Monday, October 27, 2014

Krgthulu

Back in the day, when congressman Richard Nixon was exposing Alger Hiss, it was said that to left wingers, for Nixon to pursue Hiss was despicable - but to be proved right was unforgiveable.

I see some of the same reaction in the right's view of Paul Krugman: to expose conservative follies is despicable, but to proved right (over and over) is unforgiveable.


Saturday, October 25, 2014

Republican Obama


For years I've been describing President Obama as an Eisenhower Republican (i.e. a moderate conservative).

I'm glad to see Bruce Bartlett agree:
In my opinion, Obama has governed as a moderate conservative—essentially as what used to be called a liberal Republican before all such people disappeared from the GOP.
And Rick Ungar in Forbes a couple of years ago:
Amidst all the cries of Barack Obama being the most prolific big government spender the nation has ever suffered, Marketwatch is reporting that our president has actually been tighter with a buck than any United States president since Dwight D. Eisenhower.
I see a couple of analogies between the Eisenhower and Obama presidencies.

Positive domestic action  on civil rights
Eisenhower - Little Rock
Obama - gays in the military.

Negative foreign actions which come back to haunt us:
Eisenhower - overthrowing the democratically elected Mossadeq in Iran, a misjudgment that has led to the present hardline Islamic state which is one of our greatest foreign headaches.
Obama - the indiscriminate drone wars, which have alienated large parts of the population in the very countries from whom we need support in opposing violent radical Islam, and from which we can expect further "terrorist" (i.e retaliatory) attacks.

So yes, for good and bad, an Eisenhower Republican.


Wednesday, October 22, 2014

Can We Really Undo the Damage Done by Reagan?

Kinderman and Krueger have a working paper out at the National Bureau of Economic Research proposing a return to the Eisenhower era's top marginal tax rate of around 90% as one step toward increasing federal revenue while at the same time reducing the alarming inequality we are witnessing here in the US.

Diamon and Saez have also suggested a much higher top marginal rate, settling on an optimum figure of 73%.  About 70% seems about right to me. In my post of Feb 2013 I proposed these tax rates:
Suggested marginal rates for married filing jointly - halve the income ranges for singles. The top marginal rate (constant dollars) is the same as it was in 1965-66.
10%            $0 - 25,000
15%            $25,000 - 75,000
25%            $75,000 - 150,000
35%            $150,000 - 325,000
50%            $325,000 - 650,000
60%            $650,000 - 1,500,000
70%            Over $1,500,000

Let's hope that the Kinderman Krueger paper will move the range of discussion acceptable to the Village in a rational direction.

Britain Calling

Ha-Joon Chang has a nice article in The Guardian, examining Britain's disastrous experience with austerity: a fall in income for millions of citizens, and growing inequality as an unreasonably high share of the nation's income goes to the top 1% .  We in the US have had somewhat the same experience*, yet in both countries the dominant narrative remains the same: debt is bad, and deficits must be cut.


Chang counters:
The country is in desperate need of a counter narrative that shifts the terms of debate. A government budget should be understood not just in terms of bookkeeping but also of demand management, national cohesion and productivity growth. Jobs and wages should not be seen simply as a matter of people being “worth” (or not) what they get, but of better utilising human potential and of providing decent and dignified livelihoods.
Amen

* though in our case mitigated by the 2009-2011 stimulus, the automatic stabilizers of food stamps and unemployment insurance, and the Fed's quantitative easing.

Monday, October 20, 2014

In His Own Words

So Rand Paul thinks the Bilderberg Group are
"very wealthy people, who I think manipulate and use government to their own personal advantage. They want to make it out like world government will be good for humanity. But guess what? World government is good for their pocketbook." 

Let's bring his words back to reality by just a few substitutions.
The Koch brothers are
"very wealthy people, who I think manipulate and use government to their own personal advantage. They want to make it out like Republican government will be good for the US. But guess what? Republican government is good for their pocketbook." 




Sunday, October 19, 2014

The Cephalopod Smackdown


Brad DeLong delivers it:

Consider whether one should line up with Amity Shlaes--along with William Kristol, Niall Ferguson, James Grant, David Malpass, Dan Señor, and the rest of that motley company--against Ben Bernanke. Suppose that one has no special expertise on the issue. Suppose that Ben Bernankehas studied that issue for his entire adult life.
  1. Wouldn't anybody with a functioning neural network greater than that of a moderately-intelligent cephalopod recognize that such a lining-up was an intellectual strategy with a large negative prospective α?
  2. Wouldn't--after the intellectual strategy's large negative-α returns have been realized--anybody with a functioning neural network equal to that of a moderately-intelligent cephalopod recognize that it was time to perform a Bayesian updating on one's beliefs, rather than doubling down and claiming that: it's not over--the inflationary pressures are building minute-by-minute?
  3. Wouldn't--when thinking about how to double-down on one's negative-α intellectual strategy, and placing even more of one's mental and reputational chips on the claim that expanding and keeping the Federal Reserve's balance sheet beyond $1.5T generates excessive and dangerous risks of inflation, and that any such expansion ought to be stopped and reversed--anybody with a functioning neural network even less than that of a moderately-intelligent cephalopod recognize that phrasing one's doubling-down in the voice of John Belushi on a very bad day would be unwise, would be likely to call forth mockery and scorn on the same rhetorical level that one had chosen, and would make one a figure of fun and merriment?
  4. And, when the readily-predictable tit-for-tat responses at the rhetorical level one chose do in predictable and due course manage to arrive, that to respond by whinging and sniveling and feeling offense would be unwarranted--would demonstrate only that whatever functioning neural network one does have was not fully connected to reality?
Hah! Smackdowns don't get much better than this!  (I guess it's this kind of thing that cause the practitioners of derp  to refer to Brad DeLong as Paul Krugman's "personal Rottweiler".)

Thursday, October 16, 2014

What I Do Not Understand


Imagine if in 1944, while the US was still facing its largest national crisis since the great depression, and after President Roosevelt's re-election with 53.4% of the vote, the Republicans had deliberately undercut the war effort for their political gain, resulting in the prolonging of the war, and thousands of needless deaths.  Who would vote for such a party?

But that is how the Republicans behaved during the country's greatest crisis since WWll: the financial collapse of 2008 and the subsequent downturn*, which put millions out of work.  One would have thought that after Obama's 2008 election with 52.9% of the vote (not that far from Roosevelt's 1944 share), and with the country still in crisis, the Republicans would have supported the president's efforts to get people back to work and the economy back on track.

Instead on the day after the inauguration, Republican lawmakers met to plan undercutting the president's efforts.
For several hours .... they plotted out ways to not just win back political power, but to also put the brakes on Obama's legislative platform.
That was just the immediate first step in a policy of sabotaging the recovery, which was detailed in Mike Grunwald's book The New New Deal.   “If he was for it,” former Ohio Senator George Voinovich explained, “we had to be against it.

Grunwald:
Vice President Biden told me that during the transition, he was warned not to expect any bipartisan cooperation on major votes. “I spoke to seven different Republican Senators who said, ‘Joe, I’m not going to be able to help you on anything,’ ” he recalled. His informants said McConnell had demanded unified resistance. “The way it was characterized to me was, ‘For the next two years, we can’t let you succeed in anything. That’s our ticket to coming back,’ ” 
One Obama aide said he received a similar warning from a Republican Senate staffer he was seeing at the time. He remembered asking her one morning in bed, How do we get a stimulus deal? She replied, Baby, there’s no deal!
“This is how we get whole,” she said with a laugh. “We’re going to do to you what you did to us in 2006.”
At the House retreat [before Obama took office], Pete Sessions delivered this message to his colleagues:
The team’s goal would not be promoting Republican policies, or stopping Democratic policies, or even making Democratic bills less offensive to Republicans. Its goal would be taking the gavel back from Speaker Pelosi.
“That is the entire Conference’s Mission,” Sessions wrote.
In January 2009, after just a week in office, Obama announced he would visit the Capitol to meet with Republicans at noon of that day to talk with them about his economic recovery plans.  
Grunwald:
Shortly before 11 a.m., the AP reported that Boehner had urged Republicans to oppose the stimulus. Obama press secretary Robert Gibbs handed Obama a copy of the story in the Oval Office, just before he left for the Hill to make his case for the stimulus, an unprecedented visit to the opposition after just a week in office. “You know, we still thought this was on the level,” Gibbs says. Obama political aide David Axelrod says that after the President left, White House aides were buzzing about the insult.
“It was stunning that we’d set this up and, before hearing from the President, they’d say they were going to oppose this,” Axelrod says. “Our feeling was, we were dealing with a potential disaster of epic proportions that demanded cooperation. If anything was a signal of what the next two years would be like, it was that.”
David Obey, then chairman of the House Appropriations Committee, met with his GOP counterpart, Jerry Lewis, to explain what Democrats had in mind for the stimulus and ask what Republicans wanted to include. “Jerry’s response was, ‘I’m sorry, but leadership tells us we can’t play,’ ” Obey told me. “Exact quote: ‘We can’t play.’ What they said right from the get-go was, It doesn’t matter what the hell you do, we ain’t going to help you. We’re going to stand on the sidelines and bitch.”
In his campaign, Obama had promised to hold hid hand out to the Republicans so they could tackle the economic crisis together.  The GOP had other ideas.
    Grunwald again:
Republicans recognized that after Obama’s big promises about bipartisanship, they could break those promises by refusing to cooperate.
[McConnell] realized that it would be much easier to fight Obama if Republicans first made a public show of wanting to work with him.

McConnell realized that Obama's promises of bipartisanship gave his dwindling minority real leverage.  Whenever Republicans decided not to cooperate, Obama would be the one breaking the promise. ... As long as Republicans refused to follow his lead, Americans would see partisan food fights, and conclude that Obama failed to produce change.
George Voinivich:  "All he cared about was making sure Obama could never have a clean victory."
The goal was to portray [the stimulus] as trillion dollar spending bill at a time of trillion dollar deficits, rather than an economic recovery bill at a time of economic crisis. 
The dream of hope and change was about to enter the world of cloture votes and motions to recommit.
And so President Obama's hope of a bipartisan effort to get the economy rapidly back on track was undercut, and millions of Americans suffered through unemployment - unemployment that ruined lives as careers were stalled or ended, and in the case of college graduates not even begun. (Suicides increased from around 35,000 in 2007 to over 40,000 in 2012.)

This has been suffering imposed by the Republicans solely for political and electoral gain - the good of the country be damned.  (And to add insult to injury, the Republicans claim that it has been Obama who has been "divisive"!)

What I do not understand:  why would anyone even contemplate voting for such a party?

(Update 10/29/2014  Brad DeLong agrees.)

* Some may point to 9/11 as the greatest crisis since WWll.  While it was a monstrous crime that affected thousands of people, it was more akin to the 1996 Oklahoma City bombing, though on a larger scale, and should have been treated the same way as that earlier terrorist attack, instead of the hysterical reaction of the Bush administration that led to the current threats from ISIS.