Archive for August 2010

Just a Wee Bit of McArdle Snark to Keep My Hand In: She’s Still Always Wrong, but Makes a (Sad) Funny Nonetheless, Krugman, Ryan and Judt edition

August 8, 2010

I’m off on a two week holiday to a secure undisclosed location that is blessed by no landline phone; no cell phone coverage; no town electricity or cable (and hence no internet).

Bliss, in other words.

I may be able to launch a minor blog post or two, but if not, I thought I’d wave au revoir with this little thought.  Prompted by a commenter over at Nate Silver’s place on Paul Krugman’s brutal and efficient takedown on Paul Ryan’s fantasies, (check out the Krugman blog for more) I did a stoopid — I looked in on what was happening over where She-Who-Ws-Always-Wrong informs (sic?–ed.) her following.

Predictably, she attempts a combination of more-in-sorrow-than-in-anger and petulant disdain in what amounts to an assertion that the Atlantic’s Business and Economics Editor, complete with her MBA, understands economics and tax policy better than someone with this CV.*

Well, maybe so; I’m not big on the argument from authority, and I suppose that were McArdle a quantum object, one could come up with a Feynman diagram that would allow us to calculate the probability that McArdle would in fact best Krugman in any substantive argument (that did not extend to exotic salt, of course).**

But because I’m really trying to leave this post with just one macabre visual gag, I’ll limit my snort of ridicule here to noting that in two longish posts (sure you want throw that stone, sinner? — ed.) she fails to grapple with the core of Krugman’s critique of Ryan.

That is:  the issue is not whether the CBO or the JCT was or was not asked, or should or should not have run the calculation on the revenue side of Ryan’s safety-net eviscerating and tax cut fantasies.***

What really matters is, who is right?  Does Ryan’s plan raise taxes on the poor and middle class, while cutting them on the rich, then slashing services of most importance to the poor and them middle, while still leaving the deficit in much worse shape than the status quo?

Yes it does. The only independent analysis to assess both revenue and spending cuts says it does, and Krugman, as you would expect from someone who’s actually accomplished this and that in the world, reports that fact correctly.****

So, though McArdle is deeply offended at the suggestion that someone who manages to obscure what his plan will cost in his discussions of that work in public is somehow misleading that public, I don’t have much sympathy for those who who think that calling a fraud a fraud is somehow not the thing to do over a table bedecked with pink Himalayan salt (you just can’t let that go, can you?…ed.) (No–TL).

‘And of course, the significant fact, the only one that matters, is that Ryan proposes a radical redistribution of wealth upwards, in the context of further shredding the social safety net while speeding the nation’s plunge into bankruptcy.

Until he, or his seemingly innumerate defenders***** can come up with a convincing demonstration that the Tax Policy Center’s analysis has got all that wrong, then Krugman’s conclusions as to both Ryan’s character and the impact of his policy proposals stand.

But you knew all that.

Which brings me to the snark.

I haven’t blogged on one topic I really think I should have.  I’ll may yet get to it — I hope I do.  But I don’t want to let pass the death of Tony Judt at this moment.  This is a tremendous loss.  I wish I’d had the chance to learn from him directly, rather than through his formidably researched, elegantly written and annoyingly prolific writing.

I do want to write at least a little more than that — but here what amounts to a kind of valedictory — the last two paragraphs from Judt’s most recent article in The New York Review of Books — will do to be going on with.  I read them as Judt’s deceptively simple elegy in which he captures worlds of historical and social insight:

Universities are elitist: they are about selecting the most able cohort of a generation and educating them to their ability—breaking open the elite and making it consistently anew. Equality of opportunity and equality of outcome are not the same thing. A society divided by wealth and inheritance cannot redress this injustice by camouflaging it in educational institutions—by denying distinctions of ability or by restricting selective opportunity—while favoring a steadily widening income gap in the name of the free market. This is mere cant and hypocrisy.

In my generation we thought of ourselves as both radical and members of an elite. If this sounds incoherent, it is the incoherence of a certain liberal descent that we intuitively imbibed over the course of our college years. It is the incoherence of the patrician Keynes establishing the Royal Ballet and the Arts Council for the greater good of everyone, but ensuring that they were run by the cognoscenti. It is the incoherence of meritocracy: giving everyone a chance and then privileging the talented. It was the incoherence of my King’s and I was fortunate to have experienced it.

Just enjoy those sentences for their rhythm, their swing.  Then think about their meaning…

…and then consider this statement by Ms. McArdle on Judt: “Obviously, we were not politically sympatico, but I nevertheless had enormous respect for the man’s writing; at his worst, he was a mighty foe.”

When we snarkazoids sometimes talk about McArdle’s leaden, ponderous, unlovely prose, this is the kind of stuff we’re thinking about.    But let that pass, and focus on what she’s actually trying to say here.

I was gobsmacked, I have to admit, and then, for all the sadness of the moment, and the genuine awfulness of the way death took Judt, I couldn’t stop myself trying to imagine what might have happened in the unlikely event of Judt ever bothering to notice that McArdle might consider him a foe.

I found the answer — and do forgive me for the sudden turn of bathos here — from a Balloon Juice commenter writing on a completely different subject.  That writer led me to this truly evil and socially unredeemable clip…and you can fill in the rest.

That is all — see you in a fortnight.

*Which, you will note, describes an individual who somehow hasn’t managed to update the document with this news.

**And yes, I know.  This kind of appropriations of physics jargon is fraught, to put it kindly.  But I have no intention of heading towards Dancing Wu Li territory, and it’s my blog, and it’s late, so take it up with the management if you don’t like it.

***Though the verdict seems clear here…McArdle interprets Ryan’s exchange with the Joint Committee on Taxation as a rejection of Ryan’s request:  “the answer to Paul Krugman’s question “Why didn’t he ask” is that “He did, and they said no.”  The record shows that the JCT offered only a ten year projection, and Ryan refused that, preferring instead to assert the assumption that net revenue would remain unchanged.  So what actually happened is that the JCT wouldn’t answer the question the way Ryan wanted it handled, and so he simply set the dials himself and moved on.

McArdle notes that she wrote to two Ryan staffers asking if the problem was other than what Ryan has publicly stated it was — the limit to a ten year projection. (Here’s Ryan in his reply to Krugman’s latest column: “However, CBO declined to do a revenue analysis of the tax plan, citing that it did not want to infringe on the traditional jurisdiction of the JCT. JCT, however, does not have the capability at this time to provide longer-term revenue estimates (i.e. beyond 10 years) [Krugman’s emphasis].” She reports, and I have no reason to doubt her, that the staffers agreed with her suggestion that it was mere lack of staff time, and not deliberate deceit that led Ryan to omit an actual analysis of the revenue side of his plan.

Unfortunately, McArdle, not actually being a journalist, doesn’t get why this is not dispositive, even ignoring the fact that Ryan and her unnamed sources do not have their stories straight.  I’ll leave to the reader to figure out the several problems she (fails to) confront in her attempt to identify and assert fact.

****Here’s most of the a summary of the full report (pdf):

TPC found Ryan’s plan generates much less revenue than he projects. If all taxpayers chose the simplified system, it would produce about 16.8 percent of GDP by 2020, far below the 18.6 percent he figures for that year. If taxpayers chose the system most favorable to their situation, the Ryan plan would produce even less revenue—about 16.6 percent of GDP.

What does that mean in dollars? CBO’s most realistic projection of revenues (assuming  most Bush tax cuts are extended and many middle-class families continue to be exempted from the Alternative Minimum Tax)  figures the existing tax system would raise about $4.2 trillion in 2020. By contrast, Ryan’s plan would generate about $3.7 trillion, or $500 billion less in that year alone.

While TPC didn’t model the Ryan plan beyond 2020, the pattern of revenues it generates suggests it would be decades before it reaches his goal of 19 percent of GDP—very likely sometime after 2040.

Top-bracket taxpayers would overwhelmingly benefit from Ryan’s tax cuts. By 2014 people making in excess of $1 million-a-year would enjoy an average tax cut of more than $600,000. To put it another way, their after-tax income would rise by nearly 30 percent.

By contrast, the average taxpayer making $75,000 or less would pay higher taxes if they  chose Ryan’s two-rate alternative. If they chose the tax plan more favorable to them, they’d do a bit better. For instance, people making between $50,000 and $75,000 would typically get a tax cut of $157 in 2014, while those making between $40,000 and $50,000 would pay $128 more on average.

These estimates are subject to lots of uncertainty. For instance, we assumed Ryan’s 8.5 percent VAT—the new business tax—would generate about 4.3 percent of GDP in revenues. TPC’s Joe Rosenberg, who modeled the Ryan plan, believes that estimate is generous. But since no such tax currently exists, it is hard to know for sure.

One other caveat: TPC did not assume that taxpayers would change their behavior in response to this new tax structure. We know they would, of course, in some ways that would generate additional revenue and in others that would lose revenue. But because these changes are so uncertain, TPC did not include them in our revenue estimates.

*****And no, Mr. Suderman, trying to throw dust into folks’ eyes with talk of the TPC’s liberal bias does not actually constitute a meaningful argument about the numbers they report. But you knew that.

Image:  Guy Pène du Bois,  “The Confidence Man” c. 1919.

McGeorge Bundy Lives! (Or Harvard’s Revenge on Itself and America, Larry Summers edition)

August 6, 2010

While I’m trying not to start drinking Mezcal at noon, reading stuff like this (h/t Atrios) and this doesn’t help.

By now, sitting up here at one end of Mass. Ave. in Cambridge, watching Larry Summers’ heirs pick up the pieces at Harvard (seriously — who puts operating budget into endowment investment?), while standing in silent respect for the departing Christina Romer, who more or less got the stimulus notion right, but was blocked by Summers from making that case to the President in the winter-spring of 2009, I find myself drifting back to those Best and Brightest Days of the early 1960s.

That would be when the Yale-educated wunderkind McGeorge Bundy went from having been the youngest Dean of the Faculty of Arts and Sciences at Harvard to be National Security Advisor to John F. Kennedy, and from within that position to serve as one of the architects of such triumphs as the Bay of Pigs fiasco and, of course, the Vietnam War.

Bundy’s preparation for his role as the lead Presidential advisor on security and defense was marked by acknowledged intellectual brilliance and a lack of real-world validation of his ideas and world view.  He served in World War II as a junior staff officer. (his eyesight was bad enough that he memorized the eye chart to fool recruiters.  No one ever said the man didn’t want to serve — which hasn’t been one of Summers’ sins either). But then, from 1945-1961, he lived the life of the professionally smart:  aiding former Secretary of War, Henry Stimson in writing his autobiography; then becoming first a Harvard professor of government and then, in 1953, the dean of the faculty.  He was by all accounts as clever and intellectually nimble as can be; a member of Boston’s aristocracy, a good dancer, a ferocious wit, a success…until he was placed in a position where his ideas about the use of American power hit the brutal reality of the forests, hills and lowlands of Vietnam.

Larry Summers was a wonder boy too. He too was a brilliant student, starting out at that notoriously relaxed institution of higher learning, MIT, at 16, completing his economics Ph.D.at Harvard by the time he was a greybeard 28, becoming one of the youngest tenured professors in Harvard’s history just one year later.  He too was born of an aristocratic family — this time peers of the mind, and especially economists, being as he was the nephew of two econ Nobels in Paul Samuelson and Kenneth Arrow.*

And now we see that also like Bundy, Summers’s undoubted power of intellect has not met the challenge of making policy in the hard world of power and competing interests.

The parallels aren’t exact.  I’d argue that in Summers’ case we already knew he was a dangerous administrator.  No one can say that his tenure as Harvard President was a model of smooth administration, and hints that the financial management there had been weak, to say the least, on his watch, were already discernable at exactly the time Obama was assembling his economic team.  Bundy presented a much cleaner slate in 1961 than Summers did in 2009.

But the results: disaster in human terms and lasting damage to causes of social equity and national wellbeing to which both men subscribed, are much the same.

The moral: not that brains aren’t useful–essential– in governance.  Not that economists are evil, or political scientists naive — some are, some aren’t.  Not that arrogance is itself a besetting sin. Rather, I’d say, beware of wunderkinder.  If you’ve always been the most brilliant person on your block — and you’ve only competed for that title in essentially protected environments (trust me; there are few more protected ecological niches than that in which tenured Harvard professors live), then what you have to offer is advice, not decision.

Nominally, of course, both Bundy and Summers were/are advisors.  In fact, at the ranks they engaged in that advice, they were decision makers.  The stories linked above document how Summers constrained the flow of options and information reaching the president.  He was the wrong person to be doing so — and I would argue that he was predictably so.

I only hope that he winds up having done less damage to the country than some; the blunt trauma the Democratic Party is already suffering in this political season may already be beyond repair. If that’s true, then we are in for hard times, as the not-so-loyal opposition is simply not credible as a governing body.

*Now that, pace McArdle, is an intellectually intimidating family. (See the bottom of the linked post.)

Quick hit link love

August 5, 2010

This one probably slipped by most people, as it showed up in that bastion of mass media attention, The Boston Phoenix, but Professor, née Colonel Andrew Bacevich gave a sharp and important interview to their reporter, and you should read it.

The key take away: wars fought because we’ve been fighting them are (a) futile, and (b) demand sacrifices of those committed to giving them for reasons inadequate to that devotion.

On a happier note, for those wishing to enjoy some truly happy snark on the idiocies of nativism from a historical point of view should check out this piece by that foundational journalist, Daniel Defoe, pointed out to me by the admirable Thony C of Renaissance Mathematicus.

That’s it for a busy Thursday afternoon.  Sons and in-laws await, and so I’ll steal a much better writer’s farewell until tomorrow.

Image:  Hans von Gersdorff, “Battlefield Wounds” in Feldbuch der Wundarznei, 1517

On Gary Johson, via E. D. Kain — The Eternal Return of the Magic Pony Salesman, Libertarians Hate Reality edition

August 4, 2010

Note:  this is an expansion of a comment left over at Balloon Juice.

Over at Balloon Juice, new front pager E.D. Kain has a post up dissing Newt (fine by me) but praising the latest libertarian flavor of the month, former New Mexico governor Gary Johnson, whom he touts as thinking conservative/GOPster’s best choice for President in 2012:

“’I’m more of a Gary Johnson guy myself. I like Mitch Daniels, too, but I haven’t been paying close enough attention to his foreign policy to say for sure. I’d vote for Johnson over any other candidate out there.

I beg to differ.

To begin with, I agree entirely with that Web keeper of critical thinking traditions, Aimai, who wrote in the comment thread that:

… on the question of sane/insane conservatives at this point in our political history I’d actually rather deal with an honest religious and racial bigot than a soi disant libertarian. I’m anti the drug war too but to excuse every other form of lunacy espoused by this Gary Johnson guy on the strength of that is typical of modern day libertarians. Ending the drug war while also ending social security, medicare, abortion and everything else and removing regulation in order to free up large corporations is a recipe for disaster. I don’t care from what principles you think you operate. If you think that principles matter more than reality you deserve to be left alone on a desert island with only a large corporation that produces cans of food, and no way to get a can opener and no bargaining power.

You tell ’em, Sister.

Still, there is always a chance that Johnson himself has some core of argument and knowledge that enables him to take broad principles and craft policies that would actually achieve the principal-driven goal in the real world…so to see, I honored E.D.’s encomium to the point of looking at former Gov. Johnson’s Our America site (a test -the-water production anticipating a national run).

I looked at a couple of his issue statements: for a clean environment but against carbon tax/cap and trade and so on.  This is nothing surprising — it’s just typical magic pony stuff.  He wants the tooth fairy to pay for college education, Philip Morris (sorry, Altria) to cure cancer (joking, in case it isn’t obvious)…and he wants the environment to be wonderful without doing anything about actual environmental problems.

As I say, there is nothing exceptional here, except as an illustration of the emptiness of GOP claims of policy expertise, as here, when even this “best of breed” fella has nothing to say beyond happy slogans.

But Johnson’s, and I would argue the GOP’s, pathology goes much deeper.

Without having the time required to fisk every claim at this one Johnson site, I decided to do just a bit of sampling.  To that end, I listened I read and listened to Johnson’s discussion of the Federal Reserve.

Mostly Johnson tried to avoid any controversy, and certainly any hint of the crazy that the thought of the Fed evokes from some of the libertarian/black helicopter crowed.

Thus,  mostly, he delivered an anodyne and I-love-apple-pie call for more transparency.

But, of course, you can’t keep a true believer down, and the anti-Fed scorn snuck out at the end of Johnson’s video presentation.

There he noted, scornfully, that between 1913 (the Fed’s founding) and now, the value of a 1913 dollar has dropped to 5 cents. I.e.—the portrait of Washington you have in your pocket would buy you what a nickel in 1913 did. (per Dr. Drang’s comment below — this is the result of a terrifying annualized inflation rate:  roughly 3%/year.)

Johnson’s trenchant analysis at that revelation: “Yikes.” (Quoted in full.)

Is this nonsense? Of course it is.

Why?

Because it omits the critical measure of per capita income changes from then to now.

In the haste of an afternoon at the office, I haven’t yet dug up the full time series, but just looking at it from 1950 to 2004, US per capita income has risen, in constant 2004 dollars, from $17,077 for men and $6,333 for women to $30,513 and $17,629, respectively, over that 54 year period.

The point: Americans have grown substantially wealthier despite nominal decreases in the value of a dollar, which I think pretty much everyone who pays attention to real data from the real world actually knows.

The deeper point: Libertarian fixations on the Fed, on the numerology of money, on all kinds of policy bear no relation to reality.

Most sentient folks even vaguely literate in economics understands that mild inflation is vastly preferable to deflation. Inflation hawkery in the absence of actual inflation, is one of the real threats to job creation and long term economic growth; deflation is a real danger. See,e.g.,  KThug for much more, along with many other sources (DeLong offers a good clearing house for this stuff as well) —but again, everyone here pretty much knows this stuff I think.

In that context, nominal dollars will fall in value relative to their historical predecessors.  (You want to see this in spades?  Check out this web calculator that allows you to figure out the value of the pound sterling back to 1264.  FWIW, a pound then would be worth about £520 by the retail price index measure, and £11,800 using average earnings as the exchange rate.  See also this page for a range of resources on this question.)

But Gary Johnson either does not, or chooses not to mess about in this real world of buying and selling and growing wealthy over time.

Why not?

I don’t know what’s in the man’s head, but from observation of his ilk, it’s because this part of experience confounds his narrative.  Actually engaging in government action to achieve policy goals is always bad; therefore the existence of the Fed is suspect; hence, meaningless measures like the relative values of dollars printed a century apart must somehow be mademeaningful.

Yikes, I say.

If this is what passes for deep thinking and sane Republicanism, we are in even more trouble than I thought — and I was pretty much with Pete Seeger on this one already.

And that, to me, states the real problem.  If this is the best there is — Johnson as a candidate, Kain as an analyst…then we are way more than waist deep in the Big Muddy.

And, just to lay one more downer on your Wednesday afternoon, I’ve been reading a lot lately about the end-of-empire period in Europe — those crucial years running up to World War I when various nations spit the bit in all kinds of fascinating ways.  (I recommend my current reading, Philip Blom’s The Vertigo Years for a good start).

I’m seeing and smelling that now all around us.  We’ve got a dysfunctional government, an overextended military fighting endless wars on the fringes of empire, a systematic anti-science movement daily gaining traction (here, see Naomi Oreskes and Erik Conway’s Merchants of Doubt for truly depressing reading), attacks on the contents of education (Texas, are you listening), failure to address critical problems (like that pesky carbon issue Johnson wants to ignore) and the ongoing shift of wealth and economic opportunity from the bottom and the middle to a narrowing class of the socially-disconnected rich (PDF).

In that context, Johnson’s tag line at his proto-campaign site — “Good Government is Easy” — is simply the raving of a resident of Bedlam.  And E. D. Kain is apparently his keeper, but is yet unaware that he is as much an inmate of the asylum as the man he praises.

Image:  Jan Fyt “Big Dog, Dwarf and Boy,” 1652

Scientopia!

August 4, 2010

ScienceBlogs bloggers live on in very spiffy new digs.

Many of my favorites from the old place have reorganized themselves here, at Scientopia.org.

Most wonderful, from my perspective, the interaction/conversation between blogs and bloggers that was one of the best (and occasionally worst) of the Seed Megalith’s science blogging aggregation is reproduced here, with much good fellowship and very sharp intelligence.

An evolution to be watched…

Image:  Anicet-Charles-Gabriel Lemonnier, The Salon of Madame Geoffrin” 1812.