Archive for the ‘Krugman’ Category

Blow and Krugman

March 2, 2015

Mr. Blow has a question in “CPAC: Hackneyed and Hollow:”  Where were the grand conservative thinkers? Where was the philosophical heft?  Mr. Blow, they know the answer to that even in Paris, where “HeyNorris” commented:  “Mr. Blow, I do admire your optimism. As Oscar Wilde noted, “we are all in the gutter, but some of us are looking at the stars”.  The trouble is, the sky at CPAC is as dark and foul as the gutter. It’s nothing but an audition stage for presidential hopefuls to out-conservative one another. The “thousand points of light in a broad and peaceful sky” have been extinguished by the bigotry, hatred and small-mindedness of the ultra conservatives controlling the Republican party. That’s not an environment from which could spring any kind of intellectual engagement.”  Prof. Krugman, in “Walmart’s Invisible Hand,” says a pay raise by America’s largest employer shows that low wages are a choice, and that we can and should choose differently.  Here’s Mr. Blow (who I hope has recovered the brain cells lost by attending CPAC):

I never know how to set my expectations for the Conservative Political Action Conference, also known as CPAC.

I try to approach it with as much of an open mind as I can muster, understanding that I am at odds, fundamentally, with many conservative principles and conservatives’ views about the role, size and scope of government, but also realizing that apart from a debate setting, this may be the best place to take the temperature of, and hear from, the broadest range of conservative leaders.

I still think, perhaps naïvely so, that people can be ideologically opposed but intellectually engaged, that a good idea makes the best bridge.

So I do my best to follow the speeches — from afar (thank you, live streaming!) — and wait to hear something that jolts my consciousness or challenges my sense of things.

But once again this year, I was disappointed.

There remains in the Republican Party, as evidenced by the speakers at this event, a breathtaking narrowness of vision and deficit of creative thought.

The confab, for the most part, felt to me like a revelry of contrarians. Rather than presenting the party as one with a plan, many of the speakers seemed determined to cement it as the party of resistance and opposition.

Where were the grand conservative thinkers? Where was the philosophical heft? Where was the vision of a future not built on a transporting to the past?

It was largely absent. In its place was too much rhetoric about defending, defeating, defunding, deauthorizing. There was so much anti-Obama and anti-Hillary obsessing that the “pro” alternatives — to the extent that a case could be made — were obscured.

Furthermore, it was hard to skip over all the missteps.

Scott Walker, the leader in a new and oh-so-early Quinnipiac University poll of likely Iowa Republican caucus participants, compared union protesters in Wisconsin to the savage members of the Islamic State.

Rick Perry still couldn’t get his facts straight. He said the president “says that ISIS is a religious movement. Again, he’s simply wrong.” No, sir, you are wrong. The president has taken pains to make the opposite argument, and has taken some shots for that. Perry also said that “ISIS represents the worst threat to freedom since communism.” Really? Calm down, cowboy.

Chris Christie hung much of his question and answer presentation onbemoaning his coverage in the media, skirting the obvious fact that previous media fawning is a large part of the reason he rose to national prominence. Live by the pen; die by the pen.

Jeb Bush did his best before a somewhat hostile crowd — there were boos and hisses and some folks walked out (some in costume, of course) and reportedly shouted, “No more Bushes.” It must be noted here that CPAC is a particular kind of crowd: not exactly like the Republican electorate, and not at all like the national electorate as a whole. (Rand Paul has won the last three CPAC straw polls.)

But Bush seemed awkward and uncomfortable, trying to set up camp on both sides of the ravine on some issues like immigration and the Common Core.

At least he made the point that conservatives “have to start being for things again.”

This is where the Republican Party continues to falter. The cavalcade of contra nothingness at CPAC barreled forward with more speakers who lacked vision and brio.

I guess one could make the argument that if the Republican pool of candidates is wide but shallow, that’s good for Democrats. Indeed, it is.

Republicans have done exceedingly well in the recent midterms — in part because of anti-Obama Tea Party animus in 2010 and the fact that voter turnout for the 2014 midterms was the lowest of any election cycle since World War II. But presidential election years are a different story: They are national elections with a different electoral profile and greater participation.

And nationally, the Republican brand remains tarnished.

A Pew Research Center report released last week found that “majorities say the Democratic Party is open and tolerant, cares about the middle class and is not ‘too extreme.’ By contrast, most Americans see the G.O.P. lacking in tolerance and empathy for the middle class, and half view it as too extreme.”

This, of course, does not mean Democrats will have it easy in 2016 or thereafter. In fact, history tells us that politics swing like a pendulum.

But if this is the quality of candidates and discourse of the Republican side when that pendulum swings back, then that’s tragic. If the bulk of your message is about what you are against rather than what you are for, if it’s about dragging the country back rather than leading it forward, then we’ll all suffer.

But they’ve done such a SUPERB job of gerrymandering that they’ll continue to win…  Here’s Prof. Krugman:

A few days ago Walmart, America’s largest employer, announced that it will raise wages for half a million workers. For many of those workers the gains will be small, but the announcement is nonetheless a very big deal, for two reasons. First, there will be spillovers: Walmart is so big that its action will probably lead to raises for millions of workers employed by other companies. Second, and arguably far more important, is what Walmart’s move tells us — namely, that low wages are a political choice, and we can and should choose differently.

Some background: Conservatives — with the backing, I have to admit, of many economists — normally argue that the market for labor is like the market for anything else. The law of supply and demand, they say, determines the level of wages, and the invisible hand of the market will punish anyone who tries to defy this law.

Specifically, this view implies that any attempt to push up wages will either fail or have bad consequences. Setting a minimum wage, it’s claimed, will reduce employment and create a labor surplus, the same way attempts to put floors under the prices of agricultural commodities used to lead to butter mountains, wine lakes and so on. Pressuring employers to pay more, or encouraging workers to organize into unions, will have the same effect.

But labor economists have long questioned this view. Soylent Green — I mean, the labor force — is people. And because workers are people, wages are not, in fact, like the price of butter, and how much workers are paid depends as much on social forces and political power as it does on simple supply and demand.

What’s the evidence? First, there is what actually happens when minimum wages are increased. Many states set minimum wages above the federal level, and we can look at what happens when a state raises its minimum while neighboring states do not. Does the wage-hiking state lose a large number of jobs? No — the overwhelming conclusion from studying these natural experiments is that moderate increases in the minimum wage have little or no negative effect on employment.

Then there’s history. It turns out that the middle-class society we used to have didn’t evolve as a result of impersonal market forces — it was created by political action, and in a brief period of time. America was still a very unequal society in 1940, but by 1950 it had been transformed by a dramatic reduction in income disparities, which the economists Claudia Goldin and Robert Margo labeled the Great Compression. How did that happen?

Part of the answer is direct government intervention, especially during World War II, when government wage-setting authority was used to narrow gaps between the best paid and the worst paid. Part of it, surely, was a sharp increase in unionization. Part of it was the full-employment economy of the war years, which created very strong demand for workers and empowered them to seek higher pay.

The important thing, however, is that the Great Compression didn’t go away as soon as the war was over. Instead, full employment and pro-worker politics changed pay norms, and a strong middle class endured for more than a generation. Oh, and the decades after the war were also marked by unprecedented economic growth.

Which brings me back to Walmart.

The retailer’s wage hike seems to reflect the same forces that led to the Great Compression, albeit in a much weaker form. Walmart is under political pressure over wages so low that a substantial number of employees are on food stamps and Medicaid. Meanwhile, workers are gaining clout thanks to an improving labor market, reflected in increasing willingness to quit bad jobs.

What’s interesting, however, is that these pressures don’t seem all that severe, at least so far — yet Walmart is ready to raise wages anyway. Andits justification for the move echoes what critics of its low-wage policy have been saying for years: Paying workers better will lead to reduced turnover, better morale and higher productivity.

What this means, in turn, is that engineering a significant pay raise for tens of millions of Americans would almost surely be much easier than conventional wisdom suggests. Raise minimum wages by a substantial amount; make it easier for workers to organize, increasing their bargaining power; direct monetary and fiscal policy toward full employment, as opposed to keeping the economy depressed out of fear that we’ll suddenly turn into Weimar Germany. It’s not a hard list to implement — and if we did these things we could make major strides back toward the kind of society most of us want to live in.

The point is that extreme inequality and the falling fortunes of America’s workers are a choice, not a destiny imposed by the gods of the market. And we can change that choice if we want to.

Brooks and Krugman

February 27, 2015

In “Converting the Ayatollahs” Bobo gurgles that the nuclear negotiations with Iran are based on misguided premises and could have disastrous outcomes.  In the comments (which generally take him to school) “Stuart” from NY, NY has this to say:  “Just my opinion, but I think this Op-Ed is irresponsible. First of all, it’s full of conjecture. Second, NYTimes readers already know Mr. Brooks’s tactics. He suggests a recklessness on the part of the Obama administration that reasonable people shouldn’t believe.  Mr. Brooks is only one of many wishing to derail diplomacy before seeing its results. It puts him in Dick and Liz Cheney territory. For all his warm and fuzzy think pieces, we’re expected to be swayed by this misguided propaganda. Why he would want to be the Joe Lieberman of columnists is anyone’s guess.”  Well, Stuart, he probably thinks Weeping Joe is a great ‘Murkan…  Prof. Krugman has a question in “What Greece Won:”  Why all the negative analysis about the debt deal that has actually done the rest of Europe a favor?  Here’s Bobo:

Over the past centuries, Western diplomats have continually projected pragmatism onto their ideological opponents. They have often assumed that our enemies are driven by the same sort of national interest calculations that motivate most regimes. They have assumed that economic interests would trump ideology and religion — that prudent calculation and statecraft would trump megalomania.

They assumed that the world leaders before 1914 would not be stupid enough to allow nationalist passion to plunge them into a World War; that Hitler would not be crazy enough to start a second one; that Islamic radicals could not really want to send their region back into the 12th century; that Sunnis and Shiites would never let their sectarian feud turn into a cataclysmic confrontation in places like Iraq.

The Obama administration is making a similar projection today. It is betting that Iran can turn into a fundamentally normal regime, which can be counted upon to put G.D.P. over ideology and religion and do the pragmatic thing.

The Iran nuclear negotiations are not just about centrifuges; they are about the future of the Middle East. Through a series of statements over the last few years, President Obama has made it reasonably clear how he envisions that future.

He seeks to wean Iran away from the radicalism of the revolution and bind it into the international economic and diplomatic system. By reaching an agreement on nukes and lifting the sanctions, Iran would re-emerge as America’s natural partner in the region. It has an educated middle class that is interested in prosperity and is not terribly anti-American. Global integration would strengthen Iranian moderates and reinforce democratic tendencies.

Once enmeshed in the global system, Iran would work to tame Hezbollah and Hamas and would cooperate to find solutions in Gaza, Iraq and Syria. There would be a more stable balance of power between the major powers. In exchange for good global citizenship, Iran would be richer and more influential.

To pursue this détente, Obama has to have a nuclear agreement. He has made a series of stunning sacrifices in order to get it. In 2012, the president vowed that he would not permit Iran to maintain a nuclear program. Six United Nations Security Council resolutions buttressed that principle. But, if reports of the proposed deal are correct, Obama has abandoned this policy.

Under the reported framework, Iran would have thousands of centrifuges. All restrictions on its nuclear program would be temporary and would be phased out over a decade or so. According to some reports, there will be no limits on Iran’s ballistic missiles, no resolution of Iran’s weaponizing activities. Monitoring and enforcement would rely on an inspection regime that has been good, but leaky.

Meanwhile, the United States has offended its erstwhile allies, like Israel, Saudi Arabia and Egypt, without being sure that Iran is really willing to supplement them. There is a chance that Iran’s regional rivals would feel the need to have their own nuclear programs and we would descend into a spiral of proliferation.

All of this might be defensible if Iran is really willing to switch teams, if religion and ideology played no role in the regime’s thinking. But it could be that Iran has been willing to be an international pariah for the past generation for a reason. It could be that Iran finances terrorist groups and destabilizes regimes like Yemen’s and Morocco’s for a reason. It could be that Iran’s leaders really believe what they say. It could be that Iranian leaders are as apocalyptically motivated, paranoid and dogmatically anti-American as their pronouncements suggest they are. It could be that Iran will be as destabilizing and hegemonically inclined as all its recent actions suggest. Iran may be especially radical if the whole region gets further inflamed by Sunni-Shia rivalry or descends into greater and greater Islamic State-style fanaticism.

Do we really want a nuclear-capable Iran in the midst of all that?

If the Iranian leaders believe what they say, then United States policy should be exactly the opposite of the one now being pursued. Instead of embracing and enriching Iran, sanctions should be toughened to further isolate and weaken it. Instead of accepting a nuclear capacity, eliminating that capacity should be restored as the centerpiece of American policy. Instead of a condominium with Iran that offends traditional allies like Saudi Arabia, Egypt and Israel, the U.S. should build a regional strategy around strengthening relations with those historic pillars.

It’s hard to know what’s going on in the souls of Iran’s leadership class, but a giant bet is being placed on one interpretation. March could be a ruinous month for the Middle East. Prime Minister Benjamin Netanyahu of Israel could weaken U.S.-Israeli relations, especially on the Democratic left. The world might accept an Iranian nuclear capacity. Efforts designed to palliate a rogue regime may end up enriching and emboldening it.

Now here’s Prof. Krugman:

Last week, after much drama, the new Greek government reached a deal with its creditors. Earlier this week, the Greeks filled in some details on how they intend to meet the terms. So how did it go?

Well, if you were to believe many of the news reports and opinion pieces of the past few days, you’d think that it was a disaster — that it was a “surrender” on the part of Syriza, the new ruling coalition in Athens. Some factions within Syriza apparently think so, too. But it wasn’t. On the contrary, Greece came out of the negotiations pretty well, although the big fights are still to come. And by doing O.K., Greece has done the rest of Europe a favor.

To make sense of what happened, you need to understand that the main issue of contention involves just one number: the size of the Greek primary surplus, the difference between government revenues and government expenditures not counting interest on the debt. The primary surplus measures the resources that Greece is actually transferring to its creditors. Everything else, including the notional size of the debt — which is a more or less arbitrary number at this point, with little bearing on the amount anyone expects Greece to pay — matters only to the extent that it affects the primary surplus Greece is forced to run.

For Greece to run any surplus at all — given the depression-level slump that it’s in and the effect of that depression on revenues — is a remarkable achievement, the result of incredible sacrifices. Nonetheless, Syriza has always been clear that it intends to keep running a modest primary surplus. If you are angry that the negotiations didn’t make room for a full reversal of austerity, a turn toward Keynesian fiscal stimulus, you weren’t paying attention.

The question instead was whether Greece would be forced to impose still more austerity. The previous Greek government had agreed to a program under which the primary surplus would triple over the next few years, at immense cost to the nation’s economy and people.

Why would any government agree to such a thing? Fear. Essentially, successive leaders in Greece and other debtor nations haven’t dared to challenge extreme creditor demands, for fear that they would be punished — that the creditors would cut off their cash flow or, worse yet, implode their banking system if they balked at ever-harsher budget cuts.

So did the current Greek government back down and agree to aim for those economy-busting surpluses? No, it didn’t. In fact, Greece won new flexibility for this year, and the language about future surpluses was obscure. It could mean anything or nothing.

And the creditors did not pull the plug. Instead, they made financing available to carry Greece through the next few months. That is, if you like, putting Greece on a short leash, and it means that the big fight over the future is yet to come. But the Greek government didn’t succumb to the bum’s rush, and that in itself is a kind of victory.

Why, then, all the negative reporting? To be fair, fiscal policy isn’t the only issue. There were and are also arguments about things like privatization of public assets, where Syriza has agreed not to reverse deals already made, and labor market regulation, where some of the “structural reform” of the austerity era will apparently stand. Syriza also agreed to crack down on tax evasion, although why collecting taxes is supposed to be a defeat for a leftist government is a mystery to me.

Still, nothing that just happened justifies the pervasive rhetoric of failure. Actually, my sense is that we’re seeing an unholy alliance here between left-leaning writers with unrealistic expectations and the business press, which likes the story of Greek debacle because that’s what is supposed to happen to uppity debtors. But there was no debacle. Provisionally, at least, Greece seems to have ended the cycle of ever-more-savage austerity.

And, as I said, in so doing, Greece has done the rest of Europe a favor. Remember, in the background of the Greek drama is a European economy that, despite some positive numbers lately, still seems to be sliding into a deflationary trap. Europe as a whole desperately needs to end austerity madness, and this week there have been some slightly positive signs. Notably, the European Commission has decided not to fine France and Italy for exceeding their deficit targets.

Levying these fines would have been insane given market realities; France can borrow for five years at an interest rate of 0.002 percent. That’s right, 0.002 percent. But we’ve seen a lot of similar insanity in recent years. And you have to wonder whether the Greek story played a role in this outbreak of reasonableness.

Meanwhile, the first real debtor revolt against austerity is off to a decent start, even if nobody believes it. What’s the Greek for “Keep calm and carry on”?

Blow and Krugman

February 23, 2015

In “Who Loves America?” Mr. Blow says our allegiance needn’t — mustn’t — be blind to be true. We must acknowledge our warts if we are to proclaim our beauty.  Prof. Krugman, in “Knowledge Isn’t Power,” explains why education isn’t the answer to inequality.  Here’s Mr. Blow:

We have arrived at the point where the utter tedium and desperation of personal attacks against the president about his life story and his loyalty are no longer news. The histrionics have shed their ability to shock. Most right-minded Americans — ethically speaking, not ideologically speaking — have moved on.

But occasionally the insults prove to be accidentally instructive.

Take for instance what Rudy Giuliani (“America’s mayor”) said about the president last week at a dinner for Gov. Scott Walker of Wisconsin (a contender for America’s president). At the dinner — attended, according to Politico, by “about 60 right-leaning business executives and conservative media types” — Giuliani said, “I do not believe, and I know this is a horrible thing to say, but I do not believe that the president loves America.” He continued, “He doesn’t love you. And he doesn’t love me. He wasn’t brought up the way you were brought up and I was brought up through love of this country.”

Yes, Mr. Mayor, it was a horrible thing to say, which is why you backpedaled. On Fox, Giuliani gave a meandering, mealy-mouthed defense of the this vile statement, claiming, preposterously, that “I’m not questioning his patriotism,” explaining that he hears Obama “criticize America much more often than other American presidents” and questioning the president’s faith in American exceptionalism.

Ah, American exceptionalism again.

This is in part about a fundamental difference in views. It is a definitional difference, not about the meaning of love but about the meaning of America and its place in the world. Does exceptionalism — if one accepts the premise — bestow exemption from critique? Is uniqueness perfection? Does our difference require some sort of arresting of development?

As the Pew Research Center pointed out in July, “the view that the U.S. is exceptional — standing above all other countries in the world — has declined 10 points since 2011.” At that time last year, 58 percent of Americans believed America is “one of the greatest countries in the world, along with others,” while only 28 percent believed America “stands above all other countries in the world.” (Whether this is truly a measure of exceptionalism or diminished standing isn’t completely clear to me.)

And what does it mean to love the country? We’re not talking about touristic love of the place — not the mountains and the valleys, the cities and the suburbs, the mighty rivers and the shores that kiss the oceans — but a love of the idea of America.

In a way, this is an ideological battle. Conservatism is rooted in preservation; progressivism advances alteration. These are different love languages. These languages turn on your view of change itself: When you think of America, do you see a country struggling to be maintained or one striving to be made better?

The president not only ran for office on the idea of change, but his presence — in both visage and values — is the manifestation of change. He not only represents a very real affront to the status quo and traditional power but is also not shy about pointing out where America can improve.

Our allegiance needn’t — mustn’t — be blind to be true. We must acknowledge our warts if we are to proclaim our beauty. Our aggrandizement must be grounded. We must be willing to laud America where it has soared and rebuke it where it has faltered.

America is a great country in many ways. But it is far from perfect.

America is a living idea. It isn’t only the tenets of its founding, but also the terms of its future. Every day, we make America.

Seeking to preserve and enshrine one vision of this country from one period of its past robs it of what makes it magical: its infinite possibility for adjustment.

“All men are created equal” is an exquisite idea, but one that wasn’t fully embraced when the words were written. We, the American people, have pushed this country to consider that clause in the broadest possible interpretation for hundreds of years.

We are engaged in a constant struggle to force America to “be true to what you said on paper,” as the Rev. Dr. Martin Luther King Jr. put it.

The concept of forming “a more perfect union” has embedded in it the idea of ambition but not perfection itself. There is room for betterment. America is not static. America is striving.

And sometimes, America requires critique. Jingoism is an avoidance of realism.

You can simultaneously love and be disappointed in the object of your love, wanting it to be better than it is. In fact, that is a measure of love. Honest critique is a pillar of patriotism.

As James Baldwin put it, “I love America more than any other country in the world, and, exactly for this reason, I insist on the right to criticize her perpetually.”

Amen.  Here’s Prof. Krugman:

Regular readers know that I sometimes mock “very serious people” — politicians and pundits who solemnly repeat conventional wisdom that sounds tough-minded and realistic. The trouble is that sounding serious and being serious are by no means the same thing, and some of those seemingly tough-minded positions are actually ways to dodge the truly hard issues.

The prime example of recent years was, of course, Bowles-Simpsonism — the diversion of elite discourse away from the ongoing tragedy of high unemployment and into the supposedly crucial issue of how, exactly, we will pay for social insurance programs a couple of decades from now. That particular obsession, I’m happy to say, seems to be on the wane. But my sense is that there’s a new form of issue-dodging packaged as seriousness on the rise. This time, the evasion involves trying to divert our national discourse about inequality into a discussion of alleged problems with education.

And the reason this is an evasion is that whatever serious people may want to believe, soaring inequality isn’t about education; it’s about power.

Just to be clear: I’m in favor of better education. Education is a friend of mine. And it should be available and affordable for all. But what I keep seeing is people insisting that educational failings are at the root of still-weak job creation, stagnating wages and rising inequality. This sounds serious and thoughtful. But it’s actually a view very much at odds with the evidence, not to mention a way to hide from the real, unavoidably partisan debate.

The education-centric story of our problems runs like this: We live in a period of unprecedented technological change, and too many American workers lack the skills to cope with that change. This “skills gap” is holding back growth, because businesses can’t find the workers they need. It also feeds inequality, as wages soar for workers with the right skills but stagnate or decline for the less educated. So what we need is more and better education.

My guess is that this sounds familiar — it’s what you hear from the talking heads on Sunday morning TV, in opinion articles from business leaders like Jamie Dimon of JPMorgan Chase, in “framing papers” from the Brookings Institution’s centrist Hamilton Project. It’s repeated so widely that many people probably assume it’s unquestionably true. But it isn’t.

For one thing, is the pace of technological change really that fast? “We wanted flying cars, instead we got 140 characters,” the venture capitalist Peter Thiel has snarked. Productivity growth, which surged briefly after 1995, seems to have slowed sharply.

Furthermore, there’s no evidence that a skills gap is holding back employment. After all, if businesses were desperate for workers with certain skills, they would presumably be offering premium wages to attract such workers. So where are these fortunate professions? You can find some examples here and there. Interestingly, some of the biggest recent wage gains are for skilled manual labor — sewing machine operators, boilermakers — as some manufacturing production moves back to America. But the notion that highly skilled workers are generally in demand is just false.

Finally, while the education/inequality story may once have seemed plausible, it hasn’t tracked reality for a long time. “The wages of the highest-skilled and highest-paid individuals have continued to increase steadily,” the Hamilton Project says. Actually, the inflation-adjusted earnings of highly educated Americans have gone nowhere since the late 1990s.

So what is really going on? Corporate profits have soared as a share of national income, but there is no sign of a rise in the rate of return on investment. How is that possible? Well, it’s what you would expect if rising profits reflect monopoly power rather than returns to capital.

As for wages and salaries, never mind college degrees — all the big gains are going to a tiny group of individuals holding strategic positions in corporate suites or astride the crossroads of finance. Rising inequality isn’t about who has the knowledge; it’s about who has the power.

Now, there’s a lot we could do to redress this inequality of power. We could levy higher taxes on corporations and the wealthy, and invest the proceeds in programs that help working families. We could raise the minimum wage and make it easier for workers to organize. It’s not hard to imagine a truly serious effort to make America less unequal.

But given the determination of one major party to move policy in exactly the opposite direction, advocating such an effort makes you sound partisan. Hence the desire to see the whole thing as an education problem instead. But we should recognize that popular evasion for what it is: a deeply unserious fantasy.

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…

Blow, Cohen and Krugman

February 16, 2015

In “A Kaffeeklatsch on Race” Mr. Blow says the F.B.I. chief, James Comey, enters the debate.  Mr. Cohen, in “Islam and the West at War,” says the Danish prime minister speaks of a “dark ideology.” This vagueness undermines the Muslims fighting the Islamist scourge.  Prof. Krugman addresses Greek debt and the lessons of history in “Weimar on the Aegean.”  Here’s Mr. Blow:

In our collective imaginations, we tend to conceive of the constantly called-for “national conversation on race” as having the formality of some grand conclave of consciousness — an American Truth and Reconciliation equivalent, a spiritual spectacle in which sins are confessed and blame taken and burdens lifted.

This may be ideal, but it is also exceedingly unlikely in this country, particularly in this political environment. There will be no great atoning. Reparations will not be paid. There will no sprawling absolution.

Yet we can still have a productive conversation. Indeed, I would argue that we are in the midst of a national conversation about race at this very moment. Its significance isn’t drawn from structure but from the freedom of its form.

Every discussion over a backyard fence or a cup of coffee is part of that conversation. It is the very continuity of its casualness that bolsters its profundity.

We need to stop calling for the conversation and realize that we are already having it.

Last week the F.B.I. director, James Comey, added his voice to that conversation, particularly as it relates to the relationship between law enforcement and communities of color. There were portions I found particularly potent coming from a man in his position.

He gave a list of “hard truths,” the first of which was an admission that the history of law enforcement in this country was not only part of the architecture of oppression but also a brutal tool of that system. As Comey put it, “One reason we cannot forget our law enforcement legacy is that the people we serve and protect cannot forget it, either.”

His second hard truth acknowledged the existence of unconscious racial bias “in our white-majority culture” and how that influences policing.

Third, he acknowledged that people in law enforcement can develop “different flavors of cynicism” that can be “lazy mental shortcuts,” resulting in more pronounced racial profiling.

But as in all discussions, there were portions of the speech to which I took exception.

First, Comey seems to falsely conflate condemnation of poor policing — sometimes predatory policing, in particular — with a condemnation of all policing. He makes a straw man argument, “Law enforcement is not the root cause of problems in our hardest hit neighborhoods.” Who said it was?

This is a twisting of motive and purpose of the voices of recent protesters that undermines and mischaracterizes both. Minority communities want policing the same as any other, but they want it to be appropriate and proportional. They want not to be afraid of the cops as well as the criminals. They want officers to display an equitable modicum of discernment in treating the law-abiding differently from the lawbreaking.

The discussion is not about police officers being a “root cause of problems” in a given neighborhood, but rather that they shouldn’t be a problem at all, anywhere. We are not geographically confined. We can move in and out of high-crime neighborhoods. We can’t move in and out of our own skin.

At another point, Comey states that cynicism “becomes almost irresistible and maybe even rational by some lights.” This is dangerous and unconditionally false. “Lazy mental shortcuts” — in other words, racial profiling — aren’t rational in any light. That violates not only an American principle but also a human one: that no person should be punished for the crimes or sins of another.

His fourth hard truth focused on how crimes among “many young men of color become part of that officer’s life experience.” But in seeking to offer context, he mentioned “environments lacking role models, adequate education, and decent employment.” Here he moves perilously close to a racial pathology argument, as if there were something inherent in blackness and black culture that predisposes one to criminality. This, too, is a “lazy mental shortcut.”

What too few people mention when discussing crime is the degree to which concentrated poverty, hopelessness and despair are the chambermaids of violence and incivility. These factors are developed and maintained through a complicated interplay of structural biases — historical and current — interpersonal biases, environmental reinforcements and personal choices.

Even as I disagree on portions, I take the larger point, and I applaud the endeavor and its purpose. Comey seems to be making a genuine effort to be part of the conversation and the solution, and that is more than I can say for some.

One doesn’t have to possess the certitude of gospel to have a positive impact on this discussion — for oneself and others. Just an earnest desire for insight and mutual understanding.

This is more than one can say of the hard of heart, those resistant to engagement and, therefore, beyond enlightenment. The stone cannot absorb no matter how much you drench it.

Next up we have Mr. Cohen:

After a Danish movie director at a seminar on “Art, Blasphemy and Freedom of Expression” and a Danish Jew guarding a synagogue were shot dead in Copenhagen, Helle Thorning-Schmidt, the prime minister of Denmark, uttered a familiar trope:

“We are not in the middle of a battle between Islam and the West. It’s not a battle between Muslims and non-Muslims. It’s a battle between values based on the freedom of the individual and a dark ideology.”

This statement — with its echoes of President Obama’s vague references to “violent extremists” uncoupled from the fundamentalist Islam to which said throat-cutting extremists pledge allegiance — scarcely stands up to scrutiny. It is empty talk.

Across a wide swath of territory, in Iraq, in Syria, in Afghanistan, in Pakistan, in Yemen, the West has been or is at war, or near-war, with the Muslim world, in a failed bid to eradicate a metastasizing Islamist movement of murderous hatred toward Western civilization.

To call this movement, whose most potent recent manifestation is the Islamic State, a “dark ideology” is like calling Nazism a reaction to German humiliation in World War I: true but wholly inadequate. There is little point in Western politicians rehearsing lines about there being no battle between Islam and the West, when in all the above-mentioned countries tens of millions of Muslims, with much carnage as evidence, believe the contrary.

The Danish filmmaker Finn Norgaard was killed a little over a decade after another movie director, Theo van Gogh, was slain in Amsterdam for making a film critical of Islam’s treatment of women. The Islamists’ war is against freedom of expression, freedom of conscience, freedom of the press, freedom of blasphemy, sexual freedom — in short, core characteristics of democracies seen by the would-be rebuilders of the Caliphate as signs of Western debasement.

Do not provoke them with cartoons of the Prophet Muhammad, some say, show respect for Islam, the peaceful faith of some 1.6 billion people. But what, pray, was the “provocation” of Dan Uzan, the Jewish security guard outside the Copenhagen synagogue?

Islam is a religion that has spawned multifaceted political movements whose goal is power. Islam, as such, is fair game for commentators, caricaturists and cartoonists, whose inclination to mock the depredations of theocracy and political Islam’s cynical uses of the Prophet cannot be cowed by fear.

Over the more than 13 years since Al Qaeda attacked America on 9/11, we have seen trains blown up in Madrid, the Tube and a bus bombed in London, Western journalists beheaded, the staff of Charlie Hebdo slaughtered, Jews killed in France and Belgium and now Denmark. This is not the work of a “dark ideology” but of jihadi terror.

On the right of Europe’s political spectrum, anger is rising against Islam, against marginalized Muslim communities, who in turn feel discriminated against and misrepresented, with cause. Several thousand young European Muslims troop off to join ISIS. Europe’s Jews are on edge, with cause. Israel calls them home. In the United States, three Muslim students were killed this month by a gunman in a possible hate crime denounced by Obama as “brutal and outrageous.” A tide of retaliatory menace rises.

Who or what is to blame? There are two schools. For the first, it is the West that is to blame through its support for Israel (seen as the latest iteration of Western imperialism in the Levant); its wars (Iraq); its brutality, (Guantánamo, Abu Ghraib); its killing of civilians (drones); its oil-driven hypocrisy (a jihadi-funding Saudi ally).

For the second, it is rather the abject failure of the Arab world, its blocked societies where dictators face off against political Islam, its repression, its feeble institutions, its sectarianism precluding the practice of participatory citizenship, its wild conspiracy theories, its inability to provide jobs or hope for its youth, that gives the Islamic State its appeal.

I find the second view more persuasive. The rise of the Islamic State, and Obama’s new war, are a direct result of the failure of the Arab Spring, which had seemed to offer a path out of the deadlocked, jihadi-spawning societies of the Arab world.

Only Arabs can find the answer to this crisis. But history, I suspect, will not judge Obama kindly for having failed to foster the great liberation movement that rose up in Tunisia, Libya, Egypt, Syria and elsewhere. Inaction is also a policy: Nonintervention produced Syria today.

I hear the words of Chokri Belaid, the brave Tunisian lawyer, shortly before he was gunned down by Islamist fanatics on Feb. 6, 2013: “We can disagree in our diversity but within a civilian, peaceful and democratic framework. Disagree in our diversity, yes!”

To speak of a nonspecific “dark ideology,” to dismiss the reality of conflict between the West and Islam, is also to undermine the anti-Islamist struggle of brave Muslims like Belaid — and these Muslims are the only people, ultimately, who can defeat the black-flagged jihadi death merchants.

And last but certainly not least here’s Prof. Krugman:

Try to talk about the policies we need in a depressed world economy, and someone is sure to counter with the specter of Weimar Germany, supposedly an object lesson in the dangers of budget deficits and monetary expansion. But the history of Germany after World War I is almost always cited in a curiously selective way. We hear endlessly about the hyperinflation of 1923, when people carted around wheelbarrows full of cash, but we never hear about the much more relevant deflation of the early 1930s, as the government of Chancellor Brüning — having learned the wrong lessons — tried to defend Germany’s peg to gold with tight money and harsh austerity.

And what about what happened before the hyperinflation, when the victorious Allies tried to force Germany to pay huge reparations? That’s also a tale with a lot of modern relevance, because it has a direct bearing on the crisis now brewing over Greece.

The point is that now, more than ever, it is crucial that Europe’s leaders remember the right history. If they don’t, the European project of peace and democracy through prosperity will not survive.

About those reparations: The basic story here is that Britain and France, instead of viewing the newly established German democracy as a potential partner, treated it as a conquered enemy, demanding that it make up their own wartime losses. This was deeply unwise — and the demands placed on Germany were impossible to meet, for two reasons. First, Germany’s economy had already been devastated by the war. Second, the true burden on that shrunken economy would — as John Maynard Keynes explained in his angry, powerful book “The Economic Consequences of the Peace” — be far greater than the direct payments to the vengeful Allies.

In the end, and inevitably, the actual sums collected from Germany fell far short of Allied demands. But the attempt to levy tribute on a ruined nation — incredibly, France actually invaded and occupied the Ruhr, Germany’s industrial heartland, in an effort to extract payment — crippled German democracy and poisoned relations with its neighbors.

Which brings us to the confrontation between Greece and its creditors.

You can argue that Greece brought its problems on itself, although it had a lot of help from irresponsible lenders. At this point, however, the simple fact is that Greece cannot pay its debts in full. Austerity has devastated its economy as thoroughly as military defeat devastated Germany — real Greek G.D.P. per capita fell 26 percent from 2007 to 2013, compared with a German decline of 29 percent from 1913 to 1919.

Despite this catastrophe, Greece is making payments to its creditors, running a primary surplus — an excess of revenue over spending other than interest — of around 1.5 percent of G.D.P. And the new Greek government is willing to keep running that surplus. What it is not willing to do is meet creditor demands that it triple the surplus, and keep running huge surpluses for many years to come.

What would happen if Greece were to try to generate those huge surpluses? It would have to further slash government spending — but that wouldn’t be the end of the story. Spending cuts have already driven Greece into a deep depression, and further cuts would make that depression deeper. Falling incomes would, however, mean falling tax receipts, so that the deficit would decline by much less than the initial reduction in spending — probably less than half as much. To meet its target, then, Greece would have to do another round of cuts, and then another.

Furthermore, a shrinking economy would lead to falling private spending too — another, indirect cost of the austerity.

Put it all together, and attempting to cough up the extra 3 percent of G.D.P. the creditors are demanding would cost Greece not 3 percent, but something like 8 percent of G.D.P. And remember, this would come on top of one of the worst economic slumps in history.

What would happen if Greece were simply to refuse to pay? Well, 21st-century European nations don’t use their armies as bill collectors. But there are other forms of coercion. We now know that in 2010 the European Central Bank threatened, in effect, to collapse the Irish banking system unless Dublin agreed to an International Monetary Fund program.

The threat of something similar hangs implicitly over Greece, although my hope is that the central bank, which is under different and more open-minded management these days, wouldn’t go along.

In any case, European creditors should realize that flexibility — giving Greece a chance to recover — is in their own interests. They may not like the new leftist government, but it’s a duly elected government whose leaders are, from everything I’ve heard, sincerely committed to democratic ideals. Europe could do a lot worse — and if the creditors are vengeful, it will.

Brooks and Krugman

February 13, 2015

In “Larry vs. Marco” Bobo gets all economist-ish and tries to ‘splain to us how Marco Rubio and Larry Summers give us a glimpse of the economic options likely to be on offer in 2016.  Well, at least he’s not playing rabbi today…  Prof. Krugman, in “Money Makes Crazy,” points out the obvious:  That monetary policy madness is pervasive in today’s Republican Party.  Here’s Bobo:

Pride goeth before a fall. Capitalism’s great triumph over socialism has been followed by a series of humbling setbacks since. Capitalism is not necessarily self-regulating, as we learned during the financial crisis. Capitalism does not necessarily lead to democracy abroad. Capitalism does not automatically produce sufficient social mobility.

Both Democrats and Republicans are adapting to these realities. Both are moving away from the orthodoxies that dominated the parties in the 1990s. We now have before us two documents that give us a sense of how each party is shifting.

On the Republican side, Marco Rubio, who has become the most intellectually creative of the presidential contenders, has given us a book, “American Dreams.” He moves beyond the Reagan-era emphasis on top marginal tax rates. He moves beyond the Mitt Romney distinction between makers and takers. Drawing on work by Yuval Levin, Peter Wehner and the YG Network, he gives us the clearest picture of how Republicans might use government to enhance middle-class prospects.

On the Democratic side, Lawrence Summers and the British politician Ed Balls have given us the “Report of the Commission on Inclusive Prosperity.” This report smashes the New Democratic approach that defined Bill Clinton’s (and an earlier Larry Summers’s) economic approach. It shows how boldly the Democrats have moved leftward and can be profitably read as a blueprint for a Hillary Clinton presidency.

The Rubio and Summers documents have some overlap. They have a similar sense of the core of the problem: The forces unleashed by globalization and technological change have hit middle-class earnings. Both plans would increase the earned-income tax credit or create similar subsidies. Both would take bold measures to make college affordable, though the Rubio plan is private sector and the Summers plan is public.

In other ways the two visions are different. The Summers document uses the language of social fairness; the Rubio document uses the language of individual virtue. The Summers document puts a bit more emphasis on the demand side of the economy — pumping up middle-class spending — while the Rubio document puts more emphasis on the supply side — incentives to increase investment.

Summers believes that middle-class wages have been hurt because of changes in the way corporations work; Rubio doesn’t. The progressive document implies that finance and corporate boards have rigged the game against the middle class, while Rubio argues that corporate lobbyists have used government to rig the game against small companies. While Summers would make parts of college free, Rubio has a more aggressive plan to reform higher education itself, using online learning.

The contrasts on family policy are fascinating. For a progressive document, the Summers report is clear that two-parent families are important for social mobility. But the proposals would push families toward the sorts of day care arrangements progressives like, encouraging women to stay in the work force. Rubio is more comfortable talking about family structure. His increased child tax credit would give parents greater leeway in how they want to make choices about child care and work.

The biggest philosophical difference between Rubio and Summers is this: Rubio sees government as a bridge helping people to get into the marketplace, while the Summers document argues that the marketplace is structurally flawed throughout and that government has to be a partner all the way along.

Rubio wants to transition to an immigration policy built around drawing high-level skills. He argues that employers should be allowed to immediately deduct every dollar they invest back in their business. He would simplify the tax code into two income tax rates: 15 percent and 35 percent. These proposals reshape the economic landscape but don’t get inside business decisions.

The Summers proposals get into the very gears of corporate governance and reshape workplaces on an intimate level. Summers would regulate executive compensation and use government power to encourage long-term investing. He would encourage employee ownership of companies and create mandatory work councils to bring employees into the decision-making process. He would have government ensure that employees have access to paid vacation, sick leave and generous family leave.

The questions for Rubio are: Is his approach sufficient? Will giving people access to contemporary capitalism lead to social mobility or is modern capitalism structurally flawed? The questions for Summers are: Have we forgotten the lessons of the last quarter-century? Do we think government is smart enough to intrude into millions of business decisions? Do we worry that in making hiring more expensive we will get less of it, and wind up with European-style sclerosis and unemployment levels?

This big hairy problem — insufficient social mobility — has landed in our lap. We don’t know what to do. But we are getting some alternatives.

Sweet baby Jesus on a seesaw but he’s a horse’s patoot.  Here’s Prof. Krugman, who actually knows what the eff he’s talking about:

Monetary policy probably won’t be a major issue in the 2016 campaign, but it should be. It is, after all, extremely important, and the Republican base and many leading politicians have strong views about the Federal Reserve and its conduct. And the eventual presidential nominee will surely have to endorse the party line.

So it matters that the emerging G.O.P. consensus on money is crazy — full-on conspiracy-theory crazy.

Right now, the most obvious manifestation of money madness is Senator Rand Paul’s “Audit the Fed” campaign. Mr. Paul likes to warn that the Fed’s efforts to bolster the economy may lead to hyperinflation; he loves talking about the wheelbarrows of cash that people carted around in Weimar Germany. But he’s been saying that since 2009, and it keeps not happening. So now he has a new line: The Fed is an overleveraged bank, just as Lehman Brothers was, and could experience a disastrous collapse of confidence any day now.

This story is wrong on so many levels that reporters are having a hard time keeping up, but let’s simply note that the Fed’s “liabilities” consist of cash, and those who hold that cash have the option of converting it into, well, cash. No, the Fed can’t fall victim to a bank run. But is Mr. Paul being ostracized for his views? Not at all.

Moreover, while Mr. Paul may currently be the poster child for off-the-wall monetary views, he’s far from alone. A lot has been written about the 2010 open letter from leading Republicans to Ben Bernanke, then the Fed chairman, demanding that he cease efforts to support the economy, warning that such efforts would lead to inflation and “currency debasement.” Less has been written about the simultaneous turn of seemingly respectable figures to conspiracy theories.

There was, for example, the 2010 op-ed article by Representative Paul Ryan, who remains the G.O.P.’s de facto intellectual leader, and John Taylor, the party’s favorite monetary economist. Fed policy, they declared, “looks an awful lot like an attempt to bail out fiscal policy, and such attempts call the Fed’s independence into question.” That statement looks an awful lot like a claim that Mr. Bernanke and colleagues were betraying their trust in order to help out the Obama administration — a claim for which there is no evidence whatsoever.

Oh, and suppose you believe that the Fed’s actions did help avert what would otherwise have been a fiscal crisis. This is supposed to be a bad thing?

You may think that at least some of the current presidential aspirants are staying well clear of the fever swamps, but don’t be so sure. Jeb Bush appears to be getting his economic agenda, such as it is, from the George W. Bush Institute’s 4% Growth Project. And the head of that project, Amity Shlaes, is a prominent “inflation truther,” someone who claims that the government is greatly understating the true rate of inflation.

So monetary crazy is pervasive in today’s G.O.P. But why? Class interests no doubt play a role — the wealthy tend to be lenders rather than borrowers, and they benefit at least in relative terms from deflationary policies. But I also suspect that conservatives have a deep psychological problem with modern monetary systems.

You see, in the conservative worldview, markets aren’t just a useful way to organize the economy; they’re a moral structure: People get paid what they deserve, and what goods cost is what they are truly worth to society. You could say that to the free-market true believer, to know the price of everything is also to know the value of everything.

Modern money — consisting of pieces of paper or their digital equivalent that are issued by the Fed, not created by the heroic efforts of entrepreneurs — is an affront to that worldview. Mr. Ryan is on record declaring that his views on monetary policy come from a speech given by one of Ayn Rand’s fictional characters. And what the speaker declares is that money is “the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. … Paper is a check drawn by legal looters.”

Once you understand that this is how many conservatives really think, it all falls into place. Of course they predict disaster from monetary expansion, no matter the circumstances. Of course they are undaunted in their views no matter how wrong their predictions have been in the past. Of course they are quick to accuse the Fed of vile motives. From their point of view, monetary policy isn’t really a technical issue, a question of what works; it’s a matter of theology: Printing money is evil.

So as I said, monetary policy should be an issue in 2016. Because there’s a pretty good chance that someone who either gets his monetary economics from Ayn Rand, or at any rate feels the need to defer to such views, will get to appoint the next head of the Federal Reserve.

Blow, Cohen and Krugman

February 9, 2015

In “Beyond ‘Black Lives Matter'” Mr. Blow has a question.  He says Michael Brown and Eric Garner are now old news. He then asks: Where do we go from here?  Mr. Cohen, in “Western Illusions Over Ukraine,” says the only way to change Putin’s cost-benefit analysis is to help arm Ukraine.  JUST what we need — more saber rattling and dick swinging…  Prof. Krugman says “Nobody Understands Debt.”  He says families who rely on it make themselves poorer, so isn’t that true of nations? No, it isn’t, as he explains.  Here’s Mr. Blow:

The Black Lives Matter protesters took some criticism for what others viewed as a lack of clear focus and detailed agenda. But in truth, raising an issue to the point where it can no longer be ignored is the grist for the policy mill. Visibility and vocalization have value.

In the same way that Occupy Wall Street forever elevated that concept of income inequality, the Black Lives Matter protesters have elevated the idea of inequity in policing as it relates to minority communities.

Protests following the grand jury decisions in the police killings of Michael Brown in Ferguson, Mo., and Eric Garner on Staten Island have largely died down. Those stories no longer command front page placement or lead the news. The news machine, hungry for newness, as is its wont, has moved on to measles and back to the Islamic State’s medieval murder tactics.

But, as is often the case, there was no full resolution or reconciliation. The issue of police-community relations was raised but not solved. The memory of mistrust still wafts through the air like the smell of rot being carried by the breeze.

What was it all for? What came of it? Where do we go from here?

First, the encouraging news.

In December, President Obama signed an executive order establishing the Task Force on 21st Century Policing, which in part aims to “foster strong, collaborative relationships between local law enforcement and the communities they protect.”

The White House has promoted the use of body cameras, and police departments across the country are considering their purchase and use.

The task force has held listening sessions around the country, and Attorney General Eric Holder Jr. is holding round-table discussions.

The Ferguson Police Department last week began testing a “less lethal” device that attaches to an officer’s gun. According to The Washington Post, “When a bullet fired, it melded with an attached projectile the size of a Ping-Pong ball that flew with enough force to knock a person down, maybe break some ribs, but not kill him, the product’s makers said — even at close range.”

The Huffington Post reported in November that in 2013, 27 law enforcement officers “were killed as a result of felonious acts — the lowest such figure in more than 50 years of F.B.I. reporting.” That month, The Chicago Tribune reported that “U.S. violent crimes including murders fell 4.4 percent in 2013 to their lowest number since the 1970s, continuing a decades-long downturn, the F.B.I. said.”

Now the discouraging news. According to a November USA Today report, “The number of felony suspects fatally shot by police last year — 461 — was the most in two decades, according to a new F.B.I. report.”

Something about these numbers doesn’t add up, and it will be interesting to see whether the protests and the heightened sensibilities they brought to the surface will affect these numbers in next year’s reporting.

In New York, after Mayor Bill de Blasio and the police union came to loggerheads, the mayor skipped an opportunity to address the issue of the police and minorities communities, and Police Commissioner Bill Bratton seems to be going out of his way to reassure the department at the expense of future protests.

The worry is that rapprochement may come to resemble appeasement.

In this month’s State of the City speech, as The Village Voice put it, de Blasio hardly mentioned policing, offering anodyne praise for the city’s officers. This raised the hackles of many reform advocates, even among his supporters.

Bratton has announced the creation of a separate police unit of roughly 500 patrol officers to handle temporary issues like large protests. He has resisted Gov. Andrew Cuomo’s proposal for an independent monitor in cases where grand juries fail to indict officers in the death of a civilian. And he proposed raising resisting arrest from a misdemeanor — a charge that carries a maximum penalty of one year in prison and is often tossed out — to a felony.

According to BuzzFeed, the president of the Patrolmen’s Benevolent Association, Pat Lynch, “also called for enhanced penalties against protesters, asking the Legislature to make assaulting a police officer at a public assembly a Class B felony, which would carry a penalty of up to 25 years in prison.”

Few people support resisting arrest or assaulting officers, but in the scrum of protests, such severe penalties for sometimes subjective or even dubious charges seem disproportionate and an attempt to chill dissent.

This is what happens when a story fades from the headlines, the heat is dialed down and the eyes avert: In the silence, amid the stillness, there is movement. The immediacy of protests gives way to the glacial pace of policy. The burden is to remain vigilant, so that movement is in the right direction.

Now here’s Mr. Cohen, who just can’t wait to whale away on those war drums:

The most difficult thing for a communist, it has been observed, is to predict the past. I was reminded of this as I listened to Russian Foreign Minister Sergei Lavrov, in full Soviet mode at the Munich Security Conference, suggesting that after World War II it was “the Soviet Union that was against splitting Germany.”

People laughed; they guffawed. Germans recall the Soviet clamp on the east of the country and the Berlin Wall. But in a way Lavrov was right: The Soviet Union would have been quite happy to swallow all of Germany, given the chance.

Today, in similar fashion, President Vladimir Putin’s Russia would be quite happy to absorb all of Ukraine, which it views as an extension of the motherland, an upstart deluded by the West into imagining independent statehood.

Lavrov’s performance here reflected the alternate universe in which the Russian spaceship has docked almost a quarter-century after the collapse of the Soviet Union. George Orwell’s doublethink scarcely begins to describe his assertions.

Russia’s annexation of Crimea was, he insisted, a popular uprising, the people “invoking the right of self-determination” as per the United Nations Charter. Ukrainians were engaged in an orgy of “nationalistic violence” characterized by ethnic purges directed against Jews and Russians. The United States was driven by an insatiable desire for global dominance and, in Ukraine, had orchestrated the “coup d’état” last year that led to the ousting of President Viktor Yanukovych. Europe post-1989 had turned its back on building “the common European house,” declining the prospect of a “free economic zone” from Lisbon to Vladivostok in favor of the expansion of NATO eastward to the doorstep of mother Russia.

Dream on, Sergei.

In fact, the Russian annexation of Crimea tore up by forceful means “the territorial integrity” and “political independence” of Ukraine, in direct violation of Article 2 of the United Nations Charter. It also shredded Russia’s formal commitment under the Budapest Memorandum of 1994 to respect Ukraine’s international borders. The “nationalistic violence” that has again raised issues of war and peace in Europe stems not from Kiev but from Moscow, where Putin has cultivated a preposterous fable of encirclement, humiliation and Western depredation to generate hysteria and buttress Russian aggression in eastern Ukraine.

Similarly, the fascism Lavrov purports to locate in Ukraine through allusions to attacks against Jews and other ethnic groups can in fact be far more persuasively identified back home. Putin has reminded humankind that the idiom fascism knows best is untruth so grotesque it begets unreason. The Russian leader has invoked history the better to turn it into farce. He has persevered in the nonsense that all the Russian forces and matériel in eastern Ukraine are figments of the world’s imagination.

Lavrov’s “coup” in Ukraine was nothing of the sort: It was a popular uprising against a corrupt Russian puppet strong-armed into turning his country away from closer association with the West. Ukrainians are not nuts. They find the allure of Warsaw or Berlin greater than that of sunny Minsk. When they hear “common European house” they translate it as “Soviet imperium.”

Two plus two equals five was a Soviet slogan. It was deployed in 1931 in support of the notion that Stalin’s five-year plan could be completed in four. Two plus two equals five is still the “truth” emanating from Moscow. This is worth recalling in all negotiations over Ukraine.

There was much talk here of a possible Franco-German engineered cease-fire; of there being “no military solution” to the Ukrainian conflict (except, of course, the one Putin has in mind); of the advisability or not for the West of sending weapons to support the Ukrainian government (Chancellor Angela Merkel is opposed); and of the need to be resolute, at least in word.

Resolute-schmesolute: It’s time to get real over Putin. He has not poured tanks and multiple-launch rocket systems over the Ukrainian border because he is about to settle for anything less than a weak Ukraine, sapped by low-level conflict in the Donetsk region, a country with its very own pro-Russian enclave à la Abkhazia or Transnistria, firmly within the Russian sphere of influence: the symbol of his definitive strategic turn away from closer cooperation with the West toward the confrontation that shores him up as oil prices and the currency plunge. He will not let Ukraine go.

There is a language Moscow understands: antitank missiles, battlefield radars, reconnaissance drones. Bolster the Ukrainian Army with them and other arms. Change Putin’s cost-benefit analysis. There are risks but no policy is risk-free. Recall that Ukraine gave up more than 1,800 nuclear warheads in exchange for that bogus commitment from Russia back in 1994 to respect its sovereignty and borders. Surely it has thereby earned the right to something more than night-vision goggles. The West’s current Ukraine diplomacy is long on illusion and short on realism. Two plus two equals four, in war and peace.

I wonder if there’s an area that he doesn’t want to arm…  Here’s Prof. Krugman:

Many economists, including Janet Yellen, view global economic troubles since 2008 largely as a story about “deleveraging” — a simultaneous attempt by debtors almost everywhere to reduce their liabilities. Why is deleveraging a problem? Because my spending is your income, and your spending is my income, so if everyone slashes spending at the same time, incomes go down around the world.

Or as Ms. Yellen put it in 2009, “Precautions that may be smart for individuals and firms — and indeed essential to return the economy to a normal state — nevertheless magnify the distress of the economy as a whole.”

So how much progress have we made in returning the economy to that “normal state”? None at all. You see, policy makers have been basing their actions on a false view of what debt is all about, and their attempts to reduce the problem have actually made it worse.

First, the facts: Last week, the McKinsey Global Institute issued a report titled “Debt and (Not Much) Deleveraging,” which found, basically, that no nation has reduced its ratio of total debt to G.D.P. Household debt is down in some countries, especially in the United States. But it’s up in others, and even where there has been significant private deleveraging, government debt has risen by more than private debt has fallen.

You might think our failure to reduce debt ratios shows that we aren’t trying hard enough — that families and governments haven’t been making a serious effort to tighten their belts, and that what the world needs is, yes, more austerity. But we have, in fact, had unprecedented austerity. As the International Monetary Fund has pointed out, real government spending excluding interest has fallen across wealthy nations — there have been deep cuts by the troubled debtors of Southern Europe, but there have also been cuts in countries, like Germany and the United States, that can borrow at some of the lowest interest rates in history.

All this austerity has, however, only made things worse — and predictably so, because demands that everyone tighten their belts were based on a misunderstanding of the role debt plays in the economy.

You can see that misunderstanding at work every time someone rails against deficits with slogans like “Stop stealing from our kids.” It sounds right, if you don’t think about it: Families who run up debts make themselves poorer, so isn’t that true when we look at overall national debt?

No, it isn’t. An indebted family owes money to other people; the world economy as a whole owes money to itself. And while it’s true that countries can borrow from other countries, America has actually been borrowing less from abroad since 2008 than it did before, and Europe is a net lender to the rest of the world.

Because debt is money we owe to ourselves, it does not directly make the economy poorer (and paying it off doesn’t make us richer). True, debt can pose a threat to financial stability — but the situation is not improved if efforts to reduce debt end up pushing the economy into deflation and depression.

Which brings us to current events, for there is a direct connection between the overall failure to deleverage and the emerging political crisis in Europe.

European leaders completely bought into the notion that the economic crisis was brought on by too much spending, by nations living beyond their means. The way forward, Chancellor Angela Merkel of Germany insisted, was a return to frugality. Europe, she declared, should emulate the famously thrifty Swabian housewife.

This was a prescription for slow-motion disaster. European debtors did, in fact, need to tighten their belts — but the austerity they were actually forced to impose was incredibly savage. Meanwhile, Germany and other core economies — which needed to spend more, to offset belt-tightening in the periphery — also tried to spend less. The result was to create an environment in which reducing debt ratios was impossible: Real growth slowed to a crawl, inflation fell to almost nothing and outright deflation has taken hold in the worst-hit nations.

Suffering voters put up with this policy disaster for a remarkably long time, believing in the promises of the elite that they would soon see their sacrifices rewarded. But as the pain went on and on, with no visible progress, radicalization was inevitable. Anyone surprised by the left’s victory in Greece, or the surge of anti-establishment forces in Spain, hasn’t been paying attention.

Nobody knows what happens next, although bookmakers are now giving better than even odds that Greece will exit the euro. Maybe the damage would stop there, but I don’t believe it — a Greek exit is all too likely to threaten the whole currency project. And if the euro does fail, here’s what should be written on its tombstone: “Died of a bad analogy.”

Brooks, Cohen and Krugman

February 6, 2015

In “Conflict and Ego” Bobo says the best way to successfully respond to hate, even from the likes of ISIS, is to step outside the logic of vengeance.  He opens this POS with a terrific, sniveling whine:  “If you read the online versions of newspaper columns you can click over to the reader comments, which are often critical, vituperative and insulting. I’ve found that I can only deal with these comments by following the adage, “Love your enemy.”  It’s too psychologically damaging to read these comments as evaluations of my intelligence, morals or professional skill.”  He’s delusional if he thinks that the Times doesn’t filter comments on his stuff through an EXTREMELY fine mesh strainer.  “Vituperative” never gets through.  Poor, poor Bobo is SO set upon.  Maybe he could take a fricking step back and consider WHY he gets the comments that he does…  Mr. Cohen says “Israel Needs a Grownup,” and that Netanyahu promotes himself as a “Bibi-sitter”, but babysitters don’t think about the future.  Prof. Krugman, in “A Game of Chicken,” says Europe faces a moment of truth as it deals with a debt-ridden Greece.  Here, gawd help us, is Bobo:

If you read the online versions of newspaper columns you can click over to the reader comments, which are often critical, vituperative and insulting. I’ve found that I can only deal with these comments by following the adage, “Love your enemy.”

It’s too psychologically damaging to read these comments as evaluations of my intelligence, morals or professional skill. But if I read them with the (possibly delusional) attitude that these are treasured friends bringing me lovely gifts of perspective, then my eye slides over the insults and I can usually learn something. The key is to get the question of my self-worth out of the way — which is actually possible unless the insulter is really creative.

It’s not only newspaper columnists who face this kind of problem. Everybody who is on the Internet is subject to insult, trolling, hating and cruelty. Most of these online assaults are dominance plays. They are attempts by the insulter to assert his or her own superior status through displays of gratuitous cruelty toward a target.

The natural but worst way to respond is to enter into the logic of this status contest. If he puffs himself up, you puff yourself up. But if you do this you put yourself and your own status at center stage. You enter a cycle of keyboard vengeance. You end up with a painfully distended ego, forever in danger, needing to assert itself, and sensitive to sleights.

Clearly, the best way to respond is to step out of the game. It’s to get out of the status competition. Enmity is a nasty frame of mind. Pride is painful. The person who can quiet the self can see the world clearly, can learn the subject and master the situation.

Historically, we reserve special admiration for those who can quiet the self even in the heat of conflict. Abraham Lincoln was caught in the middle of a horrific civil war. It would have been natural for him to live with his instincts aflame — filled with indignation toward those who started the war, enmity toward those who killed his men and who would end up killing him. But his second inaugural is a masterpiece of rising above the natural urge toward animosity and instead adopting an elevated stance.

The terror theater that the Islamic State, or ISIS, is perpetrating these days is certainly in a different category than Internet nastiness. But the beheadings and the monstrous act of human incineration are also insults designed to generate a visceral response.

They are a different kind of play of dominance. They are attempts by insignificant men to get the world to recognize their power and status.

These Islamic State guys burn hostages alive because it wins praise from their colleagues, because it earns attention and because it wins the sort of perverse respect that accompanies fear. We often say that terrorism is an act of war, but that’s wrong. Terrorism is an act of taunting. These murderous videos are attempts to make the rest of us feel powerless, at once undone by fear and addled by disgust.

The natural and worst way to respond is with the soul inflamed. If they execute one of our guys, we’ll — as Jordan did — execute two of their guys. If they chest-thump, we’ll chest-thump. If they kill, we’ll kill.

This sort of strategy is just an ISIS recruiting tool. It sucks us into their nihilistic status war: Their barbarism and our response.

The world is full of invisible young men yearning to feel significant, who’d love to shock the world and light folks on fire in an epic status contest with the reigning powers.

The best way to respond is to quiet our disgust and quiet our instincts. It is to step out of their game. It is to reassert the primacy of our game. The world’s mission in the Middle East is not to defeat ISIS, which is just a barbaric roadblock. It’s to reassert the primacy of pluralism, freedom and democracy. It’s to tamp down zeal and cultivate self-doubt. The world has to destroy the Islamic State with hard power, but only as a means to that higher moral end.

Many people have lost faith in that democratic mission, but without that mission we’re just one more army in a contest of barbarism. Our acts are nothing but volleys in a status war.

In this column, I’ve tried to describe the interplay of conflict and ego, in arenas that are trivial (the comments section) and in arenas that are monstrous (the war against the Islamic State). In all cases, conflict inflames the ego, distorts it and degrades it.

The people we admire break that chain. They quiet the self and step outside the status war. They focus on the larger mission. They reject the puerile logic of honor codes and status rivalries, and enter a more civilized logic, that doesn’t turn us into our enemies.

Of course the Iraq war, that Bobo was SUCH a huge fan of, had NOTHING to do with what’s going on now…  Here’s Mr. Cohen:

A pivotal Israeli election looms in March with one man towering over it: Benjamin Netanyahu. “It’s us or him,” says a slogan of the opposition Zionist Camp, as the prime minister seeks a fourth term. People tire of the same face; there’s a shelf life for any leader in a democracy. Netanyahu’s would-be successors are betting that, after a cumulative nine years in power, he has exhausted his.

Sensing the challenge, Netanyahu has gambled. His planned visit to Washington next month to address a joint session of Congress amounts to a high-risk foray. President Obama will not meet with him. Nor will Secretary of State John Kerry. Dozens of House Democrats have suggested they may give the March 3 address a pass. All have been angered by Netanyahu’s clumsy embrace of a Republican offer to step into the midst of American politics, an invitation accepted without the minimum courtesy of informing the White House.

Obama is furious, with cause. He has been a firm supporter of Israel. His patience with its leader is at an end. The question now is whether Israeli voters will be more swayed by the sight of a Netanyahu greeted by standing ovations in the Republican-controlled Congress as he lambastes a possible nuclear deal with Iran, or a Netanyahu shunned by the Obama administration for his decision to play to the gallery.

Israelis feel uncomfortable when relations with the United States deteriorate to the point reached today. They also know that any credible response to Iran is reinforced by American-Israeli unity and undermined by its absence. Netanyahu’s Washington visit — hatched by Republican House Speaker John Boehner and Israeli Ambassador Ron Dermer — smacks of a misjudgment. How serious this will prove remains to be seen.

Over the past couple of weeks, Netanyahu’s right-wing Likud party has rallied. Opinion polls now show Likud slightly ahead of the centrist Zionist Camp, winning an estimated 25 or 26 seats in the 120-seat Knesset, to the main opposition grouping’s 23 or 24. Last month, the Zionist Camp appeared to have a slight advantage. The reason comes down to a single word: security. When threats to Israel rise, Netanyahu reassures. The Bibi baritone steadies the ship. A Likud campaign ad shows him arriving at the home of parents who are going out for the evening: “You asked for a babysitter? You got a Bibi-sitter,” he says.

But of course babysitters take care of the immediate needs of kids. They do not build a future for them; they scarcely even think about the future. In this sense, the ad is instructive. The fundamental question about a potential fourth period in office for Netanyahu is: to what end?

The decision by Isaac Herzog, the Labor Party leader, and Tzipi Livni, the former foreign minister and longtime lead negotiator with the Palestinians, to call themselves the Zionist Camp is significant. Their Zionism is distinct from the Messianism of the Israeli right, which claims the mantle of Zionism while betraying it through maximalist territorial claims that undermine the long-term survival of a Jewish and democratic state.

Herzog and Livni begin with the idea that a two-state peace is the only guarantor of the founding Zionist vision of a democratic Jewish homeland. It is also the only outcome consistent with Jewish ethics founded on the principles of truth, justice and peace. Netanyahu has paid lip service, but no more, to the two-state idea. He would continue to do so if victorious with predictable consequences: a familiar status quo comprised of periodic war.

This is the fundamental issue in an election that appears to be about Netanyahu but is in fact about something far more serious: whether Israel can return to the Zionism of the founders of the modern state and seek in good faith a two-state outcome, whatever the myriad failings and errors of the Palestinians. These failings must be factored into negotiations rather than used as a pretext for the politics of kicking the can down the road.

When I was in Israel at the end of last year, Livni told me: “Netanyahu looks at the situation of Israel through the lens of the threats. His deep emotion is to stick together, be united against those who are against us. I believe we need to be for something. Written on my wall is Jewish Democratic state, two states for two peoples. Written on Likud’s wall is Jewish state, Greater Israel. For me any day that goes by without a solution is another lost day. For those believing in Greater Israel, another day that passes without an agreement is another day of victory and taking more land.”

That’s a pretty good summation of what’s at stake March 17. Beyond economic issues, corruption charges, Boehner-Bibi shenanigans and the rest, Israel’s future is on the line. It’s not a babysitter the Jewish state needs. It’s a grown-up.

And now here’s Prof. Krugman:

On Wednesday, the European Central Bank announced that it would no longer accept Greek government debt as collateral for loans. This move, it turns out, was more symbolic than substantive. Still, the moment of truth is clearly approaching.

And it’s a moment of truth not just for Greece, but for the whole of Europe — and, in particular, for the central bank, which may soon have to decide whom it really works for.

Basically, the current situation may be summarized with the following dialogue:

Germany to Greece: Nice banking system you got there. Be a shame if something were to happen to it.

Greece to Germany: Oh, yeah? Well, we’d hate to see your nice, shiny European Union get all banged up.

Or if you want the stuffier version, Germany is demanding that Greece keep trying to pay its debts in full by imposing incredibly harsh austerity. The implied threat if Greece refuses is that the central bank will cut off the support it gives to Greek banks, which is what Wednesday’s move sounded like but wasn’t. And that would wreak havoc with Greece’s already terrible economy.

Yet pulling the plug on Greece would pose enormous risks, not just to Europe’s economy, but to the whole European project, the 60-year effort to build peace and democracy through shared prosperity. A Greek banking collapse would probably lead Greece to leave the euro and establish its own currency — and if even one country were to abandon the euro, investors would be put on notice that Europe’s grand currency design is reversible.

Beyond that, chaos in Greece could fuel the sinister political forces that have been gaining influence as Europe’s Second Great Depression goes on and on. After a tense meeting with his German counterpart, the new Greek finance minister didn’t hesitate to play the 1930s card. “Nazism,” he declared, “is raising its ugly head in Greece” — a reference to Golden Dawn, the not-so-neo-Nazi party that is now the third largest in the Greek legislature.

What we’re looking at here is, in short, a very dangerous confrontation. This isn’t diplomacy as usual; this is a game of chicken, of two trucks loaded with dynamite barreling toward each other on a narrow mountain road, with neither willing to turn aside. And all of this is taking place within the European Union, which is supposed to be — indeed, has been, until now — an institution that promotes productive cooperation.

How did Europe get to this point? And what’s the end game?

Like all too many crises, the new Greek crisis stems, ultimately, from political pandering. It’s the kind of thing that happens when politicians tell voters what they want to hear, make promises that can’t be fulfilled, and then can’t bring themselves to face reality and make the hard choices they’ve been pretending can be avoided.

I am, of course, talking about Angela Merkel, the German chancellor, and her colleagues.

It’s true that Greece got itself into trouble through irresponsible borrowing (although this irresponsible borrowing wouldn’t have been possible without equally irresponsible lending). And Greece has paid a terrible price for that irresponsibility. Looking forward, however, how much more can Greece take? Clearly, it can’t pay the debt in full; that’s obvious to anyone who has done the math.

Unfortunately, German politicians have never explained the math to their constituents. Instead, they’ve taken the lazy path: moralizing about the irresponsibility of borrowers, declaring that debts must and will be paid in full, playing into stereotypes about shiftless southern Europeans. And now that the Greek electorate has finally declared that it can take no more, German officials just keep repeating the same old lines.

Maybe the Germans imagine that they can replay the events of 2010, when the central bank coerced Ireland into accepting an austerity program by threatening to cut off its banking system. But that’s unlikely to work against a government that has seen the damage wrought by austerity, and was elected on a promise to reverse that damage.

Furthermore, there’s still reason to hope that the European Central Bank will refuse to play along.

On Wednesday, the central bank made an announcement that sounded like severe punishment for Greece, but wasn’t, because it left the really important channel of support for Greek banks (Emergency Liquidity Assistance — don’t ask) in place. So it was more of a wake-up call than anything else, and arguably it was as much a wake-up call for Germany as it was for Greece.

And what if the Germans don’t wake up? In that case we can hope that the central bank takes a stand and declares that its proper role is to do all it can to safeguard Europe’s economy and democratic institutions — not to act as Germany’s debt collector. As I said, we’re rapidly approaching a moment of truth.

Blow and Krugman

February 2, 2015

In “A Future Segregated by Science?” Mr. Blow says that when you look at the number of women and minorities seeking STEM careers, the situation is bleak.  Prof. Krugman addresses “The Long-Run Cop-Out” and says in today’s economic and political environment, dismissing the here and now is craven and irresponsible.  Here’s Mr. Blow:

Let me say up front: I’m not a science guy.

I have always loved science, but I have always loved the arts — drawing, painting and, yes, writing — more.

My deepest foray into science came in high school when I won my way to the international science fair. (Don’t get too excited; that sounds more impressive than it was.) It was 1988, and I had produced a project about why the “Star Wars” missile defense system wouldn’t work. My project was a beautiful monstrosity made of stained and varnished plywood, with an insert for a diorama of missiles flying, lasers blasting and a midair explosion, and a cutout with space for a small television and a VCR (yes, I’m that old).

I won the district fair — in part, I suspect, because the judges’ pool was heavily populated by members of the military — even though I had violated one of the cardinal rules of science fairs: I hadn’t actually done an experiment. Mine was a fancy research project — like a 3-D opinion piece. But it didn’t matter. The airline lost the whole project when I flew to the international science fair, so I never got to compete.

Although my science dreams were dashed, I still loved science. And I’ve long been surrounded by science people. My ex-wife was a physics major. My oldest child is a biology major, and when my twins enter college next year, one wants to major in physics and the other in a scientific field to be determined.

But their interests defy a distressing disparity: Few women and minorities are getting STEM (science, technology, engineering and mathematics) degrees, although STEM jobs are multiplying and pay more than many other careers.

This raises the question: Will our future be highly delineated by who does and who doesn’t have a science education (and the resulting higher salary), making for even more entrenched economic inequality by race and gender?

According to : “STEM job creation over the next 10 years will outpace non-STEM jobs significantly, growing 17 percent, as compared to 9.8 percent for non-STEM positions.”

And yet, the group says, we are not producing enough STEM graduates; other countries are moving ahead of us.

When you look at women and minorities, the situation is even more bleak.

Let’s start with high school. Last year, a Georgia Tech researcher analyzed which students took the Advanced Placement exam in computer science in 2013. The researcher, Barbara Ericson, found that in three states no women took it, in eight states no Hispanics did and in 11 states no blacks did. (In Mississippi only one person — not female, black or Hispanic, by the way — took the test that year. Oh, Mississippi.)

Now, on to college, where the disparities remain bleak.

The Associated Press said in 2011 that “the percentage of African-Americans earning STEM degrees has fallen during the last decade” and that this was very likely a result of “a complex equation of self-doubt, stereotypes, discouragement and economics — and sometimes just wrong perceptions of what math and science are all about.”

It continued: “Black people are 12 percent of the United States population and 11 percent of all students beyond high school. In 2009, they received just 7 percent of all STEM bachelor’s degrees, 4 percent of master’s degrees and 2 percent of Ph.D.s, according to the National Center for Education Statistics.”

It doesn’t get better in the workplace. In a 2013 editorial, The New York Times pointed out: “Women make up nearly half the work force but have just 26 percent of science, technology, engineering or math jobs, according to the Census Bureau. Blacks make up 11 percent of the work force but just 6 percent of such jobs and Hispanics make up nearly 15 percent of the work force but hold 7 percent of those positions.”

Even when minority students do get STEM degrees, there seems to be a disproportionate barrier to their finding work in those fields. “Top universities turn out black and Hispanic computer science and computer engineering graduates at twice the rate that leading technology companies hire them,” an October analysis by USA Today found.

Furthermore, the paper reported in December: “In 2014, leading technology companies released data showing they vastly underemploy African-Americans and Hispanics. Those groups make up 5 percent of the companies’ work force, compared to 14 percent nationally.”

No matter what strides we make — or don’t — in the march toward racial and gender equality in this country, is this an area in which the future will feel more stratified, and in which the inequalities, particularly economic ones, will mount? Is science education a new area of our segregation?

Now here’s Prof. Krugman:

On Monday, President Obama will call for a significant increase in spending, reversing the harsh cuts of the past few years. He won’t get all he’s asking for, but it’s a move in the right direction. And it also marks a welcome shift in the discourse. Maybe Washington is starting to get over its narrow-minded, irresponsible obsession with long-run problems and will finally take on the hard issue of short-run gratification instead.

O.K., I’m being flip to get your attention. I am, however, quite serious. It’s often said that the problem with policy makers is that they’re too focused on the next election, that they look for short-term fixes while ignoring the long run. But the story of economic policy and discourse these past five years has been exactly the opposite.

Think about it: Faced with mass unemployment and the enormous waste it entails, for years the Beltway elite devoted almost all their energy not to promoting recovery, but to Bowles-Simpsonism — to devising “grand bargains” that would address the supposedly urgent problem of how we’ll pay for Social Security and Medicare a couple of decades from now.

And this bizarre long-termism isn’t just an American phenomenon. Try to talk about the damage wrought by European austerity policies, and you’re all too likely to encounter lectures to the effect that what we really need to discuss is long-term structural reform. Try to discuss Japan’s effort to break out of its decades-long deflationary trap, and you’re sure to encounter claims that monetary and fiscal policy are sideshows, and that deregulation and other structural changes are what’s important.

Am I saying that the long run doesn’t matter? Of course not, although some forms of long-termism don’t make sense even on their own terms. Think about the notion that “entitlement reform” is an urgent priority. It’s true that many projections suggest that our major social insurance programs will face financial difficulties in the future (although the dramatic slowing of increases in health costs makes even that proposition uncertain). If so, at some point we may need to cut benefits. But why, exactly, is it crucial that we deal with the threat of future benefits cuts by locking in plans to cut future benefits?

Anyway, even where the long-term issues are real, it’s truly strange that they have so often taken center stage in recent years. We are, after all, still living through the aftermath of a once-in-three-generations financial crisis. America seems, finally, to be recovering — but Bowles-Simpsonism had its greatest influence precisely when the United States economy was still mired in a deep slump. Europe has hardly recovered at all, and there’s overwhelming evidence that austerity policies are the main reason for that ongoing disaster. So why the urge to change the subject to structural reform? The answer, I’d suggest, is intellectual laziness and lack of moral courage.

About laziness: Many people know what John Maynard Keynes said about the long run, but far fewer are aware of the context. Here’s what he really said: “But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.” Quite. All too often, or so it seems to me, people who insist that questions of austerity and stimulus are unimportant are actually trying to avoid hard thinking about the nature of the economic disaster that has overtaken so much of the world.

And they’re also trying to avoid taking a stand that will expose them to attack. Discussions of short-run fiscal and monetary policy are politically charged. Oppose austerity and support monetary expansion and you’ll be lambasted by the right; do the reverse and you’ll be criticized and maybe ridiculed by the left. I understand why it’s tempting to dismiss the whole debate and declare that the really important issues involve the long run. But while people who say that kind of thing like to pose as brave and responsible, they’re actually ducking the hard stuff — which is to say, being craven and irresponsible.

Which brings me back to the president’s new budget.

It goes without saying that Mr. Obama’s fiscal proposals, like everything he does, will be attacked by Republicans. He’s also, however, sure to face criticism from self-proclaimed centrists accusing him of irresponsibly abandoning the fight against long-term budget deficits.

So it’s important to understand who’s really irresponsible here. In today’s economic and political environment, long-termism is a cop-out, a dodge, a way to avoid sticking your neck out. And it’s refreshing to see signs that Mr. Obama is willing to break with the long-termers and focus on the here and now.

Brooks and Krugman

January 30, 2015

Bobo has surpassed himself today.  In “Being Who We Are” he gurgles that we should stop trying to play chess in the Middle East and simply keep our promises.  In the comments “HeyNorris” from Paris had this to say:  “Good grief, Brooks has really outdone himself with this one. Ideas drive history? The bumbling of W and the evil of Cheney & Co. drove history into a head-on collision with the Middle East which had everything to do with oil and power and nothing to do with ideas, and certainly did NOT “make it more fertile for moderation”.”  Prof. Krugman has a question in “Europe’s Greek Test:”  Can Europe get past the myths and moralizing, and deal with reality in a way that respects the Continents core values?  Probably not…  Here’s Bobo:

In the middle of 2013, the United States began supporting moderate rebels in Syria. We gave them just enough support to betray them.

As Adam Entous reported in The Wall Street Journal earlier this week, we promised the fighters support but then never had the will to follow through. The C.I.A. gave the rebels just 5 percent to 20 percent of the arms they requested. One trusted commander asked for more than a thousand rifles and received fewer than 36. One commander got the equivalent of 16 bullets a month per fighter. The rebels captured dozens of tanks, but the C.I.A. wouldn’t provide cash for fuel or shells so the tanks just sat there.

The rebels asked the C.I.A. for ammunition to take advantage of temporary opportunities, but the C.I.A. sometimes took two weeks to decide. The U.S. gave the rebels money to pay their troops, but they only gave them $100 to $150 for each fighter per month. The Islamic State paid its fighters twice that.

The C.I.A. was terrified that the arms it supplied would fall into enemy hands so it maintained paralyzingly tight controls on sophisticated weaponry. Trusted commanders had to film their use of anti-tank missiles. They had to hand over spent missile launchers at a spot along the border to qualify for resupply.

“We walk around Syria with a huge American flag planted on our backs, but we don’t have enough AK-47s in our hands to protect ourselves,” one fighter told American lawmakers.

“Why did you give us hope if you were not going to do anything about it?” another asked.

“We thought going with the Americans was going with the big guns,” another leader declared at a meeting. “It was a losing bet.”

The whole Wall Street Journal report gives the impression that the Islamic State not only has more resolve than the U.S. and its intelligence agencies, it has faster and more competent leadership.

The betrayal of the rebels in 2013 and 2014 is only a small betrayal, compared with the betrayal of values that might be unintentionally happening now. It appears as though the U.S. is backing off in its opposition to Bashar al-Assad, the mass murderer whose barbaric regime is a prime cause of instability in that part of the world. In our effort to stop the Islamic State, in the hopes of smoothing the Iranian nuclear talks, we may have entered a de facto alliance with Assad.

Now, Syria is obviously a viper’s pit in a region where the choices normally range from the appalling to the horrendous. But there are ways to approach problems in this region, and there are ways not to.

The way not to approach the Middle East is as a chessboard on which the grandmasters of American foreign policy can impose their designs. This is the sort of overconfident thinking that leads policy makers to squander moral authority by vowing to destroy Assad one month and then effectively buttressing him the next. This is the sort of overconfident thinking that leads to too-clever calibration of our support for the moderate rebels — giving them enough support to give the illusion of doing something real, while not actually giving enough to do any good.

The Middle East is not a chessboard we have the power to manipulate. It is a generational drama in which we can only play our role. It is a drama over ideas, a contest between the forces of jihadism and the forces of pluralism. We can’t know how this drama will play out, and we can’t direct it. We can only promote pluralism — steadily, consistently, simply.

Sticking to our values means maintaining a simple posture of support for people who share them and a simple posture of opposition to those who oppose them. It means offering at least some reliable financial support to moderate fighters and activists even when their prospects look dim. It means avoiding cynical alliances, at least as much as possible. It means using bombing campaigns to try to prevent mass slaughter.

If we do that then we will fortify people we don’t know in ways we can’t imagine. Over the long term, we’ll make the Middle East slightly more fertile for moderation, which is the only influence we realistically have. Ideas drive history.

Right now there is bipartisan inconsistency over the effectiveness of government. Republicans think government is a bumbling tool at home but a magnificent instrument abroad. Democrats think government is a magnificent instrument at home but a bumbling tool abroad. In reality, government is best when it chooses the steady simple thing over the complex clever thing. When you don’t know the future and can’t control events, bet on people. Support the good, oppose the bad.

Realist half-commitments that undermine our allies and too-clever games that buttress our foes will only backfire — and lead to betrayals that make us feel ashamed.

Is Bobo ashamed of Reagan’s arming of the rebels in Afghanistan, the ones who morphed into the Taliban?  Here’s Prof. Krugman:

In the five years (!) that have passed since the euro crisis began, clear thinking has been in notably short supply. But that fuzziness must now end. Recent events in Greece pose a fundamental challenge for Europe: Can it get past the myths and the moralizing, and deal with reality in a way that respects the Continent’s core values? If not, the whole European project — the attempt to build peace and democracy through shared prosperity — will suffer a terrible, perhaps mortal blow.

First, about those myths: Many people seem to believe that the loans Athens has received since the crisis broke have been subsidizing Greek spending.

The truth, however, is that the great bulk of the money lent to Greece has been used simply to pay interest and principal on debt. In fact, for the past two years, more than all of the money going to Greece has been recycled in this way: the Greek government is taking in more revenue than it spends on things other than interest, and handing the extra funds over to its creditors.

Or to oversimplify things a bit, you can think of European policy as involving a bailout, not of Greece, but of creditor-country banks, with the Greek government simply acting as the middleman — and with the Greek public, which has seen a catastrophic fall in living standards, required to make further sacrifices so that it, too, can contribute funds to that bailout.

One way to think about the demands of the newly elected Greek government is that it wants a reduction in the size of that contribution. Nobody is talking about Greece spending more than it takes in; all that might be on the table would be spending less on interest and more on things like health care and aid to the destitute. And doing so would have the side effect of greatly reducing Greece’s 25 percent rate of unemployment.

But doesn’t Greece have an obligation to pay the debts its own government chose to run up? That’s where the moralizing comes in.

It’s true that Greece (or more precisely the center-right government that ruled the nation from 2004-9) voluntarily borrowed vast sums. It’s also true, however, that banks in Germany and elsewhere voluntarily lent Greece all that money. We would ordinarily expect both sides of that misjudgment to pay a price. But the private lenders have been largely bailed out (despite a “haircut” on their claims in 2012). Meanwhile, Greece is expected to keep on paying.

Now, the truth is that nobody believes that Greece can fully repay. So why not recognize that reality and reduce the payments to a level that doesn’t impose endless suffering? Is the goal to make Greece an example for other borrowers? If so, how is that consistent with the values of what is supposed to be an association of sovereign, democratic nations?

The question of values becomes even starker once we consider why Greece’s creditors still have power. If it were just a matter of government finance, Greece could simply declare bankruptcy; it would be cut off from new loans, but it would also stop paying off existing debts, and its cash flow would actually improve.

The problem for Greece, however, is the fragility of its banks, which currently (like banks throughout the euro area) have access to credit from the European Central Bank. Cut off that credit, and the Greek banking system would probably melt down amid huge bank runs. As long as it stays on the euro, then, Greece needs the good will of the central bank, which may, in turn, depend on the attitude of Germany and other creditor nations.

But think about how that plays into debt negotiations. Is Germany really prepared, in effect, to say to a fellow European democracy, “Pay up or we’ll destroy your banking system?”

And think about what happens if the new Greek government — which was, after all, elected on a promise to end austerity — refuses to give in? That way, all too easily, lies a forced exit of Greece from the euro, with potentially disastrous economic and political consequences for Europe as a whole.

Objectively, resolving this situation shouldn’t be hard. Although nobody knows it, Greece has actually made great progress in regaining competitiveness; wages and costs have fallen dramatically, so that, at this point, austerity is the main thing holding the economy back. So what’s needed is simple: Let Greece run smaller but still positive surpluses, which would relieve Greek suffering, and let the new government claim success, defusing the anti-democratic forces waiting in the wings. Meanwhile, the cost to creditor-nation taxpayers — who were never going to get the full value of the debt — would be minimal.

Doing the right thing would, however, require that other Europeans, Germans in particular, abandon self-serving myths and stop substituting moralizing for analysis.

Can they do it? We’ll soon see.


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