli Prime Minister Benjamin Netanyahu will try to undermine the talks. When the new Congress convenes next year, it may push for new sanctions. There will be talk of “appeasement,” the cheap Chamberlain riff that is a favorite sound bite of naysayers. A sanctions push would be extremely foolish. It would constitute a potential talks-breaker that may prod President Obama into a veto. This would in turn reinforce Washington chatter about “an imperial presidency.” To which Obama should respond that he’s less interested in chatter than the history books.

But isn’t Iran America’s enemy? Yes, Iran supports Hezbollah. It supports Syrian President Bashar al-Assad. Its operatives have killed or plotted to kill Americans since the birth of the Islamic Republic in 1979, especially in the early years. But Iran also has overlapping interests with the United States in Afghanistan and Iraq. It is a relative island of stability in a violent Middle East. Its young population is overwhelmingly pro-American. Most of them place Israel at the bottom of their list of priorities. The United States does business with plenty of strategic adversaries, including Russia. The Middle East is stymied. Even a cold American-Iranian understanding could redraw the map of the region.

President Hassan Rouhani seems reasonable but doesn’t Khamenei call the shots? The supreme leader and the president need each other. The Iranian economy is a shambles. Khamenei needs Rouhani to fix it. Rouhani needs Khamenei as a shield from the toughest hard-liners. The West will never find better interlocutors than Rouhani and Zarif.

Are there other reasons to favor an accord? Yes. Iran is the last sizable emerging market economy not integrated in the global economy. Integrating it will provide a huge boost. The more contact there is between Iran and the West, the more moderating forces will be reinforced.

And now here’s Mr. Nocera:

Since the early 1990s, the consensus view in the climate science community has been that if the world is going to escape the most catastrophic consequences of climate change, it needs to keep the average global temperature from rising more than 2 degrees Celsius, compared with preindustrial levels. A few years ago, the Presidential Climate Action Project issued a report in which it estimated that to meet that goal, global carbon dioxide emissions would need to be reduced by 60 percent by 2050 — and the industrialized world would need to reduce its emissions by 80 percent.

This would seem, at first glance, an impossible task. Until, that is, you meet a man named David Crane. He is the chief executive of NRG Energy, the largest publicly traded independent power producer in the country. When he took over a decade ago, NRG was just emerging from bankruptcy. Today, it is a Fortune 250 company, with 135 power plants capable of generating 53,000 megawatts of power.

NRG, Crane told an audience at the Aspen Ideas Festival this summer, is the country’s fourth-largest polluter. “We emit 60 or 70 million tons of carbon into the atmosphere each year,” he said, mainly because a third of its power is generated by coal-fired plants. “I’m not apologetic about that because, right now, owning those plants and operating those plants are critical to keeping the lights on in the United States.”

But then he quickly added, “We have to move away from that.” And he has, reducing the company’s carbon footprint by 40 percent in the decade that he’s run the company. And, on Thursday, as The Times reported, he committed NRG to reducing its carbon emissions by 50 percent by 2030 and 90 percent by 2050.

These are terribly ambitious goals, but Crane is not some pie-in-the-sky dreamer. Although he sees climate change as an “intergenerational issue” — a way of ensuring the future for our children and grandchildren — he is also a pragmatic man running a publicly traded company. He firmly believes that the technology exists to make his ambitious goals possible, and that the real problem is the refusal of the rest of the power industry to adapt and change.

Crane likes to say that when he first started hearing about carbon emissions, he didn’t view it all that seriously. “To be frank,” he said in that same Aspen presentation, “I thought this is just the next pollutant that we have to deal with.” But once he got religion — and realized, as he put it, that power producers like NRG are “the biggest part of the problem” — he was determined to make his company a leader in reducing carbon.

One of his early moves was to apply for a license to build a new nuclear power plant. (It already co-owns one nuclear plant.) But the nuclear accident at the Fukushima Daiichi plant in Japan in 2011 scotched those plans, and NRG wound up writing off more than $300 million. NRG also invested in a wind company, which it sold three years later “because we got a little disenchanted with the way that the wind technology was moving.”

So how is he planning to get that 90 percent reduction? One answer is solar power, in which NRG has invested some $5 billion. Crane is a big believer in the eventual importance of solar, both for consumers — he foresees a day when millions of Americans rely on solar as their primary power source — and for power companies. Even so, Crane told me that solar generates only 3,000 megawatts of the company’s potential for 53,000.

And then there’s coal. When I asked Crane if he would have to eliminate coal to reach his goals, he said no. Coal, he said, will continue to play a big role. A carbon tax would be a great way of reducing emissions. But that is politically impossible.

So, instead, the carbon will need to be captured and then put to some good use. At one of its Texas power plants, NRG is teaming up with JX Nippon of Japan in a $1 billion joint venture to build a carbon-capturing capacity, which it expects will capture 1.6 million tons of carbon each year — some 90 percent of the plant’s emissions. He is also convinced that that carbon will eventually be used to create liquid fuel or get embedded in cement. “We could rebuild America’s roadways with embedded carbon from coal.”

He has another reason for wanting to be out in front on climate change. He says it will make his company more attractive to investors — and consumers. The day is going to come, he believes, when climate change risk will be something investors factor in to their investment decisions. And he believes that the next generation of consumers will demand clean energy. He views the disinvestment campaign now taking place on college campuses as a harbinger of things to come.

“It’s like Wayne Gretzky said,” he told me before hanging up the phone. “We are skating where the puck is going, rather than where it is now.”

Brooks, Cohen and Krugman

October 3, 2014

Bobo has outdone himself.  In “The Problem With Pragmatism” he gurgles that our dominant political mind-set (pragmatism) tends dangerously toward rationalism uninformed by moral emotion.  In the comments “Stu Freeman” from Brooklyn, NY has this to say: “Gosh, when David Brooks goes for a “think piece” as opposed to an obvious screed on the virtues of conservative politics he comes across as even more inane than usual.”  Mr. Cohen, in “Iran, the Thinkable Ally,” says Obama’s war against ISIS makes war with Iran even more unthinkable, and that a nuclear deal is imperative.  Prof. Krugman considers “Depression Denial Syndrome” and says the fall of Bill Gross at Pimco is an example of how decision-makers refuse to acknowledge that the rules are different in a persistently depressed economy.  Here’s Bobo:

During the 20th century, political thinkers were defined less by their attachment to political parties and more by their attachment to magazines. Arthur Schlesinger was associated with The New Republic. Lionel Trilling was associated with the Partisan Review. Each magazine had its own personality, its own community of writers and readers and defined its own spot on the intellectual landscape.

Today, the Internet has made magazine communities less cohesive. Most of those magazines still exist, but people surf through them fluidly and click on individual articles. Writers are identified more as individuals and less as members of a circle.

Something important has been lost in this transition. For example, The New Republic, which turns 100 this year, made a series of superficially contradictory demands on its readers. To be a well-rounded person, the magazine implied, it is necessary to be both practical and philosophical, both politically engaged and artistically cultivated. The magazine offered, and still offers, short practical articles on politics and policy in the front of the book and long literary essays on philosophy and culture in the back.

In 1940, the magazine published a stunning critique of those who refuse to embrace both kinds of knowledge. The essay, called “The Corruption of Liberalism,” was written by the unjustly forgotten writer Lewis Mumford. It’s been revived by the magazine’s current editor, Franklin Foer, in “Insurrections of the Mind,” a collection of essays from the magazine’s first century.

Mumford’s nominal subject was his fellow liberals’ tendency, in 1940, to hang back in the central conflict of the age, the fight against totalitarianism. “Liberalism has been on the side of passivism in the face of danger,” he wrote. “Liberalism has been on the side of ‘isolation’ when confronted with the imminent threat of a worldwide upsurge in barbarism.” Liberals, he continued, “no longer dare to act.”

But, as Mumford goes along, he penetrates deeper into the pragmatist mind-set itself, the mind-set of people who try to govern without philosophic or literary depth. And, in this way, his essay is perceptive about the mind-set that is dominant in political circles today. Washington is now awash in big data analysts, policy wonks and social scientists. Today’s foreign policy debate is conducted along realist lines, by both liberals and conservatives.

A core problem with pragmatists, Mumford argues, is that they attach themselves so closely to science and social science that they have forgotten the modes of insight offered by theology and literature. This leads to a shallow, amputated worldview.

“This pragmatic liberalism,” Mumford writes, “was vastly preoccupied with the machinery of life. It was characteristic of this creed to overemphasize the part played by political and mechanical invention, by abstract thought and practical contrivance. And, accordingly, it minimized the role of instinct, tradition, history; it was unaware of the dark forces of the unconscious; it was suspicious of either the capricious or the incalculable, for the only universe it could rule was a measured one, and the only type of human character it could understand was the utilitarian one.”

Because of these blinders, pragmatists can’t understand nonpragmatists: “It is not unfair to say that the pragmatic liberal has taken the world of personality, the world of values, feelings, emotions, wishes, purposes, for granted. He assumed either that this world did not exist or that it was relatively unimportant; at all events if it did exist it could be safely left to itself, without cultivation. For him men were essentially good and only the faulty economic and political institutions — defects purely in the mechanism of society — kept them from becoming better.”

Pragmatists often fail because they try to apply economic remedies to noneconomic actors. Those who threaten civilization — Stalin then, Putin and ISIS now — are driven by moral zealotry and animal imperatives. Economic sanctions won’t work. “One might as well offer the carcass of a dead deer in a butcher store to a hunter who seeks the animal as prey. …”

Pragmatists also have trouble rousing themselves to action. They try to get rid of emotions when making decisions because emotions might lead them astray. But, in making themselves passionless, they always make themselves tepid and anesthetized. That leads to passivity. Everything is too little too late.

Mumford concludes that only people with an aroused moral sense will be properly mobilized to stand up for humanity. “Life is not worth fighting for: bare life is worthless. Justice is worth fighting for, order is worth fighting for, culture … .is worth fighting for: These universal principles and values give purpose and direction to human life.”

Today, lofty political idealism is out of favor. Even a president initially elected as an idealist has been reduced into a more technocratic role. But Mumford makes the case for leaders who understand evil down to its depths, who have literary sensibilities and who react with a heart brimming with moral emotion.

Next up we have Mr. Cohen:

Breakfast last week in New York with President Hassan Rouhani of Iran was a cordial affair, bereft of the fireworks of his predecessor, whose antics made headlines and not much more. Rouhani, flanked by his twinkly-eyed foreign minister, Mohammad Javad Zarif, was composed, lucid and, on the whole, conciliatory. He said a nuclear accord was doable by the deadline of Nov. 24 “if there is good will and seriousness.” He revealed that he had spoken last year with President Obama about “a number” of possible areas of collaboration in the event of an accord. He did not underplay the difficulties, or the implacability of a deal’s opponents in Iran and the United States, but suggested the “short-lived dustbowl” thrown up by any resolution would dissipate as win-win awareness grew. He even alluded to the aroma of roses. It was a polished performance full of the subtleties intrinsic to the Iranian mind. The question, as always with Iran, is what precisely it meant.

The interim agreement with Iran, reached in November 2013, has had many merits. Iran has respected its commitments, including a reduction of its stockpiles of enriched uranium and a curbing of production. The deal has brought a thaw in relations between the United States and Tehran; once impossible meetings between senior officials are now near routine.

The rapid spread over the past year of the Sunni jihadist movement that calls itself Islamic State has underscored the importance of these nascent bilateral relations: ISIS is a barbarous, shared enemy whose rollback becomes immeasurably more challenging in the absence of American-Iranian understanding. Allies need not be friends, as the Soviet role in defeating Hitler demonstrated. President Obama’s war against ISIS makes war with Iran more unthinkable than ever. Absent a “comprehensive solution that would ensure Iran’s nuclear program will be exclusively peaceful,” in the words of last year’s accord, the drumbeat for such a war would almost certainly resume. From Jerusalem to Washington countless drummers are ready.

It is critical that this doable deal get done, the naysayers be frustrated, and a rancorous American-Iranian bust-up not be added to the ambient mayhem in the Middle East. The Islamic Republic, 35 years after the revolution, is — like it or not — a serious and stable power in an unstable region. Its highly educated population is pro-Western. Its actions and interests are often opposed to the United States and America’s allies, and its human rights record is appalling, but then that is true of several countries with which Washington does business.

An important recent report from The Iran Project — whose distinguished signatories include Brent Scowcroft, Zbigniew Brzezinski, Thomas Pickering, Ryan Crocker, John Limbert (the former U.S. hostage in Tehran), Joseph Nye and William Luers — put the U.S. strategic interest in a deal well: “There is a strong link between settling the nuclear standoff and America’s ability to play a role in a rapidly changing Middle East.” A nuclear agreement, the report said, “will help unlock the door to new options.” From Syria to Afghanistan by way of Iraq, those options are urgently needed.

For them to be opened up, a workable narrative has to be found, one that satisfies Congress that Iran’s road to a bomb has been sealed off through curtailment and rigorous inspection of the nuclear program, and satisfies Iran’s hard-liners that the country’s ability to develop nuclear power for peaceful use has not been permanently infringed or its rights as a signatory of the Treaty on the Non-Proliferation of Nuclear Weapons irrevocably curtailed. That is a tall order. But subtlety and ingenuity are no strangers at this table. Both sides have an enormous amount to lose if talks fail.

Obama has put his personal prestige behind this effort. Collapse would amount to another Middle Eastern failure for him. He knows that the sanctions drive against Iran would likely unravel in the event of failure, as cooperation with Europe, Russia and China frays. He would be pushed once again toward military action against Iran. (Of course, he would also prefer to concentrate visible progress in the talks between Nov. 4 and Nov. 24, so that Republicans cannot brandish “softness” on Iran against the Democrats in the midterm elections.)

The difficulties are considerable. Karim Sadjadpour of the Carnegie Endowment for International Peace told me, “Those we talk to can’t deliver and those who can deliver can’t talk to us.” Ali Khamenei, Iran’s supreme leader, who does not do New York breakfasts, is a hard-liner. On issues from the number of centrifuges Iran is permitted to the duration of any deal, the two sides differ. Sadjadpour believes “managed irresolution” is the best that can be hoped for, a failure that preserves some gains. I think failure would be unmitigated: Renewed estrangement, war drift. A deal can and must be done for the simple reason it is far better — for Iran, the United States, Europe and Israel — than any of the alternatives.

And now we come to Prof. Krugman:

Last week, Bill Gross, the so-called bond king, abruptly left Pimco, the investment firm he had managed for decades. People who follow the financial industry were shocked but not exactly surprised; tales of internal troubles at Pimco had been all over the papers. But why should you care?

The answer is that Mr. Gross’s fall is a symptom of a malady that continues to afflict major decision-makers, public and private. Call it depression denial syndrome: the refusal to acknowledge that the rules are different in a persistently depressed economy.

Mr. Gross is, by all accounts, a man with a towering ego and very difficult to work with. That description, however, fits a lot of financial players, and even the most lurid personality conflicts wouldn’t have mattered if Pimco had continued to do well. But it didn’t, largely thanks to a spectacularly bad call Mr. Gross made in 2011, which continues to haunt the firm. And here’s the thing: Lots of other influential people made the same bad call — and are still making it, over and over again.

The story here really starts years earlier, when an immense housing bubble popped. Spending on new houses collapsed, and broader consumer spending also took a hit, as families that had borrowed heavily to buy houses saw the value of those homes plunge. Businesses cut back, too. Why add capacity in the face of weak consumer demand?

The result was an economy in which everyone wanted to save more and invest less. Since everyone can’t do that at the same time, something else had to give — and, in fact, two things gave. First, the economy went into a slump, from which it has not yet fully emerged. Second, the government began running a deficit, as the economic downturn caused a sharp fall in revenue and a surge in some kinds of spending, like food stamps and unemployment benefits.

Now, we normally think of deficits as a bad thing — government borrowing competes with private borrowing, driving up interest rates, hurting investment, and possibly setting the stage for higher inflation. But, since 2008, we have, to use the economics jargon, been stuck in a liquidity trap, which is basically a situation in which the economy is awash in desired saving with no place to go. In this situation, government borrowing doesn’t compete with private demand because the private sector doesn’t want to spend. And because they aren’t competing with the private sector, deficits needn’t cause interest rates to rise.

All this may sound strange and counterintuitive, but it’s what basic macroeconomic analysis tells you. And that’s not 20/20 hindsight either. In 2008-9, a number of economists — yes, myself included — tried to explain the special circumstances of a depressed economy, in which deficits wouldn’t cause soaring rates and the Federal Reserve’s policy of “printing money” (not really what it was doing, but never mind) wouldn’t cause inflation. It wasn’t just theory, either; we had the experience of the 1930s and Japan since the 1990s to draw on. But many, perhaps most, influential people in the alleged real world refused to believe us.

Which brings me back to Mr. Gross.

For a time, Pimco — where Paul McCulley, a managing director at the time, was one of the leading voices explaining the logic of the liquidity trap — seemed admirably calm about deficits, and did very well as a result. In late 2009, many Wall Street analysts warned of a looming surge in U.S. borrowing costs; Morgan Stanley predicted that the interest rate on 10-year bonds would soar to 5.5 percent in 2010. But Pimco bet, correctly, that rates would stay low.

Then something changed. Mr. McCulley left Pimco at the end of 2010 (he recently returned as chief economist), and Mr. Gross joined the deficit hysterics, declaring that low interest rates were “robbing” investors and selling off all his holdings of U.S. debt. In particular, he predicted a spike in interest rates when the Fed ended a program of debt purchases in June 2011. He was completely wrong, and neither he nor Pimco ever recovered.

So is this an edifying tale in which bad ideas were proved wrong by experience, people’s eyes were opened, and truth prevailed? Sorry, no. In fact, it’s very hard to find any examples of people who have changed their minds. People who were predicting soaring inflation and interest rates five years ago are still predicting soaring inflation and interest rates today, vigorously rejecting any suggestion that they should reconsider their views in light of experience.

And that’s what makes the Bill Gross story interesting. He’s pretty much the only major deficit hysteric to pay a price for getting it wrong (even though he remains, of course, immensely rich). Pimco has taken a hit, but everywhere else the reign of error continues undisturbed.

Brooks and Krugman

September 19, 2014

Oh, gawd…  Bobo has a question in “Startling Adult Friendships:”  How would you spend $500 million? He’s got a few ideas.  In the comments “Claus Gehner” from Seattle and Munich had this to say:  “Mr. Brooks’ editorials of late have been a bit – how shall I put it – weird. This one ascends to new heights of weirdness.”  Bobo’s obviously going through some prolonged midlife crisis.  I just wish he’d keep it to himself.  Prof. Krugman, in “Errors and Emissions,” says fighting climate change could be cheaper and easier than almost anyone imagines if we wouldn’t give in to the despair.  Here, dear sweet Baby Jesus help us, is Bobo:

Somebody recently asked me what I would do if I had $500 million to give away. My first thought was that I’d become a moderate version of the Koch brothers. I’d pay for independent candidates to run against Democratic or Republican members of Congress who veered too far into their party’s fever swamps.

But then I realized that if I really had that money, I’d want to affect a smaller number of people in a more personal and profound way. The big, established charities are already fighting disease and poverty as best they can, so in search of new directions I thought, oddly, of friendship.

Ancient writers from Aristotle to Cicero to Montaigne described friendship as the pre-eminent human institution. You can go without marriage, or justice, or honor, but friendship is indispensable to life. Each friendship, they continued, has positive social effects. Lovers face each other, but friends stand side-by-side, facing the world — often working on its behalf. Aristotle suggested that friendship is the cornerstone of society. Montaigne thought that it spreads universal warmth.

These writers probably romanticized friendship. One senses that they didn’t know how to have real conversations with the women in their lives, so they poured their whole emotional lives into male friendships. But I do think they were right in pointing out that friendship is a personal relationship that has radiating social and political benefits.

In the first place, friendship helps people make better judgments. So much of deep friendship is thinking through problems together: what job to take; whom to marry. Friendship allows you to see your own life but with a second sympathetic self.

Second, friends usually bring out better versions of each other. People feel unguarded and fluid with their close friends. If you’re hanging around with a friend, smarter and funnier thoughts tend to come burbling out.

Finally, people behave better if they know their friends are observing. Friendship is based, in part, on common tastes and interests, but it is also based on mutual admiration and reciprocity. People tend to want to live up to their friends’ high regard. People don’t have close friendships in any hope of selfish gain, but simply for the pleasure itself of feeling known and respected.

It’s also true that friendship is not in great shape in America today. In 1985, people tended to have about three really close friends, according to the General Social Survey. By 2004, according to research done at Duke University and the University of Arizona, they were reporting they had only two close confidants. The number of people who say they have no close confidants at all has tripled over that time.

People seem to have a harder time building friendships across class lines. As society becomes more unequal and segmented, invitations come to people on the basis of their job status. Middle-aged people have particular problems nurturing friendships and building new ones. They are so busy with work and kids that friendship gets squeezed out.

So, in the fantasy world in which I have $500 million, I’d try to set up places that would cultivate friendships. I know a lot of people who have been involved in fellowship programs. They made friends that ended up utterly transforming their lives. I’d try to take those sorts of networking programs and make them less career oriented and more profound.

To do that, you have to get people out of their normal hunting grounds where their guard is up. You also probably want to give them challenging activities to do together. Nothing inspires friendship like selflessness and cooperation in moments of difficulty. You also want to give them moments when they can share confidences, about big ideas and small worries.

So I envision a string of adult camps or retreat centers (my oldest friendships were formed at summer camp, so I think in those terms). Groups of 20 or 30 would be brought together from all social and demographic groups, and secluded for two weeks. They’d prepare and clean up all their meals together, and eating the meals would go on for a while. In the morning, they would read about and discuss big topics. In the afternoons, they’d play sports, take hikes and build something complicated together. At night, there’d be a bar and music.

You couldn’t build a close friendship in that time, but you could plant the seeds for one. As with good fellowship programs, alumni networks would grow spontaneously over time.

People these days are flocking to conferences, ideas festivals and cruises that are really about building friendships, even if they don’t admit it explicitly. The goal of these intensity retreats would be to spark bonds between disparate individuals who, in the outside world, would be completely unlikely to know each other. The benefits of that social bridging, while unplannable, would ripple out in ways long and far-reaching.

It’s sad to think that Bobo can’t think of another way to form friendships other than what sounds very much like a reeducation camp for people like him…  Here’s Prof. Krugman:

This just in: Saving the planet would be cheap; it might even be free. But will anyone believe the good news?

I’ve just been reading two new reports on the economics of fighting climate change: a big study by a blue-ribbon international group, the New Climate Economy Project, and a working paper from the International Monetary Fund. Both claim that strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth. This may sound too good to be true, but it isn’t. These are serious, careful analyses.

But you know that such assessments will be met with claims that it’s impossible to break the link between economic growth and ever-rising emissions of greenhouse gases, a position I think of as “climate despair.” The most dangerous proponents of climate despair are on the anti-environmentalist right. But they receive aid and comfort from other groups, including some on the left, who have their own reasons for getting it wrong.

Where is the new optimism about climate change and growth coming from? It has long been clear that a well-thought-out strategy of emissions control, in particular one that puts a price on carbon via either an emissions tax or a cap-and-trade scheme, would cost much less than the usual suspects want you to think. But the economics of climate protection look even better now than they did a few years ago.

On one side, there has been dramatic progress in renewable energy technology, with the costs of solar power, in particular, plunging, down by half just since 2010. Renewables have their limitations — basically, the sun doesn’t always shine, and the wind doesn’t always blow — but if you think that an economy getting a lot of its power from wind farms and solar panels is a hippie fantasy, you’re the one out of touch with reality.

On the other side, it turns out that putting a price on carbon would have large “co-benefits” — positive effects over and above the reduction in climate risks — and that these benefits would come fairly quickly. The most important of these co-benefits, according to the I.M.F. paper, would involve public health: burning coal causes many respiratory ailments, which drive up medical costs and reduce productivity.

And thanks to these co-benefits, the paper argues, one argument often made against carbon pricing — that it’s not worth doing unless we can get a global agreement — is wrong. Even without an international agreement, there are ample reasons to take action against the climate threat.

But back to the main point: It’s easier to slash emissions than seemed possible even a few years ago, and reduced emissions would produce large benefits in the short-to-medium run. So saving the planet would be cheap and maybe even come free.

Enter the prophets of climate despair, who wave away all this analysis and declare that the only way to limit carbon emissions is to bring an end to economic growth.

You mostly hear this from people on the right, who normally say that free-market economies are endlessly flexible and creative. But when you propose putting a price on carbon, suddenly they insist that industry will be completely incapable of adapting to changed incentives. Why, it’s almost as if they’re looking for excuses to avoid confronting climate change, and, in particular, to avoid anything that hurts fossil-fuel interests, no matter how beneficial to everyone else.

But climate despair produces some odd bedfellows: Koch-fueled insistence that emission limits would kill economic growth is echoed by some who see this as an argument not against climate action, but against growth. You can find this attitude in the mostly European “degrowth” movement, or in American groups like the Post Carbon Institute; I’ve encountered claims that saving the planet requires an end to growth at left-leaning meetings on “rethinking economics.” To be fair, anti-growth environmentalism is a marginal position even on the left, but it’s widespread enough to call out nonetheless.

And you sometimes see hard scientists making arguments along the same lines, largely (I think) because they don’t understand what economic growth means. They think of it as a crude, physical thing, a matter simply of producing more stuff, and don’t take into account the many choices — about what to consume, about which technologies to use — that go into producing a dollar’s worth of G.D.P.

So here’s what you need to know: Climate despair is all wrong. The idea that economic growth and climate action are incompatible may sound hardheaded and realistic, but it’s actually a fuzzy-minded misconception. If we ever get past the special interests and ideology that have blocked action to save the planet, we’ll find that it’s cheaper and easier than almost anyone imagines.

Brooks, Cohen and Nocera

September 9, 2014

In “Becoming a Real Person” Bobo sighs that elite American universities give students extensive résumé guidance but seem to have forgotten the moral component of their mission.  Silly me — almost 69 years old and all this time I thought moral guidance was something that came from home and community, and started as soon as you were old enough to understand the word “no.”  In “A War of Choice in Gaza” Mr. Cohen says the fighting was unnecessary — it rehabilitated a beleaguered Hamas, and gained nothing for Israel.  Mr. Nocera is back to carrying water for Big Bidness.  In “Inversion Delusion” he actually tries to convince us that the argument is bogus that corporations leave the U.S. and set up overseas because of high corporate tax rates.   Here’s Bobo:

This summer, The New Republic published the most read article in that magazine’s history. It was an essay by William Deresiewicz, drawn from his new book, “Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life.”

Deresiewicz offers a vision of what it takes to move from adolescence to adulthood. Everyone is born with a mind, he writes, but it is only through introspection, observation, connecting the head and the heart, making meaning of experience and finding an organizing purpose that you build a unique individual self.

This process, he argues, often begins in college, the interval of freedom when a person is away from both family and career. During that interval, the young person can throw himself with reckless abandon at other people and learn from them.

Some of these people are authors who have written great books. Some are professors who can teach intellectual rigor. Some are students who can share work that is intrinsically rewarding.

Through this process, a student is able, in the words of Mark Lilla, a professor at Columbia, to discover “just what it is that’s worth wanting.”

Deresiewicz argues that most students do not get to experience this in elite colleges today. Universities, he says, have been absorbed into the commercial ethos. Instead of being intervals of freedom, they are breeding grounds for advancement. Students are too busy jumping through the next hurdle in the résumé race to figure out what they really want. They are too frantic tasting everything on the smorgasbord to have life-altering encounters. They have a terror of closing off options. They have been inculcated with a lust for prestige and a fear of doing things that may put their status at risk.

The system pressures them to be excellent, but excellent sheep.

Stephen Pinker, the great psychology professor at Harvard, wrote the most comprehensive response to Deresiewicz. “Perhaps I am emblematic of everything that is wrong with elite American education, but I have no idea how to get my students to build a self or become a soul. It isn’t taught in graduate school, and in the hundreds of faculty appointments and promotions I have participated in, we’ve never evaluated a candidate on how well he or she could accomplish it.”

Pinker suggests the university’s job is cognitive. Young people should know how to write clearly and reason statistically. They should acquire specific knowledge: the history of the planet, how the body works, how cultures differ, etc.

The way to select students into the elite colleges is not through any mysterious peering into applicants’ souls, Pinker continues. Students should be selected on the basis of standardized test scores:the S.A.T.’s. If colleges admitted kids with the highest scores and companies hired applicants with the highest scores, Pinker writes, “many of the perversities of the current system would vanish overnight.”

What we have before us then, is three distinct purposes for a university: the commercial purpose (starting a career), Pinker’s cognitive purpose (acquiring information and learning how to think) and Deresiewicz’s moral purpose (building an integrated self).

Over a century ago, most university administrators and faculty members would have said the moral purpose is the most important. As Mary Woolley, the president of Mount Holyoke, put it, “Character is the main object of education.” The most prominent Harvard psychology professor then, William James, wrote essays on the structure of the morally significant life. Such a life, he wrote, is organized around a self-imposed, heroic ideal and is pursued through endurance, courage, fidelity and struggle.

Today, people at these elite institutions have the same moral aspirations. Everybody knows the meritocratic system has lost its mind. Everybody — administrators, admissions officers, faculty and students — knows that the pressures of the résumé race are out of control.

But people in authority no longer feel compelled to define how they think moral, emotional and spiritual growth happens, beyond a few pablum words that no one could disagree with and a few vague references to community service. The reason they don’t is simple. They don’t think it’s their place, or, as Pinker put it, they don’t think they know.

The result is that the elite universities are strong at delivering their commercial mission. They are pretty strong in developing their cognitive mission. But when it comes to the sort of growth Deresiewicz is talking about, everyone is on their own. An admissions officer might bias her criteria slightly away from the Résumé God and toward the quirky kid. A student may privately wrestle with taking a summer camp job instead of an emotionally vacuous but résumé-padding internship. But these struggles are informal, isolated and semi-articulate.

I’d say Deresiewicz significantly overstates the amount of moral decay at elite universities. But at least he reminds us what a moral education looks like. That is largely abandoned ground.

Drawing the veil of charity over Bobo, let us proceed to Mr. Cohen:

Another round of violence is over in the Holy Land. More than 2,100 Palestinians, most of them civilians and many of them children, have been killed. More than 70 Israelis are dead. The grass, in that appalling Israeli metaphor, has been mown (and will now start growing again). Hamas, through its resistance, has burnished its reputation among Palestinians. Israel is angrier. Nobody is better off.

Periodic eruptions are intrinsic to Prime Minister Benjamin Netanyahu’s strategy of maintaining the status quo of rule over millions of Palestinians, expansion of West Bank settlements and maneuver to deflect American mediation. Oppressed people will rise up. Israel’s anemic embrace of a two-state objective is the best possible cover for the evisceration of that aim. Still, the question arises: Was this mini-war necessary?

I think not. Certainly it was not in Israel’s strategic interest. Much mystery continues to shroud its genesis, the abduction on June 12 of three Israeli youths near Hebron and their murder, now attributed to a local Palestinian clan including Hamas operatives who acted without the knowledge or direction of the Hamas leadership. (There has been no major investigative piece in the American press on the incident, a troubling omission.)

But enough detail has emerged to make clear that Netanyahu leapt on “unequivocal proof” of Hamas responsibility (still unproduced) for political ends. The prime minister’s aim was to discredit Mahmoud Abbas, the president of the Palestinian Authority, for reconciling with Hamas; vindicate the collapse of the peace talks Secretary of State John Kerry had pursued; stir up Israeli rage over the fate of the teenagers; sweep through the West Bank arresting hundreds of suspected Hamas members, including 58 released under the terms of an earlier deal with Hamas; and consolidate divide-and-rule.

Assaf Sharon of Tel Aviv University, the academic director of a liberal think tank in Jerusalem, has a powerful piece in The New York Review of Books. It makes the important point that Hamas was beleaguered before the violence, isolated by the fall of the Muslim Brotherhood in Egypt and the rise of President Abdel Fattah el-Sisi. This weakness lay behind the reconciliation with Abbas. Netanyahu might have used this development to extend Abbas’s authority into a more open Gaza at the expense of Hamas, the very objective now apparently sought after so much needless loss of life.

For more than two weeks after the abduction, persuasive evidence that the teenagers were dead was kept from the Israeli public. A hugely emotional return-our-boys campaign was pursued while the recording of a phone call from one of those boys to the police in the immediate aftermath of the kidnapping was not divulged. In it, shots and cries of pain could be heard. As Shlomi Eldar wrote, “It was a murder in real time, horrifying and monstrous.” After it, “Those who heard the emergency call recording knew that the best one could hope for was to bring the boys to their final resting places.”

The effect of this concealment, whatever its justification, was to whip up an Israeli frenzy. This was the context in which a Palestinian teenager was killed by Israeli extremists. It was also the context of the drift to war: air campaign, Hamas rockets and tunnel raids, Israeli ground invasion. Drift is the operative word. Israel’s purpose was shifting. At different moments it included “zero rockets,” demilitarizing Gaza and destroying the tunnels. “Lacking clear aims, Israel was dragged, by its own actions, into a confrontation it did not seek and did not control,” Sharon writes.

The only certainty now is that this will happen again unless the situation in Gaza changes. That in turn necessitates Palestinian unity and renunciation of violence. It also hinges on a change in the Israeli calculus that settlement extension, a divided Palestinian movement, and vacuous blah-blah on a two-state peace are in its interest, whatever the intermittent cost in blood.

Two other recent pieces are essential reading in the aftermath of the fighting. The first is Connie Bruck’s “Friends of Israel” in The New Yorker, an examination of the political sway of the American Israel Public Affairs Committee, the pro-Israel lobby group. In it, she quotes Brian Baird, a former Democratic congressman, getting to the nub: “The difficult reality is this: in order to get elected to Congress, if you’re not independently wealthy, you have to raise a lot of money. And you learn pretty quickly that, if Aipac is on your side, you can do that.” She also quotes John Yarmuth, a congressman from Kentucky, on upholding the interests of the United States: “We all took an oath of office. And Aipac, in many instances, is asking us to ignore it.”

Finally, read Yehuda Shaul in The New Statesman on the corrosive effect of the occupation and his experience of military service in the West Bank: “We needed to erase the humanity of Palestinians along with our own humanity.”

And now we get to Joe “Gunga Din” Nocera:

On Monday, the Tax Policy Center in Washington held a panel discussion on the subject of “corporate inversions” — the practice of taking over a small company in someplace like Ireland or the Netherlands, and then using that takeover to “relocate” to the foreign country for tax reasons. One of the panelists was John Samuels, the chief tax lawyer for General Electric.

Samuels started by saying that even the most junior tax lawyers know that, when structuring a cross-border merger, “you should do whatever you can, whatever’s possible, to make sure the ultimate parent or acquirer is a foreign company, not a U.S. company, to avoid having the entire worldwide income caught up in the U.S. tax net.” He went on: “Virtually every major developed country in the world has dramatically reformed its tax system to make it more business-friendly.” He cited Britain as an example. “The U.K. recently abandoned its worldwide system for a territorial system [and] reduced its corporate tax rate to 21 percent.” Quoting the exchequer secretary to the Treasury, he added, Britain “wants to send out the signal loud and clear that Britain is open for business.”

The corporate tax rate in the United States is 35 percent, which is the highest in the industrialized world. And, unlike most other countries, it taxes a company’s worldwide earnings, at that same high rate, once they are repatriated into the United States. (That is what Samuels meant by a “worldwide system.”)

So, at first glance, Samuels’s analysis would seem to make sense: the disparity of our uncompetitive corporate tax rate versus their business-friendly rates must be driving the current mania for inversions. Many other corporate executives have made the same argument. Just a few months ago, Heather Bresch, the chief executive of Mylan, a $7 billion generic drug company, announced that her company would be doing an inversion that would place its new corporate address in the Netherlands, where the tax rate is 25 percent. She complained that the American corporate tax rate needed to become “more competitive.”

But upon closer inspection, this argument turns out to be mainly hogwash. As Edward D. Kleinbard put it in a recent report, “ ‘Competitiveness’ has nothing to do with it.”

Kleinbard, a law professor at the University of Southern California, has emerged as one of the leading critics of inversions. In his view, it isn’t so much that the corporate tax code is too tough or the rate is too high; rather, he says, companies are taking advantage of loopholes in the code that make inversions almost irresistible for corporate executives. As another critic, Kimberly Clausing of Reed College, wrote in a recent paper: “Both the high U.S. tax rate and the worldwide system of taxation have more bark than bite.”

For starters, American multinationals, with their high-powered tax departments, rarely pay 35 percent or anything close to it. And those earnings that are supposed to get taxed upon repatriation? Needless to say, they never get repatriated; by some estimates, $2 trillion in earnings by American multinationals reside, untaxed, outside the country.

Indeed, according to Kleinbard and other critics, gaining access to those earnings is a benefit of inversion. Clausing describes the tactic like this: Foreign affiliates of the American company lend money to the new foreign parent, skipping over the U.S. company and thus avoiding the repatriation tax. Kleinbard calls these “hopscotch” transactions.

Then there is something called “earnings stripping,” which inversion also makes possible. This involves using loans between the foreign “owner” and the American “affiliate” to shift income out of the United States. According to Clausing, Walgreens, which was planning an inversion but pulled back after a public outcry, would have saved “over $780 million in taxes in one year alone.”

For years, executives have called for an overhaul of the corporate tax system; recently, as per Samuels and Bresch, inversions have become a part of the argument. But, in truth, curbing inversions shouldn’t have to wait for wholesale reform. In 2004, George W. Bush pushed through a law that temporarily stopped what was then a flood of inversions.

It can be done again. Laws can be written that, for instance, insist that the foreign targets be much larger companies — thus trying to ensure that the deals are done for strategic reasons rather than solely for tax reasons. And the loopholes that allow for earnings stripping and hopscotching can be closed.

Before that panel discussion on Monday, Treasury Secretary Jack Lew made a speech in which he denounced inversions and essentially pleaded with Congress to take action. He also hinted that the administration might take regulatory action on its own, though there is disagreement among the experts whether regulation alone could stop inversions.

In either case, they need to be stopped. They aren’t just corrosive to the country’s tax base; they are corrosive, in a larger sense, to the country. Thanks to our Swiss cheese of a tax code, multinational companies already have a splendid little deal. They shouldn’t get to sweeten it even more.


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