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Krugman on Trump and Trade: Not Tariffic

Krugman on Trump and Trade: Not Tariffic

I’m no fan of the Trump tariff tantrum, but weak criticism of it does no one a service.  And while I agree with Paul Krugman on a lot of things, he has a long history of being misguided on trade policy.  Alas, his op-ed in today’s New York Times continues the legacy of the Bad Krugman, not the good one.

Before getting to the theoretical meat, let’s take a moment to observe the holes in his argument that should have been identified and vetted before publication.

1. He cites a graphic from the Peterson Institute for International Economics that claims that Trump’s tariffs on Chinese goods have risen to 21.5% this month from 3.1% under Obama (under the Most Favored Nation provision).  Applied to $500 billion in imports from China, that comes to almost $100 billion more in tariff collections, right?  Not so fast.  He reproduces a FRED chart that shows tariff revenue rising by only about $35 billion during the same period.  He hedges a bit (“the revenue numbers don’t yet include the full range of Trump tariffs”) and then tries to squirm his way out of the evidence that US consumers aren’t really paying $100 billion more for these goods.  We’ll get to the squirm in a moment, but note that some portion of the tariff will be paid by Chinese producers in the form of lower prices to maintain market share, and the evidence suggests that this portion is much too great to simply handwave away.

 

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Climate Equity: What Is It?

Climate Equity: What Is It?

While action against climate change languishes, the rhetoric keeps getting more intense.  For several years now it hasn’t been enough to demand climate policy; we need climate justice.  We will not only eliminate fossil fuels in a decade or three, we will solve the problems of poverty and discrimination, and all in a single political package.  It sounds good, but what does it mean?

You might look for an answer in new legislation introduced by AOC and Kamala Harris, the Climate Equity Act.  As reported yesterday, it establishes a federal Office of Climate and Environmental Justice Accountability, whose job would be to evaluate all proposed regulations according to their impact on low income communities.  No doubt this would bring more attention to issues at the intersection of green politics and social justice, which is all to the good, but creating new layers of oversight still doesn’t answer the question, what is climate justice?

Is justice about taking care of, say, the bottom 20% of the income distribution?  The bottom half?  Some other number?  And what counts as an impact?

The first thing to notice is that, by limiting matters of justice to low income communities, the bill reinforces a politics that divides the world into the socially excluded, the poorest and most vulnerable, on the one hand and everyone else on the other.  The majority of voters are effectively enlisted as allies of those at the bottom.  This is the consequence of drawing the line where they do.  A very different politics was proposed by Occupy, placing 99% of us in one camp and the top 1% in the other.

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Pledging Zero Carbon Emissions by 2030 or 2050: Does it Matter?

Pledging Zero Carbon Emissions by 2030 or 2050: Does it Matter?

We now have two responses to the climate emergency battling it out among House Democrats, the “aggressive” 2030 target for net zero emissions folded into the Green New Deal and a more “moderate” 2050 target for the same, just announced by a group of mainstream legislators.  How significant is this difference?  Does where you stand on climate policy depend on whether your policy has a 2030 or 2050 checkpoint?

I say no.  Neither target has any more than symbolic value, and what the government does or doesn’t do to prevent a klimapocalypse (can we use this interlingual word?) won’t depend on which one gets chosen.

Endpoint targets have no constraining power at all.  A 2030 target won’t be met or unmet until 2030, and by then it will be too late.  Same, and worse, for a 2050 target.  Moreover, the whole target idea is based on a misconception of how carbon emissions work.  The CO2 we pump into the atmosphere will remain for several human generations; it accumulates, and the sum of the carbon we emit this year plus next plus the one after and so on is what will determine how much climate change we and our descendants will have to endure.  (The relationship between our emissions and the earth system’s response is complex and may embody tipping points due to feedback effects.)  Every additional ton of carbon counts the same, whether it occurs today or just before some arbitrary target date.

What we need instead is a carbon budget, an announced total quantity of emissions we intend to hold ourselves to, starting right now and continuing through the end of the century.  That way, whether we’re living up to our pledge or scrapping it is put to us each year based on how quickly we’re using up our quota.  It sets the meter running now.

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Repeat Message to the Mainstream Media: Stop Serving as Trump’s Propaganda Machine

Repeat Message to the Mainstream Media: Stop Serving as Trump’s Propaganda Machine

I don’t usually like to repeat myself in these posts, but when it comes to the media getting suckered by Trump and serving as bots in his reelection campaign, I have to get shrill: no more headlines reporting on Trump’s tweets, taunts and tantrums!  Just stop!  Now!

The New York Times is one of the worst, and they would do well to read their own reportage on the matter.  Today’s edition carries an article entitled Trump Aims Words at Working Class, but Policies at Its Bosses, and the body says exactly that—which should come as no surprise to anyone who has been remotely paying attention the past two and a half years.  There is virtually no correspondence between what Trump says and what he does.  (And the exceptions, like border repression and the Muslim travel ban, are in policy realms in which he [unfortunately] enjoys majority support.)

Trumpian blather and obscenity are not an accident.  He has been doing this stuff for decades.  He gets to make his background and true agenda invisible while he slums as a dude with 1950s white working class politics, at the same time reaping the benefit of being perceived as unscripted, honest-for-better-or-worse and the opposite of every politician who has ever tried to put one past you.  But every word he utters is the opposite of what it claims to be: Trump’s themes are carefully scripted, cavalierly dishonest and political to the core.  It is all about misdirection, and like a devious martial arts move, it turns his opposition’s disdain to his own use.

The solution is simple.  The media should just stop megaphoning Trump’s mouth unless he is announcing a policy or personnel action he has actually taken.  Make Trump’s true agenda visible by stuffing everything else into the asides or back pages or just deleting it altogether.

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Frank Ackerman, 1946-2019

Frank Ackerman, 1946-2019

The world of economics suffered a sad loss a few days ago (July 15) with the death of Frank Ackerman.  Frank was a mainstay of the activist left within the profession; he was one of the founders of the magazine Dollars and Sense and could always be found at activities of the Union for Radical Political Economics.  He was notable for being one of the most exacting of critical economists, never substituting political passion for careful analysis and documentation of his evidence.  His “cool” personal style may have made him less prominent in the public eye, but those who knew him realized what an important role he served.

I crossed paths with him many times because of our mutual interest in, and horror at, benefit-cost analysis.  Frank coauthored his influential book Priceless: On Knowing The Price Of Everything And The Value Of Nothing to demonstrate that economic methodologies that promised to replace ideology with pragmatism were in fact riddled with ideology themselves.  His final book was Worst Case Economics, which argued sensibly for a prudential approach in finance and climate change.

I hope readers who have had a closer personal connection to Frank will use the comment thread or posts of their own to tell their stories.  This is an important transitional moment for dissident economics.

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I Think, Therefore I Know: San Francisco Edition

I Think, Therefore I Know: San Francisco Edition

Strange as it may seem, the biggest stumbling block on much of the left may be a crude philosophical error, dogmatic subjectivism.  This is a position that holds that subjective experience is the highest form of knowledge, whose claims can’t be challenged by “lesser” criteria like logical analysis or empirical observation.  To the extreme subjectivist, if I feel something to be true there is no legitimate counterargument: I think (or feel), therefore I know.

This is at the heart of the current blowup over the mural at George Washington High School in San Francisco.  It was painted in the 1930s by Victor Arnautoff, a member of the Communist Party and acolyte of Diego Rivera, under the auspices of the Works Progress Administration.  To make his point about the centrality of racism and oppression in American history, he portrayed Washington as the slaveowner he was, with a group of slaves toiling away to make him rich.  He also showed pioneers headed westward past the body of a dead Indian.  Not surprisingly, Arnautoff got into trouble during the McCarthy era and was effectively hounded out of the world of public art.

But several groups and individuals who claim to speak for today’s oppressed think the mural glorifies racist violence and makes the high school an “unsafe” environment.  The San Francisco School Board’s advisory group, The Reflection and Action Working Group, deemed Arnautoff “glorifies slavery, genocide, colonization, Manifest Destiny, white supremacy, oppression, etc.”  One of the Board members said that efforts to save the mural from being painted over were reflective of “white supremacy”, since the artwork some want to save is “white property”, while its effects are harmful to “Black and Brown ppl [people]”.  The head of the high school’s Indian Education Program asserts this and other Arnautoff murals “glorify the white man’s role and dismiss the humanity of other people who are still alive….”  Others bring up the triggering effect of images that remind us of the brutality that permeates American history.

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Elliott Maraniss

Elliott Maraniss

It’s with more than average interest that I just read a review of David Maraniss’ new book about his father Elliott, A Good American Family: The Red Scare and My Father.  I knew Elliott during my years in Madison as a contributing writer to his newspaper, the Capital Times, and as an informal sounding board for his thoughts on the New Left.  The period in question was the early 1970s.

First, Elliott was the most visibly nervous person I had ever met.  He talked quickly in a loud but skittish voice, and his usual facial expression was a half-smile that seemed to reflect a deep uncertainty about everyone and everything.  Of course, he held a position of authority—editor—and he was able to make decisions rapidly and with conviction.  Still, it always seemed there was something more going on; I had no idea.

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The New York Times: A Propaganda Machine for Trump

The New York Times: A Propaganda Machine for Trump

The Times thinks it’s leading the forces of reason and light against Donald Trump, but it doesn’t have a clue.  Every day their front page is festooned with the latest noxious Trumpian remark, followed by paragraphs of commentary on how unprecedented it is for a president to talk this way and how appalled most politicians and political observers are.  They think Trump is making one mistake after another, and if their readers are exposed to the whole lot of them, they will turn against the Donald.  But his pompous bullying is not a mistake at all; it’s pretty much all he does.

Trump has been nothing but consistent during his first run as a reality-show business tycoon and his second as a national politician.  He presents himself as a sort of alpha male, bigger, badder and sexier than anyone else on the block.  People don’t support him because they think he’s nice or sophisticated in his reasoning; they want someone who can get the job done, and Trump presents himself as willing and able to bash his way to success.  Threats and insults are standard operating procedure.

The irony, of course, is that once you get past his mouth he turns out to be an uncommonly weak and ineffectual president.  True, his allies and cronies are securing judgeships and eviscerating regulations, but Trump himself is 99% PR.  He was a fake business kingpin the first time around, and now he’s a fake president.  His only job is to distract you from what the real movers and shakers are doing.

So the Times, by giving us megadoses of Trump’s mouth are playing right into his strategy.  If they secretly want him to be re-elected, they should go on doing it.  On the off-chance that they want to defeat the guy, however, here’s a better way:

1. No, absolutely no, front page news on Trump unless he actually does something—and saying stupid or mean stuff doesn’t qualify as doing.

2. Have a regular section deeper in the paper, on page 8 say, devoted to the man’s various harangues and tweets.  Record his weird and ugly babbling for posterity.  Provide reputable internet sources for factual correctives.  But keep it small and tucked away.

3. Change the ruling meme from “He is upending the world through his threats and insults” to “He is a blowhard who actually does almost nothing.”  Treat him not like an alpha but more like an omega with endless vocalizations, best ignored.

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CORE and Periphery in the Reform of Econ 101

CORE and Periphery in the Reform of Econ 101

Thanks to Greg Mankiw, I’ve seen a preview of the piece by Sam Bowles and Wendy Carlin that will be published in a forthcoming Journal of Economic Literature.  It’s apparently part of a roundtable on the teaching of introductory economics, and not surprisingly Bowles and Carlin focus on the freely downloadable CORE text produced with support from the Institute for New Economic Thinking.  The starting point of their article is the revolution in economic textbooks inaugurated by Paul Samuelson in 1948, when Keynesian analysis and policy became the centerpiece of what every introductory student was expected to know.  Today, they say, we need a new revolution, since the introductory texts are equally out of date and fail to grapple with the issues students rightly care about.

Much of the article is taken up with a detailed comparison of their text to two leading competitors, those of Mankiw and Krugman/Wells.  They use frequency of word use to contrast the relative importance of different topics and describe in a more general way the key benchmark models that structure the alternative narratives.  They make the point that major changes in economic theory, such as greater behavioral realism, the relevance of institutions and the role of game theory, are largely absent from the mainstream texts but fundamental to CORE’s.

Of course, I strongly urge everyone one of you who happens to be an economics instructor to check out CORE.  It brings together the thoughts of a number of leading economists on how to make frontier concepts accessible to novices.  It is intellectually stimulating, and the price is right.

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A Bernie Sanders Narrative for Seniors

A Bernie Sanders Narrative for Seniors

What follows is some unsolicited advice for the Sanders campaign.

Politico has an important piece on the downside of the extraordinary age bias in Sanders’ support.  Like a teeter totter, the large advantage Sanders enjoys among younger voters is counterbalanced by his dismal showing among the older crowd.  The article reviews voting breakdowns from the 2016 campaign and current poll results, and it shows that Sanders is not just behind among seniors, but way, way behind.  His political strengths guarantee he will survive the winnowing of the twenty-odd 2020 pretenders, but sheer arithmetic suggests he will need to make significant inroads among older voters, something he hasn’t done up to this point, to overtake Biden—assuming of course Biden doesn’t overtake himself.

So how can he do this?  The first thing to realize is that he doesn’t need absolute majorities among retirees and near-retires, just enough support so his advantage among the non-elderly isn’t erased.  The second is that direct material benefits alone are never enough.  People don’t simply vote in their immediate financial interest, although of course interests play an essential role.  Economic motives are like nuclei around which layers of narrative form, but it’s the narrative—the meaning—that orients people, and an economic condition can be explained in multiple ways.  Not all explanations are equally valid, of course, but in politics that’s largely irrelevant.  So yes, Sanders can and should talk up Social Security expansion and how universal health insurance would benefit  those on Medicare too.  But that’s not a sufficient political strategy; it lacks an encompassing narrative.  This narrative doesn’t have to be one all older people will gravitate to, but it has to speak to a significant portion of them.

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