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January 2007

Why Oh Why Can't We Have a Better Press Corps? (Robin Toner/Social Security/New York Times Edition)

Ummm... Robin... Robin Toner's lead should have been: "Vice President Cheney tries to blow up Treasury Secretary Paulson's attempts to patch together a legislative deal on Social Security." It wasn't.

Robin Toner writes that hopes for Social Security reform are "fragile," and that "few other issues so clearly highlight the limits of bipartisanship these days, the mistrust and ideological division just barely below the surface.... It is, in short, a polarized debate, and likely to become all the more so..."

To back this up, we have:

People of both parties looking for a bipartisan deal: Senators Conrad, Baucus, and Gregg; Representatives Rangel and McCrery; Treasury Secretary Paulson; Assistant Treasury Secretary Davis.

Democrats afraid that Bush's pledges to negotiate in good faith are false: Senators Conrad and Baucus; Representative Emmanuel.

Democrats declaring that compromise with Republicans is unwise and unnecessary: "Brad Woodhouse of Americans United for Change, a liberal labor-backed organization."

Republicans declaring that compromise with Democrats is unnecessary: Vice President Richard Cheney, and Grover Norquist.

The people Robin Toner finds who aren't looking for a deal in the middle are named Cheney, Norquist, and Woodhouse. I guess it's fair to call this "polarized": Brad Woodhouse's standing and influence in the Democratic Party are about equal to the sum of Richard Cheney's and Grover Norquist's standing and influence in the Republican Party, after all.

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

Here's the story:

Fragile Hopes for Bipartisan Rescue of Social Security - New York Times: Social Security... few other issues so clearly highlight the limits of bipartisanship... mistrust and ideological division.... [A]ny fix -- which would be likely to involve a politically risky mix of benefit reductions, tax hikes or other painful changes -- will require broad and deep bipartisan support.

"The American people have to sense on these types of issues that it'a absolutely bipartisan and that the agreement was reached in an absolutely fair way," said Senator Judd Gregg, Republican of New Hampshire, the senior Republican on the Budget Committee.... Efforts have been made: Treasury Secretary Henry M. Paulsen Jr. has talked to crucial lawmakers, including Representative Charles B. Rangel of New York, the chairman of the Ways and Means Committee, "encouraging everyone to bring all their ideas to the table, and hoping that some kind of consensus can emerge," as Michele Davis, the assistant Treasury secretary, puts it. Mr. Rangel said he had also been talking about the possibility of action on Social Security with the ranking Republican... Jim McCrery.... Gregg and Senator Kent Conrad... a bipartisan working group....

But... Vice President Dick Cheney... said Mr. Paulsen's openness to all ideas did not indicate that the administration was open to any increase in the payroll tax.... "[N]othing's changed," Mr. Cheney said.... Conrad said that after those comments, his effort to move forward with his working group “is on life support.... People have interpreted that to mean that the administration is not willing to alter their position one iota.”... Rahm Emanuel... said that... it was all the more important “not to take away the one solid cornerstone of their retirement.” He added, “It’s not good politics and it’s not good economics.”

Senator Max Baucus of Montana... said... “I’m more than open, if the president is truly willing to look at all options.”...

[A] polarized debate, and likely to become all the more so.... [A]dvocacy groups are watching.... Grover Norquist... making a pre-emptive case against any payroll tax increase, although he had been assured by the president in December that he would hold the line.... “There is no reason for us, as a campaign working on this issue, and there’s no reason for the Democrats to compromise with this president on the most sacrosanct program to progressives after he lost the privatization debate and lost the election,” said Brad Woodhouse of Americans United for Change, a liberal labor-backed organization.


Cognitive Dissonance (Why Oh Why Can't We Have a Better Press Corps?)

Thomas Ricks has some explaining to do, as it takes him less than twelve hours to perform a truly astonishing feat of journamalism. Compare and contrast:

(1) The lead from Thomas Ricks's article in Tuesday morning's Washington Post:

General May See Early Success in Iraq: The battle for Baghdad will start in mixed Sunni-Shiite neighborhoods chosen by military strategists as being the least likely to offer stiff resistance, raising the odds of early success, according to military planners and officials.... But that could be followed by a sharp increase in violence as insurgents learn U.S. and Iraqi tactics, military officials said....

[G]eneral [Petraeus], whose Senate confirmation hearing is scheduled for this morning, plans to send all 17,500 additional U.S. troops ordered by President Bush into Baghdad.... Anticipating an uneven performance by the Iraqi army, military planners are advocating using American force and funding quickly to establish early victories, both in improving security and showing economic progress.

Petraeus's appointment as the top U.S. commander comes at a key point in the war.... The general offered a harsh critique of U.S. mistakes in Iraq in written testimony submitted to the Senate yesterday, noting a range of ills that included poorly managed elections and inadequate reconstruction plans. Now, as military and political leaders tout Petraeus as the best man to salvage the Iraq effort, he is in the delicate position of wanting to show progress quickly without raising expectations too high. "This will be a difficult mission and time is not on our side," he states in the written testimony to the Senate Armed Services Committee...

(2) Thomas Ricks Monday morning on the Brian Lehrer show:

http://prairieweather.typepad.com/big_blue_stem/2007/01/thomas_ricks_on.html[W]hile [the Bush administration] called this "Maliki's plan," it's almost the opposite. It's "we're going to send troops into the middle of the city, double the American presence on the streets of Baghdad because we don't trust your army" [plan].... The US government still hopes for a reconciliation... some sort of political solution.... [P]olitically the Bush administration consistently has been about 6 to 12 months behind the curve in Iraq from the very get-go.... The reality of Iraq that they haven't caught up with, I fear, is that the Shiites have concluded that they've won.... All we're doing is being a useful tool to help them out and keep the Sunnis off their back while they consolidate their hold....

The Iraqi prime minister saying he's dropping his protection of Muqtada al Sadr is like the third-base coach of the Yankees' single A farm team saying he's going to straighten out George Steinbrenner! That's the power relationship between Maliki and Sadr. Sadr commands a more powerful force than Maliki does. By US military calculations, Sadr's militia, the Mahdi Army, has more effective fighters than the Iraqi army does.... [T]wo aspects have characterized the American approach in Iraq over the past three years. One has been official over-optimism in which institutions fail to recognize the basic reality on the ground. The second is a rush to failure with Iraqi forces.... [T]he concern of a lot of people... especially officers who have a tour or two in Iraq is that the new plan combines both those flaws: official optimism about what Iraqis are willing to do, and a rush to failure in pushing Iraqis too soon to do too much....

Petraeus is a fascinating character. Just about the best general in the Army in a lot of people's view.... [H]e had a very successful first tour in Iraq in 2003-2004.... The other division commanders were digging themselves a pretty deep hole. Petraeus realized very quickly that US military training doctrine didn't really do the job.... He had the 101st Airborne Division up in Mosul and was quite successful.... [T]he bottom line on Petraeus with a lot of officers now is "look -- this situation is pretty bad, it's pretty bleak out there -- if anyone can do it Petraeus is probably the guy who can try best." But even then, what I'm hearing, is they don't expect it to succeed...

Either Ricks is misleading his radio listeners by allowing Brian Lehrer to goad him into portraying an excessively negative picture of the situation in Iraq, or he is misleading his Washington Post readers--on page A1--by letting his editors hornswoggle him into painting an excessively positive picture of the situation in Iraq.

We'll know which it is in three years, when he releases his next book. My betting is that the straight poop is on the radio, and the bulls--- is in the Post.

As I've said, I don't see it lasting a decade.


He Is Not of the Body!

A correspondent points me to Jonah Goldberg's unsuccessful and pathetic attempt to pass himself off as a Star Trek geek:

Jonah Goldberg on National Review Online: I referred to the Gamesters of Triskellion, a famous episode where a bunch of day-glow super-brains-under-glass capture aliens from across the galaxy (the sector, really) and pit them against one another in gladiatorial bouts (I thought it'd be cool if presidential candidates did the same thing). The brains (send more brains...), or rather the "Gamesters," bet vast sums on who will win and how, etc. But for the life of me, I couldn't remember what the name of their currency was. I could remember what it sounded like, but I couldn't be sure. So, I wrote "I wager ten thousand credits that..."

Literally, within five minutes of posting the column, five people e-mailed me saying, "It's not credits, you bonehead! It's "quatlooms"! So, I made my Webmaster put down his copy of Juggs and change it to "quatlooms." At this time I would like to point out that many of these readers -- of whom I am quite proud -- could probably use a tan. Anyway, we changed it, and over the course of the next twenty four hours I got probably two dozen e-mails from people saying, "No, no, no! It's kwatloos." Or, "Good lord, man, don't you know anything? It's Quatloos." You see the subtle distinctions?

He is not of the body! Somebody call Landru!


More of the Righteous...

A statement:

iran emrooz | first page : We the Undersigned Iranians :

Notwithstanding our diverse views on the Israeli-Palestinian conflict;

Considering that the Nazi's coldly planned %u201CFinal Solution%u201D and their ensuing campaign of genocide against Jews and other minorities during WWII constitute undeniable historical facts;

Deploring that the denial of these unspeakable crimes has become a propaganda tool that the Islamic Republic of Iran is using to further its own agendas;

Noting that the new brand of anti-Semitism prevalent in the Middle East today is rooted in European ideological doctrines of the nineteenth and twentieth centuries, and has no precedent in Iran's history;

Emphasizing that this is not the first time that the government of the Islamic Republic of Iran has resorted to the denial and distortion of historical facts;

Recalling that this government has refused to acknowledge, among other things, its mass execution of its own citizens in 1988, when thousands of political prisoners, previously sentenced to prison terms, were secretly executed because of their beliefs;

Strongly condemn the Holocaust Conference sponsored by the Government of the Islamic Republic of Iran in Tehran on December 11-12, 2006, and its attempt to falsify history;

Pay homage to the memory of the millions of Jewish and non-Jewish victims of the Holocaust, and express our empathy for the survivors of this immense tragedy as well as all other victims of crimes against humanity across the world.


The Meddling Idiot! As Though DeLong's Ape Brain Could Contain the Wisdom of the Krell!

Berkeley Letters and Science Faculty Forum. January 22, 2007. I always have problems understanding what John Campbell http://www.amazon.com/exec/obidos/asin/0199243816/braddelong00 is saying. He says that he is saying:

  • There is an important and unbridgeable gulf between our notions of physical causation and our notions of psychological causation.
  • Martian physicists--intelligences vast, cool, and unsympathetic with no notions of human psychology or psychological causation--could not understand why, could not put their finger on physical variables and factors explaining why, the fifty or so of us assemble in the Seaborg Room Monday at lunch time during the spring semester.

He says that he is not saying any of:

  • The universe has a dual nature, in which mind is different from not-mind.
  • Reductionism is wrong because there are important emergent properties of complicated systems, and reductionist and holistic explanations are quantitatively different.
  • There is an important and unbridgeable gulf between understanding based on physical laws and understanding based on human empathy. Instead, Campbell says, there is only one kind of understanding and explanation, but it is applied to different sets of causal factors in different circumstances.

The word "supervenience" was not mentioned by anybody.

I had two questions for him. I think I would have understood him if I could have understood the answers to either of them:

  • If I were a member of a team of tentacled Martian physicists (don't get me started on the image of mollusc-like Martians living on an essentially desert planet), my physical-description model of Berkeley would include a model of Assistant Dean Chuck Stroup's brain at the subatomic level. I would then be able to say: "Aha! Suppose we were to decrease the levels of serotonin in the particular half-cubic-foot of space that is Chuck Stroup's brain; then the email messages containing the string "L&S Faculty Forum today" don't get sent, and we don't assemble here for lunch. Wouldn't that be a way for Martian physicists with no concept of human psychology to begin to understand why we are all here in the Seaborg Room right now?

  • Let me roughly quote from a lecture from a course, Physics 140, that I took as a junior from Ed Purcell: "How about the lithium atom? We can't calculate the joint orbitals of all three electrons--that's too hard. But we can get an approximate solution for the valence electron. It wants to be in the ground state, but the Pauli Exclusion Principle forbids it. So we can model the orbital of the third, valence electron as a single electron moving in the field of the nucleus partially shielded by the other two electrons in the next stable energy level above the ground state. The Schrodinger equation is... [Purcell starts doing math.]" Here we have a mixture of physical and psychological causation. The physical causation--the math driven by the physical laws of quantum mechanics--comes at the end. Before that comes psychological causation: Purcell attributes human-like intelligence to the electron that has desires and needs and to the brooding overall universal presence that is the Pauli Exclusion Principle, and so reduces the physical-causation problem to a simpler one that is approximately right and that he can solve. The resort to psychological causation is a way to get an answer even though the math for the three-electron problem is beyond our grasp. What is the difference between Ed Purcell's use of psychological causation here and your use of psychological causation as a factor in addition to serotonin levels in understanding human psychological depression?

But alas! I did not understand his answers--although I have no doubt that he did.

I can't help but think that the rhetorical trope of "Martian physicists" is a problem here. I take it for granted that "Martian physicists" have models of human brains at a subatomic level and understand the dynamic evolution of brain states and the connection of brain states to human actions, and do so at a level that makes "psychology" needless save as a shorthand way of dividing brain states into categories. Philosophers' "Martian physicists" don't seem to be able to do that.


Yosef Lapid Stands with the Righteous

He says:

Yad Vashem Council Chair slams settlers for abusing Palestinians - Haaretz - Israel News: The head of the council of the Yad Vashem Holocaust memorial on Saturday assailed Jewish settlers who harass Palestinians in the West Bank city of Hebron, saying the abuse recalled the anti-Semitism of pre-World War Two Europe.

The rest of the staff of the Yad Vashem Memorial Center, not so much:

A Yad Vashem spokeswoman told Haaretz that Yad Vashem Council Chairman Yosef (Tommy) Lapid's comments do not reflect the memorial center's position.

The story goes on:

Lapid's unusually fierce and public attack was prompted by television footage showing a Hebron settler woman hissing "whore" at her Palestinian neighbor and settler children lobbing rocks at Arab homes. Lapid, a Holocaust survivor who lost his father to the Nazi genocide, said in a weekly commentary on Israel Radio that the acts of some Hebron settlers reminded him of persecution endured by Jews in his native Yugoslavia on the eve of World War Two.

"It was not crematoria or pogroms that made our life in the diaspora bitter before they began to kill us, but persecution, harassment, stone-throwing, damage to livelihood, intimidation, spitting and scorn," Lapid said. "I was afraid to go to school, because of the little anti-Semites who used to lay in ambush on the way and beat us up. How is that different from a Palestinian child in Hebron?"

Hebron has been a frequent flashpoint of more than six years of Israeli-Palestinian fighting. Some 400 settlers live there, under heavy military guard, among 150,000 Palestinians.... Noam Arnon... played down the televised harassments as "fringe incidents." "In six years, 37 Jews have been murdered in Hebron, and now they're preoccupied with curses?" Arnon said....

Lapid said while there was no comparing the Holocaust with Palestinian suffering from Israel's policies, this did not mean Israelis could not be culpable. "It is inconceivable for the memory of Auschwitz to warrant ignoring the fact that there are Jews among us who behave today towards Palestinians just like German, Hungarian, Polish and other anti-Semites behaved towards Jews," he said.


Max Sawicky on Bush's Proposed Tax Hike

What Max Sawicky misses is that Bush is proposing to use the money raised to finance not a tax credit but yet another deduction--or so his people are saying:

MaxSpeak, You Listen!: BUSH'S NEW TAX: I haven't seen much detail on the president's health care proposal. It looks like a new way of dumping more money into the individual health insurance market. In other words, by undermining risk pooling, it contributes to the "death spiral."...

The financing piece is noteworthy for a couple of reasons. First, lo and behold, there is a pretense of revenue neutrality. (Whether it is or not will have to wait for verification by honest persons.) Second, it is a new tax on [health insurance] policies above some cap. $15,000 [a year] for families was the number floated.... Why would anyone want to do this?

One plausible excuse is that an unlimited exclusion increases demand for health insurance and raises prices. The price increase pushes some people out of the market into the ranks of the uninsured. I don't know if this is true, but it could be.

A second is that all of the deductions in the income tax are fair game, in light of expected revenue needs. To get more dough, the first priority is to broaden the tax base. First on my list would be including all interest, dividends, and capital gains. Second would be capping or eliminating other deductions.... Each of these deductions is like a big spending program... available with little or no documentation or auditing.... [A]ll [deductions] be subject to scrutiny.

For the sake of fairness, simplicity, and revenue, deductions should be consolidated, capped, and turned into credits. On the merits, that is the most important angle to the Bush proposal -- breaking the ice on tax expenditures.


How Many Sunni Kurds Will Fight in Baghdad?

Leila Fadel and Yaseen Taha of McClatchy--the news-service formerly known as Knight-Ridder--do some real reporting from Iraq, outside the briefings of the Green Zone:

McClatchy Washington Bureau | 01/19/2007 | Kurdish Iraqi soldiers are deserting to avoid the conflict in Baghdad: SULAIMANIYAH, Iraq - As the Iraqi government attempts to secure a capital city ravaged by conflict between Sunni and Shiite Muslim Arabs, its decision to bring a third party into the mix may cause more problems than peace. Kurdish soldiers from northern Iraq, who are mostly Sunnis but not Arabs, are deserting the army to avoid the civil war in Baghdad, a conflict they consider someone else's problem. The Iraqi army brigades being sent to the capital are filled with former members of a Kurdish militia, the peshmerga, and most of the soldiers remain loyal to the militia.

Much as Shiite militias have infiltrated the Iraqi security forces across Arab Iraq, the peshmerga fill the ranks of the Iraqi army in the Kurdish region in the north, poised to secure a semi-independent Kurdistan and seize oil-rich Kirkuk and parts of Mosul if Iraq falls apart. One thing they didn't bank on, they said, was being sent into the "fire" of Baghdad. "The soldiers don't know the Arabic language, the Arab tradition, and they don't have any experience fighting terror," said Anwar Dolani, a former peshmerga commander who leads the brigade that's being transferred to Baghdad from the Kurdish city of Sulaimaniyah. Dolani called the desertions a "phenomenon" but refused to say how many soldiers have left the army. "I can't deny that a number of soldiers have deserted the army, and it might increase due to the ferocious military operations in Baghdad," he said.

"This is the biggest performance through which we can test them," said Lt. Gen. Ali Ghaidan, the commander of land forces for the Iraqi Ministry of Defense. The Kurdish soldiers will be using translators, and they'll start off doing less dangerous tasks, such as manning checkpoints with Arab soldiers, he said. In interviews, however, soldiers in Sulaimaniyah expressed loyalty to their Kurdish brethren, not to Iraq. Many said they'd already deserted, and those who are going to Baghdad said they'd flee if the situation there became too difficult. "I joined the army to be a soldier in my homeland, among my people. Not to fight for others who I have nothing to do with," said Ameen Kareem, 38, who took a week's leave with other soldiers from his brigade in Irbil and never returned. "I used to fight in the mountains and valleys, not in the streets." Kareem said he knew that deserting was risky, but he said he'd rather be behind bars in Kurdistan than a "soldier in Baghdad's fire." Without the language and with his Kurdish features, he was sure he would stand out, he said. He's a Kurd, he said, and he has no reason to become a target in an Arab war. Now he drives a taxi in Sulaimaniyah, eking out a living and praying that he doesn't get caught...


What Promises Have We Collectively Made to Ourselves with Respect to Social Security?

In the early 1980s, acting on the advice of the Greenspan Commission, President Reagan and the congress began "prefunding" Social Security--having the Social Security system run a surplus in the years from 1983 to 2017 or so in order for it to run a deficit later on. Reagan, George H.W. Bush, and the congresses of the 1980s and early 1990s (and George W. Bush and his congresses of 2001-2006) used this Social Security surplus as an excuse for not dealing with their enormous general-fund deficits: taxes were lower and spending was higher than if they had lived up to their responsibilities or not had the Social Security operating surplus to draw on.

What does this history entail for future fiscal policy, both as a matter of honor and a matter of prudence? Andrew Samwick tries to think through these issues, and gives his take. He says smart things:

Vox Baby: The federal government simply put a new Treasury [bond] in the trust fund and spen[t] the Social Security surplus on things other than buying back its existing debt from the public, as if the Social Security surplus were just like any other tax revenue at its disposal.... The federal government targets the unified budget deficit, which treats the Social Security surplus in this way. In my memory... the only time in the last 25 years when we did not [focus on the unified rather than the general-fund budget deficit was... in the [late] Clinton Administration.

President Bush [focused on the unified deficit] when he pledged "to cut the deficit in half in 5 years" (see this earlier post.) His Administration is doing it again with the more recent statements about budget balance by 2012. In all cases, the deficit in question is net of the Social Security surplus, and thus the policy presumes that the Social Security surplus is available to spend on general government expenditures.

I have in an earlier post argued that the government should be targeting the on-budget deficit and have Social Security in long-term balance. Bernanke stops short of saying this. That's the first way in which his testimony was not exactly what I would have said. There are two other things that I hope he stresses in his future public statements:

First, it is inconsistent for would-be Social Security reformers to be preoccupied with the debt burden placed on future generations due to Social Security's projected annual deficits but not with the debt burden placed on them by continued deficits in the General Fund. What is the rationale for running any deficit in the on-budget [general fund] account when the economy is in the up side of a business cycle?

Second, it is inconsistent for would-be Social Security reformers to be preoccupied with the debt burden placed on future generations due to Social Security's projected annual deficits while at the same time enacting legislation, like Medicare Part D, that will generate even larger annual deficits to be financed by these same future generations.

Readers of this blog know that I don't exhibit these inconsistencies. I have precious few compatriots among would-be Social Security reformers on the political right.

Returning now to Dean [Baker]'s second paragraph, he regards cutting Social Security benefits as theft, asserting that "workers have already paid for these benefits." I might believe that if the Social Security surpluses were actually being saved rather than spent. But they aren't. It would be more appropriate to say that what the workers--Dean, me, you, all of us--have paid for is all of the government services that the Social Security surpluses have purchased in the past 20 years. We've already consumed them. We have no compelling justification to assert that future generations of workers, who were not party to these decisions, should have to pay higher taxes to honor promises that our generation has made to itself.

But something has to be done, and the sooner it happens, the less disruptive it will be. As always, I recommend that policy makers start here.


Types of Social Security Reform

PGL at Angry Bear writes:

Angry Bear: [A]s Andrew [Samwick] has explained, policy makers have managed the rest of the Federal government such that the expected value of future income taxes cannot cover [existing] Federal debt [including the Social Security trust fund] plus the present value of expected future Federal spending outside of the Social Security program. This is the fiscal crisis that Ben Bernanke testified to -- as did Alan Greenspan when he was Federal Reserve chairman. So how does President Bush intend to address this general fund fiasco? Certainly not an increase in income taxes. Certainly not a reduction in defense spending. Certainly not a repeal of that expensive prescription drug benefit that he brags about in the same speeches where he brags that his tax cuts have given us our money back.

This kind of pandering and dishonesty is not the fault of Andrew Samwick or Ben Bernanke. And it's this kind of dishonesty that leads me to believe that President Bush is advocating what Brad called the second kind of [Social Security] "reform" [in which the current trust fund balance is forgotten, and future benefits are funded out of future Social Security taxes alone.]

Dean Baker calls this "default" and some uber-technical types object to his term. Fine -- let me call it grand larceny. If implemented, it would be a backdoor employment tax increase. Now if President Bush and his minions want to balance the budget by raising employment taxes, might we simply ask that they be honest about it? But then one could argue my suggestion is silly -- after all, how many thieves call the bank before they come over and clean out the vault?

I am not in favor of complete privatization as workers likely do want some form of defined benefits retirement plan. Mark Thoma has been excellent in discussing this aspect of the debate. Of course, one can reasonably ask whether we need as much longevity insurance as the Social Security program offers. Andrew and I might have a difference of opinion on this issue. But as I read Andrew's many excellent discussions on this, he is not advocating an implicit backdoor employment tax increase and nor am I.

Let's be honest -- President Bush and his minions are pushing for a backdoor employment tax increase...


Ethan Zuckerman Is a Casualty in the Media Wars

Ethan Zuckerman tries to write for a dead-tree publication:

Ethan Zuckerman's musings on Africa, international development and hacking the media. January 19, 2007: The article I didn’t write. I haven’t written much about the One Laptop Per Child initiative in the past few months. This isn’t because little has happened with the project - in the months since I wrote a long OLPC post, we’ve seen a prototype of the machine, a factory-produced device, major work on the “Sugar” operating environment, and a finalization of the first five countries to pioneer the device. It also isn’t because I’ve lost interest in the device - I continue to be fascinated both by the audacity of the project and by the degrees of success it’s had so far.

I agreed to write a long piece for a well-respected technology journal about the laptop late in the spring of 2006. The editors of the journal asked - not unreasonably - that I not use in the information I was going to publish in that piece on my blog, and I agreed. I turned in a draft of the piece in early July, went through several edits with my editor, and generally felt pretty good about where the piece was going. (A slightly updated version of that draft is available here.)

But then the managing editor of the journal got hold of the piece, and I discovered they wanted something very different from what I’d written - they wanted critique, tension and controversy about the project. I got a draft back that bore very little resemblance to what I’d written - it was filled with international development clichés (”In a world where half the world has never made a phonecall, does it make sense to give children a laptop?”) and mean-spirited skepticism about the project (”if the laptops overheat, poor people can use them as pot warmers”.)

Basically, it wasn’t something I was willing to have my name attached to. And so I withdrew from writing the piece and told the editor I’d been working with - not the editor who’d demanded these changes - that she was free to run the piece under her name using my research, but that I wasn’t going to be associated with the tone or the conclusions of the piece.

So... eight months, several drafts and many, many unhappy phonecalls later, I’m not going to have the peer-reviewed journal article that I could hold up to my colleagues at Berkman to prove that, yes, I really am trying to be an academic. And I’m left with some questions that I need to think through before taking on an assignment like this again.

One of my best friends, Nathan Kurz, read through the draft I ended up refusing and helped me conclude that I shouldn’t allow it to be published. He flew home a few days later and read “The Best American Science Writing 2006″ on the flight home, which gave him a useful insight on my experiences. “I’d wager that about half the pieces had the same tone of breathless controversy that your editor added.”...

My concerns over the project have to do with whether educators will embrace the project or fight it, and whether the project’s aims will be embraced in developing world schools. But that’s more an open question than it is a breathless conflict. It’s possible that the draft I came up with is simply so boring that it couldn’t appear in this journal without some tension to draw in readers... but it raises the question of how one writes about science or technology when there’s no great drama unfolding, just progress being made.

The other frustration in this process is the timescale. When I drafted this article half a year ago, it was quite up to date and would have broken some new ground in writing about the project. Subsequently, Wayan Vota has reported much of what I’d planned to say on his excellent OLPC blog, and John Markoff has written the definitive OLPC article in the NYTimes. Even had I approved the last edit of the piece, it would have taken another couple of months to get through peer review and into print, possibly nine months from my first draft to publication. And this isn’t even that bad - I have a book chapter waiting for publication which is now over a year old - when I wrote it, it had up-to-date statistics regarding developing world weblogs. By the time it’s published, it will only be interesting as a historical document - not a single figure will be within an order of magnitude of accuracy.

It’s hard to figure out the value of academic publishing if you’re not an academic. When I write here, I tend to get critique - usually smart, well-informed critique - within hours. I often discover that I’m flat out wrong about something I’ve asserted, and I can update my opinions and impressions based on feedback from people better informed than I am. That seems like a much more efficient form of peer review - at least in the academic realm I inhabit - than waiting six to twelve months to find out whether an anonymous reviewer thinks my now-out of date paper is worth publishing...

Seems to me that there are two problems here: (i) the long time-lag in conventional publishing, which in fast-moving fields is absolutely deadly; (ii) a double-crossing of the subeditor with whom Ethan Zuckerman was working by her boss, who had not made the assignment or the expectations clear to the magazine's own staff, let along to Ethan Zuckerman.


Why I'm Not Going to Be Reading "The Politico" (Why Oh Why Can't We Have a Better Press Corps?/Special Preemption Edition)

UPDATE: Chris Cillizza of the Washington Post also disagrees with Politico honcho John Harris's characterization of Patrick Ruffini as just a grassroots "conservative weblogger." Cillizza's headline is "Giuliani Hires e-Campaign Expert" and calls Ruffini "one of the real 'gets' on the GOP side" in the new media world. Cillizza is right: Ruffini is an excellent and energetic political activist, advocate, and apparatchik. Not just a conservative weblogger:

Giuliani Hires E-Campaign Expert - The Fix: One of the real "gets" on the GOP side of that world is Patrick Ruffini, who served as the Web master of President Bush's 2004 reelection campaign and then served in a similar role at the Republican National Committee. Ruffini gained recognition in national Republican circles for his blog, which was one of the first serious attempts on the Republican side at building an online community. Ruffini has signed on with former New York City Mayor Rudy Giuliani's presidential campaign as an e-campaign adviser. The hiring is only the latest sign that Giuliani is serious about a run for national office in 2008...


Why I'm Not Going to Be Reading "The Politico" (Why Oh Why Can't We Have a Better Press Corps?/Special Preemption Edition)

Ah. By pure coincidence, the self-description of a Mr. Patrick Ruffini just crossed my desk. It reminded me why I won't be reading a publication, The Politico,, due to be launched on January 23.

Here's Patrick's self-description:

Patrick Ruffini is an online strategist dedicated to helping Republicans and conservatives achieve dominance in a networked era... as a campaign staffer, activist, and analyst.... Since 2005, Ruffini has served as eCampaign Director at the Republican National Committee, overseeing the Party’s online strategy for the 2006 election cycle.... Even during a difficult election cycle, the RNC’s relationship with the blogosphere grew closer and stronger than ever. Beyond these successes, the RNC’s eCampaign also serves as the Republican Party’s R&D arm for innovation on the Internet.... Ruffini has advised Republican candidates and organizations at all levels on best practices for winning online.

In the 2004 election cycle, Ruffini served as webmaster for Bush-Cheney ‘04 campaign.... Towards the end of the campaign, Time magazine noted the campaign’s adept strategy of reaching beyond official organs and touching voters through media they know and trust, among them the blogosphere.

Other professional highlights include a previous stint at the RNC during the 2002 cycle and time well spent at the American Enterprise Institute...

Patrick is an able, aggressive, and intelligent apparatchik for the current Republican point of view--not a great thinker with a solid reality-based position on policy, but a great communicator of facts, factoids, visions, and soundbites that tend to make potential voters look more favorably on Republican candidates.

This is of interest right here and now because of the great gap between Patrick Ruffini's self-description and how he is described by Politico honcho John Harris. In his attack on Dan Froomkin's White House Briefing column, Harris wrote:

PressThink: John Harris: [M]y reservations about [Dan Froomkin's] "White House Briefing" are... that... he is presenting a pretty standard liberal critique of Bush... [that would] not be appropriate at all for a news reporter.... I know most readers are not idiots and get the idea that we are sponsoring a blogger. But we know there is confusion on the point.... How Dan would be writing about a Kerry administration is obviously an imponderable. Does Dan present a liberal worldview?... [A] great many people would say yes.... I don't want them thinking he works for the news side.... Without agreeing with the views of this conservative blogger who took on Froomkin, I would say his argument does not seem far-fetched to me...

"This conservative blogger" is Patrick Ruffini. An alternative, more honest John Harris would have written:

Does Dan [Froomkin] present a liberal worldview?... [A] great many people would say yes.... This argument made by the eCampaigns Director of the Republican National Committee and the former webmaster for Bush-Cheney 2004 does not seem far-fetched to me...

Instead of:

Does Dan [Froomkin] present a liberal worldview?... [A] great many people would say yes.... [T]his conservative blogger['s]... argument does not seem far-fetched to me...

Quite a difference, yes?

When I first ran across this, I laughed. I figured that Patrick Ruffini had either accidently or intentionally caused John Harris to mistake astroturf for grassroots--that due to John Harris's poor online research skills, he thought that Patrick was a grassroots conservative weblogger rather than a paid Republican message apparatchik.

Then I learned that I was wrong: that John Harris knew damned well who Patrick Ruffini was and knew damned well whose payroll he was on. He just didn't think he should tell his readers. And I was dumbfounded. John Harris had the sourcing ethics of Judy Miller--the reporter who had promised Vice Presidential aide Scooter Libby that she would identify him not as "a senior administration official" but as "a former Capitol Hill staffer."

So I'm not going to be reading The Politico. There are too many smart, dedicated people writing things trying as hard as they can to tell me how things are for me to spend time reading people who are trying to tell me how things aren't.


Payday Loans

Robert Frank on the political and moral economy of payday lending:

Payday Loans Are a Scourge, but Should Wrath Be Aimed at the Lenders? - New York Times: [T]he outrage currently directed at lenders who extend credit at extremely high rates of interest to economically disadvantaged groups. Among these lenders, so-called payday loan shops have come under particularly heavy fire.... [P]ayday lenders typically offer short-duration loans of several hundred dollars secured only by a post-dated personal check from the borrower.... Many borrowers... quickly get into financial trouble once they begin to roll over their payday loans.... The problem is that many people have difficulty weighing the trade-off between immediate benefits and future costs. When confronted with easy credit access, some inevitably borrow more than they can reasonably expect to repay. Once they get in over their heads, they borrow more....

[E]asy credit... is more like heroin and cocaine than alcohol. This evidence recently led Congress to cap the annual interest rate on payday loans to military personnel at 36 percent. In New York and 10 other states, similar restrictions apply to loans to the general public, in each case making payday lending effectively illegal.

Those who feel that payday lending is a bad thing are inclined to vent their anger.... But outrage directed at payday lenders cannot prevent those hardships, just as outrage directed at alpha male lions cannot prevent them from killing cubs. A more deserving target would be legislators who supported lax credit laws in exchange for campaign contributions from lenders -- or, better still, those who have steadfastly resisted campaign finance reform.

I somewhat disagree: there is something wrong with somebody who goes into a business where what you sell--in this case, extremely expensive credit--makes your customers worse off.


What Kinds of Social Security Reform Are Tantamount to a Bond Default?

Felix Salmon protests that Social Security reform is not a bond default:

RGE - Is social security reform a bond default?: Dean Baker says so, prompting Brad DeLong and PGL to applaud loudly from the sidelines:

This is very important to understand when someone like Federal Reserve Board Chairman Ben Bernanke proposes cuts to Social Security. Workers have already paid for these benefits. The Social Security tax is very regressive. Its regressivity can be justified by the progressive payback structure of the program. However, if the benefits are cut, at a point when the program can still easily afford the benefits (e.g. 10-20 years), then the government has effectively stolen from the people who paid Social Security taxes. There are many people who want to do this – effectively default on the government bonds held by the Social Security trust fund....

Let's agree, for the sake of argument at least, that the social security trust fund exists, chock-full of government bonds. Like any trust fund, its trustees have control over what it pays out and when. If the trust fund reduces the amount it pays out, or only pays out later than currently mandated, that's a change in the trust fund. It is not a bond default. Insofar as the bonds in the trust fund exist, they will continue to receive their coupon and principal payments. It's what the trust fund does with those payments that's being debated.

I feel strongly about this one becuase I've spent a large part of my career following actual sovereign bond defaults, and they're not pretty things. Social Security reform is a serious subject, and it should be taken seriously. Spinning any change in benefits as tanatamount to default by the world's reference risk-free creditor escalates the rhetoric to unhelpful levels.... For me, the only question about whether something is a bond default or not is the question as to whether the bondholder gets paid or not. In this case, the bondholder is the social security trust fund. What the trust fund does with the money is entirely up to it.

It depends on what kind of Social Security reform we are talking about. There's one reform in which benefits are cut and taxes are raised but the equality:

(Current Value of Trust Fund) + (Present Value of Future Social Security Taxes) = (Present Value of Future Social Security Benefits)

is preserved. That's not a default.

There's another reform in which the principal purpose is to open up a gap between the left hand side and the right hand side and make:

(Current Value of Trust Fund) + (Present Value of Future Social Security Taxes) > (Present Value of Future Social Security Benefits)

That is tantamount to default.

Most proposals for Social Security reform that start out with statements like "The Social Security Trust Fund doesn't really exist" are proposals of the second kind.


The Dawn of Humanity

Abiola Lapite finds an interesting hand-axe:

Foreign Dispatches: Analyzing Human Expansion: the genetic evidence tells a story... something happened 50-80,000 years ago to set the very small collection of individuals who were our shared ancestors on a course of rapid population expansion, shortly after the onset of which some of them started to pour out into Eurasia and beyond. Whatever that change was, the data says clearly that it cannot have been merely cultural, while the archaeological evidence also makes clear that it wasn't something one could read merely from looking at brow ridges, molars and so forth. My bet is that it was a cognitive change....

PS: An anthropologist by the name John Hawks has interesting things to say about the uniformity of Acheulean stone technology across Africa, Europe and Asia over more than 1 million years.

The maintenance of a single cultural tradition across much of three continents over a million years by exclusively social transmission seems incredible. Some have suggested that the handaxe is hardwired into the human genome, a proposition that seems even less credible (at least, to me). Absent these means of transmission, we are left with the proposition that the handaxe did not fade from the earth because of its functional utility -- either it was the tool that did the job the best, or it was the best tool that humans were capable of making that did the job adequately.

Now, the question you have to ask yourself is just how "human" creatures incapable of bettering the simple stone handaxe over a million years could possibly be; they may have looked like us, but it's clear they didn't think like us, and the timespans under consideration rule out "culture" as the limitation here.

Indeed, as Hawks suggests, at this point it isn't even clear that such a thing as "culture" (and its attendant variation across time and space) existed in a meaningful sense until about 80,000 years ago.


Yet More Unseasonable California Weather Blogging

Ben V-L and Maynard Handley correctlly argue that we do not really feel temperature:

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: Yet More Unseasonable California Weather Blogging: You have a false premise: that we feel temperatures. What we feel is the heat flowing in or out of our bodies. As one textbook puts it: in a cold campground outhouse, would you rather sit on the metal toilet or the wooden one?

We are most comfortable in our active, awake state when the surroundings are some 20 degrees (F) below our temperature (so, 70's). Then our heat loss roughly equals our generated heat. Temperatures in the 50's have twice the heat loss and feel cool. The 20's aren't just 5% cooler in this perspective. They are more than three times as cool as 70's.

Another example where thinking on absolute scales is pretty useless is air pressure. If the pressures on either side of a door differ by a few percentages, it can rip your arm off.

Posted by: Ben V-L | January 15, 2007 at 05:23 PM


Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: Yet More Unseasonable California Weather Blogging: Adding to Ben V_L's point (which is certainly essentially correct as regards the perception of cold) a second aspect of the situation to remember is that what surely matters is not the speed of air molecules, but the speed at which chemical reactions occur.

The (very very rough) rule of thumb is that chemical reactions run twice as fast for each 10K rise in temperatures. This is sufficiently rough as to be useless as an actual quantitative guide, but gives you a feel for the rapidity with which reactions become faster as temperatures heat up.

Since we are warm-blooded, this is of mainly academic interest, but there's a whole lot of invertebrate life out there that doesn't have the benefit of our warm blood and for which this changing of the speed of chemical reactions presumably has real perceptual consequences (to the extent that insect brains, for example, have perceptions).

Posted by: Maynard Handley | January 16, 2007 at 01:09 PM


Hoisted from Archives: Charles Murray Has Misled People Before...

From the archives:

David Brooks Gets Burned by Trusting Charles Murray: Archive Entry From Brad DeLong's Webjournal: David Brooks gets burned by trusting the American Enterprise Institute's Charles Murray:

The Atlantic | September 2003 | People Like Us | Brooks: My favorite illustration of this latter pattern comes from the first, noncontroversial chapter of The Bell Curve. Think of your twelve closest friends, Richard J. Herrnstein and Charles Murray write. If you had chosen them randomly from the American population, the odds that half of your twelve closest friends would be college graduates would be six in a thousand. The odds that half of the twelve would have advanced degrees would be less than one in a million...

Ummm... No. Definitely not. Back when The Bell Curve was published, according to the Statistical Abstract, 22.2% of Americans over 25 had bachelor's degrees (an additional 7% had associate's degrees) and 7.5% of Americans over 25 had advanced degrees. Draw 12 people at random from this set, and if my hasty back-of-the-envelope calculation is correct* the odds that half of them will have college degrees is 2.5% (7.2% if we are counting associate's degrees)--not "six in a thousand." The odds that half of 12 people drawn at random from this set will have advanced degrees is 0.1%--not "less than one in a million." I can't for the life of me figure out what calculations Murray was trying to make that would produce his numbers. But whatever calculations he made, he is off by a factor of 4 (or 12, if we are counting associate's degrees) for the college-educated and off by a factor of 100 for those with advanced degrees.

"Does being off by a factor of a hundred (or four) really matter?" you ask. "2.5% or 0.6%, 0.1% or 0.001%, the odds are still low--and the point that American society is not well-mixed is still true. " But Murray's (and Brooks's) point is not that American society is not well mixed. Their point is that American society is totally stratified--and that is surely false.

And there is another point. Brooks's reference to the "first, noncontroversial chapter of The Bell Curve" is hard to read as anything other than a partial attempt to try to rehabilitate the reputation that Charles Murray shattered by writing The Bell Curve. It is worth noting that nothing Charles Murray writes can be trusted without being independently verified, and that even the first chapter of The Bell Curve is "controversial"--that is, flat-out wrong.

*Suppose we draw twelve people at random. The chance that all of the first six we draw will have college degrees is 0.222^6. The chance that all of the last six we draw will not have college degrees is 0.778^6. The chance that both of these things will happen together is the product of those two numbers--0.0000265. But we don't care about the order: we would be perfectly happy if numbers 2, 4, 7,8,9, and 12 had college degrees. So we need to multiply 0.0000265 by the number of possible ways in which six college and six non-college graduates can be ordered. There are (12!)/((6!)(6!)) such ways--924 such ways. Multiplying 0.0000265 by 924 gives us 0.025--our 2.5% number.


Dave Munger Wants to Educate Charles Murray

Dave Munger of Cognitive Daily is looking for help to educate Charles Murray:

Cognitive Daily: Help create a reading list for Charles Murray: Charles Murray (of The Bell Curve fame) has written a series of articles for the Wall Street Journal on intelligence.... One frustrating aspect of the articles is that Murray doesn't cite his sources....

Is Murray really suggesting that we shouldn't bother to teach children of average ability how to read and write effectively? Murray later claims that only small, "temporary" increases in IQ are possible, and that poor performance of many schools is due primarily to low IQ in their student population....

Only the gifted -- those with IQs above 120 -- are worthy or capable of being "good," Murray suggests. Murray offers little evidence to support these notions, other than to point readers back to his 1994 book. What I'm wondering is if Cognitive Daily readers might be interested in generating a list of resources to help open Murray's mind a bit. He could start with this one.

His first suggestion:

Duckworth, A.L., & Seligman, M.E.P. (2005). Self-discipline outdoes IQ in predicting academic performance of adolescents. Psychological Science, 16(12), 939-944.

The only thing you need to know about Murray's 1994 Bell Curve book is that he and his coauthor Herrnstein suppressed all education variables from the right-hand-side of their regressions because the results when education variables were included weren't what Murray and Herrnstein wanted them to be. With education suppressed as a factor determining accomplishment, it's hard to see how the 1994 book can inform anybody about the benefits of education vs. inherited genetically-influenced smarts.


Economy-and-Environment-Positions Blogging

Over at Crooked Timber, John Quiggin notes Nick Stern and company's responses to critics:

http://crookedtimber.org/2007/01/14/exxon-joins-the-real-world/: Stern has responded to critics of his review in a recently published postscript. There’s also a Technical Annex with a sensitivity analysis, something that both critics and those (like myself) with a generally favorable view should welcome.

Stern Review: Postscript: http://www.hm-treasury.gov.uk/media/3DD/35/Postscript.pdf

Technical Annex to Postscript: http://www.hm-treasury.gov.uk/media/3DD/43/Technical_annex_to_postscript.pdf

And John watches ExxonMobil change its position on global warming:

For the last few years, Exxon Mobil has been the biggest single source of support for global warming denialism, and has also exercised a lot of influence on the Bush Administration in its do-nothing stance. For a long while, Exxon was able to act through front groups like the Global Climate Coalition, but the corporation has been increasingly isolated and its activities have been exposed to public scrutiny, most notably with the open letter from the Royal Society last year.

Now Exxon has changed its position, recognising the inevitability of some sort of controls on CO2 emissions, and lobbying for a broad approach that will be relatively favourable to businesses like Exxon, rather than one tightly focused on the energy industry. At this point, an association with shills for denialism like the Competitive Enterprise Institute is counterproductive as well as being embarrassing, so they’ve been cut adrift (along with half a dozen others not yet named).

And commenters chime in:

From what I understand, there’s been an undercurrent within XOM for a while which basically said “those a------- are taking our money to tell us lies we want to hear and making us look like laughingstocks.” It was not a winning position.

New Chairman, new era. Tillerson is not Raymond, but can’t call his former boss an idiot and big ships change course slowly. They’re changing course without changing course. The ‘now the Dems are in control” line allows everyone to change without admitting anyone was wrong before.

Not that Tillerson is joining the Sierra Club. He doesn’t want the controversy or the bad media attention, or his competitors to turf XOM out of the solution space. It’s pragmatic, which is an improvement.

Posted by Exxon Exec's kid · January 14th, 2007 at 1:34 pm

Stunning!

For some time now, Exxon’s robust denialism has divided it from the rest of the oil industry. I recall a Wall Street Journal editorial (the gold standard, if that’s the phrase, for this kind of thing) praising Exxon for sticking to climate-change denial and deriding its competitors for bedding down with the enemy.

Interestingly, the WSJ’s news pages seem to have known this was coming from at least last September. Will the WSJ’s editorialists now heap scorn on Exxon for cooperating with environmental groups? Doesn’t there come a time when you notice that there’s no one else left in the foxhole?

Posted by jre · January 14th, 2007 at 2:21 pm....

Gee, the trolls who pop up on all the global warming threads around here are really going to be confused now. I almost feel sorry for them…

I wonder if the Bush Administration’s rumored soon-to-come about-face is the result of Cheney getting new marching orders from Exxon Mobil.

Posted by Steve LaBonne · January 14th, 2007 at 4:50 pm....

In my experience, even the least green companies harbor plenty of engineers and execs who, even if they don’t buy into environmentalism as an ideology, know which way the wind is blowing on issues such as global warming. For example, you often read that the big auto companies were merely making a PR gesture when they announced programs to develop hybrids or electrics. That may have been true at the higher levels of the companies, but the people who staffed the alternate car divisions were quite serious about producing real products on a large scale. I’ve felt for some time that pro-environmental groups should make a special effort to target the realistic people inside the corporations.

Posted by Jim Harrison · January 15th, 2007 at 1:53 am...


DON'T MENTION THE WAR!!

"Listen! Don't mention the war! I mentioned it once but I think I got away with it alright..."

Attytood: Don't mention the war (or bash Bush): Look, we realize that the White House Correspondents Association dinner is a "fun" event.... But sometimes life and art imitate each other just a little too closely.... [W]e saw earlier this week that the WHCA had chosen Rich Little -- who we used to watch imitate Richard Nixon and Bob Hope on Johnny Carson in the early 1970s... (huge h/t to occasional reader Phoenix Woman).... Little now says he has an understanding not to bash Bush or mention the war:

Little said organizers of the event made it clear they don't want a repeat of last year's controversial appearance by Stephen Colbert, whose searing satire of President Bush and the White House press corps fell flat and apparently touched too many nerves.

"They got a lot of letters," Little said Tuesday. "I won't even mention the word 'Iraq.'"

Little, who hasn't been to the White House since he was a favorite of the Reagan administration, said he'll stick with his usual schtick -- the impersonations of the past six presidents.

"They don't want anyone knocking the president. He's really over the coals right now, and he's worried about his legacy," added Little, a longtime Las Vegas resident.

DON'T MENTION THE WAR!!

"So. It's all forgotten now and let's hear no more about it. So that's two egg mayonnaise, a prawn Goebbels, a Hermann Goering, and four Colditz sandwiches. No, wait a minute, I got a bit confused here. Sorry. I got a bit confused because everybody here keeps mentioning the war. So could you... What's the matter?"

"It's alright."

"Is there something wrong?"

"Will you stop talking about the war!"

"But you started it!"

"We did not start it!"

"Yes you did! You invaded Poland!"

DON'T MENTION THE WAR!!


Dean Baker on the Social Security Trust Fund

He preaches the lesson:

Beat the Press: Since the "entitlement" cutters seem to be on the warpath again, it might be time for another sermon on the Social Security trust fund. This one really should not be hard, but I am afraid that that there are many powerful people with a vested interest in creating confusion, and they have succeeded.

In 1983, Congress (following the recommendation of the Greenspan commission) deliberately raised the Social Security tax far above the level needed to pay current Social Security benefits. This led to a large surplus. Under the law, this surplus must be used to buy U.S. government bonds. Also, under the law, the bonds held by Social Security are liabilities of the federal government, just like any other bonds. When the program needs the money from the bonds to pay benefits, it can rely on the interest and eventually the principle from these bonds, just like any private pension or individual.

Note, that there was never any rule that any Social Security only gets government bonds if the government runs a surplus. In other words, from the standpoint of Social Security, it matters not an iota that the government has mostly run deficits for the last quarter century. This may have been bad policy, but it doesn'

t affect the size of the trust fund.

The most recent projections from the non-partisan Congressional Budget Office show that Social Security will have enough money between projected taxes and the bonds in the trust fund to pay all benefits through the year 2046, with no changes whatsoever. This is very important to understand when someone like Federal Reserve Board Chairman Ben Bernanke proposes cuts to Social Security. Workers have already paid for these benefits. The Social Security tax is very regressive. Its regressivity can be justified by the progressive payback structure of the program. However, if the benefits are cut, at appoint when the program can still easily afford the benefits (e.g. 10-20 years), then the government has effectively stolen from the people who paid Social Security taxes.

There are many people who want to do this -- effectively default on the government held by the Social Security trust fund. If this default is now on the national agenda, then it certainly seems reasonable for the workers who are losing their benefits to raise the prospect of defaulting on government bonds more generally. After all, what can possibly be the rationale of only defaulting on the government bonds held by workers through the Social Security trust fund, but not defaulting on the government bonds held by the wealthy people who think this is such a good idea?


The Classic Star Trek Canon

We have a preliminary list of views on some of Classic Star Trek from http://delong.typepad.com/sdj/2007/01/classic_star_tr.html: which parts are canonical and which parts are obvious inferior forgeries:

Genuine and Canonical:

Star Trek II: The Wrath of Kahn
Star Trek IV: The Voyage Home
Star Trek VI: The Undiscovered Country

Shore Leave
Mirror, Mirror
The Enterprise Incident
Arena
The Devil in the Dark
Balance of Terror
The Trouble with Tribbles
The Changeling
A Piece of the Action
Charlie X
A Taste of Armageddon
The Menagerie
Space Seed
The City on the Edge of Forever
Amok Time
The Omega Glory

Possibly Canonical, but Subject to Dispute:

The Gamesters of Triskelion
Star Trek: The Animated Series, various episodes

Definitely Heretic:

Spock's Brain (The Rex Momus heresy)
Star Trek I: The Motion Picture (The Bruce Moomaw and Jacob Levy heresy)
Star Trek III: The Search for Spock (the Stoffel and Bruce Moomaw heresy)


Handouts for Guest Lectures in Marcia Parker's Course: Trade and California

Marcia Parker's Journalism-School Class: Introduction to Trade
http://delong.typepad.com/teaching_spring_2006/journalism_school_marcia_clark/index.html

Handouts for January 18, 2007:

Comparative Advantage; Micro Market Failures and Trade

Handouts for January 16, 2007:

Trade and the Division of Labor
Athletic Footware Value Chain
Trade and Scale Variables
Adam Smith on the Division of Labor


Handout: Comparative Advantage; Micro Trade Market Failures

Handout: Comparative Advantage; Micro Trade Market Failures

J. Bradford DeLong
U.C. Berkeley
January 16, 2006

Comparative Advantage

Take a look at some trade numbers:

Principal Goods Exports: November 2006:

  • $4.31B: Semiconductors
  • $4.25B: Civilian aircraft
  • $3.08B: Computers and accessories
  • $2.76B: Pharmaceutical preparations
  • $2.73B: Industrial machines, other

Principal Goods Imports: November 2006:

  • $21.09B: Automotive vehicles, parts, and engines
  • $15.87B: Crude oil
  • $5.65B: Pharmaceutical preparations
  • $5.60B: Computers and accessories
  • $5.35B: Apparel--cotton

A question:

We understand why we import crude oil--ExxonMobil's rigs can pump more oil at other places on the earth than they could here. We understand why we import autos--as a former owner of a Chevy Citation and a Ford Taurus, I understand that especially well. There are lots of goods that people in other countries can make more productively than we can here in America--can make with fewer workers and less capital. But why do we import goods like apparel, where U.S. producers are the most productive in the world?

An answer:

The principle of comparative advantage...

You can be more productive than somebody else at a task, but it can still be not worth your time

Micro examples: I'm a d---ed good xeroxer.

The morality of comparative advantage:*

Is this ethical?
You're taking advantage of somebody else's lousy bargaining position...
You're giving them opportunities they wouldn't otherwise have had...
The case of Cuba: market exchange is inherently unjust and destructive and the U.S. trade embargo against Cuba is the source of the island's impoverishment


Micro Trade Market Failures

Externalities:

  • Environment
  • Labor standards
  • Communities of technological and craft practice
  • People who don't know what they really need

All cases in which the maxim "if it's profitable, it's good" is false...

What is to be done?

  • Domestic policies
  • Trade policies
    • Government failure
    • Responsibility to people in other countries?

Handout: Trade and the Division of Labor

Handout: Trade and the Division of Labor

J. Bradford DeLong
U.C. Berkeley
January 16, 2006

  • Examples of the division of labor
    • Within Berkeley
    • Beyond Berkeley but within California
    • Beyond California but within the United States
    • Beyond the United States
  • Importance of the division of labor
    • Allowing for the application of skill-intensive production processes
    • Allowing for the application of capital-intensive production processes
    • Allowing for the application of technology-intensive production processes
    • Providing incentives:
      • For investment in skills
      • For investment in capital--saving
      • For investment in technology--research and development
  • How important is the division of labor beyond the United States?
    • Intra-industry trade: narrow specialization
    • Intra-industry trade: competition
      • As spur to efficiency
      • As reducer of profit margins
    • Trade based on factors of production
      • Resources as a source of trade
      • Wealth as a source of trade
      • Poverty as a source of trade
    • Comparative advantage

Handout: Athletic Footware Value Chain

Athletic Footware Value Chain

In China:

  • $15.67 materials
  • $2.59 direct factory labor
  • $4.56 indirect factory labor and overhead
  • $1.90 factory capital and entrepreneurial profit

Price leaving China: $24.71

In the Pacific:

  • $3.88 shipping and transport

Price landed in Oakland: $28.59

Cost of goods here in the U.S.:

  • $0.76 Warehousing & distribution
  • $0.38 Royalties
  • $0.27 quality assurance
  • $0.23 research and development
  • $0.38 other costs of goods sold

Final cost of goods sold: $30.62

  • $12.90 Sales, etc.
  • $1.75 Corporate overhead
  • $2.56 Corporate taxes
  • $4.21 Interest and profit

Value at wholesale: $52.03

Retail sales costs: $47.97

Retail price: $100.00


UPDATE: Source: Katherine McIntyre and Ezra Perlman (2000), "Nike: Channel Conflict' (Stanford): https://gsbapps.stanford.edu/cases/documents/EC9B.pdf.


Handout: U.S. International Trade and Scale Variables

Some scale variables:

  • U.S. monthly GDP: $1 trillion
    • Monthly goods and services exports: $130 billion = 13%
    • Monthly goods and services imports: $185 billion = 18.5%
    • Balancing item: net capital flow: $55 billion = 5.5%
      • Storing up purchasing power for the future
      • Private political risk insurance
      • Public development aid
      • Public political risk insurance
  • U.S. GDP per worker: $84,000 per year
    • Exports of $10,900 per year
    • Imports of $15,500 per year

Handout: Adam Smith on the Division of Labor

Division of Labor:

From Adam Smith (1776), An Inquiry into the Nature and Causes of the Wealth of Nations:

Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people... employed in procuring him this accommodation, exceeds all computation. The woollen coat... is the produce of the joint labour of... [t]he shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others....

How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! how much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world! What a variety of labour too is necessary in order to produce the tools of the meanest of those workmen! To say nothing of such complicated machines as the ship of the sailor, the mill of the fuller, or even the loom of the weaver.... The miner, the builder of the furnace for smelting the ore, the feller of the timber, the burner of the charcoal to be made use of in the smelting-house, the brick-maker, the brick-layer, the workmen who attend the furnace, the mill-wright, the forger, the smith, must all of them join their different arts in order to produce them....

This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature... to truck, barter, and exchange one thing for another.

Whether this propensity be one of those original principles in human nature... it belongs not to our present subject to enquire. It is common to all men, and to be found in no other race of animals.... Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog....

When an animal wants to obtain something either of a man or of another animal, it has no other means of persuasion but to gain the favour of those whose service it requires. A puppy fawns upon its dam, and a spaniel endeavours by a thousand attractions to engage the attention of its master who is at dinner, when it wants to be fed by him. Man sometimes uses the same arts with his brethren, and when he has no other means of engaging them to act according to his inclinations, endeavours by every servile and fawning attention to obtain their good will.

He has not time, however, to do this upon every occasion. In civilized society he stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.... [M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love... it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages...

Extent of the Market:

From Adam Smith (1776), An Inquiry into the Nature and Causes of the Wealth of Nations:

As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by... the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce... for such parts of the produce of other men's labour as he has occasion for.

There are some sorts of industry... which can be carried on no where but in a great town.... In the lone houses and very small villages which are scattered about in so desert a country as the Highlands of Scotland, every farmer must be butcher, baker and brewer for his own family. In such situations we can scarce expect to find even a smith, a carpenter, or a mason, within less than twenty miles of another of the same trade. The scattered families that live at eight or ten miles distance from the nearest of them, must learn to perform themselves a great number of little pieces of work, for which, in more populous countries, they would call in the assistanc.... A country carpenter... is not only a carpenter, but a joiner, a cabinet maker, and even a carver in wood, as well as a wheelwright, a ploughwright, a cart and waggon maker.... It is impossible there should be such a trade as even that of a nailer in the remote and inland parts of the Highlands of Scotland....

As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon the sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself...


Why Paul Krugman Is Not an Austrian

Thanks to Bobby K.'s unofficial Paul Krugman archive, Mark Thoma directs us to Krugman's argument against "Austrian" economics.

In a nutshell, the argument is simple: In the "Austrian" framework, there is a symmetry between demand for consumption goods and investment goods. So how come a boom in demand for investment goods caused by artificially and excessively-low interest rates produces an overall boom? Why doesn't a boom in demand for consumption goods caused by artificially and excessively-high interest rates cause a boom too, or instead?

It's a very good question.

Paul Krugman: [T]he hangover theory is disastrously wrongheaded. Recessions are not necessary consequences of booms. They can and should be fought, not with austerity but with liberality--with policies that encourage people to spend more, not less. Nor is this merely an academic argument: The hangover theory can do real harm.

Liquidationist views played an important role in the spread of the Great Depression--with Austrian theorists such as Friedrich von Hayek and Joseph Schumpeter strenuously arguing, in the very depths of that depression, against any attempt to restore "sham" prosperity by expanding credit and the money supply. And these same views are doing their bit to inhibit recovery in the world's depressed economies at this very moment.

The many variants of the hangover theory all go something like this:

In the beginning, an investment boom gets out of hand. Maybe excessive money creation or reckless bank lending drives it, maybe it is simply a matter of irrational exuberance on the part of entrepreneurs. Whatever the reason, all that investment leads to the creation of too much capacity--of factories that cannot find markets, of office buildings that cannot find tenants. Since construction projects take time to complete, however, the boom can proceed for a while before its unsoundness becomes apparent. Eventually, however, reality strikes--investors go bust and investment spending collapses. The result is a slump whose depth is in proportion to the previous excesses. Moreover, that slump is part of the necessary healing process: The excess capacity gets worked off, prices and wages fall from their excessive boom levels, and only then is the economy ready to recover.

Except for that last bit about the virtues of recessions, this is not a bad story about investment cycles. Anyone who has watched the ups and downs of, say, Boston's real estate market over the past 20 years can tell you that episodes in which overoptimism and overbuilding are followed by a bleary-eyed morning after are very much a part of real life. But let's ask a seemingly silly question: Why should the ups and downs of investment demand lead to ups and downs in the economy as a whole? Don't say that it's obvious--although investment cycles clearly are associated with economywide recessions and recoveries in practice, a theory is supposed to explain observed correlations, not just assume them. And in fact the key to the Keynesian revolution in economic thought--a revolution that made hangover theory in general and Austrian theory in particular as obsolete as epicycles--was John Maynard Keynes' realization that the crucial question was not why investment demand sometimes declines, but why such declines cause the whole economy to slump.

Here's the problem: As a matter of simple arithmetic, total spending in the economy is necessarily equal to total income (every sale is also a purchase, and vice versa). So if people decide to spend less on investment goods, doesn't that mean that they must be deciding to spend more on consumption goods--implying that an investment slump should always be accompanied by a corresponding consumption boom? And if so why should there be a rise in unemployment?

Most modern hangover theorists probably don't even realize this is a problem for their story. Nor did those supposedly deep Austrian theorists answer the riddle. The best that von Hayek or Schumpeter could come up with was the vague suggestion that unemployment was a frictional problem created as the economy transferred workers from a bloated investment goods sector back to the production of consumer goods. (Hence their opposition to any attempt to increase demand: This would leave "part of the work of depression undone," since mass unemployment was part of the process of "adapting the structure of production.")

But in that case, why doesn't the investment boom--which presumably requires a transfer of workers in the opposite direction--also generate mass unemployment? And anyway, this story bears little resemblance to what actually happens in a recession, when every industry--not just the investment sector--normally contracts.

As is so often the case in economics (or for that matter in any intellectual endeavor), the explanation of how recessions can happen, though arrived at only after an epic intellectual journey, turns out to be extremely simple. A recession happens when, for whatever reason, a large part of the private sector tries to increase its cash reserves at the same time. Yet, for all its simplicity, the insight that a slump is about an excess demand for money makes nonsense of the whole hangover theory. For if the problem is that collectively people want to hold more money than there is in circulation, why not simply increase the supply of money?

You may tell me that it's not that simple, that during the previous boom businessmen made bad investments and banks made bad loans. Well, fine. Junk the bad investments and write off the bad loans. Why should this require that perfectly good productive capacity be left idle?

The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone--horrors!--printing money) can ever be a good idea.

Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms--especially when it gives them a chance to lecture others on their failings.

My inner Friedrich Hayek is stronger than Paul Krugman's, but it can't think of a good answer to his question right now...


"Economics Only" Feed: So Let It Be Written; So Let It Be Done...

Jason Furman says that he would actually *read* my weblog if I offered an economics-only RSS feed. I hear and obey. Let me try to set one up...

Later: OK. Let's try http://del.icio.us/rss/DeLong_Economics as the feed of economics-only material, and http://delong.typepad.com/delong_economics_only/atom.xml as the feed for items where I (think I) have made a significant contribution (as opposed to simply lifting an interesting thought by somebody else from elsewhere).

We'll see how this works...


Classic Star Trek: The Genuine Item vs. Obvious Inferior Forgeries

Oooh. This could be dangerous. Classic Star Trek available on the iPod...

What is real genuine Classic Star Trek, anyway?

I believe that there is universal agreement that the genuine Classic Star Trek canon includes the three movies Star Trek II: The Wrath of Khan, Star Trek IV: The Voyage Home, and Star Trek VI: The Undiscovered Country. (The other so-called "Classic" Star Trek movies--I, III, V, and VII--are, by universal agreement, dismissed as spurious interpolations added to the canon at a later date by unknown but untalented writers, producers, and directors.)

But I know of no similar agreement as to which of the one-hour Classic "episodes" are real Classic Star Trek and which are forgeries. Now that the first season is available on iPod format, this is an important question. I know of three first-season episodes that are definitely genuine: "The Devil in the Dark," "The City on the Edge of Forever," and "Balance of Terror." But what are people's views on the others?


Why You Should Invest in Private Equity

Hoisted from comments: Daniel Davies gives the big important argument for investing in private equity:

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: Where Are the Defenders of Private Equity?: Dear investors,

If you believe that you have the self-discipline to "buy and hold" a portfolio of "mid cap value stocks" for ten years, despite the fact that during that time many of them will deliver heartbreakingly awful newsflow and earnings, then go for it.

Love,

The private equity industry.

PS: The evidence of the entire history of investing is that you don't.

Posted by: dsquared | January 17, 2007 at 12:23 AM


What Did People Expect When the Constitution Was Ratified?

Note to self: Abraham Lincoln, in his seventh debate with Stephen Douglas, cites Herrenvolk agitator Preston Brooks: "[W]hen this Constitution was framed, its framers did not look to [slavery] existing until [1858]":

Brooks of South Carolina once declared that when this Constitution was framed, its framers did not look to the institution existing until this day. When he said this, I think he stated a fact that is fully borne out by the history of the times. But he also said they were better and wiser men than the men of these days; yet the men of these days had experience which they had not, and by the invention of the cotton-gin it became a necessity in this country that slavery should be perpetual.

I now say that, willingly or unwillingly, purposely or without purpose, Judge Douglas has been the most prominent instrument in changing the position of the institution of slavery which the fathers of the Government expected to come to an end ere this--and putting it upon Brooks's cotton-gin basis--placing it where he openly confesses he has no desire there shall ever be an end of it.

This has an obvious bearing on Mark Graber's theory that it was illegitimate for the North to use its numbers in 1858 to pass laws affecting slavery because nobody back in 1787 had thought that the North would have superior numbers in 1858. If you believe Abraham Lincoln and Preston Brooks, it would be equally illegitimate according to Graber's theory for Southerners to hold slaves in 1858.


Keynes, Marx, Trotsky, Yglesias

Matthew Yglesias writes:

Matthew Yglesias / proudly eponymous since 2002: Marxism: I can't say that I really understand the man's economic thought...

That's OK. I can't say I understand it either--and I've tried too hard, or so many say. As I told my graduate students this year after I made them read the Manifesto of the Communist Party:

There are really five ways to understand Karl Marx's claim that economic laws make a Communist revolution both necessary and inevitable:

  • The Technology Marx: Capital is not a complement to but a substitute for labor, and so technological progress and capital accumulation that raise average labor productivity also lower the working-class wage. Hence the market system cannot and will be seen to be unable to deliver the good society we all deserve, and it will be overthrown...
  • **The Extent-of-the-Market Marx: Businessmen continually extend the domain of captalism, and competition from poor workers in newly-incorporated peripheral regions puts a lid on the wages of labor. Hence inequality grows in the core, and triggers revolution...
  • The Unveiling-of-Reality Marx: Previous systems of hierarchy and domination maintained control by hypnotizing the poor into believing that the rich in some sense "deserved" their high seats in the temple of civilization. Capitalism unveils all--replaces masked exploitation by naked exploitation--and without its ideological legitimation, unequal class society cannot survive...
  • The Ruling-Class-Trapped-by-Its-Ideology Marx: Although the ruling class could appease the working class by sharing the fruits of economic growth, they will not. They are trapped by their own ideological legitimation--they really do believe that it is in some sense "unjust" for a factor of production to earn more than its marginal product. Hence social democracy will inevitably collapse before an ideologically-based right-wing assault, income inequality will rise, and the system will be overthrown...
  • And the Solidarity Marx: Factory work--lots of people living in cities living alongside each other working alongside each other develop a sense of their common interest and of class solidarity, hence they will be able to organize, and revolt...

Which is the real Marx? Ah, grasshopper, not until you have learned not to ask that question will you be able to snatch the pebble from my hand...

Matthew goes on:

[B]ut he had himself some damn good aphorisms.... Marx's brilliant original eleventh thesis on Feuerbach "The philosophers have only interpreted the world, in various ways; the point is to change it."

No. The point is to change it in a positive direction. The American Enterprise Institute has "changed the world," and everybody based in reality recoils in horror. I prefer to ignore Thesis XI and to take my stand with John Maynard Keynes's view of Comrade Trotsky at the Cafe Central:

[Trotsky's] first proposition. The historical process necessitates the change-over to Socialism if civilisation is to be preserved.... Second proposition. It is unthinkable that this change-over can come about by peaceful argument and voluntary surrender. Except in response to force, the possessing classes will surrender nothing.... Third proposition.... The possessing classes will do lip-service to parliamentary methods so long as they are in control of the parliamentary machine, but if they are dislodged, then, Trotsky maintains, it is absurd to suppose that they will prove squeamish about a resort to force on their side.... Fourth proposition. In view of all this, whilst it may be good strategy to aim also at constitutional power, it is silly not to organise on the basis that material force will be the determining factor in the end. In the revolutionary struggle only the greatest determination is of avail to strike the arms out of the hands of reaction to limit the period of civil war, and to lessen the number of its victims....

Granted his assumptions, much of Trotsky's argument is, I think, unanswerable. Nothing can be sillier than to play at revolution.... But... he assumes that the moral and intellectual problems of the transformation of Society have been already solved--that a plan exists, and that nothing remains except to put it into operation.... He is so much occupied with means that he forgets to tell us what it is all for.... Trotsky's book must confirm us in our conviction of the uselessness, the empty-headedness of Force at the present stage of human affairs. Force would settle nothing no more in the Class War than in the Wars of Nations or in the Wars of Religion. An understanding of the historical process, to which Trotsky is so fond of appealing, declares not for, but against, Force at this juncture of things. We lack more than usual a coherent scheme of progress, a tangible ideal. All the political parties alike have their origins in past ideas and not in new ideas and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait.


La Ilaha Illa-llah, wa Muhammadan Rasulu-llah

There is no god but God, and Muhammed is his messenger blogging. We turn the mike over to Shadi Hamid:

democracyarsenal.org: John Burns, Say it Isn't So: Look, I'm sure that "veteran Middle East correspondent for the New York Times" John Burns is a great guy. He did, after all, win a 1993 Pulitzer for "his courageous and thorough coverage of the destruction of Sarajevo and the barbarous killings in the war in Bosnia-Herzegovina." Burns has been based in Baghdad for the last couple years. So this juicy tidbit about Burns not knowing the most basic thing about Islam is unbelievable and dispiriting for all those who would like to think that we will ever understand the Muslim world. From the Angry Arab:

An American correspondent in the Middle East sent me this:

Today the Iraqi government held a one time screening of the most recent execution video of Barzan Ibrahim and Awad Hamed al-Bandar, with no cameras allowed. Bandar was very scared and crying. He was saying the shahada. Journalists asked if Bandar said the shahada. New York Times bureau chief and veteran middle east correspondent John Burns asked Basem Ridha, Nouri al Maliki's spokesman, what the shahada was. Basem said that it was the Islamic creed. 'whats that?' asked John Burns. Journalists explained that it was 'There is no God but Allah and Mohammed is his messenger.'

If this is true, then it really is pathetic. John Burns, say it isn't so?


Why Oh Why Can't We Have a Better Press Corps? (Washington Post Budget Coverage Edition)

UPDATE: Brian Reidl justly complains. He's right. I apologize. He said the same things about Bush administration fiscal policy that Chris Edwards said--the things that should have been Montgomery and and Henderson's lead, but they cherry-picked the quote from their interview with him:

And what makes you think, in the course of a 20-minute interview, I did not make also those points? Points that often *do* get quoted in countless other articles. At one point in the interview, the reporter asked me what the Administration's strategy seemed to be. You seemed to be confusing my description of a strategy with its endorsement.

That's just lazy blogging, especially from a college professor.

Brian Riedl


Lori Montgomery and Nell Henderson give yet another reason why in a just world the Washington Post would have to pay people to read it:

Burden Set to Shift On Balanced Budget - washingtonpost.com: When he takes the House rostrum next week for the State of the Union address, President Bush will list among his goals a balanced federal budget, a shift for a president who has presided over record deficits while aggressively cutting taxes.... "The Democrats have assailed deficits under President Bush. The White House is telling Democrats to walk the walk," said Brian M. Riedl, a budget analyst at the conservative Heritage Foundation...

Montgomery and Henderson's first paragraph assumes--falsely--that Bush's shift in rhetoric signals a shift in policy. Montgomery and Henderson's first quote is from one of the very very few people still willing to shill for the Bush administration's fiscal policy. Only afterwards do they concede a smidgeon to reality:

Budget experts and economists from across the political spectrum, including some who worked in the Bush White House, say that Bush is unlikely to offer real concessions toward a balanced budget in the plan he delivers to Congress next month...

Which they then take back:

Still, the administration appears to be stepping away from an economic argument that has worked well for Republicans throughout Bush's presidency: that federal deficits... offer little cause for concern...

The first quote from a critic of the Bush administration is delayed until paragraph 7:

But that view ignores some important facts, U.S. comptroller general David Walker said. The government is living far beyond its means.... Take away the Social Security money, and the deficit would have been $434 billion.... [T]he Social Security surplus will begin to shrink in 2009, as the baby boomers start to retire. It is it estimated that the fund will dry up completely in 2017. At that point, the nation's rosy fiscal picture will darken rapidly...

Only in paragraph 18 do we get the story's proper lead:

"I get the impression they're trying to beef up his reputation for fiscal responsibility, not by doing heavy lifting and actually targeting programs like farm subsidies, but through rhetoric and projections and changes in rules and things that are easy for a president to propose," said Chris Edwards, tax director at the Cato Institute...


Where Are the Defenders of Private Equity?

Felix Salmon searches for defenders of the private equity industry:

RGE - Where are the defenders of private equity?: Edward Chancellor on private equity... penned something over 2,750 words attacking the private equity industry and all it stands for. Here's the shorter version:

There's a very wide distribution of returns between the best and the worst managers. Unless investors have money in the best-performing buyout funds, they're likely to do far worse than average... Over the past 10 years, investors could have beaten the returns of the best private equity funds simply by applying private equity-style leverage to a portfolio of quoted mid-cap value stocks....

Many private equity deals nowadays involve buying companies from other buyout firms. These so-called "sponsor-to-sponsor deals" offer little obvious scope for operational improvement.... Private equity has come to resemble a game of hot potato in which companies are handed from one private equity firm to another, sometimes as often as three or four times in succession....

Private equity firms could clog up the world's stock markets as they prepare to float upwards of a trillion dollars worth of companies in the years to come. That may not be good news for limited partners, but the private equity firms will still harvest tens of millions of dollars in deal and management fees.... There's the legacy of excessive corporate debt to consider. This could cripple hundreds of companies in years to come...

Chancellor concludes:

In fact, the only major financial players who stand to profit from a buyout bust are the private equity firms themselves. Senior industry figures acknowledge that corporate valuations are currently unattractive. Some admit, in private, to looking forward to a downturn, which might allow them to acquire companies at more affordable prices. Several firms, including industry titans Blackstone, Carlyle, KKR and Texas Pacific have anticipated such an outcome by raising distressed debt funds. Today's private equity boom is shaping up to add yet another chapter to Wall Street's long history of cynicism and arrogance.

I can't say that I really disagree with much of what Chancellor says, although I certainly don't feel as vehement about it as he does. What I'd be really interested in reading, however, would be a cogently-argued defense of private equity, which is something I haven't seen much of, lately.


National Retail Federation Says Holiday Sales Were "Subdued"

We still don't have a good read on demand during the Christmas season:

The Bonddad Blog: National Retail Federation Says Holiday Sales Were "Subdued": According to the National Retail Federation (NRF), retail industry sales for December (which exclude automobiles, gas stations, and restaurants) rose 3.9 percent unadjusted over last year and increased 0.4 percent seasonally adjusted from November. November industry sales were revised down from 6.3 percent unadjusted to 5.1 percent unadjusted. December retail sales released today by the U.S. Commerce Department show that total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) rose 0.9 percent seasonally adjusted from November and increased 3.6 percent unadjusted year-over-year. "Unseasonably warmer weather and the slower housing market had a clear impact on consumer spending," said NRF Chief Economist Rosalind Wells. "NRF expects these subdued gains to continue into the first half of 2007"...


Why Oh Why Can't We Have a Better Press Corps? (Washington Post/Sebastian Mallaby Edition)

How many lies by Sebastian Mallaby can you spot here?

Sebastian Mallaby - The Other Team's Playbook - washingtonpost.com: [J]ust as Democrats have gained the upper hand on foreign policy, so Republicans have gained the upper hand on health policy.... Last week Arnold Schwarzenegger became the third Republican governor (following Jim Douglas of Vermont and Mitt Romney of Massachusetts) to announce a plan for universal health care; only one Democratic governor (John Baldacci of Maine) has matched that.... [T]he Democrats are advocating a faith-based delusion while Republicans represent the reality-based community....

The Bush administration is already more Wilsonian than Wilson's party, but that's an old piece of cross-dressing.... Bush may... emerge as the lesser of two budgetary evils. Consider: The Democrats have already slammed the door on Social Security reform and are now sorely tempted to propose congressional initiatives that aren't paid for....

The grand prize... will go to the administration if it tackles climate change.... I put the case for a carbon tax or a cap-and-trade system to... the head of the Council on Environmental Quality at the White House.... Connaughton sounded open to them. "In concept I can agree with you," he said. Something must be done to stem demand for climate-warming energy, and although there are several ways of getting there, a carbon tax or cap-and-trade system would be the most "elegant." Whoa! This may be spin, but it's certainly new spin.... [I]t will be interesting to watch the administration's energy policy. Does it want to address climate change or merely the chimera of energy security?...

With columnists like this, I really don't think the Washington Post will be here in a decade. With columnists like this, the Washington Post today should be paying its readers rather than charging them.


Religious-Themed Yuppie Food Products Blogging

We return from Trader Joe's bearing Ezekiel (that's a Hebrew prophet) bread, Maranatha (that's a prayer asking Jesus to come back soon: "Come, Holy Lord), but nothing named after the Islamic or Buddhist traditions--no Imam pistachios or Avelokiteshvara microwaveable rice dishes. This seems vaguely un-Californian...


Yet More Unseasonable California Weather Blogging

It's a Holiday Weekend. We're supposed to laze about outside playing frisbee, hiking to astonishing view points, and eating barbequed marinated shrimp at redwood tables beneath the warm California sun. But are we? Nooooo...

IIRC, when the air is 70F, its molecules are moving only 5% faster than when the air is 25F. But when I feel the 25F air on my skin, do my nerves tell me: "Hey, these air molecules are moving 5% slower than usual. How interesting!"? No. My nerves tell me: "What the f--- do you think you're doing, brain? Get us out of here NOW!"


Letter from the Birmingham Jail

A historical document:

April 16, 1963

My Dear Fellow Clergymen:

While confined here in the Birmingham city jail, I came across your recent statement calling my present activities "unwise and untimely." Seldom do I pause to answer criticism of my work and ideas. If I sought to answer all the criticisms that cross my desk, my secretaries would have little time for anything other than such correspondence in the course of the day, and I would have no time for constructive work. But since I feel that you are men of genuine good will and that your criticisms are sincerely set forth, I want to try to answer your statements in what I hope will be patient and reasonable terms.

I think I should indicate why I am here In Birmingham, since you have been influenced by the view which argues against "outsiders coming in." I have the honor of serving as president of the Southern Christian Leadership Conference, an organization operating in every southern state, with headquarters in Atlanta, Georgia. We have some eighty-five affiliated organizations across the South, and one of them is the Alabama Christian Movement for Human Rights. Frequently we share staff, educational and financial resources with our affiliates. Several months ago the affiliate here in Birmingham asked us to be on call to engage in a nonviolent direct-action program if such were deemed necessary. We readily consented, and when the hour came we lived up to our promise. So I, along with several members of my staff, am here because I was invited here I am here because I have organizational ties here.

But more basically, I am in Birmingham because injustice is here. Just as the prophets of the eighth century B.C. left their villages and carried their "thus saith the Lord" far beyond the boundaries of their home towns, and just as the Apostle Paul left his village of Tarsus and carried the gospel of Jesus Christ to the far corners of the Greco-Roman world, so am I. compelled to carry the gospel of freedom beyond my own home town. Like Paul, I must constantly respond to the Macedonian call for aid.

Moreover, I am cognizant of the interrelatedness of all communities and states. I cannot sit idly by in Atlanta and not be concerned about what happens in Birmingham. Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly. Never again can we afford to live with the narrow, provincial "outside agitator" idea. Anyone who lives inside the United States can never be considered an outsider anywhere within its bounds.

You deplore the demonstrations taking place In Brimingham. But your statement, I am sorry to say, fails to express a similar concern for the conditions that brought about the demonstrations. I am sure that none of you would want to rest content with the superficial kind of social analysis that deals merely with effects and does not grapple with underlying causes. It is unfortunate that demonstrations are taking place in Birmingham, but it is even more unfortunate that the city's white power structure left the Negro community with no alternative.

In any nonviolent campaign there are four basic steps: collection of the facts to determine whether injustices exist; negotiation; self- purification; and direct action. We have gone through an these steps in Birmingham. There can be no gainsaying the fact that racial injustice engulfs this community. Birmingham is probably the most thoroughly segregated city in the United States. Its ugly record of brutality is widely known. Negroes have experienced grossly unjust treatment in the courts. There have been more unsolved bombings of Negro homes and churches in Birmingham than in any other city in the nation. These are the hard, brutal facts of the case. On the basis of these conditions, Negro .leaders sought to negotiate with the city fathers. But the latter consistently refused to engage in good-faith negotiation.

Then, last September, came the opportunity to talk with leaders of Birmingham's economic community. In the course of the negotiations, certain promises were made by the merchants --- for example, to remove the stores humiliating racial signs. On the basis of these promises, the Reverend Fred Shuttles worth and the leaders of the Alabama Christian Movement for Human Rights agreed to a moratorium on all demonstrations. As the weeks and months went by, we realized that we were the victims of a broken promise. A few signs, briefly removed, returned; the others remained.

As in so many past experiences, our hopes bad been blasted, and the shadow of deep disappointment settled upon us. We had no alternative except to prepare for direct action, whereby we would present our very bodies as a means of laying our case before the conscience of the local and the national community. Mindful of the difficulties involved, we decided to undertake a process of self-purification. We began a series of workshops on nonviolence, and we repeatedly asked ourselves : "Are you able to accept blows without retaliating?" "Are you able to endure the ordeal of jail?" We decided to schedule our direct-action program for the Easter season, realizing that except for Christmas, this is the main shopping period of the year. Knowing that a strong economic with with-drawl program would be the by-product of direct action, we felt that this would be the best time to bring pressure to bear on the merchants for the needed change.

Then it occurred to us that Birmingham's mayoralty election was coming up in March, and we speedily decided to postpone action until after election day. When we discovered that the Commissioner of Public Safety, Eugene "Bull" Connor, had piled up enough votes to be in the run-oat we decided again to postpone action until the day after the run-off so that the demonstrations could not be used to cloud the issues. Like many others, we waited to see Mr. Connor defeated, and to this end we endured postponement after postponement. Having aided in this community need, we felt that our direct-action program could be delayed no longer.

You may well ask: "Why direct action? Why sit-ins, marches and so forth? Isn't negotiation a better path?" You are quite right in calling, for negotiation. Indeed, this is the very purpose of direct action. Nonviolent direct action seeks to create such a crisis and foster such a tension that a community which has constantly refused to negotiate is forced to confront the issue. It seeks so to dramatize the issue that it can no longer be ignored. My citing the creation of tension as part of the work of the nonviolent-resister may sound rather shocking. But I must confess that I am not afraid of the word "tension." I have earnestly opposed violent tension, but there is a type of constructive, nonviolent tension which is necessary for growth. Just as Socrates felt that it was necessary to create a tension in the mind so that individuals could rise from the bondage of myths and half-truths to the unfettered realm of creative analysis and objective appraisal, we must we see the need for nonviolent gadflies to create the kind of tension in society that will help men rise from the dark depths of prejudice and racism to the majestic heights of understanding and brotherhood.

The purpose of our direct-action program is to create a situation so crisis-packed that it will inevitably open the door to negotiation. I therefore concur with you in your call for negotiation. Too long has our beloved South land been bogged down in a tragic effort to live in monologue rather than dialogue.

One of the basic points in your statement is that the action that I and my associates have taken .in Birmingham is untimely. Some have asked: "Why didn't you give the new city administration time to act?" The only answer that I can give to this query is that the new Birmingham administration must be prodded about as much as the outgoing one, before it will act. We are sadly mistaken if we feel that the election of Albert Boutwell as mayor. will bring the millennium to Birmingham. While Mr. Boutwell is a much more gentle person than Mr. Connor, they are both segregationists, dedicated to maintenance of the status quo. I have hope that Mr. Boutwell will be reasonable enough to see the futility of massive resistance to desegregation. But he will not see this without pressure from devotees of civil rights. My friends, I must say to you that we have not made a single gain civil rights without determined legal and nonviolent pressure. Lamentably, it is an historical fact that privileged groups seldom give up their privileges voluntarily. Individuals may see the moral light and voluntarily give up their unjust posture; but, as Reinhold Niebuhr has reminded us, groups tend to be more immoral than individuals.

We know through painful experience that freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed. Frankly, I have yet to engage in a direct-action campaign that was "well timed" in the view of those who have not suffered unduly from the disease of segregation. For years now I have heard the word "Wait!" It rings in the ear of every Negro with piercing familiarity. This "Wait" has almost always meant 'Never." We must come to see, with one of our distinguished jurists, that "justice too long delayed is justice denied."

We have waited .for more than 340 years for our constitutional and God- given rights. The nations of Asia and Africa are moving with jetlike speed toward gaining political independence, but we stiff creep at horse-and-buggy pace toward gaining a cup of coffee at a lunch counter. Perhaps it is easy for those who have never felt the stinging dark of segregation to say, "Wait." But when you have seen vicious mobs lynch your mothers and fathers at will and drown your sisters and brothers at whim; when you have seen hate-filled policemen curse, kick and even kill your black brothers and sisters; when you see the vast majority of your twenty million Negro brothers smothering in an airtight cage of poverty in the midst of an affluent society; when you suddenly find your tongue twisted and your speech stammering as you seek to explain to your six- year-old daughter why she can't go to the public amusement park that has just been advertised on television, and see tears welling up in her eyes when she is told that Funtown is closed to colored children, and see ominous clouds of inferiority beginning to form in her little mental sky, and see her beginning to distort her personality by developing an unconscious bitterness toward white people; when you have to concoct an answer for a five-year-old son who is asking: "Daddy, why do white people treat colored people so mean?"; when you take a cross-county drive and find it necessary to sleep night after night in the uncomfortable corners of your automobile because no motel will accept you; when you are humiliated day in and day out by nagging signs reading "white" and "colored"; when your first name becomes "nigger," your middle name becomes "boy" (however old you are) and your last name becomes "John," and your wife and mother are never given the respected title "Mrs."; when you are harried by day and haunted by night by the fact that you are a Negro, living constantly at tiptoe stance, never quite knowing what to expect next, and are plagued with inner fears and outer resentments; when you no forever fighting a degenerating sense of "nobodiness" then you will understand why we find it difficult to wait. There comes a time when the cup of endurance runs over, and men are no longer willing to be plunged into the abyss of despair. I hope, sirs, you can understand our legitimate and unavoidable impatience.

You express a great deal of anxiety over our willingness to break laws. This is certainly a legitimate concern. Since we so diligently urge people to obey the Supreme Court's decision of 1954 outlawing segregation in the public schools, at first glance it may seem rather paradoxical for us consciously to break laws. One may won ask: "How can you advocate breaking some laws and obeying others?" The answer lies in the fact that there fire two types of laws: just and unjust. I would be the Brat to advocate obeying just laws. One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that "an unjust law is no law at all"

Now, what is the difference between the two? How does one determine whether a law is just or unjust? A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law. To put it in the terms of St. Thomas Aquinas: An unjust law is a human law that is not rooted in eternal .law and natural law. Any law that uplifts human personality is just. Any law that degrades human personality is unjust. All segregation statutes are unjust because segregation distort the soul and damages the personality. It gives the segregator a false sense of superiority and the segregated a false sense of inferiority. Segregation, to use the terminology of the Jewish philosopher Martin Buber, substitutes an "I- it" relationship for an "I-thou" relationship and ends up relegating persons to the status of things. Hence segregation is not only politically, economically and sociologically unsound, it is morally wrong and awful. Paul Tillich said that sin is separation. Is not segregation an existential expression 'of man's tragic separation, his awful estrangement, his terrible sinfulness? Thus it is that I can urge men to obey the 1954 decision of the Supreme Court, for it is morally right; and I can urge them to disobey segregation ordinances, for they are morally wrong.

Let us consider a more concrete example of just and unjust laws. An unjust law is a code that a numerical or power majority group compels a minority group to obey but does not make binding on itself. This is difference made legal. By the same token, a just law is a code that a majority compels a minority to follow and that it is willing to follow itself. This is sameness made legal.

Let me give another explanation. A law is unjust if it is inflicted on a minority that, as a result of being denied the right to vote, had no part in enacting or devising the law. Who can say that the legislature of Alabama which set up that state's segregation laws was democratically elected? Throughout Alabama all sorts of devious methods are used to prevent Negroes from becoming registered voters, and there are some counties in which, even though Negroes constitute a majority of the population, not a single Negro is registered. Can any law enacted under such circumstances be considered democratically structured?

Sometimes a law is just on its face and unjust in its application. For instance, I have been arrested on a charge of parading without a permit. Now, there is nothing wrong in having an ordinance which requires a permit for a parade. But such an ordinance becomes unjust when it is used to maintain segregation and to deny citizens the First Amendment privilege of peaceful assembly and protest.

I hope you are able to ace the distinction I am trying to point out. In no sense do I advocate evading or defying the law, as would the rabid segregationist. That would lead to anarchy. One who breaks an unjust law must do so openly, lovingly, and with a willingness to accept the penalty. I submit that an individual who breaks a law that conscience tells him is unjust and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for law.

Of course, there is nothing new about this kind of civil disobedience. It was evidenced sublimely in the refusal of Shadrach, Meshach and Abednego to obey the laws of Nebuchadnezzar, on the ground that a higher moral law was at stake. It was practiced superbly by the early Christians, who were willing to face hungry lions and the excruciating pain of chopping blocks rather than submit to certain unjust laws of the Roman Empire. To a degree, academic freedom is a reality today because Socrates practiced civil disobedience. In our own nation, the Boston Tea Party represented a massive act of civil disobedience.

We should never forget that everything Adolf Hitler did in Germany was "legal" and everything the Hungarian freedom fighters did in Hungary was "illegal." It was "illegal" to aid and comfort a Jew in Hitler's Germany. Even so, I am sure that, had I lived in Germany at the time, I would have aided and comforted my Jewish brothers. If today I lived in a Communist country where certain principles dear to the Christian faith are suppressed, I would openly advocate disobeying that country's anti religious laws.

I must make two honest confessions to you, my Christian and Jewish brothers. First, I must confess that over the past few years I have been gravely disappointed with the white moderate. I have almost reached the regrettable conclusion that the Negro's great stumbling block in his stride toward freedom is not the White Citizen's Councilor or the Ku Klux Klanner, but the white moderate, who is more devoted to "order" than to justice; who prefers a negative peace which is the absence of tension to a positive peace which is the presence of justice; who constantly says: "I agree with you in the goal you seek, but I cannot agree with your methods of direct action"; who paternalistically believes he can set the timetable for another man's freedom; who lives by a mythical concept of time and who constantly advises the Negro to wait for a "more convenient season." Shallow understanding from people of good will is more frustrating than absolute misunderstanding from people of ill will. Lukewarm acceptance is much more bewildering than outright rejection.

I had hoped that the white moderate would understand that law and order exist for the purpose of establishing justice and that when they fan in this purpose they become the dangerously structured dams that block the flow of social progress. I had hoped that the white moderate would understand that the present tension in the South is a necessary phase of the transition from an obnoxious negative peace, in which the Negro passively accepted his unjust plight, to a substantive and positive peace, in which all men will respect the dignity and worth of human personality. Actually, we who engage in nonviolent direct action are not the creators of tension. We merely bring to the surface the hidden tension that is already alive. We bring it out in the open, where it can be seen and dealt with. Like a boil that can never be cured so long as it is covered up but must be opened with an its ugliness to the natural medicines of air and light, injustice must be exposed, with all the tension its exposure creates, to the light of human conscience and the air of national opinion before it can be cured.

In your statement you assert that our actions, even though peaceful, must be condemned because they precipitate violence. But is this a logical assertion? Isn't this like condemning a robbed man because his possession of money precipitated the evil act of robbery? Isn't this like condemning Socrates because his unswerving commitment to truth and his philosophical inquiries precipitated the act by the misguided populace in which they made him drink hemlock? Isn't this like condemning Jesus because his unique God-consciousness and never-ceasing devotion to God's will precipitated the evil act of crucifixion? We must come to see that, as the federal courts have consistently affirmed, it is wrong to urge an individual to cease his efforts to gain his basic constitutional rights because the quest may precipitate violence. Society must protect the robbed and punish the robber.

I had also hoped that the white moderate would reject the myth concerning time in relation to the struggle for freedom. I have just received a letter from a white brother in Texas. He writes: "An Christians know that the colored people will receive equal rights eventually, but it is possible that you are in too great a religious hurry. It has taken Christianity almost two thousand years to accomplish what it has. The teachings of Christ take time to come to earth." Such an attitude stems from a tragic misconception of time, from the strangely rational notion that there is something in the very flow of time that will inevitably cure all ills. Actually, time itself is neutral; it can be used either destructively or constructively. More and more I feel that the people of ill will have used time much more effectively than have the people of good will. We will have to repent in this generation not merely for the hateful words and actions of the bad people but for the appalling silence of the good people. Human progress never rolls in on wheels of inevitability; it comes through the tireless efforts of men willing to be co-workers with God, and without this 'hard work, time itself becomes an ally of the forces of social stagnation. We must use time creatively, in the knowledge that the time is always ripe to do right. Now is the time to make real the promise of democracy and transform our pending national elegy into a creative psalm of brotherhood. Now is the time to lift our national policy from the quicksand of racial injustice to 6e solid rock of human dignity.

You speak of our activity in Birmingham as extreme. At fist I was rather disappointed that fellow clergymen would see my nonviolent efforts as those of an extremist. I began thinking about the fact that stand in the middle of two opposing forces in the Negro community. One is a force of complacency, made up in part of Negroes who, as a result of long years of oppression, are so drained of self-respect and a sense of "somebodiness" that they have adjusted to segregation; and in part of a few middle class Negroes who, because of a degree of academic and economic security and because in some ways they profit by segregation, have become insensitive to the problems of the masses. The other force is one of bitterness and hatred, and it comes perilously close to advocating violence. It is expressed in the various black nationalist groups that are springing up across the nation, the largest and best- known being Elijah Muhammad's Muslim movement. Nourished by the Negro's frustration over the continued existence of racial discrimination, this movement is made up of people who have lost faith in America, who have absolutely repudiated Christianity, and who have concluded that the white man is an incorrigible "devil."

I have tried to stand between these two forces, saying that we need emulate neither the "do-nothingism" of the complacent nor the hatred and despair of the black nationalist. For there is the more excellent way of love and nonviolent protest. I am grateful to God that, through the influence of the Negro church, the way of nonviolence became an integral part of our struggle.

If this philosophy had not emerged, by now many streets of the South would, I am convinced, be flowing with blood. And I am further convinced that if our white brothers dismiss as "rabble-rousers" and "outside agitators" those of us who employ nonviolent direct action, and if they refuse to support our nonviolent efforts, millions of Negroes will, out of frustration and despair, seek solace and security in black- nationalist ideologies a development that would inevitably lead to a frightening racial nightmare.

Oppressed people cannot remain oppressed forever. The yearning for freedom eventually manifests itself, and that is what has happened to the American Negro. Something within has reminded him of his birthright of freedom, and something without has reminded him that it can be gained. Consciously or. unconsciously, he has been caught up by the Zeitgeist, and with his black brothers of Africa and his brown and yellow brothers of Asia, South America and the Caribbean, the United States Negro is moving with a sense of great urgency toward the promised land of racial justice. If one recognizes this vital urge that has engulfed the Negro community, one should readily understand why public demonstrations are taking place. The Negro has many pent-up resentments and latent frustrations, and he must release them. So let him march; let him make prayer pilgrimages to the city hall; let him go on freedom rides-and try to understand why he must do so. If his repressed emotions are not released in nonviolent ways, they will seek expression through violence; this is not a threat but a fact of history. So I have not said to my people: "Get rid of your discontent." Rather, I have tried to say that this normal and healthy discontent can be channeled into the creative outlet of nonviolent direct action. And now this approach is being termed extremist.

But though I was initially disappointed at being categorized as an extremist, as I continued to think about the matter I gradually gained a measure of satisfaction from the label. Was not Jesus an extremist for love: "Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you." Was not Amos an extremist for justice: "Let justice roll down like waters and righteousness like an ever-flowing stream." Was not Paul an extremist for the Christian gospel: "I bear in my body the marks of the Lord Jesus." Was not Martin Luther an extremist: "Here I stand; I cannot do otherwise, so help me God." And John Bunyan: "I will stay in jail to the end of my days before I make a butchery of my conscience." And Abraham Lincoln: "This nation cannot survive half slave and half free." And Thomas Jefferson: "We hold these truths to be self-evident, that an men are created equal ..." So the question is not whether we will be extremists, but what kind of extremists we viii be. We be extremists for hate or for love? Will we be extremist for the preservation of injustice or for the extension of justice? In that dramatic scene on Calvary's hill three men were crucified. We must never forget that all three were crucified for the same crime---the crime of extremism. Two were extremists for immorality, and thus fell below their environment. The other, Jeans Christ, was an extremist for love, truth and goodness, and thereby rose above his environment. Perhaps the South, the nation and the world are in dire need of creative extremists.

I had hoped that the white moderate would see this need. Perhaps I was too optimistic; perhaps I expected too much. I suppose I should have realized that few members of the oppressor race can understand the deep groans and passionate yearnings of the oppressed race, and still fewer have the vision to see that injustice must be rooted out by strong, persistent and determined action. I am thankful, however, that some of our white brothers in the South have grasped the meaning of this social revolution and committed themselves to it. They are still too few in quantity, but they are big in quality. Some-such as Ralph McGill, Lillian Smith, Harry Golden, James McBride Dabbs, Ann Braden and Sarah Patton Boyle---have written about our struggle in eloquent and prophetic terms. Others have marched with us down nameless streets of the South. They have languished in filthy, roach-infested jails, suffering the abuse and brutality of policemen who view them as "dirty nigger lovers." Unlike so many of their moderate brothers and sisters, they have recognized the urgency of the moment and sensed the need for powerful "action" antidotes to combat the disease of segregation.

Let me take note of my other major disappointment. I have been so greatly disappointed with the white church and its leadership. Of course, there are some notable exceptions. I am not unmindful of the fact that each of you has taken some significant stands on this issue. I commend you, Reverend Stallings, for your Christian stand on this past Sunday, in welcoming Negroes to your worship service on a non segregated basis. I commend the Catholic leaders of this state for integrating Spring Hill College several years ago.

But despite these notable exceptions, I must honestly reiterate that I have been disappointed with the church. I do not say this as one of those negative .critics who can always find. something wrong with the church. I say this as a minister of the gospel, who loves the church; who was nurtured in its bosom; who 'has been sustained by its spiritual blessings and who will remain true to it as long as the cord of Rio shall lengthen.

When I was suddenly catapulted into the leadership of the bus protest in Montgomery, Alabama, a few years ago, I felt we would be supported by the white church felt that the white ministers, priests and rabbis of the South would be among our strongest allies. Instead, some have been outright opponents, refusing to understand the freedom movement and misrepresenting its leader era; an too many others have been more cautious than courageous and have remained silent behind the anesthetizing security of stained-glass windows.

In spite of my shattered dreams, I came to Birmingham with the hope that the white religious leadership of this community would see the justice of our cause and, with deep moral concern, would serve as the channel through which our just grievances could reach the power structure. I had hoped that each of you would understand. But again I have been disappointed.

I have heard numerous southern religious leaders admonish their worshipers to comply with a desegregation decision because it is the law, but I have longed to hear white ministers declare: "Follow this decree because integration is morally right and because the Negro is your brother." In the midst of blatant injustices inflicted upon the Negro, I have watched white churchmen stand on the sideline and mouth pious. irrelevancies and sanctimonious trivialities. In the midst of a mighty struggle to rid our nation of racial and economic injustice, I have heard many ministers say: "Those are social issues, with which the gospel has no real concern." And I have watched many churches commit themselves to a completely other worldly religion which makes a strange, on Biblical distinction between body and soul, between the sacred and the secular.

I have traveled the length and breadth of Alabama, Mississippi and all the other southern states. On sweltering summer days and crisp autumn mornings I have looked at the South's beautiful churches with their lofty spires pointing heavenward. I have beheld the impressive outlines of her massive religious-education buildings. Over and over I have found myself asking: "What kind of people worship here? Who is their God? Where were their voices when the lips of Governor Barnett dripped with words of interposition and nullification? Where were they when Governor Walleye gave a clarion call for defiance and .hatred? Where were their voices of support when bruised and weary Negro men and women decided to rise from the dark dungeons of complacency to the bright hills of creative protest?"

Yes, these questions are still in my mind. In deep disappointment I have wept over the laxity of the church. But be assured that my tears have been tears of love. There can be no deep disappointment where there is not deep love. Yes, I love the church. How could I do otherwise? l am in the rather unique position of being the son, the grandson and the great- grandson of preachers. Yes, I see the church as the body of Christ. But, oh! How we have blemished and scarred that body through social neglect and through fear of being nonconformists.

There was a time when the church was very powerful in the time when the early Christians rejoiced at being deemed worthy to suffer for what they believed. In those days the church was not merely a thermometer that recorded the ideas and principles of popular opinion; it was a thermostat that transformed the mores of society. Whenever the early Christians entered a town, the people in power became disturbed and immediately sought to convict the Christians for being "disturbers of the peace" and "outside agitators"' But the Christians pressed on, in the conviction that they were "a colony of heaven," called to obey God rather than man. Small in number, they were big in commitment. They were too God intoxicated to be "astronomically intimidated." By their effort and example they brought an end to such ancient evils as infanticide. and gladiatorial contests.

Things are different now. So often the contemporary church is a weak, ineffectual voice with an uncertain sound. So often it is an archdefender of the status quo. Par from being disturbed by the presence of the church, the power structure of the average community is consoled by the church's silent and often even vocal sanction of things as they are.

But the judgment of God is upon the church as never before. If today's church does not recapture the sacrificial spirit of the early church, it vi lose its authenticity, forfeit the loyalty of millions, and be dismissed as an irrelevant social club with no meaning for the twentieth century. Every day I meet young people whose disappointment with the church has turned into outright disgust.

Perhaps I have once again been too optimistic. Is organized religion too inextricably bound to the status quo to save our nation and the world? Perhaps I must turn my faith to the inner spiritual church, the church within the church, as the true ekklesia and the hope of the world. But again I am thankful to God that some noble souls from the ranks of organized religion have broken loose from the paralyzing chains of conformity and joined us as active partners in the struggle for freedom, They have left their secure congregations and walked the streets of Albany, Georgia, with us. They have gone down the highways of the South on tortuous rides for freedom. Yes, they have gone to jai with us. Some have been dismissed from their churches, have lost the support of their bishops and fellow ministers. But they have acted in the faith that right defeated is stronger than evil triumphant. Their witness has been the spiritual salt that has preserved the true meaning of the gospel in these troubled times. They have carved a tunnel of hope through the dark mountain of disappointment.

I hope the church as a whole will meet the challenge of this decisive hour. But even if the church does not come to the aid of justice, I have no despair about the future. I have no fear about the outcome of our struggle in Birmingham, even if our motives are at present misunderstood. We will reach the goal of freedom in Birmingham, ham and all over the nation, because the goal of America k freedom. Abused and scorned though we may be, our destiny is tied up with America's destiny. Before the pilgrims landed at Plymouth, we were here. Before the pen of Jefferson etched the majestic words of the Declaration of Independence across the pages of history, we were here. For more than two centuries our forebears labored in this country without wages; they made cotton king; they built the homes of their masters while suffering gross injustice and shameful humiliation-and yet out of a bottomless vitality they continued to thrive and develop. If the inexpressible cruelties of slavery could not stop us, the opposition we now face will surely fail. We will win our freedom because the sacred heritage of our nation and the eternal will of God are embodied in our echoing demands.

Before closing I feel impelled to mention one other point in your statement that has troubled me profoundly. You warmly commended the Birmingham police force for keeping "order" and "preventing violence." I doubt that you would have so warmly commended the police force if you had seen its dogs sinking their teeth into unarmed, nonviolent Negroes. I doubt that you would so quickly commend the policemen if .you were to observe their ugly and inhumane treatment of Negroes here in the city jail; if you were to watch them push and curse old Negro women and young Negro girls; if you were to see them slap and kick old Negro men and young boys; if you were to observe them, as they did on two occasions, refuse to give us food because we wanted to sing our grace together. I cannot join you in your praise of the Birmingham police department.

It is true that the police have exercised a .degree of discipline in handing the demonstrators. In this sense they have conducted themselves rather "nonviolently" in public. But for what purpose? To preserve the evil system of segregation. Over the past few years I have consistently preached that nonviolence demands that the means we use must be as pure as the ends we seek. I have tried to make clear that it is wrong to use immoral means to attain moral ends. But now I must affirm that it is just as wrong, or perhaps even more so, to use moral means to preserve immoral ends. Perhaps Mr. Connor and his policemen have been rather nonviolent in public, as was Chief Pritchett in Albany, Georgia but they have used the moral means of nonviolence to maintain the immoral end of racial injustice. As T. S. Eliot has said: "The last temptation is the greatest treason: To do the right deed for the wrong reason."

I wish you had commended the Negro sit-inners and demonstrators of Birmingham for their sublime courage, their willingness to suffer and their amazing discipline in the midst of great provocation. One day the South will recognize its real heroes. They will be the James Merediths, with the noble sense of purpose that enables them to face Jeering, and hostile mobs, and with the agonizing loneliness that characterizes the life of the pioneer. They will be old, oppressed, battered Negro women, symbolized in a seventy-two-year-old woman in Montgomery, Alabama, who rose up with a sense of dignity and with her people decided not to ride segregated buses, and who responded with ungrammatical profundity to one who inquired about her weariness: "My fleets is tired, but my soul is at rest." They viii be the young high school and college students, the young ministers of the gospel and a host of their elders, courageously and nonviolently sitting in at lunch counters and willingly going to jail for conscience' sake. One day the South will know that when these disinherited children of God sat down at lunch counters, they were in reality standing up for what is best in the American dream and for the most sacred values in our Judaeo-Christian heritage, thereby bringing our nation back to those great wells of democracy which were dug deep by the founding fathers in their formulation of the Constitution and the Declaration of Independence.

Never before have I written so long a letter. I'm afraid it is much too long to take your precious time. I can assure you that it would have been much shorter if I had been writing from a comfortable desk, but what else can one do when he k alone in a narrow jail cell, other than write long letters, think long thoughts and pray long prayers?

If I have said anything in this letter that overstates the truth and indicates an unreasonable impatience, I beg you to forgive me. If I have said anything that understates the truth and indicates my having a patience that allows me to settle for anything less than brotherhood, I beg God to forgive me.

I hope this letter finds you strong in the faith. I also hope that circumstances will soon make it possible for me to meet each of you, not as an integrationist or a civil rights leader but as a fellow clergyman and a Christian brother. Let us. all hope that the dark clouds of racial prejudice will soon pass away and the deep fog of misunderstanding will be lifted from our fear-drenched communities, and in some not too distant tomorrow the radiant stars of love and brotherhood will shine over our great nation with all their scintillating beauty.

Yours for the cause of Peace and Brotherhood,

Martin Luther King, Jr.


Global Imbalances and "Sustainability"

Brad Setser thinks about "sustainability":

RGE - The more the dollar falls, the more dollars you need to buy: That, more or less, is the conclusion of “portfolio balance” models of global capital flows.

The dollar tanks. Its share of your portfolio falls. So sell euros (or RMB) and buy dollars to keep the dollar share of your portfolio up.... The worse the US does (financially speaking), the more financing it gets from the rest of the world. A new IMF paper by Guy Meredith includes a graphic illustration of this.

The US has run huge current account deficits for the past few years. In dollar terms, the rest of the world’s claims on the US are growing. But because the dollar has depreciated and US markets have underperformed, the share of US assets in foreign portfolios has been constant at around 40% of the rest of the world's GDP over the past few years.... The worse US financial assets do, the more financing the US gets -- at least so long as foreigners care more about maintaining a constant dollar share of their portfolio than little things like the actual return on dollar assets....

A portfolio balance model does a better job of explaining ongoing inflows to the US than other models over the past few years. It fits the data.

And one of the strengths of Meredith's paper is that the paper tries to match the model with actual stylized facts in the data. For example, Meredith correctly note that the “US deficits reflect fast growth in the US” story doesn’t hold up.... He notes that much of the financing for the US deficit has come from central banks.... And he note that observed return (looking at the income line on the US balance of payments) on foreign investment and lending to the US has been very low – and well below the observed return on US investment and lending abroad. Throw in valuation losses from the dollar’s fall and low interest/ earnings on US investment and certainly those financing the US haven’t been doing so to make money....

Of course, a portfolio balance model cannot explain the surge in inflows to the US in the late 1990s, when US markets outperformed foreign models. Remember, in these models, outperformance is a reason to get the hell out and move into underperforming places....

If you assume, based on a portfolio balance model, that big falls in the dollar will generate both big valuation gains on US investment abroad and ongoing inflows into the US as foreigners struggle to keep the dollar share of their portfolio constant in the face of a sliding dollar;

If you assume, based on historical norms, that some of the inflows that the BEA measures in the TIC data will disappear from the survey data, reducing the measured US debt stock in the net international investment position (this is Daniel Gros’s explanation for “other valuation changes” otherwise known as statistical manna from heaven);

And if you assume that the US will continue to attract large net inflows even though US investment abroad continues to generate more interest/ dividend income than foreign investment in the US;

Then the US external position looks pretty good for quite some time so long as the US trade deficit doesn't get a lot bigger....

The only question I have is whether these assumptions make sense over time.

But I grant that they do fit the post-2002 data.


Oceania Has Always Been at War with Eastasia!

Why oh why can't we have less Orwellian right-wing webloggers?

Today Glenn Reynolds approvingly quotes Pam Hess on the surge:

Instapundit.com: PAM HESS: I think "it's gotten caught up about it, and the debate about it is actually all wrong. What reporters know and what Martha says is that 20,000 really isn't that big.... What we're not asking is actually the central... national security question, because it seems that if as a reporter you do ask the national security question, all of a sudden you're carrying Bush's water. There are national security questions at stake, and we're ignoring them and the country is getting screwed."

And waves his flag in support of Bush:

Better that the story should be missed, and the country screwed, than that a reporter might look unacceptably friendly to Bush!

But Blue Texan has the videotape, and watches Glenn Reynolds in the past insist and insist that we don't need more troops in Iraq:

Unclaimed Territory. 4/26/03: Could we have beaten the Iraqi military with fewer troops? Yes. Would it have been nice to have more troops for occupation/pacification? Yes. Does that mean our force levels were right?... Who knows? Somebody had to make an informed guess, and so far the results make the guess look pretty good...

9/7/2003: MAX BOOT REPORTS FROM IRAQ: Every U.S. officer I talked to said that the 150,000 soldiers we have in Iraq now are sufficient. What's required is not more troops, they said, but better policing methods.

12/17/2003: MORE TROOPS? Jim Dunnigan says it's an election-year gesture that will probably hurt actual readiness...

12/16/2004: My suggestion to McCain and Hagel: If you think we need more troops, then pass some legislation increasing the size of the Army. That's your job, right?

12/19/2004:I remain unconvinced that we need more troops in Iraq.... Just as one seldom wins a war by slapping armor on everything (and no army in history has armored all its soldiers and transport vehicles), one seldom wins a war by dispersing forces to lots of locations in a "prevent" defense. That seems to be what the "more troops" crowd has in mind, but it strikes me as a poor idea...

1/11/2005: I think that calling for "more troops" is a way to criticize while not sounding weak, and that it thus has an appeal that overcomes its uncertain factual foundation... the real question is whether we have enough troops to do what we're going to do next. I think the answer to that is yes...

1/29/2005: CALLING FOR CONSTRUCTIVE ACTION.... I'm not at all persuaded that we need more troops in Iraq...

Does Glenn expect us to take him seriously?


This Cruel Farce Is Being Undertaken in Bad Faith

Matthew Yglesias is shrill:

Matthew Yglesias / proudly eponymous since 2002: Surgers Versus The Surge: The Washington Post reports that America's generals don't think much of Bush's plan "to add up to 20,000 troops to the 132,000 U.S. service members already on the ground." Interestingly, even though they don't put it that way, even th eauthors of the surge plan think this is a bad idea: "Kagan and Keane both emphasized that the surge has to be both substantial (minimum 30,000 troops) and sustained (minimum 18 months)." A Kagan-Keane sized escalation won't be mounted because the Joint Chiefs say it's logistically impossible. But according to Kagan and Keane success requires "a surge of at least 30,000 combat troops lasting 18 months or so. Any other option is likely to fail."

This is the sort of thing that can make a man shrill; I'm not sure what other indication you need that this cruel farce is being undertaken in bad faith. Or does Bush have some actual reason to believe that the number of additional troops required for the Iraq mission to succeed just so happens to be the exact number of troops who it's logistically possible to send? That's be a hell of a coincidence, wouldn't it?


National Review Celebrates Martin Luther King, Jr.

Peabody and his pet boy Sherman take us through the time machine, back to watch National Review in 1959:

The soberly-dressed "clerky" little man... seemed oddly unsuited to his unmentioned but implicit role of propagandist.... Let me say at once, for the benefit of the wicked, fearful South, that Martin Luther King wil never rouse a rabble; in fact, I doubt very much if he could keep a rabble awake... past its bedtime... lecture... delivered with all the force and fervor of the five-year-old who nightly recites: "Our Father, Who art in New Haven, Harold be Thy name."...

The history of Negro freedom in the United States... according to Dr. King, is actually a history of Supreme Court decisions... in each of these decisions "the Supreme Court gave validity to the prevailing mores of the times." (That's how they decide, you see? They look up the prevailing mores--probably in the Sunday New York Times.)...

In the future, [according to King] the reactionary white south will try.... Nevertheless, victory is inevitable for the Good Guys.... The Negro must... expect suffering and sacrifice, which he must resist without sacrifice, for this kind of resistance will leqve the violent segregationist "glutted with his own barbarity. Forced to stand before the world and his God splattered with the blood and reeking with the stench of his Negro brother, he will call an end to his self-defeating massacre." (I don't think [King had] really examined that one, do you?)...

In the words of an editorial from next morning's Yale Daily News, "a bearded white listener rose, then a whole row, and then a standing ovation." Did you ever see a standing ovation rise? It's most interesting! Anyway, I rose and applauded heartily. I was applauding Dr. King for not saying "the trusth shall make you free," because actually it took the Supreme Court, in this case, didn't it?...

[A] discussion period for undergraduates followed the lecture.... Here was no trace of the sing-song "culluh'd preachuh" chant, the incongruously gaudy phrases.... Martin Luther King... relies almost entirely on force of one kind or another to accomplish integration.... [I]t seems curiously inconsistent to hear him, time after time, suggest power, or force--the force of labor, of legislation, of federal strength--as the solution....


The Minimum Wage and the EITC

From the Archives: The Minimum Wage and the EITC:

The Minimum Wage and the EITC: Archive Entry From Brad DeLong's Webjournal: I like the EITC. Come the Day of Wrath, my best pleading will be the role I played in 1993 in the Clinton administration in expanding the EITC.

But the EITC is a program that uses the IRS to write lots of relatively small checks to tens of millions of relatively poor people who satisfy picky eligibility rules. This is not the IRS's comparative advantage. The IRS's comparative advantage is using random terror to elicit voluntary compliance with the tax code on the part of relatively rich people. The EITC is a good program, but it a costly program to administer, and it is administered imperfectly to say the least.

The minimum wage, on the other hand, is nearly self-enforcing: its administrative costs are nearly nil, for workers (legal workers, at least) have a very strong incentive to drop a dime on bosses who violate it. From a government-administrative and error-rate perspective, it's a very cost-effective program.

The right solution, of course, is balance: use the minimum wage as one part of your program of boosting the incomes of the working poor (being well aware of its likely disemployment effects of the wage floor and of its sending lots of money to the wrong households), and use the EITC as the other part (being well aware of its administrative complexities and errors and the disemployment effects of the phase-out range). Try not to push either one to the point where its drawbacks grow large. Balance things at the margin.