J. Bradford DeLong's Blog, page 1130

October 26, 2014

Could We Please Have Better New York Times Columnists?: Historical Lack-of-Literacy Edition

Could we please have better New York Times columnists?

Ross Douthat: The Pope and the Precipice: "On communion for the remarried...

...the stakes are not debatable at all. The Catholic Church was willing to lose the kingdom of England, and by extension the entire English-speaking world, over the principle that when a first marriage is valid a second is adulterous, a position rooted in the specific words of Jesus of Nazareth. To change on that issue, no matter how it was couched, would not be development; it would be contradiction and reversal...

One boggles.

Henry VIII Tudor's "Great Matter" went thus: Henry VIII told the Pope: "My wife Katherine of Aragon was married to my brother before me, and this greatly disturbs me and makes me incapable of a proper marriage relationship with her. Will you recognize this and annul the marriage?" The Pope said: "No. Her nephew Emperor Charles V Habsburg's armies control Italy, and thus Rome. I cannot offend him." Does Ross really think--or anyone really think--that today's Catholic Church would not grant Henry his annulment?

And the sixteenth-century Catholic Church lost England not because Popes condemned Henry VIII Tudor's marriage to Ann Boleyn as adulterous, but because Pope Pius V rejected the legality of the Third Succession Act:

35 HENRY VIII, CAP. 1. 3 S. R. 955: An Act Fixing the Succession:...

...WHERE in the parliament held at Westminster the eighth day of June in the twenty-eighth year of the reign of our most dread sovereign lord King Henry the Eighth an act was had and made for the establishment of the succession of the imperial crown of this realm of England to the first son [Edward VI] of his body between His Highness and his then lawful wife Queen Jane, now deceased....

His Majesty therefore thinketh convenient afore his departure beyond the seas, that it be enacted by His Highness with the assent of the lords spiritual and temporal and the commons in this present parliament assembled and by authority of the same, and therefore be it enacted by the authority aforesaid, that in case it shall happen the king's majesty and the said excellent prince his yet only son Prince Edward and heir apparent, to decease without heir of either of their bodies lawfully begotten (as God defend) so that there be no such heir male or female of any of their two bodies, to have and inherit the said imperial crown and other his dominions, according and in such manner and form as in the aforesaid act and now in this is declared, that then the said imperial crown and all other the premises shall be to the Lady Mary, the king's Highness' daughter, and to the heirs of the body of the same Lady Mary lawfully begotten....

And for default of such issue the said imperial crown and other the premises shall be to the Lady Elizabeth, the king's second daughter, and to the heirs of the body of the said Lady Elizabeth lawfully begotten...

Note that the Third Succession Act of Henry VIII does not--contra Ross Douthat--declare that Queen Elizabeth's mother Ann Boleyn's marriage to Henry VIII was a lawful and valid marriage. It only declares that the Lady Elizabeth is in the line of succession, with her lawfully begotten heirs to follow her. Unless I am mistaken, the Third Succession Act contains nothing contrary to any Catholic theology about what is and is not a valid marriage.

But Pope Pius V, in Regnans in Excelsis, rejected the legality of the Third Succession Act. He commanded Catholics on pain of excommunication to overthrow Queen Elizabeth I Tudor. Regnans in Excelsis declares that it is not the Crown-in-Parliament that decides upon the line of succession to the throne of England, but the Pope. And the Pope wanted not non-Catholic Elizabeth Tudor but Catholic Mary Stuart and behind her Catholic Felipe II Habsburg:

Pius V: Regnans in Excelsis: "Resting upon the authority of Him whose pleasure it was to place us...

...(though unequal to such a burden) upon this supreme justice-seat, we do out of the fullness of our apostolic power declare the foresaid Elizabeth to be a heretic and favourer of heretics, and her adherents in the matters aforesaid to have incurred the sentence of excommunication and to be cut off from the unity of the body of Christ. And moreover (we declare) her to be deprived of her pretended title to the aforesaid crown and of all lordship, dignity and privilege whatsoever. And also (declare) the nobles, subjects and people of the said realm and all others who have in any way sworn oaths to her, to be forever absolved from such an oath and from any duty arising from lordship. fealty and obedience; and we do, by authority of these presents , so absolve them and so deprive the same Elizabeth of her pretended title to the crown and all other the above said matters. We charge and command all and singular the nobles, subjects, peoples and others afore said that they do not dare obey her orders, mandates and laws. Those who shall act to the contrary we include in the like sentence of excommunication...

Regnans in Excelsis: an ugly document, written by an ugly Pope in an ugly time, intended to start a civil war.

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Published on October 26, 2014 09:28

Could We Please Have Better New York Times Columnists?: Historical Lack-of-Literacy Ediiton

Could we please have better New York Times columnists?

Ross Douthat: The Pope and the Precipice: "On communion for the remarried...

...the stakes are not debatable at all. The Catholic Church was willing to lose the kingdom of England, and by extension the entire English-speaking world, over the principle that when a first marriage is valid a second is adulterous, a position rooted in the specific words of Jesus of Nazareth. To change on that issue, no matter how it was couched, would not be development; it would be contradiction and reversal...

One boggles.

: 35 HENRY VIII, CAP. 1. 3 S. R. 955: An Act Fixing the Succession:...

...WHERE in the parliament held at Westminster the eighth day of June in the twenty-eighth year of the reign of our most dread sovereign lord King Henry the Eighth an act was had and made for the establishment of the succession of the imperial crown of this realm of England to the first son [Edward VI] of his body between His Highness and his then lawful wife Queen Jane, now deceased....

His Majesty therefore thinketh convenient afore his departure beyond the seas, that it be enacted by His Highness with the assent of the lords spiritual and temporal and the commons in this present parliament assembled and by authority of the same, and therefore be it enacted by the authority aforesaid, that in case it shall happen the king's majesty and the said excellent prince his yet only son Prince Edward and heir apparent, to decease without heir of either of their bodies lawfully begotten (as God defend) so that there be no such heir male or female of any of their two bodies, to have and inherit the said imperial crown and other his dominions, according and in such manner and form as in the aforesaid act and now in this is declared, that then the said imperial crown and all other the premises shall be to the Lady Mary, the king's Highness' daughter, and to the heirs of the body of the same Lady Mary lawfully begotten....

And for default of such issue the said imperial crown and other the premises shall be to the Lady Elizabeth, the king's second daughter, and to the heirs of the body of the said Lady Elizabeth lawfully begotten...

Pius V: Regnans in Excelsis: "Resting upon the authority of Him whose pleasure it was to place us...

...(though unequal to such a burden) upon this supreme justice-seat, we do out of the fullness of our apostolic power declare the foresaid Elizabeth to be a heretic and favourer of heretics, and her adherents in the matters aforesaid to have incurred the sentence of excommunication and to be cut off from the unity of the body of Christ. And moreover (we declare) her to be deprived of her pretended title to the aforesaid crown and of all lordship, dignity and privilege whatsoever. And also (declare) the nobles, subjects and people of the said realm and all others who have in any way sworn oaths to her, to be forever absolved from such an oath and from any duty arising from lordship. fealty and obedience; and we do, by authority of these presents , so absolve them and so deprive the same Elizabeth of her pretended title to the crown and all other the above said matters. We charge and command all and singular the nobles, subjects, peoples and others afore said that they do not dare obey her orders, mandates and laws. Those who shall act to the contrary we include in the like sentence of excommunication...

Regnans in Excelsis: an ugly document, written by an ugly Pope in an ugly time, intended to start a civil war.

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Published on October 26, 2014 09:28

Monday Dianne Furchgott-Roth, MIchael Strain, and James Pethokoukis Inequality-of-Opportunity Smackdown

Every time I try to get out, they pull me back in. This Monday internet space is supposed to be for:

Self-improvement, correcting errors that I have made and raising to the front of consciousness smart alternatives to my views that my previous visualization of the Cosmic All had not given proper weight; and

In the process, maybe giving the spotlight to smart people who are not widely enough read.

But things keep happening.

Today we have Dianne Furchgott-Roth and James Pethokoukis, Dianne Furchgott-Roth, and Michael Strain. They really do have to decide to what degree they are going to try to maintain a toehold in the reality-based community, or simply give themselves over to total 100% hackdom:

Dianne Furchgott-Roth seems to think that Janet Yellen has given only one speech this year:

Dianne Furchgott-Roth: 5 Reasons Janet Yellen Shouldn't Focus on Income Inequality: "It would have been far better for those on the bottom of the economic heap if Yellen had spoken about how to increase economic growth...

Does Furchgott-Roth think Yellen's monetary policies are the right ones or the wrong ones to "increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates"?

She doesn't seem to have a view.

At all.

What does Furchgott-Roth think? Apparently, that a more equal post-Great Depression America would have had fewer wars:

Yellen said.... "The past several decades have seen the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality following the Great Depression.” No matter that the decades following the Great Depression saw World War II, the Korean War and the Vietnam War, all of which used valuable resources and killed hundreds of thousands of Americans...

Yellen at the start of her speech says that she is going to discuss:

four sources of economic opportunity in America--think of them as "building blocks" for the gains in income and wealth that most Americans hope are within reach of those who strive for them... resources available for children... affordable higher education... [opportunities for] business ownership and inheritances...

Does Furchgott-Roth have anything to say about these?

No. What does she say?

This:

Since 1970, income inequality has increased for a number of reasons that should not concern Janet Yellen.... Women moved into the workforce in record numbers in the 1980s.... The size of households has changed since 1980.... The Tax Reform Act of 1986 resulted in a movement of income away from corporate tax returns and on to individual income tax returns.... Many analyses of income inequality use income before taxes are subtracted and transfers are added.... People move around the income distribution during their life cycle.... Income inequality is only a problem if people cannot move up. By some measures, America is the most unequal of modern industrial countries, but it is a magnet to millions...

And:

Cuba or Russia with their more egalitarian societies are not attractive...

Does Dianne Furchgott-Roth know anything about inequality of result or inequality of opportunity in Cuba or Russia? Her belief that Russia is a "egalitarian society" suggests not.

Nor has Furchgott-Roth, apparently, read James Heckman:

Yellen suggests ways of increasing upward mobility, such as more preschool education (even though the effects of Head Start are unrecognizable by 5th grade)...

Not so!

After that, James Pethokoukis is a weak-tea amuse bouche:

James Pethokoukis: Did Fed boss Janet Yellen make a huge mistake by talking about inequality?: "That’s the question raised in a new Washington Post column by AEI economist Mike Strain...

...Or as the click-friendly headline puts it: ‘Janet Yellen is in danger of becoming a partisan hack’.... He doesn’t much like how Yellen, first, presented an incomplete analysis of how middle-class incomes have been doing the past three decades, and, second, came close to advocating expanded preschool funding, a contentious issue both politically and economically. Strain....

If Yellen continues to sound like a left-leaning politician, the political pressure on the Fed will mount, and the ability of the Fed to operate independent of politics will be threatened. If those threats are realized, everyone loses...

Strain is correct.

Also, left-liberals/progressives underestimate just how deep and wide Fed hostility is on the right.... Getting involved in the pre-kindergarten debate--an issue likely to be a big one in 2016--isn’t going to help the Fed’s reputation with GOPers, conservatives, and libertarians...

Let's look at how Janet Yellen "gets involved in the pre-kindergarten debate":

Janet Yellen: Perspectives on Inequality and Opportunity from the Survey of Consumer Finances: "Resources Available for Children: For households with children...

family resources can pay for things that research shows enhance future earnings and other economic outcomes--homes in safer neighborhoods with good schools, for example, better nutrition and health care, early childhood education, intervention for learning disabilities, travel and other potentially enriching experiences.19 Affluent families have significant resources for things that give children economic advantages as adults, and the SCF data I have cited indicate that many other households have very little to spare for this purpose. These disparities extend to other household characteristics associated with better economic outcomes for offspring, such as homeownership rates, educational attainment of parents, and a stable family structure.20

According to the SCF, the gap in wealth between families with children at the bottom and the top of the distribution has been growing steadily over the past 24 years, but that pace has accelerated recently. Figure 8 shows that the median wealth for families with children in the lower half of the wealth distribution fell from $13,000 in 2007 to $8,000 in 2013, after adjusting for inflation, a loss of 40 percent.21 These wealth levels look small alongside the much higher wealth of the next 45 percent of households with children. But these families also saw their median wealth fall dramatically--by one-third in real terms--from $344,000 in 2007 to $229,000 in 2013. The top 5 percent of families with children saw their median wealth fall only 9 percent, from $3.5 million in 2007 to $3.2 million in 2013, after inflation.

For families below the top, public funding plays an important role in providing resources to children that influence future levels of income and wealth. Such funding has the potential to help equalize these resources and the opportunities they confer.

Social safety-net spending is an important form of public funding that helps offset disparities in family resources for children. Spending for income security programs since 1989 and until recently was fairly stable, ranging between 1.2 and 1.7 percent of gross domestic product (GDP), with higher levels in this range related to recessions. However, such spending rose to 2.4 percent of GDP in 2009 and 3 percent in 2010.22 Researchers estimate that the increase in the poverty rate because of the recession would have been much larger without the effects of income security programs.23

Public funding of education is another way that governments can help offset the advantages some households have in resources available for children. One of the most consequential examples is early childhood education. Research shows that children from lower-income households who get good-quality pre-Kindergarten education are more likely to graduate from high school and attend college as well as hold a job and have higher earnings, and they are less likely to be incarcerated or receive public assistance.24 Figure 9 shows that access to quality early childhood education has improved since the 1990s, but it remains limited--41 percent of children were enrolled in state or federally supported programs in 2013. Gains in enrollment have stalled since 2010, as has growth in funding, in both cases because of budget cuts related to the Great Recession. These cuts have reduced per-pupil spending in state-funded programs by 12 percent after inflation, and access to such programs, most of which are limited to lower-income families, varies considerably from state to state and within states, since local funding is often important.25 In 2010, the United States ranked 28th out of 38 advanced countries in the share of four-year-olds enrolled in public or private early childhood education.26

Similarly, the quality and the funding levels of public education at the primary and secondary levels vary widely, and this unevenness limits public education's equalizing effect. The United States is one of the few advanced economies in which public education spending is often lower for students in lower-income households than for students in higher-income households.27 Some countries strive for more or less equal funding, and others actually require higher funding in schools serving students from lower-income families, expressly for the purpose of reducing inequality in resources for children.

A major reason the United States is different is that we are one of the few advanced nations that funds primary and secondary public education mainly through subnational taxation. Half of U.S. public school funding comes from local property taxes, a much higher share than in other advanced countries, and thus the inequalities in housing wealth and income I have described enhance the ability of more-affluent school districts to spend more on public schools. Some states have acted to equalize spending to some extent in recent years, but there is still significant variation among and within states. Even after adjusting for regional differences in costs and student needs, there is wide variation in public school funding in the United States.28

Spending is not the only determinant of outcomes in public education. Research shows that higher-quality teachers raise the educational attainment and the future earnings of students.29 Better-quality teachers can help equalize some of the disadvantages in opportunity faced by students from lower-income households, but here, too, there are forces that work against raising teacher quality for these students. Research shows that, for a variety of reasons, including inequality in teacher pay, the best teachers tend to migrate to and concentrate in schools in higher-income areas.30 Even within districts and in individual schools, where teacher pay is often uniform based on experience, factors beyond pay tend to lead more experienced and better-performing teachers to migrate to schools and to classrooms with more-advantaged students.31

See, for example, Janet Currie and Douglas Almond (2011), "Human Capital Development before Age Five," ch. 15 in David Card and Orley Ashenfelter, eds., Handbook of Labor Economics, vol. 4 (Holland: Elsevier), pp. 1315-1486. Return to text

Homeownership by parents is strongly associated with economic success for children; see Thomas P. Boehm and Alan M. Schlottmann (1999), "Does Home Ownership by Parents Have an Economic Impact on Their Children? Leaving the Board" Journal of Housing Economics, vol. 8 (September), pp. 217-32. Ninety-seven percent of top-earning families with children own a home, compared with fewer than half of the bottom 50 percent of families with children; educational attainment of parents is strongly predictive of outcomes for children that determine earnings. See Ayana Douglas-Hall and Michelle Chau (2007), "Parents' Low Education Leads to Low Income, Despite Full-Time Employment Leaving the Board" (New York: National Center for Children in Poverty, Columbia University, November). A considerable body of literature establishes the correlation between educational attainment of parents and their children. Other research has identified that this relationship is causal; see, for example, Philip Oreopoulos, Marianne E. Page, and Ann Huff Stevens (2006), "The Intergenerational Effects of Compulsory Schooling," Journal of Labor Economics, vol. 24 (October), pp. 729-60. Eighty-six percent of top-earning households in the SCF with children are headed by a college graduate, compared with 12 percent in the bottom half of households with children; children raised by a single parent earn less as adults. See Mary Ann Powell and Toby L. Parcel (1997), "Effects of Family Structure on the Earnings Attainment Process: Differences by Gender," Journal of Marriage and Family, vol. 59 (May), pp. 419-33. Only 4 percent of top-earning households with children are headed by unmarried parents, compared with 47 percent for the lower half of households with children. Return to text

Distributional statistics for families with children are based on a sorting of only families with children. Return to text

Congressional Budget Office historic budget data. Income security programs include UI, SSI, SNAP EITC, and other family support and nutrition programs. Return to text

See Jeffrey P. Thompson and Timothy M. Smeeding (2013), "Inequality and Poverty in the United States: The Aftermath of the Great Recession (PDF)," Finance and Economics Discussion Series 2013-51 (Washington: Board of Governors of the Federal Reserve System, July). Return to text

See James J. Heckman, Seong Hyeok Moon, Rodrigo Pinto, Peter A. Savelyev, and Adam Yavitz (2010), "The Rate of Return to the HighScope Perry Preschool Program," Journal of Public Economics, vol. 94 (1-2), pp. 114-28; and Clive R. Belfield, Milagros Nores, Steve Barnett, and Lawrence Schweinhart (2006), "The High/Scope Perry Preschool Program: Cost-Benefit Analysis Using Data from the Age-40 Followup," Journal of Human Resources, vol. 41 (Winter), pp. 162-90. Return to text

The share of four-year-olds in state-funded pre-K programs increased from 14 percent in 2002 to 27 percent in 2010 but has been 28 percent since. Head Start enrollments have been fairly steady since 2005. Forty-one percent of four-year-olds were enrolled in federally funded Head Start or state-funded pre-K education programs in 2013. See National Institute for Early Education Research (2013), The State of Preschool 2013: State Preschool Yearbook (PDF) Leaving the Board (New Brunswick, N.J.: Rutgers Graduate School of Education). For analysis of Head Start enrollment by age, see the Annie E. Casey Foundation KIDS COUNT Data Center Leaving the Board. Return to text

See Organisation for Economic Co-operation and Development (2013), "How Do Early Childhood Education and Care (ECEC) Policies, Systems and Quality Vary across OECD Countries? (PDF) Leaving the Board" Education Indicators in Focus Series 11 (Paris: OECD, February). Return to text

See Organisation for Economic Co-operation and Development (2013), Education at a Glance 2013: OECD Indicators (PDF) Leaving the Board (Paris: OECD). Return to text

See Education Week (2014), Quality Counts 2014: District Disruption and Revival Leaving the Board (Bethesda, Md.: Editorial Projects in Education, January). Return to text

See Eric A. Hanushek (2011), "The Economic Value of Higher Teacher Quality," Economics of Education Review, vol. 30 (June), pp. 466-79; or, for estimates of the future earnings students gain by having a better teacher, see Raj Chetty, John N. Friedman, and Jonah E. Rockoff, "The Long-Term Impacts of Teachers: Teacher Value-Added and Student Outcomes in Adulthood," Leaving the Board unpublished paper, Harvard University. Return to text

See Eric Isenberg, Jeffrey Max, Philip Gleason, Liz Potamites, Robert Santillano, Heinrich Hock, and Michael Hansen (2013), Access to Effective Teaching for Disadvantaged Students (PDF) Leaving the Board, report NCEE 2014-4001, prepared for the Institute of Education Sciences (Washington: U.S. Department of Education, Institute of Education Sciences, National Center for Education Evaluation and Regional Assistance); and Kati Haycock and Eric A. Hanushek (2010), "An Effective Teacher in Every Classroom: A Lofty Goal, But How to Do It? (PDF)" Leaving the Board Education Next, vol. 10 (Summer), pp. 46-52. Return to text

Better and more-experienced teachers tend to move to better-resourced schools, including those with more active outside funding, or those with more-advantaged students, such as magnet schools. Even within schools, more experienced and higher performing teachers are more likely to teach Advanced Placement classes which tend to serve more advantaged students. The result is that lower income and lower achieving students are more likely to be taught by less experienced and lower performing teachers. See Charles Clotfelter, Helen Ladd, Jacob Vigdor, and Justin Wheeler (2007), "High Poverty Schools and the Distribution of Teachers and Principals," North Carolina Law Review, vol. 85 (2), pp. 1345-79; Charles Clotfelter, Helen Ladd, and Jacob Vigdor (2005), "Who Teaches Whom? Race and the Distribution of Novice Teachers," Economics of Education Review, vol. 24 (August), pp. 377-92; and Hamilton Lankford, Susanna Loeb, and James Wyckoff (2002), "Teacher Sorting and the Plight of Urban Schools: A Descriptive Analysis," Education Evaluation and Policy Analysis, vol. 37 (Spring), pp. 37-62.

That's it.

What I and everybody else in the economics community outside of Washington DC see as a fair-minded review of the issues surrounding how parental resources impact opportunity, James Pethokoukis (and Michael Strain) see as "sounding like a left-leaning politician opining about hot-button political issues". The facts, apparently, have such a liberal (and Democratic!) bias that if one makes a fair-minded summary of them one is automatically "in danger of becoming a [Democratic] partisan hack".

More amusing is Michael Strain's close:

Michael Strain: Janet Yellen Is in Danger of Becoming a Partisan Hack: "Benedict XVI... gave a speech...

...in which he quoted an unfavorable remark about Islam uttered by a 14th-century Byzantine emperor. Street protests erupted across the Muslim world.... There are things a theologian and cardinal can say that a pope shouldn’t.... Janet Yellen... still must learn that part of the loneliness of the throne is often not lending voice to thought.

Let's unpack this: Michael Strain apparently thinks that:

As in the case of Benedict XVI, so in this case Janet Yellen should not say true things,
Because, as in the case of Benedict XVI, her wider audience contains faith-maddened jihadis and talibanis,
Who will, as in the case of Benedict XVI, respond with violence and uproar.

That's quite an indictment of today's American conservatives, libertarians, and GOPers.

And back up a step: What Benedict XVI did was to quote, with apparent approval, Manuel II Paelaiologos's declaration that whatever teachings Mohamed brought that were not borrowed from Christianity and Judaism were evil and inhuman:

[Manuel] addresses his interlocutor with a startling brusqueness, a brusqueness that we find unacceptable, on the central question about the relationship between religion and violence in general, saying:

Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached...

The only gap Benedict opens between his views and those of Manuel is that Manuel did not sugarcoat his statement: "startling brusqueness... that we find unacceptable..."

But I cannot believe that even Michael Strain wants to commit himself to what his analogy tells us--that:

(4) Janet Yellen's remarks about early childhood education are the equivalent of telling the libertarians, conservatives, and GOPers that everything they say that is new is evil and inhumane.

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Published on October 26, 2014 07:12

October 25, 2014

Liveblogging the Cuban Missile Crisis: Telegram From the Embassy in the Soviet Union to the Department of State: Hoisted from the Non-Internet of 52 Years Ago

Avalon Project: Telegram From the Embassy in the Soviet Union to the Department of State:

Dear Mr. President:

I have received your letter of October 25.(1) From your letter, I got the feeling that you have some understanding of the situation which has developed and a sense of responsibility. I value this.

Now we have already publicly exchanged our evaluations of the events around Cuba and each of us has set forth his explanation and his understanding of these events. Consequently, I would think that, apparently, a continuation of an exchange of opinions at such a distance, even in the form of secret letters, will hardly add anything to that which one side has already said to the other.

I think you will understand me correctly if you are really concerned about the welfare of the world. Everyone needs peace: both capitalists, if they have not lost their reason, and, still more, Communists, people who know how to value not only their own lives but, more than anything, the lives of the peoples. We, Communists, are against all wars between states in general and have been defending the cause of peace since we came into the world. We have always regarded war as a calamity, and not as a game nor as a means for the attainment of definite goals, nor, all the more, as a goal in itself. Our goals are clear, and the means to attain them is labor. War is our enemy and a calamity for all the peoples.

It is thus that we, Soviet people, and, together with US, other peoples as well, understand the questions of war and peace. I can, in any case, firmly say this for the peoples of the socialist countries, as well as for all progressive people who want peace, happiness, and friendship among peoples.

I see, Mr. President, that you too are not devoid of a sense of anxiety for the fate of the world(2) understanding, and of what war entails. What would a war give you? You are threatening us with war. But you well know that the very least which you would receive in reply would be that you would experience the same consequences as those which you sent us. And that must be clear to us, people invested with authority, trust, and responsibility. We must not succumb to intoxication and petty passions, regardless of whether elections are impending in this or that country, or not impending. These are all transient things, but if indeed war should break out, then it would not be in our power to contain or stop it, for such is the logic of war. I have participated in two wars and know that war ends when it has rolled through cities and villages, everywhere sowing death and destruction.

In the name of the Soviet Government and the Soviet people, I assure you that your arguments regarding offensive weapons on Cuba are groundless. It is apparent from what you have written me that our conceptions are different on this score, or rather, we have different definitions for these or those military means, indeed, in reality, the same forms of weapons can have different interpretations.

You are a military man and, I hope, will understand me. Let us take for example a simple cannon. What sort of means is this: offensive or defensive? A cannon is a defensive means if it is set up to defend boundaries or a fortified area. But if one concentrates artillery, and adds to it the necessary number of troops, then the same cannons do become an offensive means, because they prepare and clear the way for infantry to advance. The same happens with missile-nuclear weapons as well, with any type of this weapon.

You are mistaken if you think that any of our means on Cuba are offensive. However, let us not argue now, it is apparent that I will not be able to convince you of this, but I say to you: You, Mr. President, are a military man and should understand: can one advance, if one has on one's territory even an enormous quantity of missiles of various effective radiuses and various power, but using only these means. These missiles are a means of extermination and destruction, but one cannot advance with these missiles, even nuclear missiles of a power of 100 megatons because only people, troops, can advance, without people, any means however powerful cannot be offensive.

How can one, consequently, give such a completely incorrect interpretation as you are now giving, to the effect that some sort of means on Cuba are offensive. All the means located there, and I assure you of this, have a defensive character, are on Cuba solely for the purposes of defense, and we have sent them to Cuba at the request of the Cuban Government. You, however, say that these are offensive means.

But, Mr. President, do you really seriously think that Cuba can attack the United States and that even we together with Cuba can advance upon you from the territory of Cuba? Can you really think that way? How is it possible? We do not understand this. Has something so new appeared in military strategy that one can think that it is possible to advance thus. I say precisely advance, and not destroy, since barbarians, people who have lost their sense, destroy.

I believe that you have no basis to think this way. You can regard us with distrust, but, in any case, you can be calm in this regard, that we are of sound mind and understand perfectly well that if we attack you, you will respond the same way. But you too will receive the same that you hurl against us. And I think that you also understand this. My conversation with you in Vienna gives me the right to talk to you this way.

This indicates that we are normal people, that we correctly understand and correctly evaluate the situation. Consequently, how can we permit the incorrect actions which you ascribe to us? Only lunatics or suicides, who themselves want to perish and to destroy the whole world before they die, could do this. We, however, want to live and do not at all want to destroy your country. We want something quite different: to compete with your country on a peaceful endeavor. We quarrel with you, we have differences in ideological questions. But our view of the world consists in this, that ideological questions, as well as economic problems, should be solved not by military means, they must be solved on the basis of peaceful competition, i.e., as this is understood in capitalist society, on the basis of competition. We have proceeded and are proceeding from the fact that the peaceful co-existence of the two different social-political systems, now existing in the world, is necessary, that it is necessary to assure a stable peace. That is the sort of principle we hold.

You have now proclaimed piratical measures, which were employed in the Middle Ages, when ships proceeding in international waters were attacked, and you have called this "a quarantine" around Cuba. Our vessels, apparently, will soon enter the zone which your Navy is patrolling. I assure you that these vessels, now bound for Cuba, are carrying the most innocent peaceful cargoes. Do you really think that we only occupy ourselves with the carriage of so-called offensive weapons, atomic and hydrogen bombs? Although perhaps your military people imagine that these (cargoes) are some sort of special type of weapon, I assure you that they are the most ordinary peaceful products.

Consequently, Mr. President, let us show good sense. I assure you that on those ships, which are bound for Cuba, there are no weapons at all. The weapons which were necessary for the defense of Cuba are already there. I do not want to say that there were not any shipments of weapons at all. No, there were such shipments. But now Cuba has already received the necessary means of defense.

I don't know whether you can understand me and believe me. But I should like to have you believe in yourself and to agree that one cannot give way to passions; it is necessary to control them. And in what direction are events now developing? If you stop the vessels, then, as you yourself know, that would be piracy. If we started to do that with regard to your ships, then you would also be as indignant as we and the whole world now are. One cannot give another interpretation to such actions, because one cannot legalize lawlessness. If this were permitted, then there would be no peace, there would also be no peaceful coexistence. We should then be forced to put into effect the necessary measures of a defensive character to protect our interest in accordance with international law. Why should this be done? To what would all this lead?

Let us normalize relations. We have received an appeal from the Acting Secretary General of the UN, U Thant, with his proposals. I have already answered him. His proposals come to this, that our side should not transport armaments of any kind to Cuba during a certain period of time, while negotiations are being conducted--and we are ready to enter such negotiations--and the other side should not undertake any sort of piratical actions against vessels engaged in navigation on the high seas. I consider these proposals reasonable. This would be a way out of the situation which has been created, which would give the peoples the possibility of breathing calmly. You have asked what happened, what evoked the delivery of weapons to Cuba? You have spoken about this to our Minister of Foreign Affairs. I will tell you frankly, Mr. President, what evoked it.

We were very grieved by the fact--I spoke about it in Vienna--that a landing took place, that an attack on Cuba was committed, as a result of which many Cubans perished. You yourself told me then that this had been a mistake. I respected that explanation. You repeated it to me several times, hinting that not everybody occupying a high position would acknowledge his mistakes as you had done. I value such frankness. For my part, I told you that we too possess no less courage; we also acknowledged those mistakes which had been committed during the history of our state, and not only acknowledged, but sharply condemned them.

If you are really concerned about the peace and welfare of your people, and this is your responsibility as President, then I, as the Chairman of the Council of Ministers, am concerned for my people. Moreover, the preservation of world peace should be our joint concern, since if, under contemporary conditions, war should break out, it would be a war not only between the Soviet Union and the United States which have no contentions between them, but a worldwide cruel and destructive war.

Why have we proceeded to assist Cuba with military and economic aid? The answer is: we have proceeded to do so only for reasons of humanitarianism. At one time, our people itself had a revolution, when Russia was still a backward country, we were attacked then. We were the target of attack by many countries. The USA participated in that adventure. This has been recorded by participants in the aggression against our country. A whole book has been written about this by General Graves, who, at that time, commanded the US Expeditionary Corps. Graves called it "The American Adventure in Siberia."

We know how difficult it is to accomplish a revolution and how difficult it is to reconstruct a country on new foundations. We sincerely sympathize with Cuba and the Cuban people, but we are not interfering in questions of domestic structure, we are not interfering in their affairs. The Soviet Union desires to help the Cubans build their life as they themselves wish and that others should not hinder them.

You once said that the United States was not preparing an invasion. But you also declared that you sympathized with the Cuban counter-revolutionary emigrants, that you support them and would help them to realize their plans against the present Government of Cuba. It is also not a secret to anyone that the threat of armed attack, aggression, has constantly hung, and continues to hand over Cuba. It was only this which impelled us to respond to the request of the Cuban Government to furnish it aid for the strengthening of the defensive capacity of this country.

If assurances were given by the President and the Government of the United States that the USA itself would not participate in an attack on Cuba and would restrain others from actions of this sort, if you would recall your fleet, this would immediately change everything. I am not speaking for Fidel Castro, but I think that he and the Government of Cuba, evidently, would declare demobilization and would appeal to the people to get down to peaceful labor. Then, too, the question of armaments would disappear, since, if there is no threat, then armaments are a burden for every people. Then, too, the question of the destruction, not only of the armaments which you call offensive, but of all other armaments as well, would look different.

I spoke in the name of the Soviet Government in the United Nations and introduced a proposal for the disbandment of all armies and for the destruction of all armaments. How then can I now count on those armaments?

Armaments bring only disasters. When one accumulates them, this damages the economy, and if one puts them to use, then they destroy people on both sides. Consequently, only a madman can believe that armaments are the principal means in the life of society. No, they are an enforced loss of human energy, and what is more are for the destruction of man himself. If people do not show wisdom, then in the final analysis they will come to a clash, like blind moles, and then reciprocal extermination will begin.

Let us therefore show statesmanlike wisdom. I propose: we, for our part, will declare that our ships, bound for Cuba, are not carrying any armaments. You would declare that the United States will not invade Cuba with its forces and will not support any sort of forces which might intend to carry out an invasion of Cuba. Then the necessity for the presence of our military specialists in Cuba would disappear.

Mr. President, I appeal to you to weigh well what the aggressive, piratical actions, which you have declared the USA intends to carry out in international waters, would lead to. You yourself know that any sensible man simply cannot agree with this, cannot recognize your right to such actions.

If you did this as the first step towards the unleashing of war, well then, it is evident that nothing else is left to us but to accept this challenge of yours. If, however, you have not lost your self-control and sensibly conceive what this might lead to, then, Mr. President, we and you ought not now to pull on the ends of the rope in which you have tied the knot of war, because the more the two of us pull, the tighter that knot will be tied. And a moment may come when that knot will be tied so tight that even he who tied it will not have the strength to untie it, and then it will be necessary to cut that knot. And what that would mean is not for me to explain to you, because you yourself understand perfectly of what terrible forces our countries dispose.

Consequently, if there is no intention to tighten that knot and thereby to doom the world to the catastrophe of thermonuclear war, then let us not only relax the forces pulling on the ends of the rope, let us take measures to untie that knot. We are ready for this.

We welcome all forces which stand on positions of peace. Consequently, I both expressed gratitude to Mr. Bertrand Russell, who manifests alarm and concern for the fate of the world, and readily responded to the appeal of the Acting Secretary General of the UN, U Thant.

There, Mr. President, are my thoughts, which, if you agreed with them, could put an end to that tense situation which is disturbing all peoples.

These thoughts are dictated by a sincere desire to relieve the situation, to remove the threat of war.

Respectfully yours,

/s/ N. Khrushchev

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Published on October 25, 2014 17:54

Over at Equitable Growth: Very Rough: Exploding Wealth Inequality and Its Rent-Seeking Society Consequences: (Early) Monday Focus for October 27, 2014

Over at Equitable Growth: Emmanuel Saez and Gabriel Zucman: Exploding wealth inequality in the United States: "The share of total income earned by the top 1%...

...less than 10% in the late 1970s but now exceeds 20%.... A large portion of this increase is due to an upsurge in the labor incomes earned by senior company executives and successful entrepreneurs. But... did wealth inequality rise as well?... The answer is a definitive yes.... We use comprehensive data on capital income—such as dividends, interest, rents, and business profits—that is reported on individual income tax returns since 1913. We then capitalize this income so that it matches the amount of wealth recorded in the Federal Reserve’s Flow of Funds.... In this way we obtain annual estimates of U.S. wealth inequality stretching back a century. Wealth inequality, it turns out, has followed a spectacular U-shape evolution over the past 100 years.... How can we explain the growing disparity in American wealth? The answer is that the combination of higher income inequality alongside a growing disparity in the ability to save for most Americans is fueling the explosion in wealth inequality. For the bottom 90 percent of families, real wage gains (after factoring in inflation) were very limited over the past three decades, but for their counterparts in the top 1 percent real wages grew fast. In addition, the saving rate of middle class and lower class families collapsed over the same period while it remained substantial at the top.... If income inequality stays high and if the saving rate of the bottom 90 percent of families remains low then wealth disparity will keep increasing. Ten or twenty years from now, all the gains in wealth democratization achieved during the New Deal and the post-war decades could be lost.... There are a number of specific policy reforms needed to rebuild middle class wealth.... Prudent financial regulation to rein in predatory lending, incentives to help people save... steps to boost the wages of the bottom 90 percent of workers are needed.... One final reform also needs to be on the policymaking agenda: the collection of better data on wealth... READ MOAR

What I would like to see Emmanuel and Gabriel guess it is the share of wealth that is productive--that boosts the productivity of the working class and that shares those productivity benefits with workers--and the share of wealth that is extractive--that are pure claims on income rather than useful instruments of production, and thus that erode rather than boost the incomes of others. Wealth plays two roles, you see: as useful factors of production that boost productivity, and as extractive social power that is the result, the cause, and the maintainer of the rent-seeking society.

Taking off from my Mr. Piketty and the Neoclassicists, once we had such guesses we could build a balanced-growth model...

The important quantities would be:

(1) The annual rate of population and labor force growth: n.

(2) The annual rate of labor productivity growth: g.

(3) The warranted annual rate of accumulation ra = n + g: the rate at which wealthholders' assets need to grow if their wealth-to-national-income ratio to be constant.

(4) The wedge ω between the rates of accumulation and net profit: what share of their current assets the wealth spend, dissipate, lose to Wall Street sharks, consume, give away, and so forth.

(5) The resulting warranted annual rate of net profit rw= n + g + ω: The warranted annual rate of net profit at which wealthholders' have a constant ratio of their wealth to national income. If the actual average rate of profit r > rw, the rich become richer in relative terms. If the actual average rate of profit r < rw, the rich lose ground in relative terms. If the actual average rate of profit r = rw, the wealth of the rich remains a stable multiple of national income.

From the warranted annual rate of net profit rw, we then need to know:

How the annual rate of net profit r in the productive sector depends on the size of the stock of physical capital--which is rented out to workers at its marginal product--relative to annual income K/Y.

To calculate this we need to know:

What the physical net annual marginal product of capital is at some baseline physical capital-income ratio K/Y, say 3.
What the elasticity of the net rate of annual profit r in the productive sector with respect to the productive capital-income ratio is.

How the annual rate of net profit in the rent-seeking sector depends on the size of the stock of rent-seeking property relative to national income R/Y.

To calculate this we need to know:

What the rate of rent extraction ε is at some baseline rent-seeking property-income ratio, say 3.
What the elasticity of the net rate of rent extraction ε in the rent-seeking sector is with respect to the rent-seeking property-income ration R/Y.

If we know all those, we can then calculate:

(6) The physical capital-annual income ratio at the warranted rate of net profit: (K/Y)*

(7) The rent-seeking capital-annual income ratio at the warranted rate of profit: (R/Y)*

(8) (W/Y)* = (K/Y): The total wealth-annual income ratio at the warranted rate of profit: (W/Y)

(9) The income-from-wealth share of total income: rw x (W/Y)*, given:

(10) The physical net annual marginal product of capital at K/Y = 3: ρK

(11) The annual net return on rent-seeking capital at R/Y = 3: ρR

(12) The elasticity of the rate of profit on physical capital: λK

(13) The elasticity of the rate of profit on rent-seeking capital: λR

Which I believe gets us to this spreadsheet. If you download it and edit it in interesting ways, please send me a copy...

For the particular parameters I have chosen, we have the wealthholders cumulatively investing 2.1 times a year's GDP in productive capital that boosts the wage level, and 0.6 times in year's GDP in rent-extraction property that subtracts from the wage level. And we have a Belle Epoque and a Future Second Gilded Age in which wealthholders do indeed hold a greater multiple of GDP's worth of useful, productive, wage-boosting capital--3.4 times a year's national income--but also hold vastly more rent-seeking property: 5.2 times a year's national income.

In this interpretation of Piketty, thrift on the part of the rich is indeed beneficial to the working class--as long as it is channeled into productive investment. But if it is used to create, politically maintain, and profit from rent-extraction property... well, it is not so nice.

1126 words

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Published on October 25, 2014 13:13

Noted for Your Afternoon Procrastination for October 25, 2014

Screenshot 10 3 14 6 17 PM Over at Equitable Growth--The Equitablog

Is There Really a Profits-Investment Disconnect?: (Late) Friday Focus for October 24, 2014 - Washington Center for Equitable Growth
Jeff Madrick, Josh Bivens, Brad DeLong, Ylan Mui: How Mainstream Economic Thinking Imperils America - Washington Center for Equitable Growth
Afternoon Must-Read: Larry Mishel: The Wage Message - Washington Center for Equitable Growth
Afternoon Must-Read: David Drake: Newsletter #82 - Washington Center for Equitable Growth
Afternoon Must-Read: Fabian Kindermann and Dirk Krueger: High Marginal Tax Rates on the Top 1%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk
Nick Bunker: Easing out of inequality? - Washington Center for Equitable Growth
Nick Bunker: Weekend reading - Washington Center for Equitable Growth

Plus:

Things to Read on the Afternoon of October 25, 2014 - Washington Center for Equitable Growth

Must- and Shall-Reads:

Thomas Piketty, Claudia Kemfert, and Cameron Hepburn: Europe must set a course to decarbonise world’s economies
Karl Whelan: The Money Supply
Paul Farmer: "I have just returned from Liberia with a group of physicians and health activists. We are heading back in a few days. The country is in the midst of the largest ever epidemic of Ebola haemorrhagic fever. It’s an acute and brutal affliction"
John Williams: Federal Reserve Bank San Francisco | Navigating toward Normal: The Future for Policy |
Martin Wolf: Reform alone is no solution for the eurozone
Gauti Eggertsson and Neil Mehrotra: Secular stagnation and the paradox of worth
Izabella Kaminska: Cult Markets: When the bubble bursts
Larry Mishel: The Wage Message
David Drake: Newsletter #82
Fabian Kindermann and Dirk Krueger: High Marginal Tax Rates on the Top 1%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk
Barry Eichengreen: Doctrinal Determinants, Domestic and International, of Federal Reserve Policy 1914-1933

And Over Here:

Gauti Eggertsson and Neil Mehrotra: Secular stagnation and the paradox of worth: "It is important to ensure that the asset cannot operate as a perfect storage technology as this may put a zero bound on the real interest rate... a secular stagnation equilibrium remains a possibility as the natural rate can be negative while the discount rate relevant for risky assets remains positive. The real interest rate and the possibility of a secular stagnation can also be affected by the presence of bubble assets... [such] bubbles may be efficient, but depending on the stability of the bubble, interesting tradeoffs may emerge between the level and volatility of employment..."

Izabella Kaminska: Cult Markets: When the bubble bursts: "We’re going to stick our neck out at this stage and call this the end of Bitcoin... the positive-feedback loop forces which drove Bitcoin to $1124.76 have now become the same very same which will drive it down... the fact that the mechanism that ensures coins cannot be overproduced to benefit from high prices also prevents supply from being contracted when prices/demand collapses... in a race to the bottom it doesn’t pay to switch off your mining machine if you’re the most efficient miner. So how did we find ourselves on this delusional joy ride to begin with?... It’s the same old story of frivolity, irrational exuberance, hysteria and of course the mistaken belief that something like a free lunch is truly possible... the sort of irrationality and bad allocation of capital that the Fed is trying to shake-out at this stage with tightening talk. We’re sure we may still see a few deep pocketed VCs or ‘believers’ throw more money at defending the dream, but chances are we’ve now gone through the exponential break point. Time and money would probably be better spent trying to pump up Bitcoin V.2."

Larry Mishel: The Wage Message: "The intellectual basis for [skill-biased technological change, SBTC] in my view has collapsed. It has very little to contribute to the understanding over inequality over the last 20 years, and is not the basis for thinking about the future so much."

David Drake: Newsletter #82: "I was a conservative kid. Dad worked with his hands–he was an electrician–but he was anti-union and identified with the middle class rather than radical labor. Our family had middle-class values, read slick magazines rather than pulps, and voted Republican.... A lot of people raised the way I was think that Something Should Be Done about this or that world problem... Boko Haram’s kidnapping... the Lord’s Resistance Army... the Islamic State.... All of these organizations do horrific things by the standards of any civilized human being, myself included... [and] are demonstrably beyond the capacity of local governments to deal with.... If I hadn’t ridden a tank in SE Asia, I probably would have been on one or all of those bandwagons and on many others over the years. The thing is, I know what Doing Something means at the sharp end. I’ve helped to burn a village, I’ve watched a gutshot girl die (she’d been transporting rice for the NVA), and I was involved with a variety of other things that make me doubt the value to the ordinary people of Viet Nam and Cambodia of what we did there. Would it be different in Africa or the Middle East? Maybe, but I find wars have a logic of their own for the people in the mud and the dust and the insects. I think it would be good for folks who say, ‘We have to do something!’ to at least talk to some of us who’ve Done Something ourselves. Talk to us–or keep their mouths shut."

Fabian Kindermann and Dirk Krueger: High Marginal Tax Rates on the Top 1%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk: "Very high marginal labor income tax rates are an effective tool for social insurance even when households have preferences with high labor supply elasticity, make dynamic savings decisions, and policies have general equilibrium effects. To make this point we construct a large scale Overlapping Generations Model with uninsurable labor productivity risk, show that it has a wealth distribution that matches the data well, and then use it to characterize fiscal policies that achieve a desired degree of redistribution in society. We find that marginal tax rates on the top 1% of the earnings distribution of close to 90% are optimal. We document that this result is robust to plausible variation in the labor supply elasticity and holds regardless of whether social welfare is measured at the steady state only or includes transitional generations."

Barry Eichengreen: Doctrinal Determinants, Domestic and International, of Federal Reserve Policy 1914-1933: "International considerations were part, but only part, of the constellation of factors shaping the Fed’s outlook and policies in the gold standard era... and their importance waxed and waned with circumstance, personality, and the changing influence of competing doctrines.... Gold Standard Doctrine... rules and, more broadly, the gold standard mentalité were standard central banking doctrine in this period.... Real Bills Doctrine... enshrined in the 'elastic currency' terminology of the Federal Reserve Act. Riefler-Burgess Doctrine... pointed to interest rates as the only adequate summary statistics for the stance of monetary policy. Warburg Doctrine... emphasized the advantages of internationalizing the dollar.... privileged developing a market in trade acceptances--an instrument which, it turned out, was also convenient for intervening in financial markets. Strong Doctrine: Strong’s views are not easily summarized.... Rather than looking exclusively at interest rates, he looked also at money and credit aggregates.... Believed in discretionary policy.... Comfortable with... steriliz[ing] gold inflows... to achieve other targets.... Harrison Doctrine... difference from Strong was primarily one of temperament, not doctrine... where Strong was willful and assertive, Harrison was thoughtful and reflective..."

Should Be Aware of:

Emily Washington: The Status of Smart Growth Regulation
"We paint women with one arm as ‘aloof,’ yet women with three arms as ‘trying too hard.’ And good luck being a two-armed actress over 45 and getting cast as anything but a two-armed mom to some newly discovered Disney Channel pop star with a tail. What any woman, in any profession, of any age, chooses to do to augment her own body is not fair game for public ridicule, be it a third arm, a little Botox, or acid-spitting glands."

Paul Krugman: The Invisible Moderate: "[O]ne of the enduringly weird aspects of our current pundit discourse: constant calls for a moderate, sensible path that supposedly lies between the extremes of the two parties, but is in fact exactly what Obama has been proposing.... [Brooks:] 'The federal government should borrow money at current interest rates to build infrastructure, including better bus networks so workers can get to distant jobs. The fact that the federal government has not passed major infrastructure legislation is mind-boggling, considering how much support there is from both parties.' Well, the Obama administration would love to spend more on infrastructure; the problem is that a major spending bill has no chance of passing the House. And that’s not a problem of ‘both parties’.... Also, there’s this: '[T]he government should reduce its generosity to people who are not working but increase its support for people who are. That means reducing health benefits for the affluent elderly...' Hmm. The Affordable Care Act subsidizes insurance premiums for lower-income workers, and pays for those subsidies in part by eliminating overpayments for Medicare Advantage. So conservatives are celebrating both ends of that deal, right? Oh, wait, death panels. It’s an amazing thing: Obama is essentially what we used to call a liberal Republican, who faces implacable opposition from a very hard right. But Obama’s moderation is hidden in plain sight, apparently invisible to the commentariat."

Duncan Black: Eschaton: Savvy "One of the most annoying tics of our establishment press is, years later, to announce 'yes we all knew that' when new information comes to light. Yes we did all know that the AIG bailout was a bailout of the vampire squids, but our insider press generally talked about things as if that wasn't the case. 'Critics' spend years trying to point this out, and then when it becomes irrefutable suddenly it's 'yes that's old news'..."

Josh Marshall: Sarah, Bristol & The Recurrence Of The Eternal Victim: "In very broad terms, the origin of Fox News is analogous. Conservatives in the '70s and '80s looked at the mainstream media and saw it as liberal and against them. That was largely bogus but not entirely. The mid-late 20th century elite 'media' did generally buy into a series of cosmopolitan assumptions about public and private life. That worldview generally aligns more with liberalism than conservatism, but the two are by no means identical. And this did shape coverage in significant ways. But many conservatives genuinely believed that most people in media were and are little different from Democratic political operatives writing propaganda. So when they went to create 'their' media, that's basically what they created, a propaganda network. The reality is as much a matter of genuine misperception as bad faith, though it's both and together they make for a toxic brew. But again, if you see these issues as just a cudgel that people hit each other with, it's easy to say things that are basically nonsense. Because who cares? None of it means anything anyway. So no. Bristol is not a battered woman. She is a battering woman, which may give her some claim to being a feminist icon, as she suggests. I don't blame or care if the Palins are defending themselves or making up stories or doing whatever else. That's just the drama and involuntary performance art that makes up their public lives. But their dead-ender defenders need to accept that if you're a public figure, a recent candidate for national office, and you crash a party drunk and the fists start flying and the police have to show up to sort everything out, people may end up hovering over the details and getting a chuckle out of it. That's life."

William Black: Jamie Dimon: U.S. Must Create a “Safe Harbor” Where JPM’s Corruption Is Not “Punished” - New Economic PerspectivesNew Economic Perspectives: "It never dawns on Sorkin during the interview that there might be something desperately wrong about Dimon’s belief that multinational corporations have the inalienable right to buy influence through their hires of ‘ex government officials’ and ‘Chinese princelings’ and that the duty of the U.S. government is to create a ‘safe harbor’ for JPM’s officers so that they can be assured that they can freely buy influence with no risk of ‘getting punished.’ There epitome of merit-based hiring at JPM’s China operations is based on the answer to the colloquial question: ‘who’s your daddy?’"

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Published on October 25, 2014 12:31

Scott Lemieux on Doug Henwood's Assumption of the Late-Stage Christopher Hitchens Role...

Scott Lemieux: In Fairness, There Was Nothing About Drug Running at the Mena Airport: "I am not particularly thrilled about the prospect of a noncompetitive Democratic primary...

...with Hillary Clinton as the presumptive nominee. An article that explained why and how a candidate could be preferable would be useful. Alas, Doug Henwood’s Harper‘s cover story is not that article. Some of the problems are conveyed even in the intro that isn’t behind the paywall:

‘How’s that hopey, changey stuff working out for you?’ Sarah Palin asked American voters in a taunting 2010 speech. The answer: Not so well. We avoided a full-blown depression, but the job market remains deeply sick, and it’s become quite mainstream to talk about the U.S. economy having fallen into structural stagnation (though the rich are thriving). Barack Obama has, if anything, seemed more secretive than George W. Bush. He kills alleged terrorists whom his predecessor would merely have tortured. The climate crisis gets worse, and the political capacity even to talk about it, much less do anything about it, is completely absent.

Of the last two assertions, the first (implying that while Bush supported torture he opposed targeted killings) is risible.

The argument that nothing has been done about climate change during the Obama administration is just demonstrably false. (Even Thomas Frank concedes that Obama has a good record on the environment, fer Chrissakes.)

The claim about secrecy is, I will grant, a judgment call on a small-potatoes issue.

And the first talks about structural trends divorced from policy changes and without any explanation of what more Obama could have done about unemployment. (And if you think that a large stimulus was just inevitable, cf. most of Europe.)

As the use of Dick Morris’s ‘expertise’ suggests, things don’t get much better when things get to Clinton.

For example:

While it was certainly not the diabolical conspiracy Republicans made it out to be during the fevered days of the Clinton impeachment, it was not nothing.

No, it really was, at least insofar as the Clintons were concerned. Gene Lyons explains:

Basically, the author has performed a simple trick: putting leftward spin on GOP talking points from the 1990s. Because everybody’s either forgotten the details or never knew them, it’s possible to make long discredited charges of corruption against both Clintons sound plausible again.

Whitewater, Henwood assures readers, definitely ‘was not nothing.’

What it may have been, however, he appears to have no clue. The most basic facts elude him. No, the late Jim McDougal’s doomed Madison Guaranty savings and loan did not finance the Clintons’ real estate investment. They were never ‘investors in McDougal’s [other] schemes.’

Maybe Henwood would better understand the Clintons’ surprising ‘escape from the Whitewater morass’ if he grasped that they were basically the victims, not the perps.

Here’s how Kenneth Starr’s prosecutor Ray Jahn put it in his closing argument at poor, mentally ill Jim McDougal’s trial:

Why isn’t the President of the United States on trial?…. Because he didn’t set up any phony corporations to get employees to sign for loans that were basically worthless…The president didn’t backdate any leases. He didn’t backdate any documents. He didn’t come up with any phony reasons not to repay the property. He didn’t lie to any examiners. He didn’t lie to any investors...

A lot of the rest of the analysis isn’t much better. He derides her legislative record, arguing that:

of all her senatorial accomplishments, the [Iraq War vote] arguably had the biggest impact. The rest were the legislative equivalent of being against breast cancer.

Certainly, Clinton deserves a great deal of criticism for supporting the Iraq War, but since this vote almost certainly cost her the Democratic nomination it’s not exactly news. But it’s also true that this was pretty much the only ‘impact’ the vote had--the war was happening however she voted. It’s fair game because it reflects a serious error in judgment, but its causal impact was on the war happening was nil.

The bigger problem, though, is criticizing her for not getting major legislation passed. (This deeply odd way of evaluating a senator’s record is reflected in his language: ‘Hillary passed a total of twenty bills during her first five years in the Senate.’ Individual senators don’t ‘pass’ anything.) The rather obvious problem here is that the entirety of her Senate tenure happened with George W. Bush in the White House, and 6 of those were with a Republican Congress. Of course the only legislation she supported that passed was trivial symbolic stuff. This really takes Green Lantenism to a whole other level; apparently, if Hillary Clinton was a good senator a Republican Congress and Republican president would have passed transformative progressive legislation. That seems plausible!

So while there’s a good Clinton critique waiting to be written, this ain’t it.

…Tom Till in comments:

There are plenty of issues where Hillary Clinton deserves close, even withering scrutiny and where reasonable people can and should debate. The grotesque and preposterous sham known as Whitewater is not one of them. That a number of prominent reporters, editorialists, members of the judiciary, and various elected politicians, operatives, lobbyists, committee staffers, and wingnut bottom-feeders conspired to hatch it, prolong it (in many instances blatantly disregarding the law or at least legal ethics), and infect the political bloodstream with it to such a degree that it ultimately resulted in a president’s impeachment is, well, neither forgivable nor forgettable.

Plus:

FMguru says: Now that Christopher Hitchens is dead, I guess Herwood feels there’s an opening for the spot of aging lefty who comes at the Clintons with right-wing talking points.

Tom Till says: U.S. Senate history is, of course, replete with freshman senators who spend the majority of their first term in the minority repeatedly ramming legislation through committee and corralling the entire chamber to vote their way on every bill. In fact, committee chairman are almost too happy to turn over control of their signature issues (which some have spent at least a decade or two working on) to freshmen of the opposite party. Happens all the time. But I fear that Henwood’s article will, unfortunately, be seized on by wingnuts and centrist media types ad nauseam and achieve CW “the case against Hillary” status before too long.

Gene Lyons: Ready For 2016? Too Bad: "By hard pundit law, nonstop media coverage of the 2016 presidential campaign begins...

...on the morning after the 2014 congressional elections--approximately 18 months before normal Americans want to hear about it. However, like the ‘countdown’ to major sporting events, it’s also a cable TV ratings booster. With politicians and pundits eager to score TV face time, it’s also cheap and easy to produce. So ready or not, here comes Campaign 2016.

For a monthly magazine like Harper’s to jump the gun by two weeks requires considerable enterprise. ‘STOP HILLARY,’ the magazine’s November 2014 cover insists. ‘Vote No to a Clinton Dynasty.’

First, a quibble about terminology. A dynasty, properly speaking, is a multi-generational, inherited thing. In an American context, it’s legitimate to speak of the Roosevelts, Kennedys and Bushes as dynastic families parlaying inherited wealth into political power. As author Doug Henwood sniffishly points out, however, Bill and Hillary Clinton are what French aristocrats call ‘arrivistes’—nobodies from nowhere who climbed the power ladder through what he calls the ‘neoliberal’ strategy of ‘nonstop self-promotion.’ That this cavil would apply to virtually all American politicians seems not to have occurred to Henwood, whose loathing of the couple transcends such mundane considerations.

To him, the whole case for Hillary Clinton’s candidacy ‘boils down to this: She has experience, she’s a woman, and it’s her turn. It’s hard to find any substantive political argument in her favor.’ Maybe so, maybe not. But then Henwood, writing from the left, seems not to have looked very hard. His essay begins and ends with the appraisals of Dick Morris, perhaps America’s least credible political prognosticator. Indeed, the author acknowledges in a footnote that Morris’s ‘pronouncements on both Bill and Hillary should be taken with a substantial grain of salt.’ Even Fox News let Morris go after his forecast of a Mitt Romney landslide went awry. So why feature the man at all?

For that matter, why am I bothering with Henwood ?

Two reasons. First, personal disappointment that such slipshod work could appear in Harper’s. Twenty years ago, the magazine stuck its journalistic neck out to publish my article and book Fools for Scandal: How the Media Invented Whitewater. Second, because Henwood’s piece signals the inevitable return of what I call the ‘Clinton Rules.’ Particularly when it comes to the couple’s background in darkest Arkansas, no allegation of wrongdoing, regardless of how conclusively disproved, has ever disappeared from the national news media.

That such shoddy standards have become well-nigh universal in American political journalism is no excuse. Because everybody involved back in 1996 understood that calling out The New York Times--which originated and sustained the Whitewater hoax--was a serious business, Harper’s actually dispatched a fact checker to Little Rock, where we spent several days bulletproofing the manuscript.

Clearly, no such effort went into Henwood’s essay.

Basically, the author has performed a simple trick: putting leftward spin on GOP talking points from the 1990s.

Because everybody’s either forgotten the details or never knew them, it’s possible to make long discredited charges of corruption against both Clintons sound plausible again.

Whitewater, Henwood assures readers, definitely ‘was not nothing.’

What it may have been, however, he appears to have no clue. The most basic facts elude him. No, the late Jim McDougal’s doomed Madison Guaranty savings and loan did not finance the Clintons’ real estate investment. They were never ‘investors in McDougal’s [other] schemes.’ Maybe Henwood would better understand the Clintons’ surprising ‘escape from the Whitewater morass’ if he grasped that they were basically the victims, not the perps. Here’s how Kenneth Starr’s prosecutor Ray Jahn put it in his closing argument at poor, mentally ill Jim McDougal’s trial:

Why isn’t the President of the United States on trial?…Because he didn’t set up any phony corporations to get employees to sign for loans that were basically worthless…The president didn’t backdate any leases. He didn’t backdate any documents. He didn’t come up with any phony reasons not to repay the property. He didn’t lie to any examiners. He didn’t lie to any investors.

As for Susan McDougal, yes, it’s true she served 18 months for civil contempt after refusing to testify to a Whitewater grand jury in what she saw as a partisan perjury trap. However, it’s also true--if seemingly unknown to Henwood--that after Starr’s prosecutors charged her with criminal contempt, she testified for several days in open court, and was acquitted. Ancient history, yes. But history. The Ray Jahn quote, for example, comes directly from Joe Conason’s and my book The Hunting of the President.

Regarding Henwood’s pronouncement that it’s ‘ideologically dubious’ of Hillary Clinton to ‘make friends with her Republican colleagues,’ readers can judge for themselves.

However, a journalist who chooses to question a presidential candidate’s character by dragging up 20-year-old controversies owes it to readers to know two or three things about them."

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Published on October 25, 2014 11:13

Weekend Should-Read: Jesse Singal Comments on #GamerGate

Jesse Singal: jsingal comments on "Another poorly-researched hit-piece, from the Boston Globe": "Uh huh. That's why at this very moment three of the top six posts on KIA--the subreddit I was explicitly instructed to visit if I wanted to see the real GamerGate...

...are about Wu and Sarkeesian (oh, I'm sorry, LW1 and LW3 [or is Wu 2? I can't keep track]) and social-justice warriors.

So, to recap:

Me: I don't think this is really about corruption as much as it's about discomfort with feminism. After all, a lot of the heat seems to be aimed at small female devs/commentators of a feminist bent.

GamerGaters on Twitter: Not true! So unfair! Go to KIA!

[Goes to KIA. Suspicions appear to be mostly confirmed.]

This has happened over and over and over again (I also looked into the 8chan board and some other “approved” places). As a journalist trying to be fair-minded about this, you can't fucking win. If I'm arguing with someone from the NRA or the NAACP or some other established group, I can point to actual quotes from the group's leadership. With you guys, any bad thing that happens is, by definition, not the work of A True GamerGater. It's one of the oldest logical fallacies in the book.

So what is GamerGate “really” about? I think this is the kinda question a philosopher of language would tear apart and scatter the remnants of to the wind, because it lacks any real referent. You guys refuse to appoint a leader or write up a platform or really do any of the things real-life, adult “movements” do. I’d argue that there isn’t really any such thing as GamerGate, because any given manifestation of it can be torn down as, again, No True GamerGate by anyone who disagrees with it. And who gets to decide what is and isn’t True GamerGate? You can’t say you want a decentralized, anonymous movement and then disown the ugly parts that inevitably pop up. Either everything is in, or everything is out.

Anyway, faced with this complete lack of clarity, all I or other journalists can do, then, is journalism: We ask the people in the movement what they stand for and then try to tease out what is real and what is PR. And every every every substantive conversation/forum/encounter I've had with folks from GamerGate has led me to believe that a large part of the reason for the group's existence is discomfort with what its members see as the creeping and increasing influence of what you call social-justice warriors in the gaming world.

I’m not just making this up based on the occasional Tweet or forum post. After my HuffPost Live appearance, I was invited into a Google Hangout about GamerGate by Troy Rubert, aka @GhostLev. I accepted, and when I got in just about everyone who spoke openly talked about how mad they were that progressive politics and feminism were impinging on gaming, which they saw as an area they had enjoyed, free of politics, forever. They were extremely open about this. A day or so later, another GamerGater, @Smilomaniac, asked me to read a blog post he’d written about his involvement in the movement in which he explicitly IDs as anti-feminist, and says that while some people claim otherwise, he thinks GG is an anti-feminist movement.

I believe him; I think GamerGate is primarily about anger at progressive people who care about feminism and transgender rights and mental health and whatever else (I am not going to use your obnoxious social-justice warrior terminology anymore) getting involved in gaming, and by what you see as overly solicitous coverage of said individuals and their games. And that's fine! It's an opinion I happen to disagree with, but “at least it’s an ethos.”

But this is only going to be a real debate if you guys can cop to your real-life feelings and opinions. You should have a bit more courage and put your actual motives front and center. Instead, because some of you do have a certain degree of political savvy, as is evidenced whenever GamerGaters on 8chan and elsewhere try to rein in their more unhinged peers, you've decided to go the "journalism ethics" route.

Unfortunately, that sauce is incredibly weak. There was no Kotaku review of “Depression Quest,” and fair-minded journalists will see through that line of attack right away since ZQ was receiving hate for DQ long before her boyfriend posted that thing. Journalists donating to crowdfunding campaigns? I bet if you asked 100 journalists you'd get 100 different opinions on whether this should be inherently off-limits (personal take is that it isn't, but that journalists should certainly disclose any projects to which they donate). Collusion to strike at the heart of the gamer identity? Conservatives have been arguing that liberal journalists unfairly collude forever—I was on the “Journolist” that people wrongly claimed was coordinating pro-Obama coverage when really what we were doing, like any other listserv of ideologically like-minded people, was arguing with ourselves over everything. What happened was Gamasutra ran a column, that column went viral, and a lot of people responded to it. That sort of cross-site collusion doesn’t happen the way you think it does. When everyone’s writing about the same thing, that’s because the thing in question is getting a lot of discussion, which LA’s column did.

You guys know as well as I do that a movement based on the stated goal of regaining gaming ground lost to feminists and (ugh) SJWs would not do very well from a PR perspective. But you’re in a bind, because the ethics charges are 1) 98% false; 2) complicated to follow for the layperson; and 3) pretty clearly a ruse given the underlying ideology of the folks pushing this line forward.

(Important side note: A lot of the people calling for “journalistic ethics” quite transparently don’t know anything about journalism — to say that sites should clearly label what is and isn’t opinion, for example, is just plain weird, because a) that distinction is less and less relevant and is mostly a relic of newspaper days; and b) it’s a basic reading-comprehension thing; anyone who reads on a daily basis can tell, pretty simply from various cues in the narrative, whether they’re reading a work of “straight” journalism [outdated, troublesome term], “pure” opinion [again, bleh], or some combination of the two [which is what a lot of games coverage is].)

So I’d make a call, one last time, for honesty: Stop pretending this is about stuff it isn’t. Acknowledge that you do not want SJWs in gaming, that you want games to just be about games. Again: I disagree, but at least then I (and other journalists! you do want coverage, don’t you?) could at least follow what the hell is going on. If your movement requires journalists to carefully parse 8chan chains to understand it, it gets an F- in the PR department.

You guys need to man and woman up and talk about what’s really on your mind, or stop whining about “biased” coverage and/or blaming it on non-existent conspiracies. And that’s my overlong two cents about your movement and why I’m having a lot of trouble taking it seriously.

(Edited right away to fix some stuff; more edits surely to come given that I wrote this quickly and in an under-caffeinated state. Feel free to snap a screenshot—I won’t be making any substantive changes.)

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Published on October 25, 2014 11:12

Battle of Westport 150th Year Anniversary: Live from Swope Park

NewImage THE BATTLE OF WESTPORT: 150th Anniversary Exhibition& Reenactment
October 23-26, 2014 :: �6601 Swope Parkway, Kansas City, MO 64132

9 million people living in the Confederacy: 5 million white, 4 million Black.

1.2 million adult white males in the Confederacy. 900,000 served. 75,000 died in battle. 75,000 died of wounds and infections. 150,000 died of disease in camp. 200,000 maimed. 200,000 deserted. 200,000 still with the Stars and Bars at the end.

21 million people living in states that remained loyal to the Union. 2.3 million served--1.9 million white, 400,000 Black (including Blacks from the Confederate states). 90,000 died in battle. 90,000 died of wounds and infections. 180,000 died of disease in camp. 200,000 maimed.

Mobilizing for a total industrial war is a b*tch when (a) your rich have been investing by buying slaves rather than building factories, and (b) nearly half of your population is more likely than not to turn any guns they get against you...

Missouri sent about 140,000 men to the Union, and about 60,000 to the Confederacy...

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Published on October 25, 2014 07:18

Over at Equitable Growth: Is There Really a Profits-Investment Disconnect?: (Late) Friday Focus for October 24, 2014

Over at Equitable Growth: I think Paul Krugman gets one wrong--or, at least, I need more convincing before I think he gets this one right, in spite of the extraordinary empirical success of my rules (1) and (2):

The Profits Investment Disconnect NYTimes com

Paul Krugman: The Profits-Investment Disconnect: "Profits are very high...

...so why are companies concluding that they should return cash to stockholders rather than use it to expand their businesses? After all, we normally think of high profits as a signal: a profitable business is one people should be trying to get into. But right now we see a combination of high profits and sluggish investment. What’s going on? One possibility, I guess, is that business are holding back because Obama is looking at them funny. But more seriously, this kind of divergence — in which high profits don’t signal high returns to investment — is what you’d expect if a lot of those profits reflect monopoly power rather than returns on capital. More on this in a while. READ MOAR

Graph Real Gross Domestic Product FRED St Louis Fed

As a result of the housing bubble, the mortgage frauds, the attempts at regulatory arbitrage on their balance sheets by the money-center universal banks, the financial crisis, et sequelae, U.S. real GDP today is now 12% below what we back in 2007 expected it to be now. Since the post financial-crisis trough U.S. real economic growth has proceeded at 2.24%/year, compared to the 3.00%/year growth rate we saw between 1990 and 2007.

So far there are no signs anywhere that the gap between today and the pre-2007 trend in levels will be made up. So far there are no signs anywhere that the gap between today and the pre-2007 trend in growth rates will be made up.

That means that, come 2024 a decade hence, we can now expect a U.S. economy to be 19.5% smaller than the economy we confidently projected as of 2007 we would have.

And, with a capital-output ratio of roughly 3, that means that between 2007 and 2024 cumulative net investment will be lower than projected back in 2007 by 58.5%-point years of GDP--and cumulative gross investment considerably lower.

Given this extraordinary shift in our long-run growth trajectory and in the investment requirements consistent with that trajectory, is it really surprising that investment in this "recovery" is not matching previous patterns?

Paul Krugman says that because profits are high, the marginal return on capital is high, and that means that firms ought to be eager to add to their capital stocks via investment in order to achieve high returns and further boost their profits. This seems to me to rely on an identification of average-Q with marginal-Q that I have always found suspect. Remember: Profits are not high now because demand is high, throughput is high, and capacity is being fully used. Profits are high now because the labor share is unusually low. Firms almost surely, given the collapse in the labor share over the past fifteen years, operating with too much capital and too little labor along the isoquant to be profit maximizing. Why shouldn't we presume that--just as after 1973 and 1979 they shifted to more energy-intensive mixes, and productivity growth was thus lower than previous experience would have predicted--firms are now shifting to more labor- and information-intensive mixes, and that investment (in everything except real investments in information technology) is lower than previous experience would have predicted?

I do see a puzzle needing explanation in the extraordinary shortfall in housing investment--in the now 8 million people who ought to be out on their own in apartments and houses but who are instead living in their sisters' or other relatives' basements.

I still have to be convinced that there is any shortfall or puzzle needing explanation in non-housing investment...

UPDATE: Now Paul could respond that my point is really his: that you do not get a wedge between marginal-Q and average-Q in any competitive marketplace with constant-returns-to-scale firms and labor and capital as the factors of production. You need an additional factor of market position or some such that it is difficult to invest in and then profit from for any of a number of reasons. Too that I would say "touché...", but then I would add that I think saying that there are the two and only the two boxes of "return on invested capital" and "monopoly power" is much too simple to be of much use...

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Published on October 25, 2014 04:49