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How To Debate Paul Krugman

On Saturday Mish wrote a really awful article with those words in it’s title.

The article borrows these words and includes a quote from an even more awful article by Austrian school economist and author Detlev Schlichter.  Part of that quote is presented here.

What makes him [PK] so annoying is his unquestioning, reflexive and almost childlike enthusiasm for state intervention, even in the face of its obvious failure, and his apparent unwillingness to probe any deeper into the real causes of our present economic problems or to show any willingness to investigate the effectiveness or ineffectiveness of his particular medicine.

I want to make something perfectly clear before we go any further.  It is fine to disagree with Krugman, or me, or the Pope, or anyone else, as long as you bring facts, data, and some basic skill in rational discourse.  What is not fine is misrepresenting someone’s position and then holding the misrepresentation up to ridicule.  That is both vile and stupid.

Back to the quote: does that sound anything like the Paul Krugman who puts his ideas out there for the world to see on a daily basis?  What I see in Krugman is thoughtful analysis, and deep probing into both the causes of our problems and the consequences of economic policy decisions.  You don’t have to agree with his assesments, but you cannot validly deny that he is making them.

When the opportunities smack me in the face like this, I put on my Krugman Truth Squad hat. Schlichter offers us a standard issue stale Austrian anti-Krugman diatribe. You have to wonder if he has ever bothered to read anything that Krugman has written.  His wordy, repetitive, rambling, semi-coherent, desperate-sounding article – which I cannot recommend highly enough – is an impressive exercise in partial-truths, distortions, make believe, and straw man stuffing.  He then hints that we should go back to the gold standard and totally unfettered free markets.

Schlichter lists Krugman’s alleged assumptions, condensed here:

1)   Recessions, depressions and crises are the result of the unhampered market. 
2)   The Great Depression was caused by uncontrolled markets.
3)   Recessions, depressions and crises are practically the result of one problem: a lack of aggregate demand.  .  .  .   It is the role of government to get people spending again. This is done by printing money and causing inflation so that people spend.
 4)   The Great Depression was solved by the government spending lots of money and the central bank printing lots of money.

Let’s pause here for a moment and set aside the redundancy.  I’m not sure points 1 and 2 represent PK’s view with any degree of accuracy.  Certainly they are gross oversimplifications and neglect other factors.  But if they are true, then point 3 can’t be.  Let’s set that aside, as well.  Points 3 and 4 are reasonably close to the truth, though if you read the original, point 3 runs off the rails as it continues. 

From there it only gets worse.

5)   This explains ALL economic problems.

So, according to Schlechter, Keynes taught, Krugman believes – and would have us believe – that loose money policies and causing inflation are the right policy measures not only for recessions, but for boom times, and periods of inflation, hyper-inflation, stag-flation, or any other problem you can think of.  Even I know enough about Keynes to call that out as false.

The redundency continues to pile up.  I’ll extract one more point. [#’s 6,7, and 8 are repetitions of #4 with various degrees of elaboration and snark.]

7)   If after many rounds of money printing and deficit spending, there is still a recession, then only one conclusion is permissible: There was obviously not enough money printing and deficit spending. We need more of it.

I don’t claim to know everything, but I’m not aware of any situation in recent history that has played out like this, so it looks like a Schlichterian fantasy.  In the post WW II era, the combination of loose money and fiscal expansion has generally kept recessions rather short, leading to V-shaped recoveries, and putting the brakes on too quickly has occasionally led to a double dip.  England has recently experienced an austerity-induced double dip recession.  In the current U. S. doldrums, Krugman tells us fiscal frugality has led to a slow and limping recovery.  This is credible since spending is flat and GDP growth is anemic. [Graph 1]

Graph 1, Current Expenditures and GDP (log scale)

Has any modern major economy had a recession persist after “many rounds of money printing and deficit spending”?  Even in the Great Depression things turned around pretty quickly once New Deal policies were implemented.  But, as PK also tells us, recessions brought on by a financial crisis are different from the typical post WW II recession.

Schlichter doesn’t let up. Though this statement [emphasis added], “Krugman is the one who should be made to explain his policy recommendations and who has to answer the criticism that policies like the ones he is recommending got us into this mess in the first place and that his policy ideas have been implemented for years to no effect, at least no positive effect.” is hard to beat for sheer negation of reality [and for channeling Ron Paul],  the real capper is this: “Krugman is practicing Keynesianism as a religion.”

It is because of statements like this that I lose patience with people who use words like “disingenuous.” You can supply your own alternative vocabulary   Check Krugman’s Op-Eds and blog posts, where he repeatedly demonstrates reality with graphs and tables, shows how austerity is failing right now with real-world examples, and admits it when he gets something wrong.  When is the last time you saw a Krugman-hater do that?

Mish, to his eternal discredit, says of this nonsense: ” Moreover, it appears to be 100% accurate.”

But, Mish continues, the real way to debate Krugman is demonstrated by Economist Hans Hermann-Hoppe in this one minute video.

This is genuinely awesome.   That an economist can be so thoroughly wrong – wrong in general and wrong in every particular – about what Keynesianism is and does, leaves me speechless, and that’s saying something.

OK – almost speechless.  Any child can see that the earth is flat and the sun revolves around it.  So let’s forget the trivially unimportant technical details and ask simple-minded, allegedly probing questions that in this case are totally unrelated not only to the policies Keynes and Krugman propose, but to anything else in the real world, and then point and stare when these questions cannot be answered – by anyone, while your minions nod approvingly.

But would it work?  Mish concludes this way:

Krugman would respond with incomprehensible gibberish “for wonks only” as well as typical Keynesian nonsense about how paying people to dig holes and other people to fill them up would start a chain reaction of growth.

A child would see the answer was preposterous, but not a trained economist, politician, or brainwashed academic. Paul Krugman, keynesian economists in general, politicians wanting a free lunch, and most academics are all incurable.

Nonetheless, Hans Hermann-Hoppe’s answer is indeed the correct one. By asking questions a child will understand, some non-brainwashed people will see Keynesian and Monetary stimulus for what they really are: economic stupidity.

In a follow up article [with a 5 point list that includes 2 naked assertion and 3 irrelevancies {seriously – Zimbabwe?!?}] Mish makes it clear that in his view monetary and fiscal stimulus are BOTH stupid.   So, at this point it looks as if he – with his straw man army and blatant intellectual nihilism –  and I have devolved into a schoolyard game of calling each other stupid.

But I’m quite sure Mish is not stupid, and I’m fairly certain I’m not either.  The real questions are these: who is paying attention to reality, whose policies make things better or worse in a given situation [absolutism, anyone?] and whose concepts have had some predictive power over the last several years.  [Here’s a hint: it’s not the Austerians.]

So, maybe a better way to phrase it is, “Who is practicing their economics as a religion?”

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Brian Williams Thinks Raising the Debt Ceiling Means Increasing BUDGET APPROPRIATIONS. O Peter Jennings, Walter Cronkite, and Edward R. Murrow, Where Art Thou? — [UPDATED]

I watched NBC Nightly News with Brian Williams last night.  Big Mistake.

Big mistake.

Because now I’m really confused.  I was pretty darn sure until then that “raising the debt ceiling” meant allowing the Treasury Department to pay financial obligations already incurred, such as interest on bonds, Medicare payments, and contract obligations, and to allow continued payments for ongoing financial obligations such as Social Security payments, Veterans’ benefits, and salary payments to federal employees, some of whose jobs are sort of important.  (Think: air traffic controllers.)  I had thought that because I had followed the recurring-crisis news reports about it since 2011, when the first of the crises began.  And because Obama had actually explained it in his Jan. 14 press conference.

But now, well, I think I might have misunderstood, because after Williams reported that the Senate yesterday had approved the House bill to “suspend” the debt ceiling through May 19, he added, shaking his head in disapproval, something like: “This is Washington’s version of kicking the can down the road.  Our debt is now more than a trillion dollars.”

I suggest that next time Williams is onboard one of NBC’s corporate jets, he might read, say, Paul Krugman’s column in today’s New York Times.  It doesn’t explain the difference between the debt ceiling statute and budget-appropriations statutes, so Williams will continue to conflate the two until he digs deeper and reads earlier Krugman columns or other mainstream-media articles that did that.  But it does (yet again)–to borrow a phrase from Paul Ryan in his Meet the Press interview aired last Sunday–debate the efficacy of Keynesian economics, and whether anti-Keynesian “austerity” measures reduce or instead increase national debt in real terms and, more important (although Williams apparently doesn’t know this), decrease or instead increase debt relative to GDP.

But if he is going to wait until he’s up there in the air in that Learjet to read the Krugman column, I hope the trip occurs before May 20.  

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UPDATE: Additional recommended reading for Brian Williams: Joe Scarborough, Paul Krugman and the economist-pundit divide on debt and deficits, Neil Irwin, Washington Post, yesterday.

Scarborough, though, at least knows what the debt ceiling law is, and that it isn’t the same as budget-appropriations legislation.  He does, after all, work for MSNBC, not, say, NBC News.

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What Dana Milbank’s Stunningly Awful Column Today Reveals About the Washington Press Corps – [UPDATED]

Okay.  There’s no way to do justice to Washington Post centerist columnist Dana Milbank’s column today about Obama’s “presser” yesterday by just summarizing it or quoting a sentence or short paragraph from it.  And justice for that column, titled “President Congeniality talks tough,” is what I want. So here are the first six (blessedly short) paragraphs of it:

“I’m a pretty friendly guy,” President Obama said near the end of his White House news conference Monday afternoon.

The claim might have been a touch more plausible if he hadn’t spent the bulk of the previous hour demonstrating just how adversarial he could be. Indeed, there was no precipitating event that led him to schedule the last-minute session in the East Room — lending credibility to the theory that he summoned reporters so he could bait Republicans.

“If congressional Republicans refuse to pay America’s bills on time, Social Security checks and veterans benefits will be delayed,” the friendly president said, explaining his refusal to negotiate over increasing the debt limit.

Calling the opposition’s stance “absurd,” Obama advised Republicans that they “have two choices here: They can act responsibly and pay America’s bills, or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy. . . . And they better choose quickly, because time is running short.”

And that was just the opening statement. The hectoring continued through the Q&A. Exactly one month after the massacre at an elementary school in Newtown, Conn., Obama said of debt-reduction talks: “What I will not do is to have that negotiation with a gun at the head of the American people.”

The Republicans’ view, President Congeniality added, “was rejected by the American people when it was debated during the presidential campaign. . . . But if the House Republicans disagree with that and they want to shut down the government to see if they can get their way on it, that’s their prerogative.”

I agree completely.  The president should never summon White House reporters to the White House press room in order to hold a press conference.  Or at least not to bait Republicans.

And, I guess, not even to respond to Republican daily baiting of him by falsely telling the public that a quirk in the law, requiring Congress to authorize the Treasury to pay the government’s already-incurred bills and bond interest, and pay such things as salaries to military personnel, air traffic controllers, Agriculture Department food inspectors, and Homeland Security airport marshals–not to mention not-yet-but-about-to-be owed Social Security payments, Medicaid payments to nursing homes, and Medicare payments to physicians and hospitals–is instead a request by the president and the Democrats in Congress to increase spending appropriations.  

No, sir.  Much better to allow the Republicans to prey on the public’s misunderstanding of the phrase “raise the debt ceiling.”   

Pass the ransom note, Republicans. Just do it through the mainstream media, as you have been doing.  They’ll happily repeat your message, complete with disinformation, without adding their own: a brief explanation of what the debt ceiling actually is.  Apparently, congressional reporters, unlike the White House press corp, don’t mind being summoned as bait.  Nor do the Sunday talk-show folk.  

Worms, all.

Milbank does allow that:

Arguably, Obama’s no-more-Mr.-Nice-Guy approach is good politics. His first-term experience made clear that he gained nothing from Republicans when he took a passive approach. When it comes to getting things done in Washington, there’s no substitute for forceful presidential leadership. Teddy Roosevelt, whose oil-on-canvas likeness gazed at Obama from an East Room wall, probably would have approved.

Actually, not even just arguably, Milbank conflates statements of fact–in this instance, fact about what the debt ceiling is–with politics.  Certainly, correcting the opposition’s campaign of disinformation, and educating the public about a critical but technical statute that almost no one other than Washington pols, fiscal-policy wonks, and journalists who cover these people and subjects are familiar with, is damn good politics.  It is, in fact, absolutely necessary politics.  It’s dereliction-of-duty-for-failure-to-do-so politics.  

But statements of fact, and statements of policy based on the statements of fact, are not themselves mere politics.  They’re statements of fact and statements of policy based on those facts.

What’s most disturbing about this column is not that one high-profile political columnist confuses these things, but that he says that the entire White House press corp in attendance at the press conference yesterday does.  

So I suggest that they get out more.  Milbank, for example, might consider stepping out of Washington and into, maybe, Baltimore.  Not a long drive, really.  There, he could stop in at a coffee shop or mall and maybe ask people whether they had heard or read of Obama’s comments yesterday and, if so, whether they understood more now about the what debt ceiling statute is than they did a day before.

Then he can report his findings to the rest of the White House press corp.  And offer a different theory about the reason Obama summoned them to the press room yesterday.

Or he could just start reading Angry Bear.  

Seriously, I hope Paul Krugman and other “names” will expose Milbank’s argument for what it is. Obama has that tendency to cower whenever a media meme takes hold on fiscal-policy issues. Milbank and the White House press corp don’t read Angry Bear, but they might read Krugman’s blog. 

  Nah; probably not.  It’s not like Krugman’s a centerist, or anything. Still, it’s worth a shot, especially since what matters most is that Obama or someone close to him might.
This Bear is really ANGRY today.

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UPDATED:  Well, I woke up this morning to a few congratulatory emails, including from some Bears, telling me that Paul Krugman linked to my post yesterday in a blog post of his.  Awesome!  (Thanks, Prof. Krugman. And thanks to everyone for the congrats.)  

But I also want to republish here as an update an exchange between Bear JazzB. and me in the comments to the post:

JazzBumpa:   I always thought Milbank was more or less OK.

But this is really stupid.

Me:  Milbank was terrific back when he was the Post’s WH correspondent during the first G.W. Bush term, JazzB. But he rarely writes anything in his column that I think is really insightful or informative, and sometimes he writes a column that’s just baffling. Like yesterday’s.

What really dismays me is that he and some of the other “name” pundits flat-out missed the purpose of Obama’s Monday press conference. Obama was explaining what the debt ceiling law actually is–and what it is not. An explanation that was (and is) necessity because it’s a law that sounds like it means something that it does not, and that means something that it does not sound like it means–a fact that the Repubs have abused nearly every time one of them says anything publicly about it.

Dave Weigel wrote a [Politics article]* on Slate on Monday after the press conference that started out sounding like he missed the point–and then, wham!  He hit the nail on the head, pointing out that back in Sept. Obama said he planned to speak much more, directly, to the public and explain policy issues.  Weigel said that the Repubs mocked that then, but learned on Monday what he meant.  

And it does seem that the Repubs did learn a lot on Monday, because since then, several have publicly acknowledged that the debt ceiling game is over.  Yet Milbank and a few other pundits didn’t catch on.

And as long as I’m updating here, I’ll indulge myself and republish another exchange I had in the Comments to the post–this one with FastCommerce:

FastCommerce:  Worms. You an idiot.

Me:  Oh, dear. FastCommerce, it looks like you took the BAIT.

So sorry, folks.  But I couldn’t resist.

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*In my original comment, I said Weigel wrote a blog post.  Actually, what he wrote was a full-length article, not a comment or short piece on his Slate blog.  (Those of us who are longtime Slate addicts know there’s a difference.)

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Eh. I’ve changed my mind. [UPDATED, twice!]

I want to remove the post I posted this afternoon called “Harry Reid Throws Down the Gauntlet In Front of … Obama.  Hurray.”  I think Reid has done exactly that, and I think he’ll play a much larger role in the debt ceiling debate and other fiscal-policy debates going forward, as will the other Dem senators.  Obama will have to get Reid’s approval before he caves on anything major.  And I don’t think Reid will approve of any major cave.  So it doesn’t matter that much whether Obama wants to cave.  What matters is the extent to which Reid will let him cave.  

The main point of my post was to say that the pol/pundit/news-analysis crowd seems to have missed this.  But in my post, I also said I’m glad that the agreement was reached, and gave my reasons why I thought it was better than going over the cliff.  I said I was concerned about the effect of failing to extend unemployment insurance, and some other things.  And, although I didn’t say this in my post, I think Boehner would not have allowed an up-or-down vote on the $250,000 income-tax-hike floor, so some compromise probably would have come about then anyway.

But I’ve changed my mind–or, rather, I’m just not sure–that going over the cliff would not have gotten a better result on the Bush tax cuts.  So … apologies to my hero. I agree with Paul Krugman, after all. 
Whew. A return to normalcy.

That said, I don’t think this deal is the end on the issue of the permanence of the Bush tax hikes.  I think that during the upcoming debt ceiling controversy, the public will come to realize that important expenditures will have to be cut, or the deficit reduced less, because of the loss of revenue as a result of the failure to end those tax cuts except for those with incomes above $450,000, and the failure to lower the estate tax floor (a real travesty).  

But while Obama can’t seem to articulate this with any specificity or clarity, others–including Elizabeth Warren–in the new Senate will, I think.  The public is paying attention.  And Obama is no longer the only Democratic game in town.  A recognition of this is what’s been missing from most of the commentary and analysis.  But the next two years, and the 2014 campaign, will be playing out on a Dem-policy home field.  The Republicans lost the home-field advantage when they lost the election.  

To borrow a line from Ann Romney, it’s our turn now.
Should I leave the earlier post, or remove it, readers?

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UPDATE:  Oh, no! I’ve changed my mind again!  I just read Matthew Yglesias’s take on all this, and he agrees with my first post.  (Okay, my first post agrees with his take; he posted first.)  And he’s completely convinced me that I was right the first time.

So, now the question is: Should I remove this post?  OMG.  This cliff thing is really stressing me out.

The good news, now that I’ve changed my mind again, is that Yglesias thinks Krugman agrees with my first post, not my second one.

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SECOND UPDATE: Wow. A consensus is developing. I was right the first time!

Seriously, E. J. Dionne posted the definitive column on this. He’s right. This is a significant start to a progressive future. That was my immediate reaction. And it’s my final one.

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Harry Reid Throws Down the Gauntlet In Front of … Obama. Hurray. [UPDATED]

Obama pushed forward despite strong reservations expressed by top congressional Democrats — especially Reid — who privately described it as a “bad deal” that would increase Republican leverage in future budget fights. …

Reid figured Democrats could get a more favorable agreement if they waited. When Reid saw an offer that Obama had considered pitching to McConnell on Sunday, which included provisions opposed by Senate Democrats, the majority leader crumpled up the document and tossed it into the burning fireplace of his Capitol office.

The fiscal cliff deal that almost wasn’t, John Bresnahan, Carrie Budoff Brown, Manu Raju and Jake Sherman, Politico, today (H/T Josh Voorhees, Slate)

I’m happy with the ‘cliff’ deal.  That’s because it’s only a start. Here’s what I mean:*

Although he’s been strongly criticized by many liberals for caving on the $250,000 floor for a raise in the income tax rates after saying repeatedly that that was a ‘must’ for him, Obama was, in my opinion, right to sign off on the ultimate deal, in which the rate for incomes above $450,000 will rise to 39.6%–not the earlier-discussed possible compromise of 37% for incomes above $250,000–and in which capital gains taxes also will rise, to 20% for that same group.  

I suspect that a huge factor in Obama’s preference for this deal rather than going over the cliff and forcing an up-or-down House vote on the rate rise on incomes above $250,000 was the issue of the expiration of extended unemployment-compensation benefits for about two million people, the loss of which, whether for a few weeks or permanently, would have been devastating for the people affected and surely would not have helped the economy.  Extension of those benefits may well have been a casualty even of a successful post-cliff bill lowering the floor for the rise in income tax rates.  So might the Earned Income Tax Credit, which of course benefits members of the 47% who Mitt Romney and many other Republican politicians do not think it’s their job to worry about.

So I disagree, for once, with my beloved ideological alter ego, Paul Krugman that it might have been preferable to go over the cliff, even for a few weeks, since little economic damage would have resulted during that brief period.  The damage would have been acute to quite a number of people, if not to the economy as a whole.  That’s important.

Which is not to say that it was reason enough to give away the store.  Which, if the Politico account is accurate, apparently was, as of Sunday, what Obama wanted to do–until Harry Reid reminded him that Senate Democrats would not rubber-stamp his proposal and that approval by the Senate Democrats was as important as approval by the House.  Reid presumably told Obama that he (Reid) would not allow a giveaway bill to be brought to the Senate floor.  Just as Boehner could deny a floor vote on the bill in the House, Reid could do the same in the Senate.  And he would do exactly that on a giveaway of the type that Obama has a habit of offering.  

Among all the commentary about winners and losers from the events and the outcome, there’s been little mention of Reid.  I agree with the consensus about who, among those mentioned in the particular article, won and who lost.  I certainly agree that Biden is a big winner.  I think he’ll be playing a larger role in negotiations and communication with Congress, and that’s good thing.  But I think the negotiations and communications will be with Reid as much as with McConnell and Boehner.  And that’s a really good thing.

For that reason–Harry Reid’s and the other Senate Democrats’ increased importance in negotiations on major fiscal deals–but only for that reason, I don’t share the deep fear that Krugman and many other liberals have right now that Obama will largely hand the advantage to the Republicans.  He may try, just as he did suddenly two weeks ago, when days after saying he wouldn’t budge from the $250,000 tax-rate-increase floor, he spontaneously offered a $400,000 floor and (apparently) a reduced cost of living adjustment for Social Security–which, given his propensity to negotiate with himself rather than requiring the Republicans to negotiate with him, was viewed, by the Republicans and everyone else, as maybe just his opening offer.  

That is the fear: that he will try.  But, slow as he is in picking up on political winds, whether it’s the commandeering by the right of the rhetoric and agenda on economic stimulus issues and national healthcare reform, or, now, anti-rightwing fiscal policy, and respectively responding to or employing those winds, this time he won’t have the luxury of not noticing that Reid and the other Senate Dems are, now, post-election, going to use their enhanced power.  

Krugman ends his blog post today by saying:

Maybe this time will be different. Maybe the Treasury is secretly preparing to invoke the 14th amendment, or issue a trillion-dollar platinum coin, or direct that the whole budget gap be taken out of spending dear to Republicans. But I have to say that I now expect Obama to cave on the ceiling; and so, of course, do the Republicans, which means that the crisis is going to happen.

The only thing that might save this situation is the fact that Obama has to be aware just how much is now riding on his willingness to finally stand up for his side; if he doesn’t, nobody will ever trust him again, and he will go down in history as the wimp who threw it all away.

But even that may not be enough. I guess we’ll see.

I don’t think it matters whether that is enough.  Because it is enough that the post-election power has shifted, to a meaningful extent, from the House Republicans to the Senate Democrats.  They will not dictate the terms.  But neither will the House Republicans, however willing Obama still is to let them.  And the shots Obama calls will be as much with Harry Reid in mind as with John Boehner in mind.  Reid, I trust, will insist.  The Republicans do hold some of the cards in the upcoming debt ceiling game.  Just not enough of the cards to run the table against Harry Reid.

*I added the italicized, boldfaced sentences in light of the comments to this post as originally published.

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Paul Krugman changes his mind on impacts of automation

In the past discussions at Angry Bear on the impacts automation might have on our lives, and the economics   involved,  gathered comments such as “You are a neo luddite”. As if widespread use of automated systems was automatically good for us overall because we would have access to ‘more higher wage and higher skilled jobs’, cheaper goods, and robots need a work force to maintain them…of course, there was no offering of numbers of jobs and whether the wage premium for a college education would be maintained.   This is the time to pay more attention as ‘insourcing’ gains traction as a buzz word,

Paul Krugman calls for a new look at the economics of robotics and economics :

Catherine Rampell and Nick Wingfield write about the growing evidence for “reshoring” of manufacturing to the United States. They cite several reasons: rising wages in Asia; lower energy costs here; higher transportation costs. In a followup piece, however, Rampell cites another factor: robots.

This is an old concern in economics; it’s “capital-biased technological change”, which tends to shift the distribution of income away from workers to the owners of capital.
Twenty years ago, when I was writing about globalization and inequality, capital bias didn’t look like a big issue; the major changes in income distribution had been among workers (when you include hedge fund managers and CEOs among the workers), rather than between labor and capital. So the academic literature focused almost exclusively on “skill bias”, supposedly explaining the rising college premium.

If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an “opportunity society”, or whatever it is the likes of Paul Ryan etc. are selling this week, won’t do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.
I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn’t seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is. And it has really uncomfortable implications. 

But I think we’d better start paying attention to those implications.

Hat tip Martin Ford at Econfuture:

The really big deal in the U.S. will be when automation hits the service sector/white collar jobs. Impact on :manufacturing in China might also be very significant.

(Lifted from an e-mail from Martin Ford and pointing to Paul Krugman’s article).

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At long last, have you left no sense of decency? (The most important fact that Obama can point to tomorrow night)

Have you no sense of decency, sir? At long last, have you left no sense of decency?

Joseph N. Welch, head counsel for the United States Army while it was under investigation by Joseph McCarthy‘s Senate Permanent Subcommittee on Investigations for Communist activities, an investigation known as the Army-McCarthy hearings.  Spring 1954.

Shortly after the Denver debate two weeks ago, I wrote here that I thought it was critically important for Obama to not only illustrate, using Romney’s own words and his campaign’s own acknowledgment right after the debate, that Romney’s plan regarding healthcare insurance for people with preexisting medical conditions was the status quo, but also to tie that in directly with Romney’s “47 percent” speech at fundraisers. (And, yes, that probably was his standard speech at fundraisers, not something he said just at that one.)

I said in that post that Romney’s misrepresentation on such an important issue—literally, one of life and death in some instances—demonstrates his utter disregard for anyone who’s not wealthy. 

I mean, really; what, in heaven’s name, kind of person has such little regard for others that he’s willing to play a semantics game—y’know, it depends on what the meaning of “plan” is—in order to mislead people about something of that sort?

As I said in my earlier post, many of Romney’s misrepresentations at that debate succeeded either because he was using common words in a misleading way or because he was making representations of fact that the public lacks the expertise to recognize as false.

And two things the public does know is that you can’t get medical treatment for most illnesses, nor can you get standard diagnostic tests for most illnesses, at a hospital emergency room.  And that you do receive medical bills—sometimes ones that, for people who have no multimillion-dollar annual income from Bain Capital ties, may be prohibitive—from treatment in an emergency room or in, say, an operating room after arriving at an emergency room.

And a third thing the public knows is that some people who have no healthcare insurance do die prematurely because they failed to get a timely medical examination and resulting treatments because they had no access to them at all, or because they feared, say, the loss of their home because of the resulting bills.

So it’s terrific that since the Denver debate, Romney, as Paul Krugman details today, has said otherwise. 

It’s one thing to try to fool people about what you mean when you say, for example, that as president you won’t decrease the “share” of taxes paid by the wealthy.  As the last two weeks has shown, you can get away with that as long as you don’t explain that, by “share,” you mean the percentage of income of the taxpayer relative to the percentage of income of other taxpayers, not the amount or the proportion of tax revenues that one income bracket’s taxes will comprise.  Twenty percent of $40,000 is $8,000.  Twenty percent of $1 million is $200,000.  As in, a 20% across-the-board reduction in tax rates.

But it’s quite another thing to try to fool people about something that doesn’t depend upon what the meaning of “is” is, or on what the meaning of “plan” is, or on what the meaning of “share” is—and that they themselves actually know is false.  Just plain, flat-out false. 

But here’s betting that most of the public doesn’t know that Romney actually made the statements he’s made about the uninsureds’ access to healthcare.  They need to be informed of this.  They need to be informed of this.

And although most people will get it without an illustration, Obama should offer this illustration, nonetheless: Could Ann Romney really have learned of her breast cancer by showing up at an emergency room and requesting a mammogram?  Could she then have had the surgery and other, ongoing treatments?  And if so, would she not then have received a bill that, for her family, would amount to pocket change but to most families would amount to financial catastrophe?

And then he should offer this illustration: When Ann Romney began having the symptoms that lead to her diagnosis of multiple sclerosis, could she have just shown up at the emergency room for a diagnosis?  And for the intensive, ongoing treatments for it that have put her illness into sufficient remission to enable her to speak day after day about her husband’s kindness and caring nature, and about his ability to “fix” things?

The importance of Romney’s recent healthcare-access claims goes well beyond the obvious.  Pointing just to those instances, Obama can illustrate this fundamental truth: Not only does Romney have a deep-seated disdain for ordinary people, but he views them as simply tools to be manipulated.  At an absolute minimum, this guy is the quintessential coward.

Yes, a coward.  His modusoperandi is that of a con artist.  And he’s doing this even about the most fundamental matters, such as preexisting medical-condition coverage. 

And, as Steven Rattner details in a New York Times op-ed piece today, about a veritable slewof other critical matters.

So I end with the quote with which I began, and with the reference to the person quoted: Joseph N. Welch:

Have you no sense of decency, sir? At long last, have you left no sense of decency?

Obama could do worse tomorrow night than to use that quote.

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A Kiss From a Used-Car Salesman—and why it’s important to tie Romney’s “47%” comment directly to his Orwellian lies

As for the second of those three questions—Is he a cold-hearted conservative or a moderate Republican from Massachusetts?—I think there’s a third possibility.  I think he’s George Orwell.

Or, rather, that he’s channeling George Orwell.  Not Orwell, the person.  Orwell, the writer.

Orwell, of course, is most famous for his book 1984, in which politicians and government officials say exactly the opposite of what they mean.  Thus, the term “Orwellian,” which is not limited to politicians’ statements, but which refers to the use of common language terms that have a fixed meaning, and using them to suggest exactly the opposite of what those terms actually mean—and exactly the opposite of what the speaker does mean.

Up means down, left means right, black means white.  You get the picture.  Some people will think that when you say “up,” you mean “up.”  Others will understand that when you say “up,” you mean “down.”  It’s sophistry, con artistry. 

It’s also a key tactic that dictators use to gain or keep power.  Hitler, of course, used it routinely.  But so did Mao Tse-tung.  In fact, another word for “Orwellian” was, during the Mao era, “Mao Speak.”  You just change the definition of common words to mean exactly the opposite of what the words have meant.  That way, you can continue to claim that you’re doing something in particular, or will do something in particular, when you’re actually doing or planning to do the opposite.

In democracies, when politicians do that, it has another synonym: lie.  Or at least that’s been so until now.  On Wednesday night, Romney changed the meaning of many words and phrases so that they mean the opposite of what they have meant.  Not the least are the words “win” and “debate,” at least as the former normally is applied to the latter, although it was largely the news media that redefined “win,” and of course Jim Lehrer helped with the redefinition of “debate.”

But another word that underwent a quick transition Wednesday night from its normal meaning to the opposite of it is “plan.”  As in, he has a plan to cover preexisting medical conditions.  The word “plan” normally means, y’know, a recommendation or intention to change something from its current status.  The phrase “a plan to cover preexisting medical conditions” normally means a requirement that insurance companies provide medical insurance to people who have preexisting medical conditions such as, say, multiple sclerosis or breast cancer, beyond what federal law already requires.  That is, beyond the status quo. 
Which is that people who have, say, multiple sclerosis or a malignant breast tumor and have had no healthcare insurance within the previous three months can get treated at the emergency room, and then maybe file for bankruptcy if the hospital actually does provide, um, treatment for these medical problems.  Then again, Romney had redefined the word “treatment” even before the Wednesday debate, so I guess we now have to understand the phrase “medical treatment” to mean something like, “But you have no insurance and you need the sort of medical procedure that isn’t done in emergency rooms.”  Romney already had redefined the word “plan” to mean promised goals rather than the specific, credible means of achieving them. 

But that redefinition had applied only to his economic plan—a plan that he said on Wednesday night might not work, and which—although it escaped the punditry—he seemed to be admitting that he (the successful businessman!) had devised without any actual economic basis for thinking that the revenue/tax-deduction ends could meet as designed.  But this second redefinition of the word “plan” was something else entirely, because by saying that he has a plan to provide healthcare insurance to people who currently are denied it because of a preexisting medical condition, he was telling them that he plans to something specific that he plans not to do.  And it concerns some truly fundamental things, in some cases life or death, in others financial security or instead financial devastation. 

What kind of person stands on a stage speaking to 67 million people, and just plain lies about something of that sort?  Dare I say it—the kind of person who speaks derisively about 47 percent of Americans, none of whom are Bain investors, have overseas bank accounts, hire PriceWaterhouseCoopers to tally their tax returns, and have their IRA accounts in the Cayman Islands.  Nor contribute to Republican PACs or attend Romney fundraisers in Boca Raton.  Or anywhere else.

Maureen Dowd, in her New York Times column today, uses humor to run through many, but by no means all (she’s only allowed a limited number of words per column, after all), of Romney’s bald debate-“winning” lies.  And she includes the preexisting-medical-conditions one.  But I think it’s Paul Krugman who, in his Times column on Friday, titled “Romney’s Sick Joke,” best highlights that this particular lie is particularly brazen and particularly pernicious.  And Ezra Klein points out that Romney’s mendacity about his plan for healthcare coverage—and in this context it is indeed a plan, as that word is defined the old-fashioned way—runs even deeper. 

It’s been said, accurately, many, many times now that this election will determine the basic nature of American government.  But until now, that’s meant budgetary, taxing and regulatory policy.  It now means something even more fundamental, in addition: Whether or not we allow a redefinition of the word “democracy.”  Romney asks us to believe in America.  It turns out that he means an America of the sort that George Orwell feared.

Or at least one run by a used car salesman.  Read the fine print on that contract.  And on that separate warranty you’ll be charged for. 

A kiss is not a kiss when it’s described as one by someone with a forked tongue.  

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Spain. Please, Mr. Obama, talk about Spain. Please.

ROMNEY: Look, the revenue I get is by more people working, getting higher pay, paying more taxes. That’s how we get growth and how we balance the budget. But the idea of taxing people more, putting more people out of work, you’ll never get there. You’ll never balance the budget by raising taxes.

Spain — Spain spends 42 percent of their total economy on government. We’re now spending 42 percent of our economy on government. I don’t want to go down the path to Spain. I want to go down the path of growth that puts Americans to work with more money coming in because they’re working.

LEHRER: But — but Mr. President, you’re saying in order to — to get the job done, it’s got to be balanced. You’ve got to have…

(CROSSTALK)

Romney doesn’t want to go down the path to Spain?  Oh?  Well, since, actually, the percent of Spain’s total economy that they spend on government has nothing at all to do with Spain’s situation now, and instead has everythingto do with the fact that they had a huge, huge housing bubble, worse even than ours, and since their housing bubble is—like ours—the main cause of their economic problems, and since Romney wants to repeal the Dodd-Frank Wall Street and Mortgage-lending regulations and replace them with regulations that favor Wall Street … then, yes, Romney does want to go down the path of Spain. 

Or at least down the path we took during our deregulation juggernaut.

OK, here’s the thing: Romney and his campaign aides recognized that that debate forum would present a perfect opportunity for him to just rattle off statements without any challenge.  Just a steady stream of nonsense, without any real risk of being confronted with actual challenges to any of it.  They knew, as I did, that Lehrer—I still remember his nauseating role in the first Bush/Gore debate in 2000—does nothing but ask the candidates to state their positions on whatever.  Open-ended questions in which each one is supposed to state his policy proposal on, say, taxes, or “jobs.” There’s no actual questioning about the proposal.  None.  None.

So, Romney gets to state, free and clear, a completely false inference of fact about the cause of Spain’s economic problems.  And he gets to say, free and clear:

Look, the revenue I get is by more people working, getting higher pay, paying more taxes. That’s how we get growth and how we balance the budget. But the idea of taxing people more, putting more people out of work, you’ll never get there. You’ll never balance the budget by raising taxes.

Really?  You’ll never balance the budget by raising taxes?  Oh? Didn’t we do exactly that during the Clinton administration?

And, the revenue he gets is by more people working, getting higher pay, paying more taxes?  Oh? Through the same policies as George W. Bush did?  Really?

And so forth. 

Like, that Romney is going to cut tax rates across the board by 20%.  But he’s not going to lower tax revenue from the wealthy at all.  And so forth.

What Obama needs to do—really, really needs to do—is put up a series of ads juxtaposing Romney’s earlier statements with his gibberish from last night. (I strongly urge using a clip from Romney’s speech to the Detroit Economic Club in February, and a similar speech that same week in Arizona; Michigan and Arizona had their primaries on the same Tuesday.)  But rather than just suggesting that Romney is a slippery liar who’s trying to trick voters into putting into office a team that would put in place drastic, basic changes that he knows a substantial majority of the public doesn’t want, Obama should pretend that Romney just doesn’t know the facts and can’t do simple math.  He is, in other words, not very smart, or at least not very well-informed. 

The public, of course, will recognize that Romney’s a sleaze bucket. But Obama can just say, for example, that if Romney doesn’t know that during the Clinton years, we had a balanced budget, he’s too ill-informed to be president.

And, about that Spain thing: The final debate will be about foreign policy.  Which, Obama should point out, requires some knowledge of such things as what actuallycaused Spain’s economy to crash. And then he should educate the public about it.  He can do that in two or three sentences of medium length.  If he wants to see how it’s done, he can read any one of several Paul Krugman columns in which Krugman did exactly that.  It’s not rocket science.  It’s not even economic science.  It’s simple, established fact.  Of exactly the sort that not long ago Romney’s pollster said the Romney campaign wouldn’t trouble itself about, and that it would instead continue to make up its own facts.

Speaking of good way for the Obama campaign to get a message across in an ad ….

The bottom line: Obama can easily turn Romney’s performance last night into a plus. 

Easily.  Really.

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Typo-corrected 10/5.

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