Posted tagged ‘McArdle’

Put Bloomberg View on the Publication Suicide Watch List

June 18, 2013

Presented (almost) without comment:

Washington, D.C.-based writer for Newsweek/Daily Beast and blogger Megan McArdle is joining the ranks of Bloomberg View, where she will be a columnist covering the economy, business, politics and national affairs.

Cleopatra_with_the_Asp_(1630);_Reni,_Guido

I’m beginning to wonder if Bloomberg View is an experiment in machine-editing, ’cause I just can’t believe a sentient being would make the decision justified by this quote:

“Megan is an extraordinary writer and thinker,” said David Shipley, Executive Editor of Bloomberg View in a morning statement. “Few people have done a better job chronicling the economic, corporate and technological disruptions of the last decade. She’s going to make a lot of readers — those who have followed her for years and those who will discover her at Bloomberg — smarter and happier. We’re thrilled that she’s joining the team.”

Good luck with that.  If Bloomberg readers can count, I just don’t think “happineness” will be the correct emotional descriptor.

I did have another thought:  I’m wondering if McArdle’s finely honed survival skills are in play, in which case we may be getting a leading indicator on the prospects for our Beastly friends.

Reference your favorite McArdle howlers below.  Mine is this one ,brought into new relief by too many tragic events over the intervening years.

Image:  Guido Reni, Cleopatra with the Asp, c. 1630

Pink Himalayan Calculator Problems, Part (n)

January 10, 2013

Further to DougJ’s catch over at Balloon Juice this morning:  last night I actually found myself reading (why, oh why, dear FSM?) the McArdle post in question, a bit of fappery in which she paraded her above-the-fray disdain for the idea that the Obama administration might take action to clean up a mess the Republican rump plans to deposit on his lawn.  (No linky ’cause I’m not in the business of giving any hint of value to McArdle’s employers/enablers.)

It’s really a sad effort, in which McArdle attempts to complete a ~1,600 word piece on the failure of governance implied by a discussion of a platinum coin on the US balance sheet without implicating anyone other than President Obama.  She does make a couple of nods in the direction of “both sides do it” faux-balance, chiding the Republicans for their role in the last debt-ceiling debacle and noting that the GOP side of the aisle seems even less prepared for the consequences of actually blocking the measure this time around.

But those are head fakes.  She reserves the full blast of McArdle scorn (as always, queue Denis Healey’s “savaged by a dead sheep” line here) for Obama in particular and the Democrats in general (whodathunkit!).  Her chief complaint: Obama’s election campaign went pitiably small (an argument that relies on ignoring most of what Obama discussed on the trail), and that he and his party simply ignore the “fact” of federal over-spending.

I’m not going to do my usual obsessive 4,000 word fisk on all the failings of fact and logic that permeate this, as so many of McArdle’s effusions.  Life is too short; I’m on (self-imposed) deadline; and frankly, the slow erosion of McArdle’s career makes the task less pressing, at least to me.  The Daily Beast ain’t The Atlantic, and while the site itself may still command more traffic her old home (I’m not sure of that, but it was true a while back) you can see the impact the difference in audience makes.  I actually waded into the comment thread on the post in question (the shallow end — didn’t have the stomach or the time for the deep dive) and there were plenty there heading for Red State territory.

Agostino_Carracci_-_Hairy_Harry,_Mad_Peter_and_Tiny_Amon_-_WGA4398

There’s no doubt in my mind that McArdle is unlikely ever to want for a reasonably well-paying gig; she’s pretty well situated on the Wingnut Welfare railroad.  But there is a big difference between those who intone their harmonies inside the Wurlitzer and those who play out a bit, and it seems to me that she’s heading the wrong way on that particular arc.  Could be wrong, of course, and constant vigilance and all that.  But really, there are bigger fish to fry (looking at you, BoBo, et al.).

So, in the interest of everyone’s time, let me here just take note of the fact that McArdle’s calculator is performing as well as ever.  Her post’s coffee-spray-on-the-screen moment came on reading this gem:

For a while, Democrats could pride themselves on being the reasonable ones. Now they, too, are choosing words over math.  “We don’t have a spending problem,” President Obama apparently blithely told the Speaker of the House.  Which is technically true . . . if we’re willing to raise the government’s tax take to north of 50% of Gross Domestic Product. [ellipsis in the original]

Err.

Just to dot the “i”s: 2011 GDP?

$14,991,300,000,000.  Call it $15 trillion. (via the World Bank.)

2011 federal spending?

$3,598,000,000,000.  Call it $3.6 trillion. (Via the CBO.)

Now, I don’t know about y’all, but I’m not sure I even need to pull out my slide rule to see that 50% of $15 trillion is $7.5 trillion.  And I can probably get by without digging up a working model of a Curta to confirm that $3.6<$7.5.

But perhaps I should do the calculation anyway.  Using the rounded numbers, it seems that federal spending in fiscal 2011 amounted to ~ 24% of GDP.  Or, for those of you keeping score, right in the range  Bernard discussed yesterday.

All of which is to speak the obvious; McArdle’s number is simply bullshit.

I actually have no idea what she was thinking there; it really is one of the least well hidden secrets in US budget discussions that the feds spend a bit under one quarter of GDP.  That’s a number that’s been out there a lot, not least in the context of not-exactly-obscure proposals like the Ryan “Path to Prosperity”* budget plan, which called for long-term government spending to fall to 19% of GDP.

Just to belabor the point:  getting this proportion scaled right is not rocket science — it’s just part of the assumed knowledge of anyone talking US fiscal stuff.  Which is to say that anyone can, of course, screw up and type a number in error.  But then, if you’re numerate at all, you get that tingle that tells you there’s something just off — and you fix it.

Which leaves me with the usual McArdle conundrum:  is she simply so tone-deaf quantitatively that she really didn’t catch the absurdity of the claim?  Or is she so reckless a polemicist that she did, and didn’t care?

One last thought.  Back when McArdle was securely perched at The Atlantic, I often ended these rants by pointing out that her work colored the output of the whole site.  Sometimes I called out the writers I did (and do) admire there to make that criticism more pointed.  The same obtains today:  McArdle’s work is a measure of The Daily Beast.  If they choose to publish her, they own whatever good she may produce — and all the bad, with every bit of reputational and credibility damage that may result. In which context, whatever your feelings about Andrew Sullivan, I’ll say this:  he’s not stupid about his career.  It’s not (or not just) the manner of his leaving Tina’s playpen; it’s the fact of that abandon-ship that, to me, speaks volumes.

*Doublespeak alert

Image:  Agostino Carracci, Hairy Harry, Mad Peter and Tiny Amon, between 1598 and 1600.  I have used this before, but it really seems to fit here.

McArdle Mini-Me Follies, Real Estate Economics Division

May 25, 2012

Blogger’s note: You’ll find below that I use an anonymous source to support my attempt to dissect Someone [who] is wrong on the Internet.™  As always, anonymous sources are only as trustworthy as the writer who deploys them.  You have been warned.  (BTW — I do know that it’s cheating to do even minimal reporting on a blog post.  Sue me.)

Dr. Manhattan is one of the McArdle guests feeding the wire whilst that blog’s proprietor is preparing what will no doubt be a never-before equalled work of economic and/or culinary erudition. His is the nom de blog of someone described as “a lawyer…who represents, among others, clients in the investment industry” — a connection that may prove significant below.

Up for dissection today: his post titled “A Modest Proposal” in which he promotes the idea of killing what he alleges to be the lead culprit in the crash of 2007-8:  Mortgage Backed Securities.

What’s fishy here?  Well — lots.

I’m not going to go full metal blogpocalypse on this, in part because life is too short, and in part because Dr. Manhattan gets props in my book for having written clearly and unequivocally against the vaccine-autism claimed link on his (now dead) personal blog — from the perspective of a parent of an autistic child.  That kind of writing in that community takes courage, so this brush with the McArdle empire will be as free of my usual attitude in that direction as I can make it

That said, here’s the passage that set me wondering about this post:

…killing MBS will likely kill the 30-year fixed-rate mortgage with no prepayment penalty, which, in the words of Raj Date, “does not flourish in the state of nature.”  And right now very few people can get one of those anyway, which is not a coincidence.

Hmmmm.

One of the benefits of hanging out at a place like MIT is that there is almost always someone around who actually knows stuff on just about any subject you’d care to check…and so it is with the economics of real estate.  I dropped a line to a colleague up the street, and got confirmation of the obvious:  the 30 without a pre-payment penalty (the clause that makes refinancing mortgages so straightforward) significantly predates the rise of mortgage backed securities (by decades).  Such mortgages start to appear in the 30s; MBS start to become significant in the marketplace after 1970.  That the end of the latter would kill the former is, as we say, an assumption not in evidence.

Oh well.  And that “very few people can get one…” claim.  I’m filing this in the life-is-too-short category to check fully, so I’ll just note that (a) 30 year mortgages remain by far the most common housing loan out there — roughly three quarters of all mortgages as of the most recent Census report (2011, on 2009 data).

Also, being as I’m someone refinancing for the third time a loan first taken out in 2009, I can in my anecdotage* attest that the no-prepayment-penalty mortgage is both alive and trivially easy to obtain.  (At least in my market, it remains the default option.)

What bothers me about this passage is just the garden variety flaw behind so much glibertarian and/or right econ blogging:  what they know** requires no actual data to confirm.  This is kind of what you’d expect at a McArdle-branded blog:  that which ought to be true need not be checked.

But the tricky bit is that plausibility is all; the moment the reader’s willing suspension slips  — then you read everything else in the piece with attenae quivering.  Hence, I was ready when I took a second look at this gem:

 CDOs and credit default swaps don’t kill financial systems, mortgages kill financial systems.

Uh.  No.

As it happens, I’m not operating out of my usual sea of ignorance on this point, as my current project involves a deep dive into the first debt-for-equity swap in financial history.  The key fact most often ignored from that early period of finance is that though plenty went wrong, usually in ways that, frankly, aren’t materially different from the ways folks game and/or fail to grasp the system now, the core financial act of abstracting things into numbers is an enormously useful trick.  It is, truly, an engine of wealth.  See, e.g. Adam Smith, chapter IV of Book I of Wealth of Nations on the importance of a medium of exchange; currency is just the first step in the process by which finance mediates transactions.

In that vein, mortgage backed securities are like any tool; you can build a house with a hammer; you can also crush a harp seal’s skull.  It is all a matter of the user and the constraints that user’s society places on the deployment of such tools.  As my correspondent at MIT put it, there are three clear points of vulnerability inherent in the process of packaging individual mortgages into a big clump:

1). Originators do not have skin in the game and may try to pass off bad loans as good.
2). Rating agencies are paid by the pool creators rather than the investors (who are unknown at the stage when ratings must occur).
3). Special servicing needs a better business model. (TL: I.e., those who handle troubled or in-foreclosure mortgages need to do it right, which isn’t happening)

All of these are known flaws.  All of them are subject to regulatory responses.  My interlocutor again:

Until the 100 year flood #3 was never problematic. As for #1 and #2 as long as F&F were functioning as a public entity they monitored and disciplined originators and rating agencies with bad records. 800 lb gorillas can do that.  So a huge monopsonistic mortgage conduit actually overcame the intrinsic problems with MBS – and in my view should simply be turned into a non-profit public utility!

The alternative to MBS is to return to individual loan underwriting, retention and servicing.  We could certainly choose to say hello to all that, but at a cost — not a trivial one — that in the end would make the price of money for housing detectably higher.

This isn’t a terrifically complicated idea:  from its emergence in the 18th century, the bond market has lowered the cost of capital applied to all kinds of stuff in the real world, beginning, more or less, with the British Empire.  (See, for example, the brief essay buried about 2/3rds of the way through Volume II of Fernand Braudel’s Civilization and Capitalism, which gave me my first glimpse of the role of liquid capital markets and Britan’s rise to world-power.

All of which is to say that the derangement of the mortgage market in the United States was indeed a major and growing problem through the ‘oughts, compounded by an ideological commitment that prevented regulation everyone with an economics IQ higher than a plant’s understood to be necessary.  But even if the collapse of the housing market provided the spark for global financial disaster, the fuel for that inferno came not from the securities constructed directly out of home loans, but from their derivatives.  And as it is in derivatives that a whale’s share of the money can be made (at least until the music stops) those on Wall St. resisted and still resist not just regulation of those instruments, but any real discussion of their significance.

But here’s the blunt reality of modern finance: the scale of the derivatives market vastly exceeds that of the real economy that underlies it.  The leverage — the number of dollars at risk  in excess of the value of the real assets from which such bets are derived — is what makes for catastrophe.  Dr. Manhattan’s airy confidence, as quoted above, that ” CDOs and credit default swaps don’t kill financial systems,” is more than wrong.  To the extent that it reflects accurately what folks on Wall St. actually believe, it’s terrifying.

Or, as my MIT wise man says, more gently:

Not sure your writer fully understands how CDO and CDS markets work, and how counter party risk is basically unmeasurable – making them horribly subject to a systemic meltdown.

I’m betting none of this comes as a surprise to anyone reading this; reality based communities tend to be able to count on both fingers and toes.  And I guess I’ve committed my usual sin of John Foster Dulles-ing what was, after all, a throwaway of a line and a thought.

But I do think it important to try to push over and over again one basic point: financial markets are essential; they fund real lives.  They are also prone to failure in ways that are unsurprising, and are, at least in part, subject to constraint by design.  To pretend that failure is at once impossible and inevitable, just one of those things (like cancer) that attends the messy business of being alive, is merely to ratify the transfer of wealth from most of us to those with their paws on the capital spigots.

Dr. Manhattan might say that he is merely directing our attention to the root cause of our ills — but it is to me notable that the instrument he wants to do away with is the one that lowers the cost of a mortgage to you and me, and those he wants leave untouched are what buys as 2008.

If it were McArdle herself who had written this, I’d add snark here.  But as I said up top, Dr. Manhattan is someone who has earned some benefit of the doubt.  He may simply have gotten this one wrong, which is a state that comes to us all; me certainly.  So I’ll leave it here….

Over to you all.

*Credit for that coinage (at least in my first hearing) to the king of the three dot columnists, the gone but by no means forgotten Herb Caen .

**In the Mark Twain sense of knowledge.

Images:  Frans Snyders, The Fishmonger, first half of the 17th century.

Benjamin West, The Death of General Wolfe, 1770.

While the Cat’s Away…

April 10, 2012

She who is always wrong™ may want to check on what her September April call-ups are doing.  Here’s Adam Ozimek in McArdle’s space pointing out four things just about all economists agree upon, and among them he lists the virtues of the stimulus:

Economists may differ on whether the American Recovery and Reinvestment Act was worth the cost overall, but they are in solid agreement that as of the end of 2010 it lowered the unemployment rate. Very few disagreed with or were uncertain about this. In contrast, a significant number questioned whether the recovery act was worth the cost. Importantly, in the space for comments, Stanford’s Pete Klenow emphasized what Scott Sumner and others would say is the central issue: “how much was it offset by less aggressive (than otherwise) unconventional monetary policy?” But even stimulus skeptics should keep their criticisms in perspective: economists strongly reject the idea that stimulus is to blame for our economic woes.

In addition, economists strongly agree that the bank bailouts also lowered the unemployment rate. Of course as Austen Goolsbee commented: “the fact it was necessary doesn’t mean we should be happy about it.”

McArdle, canny as she is, has been careful not to go too far into the weeds on this one.

She doesn’t seem to have said that stimulus as a concept could only fail — as some notables (cough-cough, Mitt) on her side of the aisle have done and continue to do.  But she has consistently said that only a Platonic ideal of a stimulus had a hope, and that any real world attempt is a waste of time.  (Bonus question for those who follow that link.  Spot and name the dire distortion of the history that lies behind her carefully tweezered quote from Paul Krugman.)

BTW: here’s what Krugman actually had to say about the stimulus in 2010:

The good news from the new GDP report is that the fiscal stimulus seems to be working just about the way a sensible Keynesian approach says it should. The bad news from the new GDP report is that the fiscal stimulus seems to be working just about the way a sensible Keynesian approach says it should.

Josh Bivens at EPI has a good overview of the evidence that the stimulus is working. As he says,

“A serious look at the evidence argues that this debate should be closed: ARRA has played a starring role in pushing the        economy into positive growth.”

And here’s Krugman this spring:

On the policy side, major new stimulus may not be in the cards — but there is a real divide in the US between modest stimulus proposals that have some chance of getting implemented and major austerity moves that also have some chance of being implemented. The difference between those two policy variants could be the difference between unemployment below 7 percent two years from now and unemployment back above 9 percent. So this argument has real short-term policy relevance.

So much for McArdle’s bravura, data-less claim that

…we have had two major cases that massively favored Keynesian economics [the New Deal and the Obama stimulus] but Keynesian politics failed both times.

And as for her conclusion that

…at some level, there’s no point in spending a lot of time designing policies which can’t be enacted in any conceivable democratic polity.

…well, if by “any conceivable democratic polity” you mean one in which one of two major political parties had decided to transform itself into an authoritarian cult, then yes — the GOP, using the procedural rules of the US Senate, certainly limited what was possible.  It requires a heroic act of willed blindness to the elephant in the room, though, to see that outcome as an inescable, sadly necessary cost of democracy.

But just on the merits of this one guest post, I’d say that McArdle runs a serious risk if her audience gets used to even occasional economically literate commentary.  Perhaps even that Amen Chorus might notice a lack of couture bedecking the empress.

Image:  Henri Rousseau, The Equatorial Jungle, 1909

Megan McArdle Orders the Burlwood Dash For Her Tumbrel

December 4, 2011

Blogger’s Note: Zandar (apologies…) and Asiangrrl goaded me into diving once more into the swamp that is Megan McArdle’s prose.  But this is it.  There’s real and much more interesting work to be done out there, good stuff to read and (I hope) write.  And it’s clear that I can’t do what folks like TBogg and DougJ have mastered — the precision strike, 300 words and out, that leave the divine Ms. MM’s latest smoking in the ruins.  There’s no “I can handle just one more toke” self-delusion available to me.

So I’m quitting. Cold turkey.

This is the last McArdle post for at least six months — and I’ve empowered my colleague, Seth Mnookin, to tase me if I slip.

Also:  to steal Cosma Shalizi’s customary phrase, here is an attention conservation notice.  What follows is about 2,700 words vivisecting a 1,000 word or so book review.  It’s John Foster Dulles-scale overkill. It’s just me lancing a boil.  That’s all.  Read it at your own pleasure — but don’t come complaining to me that you’ll never get those minutes back.  We cool?

_______________________

My uncle, the ex RA officer, once told me the grim term-of-art British soldiers adapted to describe IRA bomb-makers inept enough to blow themselves up.  They had scored, it was said, an own-goal.

So it is, (without bloodshed, thankfully) that we must read the latest from our favorite Marie Antoinette re-enactor, Megan McArdle, writing in last weekend’s Wall St. Journal.  (And yes, I know DougJ got here first, along with all you would expect from the Balloon Juice commentariat, but what good is snark without oversnark, I say.  Charlie Pierce too.  (Update: and, of course, the invaluable Susan of Texas.)  Well, say I, a feast is as good as enough, is it not.?

Just to recap:  last Saturday, McArdle wrote what was ostensibly a book review that devolved rapidly into a celebration of McArdle’s own purchasing habits and the particular form of her pursuit of happiness.

There’s a lot that could be said about the miserably parched self-and-world view that informs that defense, but the rest of the column is equally egregious, so, in my usual succinct fashion, I decided to have a whack at it:

McArdle begins by announcing that she has bought herself a $1,500 food processor/cooking robot, a Buck Rodgers gadget called a Thermomix. This machine’s claim to fame is that it combines a chopper/grinder/stirrer function with a precision scale and a heating element.  Toss stuff into its mixer bowl in the right order and in what the machine tells you are the right amounts, press some buttons in the correct sequence, and standardized results accrue.

Now, contrary to the outrage in DougJ’s thread, I’m going to say up front that I have no problem with McArdle lusting after this, buying one — it’s her money to blow, after all — and concluding that this kind of automated cooking satisfies her urges.  I’ve dumped most of my sideways snark on this question to the footnote, for anyone that cares.*

No, what gets me, pretty much as always with this writer’s stuff, is her ferocious disregard for basic craft, and what I think is the essential bargain journalists make with their readers.

So, to begin, here she is, ex cathedra, on the book nominally under review, James Roberts’ Shiny Objects:

It’s a thorough survey of both academic research on consumerism and basic finance advice. Still, I first ran into an argument I hadn’t seen before somewhere around page 200…

We have a familiar McArdle rhetorical cheat here.  “I first ran into an argument I hadn’t seen before around page 200…” as if her familiarity with this literature is itself somehow dispositive.  I’ll give you that she’s not quite saying the arguments are wrong, but it is a purely uncheckable diminuition of her antagonist’s authority.

Next:

And well before then Mr. Roberts had fallen into some of the terrible habits of the genre. Though less openly contemptuous of the spendthrift masses than many of his fellow scolds, he still exudes that particular sanctimonious anti-materialism so often found among modestly remunerated professors and journalists.

Oh, snap!  It’s a measure of McArdle’s particular qualities that she manages to transform whatever publication chooses to admit her to its space into that privileged corner of the school steps where the Mean Girls live.

I mean, seriously:  working at jobs we like for money less than that the 1 % can command so warps the character as to turn us unfortunate journalists and professors into hypocritical scolds.  Damn.  I’m short on my month’s quota of vituperation and visible displays of hair-shirt couture.

Of course, this is (a) simple pre-emption:  “I’m not a culinary snob, wielding cash to distract as I chase the lives of my betters.  You’re the snob!  So there!”

And (b) it’s nonsense.  Professors and journalists are not badly paid by any reasonable standard. Roberts himself is a professor of marketing at Baylor, and as of the 2009 mean salary for such faculty was $138,000.   That’s not Prada and hot and cold running Dom rich, but it’s not bad coin by anyone’s standards, and applied to the cost of living in Robert’s Waco, Texas, that’s a sum that will set you up very nicely indeed.

All this is crushing flies with a jack-hammer, I know, but the point is, I think, pretty damn obvious:  McArdle hasn’t or won’t do the work to test the question on the table: whether or not money buys you happiness.  So she throws monkey faeces at the wall instead.

To continue:

Here are some of the things that upset him and that “document our preoccupation with status consumption”: Lucky Jeans, bling, Hummers, iPhones, 52-inch plasma televisions, purebred lapdogs, McMansions, expensive rims for your tires, couture, Gulfstream jets and Abercrombie & Fitch. This is a fairly accurate list of the aspirational consumption patterns of a class of folks that my Upper West Side neighbors used to refer to as “these people,” usually while discussing their voting habits or taste in talk radio. As with most such books, considerably less space is devoted to the extravagant excesses of European travel, arts-enrichment programs or collecting first editions.

I’ve long noted that McArdle has, to put it kindly, some reading comprehension problems; they are manifest again it this paragraph. She writes down a series of items.  Note that she does not quote — somehow she’s culled this set of items from what could be a single passage, or might be half the book, which would affect the interpretation of what Roberts was actually saying.

Now look at the key claim:  “This is a fairly accurate list of the aspirational consumption patterns of a class of folks that my Upper West Side neighbors used to refer to as “these people,” usually while discussing their voting habits or taste in talk radio.”

Do you see a pattern of consumption in that catalogue?  Iphones and McMansions — just points on a single cultural and aspirational continuum, right?  a Gulfstream falls uniquely onto the same folks’ bucket lists as Abercrombie and Fitch products?  This is a set of cultural markers that clearly distinguishes Limbaugh dittoheads from those who shop at Murray’s Sturgeon?

What’s actually going on here is McArdle distorting what Roberts is trying to say, even  within her own skewed presentation of his case, in order to transform that serious argument into a spitball fight about class and privilege.  But everybody wants something on that list, and many of us want a lot of it, which is what I understand Roberts to be saying:  the pressure to consume affects us all, no matter what we got or where we live.  Oh — and I’d have to say — it’s pretty bold, to put the nicest spin on it, for a Manhattan-bred, beltway insider like McArdle to lecture a guy living in Waco about what ordinary Americans want.

Really, McArdle’s rush to contemn her neighbors for the class snobbery she imagines she hears (make the lambs stop screaming!) sounds to my suspicious ears to be something that has crossed the writer’s mind.  There’s just a little too much specific desire in that “bling…plasma…rims” catalogue for me to trust her claim as to who spoke such slurs and who listened.  And as for that ” considerably less space is devoted to the extravagant excesses of European travel, arts-enrichment programs or collecting first editions,” I bet Roberts didn’t mention $1,500 food choppers either.

Onward!

Consider the matter of status competition. Mr. Roberts, like so many before him, argues that conspicuous consumption is an unhappy zero-sum game. But this is of course true of most forms of competition: Most academics I know can rank-order everyone in the room at a professional conference with the speed and precision of a courtier at Versailles.

Oh yeah?  McArdle must know a particularly miserable set of academics, which, now that I think on it, is not that farfetched.  All I can say is that at the conferences I attend, McArdle’s kind of high school (yes, that again) attention to who among us are the kewl kats is not the defining dynamic of the meetings.

Of course, the real stupidity here, beyond the “trust-me” bullsh*t inherent in the “most academics I know” approach to reporting, is the idea that academic exchange is merely the arena in which status competition plays out.  This is the shorthand response, but academics are members of a professional community.  They go to conferences to communicate results.   There is competition, and you notice the Nobels in the room and so on.  But most academics understand that better work by anyone raises the status of the entire group as well as of the individuals involved.  Success in physics or  geochronology or the study of counterfeiting and late 17th century finance (a plug, here, in case you were wondering (Kindle edition too!) is not  a zero-sum game.  That McArdle thinks it is explains much.

Any competition, from looks to money to academic credentialing, both consumes a lot of resources and makes many of the participants feel bad about themselves.

No.  See above.  For a beautiful account of the meaning of competing, and not just the competition, check out what is in my opinion the single best book about a sporting event ever written in America, John McPhee’s Levels of the Game.

Actually, I have to say that to say that this passage from McArdle actually made me feel a ghost of pity for her.  Such a direct glimpse into the poverty of her soul!  Setting aside all else:  what a drag it would be to be her!  (Apologies, Bobby D.)

There’s more — I’ve only covered the first half of a two-book review.  I just don’t have the strength to go through that latter half, beyond noting that it took me all of a couple of moments to find that in trashing his book she makes one claim that is simply at odds with what Rutgers economic historian James Livingston, actually says. It’s not “rich savers,” as she has it, whom Livingston charges with inflating bubbles.  Rather, he argues, “corporate profits …[are] just restless sums of surplus capital, ready to flood speculative markets at home and abroad.”  I have little doubt that similar problems obtain with the balance of her review, but there comes a point where even I can take no more.

So one last thought, really an explanation about why it is McArdle so gets under my skin.

That would be because she so diminishes the craft I have spent decades learning and now teach:  how to write about matters of fact; how to be a journalist.  I’ve detailed some, (by no means all) of the kinds of errors of argument and interpretation in this one little fish-wrap piece that make a mockery of the notion of a bargain of honesty with one’s readers.  But I’ve left till now the tic that McArdle displays over and over again that tells you that she simply can’t be trusted.  And that would be her near-constant invocation of strangely generic sources.

Journalists often use anonymous sources, and it’s always an issue.  But good journalists provide enough of the context of anonymity to give the reader a chance to gauge how likely it is that Mr. X actually said what he is reported to have done, and that Ms. Y is actually knowledgeable enough to be a sufficient authority for whatever the reporter asserts.  The guy inside Philip Morris who’s identified only as a Big Tobacco insider — that’s someone who’s need for anonymity the reader understands, and if he says that the tobacco companies knew about the smoking-cancer connection since the fifties — and oh, by the way, here are the shopping bags full of documents — then you know what you’re dealing with.

But those “neighbors” whom, presumably, McArdle engaged in friendly conversation, no doubt hiding her overflowing disdain with all the subtlety and grace for which she is so well known…I don’t think so.

Rather, whenever you read the broad cultural pronouncements of our Village betters, remember this:  the local taxi driver, the “concerned Democrat,” any of Megan McArdle’s usefully clueless liberal “friends”…they don’t exist.  Not in any meaningful sense, at any rate, and any actual journalist knows this, as does any competent editor.

And in the end, that’s why I’ve got to quit this beat for a while — a long time I hope.  McArdle has disproportionate influence, or at least, a much bigger megaphone than her own merits could command.  But in the end, she’s just not that interesting.  There are better things in life to do than to spend precious moment, much less hours, contemplating the train wreck that passes for her body of work.

Oh — and one more thing.  Whilst I’ll defend to the death McArdle’s right to spend her cash on any damn gadget she wants (see the footnote immediately below), that doesn’t mean I won’t snicker at it.  And yup, a $1,500 kitchen robot is pretty much an après moi, le déluge kind of item.

Me, I’d rather Occupy My Kitchen, and dine (as last night) on roast capon with a pasta-and-sausage stuffing, squash and cippoline onions, sides, and an almond and pear tart, home made.  Did I mention that in bamboozling my beloved into marrying me, I gained a former pro chef as a roommate?  I believe I did.

*Go to it, I say.  I don’t even think that McArdle’s appreciation for what the machine can do is as hopelessly misconceived as her examples suggest. While making a béchamel sauce hardly requires such an investment, still I can see the convenience, and in the right context, some real value of such a device.

That would be in a professional kitchen, where the goal of uniform repetition is paramount.  Once you work out the recipe for something you want your restaurant to add to its menu, a machine that automates the process of turning out consistent results every time has an obvious value.  For the home cook?  Well, Nathan Myhrvold has one, and if you are his kind of cook, one fascinated by the application of technology and precision measurement/regulation to cooking (and with the budget to sustain your fancy), then fine.

If you’re McArdle, less compelled by molecular gastronomy than the kind of kitchen olympics that leads one to write a  phrase like “…perfect hollandaise and flawless béchamel can be produced in minutes with virtually no effort,” then clearly, this kind of robot can help mask any flaws in your basic kitchen technique. And, hell, take her word for it that the gizmo is fast and convenient, and that those qualities enable her to make food she likes more often than she previously could.  As McArdle perfectly correctly says — that’s a boon, for her.

There is a price to be paid, it seems to me:  a tedious leveling of one’s cooking.  Once the robot gets going, all you can do is accept the price of automation:  you get consistent results, but you can only experiment by rerunning the whole process — making the same dish again — for each change that might seem desirable.  When you cook by more pedestrian methods, you dip and intervene.  All in all, it’s a perfect device to turn the ambitious but not-terribly-talented home cook’s kitchen into an amateur version of the sort of restaurant Calvin Trillin marvelously dubbed the Maison de la Casa House.  But all in all, if you’ve got the money and you want the crutch — hell, why not?

Images: Joachim Wtewael, Kitchen Scene, 1605.

Jean Clouet (attr.), Charles IX of France with racket,  1552.

Bartholomeus van Bassen, The Parable of the Rich Man and Lazarus, c. 1620-30.

Megan McArdle is Always Wrong™: Occupy Wall St./Income Inequality division

November 2, 2011

I have neither the patience nor the time to wade through the divine Ms. MM’s effusion on the class snobbery at the heart of the Occupy Wall St. movement. (Via Edoroso)

It’s the usual McArdle — self regarding (I was a crappy student who went into the punditing racket because I loved it! And I’m better than you because of that!*); chock full of unsourced or supported claims that, as ever with this writer, are too-good-to-check;** and, frankly too wearisome a barge-load of flabby writing to want to wallow in long enough to do the full fisking that it probably deserves.

So to keep it short (as long as you ignore the footnotes)…let’s just look at one exemplary bit of McArdle drawing on her deep knowledge of the data making sh*t up:

Similarly, in the 1990s, when I worked with a lot of mostly blue-collar and first-generation college grads (with a fair sprinkling of Ivy Leaguers, to be sure), I didn’t hear nearly so much about the rich and how greedy they were–even though in the late 1990s, income inequality was almost certainly worse than it is right now.
That would be this income inequality.  Here is a handy chart:
My 53 year old eyes may not be all that acute, but from where I squint at the screen, it sure looks like the share of US income going to the top one percent is higher now than it was in the late nineties.  If you want to see the data in tabular form, mouse on over here.
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In other words — income inequality was piss poor in the 1990s, but it is in fact worse now.
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Which means, as ever, recall the Levenson corollary to DeLong’s law:
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1.  Megan McArdle is always wrong.
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2.  If your analysis leads you to conclude Megan McArdle is right, refer to rule 1.
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*Really.  In her own words:
“here’s the difference between me and the outraged lower-upper-middle-class: I chose it.  I decided to have terrible grades and major in English, and then job hop in New York before settling down as an IT consultant. “

**Here’s McCardle on the profile of the archetypal OWS supporter, and the thought process that led him/her to camp out in a manner calculated to offend his/her betters:

Probably they should not have sunk tens of thousands of dollars into acquiring a BFA.¹  But these mistakes didn’t usually used to be crippling.  They were a drag, as you paid off those huge student loans with your tiny little income…²
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Unfortunately their choices became utterly, horrifyingly disastrous just at the moment when we had a terrible financial crisis that spiked our unemployment rate up to 10%.  We can argue about exactly who is at fault and to what extent, and how much longer our public sector spending would have been sustainable without the financial crisis.   But whether or not you think their reaction is empirically correct, it certainly isn’t surprising.  To them it looks like a bunch of greedy, stupid bankers stole the jobs that they were entitled to. [Italics added.]
Well, isn’t that special.
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Actually, it’s the usual McArdle switcheroo, a bit of clumsy rhetorical sleight of hand she hopes you won’t notice.  It’s not that the bankers — who are demonstrably greedy and stupid (as in, catastrophic failures at the core jobs of managing risk and allocating capital) — hold jobs that might go to others.  It is that their greed and incapacity destroyed the financial underpinnings of the rest of the economy, so that jobs the US used to create at fairly robust levels no longer appear.  IOW, the OWS critique of the finance crowd is that what they did screwed the rest of us — and that critique is correct, however much Mean Girl in Chief McArdle wants to distract us with the idea that the greedy old Social Security and Medicare receipients and the stimulus in response to the bankster-led crisis is actually the problem.  We’ll argue later about who to blame, she says, but for now let’s not fall prey to childish insults to the poor banking sectors.
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Working this out is really not that hard — unless one is trying to make sure that no one actually pays attention to what happens and who is to blame when a handful of the most richly compensated members of a society f*ck up their one job, whilst looting the till.  But reality is a stubborn thing, and the greed and incompetence of the bankers is by now well documented, including,  for just one example, this pretty blunt piece from the archives of McArdle’s own employer.
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         ¹Number of bachelors degrees awarded in the US in 2008-9: 1,601,368.  Number of such degrees in the fine arts: 89,140 (classified in these statistics as visual and performing arts, but matching the profile of the BFA degree).  Whatever else they are, (talented and monomaniacal, sez one married to a holder of an MFA), fine-arts graduates are unlikely to dominate the revolution, just on the numbers.
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McArdle’s sneer at the arts is even sillier, in fact, when you actually look at the difference between a BFA and a BA.  The BFA curriculum, which typically demands studio and/or practice courses as well as more traditional classroom inquiry is classified as a professional rather than a liberal arts curriculum.  The folks who sign up for a painting BFA know they want to paint, and have some idea (usually a pretty good one) as to what that means — and they have an understanding of the working life they will enter.
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McArdle might have been rhetorically better off dissing her own chosen undergraduate field of English literature — except that there are plenty of people who actually understand what a literature degree is supposed to do, which is not to guarantee an income, but to give you intellectual resources you can apply in the professional setting of your choice.  But imagining that people she disdains might actually have an autonomous inner life is beyond her vapid inability to grasp the fact that the world is not simply what she thinks it ought to be.
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          ²The data here are a bit more complicated than they might at first appear — but a simplified picture is still a pretty good indicator of what’s going on.  And that would be that it’s not that students a generation ago made the same mistakes but were bailed out by the Bush casino economy.
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In this study that looked at the period from 1993 to 2006, you see both an increase in the amount of debt and a shift in the mix of students graduating with high debt loads, with the debt burden in constant dollars rising sharply over those years for every quartile in the study.  All of which is to say that it isn’t that recent grads somehow made the same mistake their elders did and got burned; actual changes in the way the US invests in and builds human capital left them more vulnerable than their predecessors.
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Image: Anonymous,  Kitchen Interior with the Parable of the Rich Man and the Poor Lazarus, c. 1610

“Precedent? Megan McArdle keeps using that word …”

October 15, 2011

Jim Bales here, and my thanks to Tom for the loan of the soap box!

Ms McArdle has a piece in which she claims that the Republican obstructionism in Congress to the Obama Administration has a precedent in Democratic obstructionism in Congress to the Hoover Administration.

Sadly, Ms McArdle presents no evidence to support her assertion.

The closest she comes to evidence is quoting Prof. David Kennedy, of Stanford’s History Department, as saying:

“Hoover also faced a very obstructionist Democratic Congress–they understood, as these guys do today, that if they just go in the middle of the road and refused to move, that would benefit them at the next election.  And it paid off.”

Unfortunately, Ms McArdle gives us no information as to how Prof. Kennedy knows that the motives of the Democrats in the 71st and 72nd Congresses (1929-1933) were the same as the motives set forth by Republican Mitch McConnell:

The single most important thing we want to achieve is for President Obama to be a one-term president”

Think about it. Retaking the White House is more important to the Senate’s most senior Republican than, say, reducing unemployment, feeding the hungry, healing the sick, clothing the in needy, etc. All pale in comparison to putting a Republican in the White House, and so Mr. McConnell has obstructed them all.

Now, is the good Senate Minority Leader true to his word? Well, since Ms McArdle couldn’t take the time to substantiate her assertions (or tell us how Prof. Kennedy substantiates of his assertions), we will have to do a bit of her homework for her.

A simple measure of obstructionism in the Senate is the number of cloture motions introduced over the two years of a particular Congress. (If one does not consider this a measure of obstructionism, then one needs to explain how filibustering is not obstruction.)

As the Republican leader in the Senate, McConnell’s obstructionism in the 111th Congress (2009-10) led to a mere 136 cloture motions. So far (as of Oct. 12) the 112th Congress has had 32 cloture motions.

This level of obstructionism is, according to Ms McArdle, “quite precedented“. In fact, she claims that the precedent can be found in the 71st and 72nd Congresses (1929-31 and 1931-33).

Just how obstructionist were those anti-Hoover Democrats? In the 71st Congress there was precisely one (1) motion for cloture. Such motions skyrocketed in the 72nd Congress, when those dastardly Democrats forced two (2) of them.

If precedent means what the rest of us think it means*, Ms McArdle is claiming that forcing a motion for cloture three times over four years is precedent for forcing 136 such motions over two years (and 168 such motions in less than three). On the other hand, maybe precedent actually means whatever it is she thinks it means.

Vizzini Lives!

[*] Precedent (n): ” An act in the past which may be used as an example to help decide the outcome of similar instances in the future.” Source: Wiktionary

Image:  Jane Sutherland, The Obstruction on Box Hill, 1883.


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