Relevant and even prescient commentary on news, politics and the economy.

Solar Power

Last year I had solar panels installed on my roof under a deal where I pay nothing up front for the installation and pay the solar company for the power I produce at a rate about 75%   of  what I pay the electric utility.

I just got my April bill from the electric company.

It was a credit for $15.54, so I actually produced more electricity than I consumed in April.

Over the winter months I met about half of my electric needs from solar.

I thought that was pretty good for the Boston area.

So it will be interesting to see what happen this summer when solar production should be maximized.

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Ron Fournier Says Abraham Lincoln Wasn’t a Great President

Great presidents rise above circumstance. Not Obama, at least not yet. At a news conference Tuesday marking the 100th day of his second and final term, the president seemed unwilling or unable to overcome stubborn GOP opposition.

– Ron Fournier, National Journal, yesterday (h/t Jonathan Chait, New York magazine, today)

Fournier’s right, of course. About Abraham Lincoln, that is.  Lincoln was unwilling or unable to overcome stubborn Southern opposition to his agenda of ending slavery and keeping the Union whole.

Personally, I think it was the former.  Unless you count that declaration-of-war thing.  Although if you do, then you also have to count that victory at Appomattox.  Which would mean Lincoln was able to overcome stubborn Southern opposition to his agenda of ending slavery and keeping the Union whole, after all.  And that would mean that he must have been willing to do so, unless that victory was an accident.

Although, under the new definition of the word leadership, that kind of thing doesn’t count, because persuasion just didn’t work in that case.

Take me to your leader, Mr. Fournier.  Once you find one who isn’t a hypnotist or the head of a parliamentarian government. Unless, of course, by rising above circumstance, you mean military coup de tat.

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Who Do You Think Can ‘Do A Better Job of Handling’ Political Poll Semantics?

Dems hold small edge in Congressional ballot matchup: A new Quinnipiac poll finds that voters support the Dem candidate in their district over the Republican by 41-37. Sixty seven percent disapprove of the Congressional GOP, versus 60 percent who disapprove of Dems. Sixty two percent say Republicans don’t care about their needs and problems; 54 percent say that about Dems. Republicans hold a small edge on the deficit and gun policy.

– Greg Sargent, Washington Post, this morning

A longtime pet peeve of mine is that so many major political polling organizations routinely phrase policy-preference questions so that the question can mean two separate, often conflicting, things, yet the results of the poll questions are reported as though the question had only one, surely-understood, meaning.

And, first and foremost among that type of question is of the “which party is better on” guns/taxes/the deficit/fill-in-the-blanks variety.  These questions almost always actually are phrased to appear to be asking which party talks more about the particular issue, or seems to care more about the issue.  Yet inevitably the pollster’s PR release represents the poll-question result as indicating the poll respondents’ preference for that party’s policy, rather than the poll respondents’ perceptions of the respective parties’ level of interest in the subject, and the news media dutifully treats it that way.

So the result from a poll question, Question 19 in the Quinnipiac Poll, that asked, “Who do you think can do a better job of handling – the federal budget deficit, the Democrats in Congress or the Republicans in Congress?,” is reported by the polling organization as indicating that voters “prefer the Republicans on the budget deficit.”  The result from a question, Question 21, in that poll, that asked “Who do you think can do a better job of handling – gun policy, the Democrats in Congress or the Republicans in Congress?” is represented by the organization as showing that voters “prefer the Republicans on … gun policy.”

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Soooo … Eric Posner’s Angling to Ghostwrite David Brooks’s Columns. Or At Least to Fully Shed That John-Yoo-and-I Stigma. Fine, But Don’t Stigmatize ME In the Process. [FORMAT-CORRECTED AGAIN]

When Dzhokhar Tsarnaev was arrested Friday night, the celebration was instantly overtaken by an ideologically charged debate. Liberals argued that the government must respect Tsarnaev’s constitutional rights, by which they meant that he should be treated the same as any ordinary criminal suspect—informed of his Miranda rights, supplied with a lawyer, presented to court as soon as possible. The subtext was that the treatment of Tsarnaev would refute yet again the hated Bush administration’s claim that it needed expansive war powers to fight terrorists. Conservatives by contrast, notably Republican Sens. John McCain and Lindsey Graham, argued that the government should classify Tsarnaev as an enemy combatant, and thus deprive him of the rights of ordinary criminal suspects. For the left, the Tsarnaevs are examples of “vulnerable Muslims” driven to extremes by President Obama’s immoral drone war; for the right, they are foot soldiers in a civilizational war. …

Neither the knee-jerk liberal nor the knee-jerk conservative response appreciates all of these underlying dilemmas. For liberals, the constitution is a fetish to be stroked at times of peril; it will protect us, whatever the stakes. They forget that criminal procedural rights were cobbled together over decades by fallible judges, who were responding to the needs of the time. What might have been appropriate during the civil rights era, when police used criminal law to suppress protesters and torment African-Americans, may not be appropriate for an age of terror. …

The isolation of terrorist suspects is hardly a new idea; it was used effectively in the 1970s by Germany, Italy, and other European democracies to defeat terrorist groups like the Red Army Faction and the Red Brigade. Here and now in the U.S., there are several advantages to this approach. It treats in the same manner anyone who engages in terrorism or mass killing and does not single out Muslims, who are burdened by the legacy of the declaration of war against al-Qaida. It gives the police broad powers to deal with cases of extraordinary violence without granting them similar powers for ordinary criminal investigations. It avoids any reference to war or martial law, skirting the massive legal and political complexities associated with war powers. And because Congress would make the rules, and judges would oversee the system, the courts would likely hold it constitutional.

The New Law We Need in Order to Deal With Dzhokhar Tsarnaev: Congress should authorize the isolation and detention of suspected terrorists., Eric Posner*, Slate, yesterday

After reading that article this afternoon, I posted the following comment to it:

For the left, the Tsarnaevs are examples of “vulnerable Muslims” driven to extremes by President Obama’s immoral drone war; for the right, they are foot soldiers in a civilizational war? Really? For the entire left, Prof. Posner?

I’m a regular writer on a blog called Angry Bear, a left-of-center economics/politics/legal-issues blog, and yesterday, at the request of the guy who runs the blog, I posted a lengthy piece on these issues, at [this link; link corrected 4/25]. I began writing for that blog three years ago at the request of the guy who runs it, and a few of my pieces have been linked to or tweeted by some heavy-hitters. Including Paul Krugman (once), Brad DeLong, several times, and Naked Capitalism, also several times. (And occasionally by non-ideological blogs and tweeters as well, although that doesn’t matter here.) Suffice it to say that I’m of the left. Have been all my life. Almost literally; by the age of about six, I knew about McCarthyism, courtesy of my parents!

So I’m a good test case, and I invite Prof. Posner to read my blog post (if he can bear the thought and expend the time to read something written by a no-name) and point out where exactly I said or implied that I view the Tsarnaev brothers as examples of vulnerable Muslims driven to extremes by President Obama’s immoral drone war. And, since he won’t, I invite all you readers here to do that. I wish you luck.

Posner spent the early and mid 2000s angling (I think) to join his father as a judge on the Seventh Circuit Court of Appeals, an effort that included co-authoring with that well-known civil libertarian John Yoo (google him, folks, if you don’t know who he is and therefore don’t get the reference and characterization). Posner has spent the time since his dalliance with Yoo trying to salvage his own reputation, fairly successfully, and this article is, I think, another piece in his ongoing attempt to rid himself of the Yoo-association taint; you never know when a Republican might win the White House next, and anyway, well, y’know.

But the next presidential inauguration is nearly four years away, and so to bide his time he’s apparently now auditioning as David Brooks’ ghostwriter. Brooks really, really does need one, and Posner has that sweeping-generalizations-and-categorizations thing down pat, which is a good start. All he needs now is to practice up on the faint-correlation-equals-definitive-causation thing. Or at least the a-series-of-statements-of-fact-invites-a-non-sequitur-conclusion technique, a David Brooks special. And no one will be the wiser that the columns are ghostwritten.

As a liberal, I can also attest, by the way, that it is not a characteristic of ours to forget that criminal procedural rights were cobbled together over decades by judges. Nor to forget, or not to, um, notice, that judges are fallible. We notice that; trust me. Some of us even think that some judges are deliberately fallible. In fact, some of us are pretty sure of this.

As for what’s appropriate for an age of terror, one thing that I’m pretty sure is not is that any statute passes constitutional muster because Congress would make the rules, and judges would oversee the system. Congress sort-of-normally makes the rules in detailed statutes, and judges sort-of-normally oversee the system that statutes establish, at least since Marbury v. Madison. So I don’t know why the courts would likely hold it constitutional because Congress would make the rules, and judges would oversee the system. At least until Professor Posner becomes a member of one of those courts.

And just to be clear, I do not consider the Tsarnaev brothers examples of vulnerable Muslims driven to extremes by President Obama’s immoral drone war. This even though that may well have been why the older brother was able to gain the younger brother’s assistance. And even though I, too, believe that the drone war is immoral. And that there is no legitimate reason for this country to be involved in Afghanistan militarily, and that there has been no reason for a decade or so. It already looks likely that the younger brother was vulnerable to his older brother’s manipulations, probably mainly concerning the drone wars, but that the older brother had an agenda apart from the drone wars.***

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*Eric Posner is a longtime professor at the University of Chicago Law School and a son of Seventh Circuit Court of Appeals judge Richard Posner.

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**I had to fully edit the format of this piece once and then still make another formatting correction, because I’m still having trouble getting used to our new platform.  After the second edit, the title disappeared, so I had to edit this a third time. Aaargh.

Steve Roth, Dan Crawford, and reader RJS have helped a lot via emails–thanks, guys!–but I’m still semi-clueless about it all.  Apologies, readers.  I think I finally got this one right. 4/23 at 3:04 p.m.

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***In light of my exchange with Woolley in the comments below, I just amended this paragraph in  my Slate Comment and here. 4/23/13 at 4:19 p.m.

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Wellll, as I learned the hard way from perplexed emails to me about this post, our format here in WordPress does not distinguish blockquotes clearly enough.  JazzBumpa, for example, said he wondered who had poisoned me–until he finally realized that that stuff was a blockquote.  [Poisoned me?  More like kidnapped me, and then waited for Stockholm Syndrome to kick in before he allowed me to post anything.]  The solution, for the moment anyway? Italics.

 

 

 

 

 

 

 

 

 

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Miranda Rights 101 and Enemy-Combatant Law 102. No, Make That 345 and 346 (Advanced Seminars).

The two immediate what-everyone’s-talking-about legal issues in the Dzhokhar Tsarnaev case concern his Miranda rights–that is, at what point must he be read his Miranda rights notifying him that he has the right to remain silent and to the counsel of an attorney–and whether he can, and if so should, be classified as an enemy combatant under post-9/11 laws.  Dan Crawford has asked me to post on the Miranda issue, and so I will, along with the somewhat overlapping but distinct enemy-combatant issue, but with the caveat that I have no great expertise in either Miranda-rights law or enemy-combatant law.

These issues concern three provisions in the multi-guarantee Fifth Amendment.  The Amendment reads:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The Miranda issue concerns the self-incrimination clause, the clause that reads “nor shall be compelled in any criminal case to be a witness against himself.”  The enemy-combatant issue stems from the lengthy first clause, the one that requires presentment or indictment of a Grand Jury in capital or other infamous crime (now interpreted as all serious crimes, whether or not they’re infamous, although this crime certainly passes the infamy test, so the originalists and textualists should be happy), and also from the due process clause.

Okay, and also from the insistence of certain Republican Senate grandstanders that Tsarnaev be held as an enemy combatant.  At least if issue is an operative word in enemy combatant issue.  Which of course it is.

I’ve read several good news and blog analyses discussing these issues in the last couple of days, but the most comprehensive one on Miranda is a blog post by Orin Kerr (h/t Bill H), a law prof at Georgetown and a former clerk to Justice Kennedy, at The Volokh Conspiracy, a libertarian/right-leaning blog where he writes regularly.  (Kerr is the least right-wing of the several writers there, all of whom are law profs, most of them also former Supreme Court law clerks.)

The essence of Kerr’s post–and a key point made also by Katy Waldman at Slate, in another good article on the subject–is that under Supreme Court jurisprudence dating back about three decades, the issue of the constitutionality of a failure to give a Miranda warning arises only if, and then only when, the prosecution attempts to use the defendant’s pre-Miranda-warning statements at the trial.  Obvious examples are a confession, an acknowledgment that the defendant knows another of the defendants, an admission that the defendant was at a particular location at a particular time, or that the gun used in the crime belongs to him.

It is in some respects–and until now I had thought of it as, in essence–part and parcel of the more generic “exclusionary rule,” which prohibits prosecutors from using evidence at trial that was obtained unconstitutionally.  Usually (but, I believe, not exclusively), the formal exclusionary rule comes into play when evidence is seized in a search that violates the Fourth Amendment’s search-and-seizure provision–a warrantless search that does not fall within the Supreme Court’s seemingly-metastasising exceptions to that constitutional provision (freedom! liberty! originalism! textualism!)

The exclusionary rule was developed by the Supreme Court to effectuate the Fourth Amendment, rather than the Fifth Amendment, but to the extent that I had thought about them at all (which is somewhat, but mainly after a new Supreme Court case on one or the other was issued), I still had thought of them as essentially the same.  But Kerr and Waldman point out that under Supreme Court Miranda jurisprudence, prosecutors can use some tangible “fruits” of an improperly un-Mirandized statement; just not the statement itself; the prosecutor can use the gun that the defendant told them where to find, but the prosecutor cannot tell the jury that the defendant told them where he put the gun.

A more important distinction, though, both in the Tsarnaev case and, well, for you and me, is this: Law enforcement interrogators can ask the defendant questions during an improperly un-Mirandized interrogation but then cannot use the defendant’s statements at trial.  But law enforcement cannot just force their way into your home, or search your car, or search you, in violation of the Fourth Amendment provided that they don’t later try to use what they found as evidence at trial or try after the unconstitutional search to get a search warrant based on the what they found during the unlawful search.

That’s because there is a difference between the very nature of the Fifth Amendment self-incrimination provision and the nature of the Fourth Amendment search provision, according to the Supreme Court.  The Court has interpreted the former as a bar to compelled self-incriminating trial testimony–against being a trial witness against yourself. The Fourth Amendment search clause protects against the actual search, independent of your rights at trial.

I think that’s a distinction that some commentators are missing in the Tsarnaev case, and in light of the unusual specifics of this case, it strikes me as as pretty important.  As in, calm down, fellow civil libertarians.  For now, anyway.

The purposes of most law enforcement interrogations are to try to solve the crime, to obtain enough evidence to gain a conviction, and (often, as part of solving the full crime, including learning its breadth) to identify others who participated in the crime.  In this case, though, there is unequivocally no additional evidence necessary to successfully prosecute Tsarnaev.  They even have the statement from the owner of the hijacked Mercedes SUV that the brothers confessed to him that they were the Marathon bombers–unnecessary icing on a very large, multi-ingredient cake.  They do not need a confession, nor any lesser acknowledgement or admission from Tsarnaev, in order to successfully prosecute him.  Nor to argue for the death penalty.

What they do need is to know with certainty that there are no explosives still stored somewhere, and that there are no other members of their terrorism conspiracy.  Both appear unlikely, it certainly seems.  They probably took all their explosives and guns with them on their wild ride late Thursday and early Friday (they had a lot with them).  The older brother reportedly was strongly disliked among the members of the Cambridge mosque he attended, and Muslim Causas separatists are, reportedly, just that: separatists at war with Russia.  So if the older brother learned his explosive-making craft overseas, it is almost certain that he wasn’t enlisted there to explode bombs at the Boston Marathon.  But law enforcement does need to try to set these issues to rest.

What law enforcement does not need is to try to use un-Mirandized statements by Tsarnaev at his trial.  If the Department of Justice does try, that would be an absolutely unnecessary attempt to distort and stretch Miranda jurisprudence, and the only conceivable purpose would be a decision by Obama (who presumably will be making politically-charged calls in the prosecution) to wave a red flag in the face of civil libertarians, as part of his ever-present quest to be viewed as a “centrist,” and the failure he shares with so many political pundits and other pols to recognize that 2002–like 2010–has passed.

The Marathon bombings are not 9/11.  They are instead the Oklahoma City Federal Building bombing, in which the two perpetrators held radical ideological views that they shared with many others, including members of large loosely-connected groups that advocate violence and that hold deep grudges against the American government.  But those groups, in this case including al Qaeda, likely were not a part of the acts of terrorism perpetrated by the two pairs of perpetrators.

Which brings me to the issue of enemy-combatant status, and of Lindsey Graham et al., who themselves think it’s still 2002 or, more likely, think voters do.  But as Rand Paul can attest, the public doesn’t.  Including much of the Tea Party public.  Even maybe in South Carolina, where Graham hopes to fend off a Tea Party primary challenger.

There are by now enough articles and blog posts published since Friday night, by people with extensive knowledge about enemy-combatant law–which I certainly do not have–that I think I should just say, in summary on this, that, according to those articles, the law does not permit Tsarnaev, a United States citizen charged with committing a crime on United States soil and apprehended not on an overseas battlefield but instead in Watertown, MA, from being declared an enemy combatant.

But to those who insist otherwise, I suggest that they beware of the double-edged sword that they want to manufacture.  Over the weekend, some Republican senator (I don’t remember which one) pronounced the United States “the battlefield”–terminology used by the Supreme Court in their post-9/11 enemy-combatant opinions–because the act terrorism occurred in the United States.  Any act of terrorism in the United States, he claimed, renders the United States a battlefield.

Which in turn requires a definition of “terrorism,” I would think.  And since there is no evidence that the Tsarnaev brothers were connected with any foreign group at all, much less one in which the enemy-combatant statute applies, this senator is proposing, if unwittingly, that anyone accused of, say, using a semi-automatic weapon loaded with a huge magazine could, and should, be declared an enemy combatant.  A designation whose purpose is to strip the defendant of constitutional due process rights and allow permanent detention without trial.

I say, bring it on.  Gitmo for anyone suspected of using a semi-automatic assault rifle with large magazines in the commission of crime!  That’ll have to do in lieu of Gitmo for silly, hypocritical politicians.

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Due Process: Holder vs Colbert. Art or Reality. Choose.

Re-posted from last year is Dan Becker’s post:

Due Process: Holder vs Colbert. Art or Reality. Choose.
This is the object:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury,… nor be deprived of life, liberty, or property, without due process of law;

It’s all one sentence. Any questions?

This is Art:

The lyrics of Grand Funk Railroad’s Paranoid

Did you ever have that feeling in your life

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Seven Steps to Social Security cuts via Debt Commission…following the plan

This is a re-posting of a Bruce Webb post from January, 2010.  A reminder of a well crafted plan to date:

Seven Steps to Social Security cuts via Debt Commission

For those of you who didn’t go the short version of my comment is that the strategy to get major slashes to Social Security and Medicare takes an Seven Step and that this technique is not new and in fact mirrors the original plan for Bush’s Commission to Strengthen Social Security (CSSS) in 2001-2002.

Step one:  Get consensus on ‘Crisis’. In this case that current debt growth levels are unsustainable.

Step two:  Get consensus that there are only three possible paths out: revenue increases (A), cuts in military and other discretionary spending (B1 and B2), or cuts to non-discretionary spending, meaning Medicare and Social Security (C)

Step three:  Having agreed that some combination of A, B, and C is needed set up a Commission with a mandate to propose an up or down vote.

Step four:  Committee decides it is unwise to increase taxes during a recession and eliminates (A). Commission further decides that it is unwise to cut defense spending in the middle of two wars eliminating (B1) and that eliminating infrastructure spending or farm supports is both unwise or politically impossible in the current climate (B2)

Step five:  Recommend a package of cuts to Medicare and Social Security-C on the basis of shared sacrifice, after all every CD and State has a share of the elderly population.

 

Step Six:  Tell Congress that the statute doesn’t allow them to revisit A or B and then that NOT voting for a C based solution means denial of Steps one and two.

Step Seven:  Either get a vote for C or run against opponents as ‘Do Nothing Deficit Deniers”

This was exactly the plan used by the Bush Administration in their Spring 2005 Social Security Tour. Rather than produce a Plan already in hand crafted to specifications, say like Model 2 of CSSS, and have people pick it to pieces, they held it back for a later stage. . So the proposed sequence there was:

Step A: Use Social Security Tour to get consensus on Social Security Crisis
Step B: Use tour to assure everyone that all options were on the table.
Step C: Having gotten consensus from Congress try to find some mechanism to assure a final up or down vote.
Step D: Having secured a vote indicate that any plan MUST comply with the seven existing guidelines of CSSS Guiding Principles to CSSS which bar any tax-based solution and mandate private accounts.
Step E: Remind Congress that they promised an up or down vote and that refusal just meant being in denial of what was conceded in step one and two.
Step F: Either get a vote to ‘reform’ Social Security or use a denial to go for a major victory in the 2006 mid-terms.

In 2005 Bush mostly got stopped at Step A. Since his proposal was narrowly focused on Social Security, a ‘There is No Crisis’ narrative WITHIN the Social Security context was able to get traction. This time we are on a very different track, instead of selling this as a proposal for an ‘Ownership Society’ (where the numbers were pretty easily debunked), it is being sold as a matter of ‘Intergenerational Equity’ and ‘Fiscal Responsibility’. And from that starting point Step one is pretty much in the bag and logic gets you mostly through Step two.

Leaving us where? Well we are within a week of a vote on Step three of the first list and if it passes steps four through seven pretty much follow automatically, they may not work but I would hate to have to bet on it. Meaning that we need to stop Step three by convincing people that Step four is already in the bag. So called ‘Deficit Hawks’ strongly overlap with ‘Tax Hawks’ and with ‘Military Hawks’. Moreover they are largely from farm states and not likely to vote for big cuts there. Which really leaves only one question in my mind, do they stop with proposing big slashes to Social Security, Medicare and Medicaid? Or make new runs at Urban Transit, Community Develpment, or (non-military) Foreign Aid?

I suspect they know better than to get too ambitious and will instead just strike at Entitlements as such.

A last note on Bartlett who revealed too much. In noting that while open to tax increases in principle history showed that while Congress couldn’t help cutting future tax increases back (as with AMT), both Congress and people allowed the benefit cuts in the 1983 Reform to occur on schedule. Since future wage working retirees actually decided to go along with that for the general good while the wealthy would predictably resist paying taxes for that same general welfare that we should just go with the benefit cuts. Because they were ‘doable’.

So workers are ‘doable’. Which puts us ‘working guys’ into a whole new category, except in this case we are paying the Johns.

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Reinhart/Rogoff Shot Full of Holes Updated X3

This story has rapidly made the rounds in the blogosphere, and it is indeed a big deal. One of the most significant economics papers underlying the argument for why high government debt (especially over 90% of gross domestic product) is bad for growth was published in 2010 by Carmen Reinhart and Kenneth Rogoff, “Growth in a Time of Debt” (ungated version here).

The basic finding of this paper was that if debt exceeds 90% of GDP, then on average growth turns negative. But as Thomas Herndon, Michael Ash, and Robert Pollin report in a new paper (via Mike Konczal at Rortybomb), there are substantial errors including data omitted for no reason, a weighting formula that makes one year of negative growth by New Zealand equal to 19 years years of decent growth by the UK, and a simple error on their spreadsheet that excluded five countries from their analysis altogether (see Rortybomb for the screen shot).

The authors say that with these errors corrected, the average growth rate for 20 OECD countries from 1946 to 2009 with debt/GDP ratios over 90% is 2.2%, not the -0.1% found by Reinhart and Rogoff. This is a huge difference. We still have a negative correlation between debt/GDP and growth rate, but it is much smaller, as we can see from Figure 3 from their paper:

Debt/GDP Ratio     R/R Results     Corrected Results
Under 30%            4.1%               4.2%

30-60%                 2.8%               3.1%

60-90%                 2.8%               3.2%

Over 90%             -0.1%               2.2%

As Paul Krugman (link above) argues, what we are likely seeing is reverse causation: slow growth leads to high debt/GDP ratios. That is certainly what EU countries are finding as they implement austerity measures and slip back into recession. But even if high debt/GDP did cause slower growth, we can see it is nowhere near the crash that Reinhart and Rogoff’s paper made it out to be.

The bottom line here is simple: the focus on deficits and debt that have dominated our political discourse is completely misplaced. We need to do something about the unemployment crisis by increasing growth, something that is even truer in the European Union where the unemployment rate in Spain and Greece exceeds 26%.

Update: Reinhart and Rogoff have responded in the Wall Street Journal. They emphasize that there is still a negative correlation, and that having debt/GDP above 90% for five years or more reduces growth by 1.2 percentage points in developed countries, which is still substantial for developed economies.

Update 2: Paul Krugman’s response to Reinhart and Rogoff is here.  He pronounces it very disappointing, saying they are “evading the critique.”

Update 3:  Reinhart and Rogoff have a new response in the Financial Times (registration required). Here, they admit they committed the Excel error, but claim there was nothing nefarious in their disputed data choices:

The ‘gaps’ are explained by the fact there were still gaps in our public debt data set at the time of the paper. Our approach has been followed in many other settings where one does not want to overly weight a small number of countries that may have their own peculiarities.

This is a very odd response from two authors who equated one year of New Zealand to 19 years of the far larger UK economy. Worse still when you add the fact that by excluding several years when New Zealand had a debt/GDP ratio over 90%, they got an “average” (actually only one year) growth rate of -7.6%, when the correct average, with all relevant years over 90% included, was 2.58%, a 10.18 point swing!

It’s obvious that the austerity crowd is still going to defend this paper, but that doesn’t mean anyone else should be taken in by them.
Cross-posted from Middle Class Political Economist.

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Marathon

I posted all I can say publicly at Skippy. And even that wouldn’t work at a family blog like this one.

The rest are jokes that I am told–undoubtedly correctly, but lapsed traders are difficult to retrain*–are “too soon.”

The Phantom Scribbler came out of her retirement (first post in more than eleven months), though, so you should Go Read Her.

_______________

As for the other Issue of the Day, I repeat what I said chez Duy (whose summary here is concise and informative):

If I told you just those three “Stylized Facts”:
1. Average of -0.1
2. Median of 1.0
3. Positive:Negative ratio is 5:2
would you (a) immediately start talking about the “clear lack of growth”? or (b) even more immediately say, “There must be an outlier in the data. What’s the kurtosis?
I don’t believe I know anyone who would do (a).

If I were teaching Econ 301 and someone presented R&R’s data–see the Konczal link above–and came to their conclusion, they would be lucky to be told to do the assignment over.

*What’s the difference between a bond and a bond trader?  A bond matures.

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Wow. Seriously, Chris Cillizza and Sean Sullivan? Seriously??

Am I misunderstanding (certainly a possibility), or do the Washington Post’s Chris Cillizza and Sean Sullivan write an entire article based on a really obviously ridiculous conflation of two separate concepts: what tax law is, and what tax law should be?

The article, titled “Mitt Romney was right (on taxes),” chastises the public for hypocrisy in believing, on the one hand, by wide poll margins, that people should do whatever they can to legally reduce their taxes as much as possible, yet on the other hand disapproving of politicians (especially wealthy ones) doing exactly that. These writers use two examples: the respective cases of Mitt Romney and Barack Obama, the latter who just released his newly-filed tax returns for last year showing that he and his wife paid federal income taxes at a rate of 18.4%.

About Romney, they write:

The two-time presidential candidate, whose considerable wealth made the release of his tax returns a focal point of the 2012 campaign, insisted that he paid what was required but no more.

“I pay all the taxes that are legally required and not a dollar more,” Romney said at a debate in January 2012 just prior to releasing his 2010 and 2011 returns. “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”

Eighty-five percent of the American public should have agreed with Romney. But, of course, they didn’t. Romney was cast as trying to game the system for the benefit of he and his wealthy friends. In a February 2012 Washington Post-ABC News poll, two in three Americans said Romney did not pay his fair share of taxes (the public was split over the question in the fall). And a majority of voters in the 2012 exit poll said that Romney’s policies would generally favor the rich and he lost that portion of the vote overwhelmingly.

About Obama, they say, “The Drudge Report, a popular conservative-leaning aggregation site, quickly went with a banner expressing incredulity at the 18 percent rate. Conservatives on twitter were similarly disgruntled.”  As if it’s the general public rather than the far-right starve-the-beast crowd that’s shocked.  And as if it’s even clear that the Drudge Report writer’s incredulity is about Obama’s paying only the legally required amount rather than the lowness of the legally required amount.  The headline, which is not attached to a story, best as I can tell, but instead simply links to the Wall Street Journal news report about Obama’s tax return, reads, “Obama only pays tax rate of 18%?”

Well, yes.  That’s what Obama is actively trying to change: the lowness of the federal income taxes paid by the wealthy.

That much is obvious.  Obama campaigned on a promise to raise federal tax revenues obtained from the wealthy.  Romney campaigned on a promise to lower the tax revenues obtained from the wealthy, who are, y’know, jobs creators who took risks.  Risks!  Including, for many of them, such as Mitt and Ann Romney themselves and, especially, their sons, being born into a wealthy family.  Warren Buffett is not a politician, but it’s a safe bet that he paid no more income taxes than he owed under current tax law, even though he has been in the vanguard of high-profile people who openly plead with politicians to raise tax rates for the wealthy and also remove the outrageous loopholes available to them.

It’s also a safe bet–even safer than, say, betting on Berkshire Hathaway stock–that Warren Buffett has never had a retirement-savings account in a Cayman Islands bank that has between $20 million and $120 million (or the deflationary equivalent) in it, achieved almost certainly by stated initial gross devaluation of equities placed into the account.  And that he did not avail himself of the IRS’s 2009 tax amnesty program for people who were shielding income from the IRS in Swiss banks because he did shield income from the IRS in Swiss banks.  Romney likely did both, which probably is why he refused to release to the public tax documents that would dispel those inferences.  The only other reasonably possible motive for his failure to release those documents is that they would have highlighted the outrageousness of legal tax loopholes that Romney did not want to draw attention to–also a possibility, although, I suspect, not the actual, or at least not the predominant, one), but in any event not one that supports these journalists’ characterization of the public’s poll responses as hypocritical.

What’s really remarkable, in my opinion, is that at least one of these two Washington Post political writers, one of them very high-profile–and as a regular reader of their blog, The Fix, I suspect it is Cillizza, the high-profile one, rather than Sullivan–thinks that a poll question using the phrase “pay their fair share of taxes” references not preferred tax policy but instead actual, current tax policy. The poll question almost certainly was intended to reach, and was understood by the poll respondents to be asking, about the voter’s preferred tax law, not about how the voter thinks people should act, by choice, under current, existing tax law.  With the caveat, of course, that most people don’t think wealthy people such as the Romneys should violate tax law, as many, many people who followed the specifics of the Romney-tax-returns controversy last year did conclude.

There is, in other words, nothing even slightly hypocritical in believing that people are morally entitled to avail themselves of legal tax breaks but that tax law should be amended to remove some of those tax breaks, to raise tax rates on the wealthy, to tax investment income at the same or near-same rate as investment income, and to tax large estates.  Or to do at least some of these things.

The belief that the law in its current form does not exact payment of a fair share of tax revenues from the wealthy, and the belief that it’s fine for people to employ current tax law to lower their own taxes, irrespective of their views on what tax policy should be, are not contradictory. Unless, like one or both of these journalists, you think the phrase “fair share of taxes” means two distinct and contrary things at once.  But most people, I’m pretty sure, understand quite well what that phrase addresses.  And it’s only one of those two things, not both.

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