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Brooks and Krugman

July 15, 2016

Sorry for the lateness.  Been a bit under the weather.  Today Bobo says “We Take Care of Our Own,” and that the phrase has two meanings, and that difference is at the center of election 2016.  Prof. Krugman, in “Bull Market Blues,” says in some ways, the stock market’s gains reflect economic weaknesses, not strengths.  Here’s Bobo, to be followed by a response from “gemli” in Boston:

A few years ago, Bruce Springsteen came out with a song called “We Take Care of Our Own.” The chorus’s theme seemed upbeat and proud: We take care of the people closest to us. But like in a lot of Springsteen songs (including “Born in the U.S.A.”), the lyrics in the verses sit in tension with the lyrics in the chorus.

In the verses, it’s clear that taking care of our own also means not taking care of people who are not our own, like the victims of Katrina. Suddenly the phrase “We Take Care of Our Own” has an exclusivist, menacing and even racist tinge.

That phrase and the two different meanings it can have sit at the center of election 2016.

Donald Trump’s supporters stand for the first meaning. America’s first loyalty is to its own workers, its own culture, its own citizens.

This worldview is not just selfishness. For most of human history most people have prized coherent communities above all. They’ve built moral systems on loyalty and support for their own kin and fellow citizens. These bonds are not based on some abstract social contract. They are intimate bonds, born out of shared kinship, history, geography and common understandings of right and wrong.

People committed to coherent communities will fight to defend the norms that hold communities together. They accept immigrants who assimilate to existing culture, but they’ll be suspicious of those who they feel bring in incompatible customs and tear at the social fabric.

For eons, this was more or less the traditional moral system for most of the human race. But as the N.Y.U. social psychologist Jonathan Haidt points out in an outstanding essay in The American Interest, over the past several decades a different mind-set has emerged.

People with this mind-set value the emancipated individual above the cohesive community. They value, or at least try to value, self-expression, social freedom and diversity. Their morality is not based on loyalty to people close to them; it’s based on a universal equality for all humans everywhere.

People with this mind-set disdain the political or religious walls that divide people. In his essay, Haidt cites John Lennon’s song “Imagine” as an expression of this worldview:

Imagine there’s no countries; it isn’t hard to do
Nothing to kill or die for, and no religion too
Imagine all the people living life in peace
You may say I’m a dreamer, but I’m not the only one.

People with this mind-set bridle at the exclusivist implications of the line “We Take Care of Our Own.” It’s fine to value Americans, but we should also take in the immigrant and be multilateral in our foreign relations.

Haidt argues that the division between these two camps is a division between the nationalists and the globalists. It’s also between the moral particularists and the moral universalists, between those who believe that blood and historic ties take precedence and those who, like the philosopher Peter Singer, argue that you have the same moral obligation to a boy starving to death in South Sudan as to a boy drowning in the lake in front of you.

For decades the globalist/universalist mind-set — pro-immigration, pro-globalization — has been on the march. Now, with Trump, the particularists are striking back. Immigration is the subject that fuels their ire.

As Haidt writes, “By the summer of 2015 [when the Syrian refugee crisis hit] the nationalist side was already at the boiling point, shouting ‘enough is enough, close the tap,’ when the globalists proclaimed, ‘let us open the floodgates, it’s the compassionate thing to do, and if you oppose us you are a racist.’ Might that not provoke even fairly reasonable people to rage?”

The fact is that both mind-sets have their virtues. The particularists emphasize the intimate love and loyalty that is the stuff of real community. The universalists are moved by injustices anywhere, and morally repulsed by inaction and indifference in the face of that suffering.

The tragedy of this election is that America already solved this problem. Unlike France and China, we were founded as a universalist nation. You can be fiercely patriotic and relatively open because America was founded to take in people from around the globe and unite them around something new.

Unfortunately, the forces of multiculturalism destroyed that commitment to cultural union. That has led to Trump, who has upended universalistic American nationalism and replaced it with European blood and soil nationalism in a stars and stripes disguise.

The way out of this debate is not to go nationalist or globalist. It’s to return to American nationalism — espoused by people like Walt Whitman — which combines an inclusive definition of who is Our Own with a fervent commitment to assimilate and Take Care of them.

Now here’s what “gemli” has to say to Bobo:

“Since when do we take care of our own? The history of America has been one of embracing the idea of equality while carefully building walls to isolate and punish the undesirables. It’s ironic that while we were proclaiming that all men are created equal we were simultaneously wiping out the Native Americans.

Women aren’t really our own. They were grudgingly allowed to vote in 1920, and a few weeks ago it was decided that states couldn’t close clinics just to deny them the right to a legal abortion that they had been granted in 1973. But I get the feeling it’s not over yet.

People from Africa were made reluctant Americans, and since then we’ve been reluctant to call them our own. Even after a smart, poised and decent African-American man became president, they have to remind us that they don’t like being economically abandoned, imprisoned and shot at traffic stops.

God help the gays. They are most certainly not our own. In fact, they’re nobody’s. Same-sex unions are now permissible, so they can be reviled as couples instead of individually. In America, that counts as progress.

Imagine no religion. Good luck with that. For all the walls we build, the one between church and state is the flimsiest. For the entire 6,000 years since God created the earth, religion has been nothing but trouble. Atheists are not our own.

We tend to “take care” of our fellow Americans the way that mob bosses take care of troublesome rivals. With extreme prejudice.”

And now here’s Prof. Krugman:

Like most economists, I don’t usually have much to say about stocks. Stocks are even more susceptible than other markets to popular delusions and the madness of crowds, and stock prices generally have a lot less to do with the state of the economy or its future prospects than many people believe. As the economist Paul Samuelson put it, “Wall Street indexes predicted nine out of the last five recessions.”

Still, we shouldn’t completely ignore stock prices. The fact that the major averages have lately been hitting new highs — the Dow has risen 177 percent from its low point in March 2009 — is newsworthy and noteworthy. What are those Wall Street indexes telling us?

The answer, I’d suggest, isn’t entirely positive. In fact, in some ways the stock market’s gains reflect economic weaknesses, not strengths. And understanding how that works may help us make sense of the troubling state our economy is in.

O.K., let’s start with the myth Samuelson was debunking, the claim that stock prices are the measure of the economy as a whole. That myth used to be popular on the political right, with prominent conservative economists publishing articles with titles like “Obama’s Radicalism IsKilling the Dow.”

Strange to say, however, we began hearing that line a lot less once stock prices turned around and began their huge surge — which started just six weeks after President Obama was inaugurated. (But polling suggests that a majority of self-identified Republicans still haven’t noticed that surge, and believe that stocks have gone down in the Obama era.)

The truth, in any case, is that there are three big points of slippage between stock prices and the success of the economy in general. First, stock prices reflect profits, not overall incomes. Second, they also reflect the availability of other investment opportunities — or the lack thereof. Finally, the relationship between stock prices and real investment that expands the economy’s capacity has gotten very tenuous.

On the first point: We measure the economy’s success by the extent to which it generates rising incomes for the population. But stocks don’t reflect incomes in general; they only reflect the part of income that shows up as profits.

This wouldn’t matter if the share of profits in overall income were stable; but it isn’t. The share of profits in national income fluctuates, but it has been a lot higher in recent years than it was during the great stock surge of the late 1990s — that is, we’ve had a profits boom without a comparably large economic boom, making the relationship between profits and prosperity weak at best. We are not, in fact, partying like it’s 1999.

On the second point: When investors buy stocks, they’re buying a share of future profits. What that’s worth to them depends on what other options they have for converting money today into income tomorrow. And these days those options are pretty poor, with interest rates on long-term government bonds not only very low by historical standards but zero or negative once you adjust for inflation. So investors are willing to pay a lot for future income, hence high stock prices for any given level of profits.

But why are long-term interest rates so low? As I argued in my last column, the answer is basically weakness in investment spending, despite low short-term interest rates, which suggests that those rates will have to stay low for a long time.

This may seem, however, to present a paradox. If the private sector doesn’t see itself as having a lot of good investment opportunities, how can profits be so high? The answer, I’d suggest, is that these days profits often seem to bear little relationship to investment in new capacity. Instead, profits come from some kind of market power — brand position, the advantages of an established network, or good old-fashioned monopoly. And companies making profits from such power can simultaneously have high stock prices and little reason to spend.

Consider the fact that the three most valuable companies in America are Apple, Google and Microsoft. None of the three spends large sums on bricks and mortar. In fact, all three are sitting on huge reserves of cash. When interest rates go down, they don’t have much incentive to spend more on expanding their businesses; they just keep raking in earnings, and the public becomes willing to pay more for a piece of those earnings.

In other words, while record stock prices do put the lie to claims that the Obama administration has been anti-business, they’re not evidence of a healthy economy. If anything, they’re a sign of an economy with too few opportunities for productive investment and too much monopoly power.

So when you read headlines about stock prices, remember: What’s good for the Dow isn’t necessarily good for America, or vice versa.

Krugman’s blog, 6/20/16

June 21, 2016

There was one post yesterday, “Tl;dr and Modern Macroeconomics (Wonkish):”

(For the non-Twitterati “tl;dr” is short for “too long, didn’t read”.)  Now here’s the Prof.:

Dear spell-correct: no, I do not mean “monkish.”

A short break from textbook revision, with macroeconomics and how to teach it still on my mind. So let me return to an old topic, the continuing usefulness of Hicksian IS-LM economics, in a somewhat different context.

When the Great Recession struck, there was a sharp division in economic commentary between those who had learned and appreciated the old Hicksian framework and those who hadn’t and/or didn’t. For that framework made some important predictions — namely, it said that things would be different at the zero lower bound. Increases in the monetary base — even huge increases — would not be inflationary. Budget deficits would not drive up interest rates. And fiscal multipliers would be much larger than they are in normal times, when fiscal expansion or contraction is offset by monetary policy.

Those were deeply controversial predictions at the time, but they were overwhelmingly vindicated by experience — dead-enders are reduced to arguing that Hicksians just happened to be right for the wrong reasons.

But here’s the thing: doing anything like HIcksian analysis in public is still very much frowned on within the economics profession. It’s ad hoc, not microfounded, sloppy about intertemporal relationships. DSGE models with sticky prices are OK; publishing IS-LMish stuff, even in a policy forum, remains hard and in general is possible only for old guys with enough professional capital to get away with it.

So how much is lost as a result? What set me off was reading Eggertsson et al (EMSS) on contagious secular stagnation. It’s serious work, and I agree with the main conclusions; I am also a big admirer of all of the economists involved, particularly Gauti, who was investigating the weird economics of the liquidity trap long before it was cool.

And yet … it’s really tough going, epitomizing too long; didn’t read to the nth degree. In part I guess I’m just an aging economist with much less tolerance for algebraic grinding than I used to have. You also want to bear in mind the old principle that the optimal level of technical difficulty in papers is always precisely the level of your own papers. But still.

What do we get out of the rigor — the overlapping-generations setup, the explicit modeling of borrowing constraints, and so on? Suppose you came at this issue in an old-fashioned way, using Mundell-Fleming — the open-economy version of IS-LM. You would boil it down (as Olivier Blanchard has suggested in an email) to a Metzler diagram, with the exchange rate (price of foreign currency) on the horizontal axis and interest rates on the vertical:

The idea here is that a depreciation of Home’s currency causes economic expansion in Home, which Home’s central bank leans against, hence the upward slope; meanwhile, it causes contraction in Foreign, which Foreign’s central bank also leans against, hence downward slope. But both face a potential zero lower bound, hence the flat sections.

With perfect capital mobility and static expectations, interest rates must be equalized, so equilibrium is where the two lines cross. And it’s now obvious that an adverse shock in Foreign, suggested by the blue arrows, will push interest rates down in both countries. If the shock is enough to drive Foreign to the ZLB, it will do the same to Home, as transmitted through the exchange rate. In other words, Europe can export its secular stagnation to us via a weak euro and a strong dollar.

Now, you get a few additional insights from the EMSS paper, such as the role of credit constraints in inducing stagnation and the rule of limits on capital mobility in limiting its spread. But the cost in terms of complexity and cumbersomeness is huge.

And this cumbersomeness may even lead to loss of insight. The paper relies, necessarily, on the analysis of steady states. Yet I would argue that the transmission of the liquidity trap depends crucially on how permanent the shock is perceived to be — which is an insight you lose by assuming a steady state.

But, some readers may say, haven’t I myself used this kind of framework, both in my original liquidity trap analysis and in work with Gauti on deleveraging? Yes indeed — and while part of the reason was to get through the anti-Hicks barrier, in each case I believed that dotting those i’s and crossing those t’s yielded some valuable insights. In fact, I didn’t believe in the liquidity trap until I saw it pop up in a New Keynesian model, and doing the deleveraging math really helped clarify my thinking there too.

So I don’t have any general opposition to the more elaborate modeling approach. What worries me is the effective prohibition on simple, ad hoc models that sometimes yield most of the insight — in the case of contagious secular stagnation, I’d put the ratio well above 90 percent — in a form that is much more useful for real-world policy discussion.

Or then again, maybe it’s just my vintage. Also, you kids get off my lawn.

Krugman’s blog, 6/12/16

June 13, 2016

There were two posts yesterday.  The first was “Notes on Brexit:”

I guess it’s time to weigh in on an issue I have mostly been avoiding: Britain’s vote on whether to leave the EU, aka Brexit.

Not to keep you in suspense: if I had a vote, I’d vote “remain.” But I wouldn’t be as enthusiastic as I’d like – and if “remain” wins, as I hope it does, I’ll still feel a sense of dread about what the future holds.

Why? Some notes on the issue:

  1.  Conventional trade analysis says that unless Britain can make a deal that essentially preserves full access to the EU – which seems unlikely given what a “leave” vote would do to relations — Brexit would make Britain poorer, on a sustained basis, than it would otherwise have been. I’ve done my own back of the envelope calculation, and come up with a sustained 2 percent of GDP loss; this is in the same range as other calculations. The number isn’t at all a hard fact – it could be smaller, but it could also be bigger — but the direction is completely clear.

2.  On top of these conventional losses, there’s the special issue of the City of London, which looms very large in the British economy thanks to huge exports of financial services to the rest of Europe. The City’s role, like that of other financial centers, rests on hard-to-model agglomeration economies. Would the frictions and extra costs of Brexit hurt the City sufficiently to undermine its role, at big cost to the UK? Nobody knows, but if so that could add a lot to the economic costs.

3.  Pay no attention to claims that Britain, freed from EU rules, could achieve spectacular growth via deregulation. You say to-mah-to, I say voodoo, and it’s no better than the US version.

4.  On the other hand, I would greatly discount claims about dramatic financial crisis or whatever. Maybe the pound would fall – but for a country that borrows in its own currency and has an excessive current account deficit, that’s a good thing.

5.  It’s also true that the economic impact of Brexit would fall quite differently on different groups within Britain. The City and those whose incomes are tied to its fortunes would probably lose badly, but some regions of the country might actually benefit from a weaker pound.

6.  Despite such distributional issues, the straight economics is pretty clearly on the side of Remain. Why, then, am I at all ambivalent? Because the EU is so dysfunctional, and seems utterly resistant to improvement.

7.  The euro is the most obvious case: it was a mistake in the first place, and this mistake was greatly compounded by the handling of the post-2009 crisis. A big technical problem of adjustment after a sudden stop in capital flows was turned into a morality play requiring destructive austerity. And there is no hint outside the ECB that any of the major players have learned anything from the debacle.

8.  But it’s not just the euro. The EU seems unable to come to grips with migration issues – not just the refugee crisis, but the interaction among extensive welfare states, large internal income disparities, and open borders. I’m sure anti-European forces are exaggerating the burden created for Britain by migrants from eastern Europe, but it’s a flash point to which the EU doesn’t seem able to respond.

9.  So something has to give. I’d like to imagine that a close Brexit vote in favor of Remain would be a wake-up call – but there have been many such calls in recent years, and nothing seems to happen.

10.  And yet, and yet – the European project has been a source of tremendous good in the world, and it’s still very important. The EU has historically been a key force, not just for increased trade, but for democratization. Even when it falls short, as it has when dealing with the rise of authoritarianism in Hungary and now Poland, the EU and its institutions are an important restraint. If Brexit greatly damages the European project, it would open the door to a lot of ugliness.

11.  So I would vote Remain, but with some feelings of despair, because what I’d be voting to remain with is a system that desperately needs reform but shows little sign of reforming.

Yesterday’s second post was “Don’t Take a Hike:”

I’m hearing some buzz that the Fed may still be considering a rate hike at its upcoming meeting, or if not then soon. Let’s really, really hope this is wrong.

It’s true that measured unemployment is low by historical standards. But that’s a number depressed by low labor force participation; nobody really knows how far we are from full employment. Meanwhile, wage increases have risen but are still nowhere near worrying inflationary levels; actual inflation is below 2 percent, and both inflation expectations from surveys and implied market inflation predictions are low and falling.

Oh, and job growth has slowed, along with the economy. Why would we expect an inflationary surge anytime soon, if ever?

The behavior of long-term interest rates is, I think, especially telling. Such rates reflect a combination of inflation expectations and expectations about future economic strength — and they’ve been plunging, and are once again below 1.7 percent:

So the market doesn’t see a near or even medium-term future in which the Fed would have good reasons to raise rates. Are people at the Fed at all sure that they know better?

On top of all this is the asymmetry of risks, which I and many others have been arguing for again and again. If the Fed waits to raise rates, and inflation overshoots its target, that’s not a deep problem — it can always raise rates, slow the economy, and get inflation down. If it raises rates and this turns out to have been premature, with the economy losing momentum and inflation falling, that’s a mistake that’s very hard to reverse when rates are still not much above zero.

So even if the data suggested that a rate hike was appropriate if you abstract from uncertainty — which they don’t! — it would still make sense to wait.

With everything else going on in the world, the really really last thing we need is an unforced error by the Fed.

Krugman’s blog, 5/27/16

May 28, 2016

There was one post yesterday, “What I Did Last Weekend:”

A commencement speech at Simon’s Rock, in the Berkshires:

You can see other parts of the very lovely event here.

 

Krugman’s blog, 5/25/16

May 26, 2016

There was one post yesterday, “Talking Global Inequality:”

Branko Milanovic and his CUNY Grad Center colleagues discuss his excellent new book:

(Fingers crossed that the video embedded…)

 

Krugman’s blog, 5/17/16

May 18, 2016

There were two posts yesterday.  The first was “Democratic Groundhog Day:”

Ugh. More primaries today. Do they matter?

Not for the nomination. Clinton has won — her big victories in the mid-Atlantic states ended any chance that Sanders can catch up on pledged delegates or popular vote, and he’s not going to convince superdelegates to overturn the will of the voters. Again, the math: Clinton leads by 280 pledged delegates, with 897 left. To overtake, Sanders would need to win the remaining contests by a 280/897 margin, or 31 percent. This is not going to happen.

This is very much true even if he wins both primaries tonight. KY and OR are both very favorable states for Sanders, basically because they’re very white. Alan Abramowitz predicts Sanders +6 in OR, +1 in KY; Benchmark Politics predicts narrow Clinton win in KY, narrow Sanders win in OR. Suppose Abramowitz is right. Then Sanders might narrow the gap by 5 delegates — but there will be only 781 left to go, and his required margin would rise to 275/781 or 35 percent. And the demography gets much worse for him in the remaining states.

But here’s the thing: a lot of Sanders supporters don’t understand this reality — 29 percent still believe that he’s the likely nominee, and another 11 percent aren’t sure. If news reports say that he “won” tonight, they’ll persist in their illusions — and the narrative that Clinton is somehow stealing the nomination will continue to fester.

Sanders could end all of this at any point. He doesn’t even have to drop out, all he needs to do is talk honestly about the realities — and clearly condemn the kind of behavior we saw in Las Vegas over the weekend. But I’m losing hope that he will ever do the right thing.

Yesterday’s second post was “Questions of Character:”

Like a lot of people, I was shocked by the statement Bernie Sanders put out about Nevada. No hint of apology for his supporters’ behavior, lots of accusations about a “rigged” process when the issue in Nevada was whether Clinton should get more delegates in a state where she won the vote. And the general implication that the nomination is somehow being stolen when the reality is that Clinton won because a large majority of voters chose to support her.

But maybe we shouldn’t have been shocked. It has been obvious for quite a while that Sanders — not just his supporters, not even just his surrogates, but the candidate himself — has a problem both in facing reality and in admitting mistakes. The business with claiming that Clinton only won conservative states in the deep South told you that; and even before, there were strong indications that he would not accept defeat gracefully or even rationally.

Here’s what I wrote more than a month ago:

Is Mr. Sanders positioning himself to join the “Bernie or bust” crowd, walking away if he can’t pull off an extraordinary upset, and possibly helping put Donald Trump or Ted Cruz in the White House? If not, what does he think he’s doing?

The Sanders campaign has brought out a lot of idealism and energy that the progressive movement needs. It has also, however, brought out a streak of petulant self-righteousness among some supporters. Has it brought out that streak in the candidate, too?

I’m afraid that we now know the answer. And I feel sorry for all the genuinely idealistic, well-meaning people who got caught up in this terrible mess.

If you don’t read Matt Taibbi you should…

April 20, 2016

Here’s a link to his latest piece in Rolling Stone.  It’s a must read:

http://www.rollingstone.com/politics/news/why-is-the-obama-administration-trying-to-keep-11-000-documents-sealed-20160418

 

Krugman’s blog, 4/9/16

April 11, 2016

There was one post on Saturday, and none yesterday.  Saturday’s post was “The Donald and the Veg-O-Matic:”

I’ve written on a number of occasions about the Veg-O-Matic temptation — the urge to claim that your preferred policy solves all problems — it slices! It dices! It purees! It creates jobs! It raises productivity! It takes off weight without diet or exercise! There’s also the reverse version, in which a policy you dislike does everything bad — It’s inflationary! It’s contractionary! It causes acne!

When you see Veg-O-Matic claims, you should always be suspicious. Sometimes a policy does kill two or more birds with one stone — there’s a very good case that infrastructure investment under current conditions, with interest rates very low and economies still under capacity, would create jobs now, enhance long-run growth, and even improve fiscal prospects. But conclusions like that shouldn’t be accepted without a lot of hard thinking and self-criticism; you need to bend over backward to avoid falling into wishful thinking.

That consideration in itself should have flashed warning signs about, to take one important example, the embrace by Very Serious People of the doctrine of expansionary austerity — it was all too obvious that the austerians wanted a reason to cut government spending, and they should have been extremely wary of studies purporting to say that doing so would actually create jobs in a depressed economy. The fact that they instead seized on those studies was a very bad sign.

In modern America Veg-O-Matic economics has tended to be a right-wing thing, for a couple of reasons. One is that if your party’s central mission is to comfort the comfortable and afflict the afflicted, you need to claim that all kinds of wonderful side effects will take place from what might otherwise look like a combination of greed and cruelty. Another is that the parties are different; the monolithic GOP has, until just now, been able to get all its followers declaring that we’re at war with Eurasia, or Eastasia, with no awkward challenges from independent-minded wonks. The Democrats are a coalition in which the wonks have a fair bit of autonomy, and at least believe that they have a professional ethos to uphold.

That said, the Veg-O-Matic temptation exists for everyone. Yes, we see some of it in the populist uprising within the Democratic party, where anyone questioning the happy talk can be dismissed as a corrupt tool of the corporations. But the big example of Veg-O-Matic reasoning I see right now — in this case the anti-VOM version — is coming in what we might call the mainstream critique of Donald Trump.

I come here not to praise Trump — God no — and would be happy to see his political ambitions buried, with maximum ignominy. He would destroy American civil society; destroy our hopes of containing climate change; destroy U.S. influence by trying to bully everyone in sight. It’s very scary that there’s any chance that he might end up with his (long) finger on the button.

But too many anti-Trump critics seem to have settled on one critique that happens not to be right: the claim that a turn to protectionism would cause vast job losses. Sorry, that’s just not a claim justified by either theory or history.

Protectionism reduces world exports, but it also reduces world imports, so that the effect on overall demand is a wash; textbook economic models just don’t say what conventional wisdom is asserting here.

History doesn’t support this line of attack either. Protection in the 1930s was a result, not a cause, of the depression; the early postwar years, when tariffs were still high and exchange controls were pervasive, were marked by very full employment in many countries.

Why, then, focus on such a weak argument against a truly despicable candidate? I think I know the answer: it’s an argument that doesn’t involve taking on bad things in the Trump agenda that differ from the agenda of other Republicans only in degree — as Matt O’Brien says, on tax policy Trump is just Paul Ryan on steroids.

But bad arguments are bad arguments, even if used against a bad guy. And the choice of this argument is telling us something about what’s wrong with a lot of people beyond Trump.

Bobo, solo

March 15, 2016

In “The Shame Culture” Bobo moans that a new moral system is coming into place.  In the comments “Larry” from Garrison, NY had this to say:  “Funny how Brooks and Crouch focus only on the perceived transgressions of the left and not on the much larger and dangerous ones of the right. Any sane observer would say that the totally baseless ravings of the right regarding how Christianity is under attack, or the war on Christmas is infinitely worse than some teenager in his mom’s basement tweeting some inane message on his iPhone.  The shame culture of the right is organized and funded by craven right wing billionaires who are trying to shape the political landscape while the shamers on the left are individuals who simply have too much time on their hands and will grow out of it when they graduate from college.”  Here’s Bobo:

In 1987, Allan Bloom wrote a book called “The Closing of the American Mind.” The core argument was that American campuses were awash in moral relativism. Subjective personal values had replaced universal moral principles. Nothing was either right or wrong. Amid a wave of rampant nonjudgmentalism, life was flatter and emptier.

Bloom’s thesis was accurate at the time, but it’s not accurate anymore. College campuses are today awash in moral judgment.

Many people carefully guard their words, afraid they might transgress one of the norms that have come into existence. Those accused of incorrect thought face ruinous consequences. When a moral crusade spreads across campus, many students feel compelled to post in support of it on Facebook within minutes. If they do not post, they will be noticed and condemned.

Some sort of moral system is coming into place. Some new criteria now exist, which people use to define correct and incorrect action. The big question is: What is the nature of this new moral system?

Last year, Andy Crouch published an essay in Christianity Today that takes us toward an answer.

Crouch starts with the distinction the anthropologist Ruth Benedict popularized, between a guilt culture and a shame culture. In a guilt culture you know you are good or bad by what your conscience feels. In a shame culture you know you are good or bad by what your community says about you, by whether it honors or excludes you. In a guilt culture people sometimes feel they do bad things; in a shame culture social exclusion makes people feel they are bad.

Crouch argues that the omnipresence of social media has created a new sort of shame culture. The world of Facebook, Instagram and the rest is a world of constant display and observation. The desire to be embraced and praised by the community is intense. People dread being exiled and condemned. Moral life is not built on the continuum of right and wrong; it’s built on the continuum of inclusion and exclusion.

This creates a set of common behavior patterns. First, members of a group lavish one another with praise so that they themselves might be accepted and praised in turn.

Second, there are nonetheless enforcers within the group who build their personal power and reputation by policing the group and condemning those who break the group code. Social media can be vicious to those who don’t fit in. Twitter can erupt in instant ridicule for anyone who stumbles.

Third, people are extremely anxious that their group might be condemned or denigrated. They demand instant respect and recognition for their group. They feel some moral wrong has been perpetrated when their group has been disrespected, and react with the most violent intensity.

Crouch describes how video gamers viciously went after journalists, mostly women, who had criticized the misogyny of their games. Campus controversies get so hot so fast because even a minor slight to a group is perceived as a basic identity threat.

The ultimate sin today, Crouch argues, is to criticize a group, especially on moral grounds. Talk of good and bad has to defer to talk about respect and recognition. Crouch writes, “Talk of right and wrong is troubling when it is accompanied by seeming indifference to the experience of shame that accompanies judgments of ‘immorality.’”

He notes that this shame culture is different from the traditional shame cultures, the ones in Asia, for example. In traditional shame cultures the opposite of shame was honor or “face” — being known as a dignified and upstanding citizen. In the new shame culture, the opposite of shame is celebrity — to be attention-grabbing and aggressively unique on some media platform.

On the positive side, this new shame culture might rebind the social and communal fabric. It might reverse, a bit, the individualistic, atomizing thrust of the past 50 years.

On the other hand, everybody is perpetually insecure in a moral system based on inclusion and exclusion. There are no permanent standards, just the shifting judgment of the crowd. It is a culture of oversensitivity, overreaction and frequent moral panics, during which everybody feels compelled to go along.

If we’re going to avoid a constant state of anxiety, people’s identities have to be based on standards of justice and virtue that are deeper and more permanent than the shifting fancy of the crowd. In an era of omnipresent social media, it’s probably doubly important to discover and name your own personal True North, vision of an ultimate good, which is worth defending even at the cost of unpopularity and exclusion.

The guilt culture could be harsh, but at least you could hate the sin and still love the sinner. The modern shame culture allegedly values inclusion and tolerance, but it can be strangely unmerciful to those who disagree and to those who don’t fit in.

Strange as it may seem life is possible without constantly twitter-twatting…

Krugman’s blog, 2/8 and 2/9/16

February 10, 2016

There were two posts on Monday and one yesterday.  Monday’s first post was “Structural Humbug Revisited:”

Bryan Caplan reports that he has just won a bet with Tyler Cowen over whether unemployment would ever drop below 5 percent. It might be worth remembering the context.

You see, when the Great Recession struck — a demand-side shock if ever there was one — it took no time at all for a strange consensus to develop in elite opinion, to the effect that a large part of the rise in unemployment was “structural,” and could not be reversed simply by a recovery in demand. Workers just didn’t have the right skills, you see. Many of us argued at length that this was foolish. If skills were the problem, where were the occupations with rapidly rising wages? I pointed out that people said the same thing during the Great Depression, only to see it disproved when we finally got a big fiscal stimulus called World War II.

But the doctrine somehow just got stronger and stronger in elite circles, because it sounded serious and judicious, unlike the seemingly flighty proposition that all we needed was more spending. In fact, the notion that our unemployment problem was mainly structural began to be presented as a simple fact rather than as a hypothesis most professional economists rejected.

And here we are.

Monday’s second post was “Hard Money Men:”

So what will happen in NH tomorrow? I have no idea. We must dispel with this notion that anyone has the slightest idea what they are doing. However, there seems to be a real possibility for one thing that seemed unlikely before the RubiOS bug manifested itself: that John Kasich will come in second on the Republican side.

If he does, there will be an outpouring of praise from self-proclaimed centrists, who will declare Kasich the sensible, responsible Republican of their dreams. So let me attempt what will surely be a futile preemptive strike, and note that on economic policy — which sort of matters — Kasich is terrible, arguably worse than the rest of the GOP field.

It’s not just his balanced-budget fetishism, which would be disastrous in an economic crisis. He’s also a hard-money man.

Ted Cruz has gotten some scrutiny, although not enough, for hisgoldbuggism. But Kasich, when asked why wages have stagnated,gave as his number one reason “because the Federal Reserve kept interest rates so low” — because this diverted investment into stocks, or something. No, it doesn’t make any sense — but it tells you that he is viscerally opposed to monetary as well as fiscal stimulus in the face of high unemployment.

So no, Kasich isn’t sensible. He’s just off the wall in ways that differ in some ways from the GOP mainstream. If he’d been president in 2009-10, we’d have had a full replay of the Great Depression.

Yesterday’s post was “Bonds on the Run:”


Bloomberg News

While we obsess over domestic politics — not that there’s anything wrong with that, since a lot depends on whether the next leader of the world’s most powerful nation is a racist xenophobe, a sinister theocrat, an empty suit, or all of the above — something scary is going on in financial markets, where bond prices in particular are indicating near-panic.

I know, Paul Samuelson famously quipped that the stock market had predicted nine of the last five recessions; the wisdom of crowds is often overrated. Still, bond markets are a bit less flighty than stocks, and also more closely tied to the economic outlook. (A weak economy has mixed effects on stocks — low profits but also low interest rates — while it has an unambiguous effect on bonds.) What plunging rates tell us is that markets are expecting very weak economies and possibly deflation for years to come, if not full-blown crisis.

Among other things, such a world would be a very bad place into which to elect a member of a party that has spent the past 7 years inveighing against both fiscal and monetary stimulus, and has learned nothing from the utter failure of its predictions to come true.


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