J. Bradford DeLong's Blog, page 2126

W00T!!

ADP's National Employment Report says 297,000 net private payroll employment in December! Around Christmas, seasonal adjustment issues make reading the tealeaves much more hazardous than usual. Nevertheless, it is very nice to see...

Liveblogging World War II: January 5, 1941

The British invasion of Italian-occupied Libya continues with the British capture of Bardia and an additional 40,000 Italian prisoners.

Liveblogging World War II: January 4, 1941

Eleanor Roosevelt:

My Day by Eleanor Roosevelt, January 4, 1941: WASHINGTON, Friday—Last night Miss LeHand and I found ourselves at dinner surrounded by gentlemen. I couldn't help remarking how really unimportant it is to have our tables so carefully balanced as to an even number of ladies and gentlemen. We were certainly not evenly divided last night and yet everybody seemed to have a perfectly good time. Conversation flowed easily around the table.
It looks as though the gentlemen could manage to talk to each other occasionally and have an interesting time. I've learned from experience that women can do this too, so we need not be so agitated when our tables do not come out exactly even.

The chairman of the Junior Chamber of Commerce luncheon yesterday made an amusing remark when he introduced me. He said that there was apparently some fundamental reason why women added something to the enjoyment of an occasion, but he wasn't sure what that fundamental reason might be. I hope that we may someday discover that there is no real reason for being divided up in social gatherings, and that women add to an occasion because they are pleasant human beings to have about.

The French rarely separate after dinner so as to allow the men to talk alone. They have a theory, I think, that conversation carried on by both men and women is apt to be more interesting. It all boils down really to individuals that are gathered together. If the men and the women are dull, the party will be dull.

The exact number on either side doesn't really matter. It is just the individuals who make an evening pleasant and interesting, or that send one home with a feeling of a wasted evening and a fervent wish that one had chosen a book as a companion instead of human beings.

I think I must tell you a secret. Someone who read my column in which I ruefully regretted that it would be another four years before I could have a little black dog to sit on my white fur rug before the fire in my Hyde Park cottage, sent me for Christmas a life-size black toy dog! He has created a sensation.

Little Franklin, III, and everyone else, young or old, picks him up from the corner which he occupies beside the fireplace here. My husband's real live little black Scottie hasn't quite decided yet whether he is an enemy or a friend. He comes and looks at the toy dog and if anyone picks it up and starts to make it move, "Fala" runs away. I think of all my Christmas presents this has proved the most popular.

I expected to fly to New York City today, but the planes are cancelled and I am taking the train. Such are the uncertainties of winter weather and I am wondering if I shall be able to fly back tomorrow night. Operating an airplane in winter must have its difficulties. Someone remarked last night that running a government must be an irritating job at times. Well, perhaps it is complicated for much the same reason that running an airline is. Human beings are about as unpredictable as the weather!

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Yes, Gene Sperling Really Is a Liberal

Duncan Black writes:

Eschaton: Always Looking Out For The Little Guy: I actually have no opinion about Gene Sperling so just chalk this post up to general cynicism, but I have noticed that anecdotes suggesting 'he's really a liberal!' seem to pop up when people are floated for key economic positions.

But Gene Sperling really is a liberal, Duncan. Bob Woodward's The Agenda is in general not a reliable book, but its sections on Gene's attempts to push Clinton administration economic policy a little further to the left are, I think, accurate.

I Am Now, and Have for Eighteen Years Been, a Rubinite...

You know, Robert Rubin spent six years working full-time to raise his own taxes and decrease his own market power...

Robert Rubin went to work for the Clinton Administration in 1993 with four goals: (1) to make the decision-making process work smoothly; (2) to match the tax revenues of the federal government to its spending commitments; (3) to make the tax and transfer system more progressive so that people like him paid more and America's working class paid less; and (4) to make the financial system work more smoothly and transparently and so diminish the rents earned because of market position and institutional connections by people like him.

(1), (2), and (3) were big successes. (4) was a failure--the belief that financial deregulation would diminish Wall Street payouts because organizations like Goldman Sachs would face new competition from deep-pocket commercial banks--turned out to be wrong. Why it was wrong I do not understand. But it was a failure. However, it was not a catastrophic failure--it was not the repeal of Glass-Steagall that caused our current downturn, but rather other and different regulatory failures long after Rubin had left office. Against the failure of (4) you have to weigh the successes of (1), (2), and (3), in which Rubin served President
Clinton, the American people, and the world very well--and you have to weigh a career spent raising lots and lots of $$$$$$$ for Democratic and progressive causes, many of which involved increasing his taxes and making him poorer. As best as I can judge, Bob Rubin's politics put him squarely in the middle of the Democratic senatorial caucus. And Rubin has proven to be very good at almost every job he has held--the only even half-serious complaints I have heard have been about his role at Citigroup in the 2000s, where he seems to have played somewhat the role of the Earl of Kent in the production of King Lear that was the Citigroup succession.

Thus I am somewhat surprised when I read things like this from Felix Salmon:

Replacing Summers with a Wall Street millionaire: [Gene] Sperling has done nothing to counter the general impression that he’s one of many Rubinites in the administration, in the context of a political atmosphere where one of the few points of agreement between the right and left is that the departure of Summers can and should be taken as an opportunity to finally put as much distance between Obama and Rubin as possible...

I think that if you are a shareholder of Citigroup you have a beef with Rubin: senior management are supposed to make sure that institutions take bet-the-farm risks only after great and sober thought and do not take them accidentally as a lack of oversight allows an originate-and-distribute business model to slip into originate-and-don't-distribute-fast-enough or simply originate-and-don't-distribute.

I think that if you are an American or a citizen of the world you have a beef with Rubin for believing--as I did--in the "Greenspanist" doctrine that the Federal Reserve had the tools to put a firewall between finance and employment and should thus regard bubbles principally with benign neglect.

But I think you have a much bigger beef with the American voters who put Phil Gramm at the head of the Senate Finance Committee and with the Supreme Court justices who put George W. Bush in the Oval Office, for theirs were by far the most serious failures of governance.

And I understand the view that because Bob Rubin's entire career cannot help but have created a man who thinks that Wall Street is a national asset--"what's good for America is good for General Motors, and vice versa"--rather than a debilitating parasite, should play no role in shaping financial regulatory policy today. I do not agree with that view, but I understand it.

But to say that Gene Sperling should be banned from a high position in the administration because he "has done nothing to counter the general impression that he is a Rubinite"?!?!

That seems to me to be foolish.

Gene is extremely able, extremely hard-working, extraordinarily well-qualified to be Assistant to the President for Economic Policy, and would do a very good job at it. When Bloomberg paid Gene $13 a word to write columns, it wasn't because Bloomberg thought that was a way to bribe Gene but rather because Gene's previous service in the Clinton Administration had made him somebody whose byline would attract eyeballs and thus sell Bloomberg terminals. When Goldman Sachs paid Gene $1,000,000 to "consult" on its charitable contributions, it may have been a bet on their part that Gene actually knew something nobody else they could quickly find and trust did about the flow of money to social-service organizations. It may have been an attempt to make Gene think that Wall Street was overtaxed and should be cut a break. If it was the second, it failed. Sperling has not been a voice within the Obama Administration for kinder, gentler treatment of Wall Street--rather, the reverse.

Felix quotes Mark Thoma saying:

A break from the Wall Street connected side of the Clinton administration would have political value. Even better, no matter the choice, would be to show through action that the administration is, in fact, determined to reduce the chances of another meltdown by being tough on the financial sector. But, so far as I can tell, that doesn't seem to be the direction Obama intends to go.

As I read Mark, he is saying that (a) since the Obama administration is not determined to do anything more to reduce the chances of a financial meltdown, (b) then there is political value from purging Rubinites from the administration.

And Felix closes:

The problem, of course, is that Wall Street became so big and so pervasive over the course of the boom that it’s hard to find people to run the NEC who haven’t been paid large sums by banks at some point. And even if they are relatively pure on that front, there’s every reason to expect that they’ll pull an Orszag and start taking millions of Wall Street dollars the minute they leave. Obama can try to distance himself from Wall Street, but it isn’t easy.

I would put it differently. I would say that you want to draw your White House staff from successful managers--people who have had lots of experience bossing other people and who have done very well at it--and that there are only three groups of successful managers who are Democrats: Hollywood studio executives and their ilk, people who have made careers in government and academia, and executives who have worked for traditionally-Jewish investment banks. If you want managers in a Democratic administration, that's where they have to come from. And I don't think you want to throw out a third of your potential talent pool at the very start.

DISCLOSURE: Robert Rubin was my boss's boss for six months while I was a Deputy Assistant Secretary of the Treasury for Economic Policy, and Robert Rubin's son and my brother have been good friends for more than two decades. There are other, looser, and more indirect ties as well: the social network graph is fairly dense when you try to trace it out--six degrees of separation, you know.

i Am Now, and Have for Eighteen Years Been, a Rubinite...

You know, Robert Rubin spent six years working full-time to raise his own taxes and decrease his own market power...

Robert Rubin went to work for the Clinton Administration in 1993 with four goals: (1) to make the decision-making process work smoothly; (2) to match the tax revenues of the federal government to its spending commitments; (3) to make the tax and transfer system more progressive so that people like him paid more and America's working class paid less; and (4) to make the financial system work more smoothly and transparently and so diminish the rents earned because of market position and institutional connections by people like him.

(1), (2), and (3) were big successes. (4) was a failure--the belief that financial deregulation would diminish Wall Street payouts because organizations like Goldman Sachs would face new competition from deep-pocket commercial banks--turned out to be wrong. Why it was wrong I do not understand. But it was a failure. However, it was not a catastrophic failure--it was not the repeal of Glass-Steagall that caused our current downturn, but rather other and different regulatory failures long after Rubin had left office. Against the failure of (4) you have to weigh the successes of (1), (2), and (3), in which Rubin served President
Clinton, the American people, and the world very well--and you have to weigh a career spent raising lots and lots of $$$$$$$ for Democratic and progressive causes, many of which involved increasing his taxes and making him poorer. As best as I can judge, Bob Rubin's politics put him squarely in the middle of the Democratic senatorial caucus. And Rubin has proven to be very good at almost every job he has held--the only even half-serious complaints I have heard have been about his role at Citigroup in the 2000s, where he seems to have played somewhat the role of the Earl of Kent in the production of King Lear that was the Citigroup succession.

Thus I am somewhat surprised when I read things like this from Felix Salmon:

Replacing Summers with a Wall Street millionaire: [Gene] Sperling has done nothing to counter the general impression that he’s one of many Rubinites in the administration, in the context of a political atmosphere where one of the few points of agreement between the right and left is that the departure of Summers can and should be taken as an opportunity to finally put as much distance between Obama and Rubin as possible...

I think that if you are a shareholder of Citigroup you have a beef with Rubin: senior management are supposed to make sure that institutions take bet-the-farm risks only after great and sober thought and do not take them accidentally as a lack of oversight allows an originate-and-distribute business model to slip into originate-and-don't-distribute-fast-enough or simply originate-and-don't-distribute.

I think that if you are an American or a citizen of the world you have a beef with Rubin for believing--as I did--in the "Greenspanist" doctrine that the Federal Reserve had the tools to put a firewall between finance and employment and should thus regard bubbles principally with benign neglect.

But I think you have a much bigger beef with the American voters who put Phil Gramm at the head of the Senate Finance Committee and with the Supreme Court justices who put George W. Bush in the Oval Office, for theirs were by far the most serious failures of governance.

And I understand the view that because Bob Rubin's entire career cannot help but have created a man who thinks that Wall Street is a national asset--"what's good for America is good for General Motors, and vice versa"--rather than a debilitating parasite, should play no role in shaping financial regulatory policy today. I do not agree with that view, but I understand it.

But to say that Gene Sperling should be banned from a high position in the administration because he "has done nothing to counter the general impression that he is a Rubinite"?!?!

That seems to me to be foolish.

Gene is extremely able, extremely hard-working, extraordinarily well-qualified to be Assistant to the President for Economic Policy, and would do a very good job at it. When Bloomberg paid Gene $13 a word to write columns, it wasn't because Bloomberg thought that was a way to bribe Gene but rather because Gene's previous service in the Clinton Administration had made him somebody whose byline would attract eyeballs and thus sell Bloomberg terminals. When Goldman Sachs paid Gene $1,000,000 to "consult" on its charitable contributions, it may have been a bet on their part that Gene actually knew something nobody else they could quickly find and trust did about the flow of money to social-service organizations. It may have been an attempt to make Gene think that Wall Street was overtaxed and should be cut a break. If it was the second, it failed. Sperling has not been a voice within the Obama Administration for kinder, gentler treatment of Wall Street--rather, the reverse.

Felix quotes Mark Thoma saying:

A break from the Wall Street connected side of the Clinton administration would have political value. Even better, no matter the choice, would be to show through action that the administration is, in fact, determined to reduce the chances of another meltdown by being tough on the financial sector. But, so far as I can tell, that doesn't seem to be the direction Obama intends to go.

As I read Mark, he is saying that (a) since the Obama administration is not determined to do anything more to reduce the chances of a financial meltdown, (b) then there is political value from purging Rubinites from the administration.

And Felix closes:

The problem, of course, is that Wall Street became so big and so pervasive over the course of the boom that it’s hard to find people to run the NEC who haven’t been paid large sums by banks at some point. And even if they are relatively pure on that front, there’s every reason to expect that they’ll pull an Orszag and start taking millions of Wall Street dollars the minute they leave. Obama can try to distance himself from Wall Street, but it isn’t easy.

I would put it differently. I would say that you want to draw your White House staff from successful managers--people who have had lots of experience bossing other people and who have done very well at it--and that there are only three groups of successful managers who are Democrats: Hollywood studio executives and their ilk, people who have made careers in government and academia, and executives who have worked for traditionally-Jewish investment banks. If you want managers in a Democratic administration, that's where they have to come from. And I don't think you want to throw out a third of your potential talent pool at the very start.

DISCLOSURE: Robert Rubin was my boss's boss for six months while I was a Deputy Assistant Secretary of the Treasury for Economic Policy, and Robert Rubin's son and my brother have been good friends for more than two decades. There are other, looser, and more indirect ties as well: the social network graph is fairly dense when you try to trace it out--six degrees of separation, you know.

Ross Douthat on the Shortage of White Babies

Why oh why can't we have a better press corps?

Ross Douthat of the New York Times:

The Unborn Paradox: In every era, there’s been a tragic contrast between the burden of unwanted pregnancies and the burden of infertility. But this gap used to be bridged by adoption far more frequently than it is today. Prior to 1973, 20 percent of births to white, unmarried women (and 9 percent of unwed births over all) led to an adoption. Today, just 1 percent of babies born to unwed mothers are adopted, and would-be adoptive parents face a waiting list that has lengthened beyond reason...

Amanda Marcotte:

pandagon.net: Ross Douthat proves once again why the NY Times was foolish to hire him.... Douthat... is pushing [the line] that the sadness and doubt felt by some of the young women [deciding to abort] indicates they should have been forced by law to have babies they didn’t want, that contraception is evil because people didn’t even consider f---ing before it was invented, and that MTV is biased because they present facts and allow women to speak for themselves. He does not, sadly, engage in the conspiracy theory about how MTV was paid off by the shadowy condom industry....

Douthat... can’t even bring himself to feign concern for more than a paragraph before he lapses into straight up demanding that women be reduced to breeding machines....  We cannot afford to treat women as human beings when the supply of white infants on the market is so dangerously low!...

There’s a lot of human rights violations that Douthat glossed over in his chillingly inhumane euphemistic phrasing “this gap used to be bridged by adoption”.  By “bridged by adoption”, what he means is young white women (and some young black women, though there was less demand for their babies, and subsequently less forcing them into maternity homes) who turned up pregnant were forced to give birth to babies and forced into maternity homes... so they couldn’t resist when their babies were snatched from them against their wills. He’s right that Roe v. Wade had a lot to do with turning this around, and it’s not just because women had an option to abort instead.  It’s also because once it was enshrined in law that even pregnant women have rights, it became harder to justify the existence of maternity homes and coercing women to give up babies....

Look, I really feel bad for people suffering infertility.  It can be maddening and horrible, though I will point out that the notion that people resort to infertility treatments after adoption doesn’t pan out has it exactly backwards---most people prefer biological children and then turn to adoption if they can’t have their own.  And some women willingly give babies up for adoption.  But the fact that, as Douthat notes, the percentage of babies born that are given up for adoption immediately went into freefall after coercion stopped means that the coercion really was pretty f---ing coercive...

Liveblogging World War II: January 3, 1941

The Battle of Bardia:

Wikipedia, the free encyclopedia: The Battle of Bardia was fought over three days between 3 and 5 January 1941, as part of Operation Compass, the first military operation of the Western Desert Campaign of the Second World War. It was the first battle of the war in which an Australian Army formation took part, the first to be commanded by an Australian general and the first to be planned by an Australian staff. Major General Iven Mackay's 6th Division assaulted the strongly held Italian fortress of Bardia, Libya, assisted by air support and naval gunfire, and under the cover of an artillery barrage. The 16th Infantry Brigade attacked at dawn from the west, where the defences were known to be weak. Sappers blew gaps in the barbed wire with Bangalore torpedoes and filled in and broke down the sides of the anti-tank ditch with picks and shovels. This allowed the infantry and 23 Matilda II tanks of the 7th Royal Tank Regiment to enter the fortress and capture all their objectives, along with 8,000 prisoners.

In the second phase of the operation, the 17th Infantry Brigade exploited the breach made in the perimeter, and pressed south as far as a secondary line of defences known as the Switch Line. On the second day, the 16th Infantry Brigade captured the township of Bardia, cutting the fortress in two. Thousands of prisoners were taken, and the Italian garrison now held out only in the northern and southernmost parts of the fortress. On the third day, the 19th Infantry Brigade advanced south from Bardia, supported by artillery and the Matilda tanks, now reduced in number to just six. Its advance allowed the 17th Infantry Brigade to make progress as well, and the two brigades reduced the southern sector of the fortress. Meanwhile, the Italian garrisons in the north surrendered to the 16th Infantry Brigade and the Support Group of the British 7th Armoured Division outside the fortress. In all, some 36,000 Italian prisoners were taken.

The victory at Bardia enabled the Allied forces to continue the advance into Libya and ultimately capture almost all of Cyrenaica. In turn this would lead to German intervention in the fighting in North Africa, changing the nature of the war in that theatre. Bardia boosted the competence and reputation of the Australian Army. Perhaps most important of all, it raised confidence in the possibility of an ultimate Allied victory around the world, which would lead to the Lend-Lease Act being passed in the United States.

Liveblogging World War II: January 2, 1941

Chronology of World War II:

Thursday, January 2, 1941: In Washington: Roosevelt announces a program to produce 200 7500-ton freighters to standardized designs. They will be known as Liberty ships.