Nocera and Bruni

August 22, 2015

Mr. Nocera has a question in “Jeff Bezos and the Amazon Way:”  Is the company’s culture one of a kind, or a sign of the workplace of the future?  In “Gay and Marked for Death” Mr. Bruni says it’s  time for enlightened countries to address a human-rights chasm.  Here’s Mr. Nocera:

The best thing about Jeff Bezos, the founder, chairman, president and chief executive of Amazon, is that he doesn’t give a hoot what anybody else thinks. The worst thing about Jeff Bezos is that he doesn’t give a hoot what anybody else thinks.

Practically from the moment Amazon went public in 1997, Wall Street has pleaded with Bezos to generate more profits. He has ignored those pleas, and has plowed potential profits back into the company. Bezos believes that if Amazon puts the needs of its customers first — and no company is more maniacally focused on customers — the stock will take care of itself. That’s exactly what has happened. That is the good side of Bezos’s indifference to the opinion of others.

The bad side is the way he and his company treat employees. In 2011, the Allentown, Pa., Morning Call published an eye-opening series documenting how Amazon treated the workers at its warehouses. The newspaper reported that workers “were pushed harder and harder to work faster and faster until they were terminated, they quit or they got injured.”

The most shocking revelation was that the warehouses lacked air-conditioning, and that during heat waves, the company “arranged to have paramedics parked in ambulances outside” to revive workers who were overcome by the heat. “I never felt treated like a piece of crap in any other warehouse but this one,” said one worker. (After the exposé, Amazon installed air-conditioning in its warehouses.)

Last weekend, a lengthy front-page story in The New York Times examined how Amazon treats its Seattle-based white-collar employees. Although they have air-conditioning — and make good money, including stock options — the white-collar workers also appear to be pushed harder and harder to work faster and faster.

In the cutthroat culture described by The Times’s Jodi Kantor and David Streitfeld, a certain percentage of workers are culled every year. It’s an enormously adversarial place. Employees who face difficult life moments, such as dealing with a serious illness, are offered not empathy and time off but rebukes that they are not focused enough on work. A normal workweek is 80 to 85 hours, in an unrelenting pressure-cooker atmosphere.

Until last weekend, Bezos was unapologetic about the Darwinian work culture he created. “It’s not easy to work here,” he wrote in an early letter to shareholders.

According to “The Everything Store,” a fine history of Amazon by Brad Stone of Bloomberg Businessweek, Bezos liked to say that he didn’t want the company to become “a country club” where people went “to retire.” His point of reference was Seattle’s other tech behemoth, Microsoft, which devolved from a ruthless predator to a sluggish bureaucracy. That is exactly what Bezos doesn’t want to happen to Amazon. He wants it to always have the feel of a start-up, where the work pace is frantic and the pressure intense.

And you know something? Give him his due: It has worked remarkably well.

It’s worth remembering that Amazon is a first-generation Internet company; its peers, including Yahoo and AOL, are a shell of their former selves, even as Amazon has become ever-more important and powerful. Some of Bezos’s tenets — such as the importance of openly disagreeing, rather than smoothing things over — seem admirable. Everybody at Amazon is highly competent; the company doesn’t tolerate deadwood.

Even when Bezos sent around an email last weekend about the Times story, he didn’t exactly apologize. He said that he didn’t recognize the Amazon The Times wrote about, and that some of the incidents were so callous they should have been reported to the human resources department. But he didn’t say they weren’t true. That’s because they are true.

The real issue Amazon’s work culture raises — for blue- and white-collar employees alike — is: How disposable are people?Now

A previous generation of Americans could count on a social compact; if you stuck loyally by a company, it would stick by you, providing you with a good job and a decent retirement. Long ago, loyalty fell by the wayside, and longtime employees learned that their loyalty meant nothing when companies “downsized.”

Amazon — and, to be sure, any number of other companies as well — has taken this idea to its logical extreme: Bring people in, shape them in the Amazon style of confrontation and workaholism, and cast them aside when they have outlived their usefulness.

For a data-driven executive like Bezos, this kind of culture is appealing, because it maximizes the amount of work a company can wring from fundamentally fungible human beings. The question Amazon’s culture raises is whether it is an outlier — or whether it represents the future of the workplace.

Of course, Bezos didn’t have to build Amazon the way he did. He could have created a culture that valued employees and treated them well. But that would have required him to care about what somebody else thought. Fat chance.

Now here’s Mr. Bruni:

As he tried to concentrate on his final college exams, he couldn’t erase the terrifying images in his head, an endless replay of a video he’d seen. It showed two men being killed — their necks noosed, their bodies dragged through the streets and set on fire.

They had burned, he told me, because they were gay.

Just like him.

Islamic extremism was sweeping through Iraq, and terror coursed through his veins. It became unbearable when, in mid-2014, the Islamic State seized control of the city where he lived. He fled, traveling furtively across Iraq for nearly a month, looking for a point of exit, finally finding one and boarding a flight to a city in the Middle East where he wouldn’t be in danger.

“The greatest moment of my life was stepping on that plane,” said the man, in his mid-20s, who asked that I not use his name or any identifying details, lest harm come to family members back in Iraq. “I was able to breathe again. I hadn’t been breathing.”

On Monday, he will tell his story at a special United Nations Security Council meeting on L.G.B.T. rights. American officials involved in it arranged for me to talk with him in advance by phone.

Although Monday’s discussion isn’t a formal one that Security Council members are required to attend, it’s nonetheless the first time that the council has held a meeting of any kind that’s dedicated to the persecution of L.G.B.T. people, according to Samantha Power, the United States ambassador to the United Nations.

And it’s an example, she told me, of a determined push by the United States and other countries to integrate L.G.B.T. rights into all discussions of human rights by international bodies like the U.N.

“We’re trying to get it into the DNA so that when you’re talking about minorities or vulnerable groups, you would always have L.G.B.T. people included,” Power said.

There has been a commendable acceleration of that effort since September 2011, when Barack Obama, in an address to the U.N. General Assembly, unsettled many in the audience by declaring: “We must stand up for the rights of gays and lesbians everywhere.” Power, who was present for those remarks, said that she was near enough to Robert Mugabe, the president of Zimbabwe, to hear him mutter: “My God.”

There have also been enormous victories for L.G.B.T. people in nations as different as Nepal and Malta over the last few years. This year alone, a popular referendum legalized same-sex marriage in Ireland and a Supreme Court decision did so in the United States.

But, Power noted, “Unfortunately, internationally, those trends are not being paralleled in very large swaths of the world.” This divide is becoming ever starker, creating new diplomatic tensions, challenges and responsibilities for countries like the United States.

I can’t recall any foreign trip by a president that prompted as much discussion of gay rights as Obama’s to Kenya, where homosexuality is punishable by up to 14 years in prison. Obama confronted that harsh reality head-on.

“The state should not discriminate against people based on their sexual orientation,” he said at a news conference with the Kenyan president, going on to add: “The idea that they are going to be treated differently or abused because of who they love is wrong. Full stop.”

Our own country can’t wholly congratulate itself. Federal legislation to outlaw employment discrimination based on sexual orientation has languished for many years.

But American officials were among those who pushed back successfully earlier this year when Russia fought to overturn a policy to grant benefits to the same-sex spouses of U.N. employees.

“L.G.B.T. rights have become one of the most controversial dimensions — one of the most controversial tests — of the universality of human rights,” noted Jessica Stern, the executive director of the International Gay and Lesbian Human Rights Commission. She, too, will speak at the meeting on Monday.

She shared with me her group’s timeline of killings of gay men that the Islamic State has publicized, sometimes with gruesome photos. It’s a bloodcurdling document, recounting 30 executions for sodomy, though the commission is careful to stress that it cannot authenticate each incident and that the count is almost certainly not comprehensive.

Many men were reportedly thrown off roofs. Others were stoned. One was stoned after the fall from a roof didn’t kill him — to finish the job.

The Iraqi refugee I interviewed told me that on social media earlier this year, he saw images of a rooftop execution and learned later that the victim — unrecognizable because he was blindfolded and shown mostly from behind — was a friend of his who hadn’t left Iraq.

The Security Council meeting, which the United States is co-hosting with Chile, will focus on the Islamic State’s brutality against gays as a way of getting countries who might not be sensitive to the plight of gays, but who have profound concerns about the Islamic State, to pay attention.

Even so, there’s no telling whether such Security Council members as Chad, Angola, Nigeria, Russia and China will send high-level representatives or any representatives at all. The meeting is also open to countries that aren’t on the council, but it’s closed to the public and members of the news media.

Power said that it’s vital that the Islamic State’s treatment of gays not be omitted from discussions of its atrocities against other vulnerable groups.

And that’s partly because the terror felt by gays in areas controlled by the Islamic State is an extreme form of their victimization in far too many other places. It’s a summons to action for enlightened countries that could open their arms wider to L.G.B.T. refugees.

They need to recognize gay people like Subhi Nahas, 28, who will also speak at the meeting.

A little over three years ago he was still living in Syria. His town was taken over by the Nusra Front, a Syrian affiliate of Al Qaeda. It announced that it would cleanse the town of people who had engaged in sodomy, he said. Men suspected of being gay were rounded up.

He hid in his home.

After a few months he escaped to an L.G.B.T. safe house in Lebanon. He’s now in San Francisco, where he works for the Organization for Refuge, Asylum and Migration and struggles to make sense of the barbarism in Syria and why gay people should be special targets of it.

“If I did not get out, I’d be dead by now,” he told me. Knowing that, he said: “Even here, in the safest place I can think of, I still sometimes don’t feel safe.”

Krugman, solo

August 21, 2015

In “Debt is Good” Prof. Krugman tells us that a problem with the economy may be that we aren’t in deep enough, not that we’re in too deep.  Here he is:

Rand Paul said something funny the other day. No, really — although of course it wasn’t intentional. On his Twitter account he decried the irresponsibility of American fiscal policy, declaring, “The last time the United States was debt free was 1835.”

Wags quickly noted that the U.S. economy has, on the whole, done pretty well these past 180 years, suggesting that having the government owe the private sector money might not be all that bad a thing. The British government, by the way, has been in debt for more than three centuries, an era spanning the Industrial Revolution, victory over Napoleon, and more.

But is the point simply that public debt isn’t as bad as legend has it? Or can government debt actually be a good thing?

Believe it or not, many economists argue that the economy needs a sufficient amount of public debt out there to function well. And how much is sufficient? Maybe more than we currently have. That is, there’s a reasonable argument to be made that part of what ails the world economy right now is that governments aren’t deep enough in debt.

I know that may sound crazy. After all, we’ve spent much of the past five or six years in a state of fiscal panic, with all the Very Serious People declaring that we must slash deficits and reduce debt now now now or we’ll turn into Greece, Greece I tell you.

But the power of the deficit scolds was always a triumph of ideology over evidence, and a growing number of genuinely serious people — most recently Narayana Kocherlakota, the departing president of the Minneapolis Fed — are making the case that we need more, not less, government debt.

Why?

One answer is that issuing debt is a way to pay for useful things, and we should do more of that when the price is right. The United States suffers from obvious deficiencies in roads, rails, water systems and more; meanwhile, the federal government can borrow at historically low interest rates. So this is a very good time to be borrowing and investing in the future, and a very bad time for what has actually happened: an unprecedented decline in public construction spending adjusted for population growth and inflation.

Beyond that, those very low interest rates are telling us something about what markets want. I’ve already mentioned that having at least some government debt outstanding helps the economy function better. How so? The answer, according to M.I.T.’s Ricardo Caballero and others, is that the debt of stable, reliable governments provides “safe assets” that help investors manage risks, make transactions easier and avoid a destructive scramble for cash.

Now, in principle the private sector can also create safe assets, such as deposits in banks that are universally perceived as sound. In the years before the 2008 financial crisis Wall Street claimed to have invented whole new classes of safe assets by slicing and dicing cash flows from subprime mortgages and other sources.

But all of that supposedly brilliant financial engineering turned out to be a con job: When the housing bubble burst, all that AAA-rated paper turned into sludge. So investors scurried back into the haven provided by the debt of the United States and a few other major economies. In the process they drove interest rates on that debt way down.

And those low interest rates, Mr. Kocherlakota declares, are a problem. When interest rates on government debt are very low even when the economy is strong, there’s not much room to cut them when the economy is weak, making it much harder to fight recessions. There may also be consequences for financial stability: Very low returns on safe assets may push investors into too much risk-taking — or for that matter encourage another round of destructive Wall Street hocus-pocus.

What can be done? Simply raising interest rates, as some financial types keep demanding (with an eye on their own bottom lines), would undermine our still-fragile recovery. What we need are policies that would permit higher rates in good times without causing a slump. And one such policy, Mr. Kocherlakota argues, would be targeting a higher level of debt.

In other words, the great debt panic that warped the U.S. political scene from 2010 to 2012, and still dominates economic discussion in Britain and the eurozone, was even more wrongheaded than those of us in the anti-austerity camp realized.

Not only were governments that listened to the fiscal scolds kicking the economy when it was down, prolonging the slump; not only were they slashing public investment at the very moment bond investors were practically pleading with them to spend more; they may have been setting us up for future crises.

And the ironic thing is that these foolish policies, and all the human suffering they created, were sold with appeals to prudence and fiscal responsibility.

Krugman’s blog, 8/19/15

August 20, 2015

There were three posts yesterday.  The first was “How Not To Be Read (Trivial):”

A public service announcement for those who want a hearing: if you send me an email with an attached letter, which says “Please read attached letter” without any indication of what it’s about, you should know what will (or actually won’t) happen. Life is short, and if you can’t be bothered to take the time to say more, I can’t be bothered to open an attachment.

Yesterday’s second post was “Pension-cutters and Privatizers, Oh My:”

I wrote Monday about the strange phenomenon of Republicans lining up to propose cuts to Social Security, a deeply unpopular policy that is, however, also a really bad idea. How unpopular? Lee Drutman has the data: only 6 percent of American voters support Social Security cuts, while a majority want it increased. I argued that this apparent act of political self-destructiveness probably reflected an attempt to curry favor with wealthy donors, who are very much at odds with the general public on this issue:

Now we have another example: Marco Rubio has announced hishealth care plan, and it involves (a) greatly shrinking the tax deductibility of employer health benefits and (b) turning Medicare into a voucher system. Part (a) is favored by many economists, although I would argue wrongly, but would be deeply unpopular; part (b) is really terrible policy — proposed precisely at the moment when Medicare is showing that it can control costs better than private insurers! — and also deeply unpopular.

The strategy here, surely, is to propose things that voters would hate if they understood what was on the table, but hope that Fox News plus “views on shape of planet differ” reporting elsewhere will keep them confused, while at the same time pleasing mega-donors. It might even work, especially if Trump can be pushed out of the picture and the Hillary-hatred of reporters overcomes professional scruples. But it’s still amazing to watch.

The last post yesterday was “Trump in a Box:”

As pundits are discovering to their horror, there’s probably more to the Trump phenomenon than mere celebrity. The fact is that the central planks of modern conservatism — slashing taxes on the rich and benefits for the public at large — are deeply unpopular. Republicans have won elections only by wrapping these policies in other stuff; it’s about cutting benefits for welfare queens and “strapping young bucks” (that’s a Reaganism, in case you’re wondering) buying T-bone steaks with food stamps. And this in turn means that there is a sort of empty box in U.S. politics waiting to be filled.

The matrix here shows the possible positions. A welfare state available to all is the Democratic position, which is pretty much what other Western countries call the social democratic position. The dominant role in the modern GOP is played by a faction that links de facto disdain for Those People with a desire to slash social insurance. Libertarians are, in principle, small-government without the undertones; they are also basically absent from the actually existing electorate.

And then there’s the empty box. Once upon a time that box was filled by southern Democrats, who preserved Jim Crow while supporting the New Deal. But they’ve all moved over to the GOP now, and in the process become anti-social-insurance. But there are plenty of voters who want Social Security and Medicare for people who look like them, but not those other people. And at some level Trump is catering to that unserved population.

Of course, Trumpism is a really bad name for this, partly because the man himself isn’t actually coherent, partly because it’s still likely that he’s a case of hair today, gone tomorrow. And maybe nobody else will make a play for that box. But it’s also possible that we’ll see the rise of a movement that needs a better name. Hmm. How about National Social Democracy? Any problems with that?

Blow and Cohen

August 20, 2015

In “Activists Confront Hillary Clinton” Mr. Blow says liberals and conservatives alike must answer for how the criminal justice system has been unleashed upon black people in this country.  Mr. Cohen, in “California Dreaming,” says Technology’s thrill is no more than an ephemeral distraction from the unchanging puzzles of life in any age.  Here’s Mr. Blow:

A newly released video from Good magazine, showing Hillary Clinton in a meeting being confronted by young activists from the Black Lives Matter movement, thrilled me to no end. It also depressed me just as much.

The activists called on Clinton to answer for her and her husband’s part in the rise of mass incarceration in this country, a phenomenon that disproportionately affects black and brown people.

Julius Jones, a Black Lives Matter activist from Boston, said to Clinton:

“I genuinely want to know: You, and your family, have been in no uncertain way partially responsible for this, more than most.”

He then asked:

“Now, there may have been unintended consequences, but now that you understand the consequences, what in your heart has changed, that’s going to change the direction of this country? What in you, like not your platform, not, not what you’re supposed to say, like how do you actually feel, that’s different than you did before? Like, what were the mistakes and how can those mistakes that you’ve made be lessons for all of America, or a moment of reflection on how we treat black people in this country?”

(Good magazine pointed out: “Hillary Clinton lobbied lawmakers to back the Violent Crime Control and Law Enforcement Act. Bill Clinton signed the act into law in 1994. The largest crime bill in history, it provided $9.7 billion in prison funding. From 1992 to 2000, the amount of prisoners in the U.S. increased almost 60 percent.”)

Clinton pointed to her record on civil rights work, but she never apologized for, or even acknowledged, her and her husband’s role in giving America the dubious distinction of having the world’s highest incarceration rate.

To me, the diversion was stunning, and telling.

Maggie Haberman noted in The New York Times that the exchange “showed Mrs. Clinton as even her admirers lament that she is seldom seen: spontaneous, impassioned and seemingly unconcerned about potential repercussions.”

Politically, that may be true. She was agile and evasive, for sure. She bobbed and weaved like Floyd Mayweather. But there was a moral issue, an accountability issue, that still hung rotting in the ring: What in her has changed, now that she has seen the devastation a policy she advocated has wrought?

(Last month, at the annual convention of the N.A.A.C.P., Bill Clinton did apologize, saying, “I signed a bill that made the problem worse.” He continued, “And I want to admit it.” His contrition makes Hillary’s nonapology all the more vexing.)

This is the part of the Black Lives Matter political protests that I love so much: The idea that you must test the fealty of your supposed friends in addition to battling the fury of your avowed foes.

The truth of America is that both liberals and conservatives alike have things for which they must answer, sins for which they must atone, when it comes to how the criminal justice system has been aimed at and unleashed upon black people in this country.

And it’s not just the Clintons who have things they must answer for on criminal justice and black people. As I have written about before, toward the end of his tenure, President George W. Bush drastically reduced funding for the Byrne Formula Grant Program, which had been established by the Anti-Drug Abuse Act to supercharge the war on drugs — a disastrous boondoggle that would come to be a war waged primarily against marijuana use by black men.

As the American Civil Liberties Union pointed out in 2011, “The racial disparities are staggering: despite the fact that whites engage in drug offenses at a higher rate than African-Americans, African-Americans are incarcerated for drug offenses at a rate that is 10 times greater than that of whites.’”

A group of senators, mostly Democrats, wrote a letter demanding that the funding be restored. Barack Obama ran on a promise to restore that funding, and once elected, he did just that. As I wrote in 2010:

“The 2009 stimulus package presented these Democrats with the opportunity, and they seized it. The legislation, designed by Democrats and signed by President Obama, included $2 billion for Byrne Grants to be awarded by the end of September 2010. That was nearly a 12-fold increase in financing. Whatever the merits of these programs, they are outweighed by the damage being done. Financing prevention is fine. Financing a race-based arrest epidemic is not.”

And these sins exist not only at the federal level, but also at the local level.

Many of the recent cases have been in some of our most liberal cities — cities that, as Isabel Wilkerson brilliantly pointed out in January, were the very ones to which black Americans flocked during the Great Migration.

Eric Garner was choked and killed by police in New York. Tamir Rice was shot and killed by police in Cleveland. Charley Saturmin Robinet was shot and killed by police in Los Angeles.

In a way, these deadly interactions are connected to civic policies that not only implicate the police officers but the liberals who occupy these cities themselves. Stop-and-frisk existed, in obscene proportions, in New York. And yet, most white voters in the city said that they approved of the program, according to a 2012 Quinnipiac University poll.

People from both sides of the aisle have cast poor black people to the wolves and averted their gaze from the ensuing carnage. But in a way, asking liberals to answer for their complicity is even more important than asking conservatives.

More than nine in 10 blacks vote Democratic. That level of fidelity should give black people some leverage, at the very least, to demand accountability

At one point in one of the videos, Clinton said:

“I don’t believe you change hearts. I believe you change laws, you change allocation of resources, you change the way systems operate.”

But what if the same person saying that was partially responsible for changing the laws that allocated the resources that built up a system that operated as a tool of destruction?

These young activists, indeed all of us, should expect liberals to have more direct answers for their own actions — and inactions — than the one Clinton gave.

There can be no sacred cows when black people have been treated like sacrificial lambs.

Now here’s Mr. Cohen, waxing rhapsodic or something:

To question change in the state whose companies have transformed the world by networking it may seem like California dreaming. Lives last long enough now for the reality of change to be manifest. The world is not what it was when much of existence drifted by in a disconnected state and productivity had not taken a 24/7 hold.

Undistracted immersion in place and mood was easier back in the 20th century. That could make for great journalism. On the other hand, communication was harder. That could make filing the journalism a nightmare.

On the one hand, on the other: That’s life in any century. It’s lived in the gray zone of uncertainty. Delusional certainty tends to be the domain of those with ambitions to lead the muddled crowd. Politics depends on the promise of change. That’s its elixir.

But I’ve been wondering. The more things change, say the French, the more they stay the same. Or as a similar idea is put in “The Leopard,” one of the greatest of Italian novels: “If we want things to stay as they are, things will have to change.”

They do change, sometimes with swift brutality. The Bolshevik revolution in Russia swept everything away — yet here is Vladimir Putin playing czar. Uprisings come and go but Egypt harkens for its pharaoh. We dreamed of paradise, lamented the leading East German protester of 1989 who would become Germany’s president, and woke up in North Rhine-Westphalia.

Scourges, from the plague to polio, are vanquished; others arise. The Medicis grow rich, become patrons of the arts, take a stab at just rule, before their inevitable fall; to be replaced in Florence-on-the-Pacific by the likes of Brin and Page and Omidyar and Thiel, who want to invest part of their dotcom fortunes in a more enlightened, healthier humanity.

The eternal puzzles of birth and love, death and beauty, injustice and poverty, persist. The search for happiness, and meaning, goes on. The same feelings exist in changed circumstances. Technology’s thrill may be no more than an ephemeral distraction from the immutable human condition, which constitutes the realm of art.

The catalyst to these musings was something I saw in Los Angeles, probably the last place I expected to see it because I think of the city as hot-wired to the new and inclined to the brittle. It was a bronze statue from the third century B.C. of a seated boxer, a life-size rendering of a bearded man who, to judge from the bruise on his cheek and his broken nose, has just emerged from a fight, or perhaps a series of fights. His body is strong, suggestive of the heroic, but his expression is excruciatingly human, full of stoicism and questioning.

Here I am, the boxer seems to say, and such is life: an unpredictable struggle for survival in which there is no escape from hard work and wisdom must be earned the hard way. You see, he murmurs across 2,300 years, I have done what I had to do and this is the state I find myself in: tired, battered but unflinching and alive.

The statue, found in Rome in 1885, is on display at the J. Paul Getty Museum, part of an astonishing exhibition called “Power and Pathos: Bronze Sculpture of the Hellenistic World.” Astonishing for its beauty but perhaps above all for the range of expression evident in the statuary. Gods of imposing power are depicted, yet it is the emotion of human subjects in all its variety — from serenity to suffering, from elation to exhaustion — that is most unforgettable because all those emotions are recognizable as, well, contemporary.

The boxer made me think of one of my favorite paintings, Velázquez’s portrait of Pope Innocent X in Rome’s Doria Pamphilj Gallery, not in any particular detail but in the evocation of someone who has lived life to the full: the ruddy and weathered face of the pontiff, the shrewd eyes, the expression that says he sees through the pomp of his position and is aware that life, even at the summit of power, may be viewed as a cruel joke. “Troppo vero!” — “Too true!” — the pope is said to have exclaimed on seeing it.

My late uncle, Bert Cohen, was in Italy during World War II. On July 21, 1944, he reached Monte Cassino and wrote in his war diary: “Poor Cassino, wreck and desolation unbelievable, roads smashed and pitted, mines, booby traps and graves everywhere. Huge shell holes, craters filled with stagnant slime, smashed buildings, hardly outlines remaining, a silent sight of ghosts and shadows. Pictures should be taken of this monument to mankind’s worst moments and circulated through every school room in the world.”

Along with pictures of the Hellenistic boxer and the Italian pope to illustrate the illusions of power, the bruises of life, the persistence of hope and the limits of change. Relax — we’ve been here before.

Friedman and Bruni

August 19, 2015

In “The World’s Hot Spot” Mr. Friedman says that mideast governments that are often focused on bloody conflicts are being stressed by the pressures brought on by Mother Nature.  Mr. Bruni considers “Jeb Bush’s Slog: The Tortoise and the Hair” and says Jeb! had better hurry up if he wants to finish ahead of Donald Trump and a raucous Republican field.  Here’s TMOW:

Here’s my bet about the future of Sunni, Shiite, Arab, Turkish, Kurdish and Israeli relations: If they don’t end their long-running conflicts, Mother Nature is going to destroy them all long before they destroy one another. Let me point out a few news items you may have missed while debating the Iran nuclear deal.

On July 31, USA Today reported that in Bandar Mahshahr, Iran, a city adjacent to the Persian Gulf, the heat index soared to 163 degrees “as a heat wave continued to bake the Middle East, already one of the hottest places on earth. ‘That was one of the most incredible temperature observations I have ever seen, and it is one of the most extreme readings ever in the world,’ AccuWeather meteorologist Anthony Sagliani said in a statement.

“While the temperature was ‘only’ 115 degrees, the dew point was an unfathomable 90 degrees. … The combination of heat and humidity, measured by the dew point, is what makes the heat index — or what the temperature actually feels like outside.”

Then we saw something we’ve not seen before: An Iraqi government was sacked over its failure to deliver air conditioning. Two weeks ago, the prime minister, Haider al-Abadi, abolished all three vice-presidential posts and the office of deputy prime minister and proposed sweeping anti-corruption reforms after weeks of street protests over the fact that the government could supply electricity for air-conditioning for only a few hours a day during weeks of 120-degree temperatures.

As The Times’s Anne Barnard reported on Aug. 1, the heat issue in Iraq “has even eclipsed war with the Islamic State. The prime minister … declared a four-day weekend to keep people out of the sun … and ordered an end to one of the most coveted perks of government officials: round-the-clock power for their air-conditioners. …

“Several thousand people — workers, artists and intellectuals — demonstrated Friday evening … in the center of Baghdad, chanting and carrying signs about the lack of electricity and blaming corruption for it. … Some men stripped to their shorts and lay down in the street to sleep, a strong statement in a modest society. … The protest was unusual in that it did not appear to have been called for by any major political party.”

On Feb. 19, 2014, The Associated Press reported from Iran: “The first cabinet decision made under Iran’s new president, Hassan Rouhani, wasn’t about how to resolve his country’s nuclear dispute with world powers. It was about how to keep the nation’s largest lake from disappearing. Lake Oroumieh, one of the biggest saltwater lakes on earth, has shrunk more than 80 percent to … (nearly 400 square miles) in the past decade, mainly because of climate change, expanded irrigation for surrounding farms and the damming of rivers that feed the body of water, experts say.

“ ‘The lake is gone. My job is gone. My children are gone. Tourists, too,’ said Mozafar Cheraghi, 58, as he stood on a dusty platform that was once his bustling teahouse.”

Francesco Femia and Caitlin Werrell run the indispensable Center for Climate and Security in Washington that tracks these trends. They noted that the South Asia scholar Michael Kugelman recently observed “that in Pakistan more people have died from the heat wave than from terrorism this year. We would emphasize that there shouldn’t be a competition between ‘terrorism’ and ‘climate stress,’ but that the resources spent on the former vastly outstrip the latter.”

They added, “A 2011 study from the U.S. National Oceanic and Atmospheric Administration (NOAA) found strong evidence that winter precipitation decline in the Mediterranean littoral and the Middle East from 1971 to 2010 was likely due to climate change, with the region experiencing nearly all of its driest winters since 1902 in the past 20 years.”

Finally they noted: “The social contract between governments and their publics is being stressed by these extreme events, and that matters are only likely to get worse, given climate projections for many of these places. … Governments that are responsive to publics in the face of these stresses are likely to strengthen the social contract, while those who are unresponsive are likely to weaken it. And for the most part, we’re seeing inadequate responses.”

Indeed, see Syria: Its revolution was preceded by the worst four-year drought in the country’s modern history, driving nearly a million farmers and herders off the land, into the cities where the government of Bashar al-Assad completely failed to help them, fueling the revolution.

All the people in this region are playing with fire. While they’re fighting over who is caliph, who is the rightful heir to the Prophet Muhammad from the seventh century — Sunnis or Shiites — and to whom God really gave the holy land, Mother Nature is not sitting idle. She doesn’t do politics — only physics, biology and chemistry. And if they add up the wrong way, she will take them all down.

The only “ism” that will save them is not Shiism or Islamism but “environmentalism” — understanding that there is no Shiite air or Sunni water, there is just “the commons,” their shared ecosystems, and unless they cooperate to manage and preserve them (and we all address climate change), vast eco-devastation awaits them all.

I love the “them all” there…  Tommy, it’s “us all.”  Now here’s Mr. Bruni, plugging away for Jeb!:

In politics, the smallest things often turn out to be the most telling ones, and so it is with the man who was supposed to be the Republican front-runner, who once inspired such rapture among party elders and whose entrance into the presidential race they yearned and clamored for.

They not only got their wish, they got it with punctuation: Jeb! That’s Jeb Bush’s logo, and the exclamation point is the tell. None of the other Republican presidential candidates has anything like it. None of the Democrats either. It’s a declaration of passion that only someone worried about a deficit of it would issue. Methinks thou doth exclaim too much.

Before Bush announced his candidacy, talk of his vulnerabilities focused largely on certain positions — his defense of Common Core educational standards, his advocacy for immigration reform — that were anathema to many voters in the Republican primaries. He was sure to catch flak.

But catching fire is his bigger problem. He can’t do it. In a bloated field of bellicose candidates, he’s a whisper, a blur, starved of momentum, bereft of urgency and apt to make news because he stumbles, not because he soars.Can he soar? Or even sprint?

“I’m the tortoise in the race,” he told a group of voters in Florida not long ago. “But I’m a joyful tortoise.”

And Donald Trump’s a demented peacock and I’m a crotchety hippo. Reverse anthropomorphism is a fun game, but if you’re playing it in the service of selling yourself, best not to summon a sluggish creature with a muted affect and an impenetrable shell.

Republicans should have seen this turtle coming. In some sense they did. Bush’s fans and backers praised him as a thoughtful “policy wonk” and conceded that he wasn’t any dynamo at the lectern or on the trail.

But they downgraded the importance of dynamism, maybe because they didn’t expect so much competition, including Trump. (It’s “the race between the tortoise and the bad hair,” cracked Jay Leno last week.) They couldn’t envision the way in which 16 rivals would rob Bush of clear distinction and definition.

Sure, he speaks Spanish and has a Mexican-born wife, but Marco Rubio also speaks Spanish and has two Cuban-born parents. Sure, he was twice elected governor of a state that’s not reliably red, but so were Scott Walker, Chris Christie and John Kasich.

He’s not the most eloquent or the most inspiring, so his backers began to pitch him as the most adult. But at that first debate, Kasich stole even that superlative from him.

What’s left? He’s raised the most money, some of which he’ll use for television ads much sooner than anyone had anticipated. He’ll try to buy the oomph that he can’t organically generate.

Oomph is what that big speech last week — in which he blamed Hillary Clinton for the rise of the Islamic State — was largely about. He was flexing his audacity and independence, showing that his surname wouldn’t cow him from going after a Democratic rival on any matter, including Iraq. It took gall to edit his older brother out of the diatribe. It took guts to go with a diatribe in the first place.

Did it help? Polls suggest not. A CNN/ORC survey that was released on Tuesday showed that he doesn’t fare nearly as well as Trump when Republican voters are asked whom they trust most on the economy, on immigration and on battling Islamic extremists.

He runs afoul of the moment. Voters right now are more enamored of outsiders than usual, as the traction of not just Trump but also two other Republican candidates who have never held elective office — Ben Carson and Carly Fiorina — demonstrates.

Voters have had enough of protocol and pieties. Thus Trump thrives in a party that he constantly browbeats and shows no real loyalty toward, while Bernie Sanders flourishes among Democrats though he has repeatedly railed against them and doesn’t technically identify as one.

For some alienated voters, supporting either of these two insurgents is the same as raising a middle finger to establishment politicians and to politics as usual, and tactful, tasteful Bush can never be a middle finger. More like a pinkie.

The pinkie may prevail. In the Bush camp there’s a theory, or perhaps an anxiety-quelling fantasy, that the Trump mania and the related craziness will benefit Bush, who can methodically build support and incrementally lengthen his stride while the glare and heat are on others.

Trump burns out, the field eventually winnows, and Bush is saved by a superlative after all. He’s the most durable candidate.

It’s a plausible scenario. But it’s hardly a joyful one. And there’s only one way to punctuate it — with a question mark.

The first Bush presidency was blah and clumsy.  The second one was such an unmitigated disaster that to even consider the possibility of a third should give any rational human being the screaming collywobbles…

Krugman’s blog, 8/17/15

August 18, 2015

There were two posts yesterday.  The first was “The Medicaid Two-Step:”

The estimable Charles Gaba notes the latest in Obamacare denialism; OK, say the usual suspects, maybe the number of insured Americans has risen, but it’s mainly because of Medicaid expansion. As he says, this is only shocking if you consider Medicaid recipients somehow not worth counting, because, um, well.

Actually, however, this is an even worse argument than Gaba indicates. You see, before the ACA went into effect the very same people loudly insisted that expanding Medicaid was worthless, because instead of insuring more people it would mainly crowd out private insurance, making only a small dent in the number of uninsured Americans.

And maybe the Medicaid expansion has in some cases led people to drop the private coverage they would have had otherwise. But the number of uninsured has dropped sharply, especially in Medicaid expansion states. So if there was crowding out, it was more than offset by the expansion in private coverage due to the other features of Obamacare.

The point is that even aside from the facts that Medicaid is real insurance and Medicaid recipients are real people, the whole “but it’s just a Medicaid expansion” claim is outrageous coming from people who insisted just the other day that expanding Medicaid wouldn’t work.

So will the Medicaid-won’t work claim be dropped? Of course not. No anti-Obamacare argument ever is. These are people completely untroubled by cognitive dissonance.

Yesterday’s second post was “Base Versus Base:”

“This is an impressive crowd — the haves and the have-mores. Some people call you the elites; I call you my base.”

George W. Bush

Ezra Klein’s piece this morning on The Donald, and how his views are actually more representative of the GOP base than the establishment want to admit, dovetails with my piece about Social Security. Ezra is, however, a little vague about who he means by the Republican establishment; I argue that we’re really talking at this point about a small group of very wealthy donors. As the old joke by W indicates, these donors actually constitute a sort of different base.

And what we’re seeing here is a stark conflict between the two bases. The Bush base wants, well, Bush; it has anted up well over $100 million in an attempt to anoint Jeb! as the nominee, in part because he faithfully espouses its priorities. (Interesting note: If Jeb! really believed he could achieve 4 percent growth, there would be no need for Social Security cuts, since that kind of growth would rapidly fill federal coffers. But slashing the welfare state is, of course, not about the money — it’s about the pain.)

It turns out that Bro! was, for a while, pretty good at convincing the voter base that he was one of them, even while showing real featly to the big money. But that fell apart in 2005 during his attempt to privatize Social Security. And Jeb! has no talent at all for that kind of salesmanship — or, actually, anything as far as I can see. All that money, and he’s fourth in the polling.

Everyone still says that DT can’t win this thing, and they may be right. But who, exactly, is supposed to come out on top and how? The money seems to have lost its knack for hoodwinking the voters.

Cohen and Nocera

August 18, 2015

In “Iran and American Jews” Mr. Cohen says Netanyahu makes another unsubtle pitch for Congress to undermine Obama.  Netanyahu is as subtle as a rubber crutch…  Mr. Nocera has found someone else to carry water for — the e-cig gang.  In “Lowering a Tobacco Tax to Save Lives” he babbles that we should learn from the Swedes’ approach to nicotine.  Here’s Mr. Cohen:

Earlier this month, Roland Moskowitz, a Cleveland physician, and Sandra Lippy, a retired health care executive of Boca Raton, Fla., got on the line with Prime Minister Benjamin Netanyahu of Israel. As two people who have been active in major Jewish organizations, they were among thousands of American Jews invited to watch a webcast whose message was: oppose the Iran nuclear deal.

Moskowitz and Lippy listened as Netanyahu claimed the deal would give Iran “hundreds of bombs tomorrow”; turn any terrorist group backed by Iran into a “terrorist superpower”; allow Iran to “have its yellowcake and eat it, too”; cause a nuclear arms race in the Middle East; provide Iran with billions of dollars; and pave Iran’s path to a bomb.

The Israeli prime minister was contemptuous of the view, expressed by President Obama, that those who oppose the deal favor war, calling it “not just false, but outrageous.” Netanyahu insisted, against all evidence, that he rejects the deal “because I want to prevent war.”

Lippy was not impressed. She thought all the doomsday lines were tired. She’s not about to get on the phone to her representative to press for Congress to condemn the deal and then gather enough votes to override Obama’s inevitable veto of the resolution. That’s what Netanyahu wants to achieve, the deal’s demise, using American Jews as a vehicle.

“It’s not a great deal, but it’s enough of a deal to postpone the nuclear situation and maybe give us time to work things out,” Lippy told me. “While they’re being sharply reduced in their nuclear capacity, we can sit down again over the next several years and talk about the Holocaust, Israel and human rights, and that is why I go along with it.”

She’s right. A merit of this deal is that it would condemn the United States and Iran to a relationship — hostile, but still a framework for airing differences and doing business — over the next 15 years. Most young Iranians no more believe in “Death to America” than they believe the Hidden Imam is going to show up tomorrow.

Moskowitz was left feeling uneasy. On balance, not worrying enough for the United States to walk away. Nor does he want the family strife that would arise if he sided with his fears. His wife, Peta Moskowitz, is a firm supporter of the deal and a member of J Street, the largest Jewish organization to back Obama’s Iran diplomacy. These strains are not unusual. Within families and across the American Jewish community, discussion of the Iran deal is fiery.

A few things must be said. Netanyahu’s performance was of a piece with his habit of intervening in American politics, evident at the time of the last presidential election, when his preference for Mitt Romney was clear. His relations with Obama are bad. He tries to circumvent Obama, often in clumsy ways, further undermining the relationship. It’s enough to imagine Obama calling thousands of Israelis to encourage them to oppose a piece of sensitive legislation in the Knesset to gauge how inappropriate Netanyahu’s behavior is.

The Netanyahu webcast was co-sponsored by the Conference of Presidents of Major Jewish Organizations (an umbrella organization so resistant to the age-old fertile cacophony of Jewish opinion that it rejected J Street’s application for membership last year) and the Jewish Federations of North America.

Several leading Jewish groups — including the American Israel Public Affairs Committee (Aipac), the American Jewish Committee and the Anti-Defamation League — have come out against the Iran deal. This is unsurprising; they tend to move in lock step with Israel. But it’s troubling because it’s unclear how representative of American Jews as a whole these organizations are.

Some polls have suggested a majority of Jews favor the Iran deal; certainly the community is divided. It’s no service to Jews, or Israel or Middle Eastern peace, for major Jewish organizations to be unreflective of this wide diversity of opinion within American Jewry — or for them to give airtime to Netanyahu on Iran rather than Obama.

The alternative to this deal, as Obama said, is war. Why? Because sanctions on Iran will fall apart as Russia and China conclude the United States is not serious about a compromise with Tehran that increases the distance between Iran and a bomb, ring-fences its nuclear program, and subjects it to intense international inspection. Centrifuges, slashed in number by America’s diplomacy, will increase again, as will Iran’s uranium stockpile. The war drumbeat will resume. Folly will loom.

Rather than listen to Netanyahu, American Jews should listen to the longest-serving Jewish member of the House, Sander M. Levin, who supports the agreement because it is “the best way to achieve” the goal of preventing Iran from advancing toward a nuclear weapon, so making the Middle East and Israel “far more secure.” They should note that five Jewish senators have come out in favor.

In the real world, this is the best achievable deal for America and the ally, Israel, it would never forsake.

Now here’s Gunga Din Mr. Cohen:

A smokeless tobacco product called snus, which a user puts between his gums and his upper lip, has a long history in Sweden. At the start of the last century, it was the most common way Swedes ingested nicotine. By the early 1950s, however, sales of snus had been overtaken by cigarettes, a trend that continued for two decades.

But in time, snus made a comeback, while cigarette use steadily declined. As of 2012, only 13 percent of adult Swedes smoked, less than half the European Union rate. Meanwhile, 19 to 21 percent of Swedish males use snus, which is now more prevalent than cigarettes. (Swedish women, for some reason, stuck with smokes.)

The result? Even though tobacco use in Sweden is comparable to its use in the rest of Europe, Sweden’s preference for snus means that it “has Europe’s lowest tobacco-attributable mortality among men,” according to a paper in the latest issue of The New England Journal of Medicine. Indeed,a 2012 study by the World Health Organization found that tobacco caused 152 deaths per 100,000 men in Sweden, versus 467 deaths per 100,000 men in Europe.

It’s hard to know exactly what caused snus to regain its popularity. There was no explicit government policy promoting it. David Sweanor, one of the authors of the paper, told me that Sweden’s predominant tobacco company took it upon itself to market snus once the dangers of cigarettes had become irrefutable. (That company, Swedish Match, sells mainly snus today.) But another likely reason was a huge price differential between cigarettes and snus; at one point a pack of the former was taxed so heavily that it cost twice as much as a can of snus.

Sweanor, a tobacco policy expert at the University of Ottawa, and his co-authors, Kenneth Warner, a University of Michigan economist specializing in public health, and Frank J. Chaloupka, an economist focused on public health at the University of Illinois at Chicago, would label snus a “harm reduction” product. Although it contains tobacco and allows users to get their fix of addictive nicotine, snus poses far less risk than cigarettes, as the statistics amply show.

All three men are big believers in the virtue of harm reduction policies to reduce the illness and death caused by cigarettes. Thus the point of their paper: The tax policies that worked in Sweden — raise taxes on the killer product while lowering them on the harm reduction product — should be applied today to electronic cigarettes and other noncombustible nicotine delivery systems.

Regular readers will not be surprised to learn that I think this is a terrific idea. Because it contains tobacco, snus has traces of nitrosamines, a cancer-causing agent found in tobacco. Electronic cigarettes, by contrast, contain no tobacco at all. Instead, they vaporize nicotine, which gets to the user’s brain far quicker than, say, a nicotine patch, thus more closely replicating the nicotine hit delivered by a cigarette.

As Warner pointed out to me, nobody can say for sure how much safer e-cigarettes are because the products haven’t been around long enough for long-term studies. But it is plain as day that they are far less risky than cigarettes. Countries use tax policy all the time to affect behavior. Using tax policy to move people from cigarettes to e-cigarettes would, to be blunt, save lives. The e-cigarette has the potential to be the greatest tobacco cessation device ever invented.

Yet, as the authors note, because most of the tobacco-control community believes that “all tobacco products are seriously deleterious to health, conventional wisdom … has long been that all products should be taxed similarly.” Indeed, the World Health Organization has described “comparable” taxation on all tobacco products as a “best practice for tobacco taxation.”

As irrational as this is, it is easy to understand where it stems from. Health claims about e-cigarettes remind anti-tobacco activists of the days when Big Tobacco marketed low-tar cigarettes as a “healthier” smoking choice. E-cigarettes come in many flavors, which could appeal to kids. Their marketing aims to make e-cigarettes look cool — just like Big Tobacco once did. Despite a complete lack of proof, the tobacco-control community fears that young people who use e-cigarettes will eventually gravitate to combustible cigarettes.

Which is all the more reason the authors’ tax idea deserves consideration: It puts the emphasis on moving smokers to e-cigarettes, which is where it should be. “Studies have … shown that changes in the relative price of tobacco products lead some tobacco users to switch to less expensive products,” the authors write. A big tax differential is a way to take advantage of the lower risk of e-cigarettes without ever having to acknowledge it.

Not that I expect rationality to take hold any time soon. After all, you know how the European Union reacted to the Swedish snus experience, don’t you?

It banned snus.

Blow and Krugman

August 17, 2015

In “Activists ‘Feel the Bern’?” Mr. Blow says responses to disruptions at Bernie Sanders’ events raise issues about the relationship between moderate whites and black activists.  Prof. Krugman has a question in “Republicans Against Retirement:”  Why have most Republican candidates vowed to limit Social Security? He says it’s because they really answer to the relatively few people who oppose it.  Here’s Mr. Blow:

Bernie Sanders is an unlikely phenomenon.

He is attracting massive crowds. His message of economic populism has infused his insurgent candidacy with an Obama-like level of electoral enthusiasm, only his base isn’t as broad (As CNN put it last month: “A June CNN/ORC poll showed just 2 percent of black Democrats supporting Sanders, a figure that has remained unchanged since February. Among nonwhite voters overall, Sanders polls at 9 percent, compared to Hillary Clinton’s 61 percent.”)

Still, Sanders’ candidacy has become something of a movement. But two times in recent weeks, Sanders’ appearances at events have been disrupted by supporters of another movement: Black Lives Matter.

The most recent disruption came at an event in Seattle last weekend, where two female Black Lives Matter supporters prevented Sanders from speaking. Sanders has responded well to the most recent disruption, issuing a thorough and utterly impressive “Racial Justice” agenda that liberally quotes from the Rev. Dr. Martin Luther King, Jr. and even includes the line: “We need a societal transformation to make it clear that black lives matter, and racism cannot be accepted in a civilized country.” Further reiterating his commitment, he said at a rally in Los Angeles, “There is no president that will fight harder to end institutional racism.”

But, not all of Sanders’ supporters could muster his magnanimity. Some were outraged. The protesters were seen as disrespectful and indecorous. Sanders was not only seen as a bad target, he was one of the worst targets because he has a long history of civil rights activism, including participating in the 1963 March on Washington and hearing the King himself.

Some irritation was understandable. But some went too far, repaying what they saw as rudeness with what I saw as crudeness. The conspiracy theories began to swirl and the invectives — including some racist and sexist ones — began to flow. It exposed something that isn’t discussed nearly enough: a racial friction on the left.

There were sweeping condemnations of the Black Lives Matter movement itself, a sense that benevolence had been rebuffed, that allies had been alienated. Some people sympathetic to the protesters responded by making a King reference of their own, pointing to this passage from his 1963 “Letter from a Birmingham Jail”:

“I must confess that over the past few years I have been gravely disappointed with the white moderate. I have almost reached the regrettable conclusion that the Negro’s great stumbling block in his stride toward freedom is not the White Citizen’s Counciler or the Ku Klux Klanner, but the white moderate, who is more devoted to ‘order’ than to justice; who prefers a negative peace which is the absence of tension to a positive peace which is the presence of justice; who constantly says: ‘I agree with you in the goal you seek, but I cannot agree with your methods of direct action’; who paternalistically believes he can set the timetable for another man’s freedom; who lives by a mythical concept of time and who constantly advises the Negro to wait for a ‘more convenient season.’ Shallow understanding from people of good will is more frustrating than absolute misunderstanding from people of ill will. Lukewarm acceptance is much more bewildering than outright rejection.”

It all quickly became an arms race of overheated accusations.

But, I must say that I, too, found some of the responses to the protesters troubling.

First, some people said that the disruption had caused the movement to lose their support. This seemed strange and extreme to me. How fragile must your support for black lives have been if a rally’s disruption caused it to crumble?

Secondly, centering one’s disapproval of the protesters on white allegiance, rather than black agency, seems to me a kind of cultural narcissism.

The movement, to my mind, isn’t a plea for pity, or appeal to comity, but an exercise in personal and collective advocacy by an oppressed people.

It says to America: You will not dictate the parameters of my expression; you will not assign the grammar of my pain; you will not tell me how I should feel. For these young activists, it’s not ideological but existential; it’s not about a political field but a battlefield, one from which they cannot escape, one on which their very bodies are marked and threatened with destruction.

This is not an esoteric, intellectual debate about best practices, but quite literally a flesh and blood struggle for equal access to liberty and longevity.

In this movement exists a kind of urgency that only proximity to terror can produce, and yes, that urgency can be extreme and discomforting, because it must be. The sedative of all normalcies and niceties are the enemies so long as lives are in danger. The movement is revolutionary out of necessity. Some people operating under those auspices will inevitably employ tactics and select targets with which you disagree. That too is understandable.

But, those who object must be careful not to become “more devoted to ‘order’ than to justice.”

Now here’s Prof. Krugman:

Something strange is happening in the Republican primary — something strange, that is, besides the Trump phenomenon. For some reason, just about all the leading candidates other than The Donald have taken a deeply unpopular position, a known political loser, on a major domestic policy issue. And it’s interesting to ask why.

The issue in question is the future of Social Security, which turned 80 last week. The retirement program is, of course, both extremely popular and a long-term target of conservatives, who want to kill it precisely because its popularity helps legitimize government action in general. As the right-wing activist Stephen Moore (now chief economist of the Heritage Foundation) once declared, Social Security is “the soft underbelly of the welfare state”; “jab your spear through that” and you can undermine the whole thing.

But that was a decade ago, during former President George W. Bush’s attempt to privatize the program — and what Mr. Bush learned was that the underbelly wasn’t that soft after all. Despite the political momentum coming from the G.O.P.’s victory in the 2004 election, despite support from much of the media establishment, the assault on Social Security quickly crashed and burned. Voters, it turns out, like Social Security as it is, and don’t want it cut.

It’s remarkable, then, that most of the Republicans who would be president seem to be lining up for another round of punishment. In particular, they’ve been declaring that the retirement age — which has already been pushed up from 65 to 66, and is scheduled to rise to 67 — should go up even further.

Thus, Jeb Bush says that the retirement age should be pushed back to “68 or 70”. Scott Walker has echoed that position. Marco Rubio wants both to raise the retirement age and to cut benefits for higher-income seniors.Rand Paul wants to raise the retirement age to 70 and means-test benefits.Ted Cruz wants to revive the Bush privatization plan.

For the record, these proposals would be really bad public policy — a harsh blow to Americans in the bottom half of the income distribution, who depend on Social Security, often have jobs that involve manual labor, and have not, in fact, seen a big rise in life expectancy. Meanwhile, the decline of private pensions has left working Americans more reliant on Social Security than ever.

And no, Social Security does not face a financial crisis; its long-term funding shortfall could easily be closed with modest increases in revenue.

Still, nobody should be surprised at the spectacle of politicians enthusiastically endorsing destructive policies. What’s puzzling about the renewed Republican assault on Social Security is that it looks like bad politics as well as bad policy. Americans love Social Security, so why aren’t the candidates at least pretending to share that sentiment?

The answer, I’d suggest, is that it’s all about the big money.

Wealthy individuals have long played a disproportionate role in politics, but we’ve never seen anything like what’s happening now: domination of campaign finance, especially on the Republican side, by a tiny group of immensely wealthy donors. Indeed, more than half the funds raised by Republican candidates through June came from just 130 families.

And while most Americans love Social Security, the wealthy don’t. Two years ago a pioneering study of the policy preferences of the very wealthy found many contrasts with the views of the general public; as you might expect, the rich are politically different from you and me. But nowhere are they as different as they are on the matter of Social Security. By a very wide margin, ordinary Americans want to see Social Security expanded. But by an even wider margin, Americans in the top 1 percent want to see it cut. And guess whose preferences are prevailing among Republican candidates.

You often see political analyses pointing out, rightly, that voting in actual primaries is preceded by an “invisible primary” in which candidates compete for the support of crucial elites. But who are these elites? In the past, it might have been members of the political establishment and other opinion leaders. But what the new attack on Social Security tells us is that the rules have changed. Nowadays, at least on the Republican side, the invisible primary has been reduced to a stark competition for the affections and, of course, the money of a few dozen plutocrats.

What this means, in turn, is that the eventual Republican nominee — assuming that it’s not Mr. Trump —will be committed not just to a renewed attack on Social Security but to a broader plutocratic agenda. Whatever the rhetoric, the GOP is on track to nominate someone who has won over the big money by promising government by the 1 percent, for the 1 percent.

Krugman’s blog, 8/14/15

August 15, 2015

There were two posts yesterday.  The first was “The Downside of Labor Mobility:”

The theory of optimum currency areas is one of those old-fashioned pieces of macroeconomics — like IS-LM, the concept of the liquidity trap, and the theory of secular stagnation — that has turned out to be extremely relevant and useful to the world since 2008. So this is a version of Mark Thoma’s dictum that new economic thinking involves reading old books (or in this case articles). Still, we do learn some new things. And what we’ve learned lately, I’d argue, is that labor mobility — which was supposed to be good, and a prerequisite for currency union — is actually much more problematic than we knew.

In my somewhat stylized intellectual history, we owe OCA theory to three main players: Robert Mundell, Ron McKinnon, and Peter Kenen. All three assumed, realistically, that wages and prices are sticky, so that fixing your exchange rate or adopting a shared currency imposes costs in the form of making it harder to adjust to “asymmetric shocks” that depress your economy relative to trading partners. These costs must be set against the benefits of making business across borders easier and more certain. The question then becomes how the characteristics of an economy affect that tradeoff.

In Mundell’s original version the key question was labor mobility: if workers moved freely and rapidly from slumping to booming regions, asymmetric shocks became a much smaller problem. One of the arguments American euroskeptics used to make was that Europe was less suited to a single currency because it lacked America’s extremely high interstate mobility of labor.

McKinnon offered a different criterion — the share of tradables in output; basically that required relative price adjustments would be smaller in very open economies, and also that having more transactions would increase the benefits of a common currency.

Finally, Kenen argued that fiscal integration or the lack thereof was crucial, that it mattered a great deal whether depressed regions would be cushioned by paying less in taxes and receiving more in benefits from the core.

So what have we learned? I’d say that we’ve learned that Kenen trumps Mundell — that in the absence of effective fiscal integration, labor mobility makes a currency union worse, not better.

I’ve said this before, but it seems worth emphasizing again in the light of this FT report on Portugal’s “perfect demographic storm.” The debt crisis in Portugal, it turns out, looks alarmingly like the trigger for an economic death spiral: a depressed economy is leading to large-scale emigration of working age Portuguese (also lower fertility, although this will take longer to matter), undermining the tax base, making an exit from crisis even harder. It’s not easy to see how this ends before you’re left with a rump nation of old people with no resources to care for them.

Regional economies in the US are less vulnerable to this sort of thing, although our imperfect fiscal integration means that it can still happen to some degree: Puerto Rico is also in a sort of death spiral of emigration and fiscal stress, but the degree of hardship is much less thanks to the national safety net.

But the point is that the Single European Act, which was among other things supposed to prepare the ground for a shared currency, may actually have interacted with the failure to integrate fiscal matters in such a way as to create a whole new kind of catastrophe.

Your cheery euro-thought of the day.

Yesterday’s second post was “R.E.S.P.E.C.T.:”

This is a blog post about fanatical centrists, British debt history, and ponies.

Start with the fanatical centrists: Martin Longman flies into a well-justified rage over a “centrist” column that concedes that the Iran deal is something we really need to do, effectively concedes that the arguments of the deal’s opponents are scurrilous and irresponsible — but condemns Obama for being “dismissive” of the opponents’ arguments.

That’s something that happens to me all the time. I constantly get mail — and sometimes other peoples’ columns — condemning me, not for being wrong, but for being dismissive of the arguments of those I criticize. After all, these are important people, so they deserve to be treated with respect. Right?

Wrong.

If people consistently make logically incoherent, ignorant arguments, the duty of a commentator is to say just that — not to mislead readers by pretending that they’re actually serious and making sense. You shouldn’t make gratuitous insults — I have never, to my knowledge, declared that someone’s mother was a hamster and his father smelt of elderberries. But stupid/ignorant is as stupid/ignorant does, and influence changes nothing.

Where I’ve been getting pushback lately is in my pronouncements that the whole Republican field is talking nonsense on economic policy. That’s a terrible thing to say, I’m told. But what if it’s true? And of course it is.

Consider a couple of recent entries. Jeb Bush, the supposedly sensible candidate, has been pushing the utterly ludicrous claim that he can deliver 4 percent growth; so now Mike Huckabee is trying to one-up the debate by promising 6 percent. Well, I can beat any of them — whatever they’re promising, I promise the same, and a pony.

Meanwhile, Rand Paul is decrying the irresponsibility of U.S. fiscal management; why, we haven’t been debt-free since 1835. Clearly, disaster looms, and has been looming for 180 years. But that’s nothing: Britain hasn’t been debt-free since at least 1692:

More than three centuries, spanning the Industrial Revolution and much more, of crippling irresponsibility. Just you wait!

Should Rand and Jeb! and Huckabee be treated with respect here? Are they outliers, and in that case which GOP contenders do deserve respect?

I know that it’s disturbing to read columns that portray the entire field as a bunch of cranks. But it would be a dereliction of duty, basically an act of dishonest reporting, to pretend that they aren’t. I’m all for respect here — but the people who deserve respect, in the form of honest assessment, are my readers.

Nocera, solo

August 15, 2015

In “Bank of America Stiffs Shareholders” Mr. Nocera says that for  a while, bank officials accepted a binding resolution forced upon them. Then the board acted on its own, until the shareholders revolted.  Here he is:

The year 2009 was rough for the Bank of America and its chairman and chief executive, Ken Lewis. On Jan. 1, the bank closed its $50 billion purchase of Merrill Lynch, a deal Lewis had hastily negotiated the previous September, as the financial world appeared close to collapse.

Just weeks later, it all came a cropper, after Bank of America revealed, shockingly, that its new unit had lost more than $15 billion during the fourth quarter of 2008. That bank had to ask the government to backstop $118 billion in Merrill’s toxic assets, and to provide it $20 billion in additional capital. The stock dropped below $7 a share from over $33.

Furious shareholders sued. But they also did something else: Led by the Service Employees International Union and Finger Interests, a Houston hedge fund, shareholders offered a binding resolution at the annual meeting calling for Lewis to step down from his role as board chairman. The idea was that having separate people serve as C.E.O. and chairman would provide additional board oversight.

The resolution narrowly passed. Several participants have since told me that they believe it’s the only example of shareholders passing a binding resolution over a board’s objection.

Fast forward to last October. Without question, Bank of America has come a long way since those dark days. Under Brian Moynihan, who has been the chief executive — but not the chairman! — since 2010, the company has “reduced leverage, rebuilt its capital and simplified its business,” according to Jonathan Finger, comanaging partner of Finger Interests, which remains a shareholder. But the bank has also had trouble passing the Federal Reserve’s “stress tests,” had a $4 billion accounting error in 2014, and its stock has underperformed its banking industry peers.

Thus for all its improvement, the evidence suggests that the bank still needs the kind of rigorous oversight that an independent board — with an independent chairman — is supposed to provide. Yet, in October, without informing shareholders, the board decided to remove the provision in its bylaws splitting the roles, and anoint Moynihan chairman as well as C.E.O.

When they discovered what had happened, shareholders and corporate governance experts were, once again, outraged. “What hubris!” exclaimed Finger. Institutional Shareholder Services, an influential proxy advisory firm, urged shareholders to vote against the members of the board’s governance committee.

Barraged by shareholder criticism, the board announced just before its annual meeting that it would set up a special meeting to allow shareholders to vote on whether to give the board, as the bank put it, the “flexibility” to split or combine the roles, as it sees fit.

The most vocal critic of the board’s move has been Mike Mayo, an outspoken bank analyst at CLSA. He was especially scornful of a Securities and Exchange Commission filing the bank made late last month in support of the board’s move. It touted Moynihan’s “unparalleled depth of understanding,” and as proof, pointed to the $11.7 billion Bank of America earned “in the three quarters ending June 30, 2015.” (There was no mention of the $4 billion accounting error.)

“The gushing is like a teen magazine,” Mayo said. “This is supposed to be a regulatory filing.” In addition, he complained that using three quarters of a year as a benchmark was an example of the bank’s “cherry-picking data to make itself look good. It does that all the time,” he said. Mayo’s conclusion was that the document itself proved that Bank of America needed more board oversight, not less. Handing the chairman’s role to the chief executive was an example of the board “rolling over” for Moynihan instead of holding his feet to the fire.

I should note that Bank of America’s relationship with Mayo is contentious; it essentially believes he has been consistently wrong in his nonstop criticism of the bank. (He is one of the only analysts who has a “sell” recommendation on the stock, for instance.)

It also says that its decision to remove the bylaws provision was prompted by necessity; last October its chairman needed to resign quickly, and Moynihan, in the board’s opinion, was the best candidate to fill the role. In failing to inform shareholders, the board misread the situation, the bank acknowledges. It is now trying to rectify its error with the special meeting, set for Sept. 22.

To my mind, the core issue is not whether the bank is well or poorly run, or whether Mayo is right or wrong about the stock. It is the contempt the Bank of America board showed for its shareholders in quietly amending the bylaw — a contempt too often shown by boards that are supposed to protect shareholders, not defy them.

What the bank’s board did last October is not the biggest scandal ever; I know that. Instead, it’s the kind of small, corrosive scandal that too often marks the behavior of the modern company board.


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