Krugman’s blog, 4/20/16

April 21, 2016

There was one post yesterday, “101 Boosterism:”

I see that @drvox is writing a big piece on carbon pricing – and agonizing over length and time. I don’t want to step on his forthcoming message, but what he’s said so far helped crystallize something I’ve meant to write about for a while, a phenomenon I’ll call “101 boosterism.”

The name is a takeoff on Noah Smith’s clever writing about “101ism”, in which economics writers present Econ 101 stuff about supply, demand, and how great markets are as gospel, ignoring the many ways in which economists have learned to qualify those conclusions in the face of market imperfections. His point is that while Econ 101 can be a very useful guide, it is sometimes (often) misleading when applied to the real world.

My point is somewhat different: even when Econ 101 is right, that doesn’t always mean that it’s important – certainly not that it’s the most important thing about a situation. In particular, economists may delight in talking about issues where 101 refutes naïve intuition, but that doesn’t at all mean that these are the crucial policy issues we face.

The example I think of most is in my original home field of international trade. Comparative advantage says that countries are made richer by international trade, even if one trading partner is more productive than the other across the board, and the less productive country can only export thanks to low wages. Paul Samuelson once declared this the prime example of an economic insight that is true without being obvious – and to this day you get furious attempts to refute the concept. So comparative advantage has, for generations, been considered one of the crown jewels of economic analysis.

Now, there are a variety of reasons why, despite this big insight, free trade may not be the right policy – that’s Noah’s 101ism. But I want to make a different point: even if comparative advantage is a profound insight, does this make free trade versus protectionism a front-burner issue? How important is this insight, anyway?

And the answer – the answer that comes from standard trade models – is, not as important as many people seem to think. Yes, protectionism reduces world income. But if you want to make the case that trade liberalization has been the principal driver of growth, or anything along those lines, well, the models don’t say that. If you want enormous benefits to trade, you have to invoke things like technology transfer that aren’t in the very analysis that gives the case for free trade such prestige.

In fact, you see a lot of that. There’s a kind of bait and switch, in which people invoke Ricardo and the gains from trade to say “free trade good”, then tell scare stories about how protectionism would destroy millions of jobs and cause a global depression, which doesn’t make much sense – and in any case has nothing to do with the classical analysis of the gains from trade.

It seems to me that there’s something similar involved in discussions of carbon pricing.

Econ 101 tells us that if you want to reduce emissions of a pollutant, the most efficient way to do that is to put a price on emissions, so that all possible routes to reduction are taken, and the marginal cost is the same for all routes. It’s a real insight, and has had positive impacts on real-world policy — cap-and-trade has worked very well at reducing acid rain.

That said, there are reasons Econ 101 may not be right here. There is some evidence that consumers aren’t hyper rational when it comes to conservation, that they may pass up conservation opportunities even when it would save them money — and in that case rule rather than prices may be the right way to make them change. And to the extent that we’re talking about innovation, the Econ 101 case says nothing at all: the efficiency case for carbon pricing is about making best use of existing technology, not about providing incentives to develop better technology.

But leave all that aside, and ask: how *important* is it that our carbon-emissions strategy take the form of a universal or near-universal price on carbon?

The answer, in principle, is that it depends on the complexity of the required response. If reducing emissions really has to involve moving on many fronts, anything that looks like an administrative solution — telling, say, power companies what to do or not to do — is going to be much more costly than carbon pricing that exploits all the possibilities. But if a large part of the solution is going to involve a fairly limited set of measures — such as putting a quick end to the practice of burning coal to generate electricity — getting to broad-based carbon pricing is much less central.

And what I gather from reading various analyses of our prospects is that we’re closer to case #2 than to case #1: the problem of limiting climate change isn’t all that complex. End coal-burning and you’ve gone a significant way; a few other big things get you another substantial part of the way. Yes, comprehensive carbon pricing would be best, but it’s not the sine qua non of effective action.

The point is that just because Econ 101 makes a smart, counterintuitive point doesn’t make that point of central importance, here or elsewhere. People should know what’s in the textbook; above all, they should buy my book! But never imagine that it’s the be-all and end-all of what matters.

Blow and Kristof

April 21, 2016

Mr. Blow asks “What Is Sanders’s Endgame?”  He says what he has accomplished is miraculous. But having a meaningful impact does not necessarily create a sustainable movement, let alone a revolution.  Mr. Kristof, in “Obama in Saudi Arabia, Exporter of Oil and Bigotry,” says the Islamophobia festering in the U.S. is fed by extremism fostered by the Saudis.  Here’s Mr. Blow:

Hillary Clinton’s commanding victory in New York on Tuesday put yet another nail in the coffin of Bernie Sanders’s candidacy.

As The Upshot’s Nate Cohn put it:

“New York, like every contest at this stage, was a state he needed to win. The result confirms that he is on track to lose the pledged delegate race and therefore the nomination.”

At this pace, Clinton will finish this nomination cycle having won more votes, more states and more pledged delegates than Sanders. Furthermore, Clinton has also won six of the nine general election swing states that The New York Times listed in 2012.

And yet Sanders soldiers on, as is his right.

But Tuesday, Sanders’s campaign manager, Jeff Weaver, told MSNBC that if Clinton doesn’t clinch the nomination by pledged delegates alone, even if she has won the most popular votes, pledged delegates and states, Sanders will still take his fight to the convention. Sanders will “absolutely” try to turn superdelegates, who overwhelmingly support Clinton, and win the nomination that way.

First, barring something unforeseen and unimaginable, there is no way I can see that this strategy stands a gnat’s chance in hell of coming to fruition. It’s a fairy tale written in pixie dust.

But still, stop and consider what this means: The purist-of-principle, anti-establishment Sanders campaign would ask the superdelegates — the Democratic Party establishment — to overturn the will of the majority of participants in the Democrats’ nominating process.

The whole idea is outrageous coming from anyone, but coming from Sanders it seems to undermine the very virtues that make him attractive.

Power — even the proximity to it and the potential to wield it — is truly an intoxicant that blurs the vision and the lines.

Let’s back up and say this: What Sanders has accomplished is nothing short of miraculous. He has gone from a little-known senator from a little state to being a formidable opponent to Hillary Clinton, a person who Gallup called in 2014 “the best known and best liked of 16 potential 2016 presidential candidates.”

And he has done it largely by hewing to a well-worn set of principles and values that he has followed his whole life. This has buttressed his aura of authenticity, particularly among young people jaded by institutions and establishments.

But miraculous feats do not necessarily make messianic figures, and having a meaningful impact does not necessarily create a sustainable movement, let alone a revolution.

That said, Sanders has tapped into a very real populist sentiment on the left, particularly among young people, that shouldn’t be denied. And he has made space for a similar candidate in the future to be more seriously considered from the outset.

He has also shined a light on how differently young people view our democracy, compared with previous generations.

Protests, rallies, marches and, yes, even caucuses, can feel more like direct democracy, where there is no remove between the people and their power. These expressions also offer a crowd-fueled adrenaline rush. This can be particularly attractive to people who have grown up in a social media world of viral videos, where collective outrage or adoration can yield nearly instant results.

Traditional voting is just the opposite. When you vote, you are alone with your ballot, even if your polling place is packed. The vote is private, not a public display of behavior to be instantly liked, disliked or commented on. Voting makes you part of the system, the representative democracy system, on which this country was founded and still operates.

This is not to say that young people don’t vote. They do. But the energy you see at Sanders’s impressive rallies, like those he held in New York, doesn’t always translate into electoral success. There seems to be a bit of a falloff.

While Sanders was campaigning in New York as a movement candidate, Clinton was campaigning as a micro-targeted candidate, appealing individually to each important demographic and burning something into supporters’ memories that they would recall when they were alone with their ballots.

That’s how elections are won. That’s how lasting change is made. It’s not by careening from one movement to the next, spawning of-the-moment hashtags for your activism.

Still, many of these young people have put their trust and faith in Sanders, who may well be a once-in-a-generation candidate, and he and they are loath to wake from the dream of his possible election. But, sadly, every day it feels more and more like a dream, and they will inevitably have to wake up.

Sanders has to figure out how he lands this doomed plane — does he set it down easy so that everyone walks away relatively unscathed, or does he go out in a blaze of glory?

Whatever he chooses to do will say quite a bit about his allegiance to his adopted Democratic Party and about his character. At the end of the day, is his ethos greater than his ego?

And now here’s Mr. Kristof:

A college senior boarded a flight and excitedly called his family to recount a United Nations event he had attended, but, unfortunately, he was speaking Arabic. Southwest Airlines kicked him off the plane, in the sixth case reported in the United States this year in which a Muslim was ejected from a flight.

Such Islamophobia also finds expression in the political system, with Donald Trump calling for a temporary ban on Muslims entering the country (“Welcome to the U.S.A.! Now, what’s your religion?”) and Ted Cruz suggesting special patrols of Muslim neighborhoods (in New York City, by the nearly 1,000 police officers who are Muslim?). Some 50 percent of Americans support a ban and special patrols.

Such attitudes contradict our values and make us look like a bastion of intolerance. But for those of us who denounce these prejudices, it’s also important to acknowledge that there truly are dangerous strains of intolerance and extremism within the Islamic world — and for many of these, Saudi Arabia is the source.

I’m glad that President Obama is visiting Saudi Arabia, for engagement usually works better than isolation. But let’s not let diplomatic niceties keep us from pointing to the insidious role that Saudi Arabia plays in sowing instability, and, for that matter, in tarnishing the image of Islam worldwide. The truth is that Saudi leaders do far more to damage Islam than Trump or Cruz can do, and we should be as ready to denounce their bigotry as Trump’s.

Americans are abuzz about the “missing 28 pages” — unsupported leads suggesting that Saudi officials might have had a hand in the 9/11 attacks. But as far as I can tell, these tips, addressed in a still-secret section of a congressional report, were investigated and discredited; Philip Zelikow of the 9/11 Commission tells me the 28 pages are “misleading”; the commission found there was “no evidence” of the Saudi government or senior officials financing the plot.

The much better reason to be concerned with Saudi Arabia is that it has promoted extremism, hatred, misogyny and the Sunni/Shiite divide that is now playing out in a Middle East civil war. Saudi Arabia should be renamed the Kingdom of Backwardness.

It’s not just that Saudi women are barred from driving, or that when in cars they are discouraged from wearing seatbelts for fear of showing their contours, or that a 19-year-old woman who was gang-raped was sentenced to 200 lashes (after protests, the king pardoned her). It’s not just that public churches are banned, or that there is brutal repression of the Shiite minority.

As the land where Islam began, Saudi Arabia has enormous influence among Muslims worldwide. Its approach to Islam has special legitimacy, its clerics have great reach, its media spread its views worldwide and it finances madrasas in poor countries to sow hatred.

From Pakistan to Mali, these Saudi-financed madrasas have popped up and cultivate religious extremism — and, sometimes, terrorists. A State Department cable released through WikiLeaks reported that in Pakistan these extremist madrasas offered impoverished families a $6,500 bounty for turning over a son to be indoctrinated.

To be blunt, Saudi Arabia legitimizes Islamic extremism and intolerance around the world. If you want to stop bombings in Brussels or San Bernardino, then turn off the spigots of incitement from Saudi Arabia and other Gulf countries.

“Saudi Arabia is not an enemy of the U.S., but it is an enemy of itself,” a Kuwaiti once told me.

A new survey finds that young Arabs in the Middle East and North Africa want to modernize, with 52 percent saying that religion plays too big a role in the Middle East. That’s true of many, many Saudis as well, and some have tried to start a desperately needed conversation about tolerance. One of them, Raif Badawi, a blogger, was arrested and sentenced to 1,000 lashes.

In the past I sometimes defended Saudi Arabia on the basis that it was at least moving in the right direction. But in the last few years it has been backtracking while also starting a brutal war in Yemen. Obama’s biggest mistake with Saudi Arabia was providing arms for that war, implicating America in what Human Rights Watch says may be war crimes.

In short, as a Saudi father named Mohammed al-Nimr says, “Saudi Arabia is now going in the wrong direction.” He should know: His brother, a prominent Shiite religious figure, was executed in January, and his son, Ali al-Nimr, has been sentenced to death for participating in protests when he was a minor.

“Americans should care, because what happens here can affect the world,” the father told me, and he cautioned that Saudi repression destabilizes the entire Middle East. He’s right.

Bill O’Reilly has denounced me as a “chief apologist” for Islam, and I’ll continue to decry what I see as Islamophobia in the West. But at the same time, let’s acknowledge that Saudi Arabia is more than our gas station; it is also a wellspring of poison in the Islamic world, and its bigotry fuels our bigotry.

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

 

Friedman and Bruni

April 20, 2016

In “Out of Africa, Part II” The Moustache of Wisdom tells us that a farming village too parched to sustain crops is also losing its men, who leave in search of work to support their families.  Mr. Bruni, in “No Way to Elect a President,” says beyond New York’s primary is a system and sourness we must address.  Here’s TMOW, writing from Ndiamaguene, Senegal:

I am visiting Ndiamaguene village in the far northwest of Senegal. If I were giving you directions I’d tell you that it’s the last stop after the last stop — it’s the village after the highway ends, after the paved road ends, after the gravel road ends and after the desert track ends. Turn left at the last baobab tree.

It’s worth the trek, though, if you’re looking for the headwaters of the immigration flood now flowing from Africa to Europe via Libya. It starts here.

It begins with a trickle of migrants from a thousand little villages and towns across West Africa like Ndiamaguene, a five-hour drive from the capital, Dakar. I visited with a team working on the documentary “Years of Living Dangerously,” about the connection between climate change and human migration, which will appear this fall on the National Geographic Channel. The day we came, April 14, it was 113 degrees — far above the historical average for the day, a crazy level of extreme weather.

But there is an even bigger abnormality in Ndiamaguene, a farming village of mud-brick homes and thatch-roof huts. The village chief gathered virtually everyone in his community to receive us, and they formed a welcoming circle of women in colorful prints and cheerful boys and girls with incandescent smiles, home from school for lunch. But the second you sit down with them you realize that something is wrong with this picture.

There are almost no young or middle-aged men in this village of 300. They’re gone.

It wasn’t disease. They’ve all hit the road. The village’s climate-hammered farmlands can no longer sustain them, and with so many kids — 42 percent of Senegal’s population is under 14 years old — there are too many mouths to feed from the declining yields. So the men have scattered to the four winds in search of any job that will pay them enough to live on and send some money back to their wives or parents.

This trend is repeating itself all across West Africa, which is why every month thousands of men try to migrate to Europe by boat, bus, foot or plane. Meanwhile, refugees fleeing wars in Syria, Iraq and Afghanistan are doing the same. Together, these two flows pose a huge challenge for the future of Europe.

Tell these young African men that their odds of getting to Europe are tiny and they will tell you, as one did me, that when you don’t have enough money to buy even an aspirin for your sick mother, you don’t calculate the odds. You just go.

“We are mostly farmers, and we depend on farming, but it is not working now,” the village chief, Ndiougua Ndiaye, explained to me in Wolof, through a translator. After a series of on/off droughts in the 1970s and 1980s, the weather patterns stabilized a bit, “until about 10 years ago,” the chief added. Then, the weather got really weird.

The rainy season used to always begin in June and run to October. Now the first rains might not start until August, then they stop for a while, leaving fields to dry out, and then they begin again. But they come back as torrential downpours that create floods. “So whatever you plant, the crops get spoiled,” the chief said. “You reap no profits.”

The chief, who gave his age as 70 but didn’t know for sure, could remember one thing for certain: When he was young he could walk out to his fields any time during the planting season “and your feet would sink into” the moist earth. “The soil was slippery and oily and it would stick to your legs and feet and you would have to scrape it off.” Now, he said, picking up a fistful of hot sand, the soil “is like a powder — it is not living anymore.”

Has he ever heard of something called “climate change”? I asked. “We heard about it on the radio, and we have seen it with our own eyes,” he answered. The temperature is different. The winds are different. They’re hot when they should be cold.

The chief’s impressions are not wrong. Senegal’s national weather bureau says that from 1950 to 2015, the average temperature in the country rose two degrees Celsius, much faster than anticipated, and since 1950, the average annual rainfall has declined by about 50 millimeters (about two inches). So the men of Ndiamaguene have no choice but to migrate to bigger towns or out of the country.

The lucky few find ways to get smuggled into Spain or Germany, via Libya. Libya was like a cork on Africa, and when the U.S. and NATO toppled the Libyan dictator — but did not put troops on the ground to help secure a new order — they essentially uncorked Africa, creating a massive funnel through chaotic Libya to the Mediterranean coast.

The less lucky find work in Dakar or Libya or Algeria or Mauritania, and the least lucky get marooned somewhere along the way — caught in the humiliating twilight of having left and gained nothing and having nothing to return to. This is creating more and more tempting recruiting targets for jihadist groups like Boko Haram, which can offer a few hundred dollars a month.

The chief introduced me to Mayoro Ndiaeye, the father of a boy who left to find work. “My son left for Libya one year ago, and since then we have no news — no telephone, nothing,” he explained. “He left a wife and two children. He was a tile fixer. After he made some money [in the nearby town] he went to Mauritania and then to Niger and then up to Libya. But we have not heard from him since.”

The father started to tear up. These people live so close to the edge. One reason they have so many children is that the offspring are a safety net for aging parents. But the boys are all leaving and the edge is getting even closer.

Which means they are losing the only thing they were rich in: a deep sense of community. Here, you grow up with your family, parents look after children and children then look after parents, and everyone eats and lives together. But now with the land no longer producing enough, “everyone has a [male] family member who has had to leave,” said the chief. “When I was young, everyone in the family was together. … The mother would be in the house and the man would go to the farm. And everyone stayed with their family, and now it is not what it used to be. I am afraid of losing my community, because my people can’t live here anymore.”

Africa has always had migrants, but this time is different. There are so many more people and so much less natural capital — Lake Chad alone has lost 90 percent of its water — and with cellphones everyone can see a better world in Europe.

Gardens or walls? It’s really not a choice. We have to help them fix their gardens because no walls will keep them home.

Now here’s Mr. Bruni:

With Donald Trump’s and Hillary Clinton’s victories in New York, we’re one furious contest closer to the end of this spectacle. But we’ve known for a while now where we’re headed, and it isn’t anyplace good.

American voters are displeased with the candidates they’ve been given. They’re disengaged from the process that winnows the field.

And that process disregards the political center, erodes common ground and leaves us with a government that can’t build the necessary consensus for, let alone implement, sensible action in regard to taxes, to infrastructure, to immigration, to guns, to just about anything.

Make America great again? We need to start by making it functional.

This election has certainly been extraordinary for its characters, but it’s equally remarkable for its context, one of profound, paralyzing sourness.

A poll released by NBC News and The Wall Street Journal on Sunday showed that 68 percent of American voters couldn’t imagine themselves casting a vote in the general election for Trump, while 61 percent said the same about Ted Cruz and 58 percent about Clinton.

A much, much higher percentage of voters viewed each of these three unfavorably than favorably. “Unpopularity Contest” was the headline on the story on the NBC News website, which rightly asked how well any president of such polarizing effect would be able to govern.

We’ve had such presidents (and candidates) before. And pessimism isn’t new.

But there have been developments and differences in 2016 that may well be making the situation worse.

The media, for one. This election isn’t being covered so much as marketed, by news organizations whose desperation for eyeballs has turned many of them into drama queens. Each new poll is a major scoop. There are countdown clocks for events as humdrum as candidate town halls. Debates are teased with ominous soundtracks and photographs better befitting prizefights.

When you treat a campaign as if it were an athletic competition, you turn it into more of a blood sport than it already is. And when you breathlessly promote it the way you would a hit TV show’s season finale, it becomes just another piece of theater. Neither approach encourages sober-minded engagement.

Nor does the manner in which so many voters use the Internet in general and social media in particular, to curate and wallow in echo chambers that amplify their prejudices, exacerbate their tribalism and widen the fault lines between us. The online behavior of the Bernie Bros is a great example, but it’s hardly the only one.

Additionally, the precise unfolding of the Republican and Democratic races this time around, along with complaints from the candidates themselves, has exposed the undemocratic quirks and mess of the process: the peculiarity of caucuses; the seduction of delegates and superdelegates; closed versus open primaries; states that are winner-take-all as opposed to states that are winner-take-most; the possibility of a brokered convention at which an interloper could be crowned.

To prevail, a candidate doesn’t even have to persuade an especially large share of the electorate, given how splintered and detached voters are. In an important commentary published in The Hill on Monday, the Democratic pollster and strategist Mark Penn extrapolated from Trump’s and Clinton’s vote tallies to note that, in his estimation, “We now have a system in which it takes just 10 million votes out of 321 million people to seize one of the two coveted nominations.”

“The result,” he wrote, “is a democracy that is veering off course, increasingly reflecting the will of powerful activist groups and the political extremes.” Would-be nominees needn’t worry much about the roughly 40 percent of Americans who at least technically consider themselves independents — a group that’s grown over the last decade — or the 60 percent who say that a third political party is needed.

No, these candidates “can just double down on elements of their base,” Penn observed. “Rather than bring the country together, they demonize their opponents to hype turnout among select groups, targeted by race, religion or ethnicity.”

Penn suggested several smart reforms to increase voters’ participation and sense of investment, including the abolition of caucuses and a rotation of the order in which states vote, so that Iowa, New Hampshire and South Carolina don’t always get such outsize sway.

I wish we could also find a way to shorten these presidential campaigns significantly, so that they’re not such a soul-draining, throat-ravaging turnoff to almost anyone who’s not an epic narcissist or mired in politics to the point of no return.

Then maybe we’d look up one of these years and be choosing among the greater of goods, not the lesser of evils, and the victor would be left, physically and ideologically, with a voice that still carries.

Bobo, solo

April 19, 2016

Bobo has decided to issue a stern warning about “The Danger of a Single Story.”  He gurgles that our politics and our humanity suffer when we only acknowledge one explanation for a person or phenomenon, especially on issues like criminal justice.  Here’s a longish comment from “C. Hofman” from the Netherlands:  “There is so much wrong in this piece, I don’t know where to start. The false equivalence between left and right, blaming Trump for the vilifications, simplifications and misappropriations that are long part and parcel of the Republican platform, and rehashing a whole lot of long debunked sloppy research to make a point against the (mostly correct!) narrative of the left. Yes, there are more sides to a lot of issues, but the problem is that most of the sides you mentioned aren’t true.  Let me take out one of these debunked stories: Less aggressive policing means more crime. It’s really not clear that crime rose at all, in fact, it didn’t. Crime perhaps rose in some places, in others it fell, that’s natural, because things always don’t stay exactly the same. Moreover, correlation does not mean causation. Especially in this case: the places where policing became less aggressive as a reaction to protests about far too aggressive policing were *not* the places where crime rose.  I can say similar things about your other “stories”.   Single viewpoint stories can indeed be wrong, but wrong stories are worse. And then there’s the hypocrisy: the single story is the domain of the party David Brooks belongs to, and it is also always the conclusion he comes to in his columns.”  Now that we’ve heard from someone with a few brains here’s Bobo:

In 2009 the Nigerian writer Chimamanda Ngozi Adichie gave a fabulous TED talk called “The Danger of a Single Story.” It was about what happens when complex human beings and situations are reduced to a single narrative: when Africans, for example, are treated solely as pitiable poor, starving victims with flies on their faces.

Her point was that each individual life contains a heterogeneous compilation of stories. If you reduce people to one, you’re taking away their humanity.

American politics has always been prone to single storyism — candidates reducing complex issues to simple fables. This year the problem is acute because Donald Trump and Bernie Sanders are the giants of Single Storyism. They reduce pretty much all issues to the same single story: the alien invader story.

Every problem can be solved by finding some corrupt or oppressive group to blame. If America is beset by wage stagnation it’s not because of intricate structural problems. It’s because of the criminal Mexicans sneaking across the border or it’s because of this evil entity called “the banks.”

Worse, the stories have become identity markers. This is a phenomenon borrowed from campus political correctness. In order to express your solidarity with the virtuous team, you have to embrace the socially approved story. If you differ from the official story — the way Bill Clinton differed from the official progressive crime story a few weeks ago — it is not so much a sign that you are wrong (truth is not the issue). It is a sign that you have false allegiances. You must embrace the approved story to show you are not complicit in a system of oppression.

Hillary Clinton is not naturally a single story person. But while she is controlling the delegate race this campaign, Sanders is controlling the conversation and she is gradually coming around to his version of everything. For example, last week she came closer to embracing a nationwide $15 minimum wage, though still with caveats.

One true minimum wage story is that corporations are reaping record profits while pushing down wages of the unskilled. But another true story, embodied in the vast trove of research, is that if you raise the minimum wage too high, you end up punishing less skilled workers. One study found the modest hike in the national minimum wage between 2006 and 2009 reduced employment among young people without a high school degree by almost 6 percent.

The key is to find a balance between those stories. Raising the minimum wage to $15 may make sense in rich areas, but in most of the country there will be horrendous consequences for less skilled workers trying to find jobs.

In the realm of criminal justice, one true story is that America’s criminal justice system was constructed within a system of slavery and racism. It enables police brutality, often of a racist sort. It has led to massive over-incarceration, which has devastated individuals, families and neighborhoods.

Yet there are other opposing stories, also true:

Incarceration reduces crime. Experts disagree wildly on how much, but most studies show a significant effect. That’s partly because most of the people who do serious crime are career criminals. Among inmates released from state prison in 2005, the average number of previous convictions was five and the average number of previous arrests was greater than 10.

Less aggressive policing means more crime. After the release of the horrific Laquan McDonald video — which showed a Chicago cop killing him in cold blood — there was a 69 percent drop in the nonfatal shooting arrest rate and a 48 percent drop in the homicide arrest rate. In the meantime, according to an analysis by Rob Arthur and Jeff Asher of FiveThirtyEight, nonfatal shootings rose by 73 percent and homicides rose by 48 percent.

While the overall system is steeped in structural racial inequality, parts of the system don’t seem that biased. As the criminologist Barry Latzer notes in his book “The Rise and Fall of Violent Crime in America,” there is not a wide disparity between whites and blacks in time served for various offenses.

Moderate, bipartisan efforts are reducing inequality. Decades ago, evangelicals like Chuck Colson joined with a swath of progressives to reduce incarceration rates. These efforts are having an effect. Total U.S. imprisonment has declined for the past seven years. The imprisonment rate among black women has dropped by 47 percent since 2000, while the rate of imprisonment among white women has risen by 56 percent. Male imprisonment trends are similar though less striking.

As in life generally, every policy has the vices of its virtues. Aggressive policing cuts crime but increases brutality. There is no escape from trade-offs and tragic situations. The only way forward is to elect people who are capable of holding opposing stories in their heads at the same time, and to reject those who can’t.

Krugman’s blog, 4/16/16

April 18, 2016

There was one post on Saturday, and none yesterday.  Saturday’s post was “The Return of Elasticity Pessimism (Wonkish):”

I talked at the Council for European Studies conference in Philly last night, and was surprised by one aspect of the discussion. As you might expect if you’re into these things, my take on the euro was strongly informed by the theory of Optimum Currency Areas; I expected pushback. But I didn’t realize how many people now seem to believe that real exchange rates don’t matter for adjustment — that is, that even internal devaluation (downward adjustment of prices and wages relative to trading partners) isn’t necessary in the aftermath of unsustainable capital inflows.

It turns out, however, that we’re seeing a significant revival of the “elasticity pessimism” widely prevalent during the post World War II “dollar shortage”. This was the belief that trade flows barely respond to price signals, and hence that devaluations don’t help alleviate imbalances. Now as then, the argument rests in large part on specific cases where large changes in relative prices don’t seem to have produced large changes in trade (Greece’s lagging exports), or conversely, where large changes in trade seem to have happened without large changes in relative prices (Spain’s export recovery, maybe).

The difference is that in the late 1940s this kind of argument was deployed in support of more government intervention — keep those exchange controls in place, because devaluation won’t work — whereas now it’s being deployed as an argument against activism — never mind the euro, it’s all rigidities that must be cured with structural reform.

But while the purposes may be different, the substantive issues remain. What is the case against elasticity pessimism?

I guess I’d offer several answers.

First, it’s worth thinking about where those big external imbalances came from. Big capital flows to the European periphery led to inflation and rising real exchange rates, and this was associated with huge trade imbalances. How did that happen, if real exchange rates don’t matter?

Second, my sense is that at least some analyses aren’t taking sufficient account of cyclical factors. Devaluation that takes place along with an economic recovery may not be associated with a falling trade deficit, because rising demand is offsetting improved competitiveness — I think this is relevant for Iceland. Also important for understanding why sudden stops produce large import contractions even under fixed rates.

Third, there are lots of other factors, so you have to avoid picking and choosing your stories too much. One way to do this may be to do what one recent IMF study did: focus only on large real exchange rate changes, estimate elasticities for lots of countries, and pool the results. The result is to diminish the noise, both by eliminating small fluctuations that may be statistical illusions and by exploiting the power of large numbers.

Beyond all this, however, we probably need to revisit the classic 1950 Orcutt analysis of likely biases in estimates of trade response to prices.

I guess I’m showing a strong preconception here — that done right, analysis will show that trade elasticities remain fairly large. Certainly willing to be proved wrong — but we need to do this carefully, because it’s really important for future policy.

Blow and Krugman

April 18, 2016

In “Sanders Dismisses the Deep South” Mr. Blow says the candidate’s comments on the region’s importance would not help his chances in a general election.  Prof. Krugman, in “Robber Baron Recessions,” says studies have confirmed a decline in business competition, as the government turned away from anti-monopoly efforts.  Here’s Mr. Blow:

Bernie Sanders had an odd, and for me, unsettling comment at the Democratic debate in Brooklyn on Thursday night.

When CNN’s Dana Bash asked if he planned to take his nomination fight to the Democratic convention if Hillary Clinton does not clinch the nomination with pledged delegates alone, Sanders responded:

“Secretary Clinton cleaned our clock in the Deep South. No question about it. We got murdered there. That is the most conservative part of this great country. That’s the fact. But you know what? We’re out of the Deep South now. And we’re moving up.”

He went on to tout having won seven of the last eight caucuses and primaries. (In fact, of those seven, all except Wisconsin were caucuses, which are undemocratic in their own right.)

This wasn’t the first time in recent days that Sanders said something about voters in the Deep South that landed on my ear as belittling and dismissive.

When asked by Larry Wilmore on The Nightly Show whether he thought the primary system was rigged, Sanders responded: “Well, one can argue — people say, Why does Iowa go first? Why does New Hampshire go first? — but I think that having so many Southern states go first kind of distorts reality as well.”

And before that, when This Week host George Stephanopoulos pointed out to Sanders that Clinton was getting more votes than him, Sanders shot back: “Well, she’s getting more votes. A lot of that came from the South.”

This regional ridicule is a bad play for Sanders.

First, it’s not clear which states Sanders is including in the “Deep South,” a phrase whose meaning is hard to pin down. As a son of the “Deep South” myself, I will assume the list often used: Louisiana, Mississippi, Alabama, Georgia and South Carolina.

But Sanders has not only lost the “Deep South”; with the exception of Oklahoma, he’s lost the South as a whole.

It also must be pointed out that there is a racial dimension to Sanders’ dismissal, however inadvertent it is.

In general, the Southern states that Sanders says “distort reality” have some of the highest percentages of African-Americans in the country. The recent states he’s won, and on which he bases his claim of momentum, have some of the lowest percentages of African-Americans in the country. In each of the Deep South states for which there was exit poll data, black voters were the majority of Democratic primary voters. (There were no exit polls in Louisiana. The only state that had exit polls of the seven Sanders recently won was Wisconsin, where black voters represented 10 percent of primary voters in the state.)

Furthermore, as Nate Silver put it Friday, “Clinton has won or is favored to win almost every state where the turnout demographics strongly resemble those of Democrats as a whole.”

Now as for Sanders’s claim that the Deep South is the most conservative part of the country, one could argue that many of the other Southern states, as well as many of the states recently won by Sanders, are conservative in their own right.

It is true that blacks in general can be just as conservative as Republicans on some moral issues. But blacks tend to be quite liberal on the question of the size and role of the government. For instance, a 2012 Pew Research Center report found that “78 percent of blacks support government guarantees of food and shelter, compared with 52 percent of whites.” That position should have meshed well with Sanders’s expansive ideas.

As for the seven states Sanders won, four haven’t voted for the Democratic candidate in a general election since they went for Lyndon B. Johnson in 1964.

The only Southern state that has had that long of a drought for Democrats is Oklahoma — yes, the one southern state that Sanders won.

Furthermore, in 2012 The New York Times listed three of those southern states Clinton won — Florida, Virginia and North Carolina — as swing states, and only one of the recent states Sanders has won — Wisconsin.

Sanders simply has to own the fact that he didn’t sell his message well in the South, and those voters never warmed to his vision or his ability to execute it.

But he still needs to embrace and excite those voters should he become the nominee. He would need them for his much-ballyhooed political revolution. They will have to show up and flip Senate and House seats as well as governorships and control of statehouses.

One thing that the Affordable Care Act taught us is just how obstinate and obstructionist state officials can be and how their opposition to federal policies can hamper the full implementation of any law.

For instance, it wasn’t until Louisiana voters replaced the Republican governor, Bobby Jindal, with the Democrat John Bel Edwards that the state finally expanded Medicaid and thereby expanded health coverage to hundreds of thousand of people in the state.

That’s how revolutions work: From the ground up, in unlikely places and against the odds. A revolution is not evidenced by your success in territory you already control, but in territory that you don’t.

Sanders must abandon this “Deep South” talking point immediately. He’s better than this, and he should know better.

Apparently now stating demographic facts is a sin…  Here’s Prof. Krugman:

When Verizon workers went on strike last week, they were mainly protesting efforts to outsource work to low-wage, non-union contractors. But they were also angry about the company’s unwillingness to invest in its own business. In particular, Verizon has shown a remarkable lack of interest in expanding its Fios high-speed Internet network, despite strong demand.

But why doesn’t Verizon want to invest? Probably because it doesn’t have to: many customers have no place else to go, so the company can treat its broadband business as a cash cow, with no need to spend money on providing better service (or, speaking from personal experience, on maintaining existing service).

And Verizon’s case isn’t unique. In recent years many economists, including people like Larry Summers and yours truly, have come to the conclusion that growing monopoly power is a big problem for the U.S. economy — and not just because it raises profits at the expense of wages. Verizon-type stories, in which lack of competition reduces the incentive to invest, may contribute to persistent economic weakness.

The argument begins with a seeming paradox about overall corporate behavior. You see, profits are at near-record highs, thanks to a substantial decline in the percentage of G.D.P. going to workers. You might think that these high profits imply high rates of return to investment. But corporations themselves clearly don’t see it that way: their investment in plant, equipment, and technology (as opposed to mergers and acquisitions) hasn’t taken off, even though they can raise money, whether by issuing bonds or by selling stocks, more cheaply than ever before.

How can this paradox be resolved? Well, suppose that those high corporate profits don’t represent returns on investment, but instead mainly reflect growing monopoly power. In that case many corporations would be in the position I just described: able to milk their businesses for cash, but with little reason to spend money on expanding capacity or improving service. The result would be what we see: an economy with high profits but low investment, even in the face of very low interest rates and high stock prices.

And such an economy wouldn’t just be one in which workers don’t share the benefits of rising productivity; it would also tend to have trouble achieving or sustaining full employment. Why? Because when investment is weak despite low interest rates, the Federal Reserve will too often find its efforts to fight recessions coming up short. So lack of competition can contribute to “secular stagnation” — that awkwardly-named but serious condition in which an economy tends to be depressed much or even most of the time, feeling prosperous only when spending is boosted by unsustainable asset or credit bubbles. If that sounds to you like the story of the U.S. economy since the 1990s, join the club.

There are, then, good reasons to believe that reduced competition and increased monopoly power are very bad for the economy. But do we have direct evidence that such a decline in competition has actually happened? Yes, say a number of recent studies, including one just released by theWhite House. For example, in many industries the combined market share of the top four firms, a traditional measure used in many antitrust studies, has gone up over time.

The obvious next question is why competition has declined. The answer can be summed up in two words: Ronald Reagan.

For Reagan didn’t just cut taxes and deregulate banks; his administration also turned sharply away from the longstanding U.S. tradition of reining in companies that become too dominant in their industries. A new doctrine, emphasizing the supposed efficiency gains from corporate consolidation, led to what those who have studied the issue often describe as the virtual end of antitrust enforcement.

True, there was a limited revival of anti-monopoly efforts during the Clinton years, but these went away again under George W. Bush. The result was an economy with far too much concentration of economic power. And the Obama administration — preoccupied with the aftermath of financial crisis and the struggle with bitterly hostile Republicans — has only recently been in a position to grapple with competition policy.

Still, better late than never. On Friday the White House issued an executive order directing federal agencies to use whatever authority they have to “promote competition.” What this means in practice isn’t clear, at least to me. But it may mark a turning point in governing philosophy, which could have large consequences if Democrats hold the presidency.

For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era. And only one party seems bothered by either of those observations.

Krugman’s blog, 4/15/16

April 16, 2016

There was one post yesterday, “Why I Haven’t Felt The Bern:”

Today’s column offers an opportunity to say, for the record, why I haven’t been the Bernie booster a lot of people apparently expected me to be. For the business about discounting Clinton support as coming from “conservative states” in the “Deep South” actually exemplifies the problem I saw in the Sanders campaign from the beginning, and made me distrust both the movement and the man.

What you see, on this as on multiple issues, is the casual adoption, with no visible effort to check the premises, of a story line that sounds good. It’s all about the big banks; single-payer is there for the taking if only we want it; government spending will yield huge payoffs — not the more modest payoffs conventional Keynesian analysis suggests; Republican support will vanish if we take on corporate media.

In each case the story runs into big trouble if you do a bit of homework; if not completely wrong, it needs a lot of qualification. But the all-purpose response to anyone who raises questions is that she or he is a member of the establishment, personally corrupt, etc.. Ad hominem attacks aren’t a final line of defense, they’re argument #1.

I know some people think that I’m obsessing over trivial policy details, but they’re missing the point. It’s about an attitude, the sense that righteousness excuses you from the need for hard thinking and that any questioning of the righteous is treason to the cause. When you see Sanders supporters going over the top about “corporate whores” and such, you’re not seeing a mysterious intrusion of bad behavior into an idealistic movement; you’re seeing the intolerance that was always just under the surface of the movement, right from the start.

Does Clinton have problems too? Of course — she’s been too cozy with established interests in the past, she shouldn’t have given those speeches, and of course she shouldn’t have voted for the Iraq War. But there is no evidence that she’s corrupt, and lots of evidence that she both thinks hard about issues and is willing to revise her views in the light of facts and experience. Those are important virtues — important *progressive* virtues — that seem woefully absent on the other side of the primary.

But never mind. As you know, I’m only saying these things because I’m a corporate whore and want a job with Hillary.

Krugman’s blog, 4/14/16

April 15, 2016

There was one post yesterday, “No Time for Credibility:”

So, here we are with near-zero real interest rates on long-term government bonds; with a desperate need for infrastructure investment; with strong reason to believe that deficit spending in the current environment would actually improve the long-run fiscal picture, because the interest burden would be so low and higher growth would raise future revenues.

And Time magazine decides that now is a good time to devote its cover to dire prophecies about looming US insolvency, with the lead article by James Grant — signatory of the infamous 2010 letterwarning Ben Bernanke that his policies would cause inflation and debase the dollar, crusader for a return to the gold standard.

Was Time purchased by Zero Hedge when I wasn’t looking? Who thought this was a great way to make the magazine relevant and credible right now?

Better late than never… Brooks and Krugman

April 15, 2016

Sorry for the delay, but sometimes life gets in the way.  Today Bobo has a DEEEEP question:  “What Is Inspiration?”  He gurgles about how that moment when mind and spirit take flight stands apart from normal life.  There were some wonderful comments, but we’ll have to pass since I’m in a hellacious rush.  Prof. Krugman, in “The Pastrami Principle,” says beware politicians — Republican or Democratic — who sneer at voters.  Here, alas, is Bobo:

For decades, Anders Ericsson has reminded us of the value of hard work. The Florida State psychologist did the research that led to the so-called 10,000-hour rule. In his informative new book, “Peak,” he and co-author Robert Pool downplay the importance of native-born genius (even in people like Mozart) and emphasize the importance of deliberate practice — painstaking exercises to perfect some skill.

Anybody who has observed excellence knows that Ericsson is basically right. Dogged work is the prerequisite of success. Yet there are some moments — after much steady work and after the technical skills have been mastered — when the mind and spirit take flight. We call these moments of inspiration. They kind of steal upon you, longed for and unexpected.

Inspiration is a much-used, domesticated, amorphous and secular word for what is actually a revolutionary, countercultural and spiritual phenomenon. But what exactly is inspiration? What are we talking about when we use that term?

Well, moments of inspiration don’t quite make sense by normal logic. They feel transcendent, uncontrollable and irresistible. When one is inspired, time disappears or alters its pace. The senses are amplified. There may be goose bumps or shivers down the spine, or a sense of being overawed by some beauty.

Inspiration is always more active than mere appreciation. There’s a thrilling feeling of elevation, a burst of energy, an awareness of enlarged possibilities. The person in the grip of inspiration has received, as if by magic, some new perception, some holistic understanding, along with the feeling that she is capable of more than she thought.

Vladimir Nabokov believed that inspiration comes in phases. First, he wrote, there’s the “prefatory glow,” the feeling of “tickly well-being” that banishes all awareness of physical discomfort. The feeling does not yield its secret just yet, but a window has been opened and some wind has blown in.

Then, a few days later, Nabokov continued, the writer “forefeels what he is going to tell.” There’s an instant vision, the lightning bolt of inspiration, that turns into rapid speech, and a “tumble of merging words” that form the nucleus of a work that will grow from it over the ensuing months or years.

Inspired work stands apart from normal life. In the first place it’s not about self-interest as normally understood. It’s not driven by a desire for money or grades or status. The inspired person is driven intrinsically by the work itself. The work takes hold of a person.

Inspiration is not earned. Your investment of time and effort prepares you for inspiration, but inspiration is a gift that goes beyond anything you could have deserved.

Inspiration is not something you can control. People who are inspired have lost some agency. They often feel that something is working through them, some power greater than themselves. The Greeks said it was the Muses. Believers might say it is God or the Holy Spirit. Others might say it is something mysterious bursting forth deep in the unconscious, a new way of seeing.

Inspiration does not happen to autonomous individuals. It’s a beautiful contagion that passes through individuals. The word itself comes from the Latin inspirare, meaning “to breath into.” One inspiring achievement — say, the space program — has a tendency to raise the sense of possibility in others — say, a little boy who dreams of being an astronomer. Then the one who is inspired performs his own feats and inspires others, and so on down the line.

Inspiration is not permanent and solid. It’s powerful but ephemeral, which is why so many people compare it to a gust of wind. And when it is gone people long for its return.

The poet Christian Wiman wrote that inspiration is “intrusive, transcendent, transformative, but also evanescent and, all too often, anomalous. A poem can leave its maker at once more deeply seized by existence and, in a profound way, alienated from it, for as the act of making ends, as the world that seemed to overbrim its boundaries becomes, once more, merely the world, it can be very difficult to retain any faith at all in that original moment of inspiration. That memory of that momentary blaze, in fact, and the art that issued from it, can become a kind of reproach to the fireless life in which you find yourself most of the time.”

Most important, inspiration demands a certain posture, the sort of posture people feel when they are overawed by something large and mysterious. They are both humbled and self-confident, surrendering and also powerful. When people are inspired they are willing to take a daring lark toward something truly great. They’re brave enough to embrace the craggy fierceness of the truth and to try to express it in some new way.

Yes, hard work is really important for achievement. But life is more mysterious than just that.

He needs to spend a year or 12 working at minimum wage jobs and trying to find inspiration in that.  The asshole.  Here’s Prof. Krugman:

A couple of months ago, Jeb Bush (remember him?) posted a photo of his monogrammed handgun to Twitter, with the caption “America.” Bill de Blasio, New York’s mayor, responded with a picture of an immense pastrami sandwich, also captioned “America.” Advantage de Blasio, if you ask me.

Let me now somewhat ruin the joke by talking about the subtext. Mr. Bush’s post was an awkward attempt to tap into the common Republican theme that only certain people — white, gun-owning, rural or small-town citizens — embody the true spirit of the nation. It’s a theme most famously espoused by Sarah Palin, who told small-town Southerners that they represented the “real America.” You see the same thing when Ted Cruz sneers at “New York values.”

Mr. de Blasio’s riposte, celebrating a characteristically New York delicacy, was a declaration that we’re also Americans — that everyone counts. And that, surely, is the vision of America that should prevail.

Which is why it’s disturbing to see Palinesque attempts to delegitimize large groups of voters surfacing among some Democrats.

Quite a few people seem confused about the current state of the Democratic nomination race. But the essentials are simple: Hillary Clinton has a large lead in both pledged delegates and the popular vote so far. (In Democratic primaries, delegate allocation is roughly proportional to votes.) If you ask how that’s possible — Bernie Sanders just won seven states in a row! — you need to realize that those seven states have a combined population of about 20 million. Meanwhile, Florida alone also has about 20 million people — and Mrs. Clinton won it by a 30-point margin.

To overtake her, Mr. Sanders would have to win the remaining contests by an average 13-point margin, a number that will almost surely go up after the New York primary, even if he does much better than current polls suggest. That’s not impossible, but it’s highly unlikely.

So the Sanders campaign is arguing that superdelegates — the people, mainly party insiders, not selected through primaries and caucuses who get to serve as delegates under Democratic nomination rules — should give him the nomination even if he loses the popular vote. In case you’re rubbing your eyes: Yes, not long ago many Sanders supporters were fulminating about how Hillary was going to steal the nomination by having superdelegates put her over the top despite losing the primaries. Now the Sanders strategy is to win by doing exactly that.

But how can the campaign make the case that the party should defy the apparent will of its voters? By insisting that many of those voters shouldn’t count. Over the past week, Mr. Sanders has declared that Mrs. Clinton leads only because she has won in the “Deep South,” which is a “pretty conservative part of the country.” The tally so far, he says, “distorts reality”because it contains so many Southern states.

As it happens, this isn’t true — the calendar, which front-loaded some states very favorable to Mr. Sanders, hasn’t been a big factor in the race. Also, swing-state Florida isn’t the Deep South. But never mind. The big problem with this argument should be obvious. Mrs. Clinton didn’t win big in the South on the strength of conservative voters; she won by getting an overwhelming majority of black voters. This puts a different spin on things, doesn’t it?

Is it possible that Mr. Sanders doesn’t know this, that he imagines that Mrs. Clinton is riding a wave of support from old-fashioned Confederate-flag-waving Dixiecrats, as opposed to, let’s be blunt, the descendants of slaves? Maybe. He is not, as you may have noticed, a details guy.

It’s more likely, however, that he’s being deliberately misleading — and that his effort to delegitimize a big part of the Democratic electorate is a cynical ploy.

Who’s the target of this ploy? Not the superdelegates, surely. Think about it: Can you imagine Democratic Party insiders deciding to deny the nomination to the candidate who won the most votes, on the grounds that African-American voters don’t count as much as whites?

No, claims that Clinton wins in the South should be discounted are really aimed at misleading Sanders supporters, giving them an unrealistic view of the chances that their favorite can still win — and thereby keeping the flow of money and volunteers coming.

Just to be clear, I’m not saying that Mr. Sanders should drop out. He has the right to keep campaigning, in the hope either of pulling off huge upsets in the remaining primaries or of having influence at the convention. But trying to keep his campaign going by misleading his supporters is not O.K. And sneering at millions of voters is truly beyond the pale, especially for a progressive.

Remember the pastrami principle: We’re all real Americans. And African-Americans are very definitely real Democrats, deserving respect.


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