Grasping Reality on TypePad, by Brad DeLong

Writes:

The Interdictor: Personal: Securing a 27 floor high rise with no elevator support is not fun. I am totally worn out. I am gonna chill for an hour, eat dinner, then perform maintenance. But never fear, Outpost Crystal and Team SOTI have knuckled down and will never quit. Never. We are prepared to go all the way to see this thing through. Thanks again for all the support and love. One day this will all be over and ancient history, but I'll never forget the kindness of strangers. Keep the less fortunate people in your thoughts and prayers.

Impeach George W. Bush. Impeach him now. This is just the latest reason: The president has a duty to take care that the laws are faithfully executed:

Big Brass Blog : FDA Official Quits Over Plan B Pill Delay

"I can no longer serve as staff when scientific and clinical evidence, fully evaluated and recommended for approval by the professional staff here, has been overruled."-- Susan Wood, director of FDA's Office of Women's Health, in her resignation letter

...Susan Wood, head of FDA's Office of Women's Health, announced her resignation in an e-mail to colleagues at the agency....

"The recent decision announced by the Commissioner about emergency contraception, which continues to limit women's access to a product that would reduce unintended pregnancies and reduce abortions, is contrary to my core commitment to improving and advancing women's health."

The FDA last Friday postponed indefinitely its decision on whether to allow the morning-after pill, called Plan B, to be sold without a prescription. The agency said it was safe for adults to use without a doctor's guidance but was unable to decide how to keep it out of the hands of young teenagers without a prescription -- a decision contrary to the advice of its own scientific advisers.

Kevin Drum writes:

The Washington Monthly: Back in 1995, Danny Franklin wrote a piece in the Washington Monthly about the travails of FEMA, an agency that had an abominable reputation for poor planning and bureaucratic incompetence in the 80s and early 90s:

FEMA was, in the words of former advisory board member and defense analyst Lawrence Korb, a "political dumping ground," a backwater reserved for political contributors or friends with no experience in emergency management.

....Because FEMA had 10 times the proportion of political appointees of most other government agencies, the poorly chosen Bush [Sr.] appointees had a profound effect on the performance of the agency. Sam Jones, the mayor of Franklin, Louisiana, says he was shocked to find that the damage assessors sent to his town a week after Hurricane Andrew had no disaster experience whatsoever. "They were political appointees, members of county Republican parties hired on an as-needed basis....They were terribly inexperienced."

In 1992 the GAO recommended sweeping changes in FEMA's mission and organization, and the newly elected Bill Clinton took the GAO's recommendations seriously. The first thing he did was appoint as FEMA's director James Lee Witt, a former construction company owner who had worked with Clinton in Arkansas as director of the state Office of Emergency Services, where he earned high marks for his management of three presidential disaster declarations, including two major floods in 1990 and 1991.

Witt resurrected FEMA's reputation and turned it into a highly respected agency, but via email, Franklin wonders if the widely reported problems regarding federal response to Hurricane Katrina are related to George Bush's rather more patronage minded approach to staffing critical positions:

The difficulties of coordination seem to indicate we've returned to the bad old days where the FEMA administrator position is given away on the basis of political favor, rather than hard experience. The whole story of FEMA's response to Katrina has yet to be written, but it has always troubled me that Bush has appointed, in succession, his 2000 campaign manager and an Oklahoma lawyer whose only emergency management experience prior to joining FEMA was as an assistant city manager.

I hope Franklin is wrong about this, but after hearing one too many stories about unqualified political appointees taking over scientific, technical, and reconstruction positions in the Bush administration, it's hard not to wonder if FEMA hasn't suffered under his administration as well.

Oooops.

He writes:

Brendan Nyhan: The "Bush Boom," Harper's Index style:

Number of articles touting the "Bush Boom" on nationalreview.com: 44.

Change in median income 2001-2004: -$673.

Change in the number of Americans in poverty: +4.1 million

Change in the number of Americans without health insurance: +4.6 million

National Review today, in the aftermath of Hurricane Katrina:

The Corner on National Review Online: NOT THAT I WANT TO OFFEND ANYBODY [Jonah Goldberg] But it would be pretty cool if Fox played to caricature and repeatedly referred to the hurricane as Katrina vanden Heuvel.

"The destruction from Katrina vanden Heuvel is expected to be massive."

"...the poor and disabled are particularly likely to suffer from the effects of Katrina vanden Heuvel ...."

"Coming up: how to explain Katrina vanden Heuvel to your children."

Etc.

The Corner on National Review Online: ATTN: SUPERDOME RESIDENTS [Jonah Goldberg] I think it's time to face facts. That place is going to be a Mad Max/thunderdome Waterworld/Lord of the Flies horror show within the next few hours. My advice is to prepare yourself now. Hoard weapons, grow gills and learn to communicate with serpents. While you're working on that, find the biggest guy you can and when he's not expecting it beat him senseless. Gather young fighters around you and tell the womenfolk you will feed and protect any female who agrees to participate without question in your plans to repopulate the earth with a race of gilled-supermen. It's never too soon to be prepared.

Donate to the Red Cross to help the victims of Hurricane Katrina.

Economics 101b: Intermediate Macroeconomics: MWF 10-11 Evans 70 http://delong.typepad.com/101b

Economics 210a: Introduction to Economic History

PEIS Senior Thesis Seminar

Office Hours: W 11-12:30 in Evans 601, or by appointment: email [email protected]

I've had and listened in on lots of economic policy conversations among lots of people in the past two months. It strikes me that everyone I've talked to or listened to has made one overriding assumption--an assumption that is almost never mentioned.

That assumption has three parts. They are:

1. Macroeconomic stability would be much easier to preserve and major disasters like depressions and bad financial crises much easier to avoid if America's federal budget were rapidly moving toward surplus right now or in the near future.
2. Nothing, however, can be expected from the rest of the government.
3. Thus the Federal Reserve (and other central banks) will have to manage risks using monetary policy alone.

The fact that everybody--left or right, forward or back, up or down--takes it so much for granted that nothing helpful can be expected from the executive and legislative branches that it isn't even worth mentioning is profoundly depressing.

It is August. A pumpkin-spice muffin is not "seasonal" in August. No way.

Resist the Machine!!

: I Don't Think Doc Searls Is Ever Going to Pay Another Cent to Quicken: He writes:

The Doc Searls Weblog : Tuesday, August 30, 2005: Customer Relationship Mismanagement: My accountant has been on the phone, mostly on hold, for 20 minutes (so far) trying to get Quicken to give her the info she needs to restore her copy of QuickBooks after the program disabled itself for want of registration information that is in no obvious place and appears to require talking with a series of customer support personnnel in some other country over a bad phone connection.

Now (half an hour later), a Quicken person is telling her she'll have to wait until tomorrow or later to get help recovering from the worsening of the situation, caused by an apparently incorrect registration number provided by an earlier 'service' person.... At this point the customer service person was required to ask us to express our satisfaction with her performance, and then shunted us to an automated system that asked us two questions about this person's performance, but NOTHING about the hell we went through before we got to a person who could solve our problem.

The whole system is f*d up in so many ways I don't know where to begin, so I won't. I will say it's lame in the extreme for a CRM system to put the whole evaluation burden on one individual, rather than the hold-and-transfer chain that leads to that person. Total time wasted: one hour and ten minutes.

My sympathies. I won't ever pay another cent to Adobe after wasting an hour and a half on phone support because a screen said 'Enter Go-Live serial number' when it should have said 'Enter PageMill serial number.' It would take a personal phone call from the COO before I would pay them another cent for anything.

: Let's Blame Ronald Reagan!: Bush blames 9/11 on Ronald Reagan (and others). He even blames it on himself: he was the one who decided not to retaliate after the attack on the U.S.S. Cole:

Think Progress: From his address today in San Diego:

They looked at our response after the hostage crisis in Iran, the bombings of the Marine barracks in Lebanon, the first World Trade Center attack, the killing of American soldiers in Somalia, the destruction of two U.S. embassies in Africa, and the attack on the USS Cole. They concluded that free societies lacked the courage and character to defend themselves against a determined enemy. After September the 11th, 2001, we've taught the terrorists a very different lesson: America will not run in defeat and we will not forget our responsibilities...

: Daniel Gross Sees the End of the Housing Boom: Daniel Gross writes:

HOME STRETCH: Among the flood of data suggesting high-end housing may be a bit overpriced, a few items have caught my attention in the past few days.

1. High-end home builder Toll Brothers reported a fine quarter last week. But in a follow-up story, Kemba Dunham of the Wall Street Journal noted that "about 38% of buyers during the third quarter had interest-only mortgages, up from 19% a year ago."
2. Business Week had a small graphic showing that in California, almost 20 percent of households spend more than half their income on housing in 2003. For the rest of the U.S., fewer than 10 percent spend more than half their income on housing.
3. Westportnow.com, the website that covers all doings in my home town, reports that a home for sale in what should be the sweet spot of the local market -- about $1.5 million -- is offering a free Mini Cooper as an inducement.

: It's a Close Race!: Daniel Gross believes that Steven Moore has snatched the Stupidest Man Alive crown:

MOORE-ON: It would be nice if an agent with human intelligence edited the articles that appeared on the Wall Street Journal editorial page. If one did, we wouldn't have lines like this.

Stephen Moore, a member of the Journal's editorial board, writes in today's paper:

The explosion of benefits paid to workers is in large part an artifact of the federal tax code, which allows employers to deduct from taxes pensions, health care, child care, and the like, but not wages.

Read it twice. Stephen Moore apparently thinks companies can't deduct wages paid to their workers from their taxable income the way they can deduct pension, health care, and child care costs. And apparently nobody at the Journal's op-ed page knew enough, or thought enough, to correct him.

: Outsourcing!: To China:

Simon World :: United's Chinese Engineers: In a vast country like China, even amidst poor standards for a host of products, China's semiconductor foundries and now an aircraft maintenance firm are demonstrating that it can handle the pressures of high precision and reliability.

At least, that is the faith United Airlines is showing in Ameco Beijing: a story on CNN has United sending all 52 of their 777 aircraft to Beijing for repairs and maintenance for the next five years. Let us not misrepresent Ameco - it is a joint venture between Air China and Lufthansa German Airlines, and many of China's joint ventures have worked wonders (I even tried an excellent red wine from the Chengyu vineyard the other day - miracles never cease)...

Posted by DeLong at August 30, 2005 04:17 PM"

To China:

Simon World :: United's Chinese Engineers: In a vast country like China, even amidst poor standards for a host of products, China's semiconductor foundries and now an aircraft maintenance firm are demonstrating that it can handle the pressures of high precision and reliability.

At least, that is the faith United Airlines is showing in Ameco Beijing: a story on CNN has United sending all 52 of their 777 aircraft to Beijing for repairs and maintenance for the next five years. Let us not misrepresent Ameco - it is a joint venture between Air China and Lufthansa German Airlines, and many of China's joint ventures have worked wonders (I even tried an excellent red wine from the Chengyu vineyard the other day - miracles never cease)...

Daniel Gross believes that Steven Moore has snatched the Stupidest Man Alive crown:

MOORE-ON: It would be nice if an agent with human intelligence edited the articles that appeared on the Wall Street Journal editorial page. If one did, we wouldn't have lines like this.

Stephen Moore, a member of the Journal's editorial board, writes in today's paper:

The explosion of benefits paid to workers is in large part an artifact of the federal tax code, which allows employers to deduct from taxes pensions, health care, child care, and the like, but not wages.

Read it twice. Stephen Moore apparently thinks companies can't deduct wages paid to their workers from their taxable income the way they can deduct pension, health care, and child care costs. And apparently nobody at the Journal's op-ed page knew enough, or thought enough, to correct him.

Daniel Gross writes:

HOME STRETCH: Among the flood of data suggesting high-end housing may be a bit overpriced, a few items have caught my attention in the past few days.

1. High-end home builder Toll Brothers reported a fine quarter last week. But in a follow-up story, Kemba Dunham of the Wall Street Journal noted that "about 38% of buyers during the third quarter had interest-only mortgages, up from 19% a year ago."
2. Business Week had a small graphic showing that in California, almost 20 percent of households spend more than half their income on housing in 2003. For the rest of the U.S., fewer than 10 percent spend more than half their income on housing.
3. Westportnow.com, the website that covers all doings in my home town, reports that a home for sale in what should be the sweet spot of the local market -- about $1.5 million -- is offering a free Mini Cooper as an inducement.

Bush blames 9/11 on Ronald Reagan (and others). He even blames it on himself: he was the one who decided not to retaliate after the attack on the U.S.S. Cole:

Think Progress: From his address today in San Diego:

They looked at our response after the hostage crisis in Iran, the bombings of the Marine barracks in Lebanon, the first World Trade Center attack, the killing of American soldiers in Somalia, the destruction of two U.S. embassies in Africa, and the attack on the USS Cole. They concluded that free societies lacked the courage and character to defend themselves against a determined enemy. After September the 11th, 2001, we've taught the terrorists a very different lesson: America will not run in defeat and we will not forget our responsibilities...

He writes:

The Doc Searls Weblog : Tuesday, August 30, 2005: Customer Relationship Mismanagement: My accountant has been on the phone, mostly on hold, for 20 minutes (so far) trying to get Quicken to give her the info she needs to restore her copy of QuickBooks after the program disabled itself for want of registration information that is in no obvious place and appears to require talking with a series of customer support personnnel in some other country over a bad phone connection. Now (half an hour later), a Quicken person is telling her she'll have to wait until tomorrow or later to get help recovering from the worsening of the situation, caused by an apparently incorrect registration number provided by an earlier "service" person.... At this point the customer service person was required to ask us to express our satisfaction with her performance, and then shunted us to an automated system that asked us two questions about this person's performance, but NOTHING about the hell we went through before we got to a person who could solve our problem.

The whole system is f*d up in so many ways I don't know where to begin, so I won't. I will say it's lame in the extreme for a CRM system to put the whole evaluation burden on one individual, rather than the hold-and-transfer chain that leads to that person. Total time wasted: one hour and ten minutes.

My sympathies. I won't ever pay another cent to Adobe after wasting an hour and a half on phone support because a screen said "Enter Go-Live serial number" when it should have said "Enter PageMill serial number." It would take a personal phone call from the COO before I would pay them another cent for anything.

Matthew Yglesias writes:

TPMCafe || Economic News: As if the hurricane wasn't bad enough, we learn today that poverty is up for the fourth year in a row, median income is still flat, and the only thing preventing an explosion in the number of the uninsured is that federal programs the GOP is busy trying to eliminate are picking up the slack. This is bad stuff. The AP describes all this as happening "[e]ven with a robust economy" but, honestly, how robust is the economy if incomes are stagnating while poverty grows? Not very, I would think.

I expect this bad news will be met with a torrent of mumbo-jumbo, so one should state outright that there are various questions that could be raised about the accuracy or adequacy of the Census Bureau's statistics. That notwithstanding, these statistics are very good at capturing trend lines with a good deal of accuracy, so things are definitely getting worse.

Matt: The mumbo-jumbo started yesterday, with Jonathan Weisman's lead:

Measuring the Economy May Not Be as Simple as 1, 2, 3: The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance.

Don't believe the numbers.

Dean Baker says that Alan Greenspan-worshippers (like me) are deluded:

MaxSpeak, You Listen!: GREENSPANFEST 2005: BE GLAD YOU WEREN'T INVITED: The Federal Reserve Board is having its annual retreat at Jackson Hole, Wyoming and the agenda this year is devoted to a retrospective of Greenspan's 18-year tenure as Fed chairman. The world has not seen a greater display of obsequiousness since the death of Leonid Brezhnev....

1) Mr. Greenspan ignored the stock bubble.... The tens of millions of people who saw much of their retirement savings disappear in the crash are just out of luck, as are the pension funds that are now insolvent because their managers somehow didn't see the bubble.

The proper remedy for the bubble was actually very simple -- talk. If Greenspan used his Congressional testimony and other public speaking opportunities to lay out the case for the bubble, there is little doubt that it would have deflated long before it reached such outlandish proportions.... A fund manager that ignored Greenspan, and kept most of a portfolio in a bubble market, would undoubtedly be sued for negligence by their clients and probably have to pay every penny they owned in damages....

2) Mr. Greenspan promoted the housing bubble... Greenspan's tool for getting out of the recession created by the collapse of the stock bubble was to promote a bubble in the housing market. He did this most blatantly back in the summer of 2002.... When the housing bubble bursts, we will see the loss of $5 trillion in housing bubble wealth.... The economic fallout will also be enormous....

5) Finally, he did not tell the truth when he endorsed President Bush's tax cut in 2001....

Okay, I close with my own praise of Alan Greenspan. In 1995 and 1996 he lowered interest rates and kept them low. This allowed the unemployment rate to fall below the 6.0 percent level.... The decision to allow the unemployment rate to fall to levels that most economists thought would trigger inflation gave millions of people jobs.... The tight labor market of the late nineties allowed for the first sustained growth in real wages for most of the country's workers since the early seventies. We will benefit from this decision for years to come... the country benefited hugely because [of] Alan Greenspan..

I think Dean Baker understates how big a win Greenspan's decision to go for growth in 1995-1996 was. I agree with Dean's criticism (5): Greenspan did not understand how much damage the Bush administration was going to do to America's long-term fiscal stability, and should have worked much harder to aid the deficit-hawk wing of the Bush administration.

(1) and (2) are, I think, harder questions. Dean Baker wants Alan Greenspan to have taken on the role of investment adviser to America--telling Americans when assets are overvalued. Alan Greenspan would say that that is not his role, and that he's not very good at that role: he thought that stocks were overvalued in December of 1996, and high-tech stocks now--long after the end of the dot-com bubble--are twice what they were then. I don't think that it was as simple as "talk."

I also reject the claim that Greenspan should have raised interest rates and added to unemployment in the late 1990s to cool off stocks and in the early 2000s to cool off housing. That seems to me to be a clear loser, and a bad thing.

Where I would criticize Greenspan is in his failure to use his regulatory authority to brake some of the enthusiasm for first high-tech stocks and then housing. Organizations making it easier for individuals to make risky and ill-considered bets are creating systematic risk--and should be subject to heightened scrutiny and raised capital requirements as a result. That both stabilizes the system and potentially cools off the bubble. And that wasn't done.

But my thoughts critical of Greenspan--except in fiscal policy--are unformed. I think that of the three kinds of policy--monetary, fiscal, and financial asset--that Greenspan was concerned with, monetary policy was most important. And Greenspan has done a masterly job at monetary policy.

Today the Census Bureau reports:

Real median earnings of men age 15 and older who worked full-time, year-round declined 2.3 percent between 2003 and 2004, to $40,798. Women with similar work experience saw their earnings decline by 1.0 percent, to $31,223.... There were 37.0 million people in poverty (12.7 percent) in 2004, up from 35.9 million (12.5 percent) in 2003.... The Midwest was the only region to show an increase in their poverty rate.... The South continued to have the highest poverty rate....

The percentage of the nation’s population without health insurance coverage remained unchanged, at 15.7 percent in 2004. The percentage of people covered by employment-based health insurance declined from 60.4 percent in 2003 to 59.8 percent in 2004. The percentage of people covered by government health insurance programs rose in 2004, from 26.6 percent to 27.2 percent, driven by increases in the percentage of people with Medicaid coverage, from 12.4 percent in 2003 to 12.9 percent in 2004. The proportion and number of uninsured children did not change in 2004, remaining at 11.2 percent or 8.3 million...

Yesterday in the Washington Post's Jonathan Weisman told his readers that they shouldn't believe the Census Bureau:

Measuring the Economy May Not Be as Simple as 1, 2, 3: The Census Bureau tomorrow will release the latest statistics on poverty in the United States, the income level of an average household and the number of Americans still lacking health insurance. Don't believe the numbers.

What reasons does Weisman give to support the lead of his article--to support his warning that we should not believe the numbers in today's report?

1. David Malpass wishes that the Commerce Bureau of Economic Analysis had a change-in-wealth rather than a financing-of-investment definition of saving.
2. A number of those without health insurance could afford it, but prefer to spend their money on other things.
3. Marilyn Bryant, making $20,000 a year in Washington D.C., "earns too much money to qualify for any federal assistance" but has a very low standard of living because she lives in an expensive area and pays $5,000 a year in child support to her ex-husband.
4. Because successive White Houses have stuck with the Orshansky measure of poverty, "officially, the poverty rate has drifted upward since 2000, from 11.3 percent to 12.5 percent in 2003. But a more sophisticated measurement... shows the official rate has consistently understated poverty... the percentage of Americans below the poverty line has risen from 12.8 percent in 2000 to 14.2 percent in 2003."
5. We aren't spending enough money collecting economic statistics, and Rahm Emmanuel thinks we should set up a commission to overhaul our statistical agencies.
6. Successive White Houses have stuck with the simple to calculate and interpret Orshansky poverty measure rather than move to a more accurate but less transparent measure.
7. The Consumer Price Index is a fixed-weight index, rather than a chained-weight cost of living index--and if the government used a cost of living index to index Social Security and tax brackets, we would collect more in taxes and pay out less in benefits.
8. The 45-million count of those without health insurance is overstated by a relatively constant 5 to 10 million.
9. "Since poverty levels are not adjusted for regional costs of living, the working poor in expensive urban centers like Washington are routinely excluded from federal programs because their income lifts them above the official poverty line."

Weisman's reason (1) is simply irrelevant: that David Malpass wishes that Simon Kuznets had set the National Income and Product Accounts in a different way doesn't make the BEA's numbers unbelievable. Reason (2) is irrelevant as well: that some people who lack health insurance could afford to buy it does not make estimates of the number who lack health insurance unbelievable. Reason (3) is also irrelevant: that Congress bases program eligibility on income rather than income minus child support does not make the Census Bureau's numbers wrong. Weisman's reason (4) is simply wrong: there are more sophisticated alternative poverty measures that show higher rates of poverty and measures that show lower rates. All measures, however, do show very similar trends and patterns. Reason (5) is bizarre: we should spend more money collecting economic statistics, but that our estimates are not as detailed and informative as we would wish does not mean mean that we should not believe the numbers we have.

Weisman's reason (6) is a reason to report and consider a range of different poverty-level estimates and concepts, and to be cautious in interpreting reported levels of poverty. But it is not a reason to dismiss the trends and movements in poverty over time that the Census Bureau reports. Reason (7) is a reason to adjust real earnings estimates upward: on the most appropriate cost-of-living index basis, full-time year-round median male real earnings probably fell by only 1.5% rather than 2.3% in 2004. Reason (8) is, once again, a reason to adjust the level of uninsured--but not to doubt the trends in health insurance gaps and in the erosion of the employer-sponsored health-insurance system that we have seen over time.

Only reason (9) is truly cogent in the way that Weisman claims: differences in regional and local costs of living do make comparisions of regional and local poverty estimates unreliable, and do channel less federal poverty-support money to people living in high-cost areas.

The conclusion we should draw? Don't believe Jonathan Weisman. When Weisman says, "Don't believe the numbers" the Census Bureau released today on "poverty... income... and the number of Americans still lacking health insurance," he is not playing it straight. The numbers are quite good. The biases in their levels are relatively small. And they are accurate indicators of changes, trends, and patterns.

PGL at Angry Bear writes:

Angry Bear: Robert Hall discusses Separating the Business Cycle from Other Economic Fluctuations at the Federal Reserve Bank of Kansas City's annual Jackson Hole conference. David Altig claims Hall explained it all. But what does Hall say about the most recent weakening of the labor market?

For example, all practical accounts of the recession of 2001 emphasize the huge decline in high-tech investment. In earlier recessions, declines in home-building were prominent features. On the other hand, more theoretically inclined macroeconomists tend to take a decline in productivity--or at least a pause in the normal growth of productivity--as the central driving force.

There is, however, a problem:

Nonfarm Business Productivity

What decline in productivity--or at least a pause in the normal growth of productivity--does Hall think that we are supposed to see in 2001, and identify as the driving force of the subsequent weakness in the labor market? There's no decline in productivity. There's no slowdown in productivity growth.

It is difficult to label something that doesn't exist as the "principal cause" of a business-cycle downturn...

Is there anybody else in the world who regularly confuses Robert Heilbroner with Robert Heinlein?

The main Economics 101b website will be here.

This is my schedule for this fall. The distressing thing is that nobody has told me where the PEIS thesis seminar is supposed to meet...

Tyler Cowen reads Charles Mann (2005), 1491: New Revelations of the Americas Before Columbus (New York: Knopf: 140004006X) http://www.amazon.com/exec/obidos/asin/140004006X/braddelong00.

Marginal Revolution: 1491:

At the DNA level, all the major cereals -- wheat, rice, maize, millet, barley, and so on -- are surprisingly alike. But despite their genetic similarity, maize looks and acts different from the rest. It is like the one redheaded early riser in a family of dark-haired night owls. Left untended, other cereals are capable of propagating themselves. Because maize kernels are wrapped inside a tough husk, human beings must sow the species -- it cannot reproduce on its own...no wild maize ancestor has ever been found, despite decades of search. Maize's closest relative is a mountain grass called teosinte that looks nothing like it...And teosinte, unlike wild wheat and rice, is not a practical food source; its "ears" are scarcely an inch long and consist of seven to twelve hard, woody seeds. An entire ear of teosinte has less nutritional value than a single kernel of modern maize...

...the modern species [of maize] had to have been consciously developed by a small group of breeders who hunted through teosinte strands for plants with desired traits. Geneticists from Rutgers University...estimated in 1998 that determined, aggressive, plan breeders -- which Indians certainly were -- might have been able to breed maize in as little as a decade...modern maize was the outcome of a bold act of conscious biological manipulation -- "arguably man's first, and perhaps his greatest, feat of genetic engineering," [Nina Federoff]..."To get corn out of teosinte is so -- you couldn't get a grant to do that now, because it would sound so crazy...Somebody who did that today would get a Nobel Prize! If their lab didn't get shut down by Greenpeace, I mean."

That is from 1491: New Revelations of the Americas Before Columbus, by Charles C. Mann. I loved this book, which also tells you why Norte Chico, at its peak, may have been as advanced as the Sumerians. Do note the author is a journalist, the book covers much of the New World, and the evidence in this area is in general muddy. So the book almost certainly contains mistakes. But the judgments are generally well-reasoned, the author is remarkably well-read, and the area I know the best -- the Nahua culture of early Mexico -- is presented in a sober and balanced manner.

How does he have enough time to still be reading brand-new nonfiction books printed three weeks ago? Doesn't he know that the semester is starting? Don't they teach at George Mason?

Brad DeLong [email protected] Office Hours: W 11-1 Evans 601, or by appointment http://www.j-bradford-delong.net/

Suresh Naidu [email protected] Office Hours: MW 11-12 place tba

Lecture Meets: MWF 10-11, 70 Evans
Sections Meet: MW 9-10, WF 8-9, 41 Evans

This is the syllabus for the first half of Economics 101b, Macroeconomics. It carries the course up until October 12. The syllabus for the second half will be distributed at the end of September. It will depend on (a) how well the class does in the month of September, and (b) what are currently "hot topics" in the economic news. The U.S. budget deficit, the looming possibility of a major U.S. dollar-financial crisis, the dilemmas of Federal Reserve policy, and the ongoing industrial revolutions in East and South Asia will certainly be on the second-half syllabus, but there will be other topics as well.

This is the go-faster and do-more version of macroeconomics--the study of the determination of output, production, income, employment, and prices in the economy as a whole. Four books are required:

1. The intermediate macroeconomics textbook I am most comfortable with is the one that I and Marty Olney have written. DeLong and Olney (2005), Macroeconomics 2nd ed. (New York: McGraw-Hill/Irwin) http://www.amazon.com/exec/obidos/asin/0072877588. Here is our explanation of why we wrote it the way we did: http://www.j-bradford-delong.net/Teaching_Folder/manifesto.html
2. The Economic Report of the President, available online at http://w3.access.gpo.gov/eop/. (You might also browse, for recent economic data, the CEA-JEC Economic Indicators http://www.access.gpo.gov/congress/eibrowse/broecind.html.
3. Robert Heilbroner's The Worldly Philosophers (New York: Touchstone) http://www.amazon.com/exec/obidos/asin/068486214X/.
4. Alan Blinder and Janet Yellen's (2001) The Fabulous Decade (New York: Century Foundation) http://www.amazon.com/exec/obidos/asin/0870784676.

If you want alternative takes at the subject matter, let me recommend two alternative textbooks: Greg Mankiw's Macroeconomics http://www.amazon.com/exec/obidos/ASIN/0716752379, and Olivier Blanchard's Macroeconomics http://www.amazon.com/exec/obidos/ASIN/0131860267/.

Since this is a go-faster do-more course, we will go faster and do more. As a group, the class will be made up of people comfortable using calculus, so we'll feel free to use it in lectures, handouts, and in problem sets (and on exams). If you aren't comfortable using calculus, you probably don't belong here and may well not have a good time...

We--Suresh Naidu and I are keenly aware that almost everybody signing up for this course could alternatively take and do very well in Economics 100b. We are anxious not to have students vote with their feet for an easier course and learn less because they fear the consequences of lowering their grade point average. Therefore this course will have a high curve: the idea is that nobody should get a lower grade than they would have gotten had they decided to take Economics 100b instead: Grades will be based on the following:

• 30% from a (short: two hours long) Final Exam to be given Tuesday December 13 8-11 AM
• 20% from a first Midterm Exam to be given Wednesday September 28. (This is really early to give a midterm. Nevertheless it is important to give a midterm exam early in the course to serve as a reality check: so that students in trouble can figure out how much trouble they are in, and also--more important--so that at least one of us (DeLong) can figure out how unrealistic and detached from reality his beliefs about his teaching effectiveness are.)
• 20% from a second Midterm Exam to be given November 13.
• 20% from Problem Sets and other assignments to be due at the start of section. Problem Sets will be graded either 0 points (didn't hand it in at start of section), 1 point (handed it in but didn't make an effort), and 2 points (made an effort--whether successful or not--to solve all the problems).
• 10% on section participation.

No makeup exams will be offered. Students who miss one of the three exams will have their scores for the other exams reweighted to add up to 70%. Students who miss two of the three exams should not expect to pass.

Preliminaries

Readings:

• DeLong and Olney (2005), Macroeconomics 2nd ed., chs. 1-3
• Heilbroner, The Worldly Philosophers, entire.

Classes:

M Aug 29: Introduction to Course, and National Income Accounting
W Aug 31: The Index Number Problem, and Key Economic Variables F Sep 2: How Macroeconomists Think (problem set 1 issued)

Sections: erosion of Okun's Law Handout http://www.j-bradford-delong.net/movable_type/2003_archives/002121.html.

Long-Run Economic Growth

Readings:

• DeLong and Olney (2005), Macroeconomics, chs. 4-5.
• Michael Kremer (1993), "Population Growth and Technological Change: One Million B.C. to 1990," Quarterly Journal of Economics 108:3 (Aug 1993), pp. 681-716. (Alternative link.)

Classes:

W Sep 7: Patterns of Economic Growth and Divergence: Facts
F Sep 9: Theories of Economic Growth and Divergence: The Solow Model (problem set 2 issued/problem set 1 due)

Sections: only one section this week.

M Sep 12: Using the Solow Model
W Sep 14: Inadequacies of the Solow Model
F Sep 16: Extensions and Puzzles (problem set 3 issued/problem set 2 due)

Sections: Kremer (1993) QJE on the question was an industrial revolution inevitable?

If There Were No Business Cycles Proper

Readings: DeLong and Olney (2005), Macroeconomics, chs. 6-7.

Classes:

M Sep 19: Components of Aggregate Demand: C, I, G, NX
W Sep 21: Flexible-Price Equilibrium
F Sep 23: Using the Flexible-Price Model (problem set 3 due/mock midterm handed out)

Sections: Go over problem set 2. Cover wealth in the consumption function; behavioral theories of consumption; cash flow and investment.

Monetary Economics When Prices Are Flexible

Readings: DeLong and Olney (2005), Macroeconomics, ch 8.

Classes:

M Sep 26: The Quantity Theory of Money
W Sep 28: FIRST MIDTERM EXAM

Sections: one section only this week.

Business Cycles Proper

Readings:

• DeLong and Olney (2005), Macroeconomics, chs. 9-12.
• Olivier Blanchard (1981), "Output, the Stock Market, and Interest Rates," American Economic Review 71:1 (March), pp. 132-43 http://links.jstor.org/sici?sici=0002-8282%28198103%2971%3A1%3C132%3AOTSMAI%3E2.0.CO%3B2-Q.
• J. Bradford DeLong (1997), "America's Peacetime Inflation," in Christina Romer and David Romer. eds., Reducing Inflation: Motivation and Strategy (Chicago: University of Chicago Press, 1997)http://www.j-bradford-delong.net/pdf_files/Peacetime_Inflation.pdf
• James Galbraith (1997), "Time to Ditch the NAIRU," Journal of Economic Perspectives Vol. 11, No. 1. (Winter), pp. 93-108 http://links.jstor.org/sici?sici=0895-3309%28199724%2911%3A1%3C93%3ATTDTN%3E2.0.CO%3B2-H.
• Joseph Stiglitz (1997), "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives Vol. 11, No. 1. (Winter), pp. 1-8. http://links.jstor.org/sici?sici=0895-3309%28199724%2911%3A1%3C3%3AROTNRH%3E2.0.CO%3B2-C.

Classes:

F Sep 30: Sticky Prices, Consumption, and the Multiplier (problem set 4 issued)
M Oct 3: Investment and the IS Curve
W Oct 5: Using the IS Curve to Understand the Economy
F Oct 7: Inflation and the Phillips Curve (problem set 5 issued/problem set 4 due)

Sections. Go over midterm. Cover Blanchard (1981).

M Oct 10: The Natural Rate of Unemployment and the Federal Reserve
W Oct 12: From the Short Run to the Long Run
F Oct 14: Understanding American Business Cycles Using the Phillips Curve/Monetary Policy framework (problem set 6 issued/problem set 5 due)

Sections: go over problem set 4, and supply shocks.

Matthew Yglesias reads David Brooks:

TPMCafe || Capacities, Anyone?: [W]e have to think in the long term. For fear of straining the armed forces, the military brass have conducted this campaign with one eye looking longingly at the exits.

And Matthew's head explodes. He writes:

To me, this is a lot like acknowledging that the real reason we haven't embarked on interstellar colonization is that our rocketships can't travel to other stars and then slamming NASA for timidity. Why shouldn't the military brass fear straining the armed forces? It's nice to point out that if America's capacities were much larger than they actually are, that if we used those capacities cleverly we could do all kinds of stuff, but what does it really mean at the end of the day? Not much, as far as I can see.

David Brooks's attempt to shove responsibility from the Bushies to the military is indeed the most idiotic thing I've seen this month.

When looking for food in Jackson Hole, the preferred options are:

1. Go down to the Snake River, catch a trout, build a wood fire by the bank, cook the trout, and eat it.
2. If that's not possible (either because of a lack of time, a lack of fire-making skills, or a fear of a close encounter with an ursus horribilis in the mood for either trout or east African plains ape), catch a trout, carry it back to a restaurant, and ask them to cook it for you.
3. If that's not possible, go to a restaurant and order trout.
4. If that's not possible, grab the pre-cooked trout from the buffet steam table.
5. If that's not possible, think about how good trout would taste.

In other news from Jackson Hole, I was pleased to see Janet Yellen standing up for the eastern face of the Sierra Nevada as the equal of--and perhaps superior to--the eastern face of the Grand Tetons in beauty and majesty. Federal Reserve bank presidents should stand up for the mountains of their own Federal Reserve districts.

Ah. Nell Henderson in the Washington Post:

Rubin Praises Stance Of Greenspan on Deficits: Greenspan "stands for the principle of fiscal discipline," Rubin said in an interview before he delivered a speech at the symposium here on Greenspan's legacy at the central bank.Bush administration officials dispute Rubin's explanation for the current budget deficits.

"The greatest single cause of the fiscal surplus of the 1990s was the stock market bubble, which led to an unsustainably high level of economic activity and tax revenues," said Ben S. Bernanke, the chairman of Bush's Council of Economic Advisers.

Together with the 2001 terrorist attacks and the war on terror, the collapse of the bubble was the major cause of the shift toward deficits after 2000, said Bernanke, who is attending the conference.

The Fed is supposed to craft monetary policy independent of political pressures from the White House or Congress, something economists agree it has done under Greenspan.... Rubin, in his prepared remarks... [said:] "I believe the Fed should not only pursue sound and disciplined monetary policy, but should also stand for the principle of sound and disciplined fiscal policy." Bernanke declined to respond to Rubin's suggestion that the Fed should oppose budget deficits. Rubin praised Greenspan for advocating deficit reduction in 1993, both in discussions with Clinton and in his public comments. And he said Greenspan "never engaged, correctly in my view," in the political debate about Clinton's proposals to reduce the deficit through specific tax increases....

[Greenspan] warned [in 2001] that the forecasts could be wrong and suggested the [tax] cuts be structured with "triggers" that would alter them automatically if deficits reappeared. Greenspan never endorsed Bush's tax cut proposal specifically, but his general support for tax cuts helped win passage of the president's package, which was enacted without such triggers. Greenspan has said since that it is unfair for critics to blame him for the deficits, since his advice on triggers was ignored. Rubin described Greenspan's 2001 testimony as offering "a truly complex framework for making the decision" and added, "The framework, on balance, was right."

The strange thing--the very strange thing--is Ben Bernanke's comment. Of the swing in the federal budget from a deficit of 4.7% in 1992 to a surplus of 2.4% in 2000--a swing of 7.1 percentage points--approximately 2.0% is due to a booming economy, an extra 1.0% to the high value of capital gains taxes paid in 2000 because of the high value of the stock market, 3.0% to the effects of the Clinton 1993 deficit-reduction package, and 1.0% to the effects of the 1990 Bush-Mitchell-Foley deficit reduction package. At most 1/3 of the extra revenues from a booming economy can be attributed to the bubble. Some of the fact that the economy was booming--that we had a high investment recovery--was due to the fact that, because of the deficit-reduction packages, the federal government was no longer draining the financing away from American business.

How Ben Bernanke converts a maximum of 1.7 percentage points of deficit reduction into "the greatest single cause of the fiscal surplus" is a mystery to me. Why Nell Henderson doesn't remember enough about the 1990s to even question Bernanke's assertion is a riddle. And why Nell Henderson couldn't be bothered to take the two minutes that would be necessary to find one of the many people in Jackson Hole--me or Gene Sperling or Alan Blinder or Larry Summers or a host of others--who have these numbers near their fingerprints and could de-bamboozle her... that's an enigma.

Hilzoy of Obsidian Wings thinks about explanations vs. justifications and unwillingly draws the bright line between "explaining" and "justifying":

Obsidian Wings: Explanation, Justification, Blah Blah Blah: I was so hoping not to write anything about Brad DeLong's post on explanation v. justification -- it is, after all, my day job. But.... To start with the basics: explanation and justification are two quite different things. When you explain something, you try to say why it happened. You do not need to take a position on whether it was good or bad that it happened; you just try to figure out what caused it. When you justify something, you try to say why it was right that something happened. You may be interested in its causes, but only insofar as these affect the moral question involved.... We can try to explain anything that happens.... When rational agents are involved, however, sometimes the right explanation of their conduct refers to their reasons -- why they thought that they were justified in acting as they did. This is not, obviously, a form of explanation that's available to us when we try to understand the motions of the planets....

When we explain the behavior of people using reasons, we normally think not just that they're set up to be able to get the right answer, as my calculator is, but also that they're capable of understanding those reasons and acting on them, as my calculator is not. So explaining via reasons isn't just a heuristic shortcut, as in the case of a calculator.... [And] what matters is not whether the reasons are good ones, but just that they believed them....

If this is right, then there is a clear and obvious difference between explanation and justification. So why do people tend to confuse the two? One easy reason is that both, when applied to people, can cite the reasons why those people did what they did. They will, of course, cite them in different ways.... Both the role of reasons and the form of necessity appealed to in explanation and justification are different, but people aren't always completely clear about this....

The basic view of moral responsibility underlying this is: if you do something which you have every reason to believe could lead to some bad outcome, and if, given what you know at the time, you should not do this thing, and if it does lead to the bad outcome, then you are responsible for that outcome.... This general view explains why responsibility is not zero-sum. The fact that some bad decision of mine helped to produce some state of affairs does not imply that no bad decision of anyone else's helped to produce it as well.... [W]hen someone says... that our decision to go into Iraq with too few troops contributed to the breakdown of order and the murder of innocent Iraqis, what she says does not imply, in any way, that anyone else is less responsible... that Iraqi insurgents are not fully responsible for what they do....

She then goes on to point out that there are circumstances under which it is definitely not OK to offer certain kinds of explanations:

Just because something is true doesn't mean that it's OK to say it in a given situation. For instance: suppose you decide to play blind man's buff on a fifth-floor balcony, and end up falling over the railing onto the sidewalk below, and, as luck would have it, I am standing nearby. And suppose that instead of calling an ambulance, or yelling for a doctor, or tending to your wounds myself, I say: that was really stupid of you, or: I just finished cleaning this sidewalk, and now you've gotten blood all over it.... Just because they're true, however, doesn't mean that there are not other grounds for criticizing me for saying them. I am heartless, more concerned with pointing out your failings than with saving your life, etc.... If my first response to the sight of you bleeding on the sidewalk should be to tend to your wounds, not to tell you how dumb you were, then by the same token my first response to 9/11 should have been to tend to, or (if I wasn't in a position to help directly) at least to mourn with, the dead and injured and those who loved them. It should not have been to point out America's role (if any) in the genesis of terrorist movements; and anyone whose first response to 9/11 was not horror but blaming America would, I think, have shown real moral ugliness....

He writes:

Greenspan Chides Investors - New York Times: Even as he was being praised for fostering two decades of rising prosperity, Alan Greenspan, the chairman of the Federal Reserve, warned on Friday that people have been unrealistic in believing that the economy has become permanently less risky. In the first of two speeches at a Fed symposium about the "Greenspan legacy," the Fed chairman implicitly took aim at both the torrid run-up in housing prices and at the broader willingness of investors to bid up the prices of stocks and bonds and accept relatively low rates of return. Both trends reflect what Mr. Greenspan said was the increased willingness of investors to accept low "risk premiums, a willingness based on a complacent assumption that the low interest rates, low inflation and strong growth of recent years are likely to be permanent."

"Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher prices," he said. "This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums." Mr. Greenspan also noted that consumers were more willing to spend money based on an apparent increase in wealth, rather than increases in their earnings, when part of that wealth was based on gains from stocks or real estate that could readily disappear....

Many Fed officials are expecting President Bush to decide on a successor this fall to give financial markets time to prepare and to allow the confirmation process to be completed in the Senate by the time Mr. Greenspan's term expires. The anxiety about a new Fed chairman reflects worries about Mr. Greenspan's nearly mythic reputation as the most powerful and effective central banker of modern times. But it also reflects the challenges that he will be leaving behind, among them issues being much discussed here like the United States' large current-account deficit and rapidly rising foreign indebtedness; the possibility of a major plunge in the dollar; and the prospect of today's big deficits swelling in the absence of fiscal discipline by either the White House or Congress.

President Bush has given no hint of his intentions. Almost all of the most widely rumored candidates were in Jackson Hole: Martin Feldstein, an economist at Harvard; R. Glenn Hubbard, a top former economic adviser to President Bush; and Ben S. Bernanke, a former Fed governor and the chairman of the Council of Economic Advisers. Another possible candidate, Lawrence B. Lindsey, a former director of Mr. Bush's National Economic Council, did not attend.

In his comments on Friday, Mr. Greenspan did not appear to be signaling a new desire by the Fed to pop a potential bubble in housing prices or to curb other forms of risk-taking. But he and a growing number of Fed officials do appear more intent on talking investors down from what they see as a potentially dangerous level of optimism and complacency. Housing prices have climbed far faster than overall inflation and far faster than household incomes for the last five years, partly in response to the Fed's policy of keeping interest rates low but also because of speculative behavior that is increasingly reminiscent of the frenzy over technology stocks just before the market bubble collapsed in 2000. But Mr. Greenspan was also alluding to a much broader pattern of economic behavior, an increased hunger among investors to look for higher profits wherever they might be and to pay higher prices for everything from bonds of Latin American nations to shares in risky hedge funds.

Mr. Greenspan's remarks also hark back to what he has called the "conundrum" of long-term interest rates declining even as the Federal Reserve has been systematically raising the overnight federal funds rate on loans between banks. The conundrum has been somewhat less in evidence lately, as interest rates on long-term 10-year Treasury bonds have edged higher. Still, long-term rates are no higher now than they were just before the Fed began raising overnight lending rates in June 2004.

Mr. Greenspan has adamantly insisted, despite criticism from some economists, that the Fed's job is not to pop speculative bubbles because bubbles are extremely difficult to define and because the Fed's tools - like a sharp increase in interest rates - could cause more damage to the economy than they might prevent. But his comments nevertheless did suggest that the central bank wants to preach a new gospel of caution that might damp what Mr. Greenspan once called the "irrational exuberance" of investors.

As he has many times in the past, but with somewhat more urgency in this speech, Mr. Greenspan pleaded for policy makers to resist the temptation to set trade and financial barriers to protect jobs from foreign competition. The openness and flexibility of the United States, he said, had allowed it to weather the shocks of terrorist attacks in 2001 with only a mild recession and had thus far allowed the country to endure the escalation of oil prices with little disruption. "The more flexible an economy, the greater its ability to self-correct in response to the inevitable, often unanticipated disturbances," he said.

The symposium here this weekend, a select gathering of about 100 economists and central bank officials, attracted an unusually stellar crowd, in part because it is the last such gathering before Mr. Greenspan steps down. Xiaochuan Zhou, governor of China's central bank, spent much of the day huddled in meetings with American and European officials. Jean-Claude Trichet, president of the European Central Bank, and Mervyn A. King, governor of the Bank of England, were here as well. Robert E. Rubin, Treasury secretary under President Bill Clinton, sang Mr. Greenspan's praises at lunch.

Matthew Yglesias writes:

TPMCafe || Holds Up Well?: For all I know, the uncontroversial parts of [Herrnstein and Murray's The Bell Curve book] (which I understand to have been the clear majority of the text) hold up just find, but the controversial stuff about race and IQ doesn't hold up at all...

Ummm... No.

The "uncontroversial" parts of the book are a set of claims that:

1. Genetically-inherited intelligence is the really important driver of socioeconomic success or failure in America.
2. American society is or is about to become highly stratified by genetically-inherited intelligence.
3. An important consequence of this is that there is nothing we can do to prevent the children of the rich and powerful from being rich and powerful themselves.
4. Because the reason they are rich and powerful is because they are members of a genetic cognitive elite.

These are all wrong too. As Bowles and Gintis report:

Brad DeLong's Semi-Daily Journal: Why Oh Why Can't We Have a Better Press Corps? (Michael Barone: Intellectual Garbage Scow Edition): If the heritability of IQ were 0.5 and the degree of assortation, m, were 0.2 (both reasonable, if only ball park estimates) and the genetic inheritance of IQ were the only mechanism accounting for intergenerational income transmission, then the intergenerational correlation [of lifetime income] would be 0.01, or roughly two percent [of] the observed intergenerational correlation [of lifetime income between parents and children].

Yes, America is an increasingly stratified society. Yes, a huge amount of inequality is inherited. No, differences in IQ--acting both directly on job performance and indirectly because higher IQ people get more education--is not a terribly important source of income inequality. No, inheritance of genetic factors shaping IQ is not more than a trivial source of the intergenerational transmission of income inequality.

He writes:

www.AndrewSullivan.com - Daily Dish: One of my proudest moments in journalism was publishing an expanded extract of a chapter from [Herrnstein and Murray's] "The Bell Curve" in the New Republic before anyone else dared touch it. I published it along with multiple critiques (hey, I believed magazines were supposed to open rather than close debates) - but the book held up, and still holds up as one of the most insightful and careful of the last decade...

The impeccably right-wing Thomas Sowell certainly doesn't think so. And Thomas Sowell knows a hell of a lot more about these issues than Andrew Sullivan does:

Notes: What Thomas Sowell Thinks of The Bell Curve: Archive Entry From Brad DeLong's Webjournal: Strangely, Herrnstein and Murray refer to "folklore" that "Jews and other immigrant groups were thought to be below average in intelligence. " It was neither folklore nor anything as subjective as thoughts. It was based on hard data, as hard as any data in The Bell Curve. These groups repeatedly tested below average on the mental tests of the World War I era, both in the army and in civilian life. For Jews, it is clear that later tests showed radically different results--during an era when there was very little intermarriage to change the genetic makeup of American Jews.

My own research of twenty years ago showed that the IQs of both Italian-Americans and Polish-Americans also rose substantially over a period of decades. Unfortunately, there are many statistical problems with these particular data, growing out of the conditions under which they were collected. However, while my data could never be used to compare the IQs of Polish and Italian children, whose IQ scores came from different schools, nevertheless the close similarity of their general patterns of IQ scores rising over time seems indicative--especially since it follows the rising patterns found among Jews and among American soldiers in general between the two world wars, as well as rising IQ scores in other countries around the world.

The implications of such rising patterns of mental test performance is devastating to the central hypothesis of those who have long expressed the same fear as Herrnstein and Murray, that the greater fertility of low-IQ groups would lower the national (and international) IQ over time. The logic of their argument seems so clear and compelling that the opposite empirical result should be considered a refutation of the assumptions behind that logic....

A man who scores 100 on an IQ test today is answering more questions correctly than his grandfather with the same IQ answered two-generations ago, then someone else who answers the same number of questions correctly today as this man's grandfather answered two generations ago may have an IQ of 85.

Herrnstein and Murray openly acknowledge such rises in IQ and christen them "the Flynn effect," in honor of Professor Flynn who discovered it. But they seem not to see how crucially it undermines the case for a genetic explanation of interracial IQ differences. They say:

The national averages have in fact changed by amounts that are comparable to the fifteen or so IQ points separating blacks and whites in America. To put it another way, on the average, whites today differ from whites, say, two generations ago as much as whites today differ from blacks today. Given their size and speed, the shifts in time necessarily have been due more to changes in the environment than to changes in the genes.

While this open presentation of evidence against the genetic basis of interracial IQ differences is admirable, the failure to draw the logical inference seems puzzling. Blacks today are just as racially different from whites of two generations ago as they are from whites today. Yet the data suggest that the number of questions that blacks answer correctly on IQ tests today is very similar to the number answered correctly by past generations of whites. If race A differs from race B in IQ, and two generations of race A differ from each other by the same amount, where is the logic in suggesting that the IQ differences are even partly racial?

Herrnstein and Murray do not address this question, but instead shift to a discussion of public policy:

Couldn't the mean of blacks move 15 points as well through environmental changes? There seems no reason why not--but also no reason to believe that white and Asian means can be made to stand still while the Flynn effect works its magic.

But the issue is not solely one of either predicting or controlling the future. It is a question of the validity of the conclusion that differences between genetically different groups are due to those genetic differences, whether in whole or in part. When any factor differs as much from Al to A2 as it does from A2 to B2, why should one conclude that this factor is due to the difference between A in general and B in general?...

A remarkable phenomenon commented on in the Moynihan report of thirty years ago goes unnoticed in The Bell Curve--the prevalence of females among blacks who score high on mental tests. Others who have done studies of high- IQ blacks have found several times as many females as males above the 120 IQ level. Since black males and black females have the same genetic inheritance, this substantial disparity must have some other roots, especially since it is not found in studies of high-IQ individuals in the general society, such as the famous Terman studies, which followed high-IQ children into adulthood and later life. If IQ differences of this magnitude can occur with no genetic difference at all, then it is more than mere speculation to say that some unusual environmental effects must be at work among blacks. However, these environmental effects need not be limited to blacks, for other low-IQ groups of European or other ancestries have likewise tended to have females over-represented among their higher scorers, even though the Terman studies of the general population found no such patterns.

One possibility is that females are more resistant to bad environmental conditions, as some other studies suggest. In any event, large sexual disparities in high-IQ individuals where there are no genetic or socioeconomic differences present a challenge to both the Herrnstein- Murray thesis and most of their critics.

Black males and black females are not the only groups to have significant IQ differences without any genetic differences. Identical twins with significantly different birthweights also have IQ differences, with the heavier twin averaging nearly 9 points higher IQ than the lighter one. This effect is not found where the lighter twin weighs at least six and a half pounds, suggesting that deprivation of nutrition must reach some threshold level before it has a permanent effect on the brain during its crucial early development.

Perhaps the most intellectually troubling aspect of The Bell Curve is the authors' uncritical approach to statistical correlations. One of the first things taught in introductory statistics is that correlation is not causation. It is also one of the first things forgotten, and one of the most widely ignored facts in public policy research. The statistical term "multicollinearity," dealing with spurious correlations, appears only once in this massive book.

Multicollinearity refers to the fact that many variables are highly correlated with one another, so that it is very easy to believe that a certain result comes from variable A, when in fact it is due to variable Z, with which A happens to be correlated. In real life, innumerable factors go together. An example I liked to use in class when teaching economics involved a study showing that economists with only a bachelor's degree had higher incomes than economists with a master's degree and that these in turn had higher incomes than economists with Ph.D.'s. The implication that more education in economics leads to lower incomes would lead me to speculate as to how much money it was costing a student just to be enrolled in my course. In this case, when other variables were taken into account, these spurious correlations disappeared. In many other cases, however, variables such as cultural influences cannot even be quantified, much less have their effects tested statistically...

They are out there in abundance: lots of bison bison, alphes alphes, cervus canadensis, and canis latrans. The racks on the cervi are very impressive: you wonder why they don't get caught on trees and hinder their mobility.

The canes are very impressive as well--they are big. These are not scrawny garbage-eating coyotes. These are animals that are clearly and rapidly evolving to a larger size: a bigger body mass is a great help in keeping warm through the winter.

And now that fires have opened up some of the sight lines, you can see Mt. Moran all the way from Lake Lewis in Yellowstone...

It was in the late spring of 1985 that one of my elders explained to me that I was grossly ignorant: that the magnitude of the U.S. current account deficit was such that a hard landing was inevitable. Foreigners would be unwilling to finance the U.S. trade deficit for long. The dollar would fall. As the dollar fell, foreigners would demand high expected depreciation premia. As the dollar fell, rising import prices would push up American inflation. The FOMC would have no good options: it would have to choose inflation or recession--and if it was unlucky, it would have both plus financial crisis and depression as well.

I was convinced.

But somehow from 1987 to 1990 the U.S. made it through a 3-percentage-points-of-GDP decline in its trade deficit without a blip in inflation, and with barely a blip in asset prices and interest rates.

How was this reversal of two decades ago accomplished without severe macroeconomic upset? And is there anything different about today that makes the Plaza-Louvre experience a bad model?

Teton County, Wyoming, ranks sixth in the United States in per capita income--behind Marin (north of San Francisco), Manhattan, Falls Church, Virginia (think lobbyist central), Pitkin County, Colorado (don't know much about it), and Fairfield County, Connecticut (think "Greenwich").

Cell phone reception at the Jackson Lake Lodge is amazing.

There is one sentence in Alan Blinder's and Ricardo Reis's paper on the Greenspan era that I wish had been greatly expanded, into a page, or a section--or a book. It is: "we are perfectly comfortable with the long-standing practice of central bankers all over the world to rail against excessive fiscal deficits." The principal criticism that future historians may make of today's Federal Reserve is that it has not been vocal enough on this issue. In the long-run the Federal Reserve must fail to provide price stability if nominal government debt grows significantly faster than real GDP. Our High Politicians in Washington have dismantled the institutional and procedural mechanisms--for example, the Budget Enforcement Act--that effectively constrained government debt growth. Unless these mechanisms can be rebuilt--which will, I think, require that future Federal Reserves take a more active and aggressive role in lecturing High Politicians on their fiscal fecklessness--future FOMCs may well find that effective price stability is unattainable. The long-run stakes are very high. There is no sign that our executive and legislative branches understand them.

He says:

I would like to thank the organizers of this conference for taking the highly-productive step of banning PowerPoint from this conference. This promises to double the speed at which we can learn...

Kenneth Chang digs himself deeper into his hole. He defends himself against the charge that the "there's a fight!" headline and the "Intelligent Design people make serious arguments" lead of his "Intelligent Design" article are misleading and unprofessional:

Brad DeLong's Semi-Daily Journal: Why Oh Why Can't We Have a Better Press Corps? (Kenneth Chang Edition): Chang: "I don't think anyone reading just the first eight paragraphs [of the article] would come to that conclusion" that there was "'a raging scientific controversy' or 'The New York Times blesses intelligent design'," but anyone who was only interested enough to read eight paragraphs probably wasn't going to be swayed one way or the other no matter what I wrote."...

Once again, here is the lead:

In Explaining Life's Complexity, Darwinists and Doubters Clash: At the heart of the debate over intelligent design is this question: Can a scientific explanation of the history of life include the actions of an unseen higher being? The proponents of intelligent design, a school of thought that some have argued should be taught alongside evolution in the nation's schools, say that the complexity and diversity of life go beyond what evolution can explain. Biological marvels like the optical precision of an eye, the little spinning motors that propel bacteria and the cascade of proteins that cause blood to clot, they say, point to the hand of a higher being at work in the world.

In one often-cited argument, Michael J. Behe, a professor of biochemistry at Lehigh University and a leading design theorist, compares complex biological phenomena like blood clotting to a mousetrap: Take away any one piece - the spring, the baseboard, the metal piece that snags the mouse - and the mousetrap stops being able to catch mice. Similarly, Dr. Behe argues, if any one of the more than 20 proteins involved in blood clotting is missing or deficient, as happens in hemophilia, for instance, clots will not form properly.

Such all-or-none systems, Dr. Behe and other design proponents say, could not have arisen through the incremental changes that evolution says allowed life to progress to the big brains and the sophisticated abilities of humans from primitive bacteria. These complex systems are "always associated with design," Dr. Behe, the author of the 1996 book "Darwin's Black Box," said in an interview. "We find such systems in biology, and since we know of no other way that these things can be produced, Darwinian claims notwithstanding, then we are rational to conclude they were indeed designed."...

As a number of people have noted, the ID-side Discovery Institute is happy with Chang's article; the assembled biologists of the world are not.

Andrew Samwick gives a very good version of the economists' rant against the CAFE standards. I, too, was abashed to discover that my Subaru Legacy is an "SUV."

From Congress's point of view, CAFE is useful because it keeps people from thinking that Congress is taxing them. What CAFE does is to impose a tax on fuel-inefficient vehicles which is then rebated as a subsidy on fuel-efficient vehicles. This tax, however, is collected and then rebated by the auto manufacturers themselves--they reduce prices on fuel-efficient vehicles below what they would otherwise be in order to meet their CAFE targets, and make it up by raising margins on fuel-inefficient vehicles.

Thus Congress is far from the scene of the tax. The problem is that, as Andrew says, it is a lousy tax to be levying. What we want to tax is gasoline usage, and taxing fuel-inefficient vehicles is a lousy substitute.

Twelve years ago the Clinton administration proposed such a tax--an energy usage ("BTU") tax. Think how much better off we would be on how many dimensions if that tax had been passed back in 1993.

Vox Baby: Don't Linger in this CAFE: ...driving an SUV... a vehicle subject to the lower standards of fuel economy for light trucks under the CAFE regulations. Like many of my liberal friends in rural New England, I drive a Subaru Outback. I had no idea at the time I purchased it that it qualifies as a light truck.... I think the CAFE standards are lunacy as currently conceived, and I'll cite three issues. The first issue, as I've alluded to earlier, is that the problem we care about is total usage of gasoline. Total use is the amount of miles driven divided by fuel economy. CAFE standards, at best, address fuel economy, but they provide no incentive to economize on the number of miles driven. This is why a gas tax is better--it allows people to decide how they want to conserve on fuel usage, fewer miles or fewer gallons per mile.

The second issue is that the CAFE standards operate at the level of a fleet of vehicles produced by one manufacturer.... Why provide an incentive for Toyota to make larger cars just because it happens to make good small cars? If the objective is to regulate the average fuel economy of all cars on the road, then there ought to be a tradable permit system established. We would get a better variety of cars on the market, though not at any one particular dealer. Pure welfare gain.

The third issue is that the CAFE standards operate in a hidden fashion, and as a result there have been plenty of abuses. CAFE standards are negotiated behind the scenes with a few entities (the manufacturers). They lobby for complexity and then exploit loopholes, like the different standards for cars and light trucks or, as I fear, all these new flavors of SUV. Lack of transparency is the enabler of bad policy. Is there anything more transparent than a gas tax at the pump?

Keep it simple. Scrap CAFE, set a higher gas tax, and return the aggregate revenues from that gas tax through lower income taxes in a progressive fashion.

Memo to self: In Jackson Hole on August 26, the sun rises not at 6 AM but at 6:39 AM. It is 30F outside. Stay inside the Jackson Lake Lodge, drinking coffee and talking to reporters trying to find a news hook in Alan Greenspan's embargoed remarks, until 6:25 or so. Only moose have any business being outside at 6 AM.

Sunrise over the Tetons is, however, absolutely beautiful as the first rays illuminate Grand Teton and then Mt. Moran.

Alan Murray tells investors: if Google's insiders are selling, is there any reason for you to be buying?

WSJ.com - Business : Google's Stock Sale Mystery Is Simply Solved: There Are Buyers: Google's decision to issue $4 billion in new stock has been greeted with surprise and stupefaction by the army of analysts who are overpaid to divine happenings within the Googleplex. It is an impenetrable mystery, they say. The company already has nearly $3 billion in cash; why does it need more? Are the Googlers planning to build a global wireless network? Dive headlong into Internet telephony? Construct an elevator into space?...

Hello?

Let's try a little test. If I offer you $100,000 for your Honda Civic, how would you respond? Here are your choices:

a) "No, thank you, my checking account is already full."

b) "Maybe, but let me look around first to see if there is another car I'd like to buy."

or

c) "Here are the keys."

If you answered a) or b), you have the makings of a Google analyst.

There is no mystery here, folks. When companies think their stock is undervalued, they buy it back. The Googlers are in the opposite fix. Their stock is overvalued, so what do they do?

Sell more. Quickly. Before sanity returns to the marketplace.

Now I know there are a number of hypothetically smart people out there who think that at $285 a share, Google still is a bargain. Some were quoted in the pages of my favorite newspaper last week. "We think it's extremely cheap at this level," said Jason Schrotberger of Turner Investment Partners Inc.... In recent months, the top Googlers have sold off nearly $3 billion of their own holdings. These insider sales all have been on the up and up, conducted under a so-called 10b5-1 plan that allows them to sell a predetermined number of shares over a given period. Diversifying their riches in this way would be a wise strategy for the Google boys under any circumstances. But it is particularly wise if you suspect your stock has a touch of hot air.

They also have been changing their compensation plans, moving away from reliance on stock options, which become worthless if the stock drops. Instead, they have started using Google stock units, or GSUs. That is Googlespeak for restricted stock that takes four years to vest, but will continue to hold value even if the share price swoons. The company issued 61 million GSUs in its second quarter...

He reads Ken Rogoff on the Greenspan succession:

Economist's View: Have No Fear, The Non-Activist Fed Will Still Be Here: Kenneth Rogoff of Harvard University and former chief economist at the International Monetary Fund shares his thoughts in The Financial Times on Greenspan’s days at the Fed. That he sees Greenspan as the Michael Jordan of central bankers gives you an idea of his view of Greenspan's tenure...

As Alan Greenspan’s fifth and final term as Federal Reserve chairman comes to a close in January next year, more and more people are asking the question: “What were the secrets of his extraordinary success and can he pass them on to his successor?”... [I]f one looks at how the science of monetary policy has evolved over the past two decades, there is cause for optimism.... Alan Greenspan is the Michael Jordan/Lance Armstrong/Garry Kasparov of modern-day central bankers.... [H]e took charge of a great team of economists and made them better.... The enormous prestige and respect he has brought to the job has, in turn, been a huge tool in recruitment and retention of top talent....

By and large, Fed policy is aimed at maintaining a stable inflation rate, except in the face of clearly discernable big shocks.... Some of Mr Greenspan’s most influential calls have come precisely from explaining how changing trends in productivity and globalisation were affecting the interest rates required to maintain price stability... The salient effects of the Fed’s stabilising strategy, and similar ones followed by most other leading central banks around the world, have been stunning. The risk premium on long-term interest rates is down sharply, helping fuel sustained growth and expansion.... One only has to look at countries such as Mexico and Brazil....

Paradoxically, then, the Greenspan Fed has succeeded by reducing the role of monetary policy, rather than by enhancing it....

And he reads about the Swedish welfare state:

Economist's View: What Inferiority Complex? The Swedish Welfare State : We don’t need no stinkin’ US style capitalism! Sweden tells Europe to hold its head high:

In defense of the welfare state, by Jonathan Power, International Herald Tribune: (Stockholm) The statistics had arrived on the Swedish prime minister's desk … It was good news. Goran Persson, now in his ninth year of office, told me that the growth rate for this year will be near 3 percent and next year more than 3 percent - enough, he said, to maintain Sweden's trajectory of the last decade, which was "above the average for the European Union" and, in particular, "as good as the Anglo-Saxons, Britain and the U.S."... This raised the first question - how does this self-confessed socialist state do it? What is the secret for success when Swedish taxes are the highest in the world and the welfare state is the country's single largest employer?... "If you have a free economy," explained the prime minister, "a highly educated work force, a very healthy people, very high productivity and a sound environment then you can create the critical size of resources to create good growth. "That has to be joined with adequate public financing of universities, research and development. As long as we are efficient and constantly challenging ourselves we continue to be productive. "Then if we produce successful growth, the government gets the public's support for high taxes. If the quality of the public sector is good, then a prosperous people will continue to vote for funding it."...

"Europe has a lack of confidence vis-à- vis the U.S.," he said. "The U.S. is competitive, but not as competitive as we think. We are too self-critical in Europe, even though we have a much better social system and in Sweden are just as productive. On unemployment, it is overlooked that the U.S. has approaching two million people in jail and out of the labor market."...

Tim Geithner is a prudent man:

Fed Officials Summon Wall St. Firms to Discuss Derivatives - New York Times: By RIVA D. ATLA: The Federal Reserve Bank of New York has called a meeting of top Wall Street firms to discuss practices in the booming, if opaque, credit derivatives market.... The meeting, which will be held on Sept. 15, is being called three months after global stock and bond markets were rattled by fears that some of the largest banks were caught wrong-footed on some credit derivatives bets.... A letter went out this month from Timothy Geithner, the president of the New York Fed, to executives at 14 dealers inviting them to discuss "a range of issues in the credit derivatives market," said Peter Bakstansky, a spokesman for the New York Fed. The meeting will focus in particular on issues tied to the processing of these trades, he said. Mr. Bakstansky declined to list the banks invited to the meeting, but the largest participants in the market include J. P. Morgan, Deutsche Bank, Goldman Sachs and Morgan Stanley.

Representatives of the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the New York State banking department will attend the meeting, Mr. Bakstansky said. Banking regulators from Britain, Switzerland and Germany have also been invited. The rapid growth of the credit derivatives market was a major focus of a report in July by the Counterparty Risk Management Group, a team of top bankers originally formed at the request of the New York Fed to assess market risk... the financial services industry "has had very limited experience with settling large numbers of transactions following a credit event," like a corporate default or bankruptcy...

WTF? Bush Advisor Dan Bartlett declares that America will not tolerate the Saudi Dictatorship:

Think Progress: Yesterday on CBS's Early Show, senior presidential advisor Dan Bartlett took the "opportunity to clarify what President Bush is saying" about the war on terrorism:

BARTLETT: Not only after 9/11 do we have to go after Osama bin Laden and the people who perpetrated the act on 9/11, but also we had to change our policy in the Middle East. The policies of stability in tolerating dictatorships got us 9/11 in the first place. The status quo has to change.

(CROSSTALK)

SMITH: So you're talking about Saudi Arabia then?

BARTLETT: Absolutely.

My wise ex-teacher Jeff Weintraub asks whether I really wish to endorse (see http://delong.typepad.com/sdj/2005/08/kitten_blood.html) the:

specific formulation you quoted approvingly from... Lindsay Beyerstein... that there are "very, very few" westerners "who make excuses for brutal theocratic thuggery." [That] doesn't hold up under serious examination. Instead, it's the kind of polemical overstatement that slides into its own form of absurdity and outright... and, I suspect, it amounts to a distortion and trivialization of what you yourself actually believe. OK, perhaps she really meant to say something else, and just didn't get around to refining this formulation.... But if we take this claim seriously as stated, then I would have to say to anyone who found it plausible--I know people who do, and I read others--that they are describing a different planet from the one I'm living on.

Jeff lives on a planet on which he sees many Westerners "who defend the Iraqi insurgents, or at least justify their actions as being a supposed campaign for self-determination, allegedly justifiable rage at Western misbehavior, and so on." He proposes a list of people he thinks fall into this group: "Ken Livingstone, Naomi Klein, Nathan Newman, Michael Burawoy, anti-Orientalists... a lot of people whose stuff I read in obscure fringe publications like the Nation, the Guardian, the New Statesman."

I think I do agree with Lindsay Beyerstein. But I do agree that I need to think about these issues much more deeply than I have done so to date.

I think I live on a planet on which I think I see relatively few such Westerners who "defend... or justify" or excuse. I don't think that many of those whom Jeff regards as "defend[ing]... or at least justify[ing]" the brutal theocratic thuggist terror-bombings wrought by Iraqi insurgents or by the favored children of Yasir Arafat are in fact defending or justifying. I think that they are explaining.

What's the difference? Let's back up to Niccolo Machiavelli, who started a form of argument that we fall into quite naturally these days. This form of argument starts with the assumption that we--the writer and his readers--are rational analysts and moral agents who care about consequences and understand what good states of the world would be. We are trying to figure out what to do in order to bring about as good a state of the world as possible. Outside this charmed circle of writer and readers, however, is everybody else. We do not think of the people who make up "everybody else" as rational analysts and moral agents. We analyze them as stimulus-response zombie-automata, who act in certain predictable ways when circumstances push certain of their buttons. We consider them "as they are, and not as we would wish them to be." Most of the consequences of our actions are the reactions they induce in other people. Thus key to figuring out how we should act is to understand what their hot buttons are, and how we can push the right ones to generate the reactions that we want to produce the consequences we desire.

Now things quickly get complex. One important button for us to push is to appeal to their belief that they are moral agents, and urge them to be their best selves. Another important button for us to push is to convince them that we are not rational analysts and moral agents who care about consequent states of the world, but are instead ourselves zombie-automata motivated by honor or revenge or pride--"we will never negotiate with the terrorists!" Explanations tend to leak into moral judgments and so become excuses because of our tendency to grade not on results but on effort: "Given who they are and where they were brought up, we should give them credit for their decision not to burn but only imprison witches." And when the charmed circle within which we demand moral agency is drawn not around us but around them, truly perverse conclusions follow. (Consider Noam Chomsky, who condemns the U.S. government and Israel but nobody else. The U.S. government and Israel are moral agents to be scorned and condemned for their failings. Everybody else... well, they're just reacting to stimuli and there's no point in judging them.)

Nevertheless, the underlying conceptual distinction is clear. We are trying to be our best selves, and are making moral choices. They are pre-wired and are reacting to stimuli. What are the right actions for us depends critically on what their internal wiring from buttons-to-actions happens to be--we take other people as they are, and not as we wish them to be. And for us to act in a way that predictably produces bad consequences because they act like the people they are rather than the people we wish them to be--that's a moral failing on our part.(1)

Where explaining crosses into justifying--or excusing--is when you go on to say not just "we have pushed their buttons in ways that have, predictably, generated bad consequences" but also to say either that "in acting as they have, they have been their best selves and acted from praiseworthy and moral motives," or that "given their circumstances, we cannot condemn them for not being their best moral selves." Where I sit, I see many arguing that brutal theocratic thuggist terror-bombers are being (predictably) human, and that we ought to recognize that people will be human in calculating what we should do. I see very few Westerners arguing that brutal theocratic thuggist terror-bombers are being moral, or even that it is unfair to blame brutal theocratic thuggist terror-bombers for not being their best selves.

Where I sit, I see considerably more Westerners trying to spread ignorance by condemning explanations which they dislike as "excuses."

(1) Of course, their failure to be their best selves--who we wish them to be--is a fatal moral failing on their part.

Jeff replies:

I think it would be a good idea, in principle, for you to post something along these lines. The issues are important, and you're right that they underlie a lot of moral and political debates, blogospheric & otherwise. So they deserve more careful attention, and it would be useful and enlightening for you to deal with them.... [But] you... [need] to complexify and refine it a bit, precisely because the issues are important--and also, in some ways, more complex than either you or the (mostly right wing) people who were the polemical targets of the "Kitten Blood" post present them as being....

(1) I think [you present] my own position... in a slightly misleading way... in part because it eliminates some conceptual and empirical distinctions I tried to make, and conflates some of my points that are related but not identical....

(2) Even in terms of presenting your own argument, including the key distinction on which it's based--i.e., between "explaining" a phenomenon and "defending" or "justifying" it (or, I would add, straightforwardly endorsing it at one pole and absolving, whitewashing, apologizing for, and/or making excuses for it at the other)--I think you will want to refine and complexify your analysis a bit. (This is quite aside from whether or not, or how much, I think I will agree with your argument in the end.)...

In my humble opinion, the alternatives as you currently present them are misleadingly oversimplified, both conceptually and empirically (let me emphasize, not just oversimplified, but substantively misleading). 

You want to make the point that there is, in principle, an analytical difference between "justifying" and "defending" certain phenomena (including terrorism, mass murder, dictatorship, torture, jaywalking, failure to wear seat belts, plagiarism, student cheating, systematic lying by the Bush administration, murdering abortion doctors, etc.) and merely "explaining" them. I agree completely, of course, and it would be foolish to suggest otherwise. (OK, there are all those epistemological/axiological arguments about whether the fact/value distinction can really be made to hold up, and there's something to those arguments, but in the present context we shouldn't get too persnickety.)

However, it is also true that there are different ways to "explain" things. While it is certainly correct, and worth saying, to point out that NOT ALL analyses presented as "explanations" are always or necessarily identical to justifications, it does not logically follow that NO "explanations" (or pseudo-explanations) are intended to serve as justifications, apologies, or extenuations... or that they don't wind up being close to identical in practice, even when the people making such arguments aren't entirely aware of the conceptual slide themselves. 

I believe it was Madame de Stael who said that to understand all is not to pardon all. But the reason she took the trouble to say this is that many people DO believe that once you have "explained" something it is no longer possible to judge or condemn it, so that in practice an "explanation" falls somewhere between an excuse, an apology, or an outright justification. This is especially true when such a strategy of extenuating "explanation" is applied to SOME people, groups, actions, or institutions... but not others. Then what is going on falls somewhere between fallacy and hypocrisy, or some combination thereof.

Nor is this a purely hypothetical or uncommon phenomenon. I would go so far as to say that it pervades journalistic & blogospheric discussion on certain issues, on all sides... so thoroughly that it's almost difficult to decide on specific examples. Over the past year or so, Norman Geras (for example) has gone through the tedious process of identifying a large number of examples and analyzing the pseudo-"arguments" involved to demonstrate where and how these particular fallacies manifest themselves. (Just a few of the most recent examples are http://normblog.typepad.com/normblog/2005/08/mccarthyism_at_.html http://normblog.typepad.com/normblog/2005/08/roots_of_steele.html http://normblog.typepad.com/normblog/2005/08/asking_the_righ.html http://normblog.typepad.com/normblog/2005/08/kens_unfair_bal.html http://normblog.typepad.com/normblog/2005/08/apology_and_its_1.html... but let me emphasize that these are NOT at all the most significant or penetrating examples, just the ones that happened to be most recent. So if these particular examples don't convince you, Geras has dozens more from the past few years.)

At all events, in order to adequately address the issues that concern you, it is conceptually insufficient and misleading to rely exclusively on a simple binary distinction between "explanation" and "justification... or even between pure-explanation-without-justification and deliberate "explanation"-as-justification. There are a lot of intermediate steps between these two ideal-typical poles--and they happen to capture most of the actual debates in question, so that the binary distinction you want to use, while potentially a useful and clarifying opening step in a polemical response to simplistic attempts to equate all analysis with apologia, becomes a misleading (and even ideologically mystifying) false dilemma if it is used to shut out all the actual forms that most of the real arguments take.

(For example, consider the following possibility in purely conceptual terms. A typical fellow traveler--not a CP member--says in the 1930s about Stalinism in the Soviet Union:

Well, of course I think murdering millions of people and suppressing civil liberties isn't nice, and it would be false and despicable to suggest that I condone it in any way. At the same time, we have to recognize that Stalinist industrialization works, and you can't make an omelette without breaking eggs... and, anyway, it's clear that all the excesses of this process are completely explained--I'm just explaining them, not justifying them--by the effects of capitalist encirclement, anti-Communism, the need to suppress Trotskyite wrecking, etc.... and anyway, what about the history of western colonialism, the oppression of negroes in the US south, and other distracting subjects that I can multiply indefinitely? Superficial moralism is all very well, and I used to be a little uneasy myself about all those stories I heard about concentration camps and the rest, but I have just explained that everything happening in the USSR is necessary and inevitable, however regrettable... and it wouldn't be happening at all if world capitalism would just be good enough to curl up and die. So if anyone actually criticizes, condemns, or opposes Stalinism in the Soviet Union, they ought to be denounced as naively destructive at best, and in most cases as objectively fascist. And anyone who accuses me of justifying dictatorship, mass murder, and political repression is either confused, or else a liar who should probably be sued for libel. All I've done is to explain why everything that's going on--and maybe it's not really going on, anyway--is necessary and inevitable.

I'm not asking whether you think these quite typical kinds of arguments were factually valid and/or moraly defensible. I'm simply asking whether you think someone who offered these arguments was "making excuses" for the crimes of Stalinism, or "defending" them, or even perhaps "justifying" them. If your answer to all three is no, then we have a real disagreement--but frankly, I find the possibility that you would actually deny the undeniable in this case quite non-credible.)

(3) Regarding the argument you are trying to develop in order to draw the key distinctions ...

Where explaining crosses into justifying--or excusing--is when you go on to say not just "we have pushed their buttons in ways that have, predictably, generated bad consequences" but also to say that "in acting as they have, they have been their best selves and acted from praiseworthy and moral motives." I see very few Westerners crossing that line. I see many arguing that brutal theocratic thuggist terror-bombers are being (predictably) human, and that we ought to recognize that people will be human in calculating what we should do. I see very few Westerners arguing that brutal theocratic thuggist terror-bombers are being moral.

This is intriguing and has interesting possibilities, but I also think it still needs some work. Even after it's refined a bit, I think I'm still not going to agree that this is the most appropriate or illuminating way to draw the line--conceptually, factually, or morally. (The criteria for "justifying" here is so demanding and exclusive that, in my humble opinion, it obscures the real isues rather than clarifying them.) But that's not my main point here at the moment. Even in its own terms, I think you want to reformulate your argument a bit to convey what you really have in mind. More on this later ...

(4) And then in empirical terms, I think you need to take more account of the fact that while pure-explanation-without-justification-or-moral-extenuation is certainly possible in principle, and sometimes even an accurate description of what specific people are doing in concrete cases, the mere fact that someone CLAIMS that this is what they're doing (or that third parties, on their behalf, claim that this is what they are doing) is not sufficient, by itself, to immunize them from criticism. In the real world, ideological polemics don't work that way. In some cases, claims of this sort are genuine and valid. In other cases, they are more properly described as examples of logical fallacy, bullshit, self-deception, and/or outright dishonesty. If you appear not to have noticed this distinction, that will simply weaken the force of your argument, and make it easier for the pseudo-moralists of the loudmouth right to dismiss the valid criticisms you are making. And once this distinction is recognized, it requires some argument to plausibly support the idea that certain of the people I mentioned really belong in the first category rather than the second. (In a lot of cases, as I noted above, Geras has established pretty conclusively that they belong in the second category, so it might be worth considering his painstakingly accumulated pile of examples. I think I've demonstrated that in a number of specific cases, too, by the way ... but not in such a thorough or painstaking way, or in a way that focuses so tightly on these specific issues.)

By contrast, I think (rightly or wrongly) that the blanket absolution you are currently offering does no service to our understanding of the realities of the situation or of the genuine issues at stake....

Kenneth Chang of the New York Times writes:

Kenneth Chang: I can understand that you don't like the article, and I won't suggest that you're a horrible reader for not liking it. If I left you the impression of a raging scientific controversy, then the article failed at some level.

Chang is correct. His article is a catastrophic failure.

Here are the lead paragraphs of Chang's article:

In Explaining Life's Complexity, Darwinists and Doubters Clash: At the heart of the debate over intelligent design is this question: Can a scientific explanation of the history of life include the actions of an unseen higher being? The proponents of intelligent design, a school of thought that some have argued should be taught alongside evolution in the nation's schools, say that the complexity and diversity of life go beyond what evolution can explain. Biological marvels like the optical precision of an eye, the little spinning motors that propel bacteria and the cascade of proteins that cause blood to clot, they say, point to the hand of a higher being at work in the world.

In one often-cited argument, Michael J. Behe, a professor of biochemistry at Lehigh University and a leading design theorist, compares complex biological phenomena like blood clotting to a mousetrap: Take away any one piece - the spring, the baseboard, the metal piece that snags the mouse - and the mousetrap stops being able to catch mice. Similarly, Dr. Behe argues, if any one of the more than 20 proteins involved in blood clotting is missing or deficient, as happens in hemophilia, for instance, clots will not form properly.

Such all-or-none systems, Dr. Behe and other design proponents say, could not have arisen through the incremental changes that evolution says allowed life to progress to the big brains and the sophisticated abilities of humans from primitive bacteria. These complex systems are "always associated with design," Dr. Behe, the author of the 1996 book "Darwin's Black Box," said in an interview. "We find such systems in biology, and since we know of no other way that these things can be produced, Darwinian claims notwithstanding, then we are rational to conclude they were indeed designed."

If you keep reading down Chang does actually quote some scientists. Here's the first such quote, in context:

But mainstream scientists say that the claims of intelligent design run counter to a century of research supporting the explanatory and predictive power of Darwinian evolution, and that the design approach suffers from fundamental problems that place it outside the realm of science. For one thing, these scientists say, invoking a higher being as an explanation is unscientific.

"One of the rules of science is, no miracles allowed," said Douglas H. Erwin, a paleobiologist at the Smithsonian Institution. "That's a fundamental presumption of what we do."

That does not mean that scientists do not believe in God. Many do. But they see science as an effort to find out how the material world works, with nothing to say about why we are here or how we should live...

If I set out to write a weak refutation of the scientific claims of ID, I could do no better--that is, no worse--than Chang has managed to do in these three paragraphs.