Posted tagged ‘Megan McArdle’

My Review of Megan McCardle’s Upcoming Opus (Further to the Megan McCardle Is Always Wrong chronicles)

January 13, 2014

I learned — or rather was horribly brought to recall, after having labored hard to unknow the hideous realization, that Megan McArdle is coming out with a book on how failure propels success. (Sic!)  This grim fact was brought to my attention by a co-blogger at Balloon Juice, DPM (Dread Pirate Mistermix), and to my horror, my many enablers in DPM’s thread have noted that news of McArdle’s upcoming volume might be “worth” reviewing.  One even suggested a basic format.
First:  you all are horrible people, wishing upon me or anyone the evils of (a) reading McArdle at book-length and (b) spending the time it would take to disembowel the work honorably.

Second: I’ve already completed my review, along the precise lines recommended within the Balloon Juice comment thread:

Please suggest other one line/haiku McArdle reviews; it’s a rich vein of snark I’m offering here.

The Political Folly of the Middle

November 12, 2011

Jim Bales here, with my thanks to Tom for the loan of his soapbox.

Megan McArdle has a new post up at The Atlantic, entitled “The Financial Folly of Fairness” that makes some important points, including:

The solution to the problem [of the Great Depression] turned out to be throwing money at it: going off the gold standard, devaluing, and guaranteeing everyone’s bank accounts. Oh, yes, there was moral hazard. There still is. What there aren’t, is bank runs that wipe out peoples’ life savings overnight, or an unemployment rate of 25%.

One can name dozens of examples of things that violate our sense of fairness and obligation, and thereby make us all richer, from limited liability to bankruptcy.

The “just world” described above is not some bourgeois paradise; it is the western world during the Great Depression. It was not a better world for everybody; it wasn’t even a better world for anybody that I can think of. After it had finished punishing people who made stupid decisions, it went on to wreak brutal vengeance on a lot of people who had been quietly minding their own business.

Sadly, she then tries to position this as steering between the Scylla of the Left and the Charibdys of the Right. She tries to contrast herself with most people (who are of one of the two extremes), claiming that they “may believe the part of it that supports some larger “fairness” agenda they’re committed to. But their support is almost always piecemeal: try getting a liberal who loves easy bankruptcy to give a second chance to bankers who made a few stupid money decisions, or convincing conservatives …” [Emphasis in the original]

Now, if anything constitutes giving a second chance to bankers who made many massively stupid money decisions, it is TARP. TARP didn’t just give banks a second chance; it gave bankers a second chance by leaving the leadership and ownership of participating banks in the hands of those whose actions caused the crisis.

If Ms McArdle is correct in characterizing liberals as unwilling to “give a second chance to bankers who made a few stupid money decisions”, then TARP must have passed with overwhelming Republican support and despite determined Democratic opposition.*

The final vote on TARP? In the House 73% of Democrats voted for the bill compared to 46% of Republicans. In the Senate 80% of Democrats voted for the bill compared to 69% of Republicans.

So, when the chips were down, liberals quite literally gave a second chance to bankers despite their massively stupid money decisions, decisions that damaged our economy and put millions out of work. Utterly unfair, but necessary, as the liberals recognized!

Ms McArdle does us all a service in reminding us to place the well being of our people ahead of our desire for fairness. However, she does us a disservice in pretending that there are two extreme views in our discourse.


For, in addition to the “folly of fairness” there is the “folly of the middle” — the belief that the safe course is the always the one between left and right, liberal and conservative, Democrat and Republican. In today’s America, one can embrace the middle only by twisting oneself into a pretzel. One must simply believe that liberals would never give a second chance to bankers who made stupid money decision, and not actually look at the evidence.

In today’s America, there is only one extreme view of import, the view embraced by the Republican Party. This is the belief that defeating Obama in 2012 is “the single most important thing we want to achieve”, far more important than creating jobs for those who wish to work but cannot find employment.

The moderate position in today’s America is the Democratic position. Today’s Democratic party has been — and is even now — striving to protect “people who had been quietly minding their own business” from having “brutal vengeance” wrecked upon them. They are not succeeding because of the consistent and systematic obstruction of the Republican Party.

It is not enough to reject the “folly of fairness”. We must also reject the “folly of the middle”. The two parties are not cut from the same cloth, and we cannot pretend otherwise.

Best,

Jim Bales

[*] One might claim that Democrat is not synonymous with “liberal”. I will simply note that Democrats in White House and Congress are actually in a position to change people’s lives, while the extreme liberals who might otherwise fit Ms McArdle’s description lack that power. To ignoring Democrats while fretting about the out-of-power hyper-liberals is another contortion required to embrace the folly of the middle.

Image:  Henri de Toulouse-Lautrec, Folies Bergere: The Brothers Marco, c. 1895

Megan McArdle: Is it her reading that’s the problem? Her comprehension? Her honesty? You Make The Call!

August 1, 2011

I know that this is all kind of moot in light of the events of the last few days, but someone passed word of this McArdle post to me yesterday, and it seemed to me to capture so much of what has gone wrong in the way the media engaged the debate over deficits and their discontents.

In this particular example of Village media retailing a false narrative, She Who Is Always Wrong™ took issue with a chart referenced by and a conclusion her actually, you know, accomplished colleague* James Fallows has been arguing for a while.

And yes, I know, a cage match between Fallows and McArdle is kind of like watching Ali (in his prime) against the Weehauken Regional Golden Gloves champion, at least as far as intellect and journalistic chops are concerned.  McArdle would win, no doubt, were the judges scoring condescension and high-school in-group wit.  But when it comes to actually reporting an issue, understanding what one has been told, and reporting both facts and (clearly demarcated) analysis/opinion, Fallows v. McArdle wouldn’t be licensed even in Nevada.

But that doesn’t stop the divine Ms. MM, unsurprisingly.  Her role is not to be responsible, or accurate, or even coherent.  It is to advance the approved Central Committee line — which, McArdle, loyal and very effective apparatchik that she is, seems to know before the word from on high need ever get spoken out loud.

Hence her attempt to deflect the hideously liberally biased facts of the history of the deficit.

For, you see, the Fallows post she seeks to undermine focused on this chart:

https://i2.wp.com/cdn.theatlantic.com/static/mt/assets/jamesfallows/debt_chart_wh_0.jpg

Fallows made the point, also raised by such raving loony left organizations as the Pew Charitable Trusts and the ever-liberal New York Times that such recourses to history and actual data suggest both a problem and solutions that are different from those we’ve just gone through the wringer trying to debate. (Both references supplied by the White House.)

The broad point is both obvious and obviously too painful for McArdle to contemplate:  George Bush the Lesser inherited significant surpluses and a budget that promised to generate further surpluses through times of economic growth, and transformed that extraordinary fiscal idyll into a crater, a truly spectacular failure of financial prudence.

As the chart above accurately depicts, the largest driver of the deficit is the Bush tax cuts that coincided with the eight years of desperately unspectacular economic returns, culminating in the catastrophic failure of global financial capitalism.** The next largest creator of new debt was expanding domestic spending, followed closely by the wars in Afghanistan and Iraq, both wars of choice.  The prescription drug benefit (Medicare Part D) is a smaller item on this list — just 10% of the scale of the tax cuts — but it’s worth noting for the argument to come below.

All this, of course, shows what we already knew:  Bush policies, supported overwhelmingly by a GOP party that controlled the House for six of the eight years of the Lesser’s adminstration, and the Senate for more than four of those years, are what produced something approaching half of the total still-outstanding debt accumulated to date by all administrations since the birth of the Republic.  This, the Obama administration contrasts with its own record of a 1.4 trillion dollar addition to what we owe now, composed mostly of the stimulus, some particular policy choices, and a bit (and the significance of this will become obvious in a moment) of the extension of Bush tax policies.

So, given that none of these claims are controversial to anyone but McArdle, why is The Atlantic’s Business and Economics Editor so unhappy with her colleague?

Let’s give her the floor for a a moment:

I’m a little less enamored, considering that this graph attributes decisions made by Obama and an all-Democratic Congress–like doubling down in Afghanistan–to Bush, while taking responsibility for basically nothing except the stimulus.  When Obama extends the Bush tax cuts for the rich under pressure from Congressional Republicans, that disappears from his side of the ledger, because after all, he didn’t want to do it.  When Bush enacts Medicare Part D under pressure from Congressional Democrats, the full cost is charged against his presidency.  The list of such silliness goes on.  Our president seems set to coin another presidential motto: “The duck starts here.”

Ah, word salad.

I’ve been enjoying ignoring McArdle, as life is too short to waste time on the negligible.  But that means I’ve forgotten the peculiar pleasure of watching someone lie so badly.  It really is an art, to say something contradicted within fractions of a column inch without noticing — or more likely, without caring, for the purpose of this kind of communication is not to advance an argument but to establish a talking point.

So, to the fisking:

On attributing to Bush costs for the two wars:  well, (a) the $1.4 trillion laid to the Bush account underestimates the long term budgetary consequences, reasonably accurately totals up the budgetary authority extended to conduct the war through FY2009, including homeland security and foreign aid costs of the choice made to go to war.   More to the point, it correctly attributes the decision to the administration that made it.  We are still paying for Medicare Part D, for example, and will continue to do so, because unless repealed, future administrations continue to administer decisions made by prior ones.

It’s true that Obama and his administration have continued to fight the wars launched by his predecessors — but unless you want to advance the claim that all decisions by a President vanish from their legacy the moment they leave office, it still seems appropriate to lay the bulk of the cost of any given decision to the President who made it.  It is fair to state that Obama has chosen to pursue war in Afghanistan while dialling down our commitment (and cost) in Iraq — which is indeed a commitment for which the US taxpayer must pay.  That would suggest one could add a chunk to Obama’s ledger of deficit spending for war, while the chart above suggests other choices are responsible.

But again, if you think about what that chart is actually arguing —  that you should look to new choices on spending, president by president, to understand our current budget predicament — then you grasp its logic.  Bush sent us to war that we must somehow finish.  Obama demanded stimulus, which has not proved to be sufficient.  Both of these are real decisions taken at particular points in time by distinct administrations.  And both choices are accurately reflected above.  To which McArdle responds by conflating our president with water fowl. (Sic — ed.)

Meanwhile, consider McArdle’s next claim:

When Obama extends the Bush tax cuts for the rich under pressure from Congressional Republicans, that disappears from his side of the ledger, because after all, he didn’t want to do it.

Oh snap!  I wish I could proffer such incisive analysis with such — how to describe it? — insouciance.

Except (and this is where my jaw hit the floor, even considering the source), if you take one moment to look at the chart in question, you’ll find, nicely colored in blue, attributed to Obama, $250 billion accounted for as part of the December, 2010 deal that extended the Bush tax cuts for two years.

It really doesn’t seem too much to ask that the Business and Economic Editor of an institution as venerable as The Atlantic might actually read the chart she’s analyzing.  But sadly, that’s just a bridge too far for McArdle.

Update 8/2/31:  reader Atlas Fugged caught an error here:  Obama lays claim to $250 billion of the $800 billion cost of the December 2010 deal; that covers the unemployment extension and other aspects of that bargain; the tax cut extension does, as McArdle says, lie on Bush’s side of the ledger.  I apologize for the error — but note that the argument made on the cost of war still applies:  the decisions made by presidents do not die with the end of a given administration; legacies are, after all legacies.  To be strictly fair, I’d say Obama should own the middle class portion of the tax cuts; the extension of the tax cuts on earners over the $250,000 was clearly a Republican ambition first and last.

And now for the capper:

When Bush enacts Medicare Part D under pressure from Congressional Democrats, the full cost is charged against his presidency.

This is called doing the best (worst) you can when the hand you’ve been dealt has no cards at all.  Just to recall.  Medicare Part D, the prescription drug benefit, was debated and passed in 2003, a year in which the Republicans controlled both houses of Congress.  Republican leadership in the House of Representatives famously bent procedure to the point of breaking to ensure the measure’s passage there.  It’s not clear what pressure that the Democrats could have brought to bear on any of the key players, and certainly not Bush himself:  this was a period of unequivocal Republican control of the legislative process.

McArdle hopes no one remembers when and what happened here, I guess.  She’s playing to the established meme that Medicare is a Democrat’s program, so any spending for it must be due to some nefarious Democratic strategem.  But facts do have that well-known liberal bias, and this claim of hers is simply false.  Whether it is a conscious lie or merely a reflexive one is unclear and unimportant.  That McArdle publishes obviously wrong statements — this one, and the tax gaffe above, for two — is what actually matters.

Enough, mostly…except for a quick take on what this is all about.  One thing among many has been driven home by the ongoing debt-limit debacle:  however poorly you may rate Obama’s poker skills, the GOP has been revealed, again, as a party that cannot govern.

It can make use of power, of course — that’s the what they’re doing now, as they attempt to transfer yet more of the burden of living in American from the rich to the poor and middle class.  (Just to anticipate the usual trolls, how else to characterize an approach to deficits that bans tax increases on the rich and the richest but explicitly raises all kinds of costs borne by the rest of us.)

But it can’t actually do stuff that makes the country go.  The Bush the Lesser administration was an eight year demonstration of that incapacity to do even the basics — from the catastrophic mismanagement of the Coalition Political Authority to “heckava job Brownie” adventures in abandoning an American city, to the sustained and successful campaign of failure in economic and fiscal mismanagement.  Remember:  Bush policies left us with debt, a burst housing bubble, and the near-death experience of the US and world banking system.

It shouldn’t require reminding folks of this:  the GOP had its hands essentially unchallenged on the levers of governance and they failed.  Full stop.  A crater.  We’re currently flying with a partly crippled FAA because the GOP still can’t find their asses with two hands behind their backs.  And above all, as the chart that the White House published, others have corroborated, and James Fallows correctly pointed out accurately depicts, any Republican who claims to care about deficits who voted for Bush-era spending measures is a fraud.

Which gets back, at long last, to McArdle’s real aim in her post.  She writes:

The focus on the past makes it a very bad guide to the relative magnitude of the future choices we need to make.  Some of these items (tax cuts, entitlements) will grow, and some of them (military spending, some discretionary items) won’t….Settling whether “Bush policies” or “Obama policies” were the “cause” of the deficit wouldn’t tell us a damn thing about what we should do

This is an attempt to bely the obvious: knowing what policies, chosen by whom actually created the federal debt tells us a great deal about what we should do.  E.g.:  GOP tax cutting creates recurrent fiscal disasters, leading, inter alia to the need for Democratic choices to spend on stimulus to try to recover from the mess.  Pace McArdle, looking at what was done, administration by administration, and then examining both the context and the consequences of those decisions is precisely what you need do in order to frame choices here-and-now about what we should do.

That McArdle knows this at some level, I have little doubt.  But the consequences of becoming aware of such knowledge are insupportable: she’d have to come to grips with the realization that much of what she has written and supported in the past is turning to ashes in her mouth — not to mention the difficulties it would cause her with her patrons were consciousness to descend upon her.  So, again, she is a pretty straight forward illustration of the truism that it is very hard to grasp that which would cost you to understand.

That’s it, but for this last bit of snark:  McArdle near the bottom of her post contrasts the White House chart with one that she “just happen[s] to have handy.”  I invite you to enjoy it, for it is a peculiar masterpiece. It is both one of the worst examples of the graphic display of information I’ve seen since the great Tufte began to show us the way — and it is, as one would expect, a deeply dishonest depiction.

I’ll leave it to you to pick out the various ways in which the chart conceals relevant information, while just noting that I find it … interesting … that McArdle does not provide a source for this handy chart.  Would it’s provenance be that embarassing?

And with that, enough.

*I know that it must hurt Fallows, an actual journalist, to be thus labelled by McArdle. But, in fact, she’s right, with all the implications for both that follows from that harsh reality.

**I know that sounds like hyperbole — but as the Michael Lewis work at that link documents (as many others do), it ain’t.

Images:  Joachim Beuckelaer, Vegetable Seller2nd half of 16th century.

Gerard ter Borch, The Reading Lesson, 2nd half of the 17th century.

When You Hit Bottom, Stop Digging…or McArdle’s Kitchen Chronicles redux.

February 28, 2011

Fair warning:  This is way too long and fundamentally way too trivial to bother with.  Given all the urgent stuff going on in the world, Megan McArdle hardly deserves anyone’s attention.  I’m just posting this to clear my hard drive and brain of a bit of unfinished business. Plus I think I promised several times to post on Megan McArdle’s response to my post on the serial factual errors in her writing on the history of innovation as seen in the American kitchen.

So by all means, walk on by if you’ve had enough McArdle (I have, and won’t be going to that well again for a while) — but if you want some smack talking and the odd bit of fact, jump the jump and join me.

First, just to catch up with the action:   I’ve had prior occasion to think of this list of officers’ fitness reports in the context of the writer in question.  The title of this post refers to the twelfth item on that tally, but many others apply, I think. Pick your favorites in the comment thread.

In her response, McArdle was particularly stung, I believe (because of her link to it), by a Wall Street Journal blog’s summary of the Krugman-Cowen-McArdle-Levenson sequence.

Thus provoked, she was then moved  to produce an 2,300 word justification of her claims, on which mastication I will now comment.  (That noun chosen because being attacked by McArdle always reminds me of Denis Healey’s marvelous description of being attacked in debate by the Tory politician Sir Geoffrey Howe: it is “like being savaged by a dead sheep.”)

I’ve got to say I am a bit resentful here.  I’m the one supposed to stupify my antagonists with posts rivaling War and Peace for length if in no other aesthetic category, and here she comes stealing onto my patch.*

Ah well.

McArdle begins well, at least for the case I’m trying to argue, setting out on her journey of redemption with perhaps the most revealing and humiliating sentence I’ve read on any blog:

“It’s certainly possible that I got something wrong in that post; I am of course not a historian of kitchens.”

There’s a perhaps even more self-diminishing line that follows: “But neither is Mr. Levenson, and I can’t plead guilty to the offenses I am charged of based on his evidence.”

I like to think that I’ve left seventh grade far behind me, and so see no need for comment here — beyond that we are dealing with someone who really needs to think some more about the argument from authority.

Once she gets past that reflex of pique, she answers my criticisms with three basic types of deflection.

__

First, she tries to shift between categories of existence, availability and penetration to suggest that whatever actually occurred, the specific appliances she cites weren’t really part of the 50s landscape. This is nonsense, as I’ll detail a bit below.

Second, she tries a bit of indirection suggesting that some of my examples of her errors aren’t really that significant, because, in essence she knows better.

Third she uses what is perhaps her most powerful (and often used) trick when cornered.  She declares that she was talking about something else that whatever it was she clearly got wrong — and when seen in light of that other issue, everything she said becomes both correct and humiliatingly more insightful than whatever her critics might have argued — or, as she wrote, it surprised her that “someone who teaches science writing at MIT is so unfamiliar with the containerization revolution that he can mistake “container” for “refrigerated.”  It was ever thus:  when cornered, she resorts to the ad hominem, hoping that the insult will distract from the failed argument behind it.

On tactic number one: McArdle had originally claimed that  50s kitchens did not contain, “electric drip coffee brewers, stand mixers, blenders, food processors, or crock pots.” I countered by documenting the history of stand mixers (sold to the public in 1918, widely disseminated in cheaper models through the 20s and 30s); blenders (invented in the twenties, sold in mass quantities in the 30s) and of electric coffee makers, common since the thirties.

__

In response to this impressive record of error, McArdle complains I should have understood that what she meant was not that the 50s kitchen lacked this or that, but that it did not possess versions of these inventions that would have been acceptable to one Megan McArdle:

I thought it was obvious why I was specifying drip coffeemakers:  at least for people from my generation, percolated coffee tastes horrible. I do not think of percolators as drip coffee equivalents, I think of them as something close to crime against humanity.

Note at least three things:  first and least, she’s simply trying to baffle with bullsh*t, replying to a claim unmade.  As it happened, as examples of pre-1950 electric coffee makers, I offered not percolaters, but the vacuum coffee maker, a very different technology that the steampunk caffeinistas among us rate highly.  These were indeed generally available in the thirties and are still prized.

Second, and really all in all, recall that the theme of all this is innovation.  The question she herself raised was whether or not there were in the fifties the means to automate a common kitchen task, brewing up a cup of coffee?

Well, yes, there were, as she in fact admits.  Which is what she hopes to keep you from noticing when she decides to wrangle over whether she would actually drink such brew.

Which leads me to this:  it did give me pleasure to read the sentence above, because in a sense it captures all you ever need to know about McArdle.  She decides the facts worth knowing by a simple criterion: do they meet her exquisite standards.

Percolators? Get me The Hague on line one!

Moving on: for an example of the next of McArdle’s favorite tricks to hide her failings, check out this attempt to persuade the reader that she may have been wrong … but not really:

As for the rest, my understanding is that the stand mixer was not widely dispersed in American households until the early 1960s; the stand mixer invented in 1919 was commercial grade; the home versions appeared in the 1930s and sold well, but were somewhat derailed by the dearth of consumer production during World War II.   Of course, if anyone has data better than I was able to find, I am open to correction.

Again, errors, minor, but still there:  according to the Kitchenaid company the commercial stand mixer was first produced (not invented) in 1915, and the first home models were sold in 1919. Perhaps McArdle may asssert that by “commercial grade” she means “home,” but I think a reasonable person would find that disengenuous at best.

She admits, though that mixers sold well — Sunbeam, makers of cheaper models than Kitchenaid, topped 1 million sold before World War II.  But, argues McArdle, she’s still right, despite all this, writing that “some of this, however, may simply be an argument about what constitutes ‘common.'”

I didn’t think she loved Bill Clinton so much that she’d expropriate his “defintion of ‘is'” defense so readily.

She goes through a similar exercise for the blender, and then concludes that after all, maybe she and I were both right:   “I lean towards requiring some amount of broad diffusion, [of appliances] but I can see the argument for the other side–indeed, that’s what I was getting at in the post, that the definition of a “1950s kitchen” is tricky.

Well, I guess.

__

Just to be as blunt as possible:  by “common” or “broad diffusion” she seems to mean whatever number is just a little bit higher than those actually use in the 1950s.  That’s a child’s bob and weave, not an argument from anyone who wishes to be taken seriously.

Oy.  This will never end, will it — which is, of course, McArdle’s true genius.  She throws up such an endless spray of word salad that actually pulling apart each and every one of her distortions, errors, and outright lies takes much longer than anyone wants to either write or read.  So I’ll just give the slightest of glosses on the third attempt McArdle makes to defend herself, in her discussion of the emergence of container shipping.

As noted above, she does so in a way that emphasizes her mock horror that a professor at MIT should mistake refrigeration for containerization– which would indeed have been a simpleton’s error had it been made.

But the problem is that the discussion was, in McArdle’s own framing, about whether or not people in the 50s had access to fresh produce:

I don’t believe that they have gone without fresh produce for six to eight months at a time, as my mother did in her childhood–and was told to be grateful for the frozen vegetables which hadn’t been available when her mother was young….

Is the shift to flash frozen produce greater, or less great, than the shift from flash frozen to the fresh produce made possible by falling trade barriers, rising air travel, and the advent of container shipping?

McArdle’s gaming the question here of course, asserting her assumptions as the answer:  fresh produce in her telling could only arrive on American tables through her triad of trade (which, I guess, could only have happened post 1960, to the great surprise of the United Fruit Company and Dole), air travel (fresh fish was delivered by air to Moscow in 1945!) and containers, a genuinely post 1960 innovation, (one that I actually witnessed transforming my home town; I was a child when San Francisco’s docks died and the upstart Port of Oakland’s container terminal came to dominate freight traffic to the Bay Area).

But if you were to make the mistake of taking McArdle’s question more seriously than she herself does, then what we want to know is what innovations were most important in delivering fresh food to distant markets.  And there, the answer you find again and again in histories of food was rolling refrigeration, which, as I gabbled on at length last time, is a development that has a history in the US dating to before the Civil War.  Last time, I talked of meat — but just in case you were wondering, the first American shipment of fresh produce — strawberries –rode the rails of the Illinois Central in 1867, which is a factoid that makes this quote from McArdle at once pathetic and telling:

When my mother was growing up, it was  theoretically possible to buy fresh strawberries or asparagus in December, shipped in a refrigerated boxcar from a hothouse or maybe California.  But I doubt the grocers in her small town would have stocked them, and if they did, my grandparents, who were solidly middle class but whose memories of the Great Depression died hard, would never have dreamed of buying them…

Yup.  We’re back to that again. This or that is unpossible because I or mine can’t imagine it.

And so on and on.   There’s more, but I’m done.  There isn’t time in the day to fisk out every last bit of nonsense showering forth from McArdle’s keyboard.

So I’ll just leave you with one last thought.

As in my earlier post, let me explicitly call out The Atlantic. For all that there are good people doing good work over there — for one example, have you seen the folks posting at Fallow’s blog lately?  They’re going great guns — the bottom line is this:

A major media operation resembles an old fashioned World War II convoy, at least in one respect:  just as those gaggles of vessels traversing the North Atlantic couldn’t travel faster than the slowest ship, over time, publications can’t be seen as more reliable than their least trustworthy writer.

Just sayin.

*Perhaps it’s because the indictment hit just a little too close to home, and she has opted for one of the traditional tactics of those in peril with the truth: “When the law is against you, argue the facts. When the facts are against you, argue the law.  When both are against you, attack the plaintiff.”

Images:  Georg Flegel, Pantry by Candlelight, c. 1630-1635.

Ivana Kobilca, Coffee Drinker 1888.

Willem Frederik van Royen, The Carrot, 1699.

David Brooks is Always Wrong Too: Why Does Brooks (And The Republicans) Hate Contracts So Much?

September 24, 2010

DougJ over at Balloon Juice highlights this latest bit of sleight of hand from that genial con, David Brooks:

Financiers send the world into recession and don’t seem to suffer. Neighbors take on huge mortgages and then just walk away when they go underwater.

Now, I’ll have more to say about this column, as it is yet one more textbook case of bad faith, ignorance and, I’d wager, deliberate, useful error. (There’s a nastier term for that, but people of Mr. Brooks delicate constitution tend to faint when Anglo-Saxonisms slip into the discussion, so I’ll let y’all fill in the gaps.)

But here I just want to say something that seems to me so obvious that I hadn’t bothered to point it out yet.  That is, the difference between the two poles of this false dichotomy lies not just in the kinds of disparities Doug points out:  financiers who get rich by destroying the fabric of civilization are not quite the same as individual home-owners.*

Rather, or additionally the nature of the act committed by a financier betting the firm (but not his compensation — see Michael Lewis’s The Big Short for blood-pressure raising details if you are interested) is fundamentally unlike that performed by a mortgage borrower dropping her or his keys.

The financier has obligations — fiduciary ones to investors, and social ones that derive from the claim that finance plays an essential role in building a prosperous society — the argument used to justify outsize compensation and the rest.  There are legal ones too:  no fraud, no insider dealing and the rest.  This raft of requirements add up to a duty of care that our robber barons clearly failed to meet over the last few years.  They broke the social compact, and they continue to do so, IMHO.

Home owners, mortgage holders, by contrast, have a very specific set of obligations, defined in a contract.  Failure to perform their commitments under that contract carry specified, limited consequences, known and agreed to by both sides.

Anyone whose bought a house knows this very well; dealing with all this is why a closing takes a couple of hours, 975 signatures (I made that number up) and so on.  You learn that you are bound to pay the mortgage as scheduled, pay your taxes (when not escrowed), keep insurance on the property and so on.  If you choose or are compelled to cease to do so, the lender has certain rights, of which the chief is to seize the property on which it holds the mortgage.

That is: you don’t pay, they get your house.  That’s not a moral failing (unless the lender defrauded you, of course — or you lied to your bank); that’s a contract.  You can pay or not, and different outcomes, spelled out, result from either of those actions.

It’s a contract!  We love contracts, property rights, the rule of law — don’t we?

No we don’t.

Not if “we” happen to be conservative, especially if we slip into the skin of a faux “values” arbiter, or a glibertarian.  Contracts have two sides — but Brooks, and folks like Megan McCardle, who predictably wrote similarly breathlessly about the bad behavior of folks exercising their rights under perfectly clear (standard!) contracts a while back, only recognize that part of the contract that benefits the approved parties, the rich, the powerful, the institutional.

Surrendering a house that you cannot pay for may reflect all kinds of things about you personally:  everything from your status as one of millions of collaterally damaged folks undone by global financial disaster and global economic shifts to your actions as a lying scumsucker of a social climber taking advantage of easy money to live high for a few years.  (In which case more than ever, caveat lender.)

No where along that spectrum though, is that behavior anything but perfectly acceptable under the long-held practices of a contract-ruled social and economic system.  That’s a little different from what the banksters did:  stack up a huge pile of dry wood (the financial system, overleveraged through derivatives created for no economic purpose), add gasoline (an insurance scheme that had no actual solvent counterparties guaranteeing loss payouts) and then stand around flipping glowing butts at the pile just to see what would happen.

That Brooks refuses to see the difference between individuals acting as their legal constraints permit them, and those who thus played chicken with the entire global banking system is a measure of his mind.  To me, it says that he is a shill, a hack, a dishonest broker.  YMMV.

*Demonized here as deluded climbers — the “huge mortgage” trope.  If you actually start digging into the numbers that’s bullshit, as one might guess considering (a) the source and (b) the fatuous blanket quality of the statement.  This is a Brooks tell, how you know that he is a propagandist, and not an original thinker.  I’m still tracking down precise data, but a place to start to get a handle on mortgage size and delinquency would be this HUD report to Congress on the root causes of the foreclosure crisis.  A key point there:  it was house price appreciation, not the magnitude of the price of a given home, that seems to have driven the bus when it comes to the collapse of the bubble and the foreclosure crisis.  Brooks is doing a shifty bit here, that is, blaming individual moral failings instead of the much more complex and society-wide issue of why prices rose so unsustainably.  That has obvious policy implications, which is the point: Brooks plays a clever game, and it takes some digging to get past the easy and plausible generalizations with which he masks his real aim.

How Hard Are Fractions, Really: Elizabeth Warren Scares Her/Megan McArdle Is Always Wrong Chronicles, Cont’d.

July 28, 2010

Update: some edits to make the post read like someone without a grudge against English syntax wrote this post. Nothing substantive — a couple of cuts, a couple of verbs supplied to verbless “sentences.”

I guess I just can’t quit that Ms. McArdle.

I vowed to give myself a break from looking at the work of someone who seems to me to be trying to live up to fitness report number 12 on this list (or perhaps, better, number 4…oh hell, actually, a whole bunch of them).*

But then I read on, and I can’t help myself.

In my last post on this subject, I compared elements of her hatchet job on Warren to the techniques Andrew Breitbart uses in his war on progressives, Obama, and random African Americans who drift into his sights.

This time, it’s a little different:  McArdle is here simply trying to confuse the issue, apparently in the hopes that each bit of noise and nonsense that she can generate around Elizabeth Warren will damage her chances to become the first director of the he new Consumer Financial Protection Agency.  It’s an example of what I’ve called in the past McArdle’s monkey-in-the-zoo approach, in which she flings anything that comes to hand against the wall and hopes some fraction of it will stick..

To recap McArdle has promised the world a second part to that first post that attracted much uncomplimentary attention, but, as Susan of Texas notes it’s been a while.  In the meantime, she has outsourced the task, excerpting a Wall St. Journal op-ed of some years ago, which she presents under the title, “More Weird Metrics for Elizabeth Warren.”

What is so weird to McArdle?

Expressing tax liabilities as percentages of income.

No, really.

As in:  a single-earner family with an income of $38,700 facing a tax burden that claims 24% of that total.

As in: a two-earner family with earnings of $67,800 facing a tax burden of 33%.

Stating tax bills in this manner is apparently a dreadful sin, a willingness to mislead or a confusion about the underlying data.

Or so says the WSJ item’s author, Todd Zywicki, who in the passage quoted by McArdle complains that Elizabeth Warren and her co-author Amelia Warren Tyagi express certain items in raw dollar terms — $5,140 on car expenses for the single earner example, for example, vs. $8,000 in the two income family — but state tax liabilities only as percentages.

To Zywicki, this amounts to an obvious attempt to confound “an “apples to apples” comparison of all expenses.”

He corrects this, in his mind, by performing what he seems to regard as the utterly impenetrable magic act of performing two calculations:  .24*38,700 and .33*67,800, to yield dollar figures for the tax bills the two families in these examples owed.**

But beyond this en passant swipe at the eternal mystery that is the Wall St. Journal op-ed operation, our real concern here is McArdle.

She too, apparently, finds expressing a quantity as percentage of another, specified quantity, somehow suspect, a “weird metric.”

More, she regards this example as somehow dispositive of a systematic misuse of data, a demonstration of either Warren’s incompetence or her dishonesty.  McArdle writes,

Does it matter if we have a regulator who can use data consistently?  A lot of commenters seem angry that I would suggest it might.  As for me, I don’t know which is worse:  the notion that Elizabeth Warren understood what she was doing, or the notion that she didn’t.

My question would be, were I the publisher of The Atlantic, does it matter if we have an economics writer who can, apparently, neither read nor count?

Now that’s harsh, and I know it, but look at what happens if you read Warren’s and Tyagi’s examples in good faith, with a view to understanding what they are actually trying to say.

Well, long ago I wrote about the importance of such simple calculations as percentages to raw data in the context of Iraq War casualties.

The point there was that doing so allowed one to make comparisons across disparate bodies of data or historical examples.  If you want to understand the implications of  600,000 casualties among Iraqis, it helps to express that as a percentage of the population affected, which then allows you to compare it to, say, the deaths suffered by combatant nations in World War I or the American Civil War.  Thinking about the comparisons those enabled provided the frame for the moral of that post:  that the application of even veryy simple arithmetical/mathematical ideas to the raw experience of the world can prove enormously useful.

So, what might persuade Warren and Tyagi to present housing expenses or car costs as dollar numbers but  tax burdens as percentages?

Well, if I were to guess, it would be to make a point central to their larger argument:  that there are systematic increases in costs that accompany the increase in earnings in as you move from one income to two — but that different kinds of cost increases behave differently, have different scales of impact on the outcome for a two-earner family.

That is — increase in car costs like most family expenditures are basically linear:  if you go from one car to two, you pay a bit more in payments, insurance, and maintence, and that’s it.  If you take on a larger mortgage, the same applies and so on.  As Zywicki notes, apparently with some sense of being deceived, this results in such costs consuming a smaller percentage of the gross family income for two-earner households compared with single earner ones.***

Update:   note commenter Jim Bales analysis below.  Zwicki’s sins are worse than what I, in my haste to get this up, fully recognized; Jim does the due diligence.

But I think every sentient American knows that taxes don’t behave like housing or car payments.

In fact, I find it hard to believe –absurd, in fact — that McArdle, of all people, a self proclaimed libertarian, doesn’t grok the point Warren and Tyagi are trying to make as clearly as possible by using an expression for the tax burden faced by their two families in percentages.

After all, the book is about the two income trap.  And one of critical elements of that trap, as we all know, is that marginal tax rates go up at higher income levels.  This is, of course, something that McArdle has written about –notoriously quite recently, in her “calculatorgate” post.

In fact, in every context but the one in which she attacks Warren, McArdle grasps the implications of a progressive income tax, and she should, of course, given the fact, noted above, that every American who has ever looked at a tax table recognizes that the last dollar of income above minimum thresholds is taxed at a higher rate, a higher percentage than is the first.

So, quite the contrary to the charges leveled against them by Zwicki and McArdle:  Warren and Tyagi weren’t obscuring a fact that anyone — probably even McArdle’s calculator! — could obtain in seconds from the raw data they povided in full.  Rather, they were making the point that their own argument required in the best form they could — which, I meekly say, as the writer of this and that myself, is the essential core of an author’s job.

And that argument, the one that Warren and Tyagi developed across a couple of hundred pages, turned on explicating the fact that two incomes do not bring wealth proportional to the effort expended to acquire them.

Which is what would be understood, pretty clearly, I believe, by any reader unburdened by a willed desire not to get it.  How hard is to grasp that marginal tax rates in progressive taxation systems — which are generally pretty well expressed as percentages — act as a drag on the aspirations of two earner families?

This is not a raving radical position.

I believe I’ve heard some conservatives lament this very fact.

All of which is to say that there was nothing “weird’ about Warren and Tyagi’s metrics– unless asking a reader to do a quick bit of mental arithmetic (what’s one quarter of 39K vs. one third of 68) is somehow a malicious act by authors bent on deceit.

That McArdle might find that task daunting I find plausible, barely, given her recent trouble with long division.

But really, I know that she’s perfectly capable of handling fractions.  This is pretty clearly a case of willful misreading to a malicious end,  a baffle with bullsh*t moment.

So, with that,  I’m left here with is her own question, again rephrased for those in charge at The Atlantic. Does it matter if your “Business and Economics Editor” cannot consistently grasp the simplest of calculations, the most elementary of analyses?  Is it worse that McArdle understands what she is doing, or that she doesn’t?

*My personal favorite has always been number 2, but that’s just me.

**…Then, seemingly oblivious of the hilarity that thus ensues, Zywicki converts a number of the other quantities into percentages to make comparisons of the relative weight of different expenses possess in the two family’s budgets.  Seriously.  Oh well.  That was long ago, in a country far, far away, and besides, the kvetch is dead.

***He seems to think Warren and Tyagi are concealing this fact, as if it is beyond the ken for someone to notice that $8,000 is a smaller chunk of around 68K than roughly $5,200 is of $39,000. Truly, this just isn’t that hard.

Images:  Jan Massys, “At the Tax Collector,” 1539

The title pages to two arithmetic texts published in Germany in 1514

Why Friends Don’t Let Friends Cite The Atlantic’s “Business and Economics Editor”: Further to the Megan McArdle is Always Wrong chronicles.

July 24, 2010

Update: Greetings to everyone coming here via TBogg, Susan of Texas, Eschaton and Brad DeLong — and my thanks to those good folks for the links.  A special thanks, of course, to Ms. McArdle herself, who tweeted this very post, apparently authored by “some idiot.” She has forgotten, I think, that here in Boston, that’s an epithet of glorious memory.  This idiot welcomes readers from wherever they come.

Though if I were just a little snarkier, I would add that being insulted by McArdle calls to my mind the experience of being attacked by the British Tory parliamentarian Sir Geoffrey Howe, as described by Roy Hattersley Denis Healey:  it is like being savaged by a dead sheep.

Update 2: Welcome everyone coming over from the GOS, Post Bourgie, Rortybomb, C&L, and Richard Eskow/HuffPo.  Rortybomb  and Eskow dramatically expand the takedown — reccommended.   I know I’m missing others  — for which I apologize; I’ve been a little swamped by the response to this one.

________________________________________________________________________________________

The old joke* about Richard Nixon asked “How can you tell when he’s lying?”

The answer:  “When his lips move.”

I’ve finally come to the conclusion that something similar must be said about Megan McArdle.  Perhaps lying is too harsh a word — but the serial errors that all fall on the side that supports her initial claims and that recur again and again in her work suggest to me that something other than mere intellectual sloth and sloppiness is the driver.

Ordinarily, such a record wouldn’t matter much, especially in journalism.  In theory, a series of clips as riddled with error as McArdle’s would end most careers in high prestige journalism.  Hot Air might still find a use for you, but The Atlantic?

But the problem is that McArdle is useful:  she advances an agenda — that which comforts the comfortable — and she does so with what I think is truly her original talent, the capacity not to notice the ridicule and ferociously dismissive debunking that she so often attracts.

Being able to be wrong in a form and fashion that aids the powerful, and possessing the ability not to mind a life that must be thus lived in willing embrace of error…now that’s a trick.

But it is one that does real damage to the republic, as the post that aroused this latest bout of McArdle-bashing demonstrates.  In it, McArdle seeks to discredit Elizabeth Warren as a potential leader of the new Consumer Finance Protection Agency to be set up under the just-passed financial reform bill.

To do so she tries to impugn both the quality and integrity of Warren’s scholarship, and she does so by a mix of her usual tricks — among them simple falsehoods;** highly redacted descriptions of what Warren and her (never mentioned) colleagues actually said;*** and descriptions of Warren’s work that are inflammatory — and clearly wrong, in ways she seems to hope no one will bother to check.****

You can see the footnotes for quick examples of these sins.  Here, I’ll confine myself to pointing out that in this post you find McArdle doing the respectable-society version of the same approach to argument  that Andy Breitbart has just showed us can have such potent effect.

To see what I mean, you have to follow through two steps: how McArdle constructs her picture of a feckless, partisan and dishonest Warren — and then how she generalizes from it.

Partly, McArdle relies on the strength of her platorm.  As “Business and Economics editor of The Atlantic” she routinely writes in assertions that we are to accept on her say -so.

(As an aside — this argument from authority is never that strong, and, as McArdle demonstrated very recently, can descend to pure, if unintended, comedy (go to Aimai’s comment at the bottom of Susan of Texas’s post), its flip side is that  different.  Everytime someone gets something thing wrong in a consequential way, the loss of trust should advance, ratcheting up with each such error detected, to the point where it becomes the safest default position to assume that someone — McArdle, for example — is always wrong till proven otherwise.)

But back to the anatomy of McArdle’s campaign. I’m going to focus on just one example where McArdle asks us to believe that her argument is strong and supported by the literature — without quite fessing up to what her supporting material actually says.  As part of her sustained campaign to deny the significance of medical bankruptcy in the US, she writes,

A pretty convincing paper argues that the single best predictor of bankruptcy is simply how much debt you’ve accumulated–not income, job loss, divorce, or what have you.  People who declare bankruptcy tend to have nicer stuff than others at the same income level.

The problem here is that the paper does not actually say quite what McArdle implies it does.  She’s mastered here the trick Sally Field played in Absence of Malice — she’s managed to come up with a sentence that is accurate…but not truthful.

In fact, should you actually take the trouble to read the cited study (by UC Davis finance prof, Ning Zhu) you will find material like this:  “households with medical conditions are twice more likely to file for bankruptcy (33.5 percent) than households that do not have medical conditions (14.8 percent)…;”

And this: “Having medical problems increases the households’ filing probability by 7.6 percent and one standard deviation of increase in employment tenure is associated with an increase of 9.2 percent in the filing probability. Such changes represent 48.40 and 58.60 percent deviation from the baseline probability….;”

And this “our results provide qualitative support for both the adverse event and the over-consumption/strategic filing explanations.”

To be fair Zhu concludes that overconsumption — spending too much on housing, cars and credit cards account for more of the total burden of bankruptcy than medical events, divorce or unemployment, as McArdle wrote.

But as McArdle completely failed to acknowledge, Zhu does so while using somewhat more stringent standard for counting medical expenses as a factor in bankruptcy than other scholars employed — as he explicitly acknowledges.  He concedes the continuing significance of medically -induced bankruptcy.  He acknowledges what he believes to be a weak underweighting of that factor (because some people pay for medical expenses on credit cards).  And he notes that a number of other studies, not limited to those co-authored by Warren, come to different conclusions.

In other words:  McArdle correctly describes one conclusion of this paper in a way that yields for its readers a false conclusion about what the paper itself actually says.  And look what that false impression implies:  if  medical bankruptcy is a trivial problem, society-wide, then Warren can be shown to be both a sloppy scholar and, as McArdle more or less explicitly says, a dishonest one as well.

And that leads me back to the thought that got me going on this post.  It seems to me that what we read in McArdle here is a genteel excursion into Andrew Breitbart territory.  Like the Big Hollywood thug, she misleads by contraction, by the omission of necessary context, by simply making stuff up when she thinks no one will check (again, see the footnotes for examples).  And like Breitbart, she does so here to achieve a more than on goal. The first is simply to damage Elizabeth Warren as an individual, to harm her career prospects.  Hence ad hominem stuff like this:

Her work gets so much attention because it comes from a Harvard professor.  And this isn’t Harvard caliber material–not even Harvard undergraduate.

Which neatly sets up this punch line:

..this woman is now under consideration to head a powerful new agency.  If this is how she evaluates data, then isn’t that going to hamper her in making good policy?

But there is a larger goal as well.  McCardle hasn’t given up, as the GOP hasn’t either, on the idea of simply undoing all that the Obama administration has managed to push past the outright lies and bad faith arguments of the right.  So here she does her bit for the cause, taking every attempt to sideswipe health reform:

Obviously, this was also held out as an argument for PPACA, [the health care reform bill] making an implicit promise to the American people which I believe to be false.

So Warren is the target, and there is no doubt that McArdle is trying by any means to discredit her to the public — but the larger ambition here is to discredit major reforms undertaken by the Obama administration in a kind of guilt by association. (See, e.g. the connection some GOP leaders are making between Shirley Sherrod and the negotiated settlement in the discrimination case brought by African American farmers and the USDA.)

McArdle is much more housebroken than many of her fellow travelers of course.  She knows which fork to use (or perhaps better, that particular ocean margin from which the right people secure their salt).  People who would not dream of taking Breitbart seriously still quote McArdle as a seemingly respectable source.

But she’s doing the same kind of work.

Caveat Lector.

And with that, I’m done with McArdle-world for the summer.  Just not worth suffering the Ceti Eel infections that result from too frequent a return to that particular planet.

(In German!  It sounds even more fun..)

*of the “hurts too much too laugh, but I’m too big to cry” variety.

**She cites as her first reason to disbelieve the most recent study in which Warren was one of four co-authors that the response rate to the study questionnair was, at 20%, too low to rule out sample bias.  In fact, as the authors report on the first page of the paper to which McArdle linked in an earlier post that their response rate was 46.5%.  Remember: the default position is that McArdle is Always Wrong.™

***E. g. McArdle rights writes that Warren and her colleagues “defined anyone with $1000 worth of medical bills as having a medical bankruptcy…”  This is how Himmelstein, Thorne, Warren, and Woolhandler actually described their criteria: “We developed two summary measures of medical bankruptcy. Under the rubric “Major Medical Bankruptcy” we included debtors who either (1) cited illness or injury as a specific reason for bankruptcy, or (2) reported uncovered medical bills exceeding $1,000 in the past years, or (3) lost at least two weeks of work-related income because of illness/injury, or (4) mortgaged a home to pay medical bills. Our more inclusive category, “Any Medical Bankruptcy,” included debtors who cited any of the above, or addiction, or uncontrolled gambling, or birth, or the death of a family member.”

That is: once again, what McArdle wrote was accurate inaccurate — but not true. Per commenter perspicio below, and in more detail from commenter Nylund.  Warren and her colleagues in the 2001 paper set $1,000 in uncovered medical bills as the threshold, one they raised to $5,000 in their 2007 study.  Big, big difference between a total bill, in part or entirely covered by insurance, and true out-of-pocket costs — and one which McArdle simply ignores.  Naughty, naughty.

****E.g. — she writes of Warren’s book, co-authored with Amelia Warren Tyagi, “that Warren simply fails to grapple with what her thesis suggests about the net benefits of the two-earner family.  ….. Warren kind of waves her hands and mumbles about social programs and more supportive work environments.  There is no possible solution outside of a more left-wing government.”

Except, of course, Warren does not say anything of the kind.  Instead, of the indebtedness trap that captures two income families, especially after divorce, the two authors write this stirring socialist slogan:  “If a family does not have the income to qualify for a loan at a reasonable rate they should not get that loan” (italics in the original; The Two Income Trap, p. 152.)

It is true that Warren and Tyagi suggest a number of possible policy changes to make the overall landscape of work, family and finance more equitable, from changes to the law on predatory lending to suggestions for child care subsidies.   But here’s their final thought, a rousing demand for Castro-esque intervention into the daily life American families:  “…families need to safeguard themselves” — which is followed by suggestions that range from switching to cheaper preschools and opting to buy or even rent houses smaller than those that put you at the edge of one’s financial capacity.

Warren and Tyagi argue, that is, that individuals should make defensive financial decisions to shield themselves from sudden catastrophic changes in their income.  Wouldn’t John (or Jane) Galt applaud?

Also, I have to say that in this context, this is the measure of McArdle’s character, her moral quality.  There is chutzpah here,  given how little tangible intellectual accomplishment as McArdle can muster to compare with Warren’s resume, and more when she speaks Warren’s mumbling or hand waving in the conext of a paragraph in which the ellipsis above fills in as follows: “Admittedly, I don’t quite know what to say either, but at least I can acknowledge that it’s a pretty powerful problem for the current family model.”

But while we can admire the bravado here, sort of, at bottom this is exactly the kind of petty character assassination that McArdle performs so well, and to such nasty purpose.  A mumbling, vague, imprecise Warren is obviously no one to run an important agency…and thus the post-long mission of character and career assassination is advanced.  Loathesome.

Image:  El Greco, “An Allegory with a Boy Lighting a Candle in the Company of an Ape and a Fool” c. 1600.