By Matt Miller, Tuesday, August 21, 6:23 AM
As Republicans head toward next week’s convention something extraordinary has come into view now that their ticket is complete.
Mitt Romney came from wealth and went on to build his own quarter-of-a-billion dollar fortune. Paul Ryan, who has never worked a day in the private sector (outside a few months in the family firm) reports a net worth of as much as $7 million, thanks to trusts and inheritances from his and his wife’s family.
Wealthy political candidates are nothing new, of course. But we’ve never had two wealthy candidates on a national ticket whose top priority is to reduce already low taxes on the well-to-do while raising taxes on everyone else — even as they propose to slash programs that serve the poor, or that (like college aid) create chances for the lowly born to rise.
Call them the Drawbridge Republicans. As the moniker implies, these are wealthy Republicans who have no qualms about pulling up the drawbridge behind them. Such sentiments used to be reserved for the political fringe. The most prominent example was Steve Forbes, whose twin obsessions during his vanity presidential runs in 1996 and 2000 — marginal tax rates and inflation — were precisely what you’d expect from an heir in a cocoon.
(In case you were wondering, Ronald Reagan wasn’t a Drawbridge because he entered office when marginal rates, at 70 percent, were truly damaging to the economy. But as GOP business leaders now tell me privately, the Clinton-era top rate of 39.6 percent, let alone today’s 35 percent, are hardly a barrier to work or investment).
Most rich Republicans who champion regressive tax plans find it necessary to at least pretend they’re doing something to help average folks. John McCain, who’s lived large for decades thanks to his wife’s inheritance, famously had trouble keeping track of how many homes he owned — but McCain also tried bravely to create a path to citizenship for illegal immigrants. George W. Bush campaigned as a “compassionate conservative,” and touted education initiatives that made this claim plausible.
Today’s Drawbridge Republicans can’t be bothered. Yes, when their political back is to the wall — as Romney’s increasingly is — they’ll slap together a page of bullet points and dub it “a plan for the middle class.” But this is only under duress. The rest of the time they seem blissfully unaware of how off-key they sound. As the humorist Andy Borowitz tweeted the other day, “As a general matter, it’s a bad idea to talk about austerity if you just had a horse lose in the Olympics.”
Contrast conservative Prime Minister (and heir) David Cameron’s decision to defer his plans to lower the top 50 percent marginal rate in the UK. “When you’re taking the country through difficult times and difficult decisions,” Cameron said, “you’ve got to take the country with you. That means permanently trying to make the argument that what you’re doing is fair and seen to be fair.” As his spokesman added: “We need to ask those with the broadest shoulders to contribute the most.”
Now that’s a conservative ruling class with a conscience! Can anyone imagine Romney and Ryan saying the same?
The interesting question concerns psychology. Drawbridge Republicans are flesh and blood human beings peddling indefensible priorities. How do they manage it and still feel good about themselves? One possibility is that they’re simply missing the genes for empathy and self-awareness. (Steve Forbes always did seem a bit like a bubble boy whose inheritance left him impervious).
But for today’s GOP ticket that explanation feels off. Romney, for all his awkwardness, campaigned and governed in a liberal state, and he enacted a pioneering universal health care law that’s helped many of modest means achieve health security. Ryan is equally mysterious — the boy-next-door who pays lip service to “upward mobility” yet seems to have no notion his plans would likely produce what liberal analyst Robert Greenstein calls “the largest redistribution of income from the bottom to the top in modern U.S. history.”
My hunch is that extreme forms of rationalization and other defense mechanisms help Drawbridge Republicans cope with the cognitive dissonance. The growth of partisan media makes it easy to tune out disquieting dissenting views.
Whatever lies behind it, the rise of the Drawbridge Republicans makes the stakes of this election even higher. If Romney and Ryan actually win on their Drawbridge agenda, the United States will have crossed a scary new Rubicon for a supposedly advanced democracy. For years, whenever I’ve heard people criticize “limousine liberals,” I’ve always thought, well, at least that’s better than being a “limousine jerk.” Now it turns out that’s exactly what a Drawbridge Republican is.
Matt Miller is a senior fellow at the Center for American Progress and co-host of public radio’s “Left, Right & Center.” He writes a weekly online column for The Post.
Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts
Tuesday, August 21, 2012
Thursday, August 16, 2012
Recognizing Paul Ryan’s ‘tell’ when he is trying to avoid something
By Matt Miller, Published: August 16
In poker a “tell” is the physical giveaway or tic that lets you know someone is lying about his or her hand. In politics it’s the mode of evasion a politician chooses to sidestep a truth he or she doesn’t want to admit or to avoid saying something against self-interest. In his debut interview with Fox News’ Brit Hume Tuesday, Rep. Paul Ryan’s “tells” were audacious and revealing. They suggest an opening Democrats would be wise to pursue.
Ryan (R-Wis.) tried to cloak himself in his supposedly charming “wonky-ness” to sidestep two simple questions from Hume: When does Mitt Romney’s budget reach balance, and when does Ryan’s own budget plan do the same? Ryan pirouetted because Hume’s queries threatened to expose his famed “fiscal conservatism” as a fraud.
It’s worth parsing Ryan’s tactics in this exchange because it shows the brand of disingenuousness we’re dealing with. So let’s go to the videotape. Have a look at the relevant two-minute portion of the clip (excerpted on this CNN video) and then we’ll dissect it.
Okay, you’re back. Hume started with a simple question: “The budget plan that you’re now supporting would get to balance when?”
Now, for context, recall that in the last era of epic budget smackdowns, 1995 and 1996, Newt Gingrich would have had an equally simple answer: in seven years. President Bill Clinton’s failure to embrace the goal of a balanced budget at all was a major political liability that Clinton finally (and shrewdly) erased when he came out with his own 10-year plan in mid-1995. (It’s worth underscoring that a 10-year path to balance was viewed then as the outer limit of credibility — pledging to end the red ink any further than a decade out didn’t pass the laugh test.)
Since Ryan knows that Romney’s bare sketch of a plan never reaches balance, he stumbles momentarily before trying to move the conversation to his comfortable talking points about Romney’s goal of reducing spending to historic norms as a share of gross domestic product.
But Hume grows quietly impatient. He practically cuts Ryan off.
“I get that,” Hume says. “But what about balance?”
You can see Ryan flinch. He doesn’t know, he says. Why not? “I don’t want to get wonky on you,” he says, recovering, “because we haven’t run the numbers on that specific plan.” But that’s not “getting wonky” at all. As common sense (and the Gingrich/Clinton approach) suggests, there’s nothing arcane about this subject. You decide on a sensible path to balance as a goal and come up with policies that achieve it. All this means is that Romney hasn’t done what a fiscally conservative leader would do. Trying to evade this as a matter of not “getting wonky” is Ryan’s tell. He’s betting Hume is too dumb, uninterested or short on time to press the point.
Ryan then adds that “the plan that we’ve offered in the House balances the budget.” But he immediately stops short of saying when — you see his eyes dart to the right at that moment, his next tell — because that would mean admitting it reaches balance in the 2030s. And Ryan wants to get through this interview without saying that, because he knows it doesn’t sound good. After all, what kind of “fiscal conservative” has a 25-year plan to balance the budget? Instead, in a practiced maneuver signaled by his telltale sideways glance, he moves to a contrast with President Obama, who he says has never offered a budget that ever reaches balance.
This is true — but is a plan to balance the budget when Ryan is nearly 70 really different enough to make Ryan the “deficit hawk”? Please.
Meanwhile, Hume’s quiet baritone presses on.
“Your own budget . . . when does that contemplate reaching balance?” Hume asks.
There’s no exit. Not until the 2030s, Ryan finally admits, looking uncomfortable — but then he quickly adds, making a face, that’s only under the Congressional Budget Office’s scoring rules, implying that they’re silly constraints every Fox News viewer would agree are ridiculous (instead of sensible rules meant to credit politicians only for policy proposals that are real). Ryan adds that “we believe” if we get the economy growing, “it would balance in 10 years.” But that’s supply-side faith-based budgeting again — exactly what we ran an empirical test on in the 1980s. (And the truth is, if Ryan’s big tax cuts were properly accounted for, his plan’s real date of balance would push well beyond 2040).
Why am I harping on this? Because it’s impossible to overstate how central the unjustified label of “fiscal conservative” is to the Ryan brand and the GOP’s strategy. As Clinton understood in the 1990s, “fiscal responsibility” is a values issue important to the voters who decide modern presidential elections.
The point: Democrats can’t afford to let Ryan/Romney’s phony image as superior fiscal stewards survive. And Hume’s interview shows how swiftly this charade can be exposed if Democrats and the press zero in on simple questions like Hume’s. If the press is primed to cover this more intelligently, such queries will also expose the big Republican lie — the idea that you can balance the budget as the baby boomers age without taxes rising.
Let me be clear. The most important issue facing the country isn’t when we’re going to balance the budget. It’s how to get growth and jobs reignited in the near term and how to renew the country’s promise and competitiveness after that (an agenda in which long-term budget sanity is just the ante). But if Democrats spend all their energy on Medicare — and don’t knock out the GOP ticket’s undeserved reputation for fiscal responsibility — they’ll find themselves in unexpected peril as the race heads to the fall.
In poker a “tell” is the physical giveaway or tic that lets you know someone is lying about his or her hand. In politics it’s the mode of evasion a politician chooses to sidestep a truth he or she doesn’t want to admit or to avoid saying something against self-interest. In his debut interview with Fox News’ Brit Hume Tuesday, Rep. Paul Ryan’s “tells” were audacious and revealing. They suggest an opening Democrats would be wise to pursue.
Ryan (R-Wis.) tried to cloak himself in his supposedly charming “wonky-ness” to sidestep two simple questions from Hume: When does Mitt Romney’s budget reach balance, and when does Ryan’s own budget plan do the same? Ryan pirouetted because Hume’s queries threatened to expose his famed “fiscal conservatism” as a fraud.
It’s worth parsing Ryan’s tactics in this exchange because it shows the brand of disingenuousness we’re dealing with. So let’s go to the videotape. Have a look at the relevant two-minute portion of the clip (excerpted on this CNN video) and then we’ll dissect it.
Okay, you’re back. Hume started with a simple question: “The budget plan that you’re now supporting would get to balance when?”
Now, for context, recall that in the last era of epic budget smackdowns, 1995 and 1996, Newt Gingrich would have had an equally simple answer: in seven years. President Bill Clinton’s failure to embrace the goal of a balanced budget at all was a major political liability that Clinton finally (and shrewdly) erased when he came out with his own 10-year plan in mid-1995. (It’s worth underscoring that a 10-year path to balance was viewed then as the outer limit of credibility — pledging to end the red ink any further than a decade out didn’t pass the laugh test.)
Since Ryan knows that Romney’s bare sketch of a plan never reaches balance, he stumbles momentarily before trying to move the conversation to his comfortable talking points about Romney’s goal of reducing spending to historic norms as a share of gross domestic product.
But Hume grows quietly impatient. He practically cuts Ryan off.
“I get that,” Hume says. “But what about balance?”
You can see Ryan flinch. He doesn’t know, he says. Why not? “I don’t want to get wonky on you,” he says, recovering, “because we haven’t run the numbers on that specific plan.” But that’s not “getting wonky” at all. As common sense (and the Gingrich/Clinton approach) suggests, there’s nothing arcane about this subject. You decide on a sensible path to balance as a goal and come up with policies that achieve it. All this means is that Romney hasn’t done what a fiscally conservative leader would do. Trying to evade this as a matter of not “getting wonky” is Ryan’s tell. He’s betting Hume is too dumb, uninterested or short on time to press the point.
Ryan then adds that “the plan that we’ve offered in the House balances the budget.” But he immediately stops short of saying when — you see his eyes dart to the right at that moment, his next tell — because that would mean admitting it reaches balance in the 2030s. And Ryan wants to get through this interview without saying that, because he knows it doesn’t sound good. After all, what kind of “fiscal conservative” has a 25-year plan to balance the budget? Instead, in a practiced maneuver signaled by his telltale sideways glance, he moves to a contrast with President Obama, who he says has never offered a budget that ever reaches balance.
This is true — but is a plan to balance the budget when Ryan is nearly 70 really different enough to make Ryan the “deficit hawk”? Please.
Meanwhile, Hume’s quiet baritone presses on.
“Your own budget . . . when does that contemplate reaching balance?” Hume asks.
There’s no exit. Not until the 2030s, Ryan finally admits, looking uncomfortable — but then he quickly adds, making a face, that’s only under the Congressional Budget Office’s scoring rules, implying that they’re silly constraints every Fox News viewer would agree are ridiculous (instead of sensible rules meant to credit politicians only for policy proposals that are real). Ryan adds that “we believe” if we get the economy growing, “it would balance in 10 years.” But that’s supply-side faith-based budgeting again — exactly what we ran an empirical test on in the 1980s. (And the truth is, if Ryan’s big tax cuts were properly accounted for, his plan’s real date of balance would push well beyond 2040).
Why am I harping on this? Because it’s impossible to overstate how central the unjustified label of “fiscal conservative” is to the Ryan brand and the GOP’s strategy. As Clinton understood in the 1990s, “fiscal responsibility” is a values issue important to the voters who decide modern presidential elections.
The point: Democrats can’t afford to let Ryan/Romney’s phony image as superior fiscal stewards survive. And Hume’s interview shows how swiftly this charade can be exposed if Democrats and the press zero in on simple questions like Hume’s. If the press is primed to cover this more intelligently, such queries will also expose the big Republican lie — the idea that you can balance the budget as the baby boomers age without taxes rising.
Let me be clear. The most important issue facing the country isn’t when we’re going to balance the budget. It’s how to get growth and jobs reignited in the near term and how to renew the country’s promise and competitiveness after that (an agenda in which long-term budget sanity is just the ante). But if Democrats spend all their energy on Medicare — and don’t knock out the GOP ticket’s undeserved reputation for fiscal responsibility — they’ll find themselves in unexpected peril as the race heads to the fall.
Monday, July 25, 2011
A Downward Spiral? Economics Made Too Simple by STUART KAUFFMAN
A Downward Spiral? Economics Made Too Simple by STUART KAUFFMAN
Categories: Science and Policy
09:23 am
July 25, 2011
When asked, the great mathematician John von Neumann intuited that money was
somehow related to physical energy.
The intuition has rested there. I believe von Neumann was on the right track and it
probably bears on our current economic mess.
In physics, energy is defined as "the capacity to cause change." The root of this in
physics lies in Newton's three laws of motion.
The first law, we recall, states that a body in motion continues in straight-line motion
at a constant velocity. Newton rests this on the concept of inertia, from Galileo.
Technically, "velocity" includes speed and direction of motion.
The second law of motion is central to us: Any change in straight line motion at a
constant velocity requires an outside force which changes, or "accelerates" that
motion. The famous equation is F = MA. Force equals mass times acceleration,
where acceleration is the rate of change, positive or negative of the speed of motion,
or the direction of motion.
The third law will not concern us: For every action there is an equal and opposite
reaction.
13.7: Cosmos And Culture
Sandra Mu/Getty Images
Cash money
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 1 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
It is from the second law which defines force as that which "changes" motion, that we
get with some manipulations, an expression for energy E = 1/2MV squared.
Fine. Some time ago a group of friends including myself and Mike Brown, former
CFO of Microsoft and Chairman of NASDAQ were wondering how von Neumann
could be right. We realized we needed an "Economic First Law of Motion." But none
exists in the text books. So we invented one: It starts with "Trade or die."
Indeed, Mike had spearheaded an effort to build our proud agent-based "Partecon"
model with agents and a set of goods. Agents had to trade within a given period or
die.
Is this "trade or die" rule sensible? Yes. (It is the economic analogue of "inertia" in
fact.)
It is 50,000 years ago. I have caught a rabbit today, you have caught nothing today.
"I'll give you half my rabbit today if you'll give me an equal weight of what you catch
in the next while," I offer you. You accept. Note that credit has just been created, for
you owe me a share of whatever you catch in the next while, say a month.
Then, 50,000 years ago, with food scarce and problematic, we trade or die. If there
are several goods and hunting and gathering, we hunt, gather (i.e. produce food) and
trade or die. Sometimes we trade for what we like more but do not have, traded for
what we have too much of, which is the economist's advantages of trade and
Edgeworth box.
So we have a first law of economic motion: Trade or Die, within some bounded
period is the roughly conserved average economic inertia. Then that first law states:
In the absence of outside forces, the total rate of trade in the clan will be, on average,
constant — like Newton's first law. Note clan GDP is constant.
Now let salt emerge as a favored good we all want and use as money to facilitate
trade among many parties with diverse goods and preferences.
Now let paper money emerge. The Chinese were the first to invent it, and the
emperor, it seems, entranced, printed vast amounts and induced fantastic, ruinous
inflation.
Which brings us to the "money supply." In a simplest, steady state economic theory,
if the money supply suddenly doubles, more money in our hands chases the same
number of goods, so prices double. If this price doubling were to happen in an
instant, the average rate of trade remains constant. The Economic First Law would
hold.
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 2 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
But the steady state economic theory is wrong. Price changes lag a change in money
supply. Suppose instead a slow, steady increase in the money supply. What will
really happen in this case is that prices will indeed rise, but with a lag, say of eight
months or so.
Then, given a slowly increasing money supply and a lag in price rises, we really do
have more money per good at their current prices, even as money supply continues
to slowly increase.
So what happens? We really do purchase more goods and produce more goods to
match. In short, the total average rate of trades increases, and increases steadily if
the money supply continues to increase and prices continue to lag.
We have our second economic law of motion: An increasing money supply and
lagging prices increases (positively accelerates) the average rate of trade. The
economy grows, clan GDP grows and there is slow inflation. The increasing money
supply and lagging price increases is the analogue of F = MA, an economic force
acting to accelerate the First economic law of motion of constant rate of trade. The
appropriate integral of this force will be the analogue of economic energy added to
the economy.
But conversely, and critically, if money supply gradually decreases and price drops
lag, we really have less money per good and so purchase less and produce less. Trade
slows, or decelerates. In short, the "velocity of money" slows, GDP drops and
economic energy is drained from the economy.
Then what has driven so much growth in the First World since WWII? In some part,
there has been a global fluctuating increase in debt, from credit card debt, to
mortgage debt, to sovereign debt. This has slowly increased the money supply with
lagging price increases, and so driven an increase of trade, i.e. GDP growth.
I suspect, with most of us, that the debt rubber band is very stretched. We have only
to look at Greece, Ireland, Spain, Portugal, Italy and our own mushrooming debt.
At some point, say now, you do not repay my half-rabbit in a month but in five years.
I'm no longer willing to extend credit to you.
We may be there now. A credit bubble may be about to start a long contraction with
price drops lagging, sapping economic energy from our First World economy in a
long downward spiral.
This world is not this simple. I'm sure von Neumann would smile, even if he liked
this version of money as economic energy. But I doubt he would think the above is
entirely wrong.
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 3 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 4 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
Categories: Science and Policy
09:23 am
July 25, 2011
When asked, the great mathematician John von Neumann intuited that money was
somehow related to physical energy.
The intuition has rested there. I believe von Neumann was on the right track and it
probably bears on our current economic mess.
In physics, energy is defined as "the capacity to cause change." The root of this in
physics lies in Newton's three laws of motion.
The first law, we recall, states that a body in motion continues in straight-line motion
at a constant velocity. Newton rests this on the concept of inertia, from Galileo.
Technically, "velocity" includes speed and direction of motion.
The second law of motion is central to us: Any change in straight line motion at a
constant velocity requires an outside force which changes, or "accelerates" that
motion. The famous equation is F = MA. Force equals mass times acceleration,
where acceleration is the rate of change, positive or negative of the speed of motion,
or the direction of motion.
The third law will not concern us: For every action there is an equal and opposite
reaction.
13.7: Cosmos And Culture
Sandra Mu/Getty Images
Cash money
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 1 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
It is from the second law which defines force as that which "changes" motion, that we
get with some manipulations, an expression for energy E = 1/2MV squared.
Fine. Some time ago a group of friends including myself and Mike Brown, former
CFO of Microsoft and Chairman of NASDAQ were wondering how von Neumann
could be right. We realized we needed an "Economic First Law of Motion." But none
exists in the text books. So we invented one: It starts with "Trade or die."
Indeed, Mike had spearheaded an effort to build our proud agent-based "Partecon"
model with agents and a set of goods. Agents had to trade within a given period or
die.
Is this "trade or die" rule sensible? Yes. (It is the economic analogue of "inertia" in
fact.)
It is 50,000 years ago. I have caught a rabbit today, you have caught nothing today.
"I'll give you half my rabbit today if you'll give me an equal weight of what you catch
in the next while," I offer you. You accept. Note that credit has just been created, for
you owe me a share of whatever you catch in the next while, say a month.
Then, 50,000 years ago, with food scarce and problematic, we trade or die. If there
are several goods and hunting and gathering, we hunt, gather (i.e. produce food) and
trade or die. Sometimes we trade for what we like more but do not have, traded for
what we have too much of, which is the economist's advantages of trade and
Edgeworth box.
So we have a first law of economic motion: Trade or Die, within some bounded
period is the roughly conserved average economic inertia. Then that first law states:
In the absence of outside forces, the total rate of trade in the clan will be, on average,
constant — like Newton's first law. Note clan GDP is constant.
Now let salt emerge as a favored good we all want and use as money to facilitate
trade among many parties with diverse goods and preferences.
Now let paper money emerge. The Chinese were the first to invent it, and the
emperor, it seems, entranced, printed vast amounts and induced fantastic, ruinous
inflation.
Which brings us to the "money supply." In a simplest, steady state economic theory,
if the money supply suddenly doubles, more money in our hands chases the same
number of goods, so prices double. If this price doubling were to happen in an
instant, the average rate of trade remains constant. The Economic First Law would
hold.
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 2 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
But the steady state economic theory is wrong. Price changes lag a change in money
supply. Suppose instead a slow, steady increase in the money supply. What will
really happen in this case is that prices will indeed rise, but with a lag, say of eight
months or so.
Then, given a slowly increasing money supply and a lag in price rises, we really do
have more money per good at their current prices, even as money supply continues
to slowly increase.
So what happens? We really do purchase more goods and produce more goods to
match. In short, the total average rate of trades increases, and increases steadily if
the money supply continues to increase and prices continue to lag.
We have our second economic law of motion: An increasing money supply and
lagging prices increases (positively accelerates) the average rate of trade. The
economy grows, clan GDP grows and there is slow inflation. The increasing money
supply and lagging price increases is the analogue of F = MA, an economic force
acting to accelerate the First economic law of motion of constant rate of trade. The
appropriate integral of this force will be the analogue of economic energy added to
the economy.
But conversely, and critically, if money supply gradually decreases and price drops
lag, we really have less money per good and so purchase less and produce less. Trade
slows, or decelerates. In short, the "velocity of money" slows, GDP drops and
economic energy is drained from the economy.
Then what has driven so much growth in the First World since WWII? In some part,
there has been a global fluctuating increase in debt, from credit card debt, to
mortgage debt, to sovereign debt. This has slowly increased the money supply with
lagging price increases, and so driven an increase of trade, i.e. GDP growth.
I suspect, with most of us, that the debt rubber band is very stretched. We have only
to look at Greece, Ireland, Spain, Portugal, Italy and our own mushrooming debt.
At some point, say now, you do not repay my half-rabbit in a month but in five years.
I'm no longer willing to extend credit to you.
We may be there now. A credit bubble may be about to start a long contraction with
price drops lagging, sapping economic energy from our First World economy in a
long downward spiral.
This world is not this simple. I'm sure von Neumann would smile, even if he liked
this version of money as economic energy. But I doubt he would think the above is
entirely wrong.
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 3 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
A Downward Spiral? Economics Made Too Simple : 13.7: Cosmos And Culture : NPR Page 4 of 4
http://www.npr.org/blogs/13.7/2011/07/25/138671362/a-downward-spiral-economics-made-too-simple 7/25/2011
Thursday, July 07, 2011
Five myths about the debt ceiling By Bruce Bartlett
Five myths about the debt ceiling By Bruce Bartlett
Published: July 7
In recent months, the federal debt ceiling — last increased in February 2010 and now standing at $14.3 trillion — has become a matter of national debate and political hysteria. The ceiling must be raised by Aug. 2, Treasury says, or the government will run out of cash. Congressional Republicans counter that they won’t raise the debt limit unless Democrats agree to large budget cuts with no tax increases. President Obama insists that closing tax loopholes must be part of the package. Whom and what to believe in the great debt-limit debate? Here are some misconceptions that get to the heart of the battle.
1. The debt limit is an effective way to control spending and deficits.
Not at all. In 2003, Brian Roseboro, assistant secretary of the Treasury for financial markets, explained it best: “The plain truth is that the debt limit does not affect the deficits or surpluses. The critical revenue and spending decisions are made during the congressional budget process.”
The debt ceiling is a cap on the amount of securities the Treasury can issue, something it does to raise money to pay for government expenses. These expenses, and the deficit they’ve wrought, are a result of past actions by Congress to create entitlement programs, make appropriations and cut taxes. In that sense, raising the debt limit is about paying for past expenses, not controlling future ones. For Congress to refuse to let Treasury raise the cash to pay the bills that Congress itself has run up simply makes no sense.
Some supporters of the debt limit respond that there is virtue in forcing Congress to debate the national debt from time to time. This may have been true in the past, but the Budget Act of 1974 created a process that requires Congress to vote on aggregate levels of spending, revenue and deficits every year, thus making the debt limit redundant.
2. Opposition to raising the debt limit is a partisan issue.
Republicans are doing the squawking now because there is a Democrat in the White House. But back when there was a Republican president, Democrats did the squawking. On March 16, 2006, one Democratic senator in particular denounced George W. Bush’s request to raise the debt limit. “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” the senator thundered. “Increasing America’s debt weakens us domestically and internationally. . . . Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.”
That senator was Barack Obama, and he, along with most Democrats, voted against a higher limit that day. It passed only because almost every Republican voted for it, including many who are now among the strongest opponents of a debt-limit increase.
3. Financial markets won’t care much if interest payments are just a few days late — a “technical default.”
Some Republicans believe that bondholders know they will get their money eventually and will understand that a brief default — just a few days — might be necessary to reduce future deficits. “If a bondholder misses a payment for a day or two or three or four,” Rep. Paul Ryan (R-Wis.) told CNBC in May, “what is more important [is] that you’re putting the government in a materially better position to be able to pay their bonds later on.”
This is nothing but wishful thinking. The bond-rating agencies have repeatedly warned that any failure to pay interest or principal on a Treasury security exactly when due could cause the U.S. credit rating to be downgraded, which would push interest rates upas investors demand higher rates to compensate for the increased risk.
J.P. Morgan recently surveyed its clients and asked how much rates would rise if there was a delay in payments, even a very brief one. Domestic investors thought they would go up by 0.37 percentage points, but foreign buyers — who own close to half the debt — predicted an increase of more than half a percentage point. Any increase in this range would raise Treasury’s borrowing costs by tens of billions of dollars per year.
Some may think that a rise in rates would be temporary. But there was a case back in 1979 when a combination of a failure to increase the debt limit in time and a breakdown of Treasury’s machines for printing checks caused a two-week default. A 1989 academic study found that it raised interest rates by six-tenths of a percentage point for years afterward.
4. It’s worth risking default on the debt to prevent a tax increase, given the weak economy.
While Republicans’ concerns about higher taxes are not unreasonable, most economists believe that any fiscal contraction at this time would be dangerous. They note that a large cut in spending back in 1937 brought on a sharp recession, which undermined the recovery the country was making after the Great Depression.
Republicans respond that tax increases are especially harmful to growth. However, they made the same argument in 1982, when Ronald Reagan requested the largest peacetime tax increase in American history, and again in 1993, when Bill Clinton also asked for a large tax boost for deficit reduction. In both cases, conservative economists’ predictions of economic disaster were completely wrong, and strong economic growth followed.
5. Obama must accept GOP budget demands because he needs Republican support to raise the debt limit.
Republicans believe they have the president over a barrel. But their hand may be weaker than they think. A number of legal scholars point to Section 4of the 14th Amendment, which says, “The validity of the public debt of the United States . . . shall not be questioned.”
Some scholars, including Michael Abramowicz of George Washington University Law Schooland Garrett Epps of the University of Baltimore Law School, think this passage may make the debt limit unconstitutional because by definition, the limit calls into question the validity of the public debt. Thus Treasury may be able to just ignore the debt limit.
Other scholars, such as Michael McConnell of Stanford Law School, say the 14th Amendment will force Obama to prioritize debt payments and unilaterally slash spending to pay bondholders. But this would involve the violation of laws requiring government spending.
Either way, a failure to raise the debt limit would force the president to break the law. The only question is which one.
Bruce Bartlett, a former adviser to President Ronald Reagan and a Treasury official in the George W. Bush administration, is the author of “The New American Economy: The Failure of Reaganomics and a New Way Forward.” He will be online at 11 a.m. on Monday, July 11, to chat. Submit your questions and comments now.
Want to challenge everything you know? Visit our “Five myths” archive , including “Five myths about interest rates,” “Five myths about the Bush tax cuts,” “Five myths about defense spending,” and “Five myths about the deficit.”
Published: July 7
In recent months, the federal debt ceiling — last increased in February 2010 and now standing at $14.3 trillion — has become a matter of national debate and political hysteria. The ceiling must be raised by Aug. 2, Treasury says, or the government will run out of cash. Congressional Republicans counter that they won’t raise the debt limit unless Democrats agree to large budget cuts with no tax increases. President Obama insists that closing tax loopholes must be part of the package. Whom and what to believe in the great debt-limit debate? Here are some misconceptions that get to the heart of the battle.
1. The debt limit is an effective way to control spending and deficits.
Not at all. In 2003, Brian Roseboro, assistant secretary of the Treasury for financial markets, explained it best: “The plain truth is that the debt limit does not affect the deficits or surpluses. The critical revenue and spending decisions are made during the congressional budget process.”
The debt ceiling is a cap on the amount of securities the Treasury can issue, something it does to raise money to pay for government expenses. These expenses, and the deficit they’ve wrought, are a result of past actions by Congress to create entitlement programs, make appropriations and cut taxes. In that sense, raising the debt limit is about paying for past expenses, not controlling future ones. For Congress to refuse to let Treasury raise the cash to pay the bills that Congress itself has run up simply makes no sense.
Some supporters of the debt limit respond that there is virtue in forcing Congress to debate the national debt from time to time. This may have been true in the past, but the Budget Act of 1974 created a process that requires Congress to vote on aggregate levels of spending, revenue and deficits every year, thus making the debt limit redundant.
2. Opposition to raising the debt limit is a partisan issue.
Republicans are doing the squawking now because there is a Democrat in the White House. But back when there was a Republican president, Democrats did the squawking. On March 16, 2006, one Democratic senator in particular denounced George W. Bush’s request to raise the debt limit. “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure,” the senator thundered. “Increasing America’s debt weakens us domestically and internationally. . . . Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren.”
That senator was Barack Obama, and he, along with most Democrats, voted against a higher limit that day. It passed only because almost every Republican voted for it, including many who are now among the strongest opponents of a debt-limit increase.
3. Financial markets won’t care much if interest payments are just a few days late — a “technical default.”
Some Republicans believe that bondholders know they will get their money eventually and will understand that a brief default — just a few days — might be necessary to reduce future deficits. “If a bondholder misses a payment for a day or two or three or four,” Rep. Paul Ryan (R-Wis.) told CNBC in May, “what is more important [is] that you’re putting the government in a materially better position to be able to pay their bonds later on.”
This is nothing but wishful thinking. The bond-rating agencies have repeatedly warned that any failure to pay interest or principal on a Treasury security exactly when due could cause the U.S. credit rating to be downgraded, which would push interest rates upas investors demand higher rates to compensate for the increased risk.
J.P. Morgan recently surveyed its clients and asked how much rates would rise if there was a delay in payments, even a very brief one. Domestic investors thought they would go up by 0.37 percentage points, but foreign buyers — who own close to half the debt — predicted an increase of more than half a percentage point. Any increase in this range would raise Treasury’s borrowing costs by tens of billions of dollars per year.
Some may think that a rise in rates would be temporary. But there was a case back in 1979 when a combination of a failure to increase the debt limit in time and a breakdown of Treasury’s machines for printing checks caused a two-week default. A 1989 academic study found that it raised interest rates by six-tenths of a percentage point for years afterward.
4. It’s worth risking default on the debt to prevent a tax increase, given the weak economy.
While Republicans’ concerns about higher taxes are not unreasonable, most economists believe that any fiscal contraction at this time would be dangerous. They note that a large cut in spending back in 1937 brought on a sharp recession, which undermined the recovery the country was making after the Great Depression.
Republicans respond that tax increases are especially harmful to growth. However, they made the same argument in 1982, when Ronald Reagan requested the largest peacetime tax increase in American history, and again in 1993, when Bill Clinton also asked for a large tax boost for deficit reduction. In both cases, conservative economists’ predictions of economic disaster were completely wrong, and strong economic growth followed.
5. Obama must accept GOP budget demands because he needs Republican support to raise the debt limit.
Republicans believe they have the president over a barrel. But their hand may be weaker than they think. A number of legal scholars point to Section 4of the 14th Amendment, which says, “The validity of the public debt of the United States . . . shall not be questioned.”
Some scholars, including Michael Abramowicz of George Washington University Law Schooland Garrett Epps of the University of Baltimore Law School, think this passage may make the debt limit unconstitutional because by definition, the limit calls into question the validity of the public debt. Thus Treasury may be able to just ignore the debt limit.
Other scholars, such as Michael McConnell of Stanford Law School, say the 14th Amendment will force Obama to prioritize debt payments and unilaterally slash spending to pay bondholders. But this would involve the violation of laws requiring government spending.
Either way, a failure to raise the debt limit would force the president to break the law. The only question is which one.
Bruce Bartlett, a former adviser to President Ronald Reagan and a Treasury official in the George W. Bush administration, is the author of “The New American Economy: The Failure of Reaganomics and a New Way Forward.” He will be online at 11 a.m. on Monday, July 11, to chat. Submit your questions and comments now.
Want to challenge everything you know? Visit our “Five myths” archive , including “Five myths about interest rates,” “Five myths about the Bush tax cuts,” “Five myths about defense spending,” and “Five myths about the deficit.”
How Health Insurance Affects Health
By DAVID LEONHARDT In the nearly year and a half since Congress passed the health care overhaul, one of the main purposes of the bill — to provide health insurance to people who lack it — has often been lost in the debate. Instead, supporters and opponents of the bill have argued over whether the bill is constitutional, and they’ve argued over whether the bill will cut medical costs more or less than the Congressional Budget Office projects.
Those are obviously important issues. But so is the fact that, unlike any other rich country in the world, the United States has tens of millions of people who do not have health insurance and therefore go without some forms of medical care.
A new study being released today, by some of the country’s top health economists, aims to estimate the effects of not having health insurance — and the effects are large.
The researchers used a lottery that the state of Oregon conducted in 2008 to determine who would become eligible to apply for a limited number of Medicaid slots. The researchers compared the health outcomes of those who won the lottery (many of whom then received insurance) and those who did not (who were more likely to remain uninsured).
The researchers have followed the subjects for only a year so far, so the paper has some clear limitations. But it nonetheless suggests that having health insurance substantially improves health. Expanding insurance does not save society money — as some advocates of preventive medicine have claimed — but it does appear to make people mentally and physically healthier.
The authors point out that the insurance in question — Medicaid — is the same one that many uninsured people will receive as part of the health care law. For that reason, among others, the paper suggests that the law is likely to improve the health and well-being of many of the uninsured.
Katherine Baicker — one of the authors and a Harvard economist who served in President George W. Bush’s administration — wrote the following to me, via e-mail:
Excerpts from the study, which my colleague Gina Kolata writes about today, follow:
Those are obviously important issues. But so is the fact that, unlike any other rich country in the world, the United States has tens of millions of people who do not have health insurance and therefore go without some forms of medical care.
A new study being released today, by some of the country’s top health economists, aims to estimate the effects of not having health insurance — and the effects are large.
The researchers used a lottery that the state of Oregon conducted in 2008 to determine who would become eligible to apply for a limited number of Medicaid slots. The researchers compared the health outcomes of those who won the lottery (many of whom then received insurance) and those who did not (who were more likely to remain uninsured).
The researchers have followed the subjects for only a year so far, so the paper has some clear limitations. But it nonetheless suggests that having health insurance substantially improves health. Expanding insurance does not save society money — as some advocates of preventive medicine have claimed — but it does appear to make people mentally and physically healthier.
The authors point out that the insurance in question — Medicaid — is the same one that many uninsured people will receive as part of the health care law. For that reason, among others, the paper suggests that the law is likely to improve the health and well-being of many of the uninsured.
Katherine Baicker — one of the authors and a Harvard economist who served in President George W. Bush’s administration — wrote the following to me, via e-mail:
There has been a great deal of uncertainty about how much of a difference Medicaid makes to enrollees. Some argued that Medicaid isn’t ‘good’ insurance coverage and that a Medicaid card doesn’t get enrollees much access to care. Others argued that the uninsured already have access to care through the emergency room, clinics, or charity care.The authors also point out that the benefits of health insurance aren’t only medical. They’re financial too, as is the case with other forms of insurance. Here’s another author, Amy Finkelstein (an M.I.T. economist who has written for The Wall Street Journal opinion pages and whom I’ve written about), also via e-mail:
Our study shows that gaining access to Medicaid matters on a number of different dimensions, including increased access to and use of health care.
Health insurance isn’t just about access to health care – it’s also about protection from financial ruin. This point isn’t often discussed in the debate about health insurance expansions, but the reduction in financial strain that we found was substantial. This is important for enrollees, but it is also important for the providers who see fewer of their bills go unpaid.Besides Ms. Baicker and Ms. Finkelstein, the paper’s authors include Jonathan Gruber (an M.I.T. economist, who has advised the Obama administration) and Joseph Newhouse (a Harvard economist who designed and ran the famous RAND Health Insurance Experiment in the 1970s and ’80s). The other authors are Sarah Taubman, Bill Wright, Mira Bernstein, Heidi Allen and members of the Oregon Health Study Group.
Excerpts from the study, which my colleague Gina Kolata writes about today, follow:
About one year after enrollment, we find that those selected by the lottery have substantial and statistically significantly higher health care utilization, lower out-of-pocket medical expenditures and medical debt, and better self-reported health than the control group that was not given the opportunity to apply for Medicaid.
The increase in hospital admissions appears to be disproportionately concentrated in the approximately 35 percent of admissions that do not originate in the emergency room, suggesting that these admissions may be more price sensitive.
[W]e find that insurance is associated with improvements across the board in our measures of self-reported physical and mental health, averaging two-tenths of a standard deviation improvement. These results appear to reflect improvements in mental health and also at least partly a general sense of improved well being; they may also reflect improvements in objective, physical health, but this is more difficult to determine with the data we now have available.
[I]nsurance is also associated with an increase in compliance with recommended preventive care. We look at four different measures of preventive care: blood cholesterol checks, blood tests for diabetes, mammograms, and pap tests. …[T]he results indicate … a 20 percent increase in the probability of ever having one’s blood cholesterol checked, a 15 percent increase in the probability of ever having one’s blood tested for high blood sugar or diabetes, a 60 percent increase in the probability of having a mammogram within the last year (for women 40 and over), and a 45 percent change in the probability of having a pap test within the last year (for women).
[Our] calculation suggests that insurance is associated with a $778 (standard error = $371) increase in annual spending, or about a 25 percent increase relative to the implied control mean annual spending.
First Study of Its Kind Shows Benefits of Providing Medical Insurance to Poor By GINA KOLATA
First Study of Its Kind Shows Benefits of Providing Medical Insurance to Poor By GINA KOLATA
When poor people are given medical insurance, they not only find regular doctors and see doctors more often but they also feel better, are less depressed and are better able to maintain financial stability, according to a new, large-scale study that provides the first rigorously controlled assessment of the impact of Medicaid.While the findings may seem obvious, health economists and policy makers have long questioned whether it would make any difference to provide health insurance to poor people.
It has become part of the debate on Medicaid, at a time when states are cutting back on this insurance program for the poor. In fact, the only reason the study could be done was that Oregon was running out of money and had to choose some people to get insurance and exclude others, providing groups for comparison.
Some said that of course it would help to insure the uninsured. Others said maybe not. There was already a safety net: emergency rooms, charity care, free clinics and the option to go to a doctor and simply not pay the bill. And in any case, the argument goes, if Medicaid coverage is expanded, people will still have trouble seeing a doctor because so few accept that insurance.
Until now, the arguments were pretty much irresolvable. Researchers compared people who happened to have insurance with those who did not have it. But those who do not have insurance tend to be different in many ways from people who have it. They tend to be less educated and to have worse health habits and lower incomes, said Dr. Alan M. Garber, an internist and health economist at Stanford. No matter how carefully researchers try to correct for the differences “they cannot be completely successful,” Dr. Garber said. “There is always some doubt.”
The new study, published Thursday by the National Bureau of Economic Research, avoided that problem. Its design is like that used to test new drugs. People were randomly selected to have Medicaid or not, and researchers then asked if the insurance made any difference.
Health economists and other researchers said the study was historic and would be cited for years to come, shaping health care debates.
“It’s obviously a really important paper,” said James Smith, an economist at the RAND Corporation. “It is going to be a classic.”
Richard M. Suzman, director of the behavioral and social research program at the National Institute on Aging, a major source of financing for the research, said it was “one of the most important studies that our division has funded since I’ve been at the N.I.A.,” a period of more than a quarter-century.
In its first year of data collection, the study found a long list of differences between the insured and uninsured, adding up to an extra 25 percent in medical expenditures for the insured.
Those with Medicaid were 35 percent more likely to go to a clinic or see a doctor, 15 percent more likely to use prescription drugs and 30 percent more likely to be admitted to a hospital. Researchers were unable to detect a change in emergency room use.
Women with insurance were 60 percent more likely to have mammograms, and those with insurance were 20 percent more likely to have their cholesterol checked. They were 70 percent more likely to have a particular clinic or office for medical care and 55 percent more likely to have a doctor whom they usually saw.
The insured also felt better: the likelihood that they said their health was good or excellent increased by 25 percent, and they were 40 percent less likely to say that their health had worsened in the past year than those without insurance.
The study is now in its next phase, an assessment of the health effects of having insurance. The researchers interviewed 12,000 people — 6,000 who received Medicaid and 6,000 who did not — and measured things like blood pressure, cholesterol and weight.
The study became possible because of an unusual situation in Oregon. In 2008, the state wanted to expand its Medicaid program to include more uninsured people but could afford to add only 10,000 to its rolls. Yet nearly 90,000 applied. Oregon decided to select the 10,000 by lottery.
Economists were electrified. Here was their chance to compare those who got insurance with those who were randomly assigned to go without it. No one had ever done anything like that before, in part because it would be considered unethical to devise a study that would explicitly deny some people coverage while giving it to others.
But this situation was perfect for assessing the impact of Medicaid, said Katherine Baicker, professor of health economics at the Harvard School of Public Health. Dr. Baicker and Amy Finkelstein, professor of economics at M.I.T., are the principal investigators for the study.
“Amy and I stumbled across the lottery in Oregon and thought, ‘This is an unbelievable opportunity to actually find out once and for all what expanding public health insurance does,’ ” Dr. Baicker said.
They had just a short window of time. Within two years, Oregon found the money to offer Medicaid to the nearly 80,000 who had been turned down in the lottery.
As an economist, Dr. Finkelstein was interested, among other things, in whether Medicaid did what all insurance — homeowner’s, auto, health — is supposed to do: shield people from financial catastrophe. Almost no one had even tried to investigate that question, she said.
“It is shocking that it is not even in the discourse,” Dr. Finkelstein said.
The study found that those with insurance were 25 percent less likely to have an unpaid bill sent to a collection agency and were 40 percent less likely to borrow money or fail to pay other bills because they had to pay medical bills.
Dr. Finkelstein said she had thought that the people were so poor to begin with that they just did not spend very much out of pocket on medical care when they did not have insurance. “Yet look at the results,” she said.
Dr. Baicker interviewed people for Part 2 of the study and was impressed by what she heard.
“Being uninsured is incredibly stressful from a financial perspective, a psychological perspective, a physical perspective,” she said. “It is a huge relief to people not to have to worry about it day in and day out.”
What Obama Wants By PAUL KRUGMAN
What Obama Wants By PAUL KRUGMAN
On Thursday, President Obama met with Republicans to discuss a debt deal. We don’t know exactly what was proposed, but news reports before the meeting suggested that Mr. Obama is offering huge spending cuts, possibly including cuts to Social Security and an end to Medicare’s status as a program available in full to all Americans, regardless of income.
Obviously, the details matter a lot, but progressives, and Democrats in general, are understandably very worried. Should they be? In a word, yes.
Now, this might just be theater: Mr. Obama may be pulling an anti-Corleone, making Republicans an offer they can’t accept. The reports say that the Obama plan also involves significant new revenues, a notion that remains anathema to the Republican base. So the goal may be to paint the G.O.P. into a corner, making Republicans look like intransigent extremists — which they are.
But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.
One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”
That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.
In his brief remarks after Thursday’s meeting, by the way, Mr. Obama seemed to reiterate the Herbert Hooveresque view that deficit reduction is what we need to “grow the economy.”
People have asked me why the president’s economic advisers aren’t telling him not to believe in the confidence fairy — that is, not to believe the assertion, popular on the right but overwhelmingly refuted by the evidence, that slashing spending in the face of a depressed economy will magically create jobs. My answer is, what economic advisers? Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving.
Nor have they been replaced. As The Wall Street Journal recently noted, there are a “stunning” number of vacancies in important economic posts. So who’s defining the administration’s economic views?
Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election. And Mr. Clinton did, indeed, rebound from a big defeat in the 1994 midterms to win big two years later. But some of us think that the rebound had less to do with his rhetorical move to the center than with the five million jobs the economy added over those two years — an achievement not likely to be repeated this time, especially not in the face of harsh spending cuts.
Anyway, I don’t believe that it’s all political calculation. Watching Mr. Obama and listening to his recent statements, it’s hard not to get the impression that he is now turning for advice to people who really believe that the deficit, not unemployment, is the top issue facing America right now, and who also believe that the great bulk of deficit reduction should come from spending cuts. It’s worth noting that even Republicans weren’t suggesting cuts to Social Security; this is something Mr. Obama and those he listens to apparently want for its own sake.
Which raises the big question: If a debt deal does emerge, and it overwhelmingly reflects conservative priorities and ideology, should Democrats in Congress vote for it?
Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.
Obviously, the details matter a lot, but progressives, and Democrats in general, are understandably very worried. Should they be? In a word, yes.
Now, this might just be theater: Mr. Obama may be pulling an anti-Corleone, making Republicans an offer they can’t accept. The reports say that the Obama plan also involves significant new revenues, a notion that remains anathema to the Republican base. So the goal may be to paint the G.O.P. into a corner, making Republicans look like intransigent extremists — which they are.
But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.
One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”
That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.
In his brief remarks after Thursday’s meeting, by the way, Mr. Obama seemed to reiterate the Herbert Hooveresque view that deficit reduction is what we need to “grow the economy.”
People have asked me why the president’s economic advisers aren’t telling him not to believe in the confidence fairy — that is, not to believe the assertion, popular on the right but overwhelmingly refuted by the evidence, that slashing spending in the face of a depressed economy will magically create jobs. My answer is, what economic advisers? Almost all the high-profile economists who joined the Obama administration early on have either left or are leaving.
Nor have they been replaced. As The Wall Street Journal recently noted, there are a “stunning” number of vacancies in important economic posts. So who’s defining the administration’s economic views?
Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election. And Mr. Clinton did, indeed, rebound from a big defeat in the 1994 midterms to win big two years later. But some of us think that the rebound had less to do with his rhetorical move to the center than with the five million jobs the economy added over those two years — an achievement not likely to be repeated this time, especially not in the face of harsh spending cuts.
Anyway, I don’t believe that it’s all political calculation. Watching Mr. Obama and listening to his recent statements, it’s hard not to get the impression that he is now turning for advice to people who really believe that the deficit, not unemployment, is the top issue facing America right now, and who also believe that the great bulk of deficit reduction should come from spending cuts. It’s worth noting that even Republicans weren’t suggesting cuts to Social Security; this is something Mr. Obama and those he listens to apparently want for its own sake.
Which raises the big question: If a debt deal does emerge, and it overwhelmingly reflects conservative priorities and ideology, should Democrats in Congress vote for it?
Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.
Tuesday, July 05, 2011
The Mother of All No-Brainers By DAVID BROOKS
The Mother of All No-Brainers By DAVID BROOKS
The Republicans have changed American politics since they took control of the House of Representatives. They have put spending restraint and debt reduction at the top of the national agenda. They have sparked a discussion on entitlement reform. They have turned a bill to raise the debt limit into an opportunity to put the U.S. on a stable fiscal course.Republican leaders have also proved to be effective negotiators. They have been tough and inflexible and forced the Democrats to come to them. The Democrats have agreed to tie budget cuts to the debt ceiling bill. They have agreed not to raise tax rates. They have agreed to a roughly 3-to-1 rate of spending cuts to revenue increases, an astonishing concession.
Moreover, many important Democrats are open to a truly large budget deal. President Obama has a strong incentive to reach a deal so he can campaign in 2012 as a moderate. The Senate majority leader, Harry Reid, has talked about supporting a debt reduction measure of $3 trillion or even $4 trillion if the Republicans meet him part way. There are Democrats in the White House and elsewhere who would be willing to accept Medicare cuts if the Republicans would be willing to increase revenues.
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
This, as I say, is the mother of all no-brainers.
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.
The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.
The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.
The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.
But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol.
Over the past week, Democrats have stopped making concessions. They are coming to the conclusion that if the Republicans are fanatics then they better be fanatics, too.
The struggles of the next few weeks are about what sort of party the G.O.P. is — a normal conservative party or an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation.
If the debt ceiling talks fail, independent voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.
And they will be right.
This article has been revised to reflect the following correction:
Correction: July 5, 2011
Monday, June 13, 2011
(Almost) Everything You Need to Know about Culture in 10 Books by Maria Popova
13 JUNE, 2011
(Almost) Everything You Need to Know about Culture in 10 Books by Maria Popova
What the limits of the universe have to do with the history of jazz and the secret of happiness.
Last week, I was reorganizing my library and realized that some of my favorite books are ones that introduced me to subjects I either admired but knew little about or was unaware of altogether. The kinds of reads that profoundly enrich one’s lens on the world. So I thought I’d put together a modest reading list of essential primers for, well, everything. Okay, maybe not everything — I’m keenly aware of how laughable that proposition is — but a fair amount to offer a basis for the kind of cross-disciplinary understanding of culture that I believe is crucial to contributing to the world in a meaningful way. To begin, here are ten essential primers on everything from jazz to data visualization to money.
DATA VISUALIZATIONLong before there was The Visual Miscellaneum or Data Flow, there was Graphis diagrams: The graphic visualization of abstract data — a seminal vision for the convergence of aesthetics and information value, originally published in 1974, which codified the conventions of contemporary data visualization and information design. One of the 100 most influential design books of the past 100 years, it features work by icons like iconic designer and animator Saul Bass, Brain Pickings favorite Milton Glaser, TED founder Richard Saul Wurman and many more.
Images courtesy of insect54
JAZZAs a lover of jazz, I was thrilled for this month’s release of The History of Jazz — Ted Gioia‘s fascinating and ambitious cultural biography of the genre, though such classification is incredibly reductionist, that permeated just about every facet of creative culture, social dynamics and politics.
The idea of a ragtime ballet or opera must have seemed an oxymoron to those on both sides of the great racial divide that characterized turn-of-the-century American society. It required the development of a different aesthetic before such works could be appreciated on their own terms.
In our own day, we have embraced just such a new aesthetic, one that allows audience not only to accept, but often rush to praise, willy-nilly, various transformations of vernacular forms of culture into serious art. This tendency is evident not only — or even primarily — in jazz but in virtually every contemporary genre and style of creative human expression. But even in tolerant, liberal-mined times, the tension between these two streams of activity continues to seethe under the surface. This dynamic interaction, the clash and fusion — of African and European, composition and improvisation, spontaneity and deliberation, the popular and the serious, high and low — will follow us at virtually every turn as we unfold the complex history of jazz music.” ~ Ted Gioia
COSMOLOGYIn 1988, legendary theoretical physicist and cosmologist Stephen Hawking wrote what’s commonly held as the most important book in popular science ever published. A Brief History of Time attempted to answer one of humanity’s most fundamental questions — where did the universe come from? — and tackled the complex subject of cosmology through a multitude of angles, including the Big Bang theory, black holes, high mathematics, the nature of time, gravity and much more, yet did it in a way digestible enough to invite the non-expert reader to consider the universe in an entirely new way. (Eight years later, a fantastic illustrated edition offered a revised, updated and expanded version of the book.) With a foreword by none other than Carl Sagan, the book remains a fundamental sensemaking mechanism for understanding the cosmos, our place in it, how we got there and where we might be going.
Perhaps most powerful of all is the human hope and scientific vision of Hawking’s ending:
If we find [a unified theory], it would be the ultimate triumph — for then we would know the mind of God.”
INFORMATION THEORYThe future of information is something I’m deeply interested in, but no such intellectual exploit is complete without a full understanding of its past. Running the risk of overbeating that drum — since I both reviewed it separately earlier this year and placed it atop my annual summer reading list for 2011 — I still maintain that James Gleick’s The Information: A History, a Theory, a Flood is the most important and ambitious work in illuminating human communication and media theory since the days of Marshall McLuhan. Gleick illustrates the central dogma of information theory through a riveting journey across African drum languages, the story of the Morse code, the history of the French optical telegraph, and a number of other fascinating facets of humanity’s infinite quest to transmit what matters with ever-greater efficiency.
We know about streaming information, parsing it, sorting it, matching it, and filtering it. Our furniture includes iPods and plasma screens, our skills include texting and Googling, we are endowed, we are expert, so we see information in the foreground. But it has always been there.” ~ James Gleick
But what makes the book truly shine is that, unlike some of his more techno-dystopian contemporaries, Gleick roots his core argument in a certain faith in humanity, in our moral and intellectual capacity for elevation, making the evolution and flood of information an occasion to celebrate new opportunities and expand our limits, rather than to despair over our limitations.
MONEYIn The Ascent of Money: A Financial History of the World, Harvard historian Niall Ferguson makes a compelling case for banking and the development of currency as a central force behind how civilization has evolved. As we begin to emerge from one of the biggest global recessions in recorded history, Ferguson offers a timely and timeless reminder of one of the greatest truths in financial history and, I would add, human psychology at large: Sooner or later, every bubble bursts. What makes the book even more interesting is that Ferguson completed his research for it prior to the actual economic recession in the U.S., yet many of his insights and conclusions presage what was about to happen with uncanny accuracy.
Behind each great historical phenomenon there lies a financial secret, and this book sets out to illuminate the most important of these. For example, the Renaissance created such a boom in the market for art and architecture because Italian bankers like theMedici mad fortunes by applying Oriental mathematics to money. The Dutch Republic prevailed over the Habsburg Empire because having the world’s first modern stock market was financially preferable to having the world’s biggest silver mine. The problems of the French monarchy could not be resolved without a revolution because a convicted Scots murderer had wrecked the French financial system by unleashing the first stock market bubble and bust.” ~ Niall Ferguson
Above all, the book — one of 5 must-read books by this year’s TED Global speakers and a companion read to a BBC documentary of the same name, now free to watch online — is an admirable effort to break down what Ferguson calls “the dangerous barrier which has arisen between financial knowledge and other kinds of knowledge,” a hallmark of the holistic knowledge and cross-disciplinary curiosity I so firmly believe are the key to a richer, more creative, more intelligent life.
CLASSICAL MUSICClassical music is something most people recognize for its cultural importance, but admire from a safe distance. Yet its influence on contemporary culture, both musically and beyond, is wide and all-permeating. In The Rest Is Noise: Listening to the Twentieth Century, New Yorker music critic Alex Ross dances across the most essential 20th-century pieces in major and minor with so much grace and eloquence that you emerge with a newfound understanding for and appreciation of the beautiful language of classical music. From Strauss to Mahler to Coltrane to Glass, from politics to technological innovation to art history, Ross offers a biographical, historical and social context for the most elevated soundtrack of the past century and extends an invitation to listen to it with new ears and new heart.
Because composers have infiltrated every aspect of modern existence, their work can be depicted only on the largest possible canvas. The Rest Is Noise chronicles not only the artists themselves but also the politicians, dictators, millionaire patrons, and CEOs who tried to control what music was written; the intellectuals who attempted to adjudicate style; the writers, painters, dancers, and filmmakers who provided companionship on lonely roads of exploration; the audiences who variously reveled in, reviled, or ignored what composers were doing; the technologies that changed how music was made and heard; and the revolutions, hot and cold wars, waves of emigration, and deeper social transformations that reshape the landscape in which composers worked.” ~ Alex Ross
Ross’s sequel, Listen to This, is one of 7 must-read books on music, emotion and the brain.
WRITINGWhen it was published earlier this year, it didn’t take long to recognize How to Write a Sentence: And How to Read One by New York Times columnist Stanley Fish as the most important and ambitious work on the art and craft of language since Strunk and White’s iconic 1918 classic, The Elements of Style. In fact, Fish offers an intelligent rebuttal to some of the cultish mandates of Strunk and White’s bible, most notably the blind insistence on brevity and sentence minimalism. To make his case, he picks apart some of history’s most powerful sentences, from Shakespeare to Dickens to Lewis Carroll, using a kind of literary forensics to excavate the essence of beautiful language through its fundamental building block, the sentence.
The pleasure I take in the sentence has nothing to do with the case or with the merits of either the majority’s or the dissent’s arguments. It is the pleasure of appreciating a technical achievement — here the athletic analogy might be to target shooting. [...] I carry the sentence around with me as others might carry a precious gem or a fine Swiss watch. I pull it out and look at it. I pull it out and invite others (who are sometimes reluctant) to look at it. I put it under a microscope and examine its innermost workings.” ~ Stanley Fish
FILMHoward Suber is considered America’s most distinguished film scholar, having founded the UCLA Film Archive and dramatically reformed the Society for Cinema and Media Studies, and The Power of Film is nothing short of a remarkable reflection of his reputation and his lifetime of teaching film. In fact, screenwriter David Koepp might not be exaggerating when he says that what Aristotle did for drama, Suber has done for film. The book is essentially a laboratory exploring the patterns, principles and elements of cinematic storytelling that make a film successful, memorable and culturally impactful. And, as Francis Ford Coppola points out about the book, “[m]uch of it is surprisingly contrary to what ‘everyone knows.’”
Popular films are a special kind of drama. While much that is in them can be traced back to the ancient dramas of Aeschylus, Sophocles, and Euripides, whose works were performed in a kind of popular theater for Athenians, only some of what was true for dramatists and their audiences then continues to be true twenty-five centuries later.
Popular films have their own principles, patterns and structures. These deal not so much with style and technique as with the psychology of storytelling, which ultimately is the psychology of contemporary human beings.” ~ Howard Suber
SCIENCE FICTIONScience fiction is a relatively nascent literary genre, and yet it has become intricately intertwined with much of contemporary culture, from entertainment to design to scientific inquiry to technological innovation. As Star Trek creator Gene Roddenberry famously noted in a 1980 letter, “[t]he links between science fiction and science are well-established.” In The Secret History of Science Fiction anthologists James Patrick Kelly and John Kessel offer a fascinating parallel history of the genre born out of an active rebellion against the very term “genre” and a frustration with the multitude of definitions of “science fiction.”
We understand why some might say that, after the mid-1970s, sf went back to the playroom, never to be taken seriously again. But they do a vast disservice to the writers and readers of the next thirty years. What we hope to present in this anthology is an alternative vision of sf from the early 1970s to the present, one in which it becomes evident that the literary potential of sf was not squandered. We offer evidence that the developments of the 1960s and early ’70s have been carried forth, if mostly outside of the public eye. For years they have been overshadowed by popular media sf and best-selling books that cater to the media audience. And at the same time that, on one side of the genre divide, sf was being written at the highest levels of ambition, on the other side, writers came to use the materials of sf for their own purposes, writing fiction that is clearly science fiction, but not identified by that name.”
The book features 19 stories from iconic authors, many not classically considered science fiction writers, including Margaret Atwood, Don DeLillo, Jonathan Lethem and George Saunders. (It’s also incredibly refreshing to see such a gender-balanced anthology.)
HAPPINESSEarlier this year, I did an extensive reading list of what I consider to be the 7 most essential books on the art and science of happiness. Topping it was Jonathan Haidt‘s The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom, which examines millennia of philosophical thought on the grand question of what makes us happy to unearth ten great theories of happiness discovered by the thinkers of the past. From Plato to Jesus to Buddha, they reveal a surprising abundance of common tangents. (For example, from Shakespeare: “There is nothing either good or bad, but thinking makes it so.” From Buddha: “Our life is the creation of our mind.”)
Haidt takes this ambitious analysis of philosophical thought over the centuries and examines it through the prism of modern psychology research to paint a profound portrait of our civilization’s understanding of happiness and extract a remarkably compelling blueprint for optimizing the human condition for well-being.
The story begins with an account of how the human mind works. Not a full account, of course, just two ancient truths that must be understood before you can take advantage of modern psychology to improve your life. The first truth is the foundational idea of this book: The mind is divided into parts that sometimes conflict. Like a rider on the back of an elephant, the conscious, reasoning part of the mind has only limited control of what the elephant does. Nowadays, we know the causes of these divisions, and a few ways to help the rider and the elephant work better as a team.” ~ Jonathan Haidt
* * *
What are the books that gave you new understanding of something or opened your eyes to a facet of culture that had been previously foreign to you?
(Almost) Everything You Need to Know about Culture in 10 Books by Maria Popova
What the limits of the universe have to do with the history of jazz and the secret of happiness.
Last week, I was reorganizing my library and realized that some of my favorite books are ones that introduced me to subjects I either admired but knew little about or was unaware of altogether. The kinds of reads that profoundly enrich one’s lens on the world. So I thought I’d put together a modest reading list of essential primers for, well, everything. Okay, maybe not everything — I’m keenly aware of how laughable that proposition is — but a fair amount to offer a basis for the kind of cross-disciplinary understanding of culture that I believe is crucial to contributing to the world in a meaningful way. To begin, here are ten essential primers on everything from jazz to data visualization to money.
DATA VISUALIZATIONLong before there was The Visual Miscellaneum or Data Flow, there was Graphis diagrams: The graphic visualization of abstract data — a seminal vision for the convergence of aesthetics and information value, originally published in 1974, which codified the conventions of contemporary data visualization and information design. One of the 100 most influential design books of the past 100 years, it features work by icons like iconic designer and animator Saul Bass, Brain Pickings favorite Milton Glaser, TED founder Richard Saul Wurman and many more.
Images courtesy of insect54
JAZZAs a lover of jazz, I was thrilled for this month’s release of The History of Jazz — Ted Gioia‘s fascinating and ambitious cultural biography of the genre, though such classification is incredibly reductionist, that permeated just about every facet of creative culture, social dynamics and politics.
The idea of a ragtime ballet or opera must have seemed an oxymoron to those on both sides of the great racial divide that characterized turn-of-the-century American society. It required the development of a different aesthetic before such works could be appreciated on their own terms.
In our own day, we have embraced just such a new aesthetic, one that allows audience not only to accept, but often rush to praise, willy-nilly, various transformations of vernacular forms of culture into serious art. This tendency is evident not only — or even primarily — in jazz but in virtually every contemporary genre and style of creative human expression. But even in tolerant, liberal-mined times, the tension between these two streams of activity continues to seethe under the surface. This dynamic interaction, the clash and fusion — of African and European, composition and improvisation, spontaneity and deliberation, the popular and the serious, high and low — will follow us at virtually every turn as we unfold the complex history of jazz music.” ~ Ted Gioia
COSMOLOGYIn 1988, legendary theoretical physicist and cosmologist Stephen Hawking wrote what’s commonly held as the most important book in popular science ever published. A Brief History of Time attempted to answer one of humanity’s most fundamental questions — where did the universe come from? — and tackled the complex subject of cosmology through a multitude of angles, including the Big Bang theory, black holes, high mathematics, the nature of time, gravity and much more, yet did it in a way digestible enough to invite the non-expert reader to consider the universe in an entirely new way. (Eight years later, a fantastic illustrated edition offered a revised, updated and expanded version of the book.) With a foreword by none other than Carl Sagan, the book remains a fundamental sensemaking mechanism for understanding the cosmos, our place in it, how we got there and where we might be going.
Perhaps most powerful of all is the human hope and scientific vision of Hawking’s ending:
If we find [a unified theory], it would be the ultimate triumph — for then we would know the mind of God.”
INFORMATION THEORYThe future of information is something I’m deeply interested in, but no such intellectual exploit is complete without a full understanding of its past. Running the risk of overbeating that drum — since I both reviewed it separately earlier this year and placed it atop my annual summer reading list for 2011 — I still maintain that James Gleick’s The Information: A History, a Theory, a Flood is the most important and ambitious work in illuminating human communication and media theory since the days of Marshall McLuhan. Gleick illustrates the central dogma of information theory through a riveting journey across African drum languages, the story of the Morse code, the history of the French optical telegraph, and a number of other fascinating facets of humanity’s infinite quest to transmit what matters with ever-greater efficiency.
We know about streaming information, parsing it, sorting it, matching it, and filtering it. Our furniture includes iPods and plasma screens, our skills include texting and Googling, we are endowed, we are expert, so we see information in the foreground. But it has always been there.” ~ James Gleick
But what makes the book truly shine is that, unlike some of his more techno-dystopian contemporaries, Gleick roots his core argument in a certain faith in humanity, in our moral and intellectual capacity for elevation, making the evolution and flood of information an occasion to celebrate new opportunities and expand our limits, rather than to despair over our limitations.
MONEYIn The Ascent of Money: A Financial History of the World, Harvard historian Niall Ferguson makes a compelling case for banking and the development of currency as a central force behind how civilization has evolved. As we begin to emerge from one of the biggest global recessions in recorded history, Ferguson offers a timely and timeless reminder of one of the greatest truths in financial history and, I would add, human psychology at large: Sooner or later, every bubble bursts. What makes the book even more interesting is that Ferguson completed his research for it prior to the actual economic recession in the U.S., yet many of his insights and conclusions presage what was about to happen with uncanny accuracy.
Behind each great historical phenomenon there lies a financial secret, and this book sets out to illuminate the most important of these. For example, the Renaissance created such a boom in the market for art and architecture because Italian bankers like theMedici mad fortunes by applying Oriental mathematics to money. The Dutch Republic prevailed over the Habsburg Empire because having the world’s first modern stock market was financially preferable to having the world’s biggest silver mine. The problems of the French monarchy could not be resolved without a revolution because a convicted Scots murderer had wrecked the French financial system by unleashing the first stock market bubble and bust.” ~ Niall Ferguson
Above all, the book — one of 5 must-read books by this year’s TED Global speakers and a companion read to a BBC documentary of the same name, now free to watch online — is an admirable effort to break down what Ferguson calls “the dangerous barrier which has arisen between financial knowledge and other kinds of knowledge,” a hallmark of the holistic knowledge and cross-disciplinary curiosity I so firmly believe are the key to a richer, more creative, more intelligent life.
CLASSICAL MUSICClassical music is something most people recognize for its cultural importance, but admire from a safe distance. Yet its influence on contemporary culture, both musically and beyond, is wide and all-permeating. In The Rest Is Noise: Listening to the Twentieth Century, New Yorker music critic Alex Ross dances across the most essential 20th-century pieces in major and minor with so much grace and eloquence that you emerge with a newfound understanding for and appreciation of the beautiful language of classical music. From Strauss to Mahler to Coltrane to Glass, from politics to technological innovation to art history, Ross offers a biographical, historical and social context for the most elevated soundtrack of the past century and extends an invitation to listen to it with new ears and new heart.
Because composers have infiltrated every aspect of modern existence, their work can be depicted only on the largest possible canvas. The Rest Is Noise chronicles not only the artists themselves but also the politicians, dictators, millionaire patrons, and CEOs who tried to control what music was written; the intellectuals who attempted to adjudicate style; the writers, painters, dancers, and filmmakers who provided companionship on lonely roads of exploration; the audiences who variously reveled in, reviled, or ignored what composers were doing; the technologies that changed how music was made and heard; and the revolutions, hot and cold wars, waves of emigration, and deeper social transformations that reshape the landscape in which composers worked.” ~ Alex Ross
Ross’s sequel, Listen to This, is one of 7 must-read books on music, emotion and the brain.
WRITINGWhen it was published earlier this year, it didn’t take long to recognize How to Write a Sentence: And How to Read One by New York Times columnist Stanley Fish as the most important and ambitious work on the art and craft of language since Strunk and White’s iconic 1918 classic, The Elements of Style. In fact, Fish offers an intelligent rebuttal to some of the cultish mandates of Strunk and White’s bible, most notably the blind insistence on brevity and sentence minimalism. To make his case, he picks apart some of history’s most powerful sentences, from Shakespeare to Dickens to Lewis Carroll, using a kind of literary forensics to excavate the essence of beautiful language through its fundamental building block, the sentence.
The pleasure I take in the sentence has nothing to do with the case or with the merits of either the majority’s or the dissent’s arguments. It is the pleasure of appreciating a technical achievement — here the athletic analogy might be to target shooting. [...] I carry the sentence around with me as others might carry a precious gem or a fine Swiss watch. I pull it out and look at it. I pull it out and invite others (who are sometimes reluctant) to look at it. I put it under a microscope and examine its innermost workings.” ~ Stanley Fish
FILMHoward Suber is considered America’s most distinguished film scholar, having founded the UCLA Film Archive and dramatically reformed the Society for Cinema and Media Studies, and The Power of Film is nothing short of a remarkable reflection of his reputation and his lifetime of teaching film. In fact, screenwriter David Koepp might not be exaggerating when he says that what Aristotle did for drama, Suber has done for film. The book is essentially a laboratory exploring the patterns, principles and elements of cinematic storytelling that make a film successful, memorable and culturally impactful. And, as Francis Ford Coppola points out about the book, “[m]uch of it is surprisingly contrary to what ‘everyone knows.’”
Popular films are a special kind of drama. While much that is in them can be traced back to the ancient dramas of Aeschylus, Sophocles, and Euripides, whose works were performed in a kind of popular theater for Athenians, only some of what was true for dramatists and their audiences then continues to be true twenty-five centuries later.
Popular films have their own principles, patterns and structures. These deal not so much with style and technique as with the psychology of storytelling, which ultimately is the psychology of contemporary human beings.” ~ Howard Suber
SCIENCE FICTIONScience fiction is a relatively nascent literary genre, and yet it has become intricately intertwined with much of contemporary culture, from entertainment to design to scientific inquiry to technological innovation. As Star Trek creator Gene Roddenberry famously noted in a 1980 letter, “[t]he links between science fiction and science are well-established.” In The Secret History of Science Fiction anthologists James Patrick Kelly and John Kessel offer a fascinating parallel history of the genre born out of an active rebellion against the very term “genre” and a frustration with the multitude of definitions of “science fiction.”
We understand why some might say that, after the mid-1970s, sf went back to the playroom, never to be taken seriously again. But they do a vast disservice to the writers and readers of the next thirty years. What we hope to present in this anthology is an alternative vision of sf from the early 1970s to the present, one in which it becomes evident that the literary potential of sf was not squandered. We offer evidence that the developments of the 1960s and early ’70s have been carried forth, if mostly outside of the public eye. For years they have been overshadowed by popular media sf and best-selling books that cater to the media audience. And at the same time that, on one side of the genre divide, sf was being written at the highest levels of ambition, on the other side, writers came to use the materials of sf for their own purposes, writing fiction that is clearly science fiction, but not identified by that name.”
The book features 19 stories from iconic authors, many not classically considered science fiction writers, including Margaret Atwood, Don DeLillo, Jonathan Lethem and George Saunders. (It’s also incredibly refreshing to see such a gender-balanced anthology.)
HAPPINESSEarlier this year, I did an extensive reading list of what I consider to be the 7 most essential books on the art and science of happiness. Topping it was Jonathan Haidt‘s The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom, which examines millennia of philosophical thought on the grand question of what makes us happy to unearth ten great theories of happiness discovered by the thinkers of the past. From Plato to Jesus to Buddha, they reveal a surprising abundance of common tangents. (For example, from Shakespeare: “There is nothing either good or bad, but thinking makes it so.” From Buddha: “Our life is the creation of our mind.”)
Haidt takes this ambitious analysis of philosophical thought over the centuries and examines it through the prism of modern psychology research to paint a profound portrait of our civilization’s understanding of happiness and extract a remarkably compelling blueprint for optimizing the human condition for well-being.
The story begins with an account of how the human mind works. Not a full account, of course, just two ancient truths that must be understood before you can take advantage of modern psychology to improve your life. The first truth is the foundational idea of this book: The mind is divided into parts that sometimes conflict. Like a rider on the back of an elephant, the conscious, reasoning part of the mind has only limited control of what the elephant does. Nowadays, we know the causes of these divisions, and a few ways to help the rider and the elephant work better as a team.” ~ Jonathan Haidt
* * *
What are the books that gave you new understanding of something or opened your eyes to a facet of culture that had been previously foreign to you?
Tuesday, June 07, 2011
The German Example By DAVID LEONHARDT
The German Example By DAVID LEONHARDT
Germany has been a frequent cudgel in recent fights over the American economy. When Germany has grown faster than the United States, stimulus skeptics like to point across the Atlantic Ocean and say that austerity works. When it has grown more slowly, people who think the American stimulus made a big difference — including me — return the favor.
But the full story is more interesting than any caricature. In the last decade, Germany has succeeded in some important ways that the United States has not. The lessons aren’t simply liberal or conservative. They are both.
With our economy weakening once again — and with Chancellor Angela Merkel of Germany visiting the White House this week — now seems to be a good time to take a closer look.
The brief story is that, despite its reputation for austerity, Germany has been far more willing than the United States to use the power of government to help its economy. Yet it has also been more ruthless about cutting wasteful parts of government.
The results are intriguing. After performing worse than the American economy for years, the German economy has grown faster since the middle of last decade. (It did better than our economy before the crisis and has endured the crisis about equally.) Just as important, most Germans have fared much better than most Americans, because the bounty of their growth has not been concentrated among a small slice of the affluent.
Inflation-adjusted average hourly pay has risen almost 30 percent since 1985 in Germany, the kind of gains American workers have not enjoyed since the ’50s and ’60s. In this country, hourly pay has risen a scant 6 percent since 1985.
Germany also managed to avoid a housing bubble, unlike the United States, Britain, Ireland, Spain and other countries. German children have stronger math and science skills than ours. Its medium-term budget deficit is smaller. Its unemployment rate is like a mirror image of ours: 6.1 percent, well below where it was when the financial crisis began in 2007. Our rate has risen to 9.1 percent.
I’m not saying that the United States should want to become Germany. Americans remain considerably richer. We have the innovative companies — Wal-Mart, Google, Apple, Facebook, Twitter — that make other countries swoon. We remain the world’s immigration Mecca.
Yet for all the strengths of the United States, almost nobody claims that the economy is in especially good shape. It so happens that our current out-of-town guests could teach us a few things.
•
The first lesson is that it’s really possible to make government more efficient. Like much of Western Europe, Germany long had a unemployment benefits system that discouraged work. But almost a decade ago, it began to make some changes.
It cut many benefits, in both duration and level, and it reduced the incentives to retire early. It also began trying to move the long-term unemployed into the labor force.
Specifically, the government took a fresh look at people who had not worked in years to determine who could and couldn’t work. The able and healthy were matched with potential employers. If they took a low-paying job, which was often the case, they would still receive a small portion of their benefits for a time. If they refused to work, their benefits were reduced anyway.
“The incentives to take up work were strengthened,” says Felix Hüfner of the Organization for Economic Co-operation and Development, “and also the sanctions were strengthened.” Sure enough, the reforms have nudged more people back into the labor force — and work tends to beget more work, as people develop skills and have more money to spend.
In the United States, short-term jobless benefits are not generous enough to be a major problem. But the Social Security disability program, which is one reason nearly 20 percent of working-age American men are not working, would benefit from some German-like reforms. So would those public sector pensions that encourage people to retire at 55 or 60.
Beyond the job market, Germany has also made a big effort to improve its education system. Eric Hanushek, a Stanford University economist, notes that Germany’s performance on the main international math, reading and science tests have become such a matter of national concern that the name of the tests — Pisa — is now a household word. “In the U.S.,” he says, “Pisa is still a bell tower in Italy.”
The math scores of German students have risen significantly since 2000, extending their existing lead over American students. Germany’s national average is now higher than the average in Massachusetts, this country’s top-performing state. And there is obviously a connection between strong technical skills and a strong manufacturing sector.
But the German story is not merely about making government more efficient. It’s also about understanding the unique role that government must play in a market economy.
That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent.
Unlike what happened here, German laws and regulators have also prevented the decimation of their labor unions. The clout of German unions, at individual companies and in the political system, is one reason the middle class there has fared decently in recent decades. In fact, middle-class pay has risen at roughly the same rate as top incomes.
The top 1 percent of German households earns about 11 percent of all income, virtually unchanged relative to 1970, according to recent estimates. In the United States, the top 1 percent makes more than 20 percent of all income, up from 9 percent in 1970. That’s right: only 40 years ago, Germany was more unequal than this country.
Finally, there are taxes. Germany does not have a smaller budget deficit because it spends less. Germany, you’ll recall, is the original welfare state. It has a smaller deficit because it is more willing to match the benefits it wants with the needed taxes. The current deficit-reduction plan includes about 60 percent spending cuts and 40 percent tax increases, Mr. Hüfner says. It’s like trying to lose weight by both eating less and exercising more.
As I suggested before, the American economy’s strengths may still be greater than the German economy’s. But Germany sure does seem more serious about dealing with its weaknesses.
And us? Well, lobbyists for the mortgage bankers and the N.A.A.C.P. have recently started pushing for less stringent standards for down payments. Wall Street is trying to water down other financial regulation, too.
Some Democrats say Social Security and Medicare must remain unchanged. Most Republicans refuse to consider returning tax rates even to their 1990s levels. Republican leaders also want to make deep cuts in the sort of antipoverty programs that have helped Germany withstand the recession even in the absence of big new stimulus legislation.
There is no getting around the fact that financial crises wreak terrible damage. It’s too late for us to prevent that damage, and it will take a long time to recover fully. It is not too late to learn from our mistakes.
What Your Taxes Do (and Don’t) Buy for You By BRUCE BARTLETT
June 7, 2011, 6:00 am
What Your Taxes Do (and Don’t) Buy for You By BRUCE BARTLETT
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.
Last week I showed that total taxes at the federal level — individual and corporate income taxes, payroll taxes and so on — are at a 60-year low as a share of the broadest measure of income, the gross domestic product.
Some readers took issue with my failure to include state and local taxes in the calculation. I have now done that, using data from the Organization for Economic Cooperation and Development, which represents the major developed countries. Among its most important responsibilities is the collection of internationally comparable data on a wide variety of topics, including taxes and health care spending.
The table below shows total taxes, including state and local government taxes, as a share of G.D.P. in 2008, the latest year for which there is complete data. The table makes clear that the United States has very low taxes by international standards.
Organization for Economic Cooperation and Development
When Americans see these data they are usually incredulous that Europeans submit to such seemingly oppressive tax levels. Conservatives, in particular, tend to view freedom as a fixed sum: the bigger government is as a share of G.D.P., the less freedom there is for the people (if government consumes, say, 40 percent of G.D.P., then people are only 60 percent free).
The late Milton Friedman popularized this idea, but even he thought that freedom would not be seriously threatened in Western democracies until government spending reached 60 percent of G.D.P. We are far away from that “tipping point,” as he called it; in 2010, total federal, state and local government spending amounted to 36 percent of G.D.P.
American conservatives tend to ignore the composition of spending; to them, just about all spending is equally bad. Europeans don’t have this attitude because their governments provide them with benefits from which all residents gain.
First is cash allowances that almost all families with children receive. We have something similar, the earned-income tax credit. Because it is part of the tax code, it reduces the tax burden; in Europe such programs are part of the budget and thus raise spending. Moreover, the earned-income tax credit benefits only low-income workers; in Europe, family allowances benefit virtually all families with children.
The impact on the tax burden can be dramatic if one views family allowances as negative taxes. For example, in Luxembourg, an average married worker with two children pays a nominal income tax rate of 16.5 percent (including state and local income taxes), while an American in the same situation would pay 5.2 percent. But once family allowances are subtracted from the Luxembourg worker’s income-tax payment, the effective tax rate falls to just nine-tenths of 1 percent.
More importantly, almost every other country has some form of national health insurance that covers, on average, 72 percent of all health costs. The comparable figure in the United States is 46.5 percent, and almost all of that is accounted for by Medicare and Medicaid, which largely benefit the elderly and the poor.
Average American workers must pay for health care out of their pockets, or through their employers in the form of lower wages. Europeans prefer to pay higher taxes and get government health care for every resident in return.
Conservatives universally believe that whenever the government provides a service it will be vastly more costly than if the private sector does so. This is why they support the plan offered by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, to essentially privatize Medicare. Conservatives believe competition will drive down health costs for the elderly.
But O.E.C.D. data show that Americans pay vastly more for health care than the residents of any other major country. In 2008, we paid 16 percent of G.D.P. in total health care costs, public and private combined. The people with the next heaviest health care burden were the French, who paid 11.2 percent of G.D.P. Indeed, at 7.4 percent of G.D.P., the governmental share of health spending in the United States is about the same as total health care costs in many other countries, including (as a percentage of G.D.P.) Luxembourg (6.8 percent), Israel (7.8 percent), Japan (8.1 percent), Britain (8.4 percent) and Norway (8.5 percent).
In other words, if we had a health care system like those in most developed countries, we could, in effect, give every American an increase in their disposable income of 8 percent of G.D.P. – about what they pay in federal income taxes – and have health care no worse than they have in Britain or Japan. It would be like abolishing the federal income tax in terms of allowing people to spend more of their income on something other than health care.
Because most people have little more choice about medical spending than they do about the taxes they pay, one can think of the two as being similar in nature. In the table below, I have added private health care spending as a share of G.D.P. to the tax data in the table above. This puts the United States and other countries on the same footing, by accounting for the fact that they get health care mostly through government while Americans mostly pay for it themselves.
Organization for Economic Cooperation and Development
As one can see, the burden of taxes plus private health care spending substantially equalizes the loss of disposable income in the United States and other countries, because we pay 8.6 percent of G.D.P. for health care over and above what the government pays, whereas those in other major countries pay an average of just 2.3 percent of G.D.P. out of their pockets.
Looking at taxes alone, the burden in the United States is 25 percent below the O.E.C.D. average, but including the additional health costs Americans pay, the United States is just 4.7 percent below average.
In short, a substantial portion of the higher tax burden that Europeans pay is really illusory. They are really just paying their health insurance premiums through their taxes rather than through lower wages, as we do.
Middle-class Europeans also get cash benefits from government that offset much of the tax burden in a way that the United States offers only for the poor. There may be reasons why it is better not to subsidize every family with children and not provide government health insurance for every citizen. But the idea that Europeans are enslaved by high taxes, as most American conservatives believe, is just nonsense.
What Your Taxes Do (and Don’t) Buy for You By BRUCE BARTLETT
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.
Last week I showed that total taxes at the federal level — individual and corporate income taxes, payroll taxes and so on — are at a 60-year low as a share of the broadest measure of income, the gross domestic product.
Some readers took issue with my failure to include state and local taxes in the calculation. I have now done that, using data from the Organization for Economic Cooperation and Development, which represents the major developed countries. Among its most important responsibilities is the collection of internationally comparable data on a wide variety of topics, including taxes and health care spending.
The table below shows total taxes, including state and local government taxes, as a share of G.D.P. in 2008, the latest year for which there is complete data. The table makes clear that the United States has very low taxes by international standards.
Organization for Economic Cooperation and Development
When Americans see these data they are usually incredulous that Europeans submit to such seemingly oppressive tax levels. Conservatives, in particular, tend to view freedom as a fixed sum: the bigger government is as a share of G.D.P., the less freedom there is for the people (if government consumes, say, 40 percent of G.D.P., then people are only 60 percent free).
The late Milton Friedman popularized this idea, but even he thought that freedom would not be seriously threatened in Western democracies until government spending reached 60 percent of G.D.P. We are far away from that “tipping point,” as he called it; in 2010, total federal, state and local government spending amounted to 36 percent of G.D.P.
American conservatives tend to ignore the composition of spending; to them, just about all spending is equally bad. Europeans don’t have this attitude because their governments provide them with benefits from which all residents gain.
First is cash allowances that almost all families with children receive. We have something similar, the earned-income tax credit. Because it is part of the tax code, it reduces the tax burden; in Europe such programs are part of the budget and thus raise spending. Moreover, the earned-income tax credit benefits only low-income workers; in Europe, family allowances benefit virtually all families with children.
The impact on the tax burden can be dramatic if one views family allowances as negative taxes. For example, in Luxembourg, an average married worker with two children pays a nominal income tax rate of 16.5 percent (including state and local income taxes), while an American in the same situation would pay 5.2 percent. But once family allowances are subtracted from the Luxembourg worker’s income-tax payment, the effective tax rate falls to just nine-tenths of 1 percent.
More importantly, almost every other country has some form of national health insurance that covers, on average, 72 percent of all health costs. The comparable figure in the United States is 46.5 percent, and almost all of that is accounted for by Medicare and Medicaid, which largely benefit the elderly and the poor.
Average American workers must pay for health care out of their pockets, or through their employers in the form of lower wages. Europeans prefer to pay higher taxes and get government health care for every resident in return.
Conservatives universally believe that whenever the government provides a service it will be vastly more costly than if the private sector does so. This is why they support the plan offered by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, to essentially privatize Medicare. Conservatives believe competition will drive down health costs for the elderly.
But O.E.C.D. data show that Americans pay vastly more for health care than the residents of any other major country. In 2008, we paid 16 percent of G.D.P. in total health care costs, public and private combined. The people with the next heaviest health care burden were the French, who paid 11.2 percent of G.D.P. Indeed, at 7.4 percent of G.D.P., the governmental share of health spending in the United States is about the same as total health care costs in many other countries, including (as a percentage of G.D.P.) Luxembourg (6.8 percent), Israel (7.8 percent), Japan (8.1 percent), Britain (8.4 percent) and Norway (8.5 percent).
In other words, if we had a health care system like those in most developed countries, we could, in effect, give every American an increase in their disposable income of 8 percent of G.D.P. – about what they pay in federal income taxes – and have health care no worse than they have in Britain or Japan. It would be like abolishing the federal income tax in terms of allowing people to spend more of their income on something other than health care.
Because most people have little more choice about medical spending than they do about the taxes they pay, one can think of the two as being similar in nature. In the table below, I have added private health care spending as a share of G.D.P. to the tax data in the table above. This puts the United States and other countries on the same footing, by accounting for the fact that they get health care mostly through government while Americans mostly pay for it themselves.
Organization for Economic Cooperation and Development
As one can see, the burden of taxes plus private health care spending substantially equalizes the loss of disposable income in the United States and other countries, because we pay 8.6 percent of G.D.P. for health care over and above what the government pays, whereas those in other major countries pay an average of just 2.3 percent of G.D.P. out of their pockets.
Looking at taxes alone, the burden in the United States is 25 percent below the O.E.C.D. average, but including the additional health costs Americans pay, the United States is just 4.7 percent below average.
In short, a substantial portion of the higher tax burden that Europeans pay is really illusory. They are really just paying their health insurance premiums through their taxes rather than through lower wages, as we do.
Middle-class Europeans also get cash benefits from government that offset much of the tax burden in a way that the United States offers only for the poor. There may be reasons why it is better not to subsidize every family with children and not provide government health insurance for every citizen. But the idea that Europeans are enslaved by high taxes, as most American conservatives believe, is just nonsense.
Monday, June 06, 2011
Where Wisdom Lives By DAVID BROOKS
Where Wisdom Lives By DAVID BROOKS
Sometimes life presents you with a basic philosophical choice. Americans are going to have to confront a giant one over the next several years.
It starts in the wonky world of Medicare. As presently constructed, Medicare is based on an open-ended fee-for-service system. The government pays providers each time they deliver a service. The more services they provide, the more money they get.
The fee-for-service system is incredibly popular. Recipients don’t have to think about the costs of their treatment, and they get lots of free money. The average 56-year-old couple pays about $140,000 into the Medicare system over a lifetime and receives about $430,000 in benefits back. The program is also completely unaffordable. Medicare has unfinanced liabilities of more than $30 trillion. The Medicare trustees say the program is about a decade from insolvency.
Some Democrats simply want to do nothing as Medicare careens toward bankruptcy. Last Sunday on “Face the Nation,” for example, Nancy Pelosi said, “I could never support any arrangement that reduced benefits for Medicare.”
Fortunately, more responsible Democrats are looking for ways to save the system. This is where the philosophical issues come in. They involve questions like: Who should make the crucial decisions? Where does wisdom reside?
Democrats tend to be skeptical that dispersed consumers can get enough information to make smart decisions. Health care is phenomenally complicated. Providers have much more information than consumers. Insurance companies are rapacious and are not in the business of optimizing care.
Given these limitations, Democrats generally seek to concentrate decision-making and cost-control power in the hands of centralized experts. Under the Obama health care law, a team of 15 officials will be created to discover best practices and come up with cost-cutting measures. There will also be a Center for Medicare and Medicaid Innovation in Washington to organize medical innovation. Centralized officials will decide how to set national reimbursement rates.
Republicans at their best are skeptical about top-down decision-making. They are skeptical that centralized experts can accurately predict costs. In 1967, the House Ways and Means Committee projected that Medicare would cost $12 billion by 1990. It actually cost $110 billion. They are skeptical that centralized experts can predict human behavior accurately enough to socially engineer new programs. Medicare’s chief actuary predicted that 400,000 people would sign up for the new health care law’s high-risk pools. In fact, only 18,000 have.
They are skeptical that political authorities can, in the long run, resist pressure to hand out free goodies. They are also skeptical that planners can control the unintended effects of their decisions.
Republicans point out that Medicare has tried to control costs centrally for decades with terrible results. They argue that a decentralized process of trial and error will work better, as long as the underlying incentives are right. They suggest replacing the fee-for-service with a premium support system. Seniors would select from a menu of insurance plans. Their consumer choices would drive a continual, bottom-up process of innovation. Providers could use local knowledge to meet specific circumstances.
Representative Paul Ryan’s Republican plan is controversial because of the amount of public money he would dedicate to his premium support plan, but the basic architecture of the plan has been around for decades. In less rigidly ideological times, many Democrats supported variations of this basic approach.
Advocates, like Alain Enthoven of Stanford, point out that competition-based plans have improved outcomes in many places. Such plans cover employees of the University of California and state employees in California, Wisconsin and Minnesota. They also note that the Medicare prescription drug benefit also uses a competition model. Consumers have been adept at negotiating a complex marketplace, and costs are 41 percent below expectations.
The fact is, there is no dispositive empirical proof about which method is best — the centralized technocratic one or the decentralized market-based one. Politicians wave studies, but they’re really just reflecting their overall worldviews. Democrats have much greater faith in centralized expertise. Republicans (at least the most honest among them) believe that the world is too complicated, knowledge is too imperfect. They have much greater faith in the decentralized discovery process of the market.
I’d only add two things. This basic debate will define the identities of the two parties for decades. In the age of the Internet and open-source technology, the Democrats are mad to define themselves as the party of top-down centralized planning. Moreover, if 15 Washington-based experts really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.
Tuesday, May 31, 2011
One Person, One Vote? Not Exactly By DAVID LEONHARDT
One Person, One Vote? Not Exactly By DAVID LEONHARDT
Two economists, Brian Knight and Nathan Schiff, set out a few years ago to determine how much Iowa, New Hampshire and other early-voting states affected presidential nominations.
Mr. Knight and Mr. Schiff analyzed daily polls in other states before and after an early state had held a contest. The polls tended to change immediately after the contest, and the changes tended to last, which suggested that the early states were even more important than many people realized. The economists estimated that an Iowa or New Hampshire voter had the same impact as five Super Tuesday voters put together.
This system, the two men drily noted in a Journal of Political Economy paper, “represents a deviation from the democratic ideal of ‘one person, one vote.’ ”
A presidential campaign is once again upon us, and Iowa and New Hampshire are again at the center of it all. On Thursday, Mitt Romney will announce his candidacy in Stratham, N.H. Last week, Tim Pawlenty opened his campaign in Des Moines. The two states have dominated the nominating process for so long that it’s easy to think of their role as natural.
But it is not natural. It’s undemocratic, in fact. It is unfair to voters in the other 48 states. And it distorts economic policy in several damaging ways.
Most obviously, the federal government has lavished subsidies on ethanol, even though those subsidies drive up food prices and do little to solve the climate problem, partly because candidates pander to the Iowa corn industry. (Mr. Pawlenty, who now says the subsidies must end, is an admirable exception.) Beyond ethanol, a recent peer-reviewed study found that early-voting states received more federal dollars after a competitive election — so long as they supported the winning candidate.
Pork is hardly the only problem with the voting calendar. In the long run-up to the first votes, Iowa and New Hampshire also distort the national conversation because they are so unrepresentative. They are not better or worse than other states, to be clear. But they are different.
Their populations are growing more slowly than the rest of the country’s. Residents of Iowa and New Hampshire are more likely to have health insurance. They are older than average. They are more likely to work in manufacturing.
Above all, Iowa and New Hampshire lack a single big city, at a time when large metropolitan areas are crucial to lifting economic growth. Big metro areas are where big ideas most often take shape and great new companies are most often born. The country’s 25 largest areas are responsible for 52 percent of the country’s economic output, according to the Brookings Institution, and are home to 42 percent of the population.
Yet metro areas are also struggling with major problems. The quality of schools is spotty. Commutes last longer than ever. Roads, bridges, tunnels and transit systems are aging.
You don’t hear much about these issues in the first year of a presidential campaign, though. No wonder. Iowa, New Hampshire and the next two states to vote, Nevada and South Carolina, do not have a single city among the country’s 25 largest. Las Vegas, the 30th-largest metro area, and the Boston suburbs that stretch into New Hampshire are the closest these states come.
So the presidential calendar becomes another cause of what Edward Glaeser, a conservative-leaning Harvard economist, calls our “anti-urban policy bias.” Suburbs and rural areas receive vastly more per-person federal largess than cities. One big reason, of course, is the structure of the Senate: the 12 million residents of Iowa, New Hampshire, Nevada and South Carolina have eight United States senators among them, while the 81 million residents of California, New York and Texas have only six.
Bruce Katz, a Brookings vice president and veteran of Democratic administrations, points out that the world’s other economic powers take their cities more seriously. China, in particular, has made urban planning a central part of its economic strategy.
“The United States stands apart as an anti-urban nation in an urbanizing world,” Mr. Katz told me. “Our political tilt toward small states and small towns, in presidential campaigns and the governing that follows, is not only a quaint relic of an earlier era but a dangerous distraction at a time when national prosperity depends on urban prosperity.”
The typical defense from Iowa and New Hampshire is that they care more about politics than the rest of us and therefore do a better job vetting candidates. But the intense 2008 race between Barack Obama and Hillary Clinton showed that if Iowa and New Hampshire care more, it’s only because of their privileged status. In 2008, turnout soared in states that finally had a primary that mattered, be it Indiana or Texas, North Carolina or Rhode Island.
A more democratic system would allow more voters to see the candidates up close for months at a time. The early states could rotate each year, so that all kinds — big states and small, younger and older, rural and urban — had a turn. In 2016, the first wave could include states that have voted near the end recently, like Indiana, North Carolina, Oregon and South Dakota.
A rotation along these lines would enliven the political debate. Investments in science and education, which are the lifeblood of future economic growth, might play a bigger role in the campaign. You could even imagine — optimistically, I know — that the deficit might prove easier to address if Medicare and Social Security recipients did not make up such a disproportionate share of early voters.
The issues particular to small-town America would still receive extra attention because so many of the 50 states are rural and sparsely populated. It’s just that Iowa and New Hampshire would no longer receive the extreme special treatment they now do.
And that special treatment is a nice thing, indeed. It focuses the entire country, and its next leader, on the concerns of only 1 percent of the population, as if democracy were supposed to work that way.
At a recent candidates’ forum in Des Moines, The Wall Street Journal reported, the moderator did something that seemed perfectly normal: She chided Mr. Romney for not having spent enough time in Iowa lately. “Where have you been?” she asked.
How do you think the rest of us feel?
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