Grasping Reality on TypePad, by Brad DeLong

Paul Krugman looks at this graph:

And writes:

Embedded vs. non-embedded inflation: [W]hen is it appropriate to get very concerned about inflation, and when is it OK to assume that a rise in prices is a temporary shock that will pass? The answer is that inflation becomes a big problem if it becomes “embedded” in the economy, which makes it hard to restore more or less stable prices. But how does inflation get embedded?

Well, I’m basically a believer in a “staggered price-setting” story... inflationary leapfrogging.... Harry wants his average price over the next year to be about the same as Louise’s; Louise wants her average price to be about the same as Harry’s. But their price setting takes place on different dates. (This is a metaphor for the real economy, in which people setting prices have to think about the prices of many competitors and suppliers that will prevail until they revise the price again.) In this situation... Harry raises his price above Louise’s, because he expects her to raise her price in the future, and she does the same thing when it’s her turn.... Once expectations of inflation get embedded like this, it’s hard to get price stability back. In practice, what happens is that central banks deliberately cause a recession... inflationary momentum gets wrung out of the system — but at a high cost. In the 1980s, it took double-digit unemployment to get rid of the embedded inflation from the 1970s.

ut how is this relevant to current events? Well, the problem of embedded inflation applies only to prices that are set at fairly long intervals.... There’s no comparable problem with commodities like wheat or oil, where the price changes minute by minute, and goes down as easily as it goes up. It may sound perverse, but embedded, hard-to-reverse inflation is only a problem for parts of the economy with relatively sticky prices. So to get a sense of whether embedded inflation is becoming a problem, you have to purge the highly volatile prices — basically, commodities — from the picture. That’s why the Fed focuses on “core” inflation.... [I]t’s not a nefarious scheme to ignore the real hardships people face, it’s an attempt to figure out if inflation is getting built into the system.

In the 70s, it was: core inflation quickly shot up after the energy and food price spikes. But this time that’s not happening at all: the rise in inflation is all commodities, with no sign that expectations of inflation are getting embedded in price-setting through the rest of the economy.... Inflation is... not getting a grip in a way that will cause it to persist if and when oil and food top out. And it would be a big mistake if the Fed lets fear of inflation distract it from the urgent task of heading off a financial meltdown.

He says that "we"--that is, the Washington Post's reporters and editors--failed to do their job. But there is one question: why has it taken him until 2008 to tell us this?

The Pot and the Kettle - Fact Checker: what of his criticism of the so-called "liberal media" which you can read in greater detail here? Were we "complicit enablers" for the Bush administration in its march to war?

As a reporter who was part of The Washington Post's foreign policy team during the period 2002-2003, I have thought about this question a lot over the past five years. Many of my colleagues have dismissed McClellan's criticisms, insisting that they asked "all the right questions" during the run-up to the war, and it was hardly our fault if the administration failed to answer them honestly. I disagree. I think the American media -- and that includes me, personally -- failed to do its job properly during the run-up to the war.

Part of the problem was the conventions of American journalism, which can sometimes reduce thinking reporters to unthinking note-takers.... [W]e were not permitted to question the rationale for war on our own authority, even if we had considerable experience in covering foreign policy and the Middle East.... [W]e had to find authoritative sources.... The senior administration officials who have since emerged as critics of the war, such as Lt. Gen. Ricardo Sanchez and Col. Lawrence Wilkerson, chief of staff to secretary of state Colin Powell, were all singing a very different tune at the time. It is legitimate to ask why none of these people went public with their doubts much earlier. As I recall, the most senior U.S. official to actually resign in protest against the war was the political counselor in the U.S.Embassy in Greece, John Kiesling....

None of this absolves the media of its share of the blame for uncritically relaying the administration's case for war, as articulated by the likes of Scott McClellan. As I look back on my own reporting during the runup to the war, there are articles to which I can point with pride and others I would prefer to forget. But the bottom line is that we spent too much time, as McClellan says, "covering the march to war" rather than "the necessity of war."...

[H]ere at The Post, the media's failure went from top to bottom. Editors were reluctant to give front-page prominence to stories that challenged the administration's rationale.... [R]eporters (including myself) often failed to display sufficient skepticism....

I should make clear that I am not singling out The Post for special criticism. With a very few exceptions (the Washington bureau of Knight-Ridder comes to mind), the entire American media failed to aggressively challenge the administration's narrative.

I would like to think that the mainstream media is learning from its mistakes.... The traditional "he said, she said" style of reporting certainly has its place in American journalism. But we should not allow it to supersede an even more important journalistic goal, which is to determine the truth as best we can.

As a former operator of the White House "propaganda machine", Scott McClellan lacks credibility as a critic of the press. But on the question of whether the American press did its job properly during the run-up to the Iraq war, it is difficult to argue with his conclusions. We failed you.

A reason why reading the Financial Times is not enough:

• Lost Opportunities Haunt Final Days of Bear Stearns:
• Fear, Rumors Touched Off Fatal Run on Bear Stearns
• Bear Stearns Neared Collapse Twice in Frenzied Last Days

Marty Lederman is flummoxed:

Balkinization: There's a UC Berkeley alum in my household, and so we're frequently inundated with promotional materials from the University. Last week we received the latest issue of The Promise of Berkeley, a big glossy production designed to tout the accomplishments of members of the University community. The Spring issue includes a piece promoting the close connections between Cal Berkeley and the U.S. government here in D.C. "A number of Berkeley's faculty have held positions in past presidential administrations or worked closely with presidential candidates," it boasts. And so the Promise of Berkeley asked six faculty members -- "three from each side of the aisle" -- to "reflect on their time in Washington, what's at stake in the 2008 presidential election, and what Berkeley means to them."

The Dems profiled are, not surprisingly, Chris Edley, Bob Reich and Janet Yellen.

The editors apparently had a more difficult time finding prominent Republican officials on their faculty: The chose Dan Schnur (a Poli Sci lecturer who worked on McCain's 2000 primary campaign), Sandy Muir (a speechwriter for Bush 41), and, you guessed it . . . John Yoo.

Now, it's one thing to decide not to challenge a tenured professor's job security, notwithstanding substantial evidence that he facilitated war crimes (a decision of Chris Edley's that I supported here). But it's quite another to give that faculty member pride of place -- because of his government service -- in a publication intended to encourage alumni contributions by stressing the laudable public service of one's faculty members. Did the editors of The Promise of Berkeley really think that including John Yoo in their brochure would result in more robust alumni donations? My sense is that this is tone-deafness of a very high order -- but what do I know?

In any event, the editors asked John whether he would consider another stint in Washington, and this was his response:

Public service is an important responsibility, especially for those of us who are members of a public university. Moving to Washington for a few years can be very disruptive to a professor’s research plans and personal life. But I think that it is important we make a contribution when our government calls. Personally, I would not want to hold again any of the jobs that I have held, not because I disliked them, but because it would feel like watching the same movie again.

Matt quotes Henry Farrell:

Matthew Yglesias:

Stephen Hayes was on NPR a few minutes ago complaining about how Scott McLellan wasn’t very interesting, because he was just delivering ‘left wing blogworld talking points.’ This complaint itself, of course, being itself a re-iteration of a Karl Rove talking point.

And writes:

Ironic, yes. More broadly, this line of response to McClellan simply consists of repeating what's so damning about McClellan's new book but saying it as if this discredits him. But the point is this: Scott McClellan, longtime George W. Bush press flack, is now talking like a left-wing blogger. Right-wing flack talking like a right wing flack -- not news. Left-wing blogger talking like a left-wing blogger -- not news. Right-wing flack talking like a left-wing blogger -- news. It's as if a man is biting a dog in the middle of the street. Is this enough penitence to redeem McClellan for his sins? Not in my book. But it's still an extraordinary turn of events.

We are all shrill bloggers now.

Tanta of Calculated Risk has very sharp eyes, and a very quick wit:

Calculated Risk: BK Judge Rules Stated Income HELOC Debt Dischargeable: This is a big deal, and will no doubt strike real fear in the hearts of stated-income lenders everywhere. Our own Uncle Festus sent me this decision, in which Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy. Nat City had argued that the debt should be non-dischargeable because the debtors made material false representations (namely, lying about their income) on which Nat City relied.... The court agreed that the debtors had in fact lied... but it held that the bank did not "reasonably rely" on the misrepresentations....

[T]he whole point of stated income lending was to make the borrower the fall guy: the lender can make a dumb loan--knowing perfectly well that it is doing so--while shifting responsibility onto the borrower, who is the one "stating" the income and--in theory, at least--therefore liable for the misrepresentation. This is precisely where Judge Tchaikovsky has stepped in and said "no dice." This is not one of those cases where the broker or lender seems to have done the lying without the borrower's knowledge; these are not sympathetic victims of predatory lending. In fact, the very egregiousness of the borrowers' misrepresentations and chronic debt-binging behavior is what seems to have sent the Judge over the edge here, leading her to ask the profoundly important question of how a bank like National City could have "reasonably relied" on these borrowers' unverified statements of income to make this loan....

[T]he published guidelines by which the loans were made and evaluated... made it "fast and easy" for fraud to occur. Judge Tchaikovsky directly addresses the issue of the bank's reliance on "guidelines" that should, in essence, never have been relied upon in the first place.... In re Hill (City National Bank v. Hill), United States Bankruptcy Court, Northern District of California, Case No. A.P. 07-4106 (May 28, 2008)....

If you make a "liar loan," the Judge is saying here, then you cannot claim you were harmed by relying on lies. And if you rely on an inflated appraisal, that's your lookout, not the borrower's. This is going to give a lot of stated income lenders--and investors in "stated income" securities--a really bad rotten no good day. As it should. They have managed to give the rest of us a really bad rotten no good couple of years, with no end in sight...

This adversary proceeding is a poster child for some of the practices that have led to the current crisis in our housing market...

Moreover, the Hills, while not highly educated, were not unsophisticated. They had obtained numerous home and car loans and were familiar with the loan application process. They knew they were responsible for supplying accurate information to a lender concerning their financial condition when obtaining a loan. Even if the Court were persuaded that they had signed and submitted the October Loan Application without verifying its accuracy, their reckless disregard would have been sufficient to satisfy the third and fourth elements of the Bank’s claim...

However, the Bank’s suit fails due to its failure to prove the sixth element of its claim: i.e., the reasonableness of its reliance. As stated above, the reasonableness of a creditor’s reliance is judged by an objective standard. In general, a lender’s reliance is reasonable if it followed its normal business practices. However, this may not be enough if those practices deviate from industry standards or if the creditor ignored a “red flag.” See Cohn, 54 F.3d at 1117. Here, it is highly questionable whether the industry standards–-as those standards are reflected by the Guidelines–-were objectively reasonable. However, even if they were, the Bank clearly deviated to some extent from those standards. In addition, the Bank ignored a “red flag” that should have called for more investigation concerning the accuracy of the income figures...

Based on the foregoing, the Court concludes that either the Bank did not rely on the Debtors representations concerning their income or that its reliance was not reasonable based on an objective standard. In fact, the minimal verification required by an “income stated” loan, as established by the Guidelines, suggests that this type of loan is essentially an “asset based” loan. In other words, the Court surmises that the Bank made the loan principally in reliance on the value of the collateral: i.e., the House. If so, the Bank obtained the appraisal upon which it principally relied in making the loan. Subsequent events strongly suggest that the appraisal was inflated. However, under these circumstances, the Debtors cannot be blamed for the Bank’s loss, and the Bank’s claim should be discharged...

Justin Fox looks at a graph:

And writes:

The trade deficit has turned very oily lately: The U.S. economy remains globally competitive and may even be headed for a trade surplus ex-oil within the next few years, barring another investment bubble like houses or tech stocks. And... that our addiction to oil is costing us big-time. Whether that cost is something we really ought to worry about depends on whether the current high oil price is the artifact of an investment bubble or a sign of things to come...

Two quibbles.

First, we ought to worry about our addiction to oil even if the oil price drops a lot in the near future. Even if we don't pay for oil at the pump, we pay for it in terms of the additional global warming disaster risk we assume.

Second, this "competitive"--the U.S. can have an export surplus if the dollar drops far enough. It may be "competitive" at a lower standard of living than other countries, but "competitive" and "uncompetitive" are not clarifying adjectives in this discussion.

We watch the dead-ender wingnuts attack Scott McClellan, and conclude it is time to shut down the Republican Party--a new opposition with totally new personnel is needed, badly.

Outsourced to TBogg:

TBogg » We have always been at war with Scott McClellan: Under the headline: "Is this book really necessary?" Power Line today:

When Scott McClellan was the president's press secretary, I usually winced when I heard him speak. The wincing finally ended when Tony Snow replaced McClellan. Now, with the publication of his new book, we get the chance to wince once more. It's an opportunity I intend to pass up.... JOHN adds: McClellan was a lousy press secretary.... Tony Snow... said that he came away with a deep appreciation of President Bush's character, judgment and knowledge of the issues. Unless McClellan can come up with some facts to back up his claims--facts have been notably absent from the press accounts I've seen of his book--I think Tony's assessment is considerably more reliable.

Power Line then:

Scott McClellan resigned as White House press secretary this morning. I think McClellan has done a capable job, and it's probably wishful thinking to imagine that the President would appoint someone who would take a more combative attitude toward the White House press corps. To be fair, McClellan has sometimes pushed back. But I think there is a lot of room to take a more aggressive approach.

This would be hilarious if it weren't so predictable.

And:

TBogg » We are so very sad. Very very sad.: Now even harder to lie to the press. Life is not fair. Dana Perino, who is apparently still gruntled with her job, is just so disappointed in Scott McClellan:

White House press secretary Dana Perino released this statement on Scott McClellan's critical book on the Bush White House: "Scott, we now know, is disgruntled about his experience at the White House. For those of us who fully supported him, before, during and after he was press secretary, we are puzzled. It is sad -- this is not the Scott we knew." More from Perino: "The book, as reported by the press, has been described to the president. I do not expect a comment from him on it -- he has more pressing matters than to spend time commenting on books by former staffers."

It doesn't take much to puzzle Dana Perino. The next gaggle should be a hoot.

And:

TBogg » What lies beneath the lies: Stopped clocks have a better record. Weekly Standard All-Star Fabulist, Stephen F. Hayes:

Ask fifty Washington reporters for an assessment of Scott McClellan and forty-nine of them will give you some version of this: He's a nice guy who was in way over his head. (Most of them will be tougher in their analysis of his intellect.)

Does Stephen really want to go there? Probably not, but tough shit. This would be the same Stephen F. Hayes who parlayed a leaked memo from Doug Feith into this even though it didn't pan out. As Spencer Ackerman wrote:

Hayes, in the Standard, has made a career out of pretending Saddam and Al Qaeda were in league to attack the United States. He published a book -- tellingly wafer-thin and with large type in its hardcover edition -- called "The Connection." One infamous piece even suggested that Saddam might have aided the 9/11 attack. Hayes can be relied on to provide a farrago of speciousness every time new information emerges refuting his deceptive thesis. Unsurprisingly, Cheney has repeatedly praised Hayes's work, telling Fox News, "I think Steve Hayes has done an effective job in his article of laying out a lot of those connections."...

Every single inquiry into the Saddam/Al Qaeda link has revealed it to be untrue. First, in 2004, the 9/11 Commission's definitive study found "no collaborative operational ties" between the two. (Hayes' response was first to attack the commission, and then to claim that this was a legalistic way of saying that Saddam and Al Qaeda were actually in league.) Then, in 2006, the Senate intelligence committee rejected it. Then, in 2007, the Pentagon inspector general -- albeit in a more circuitous way -- rejected it. Now, in a report released last week, the U.S. military's Joint Forces Command rejects it. The Joint Forces Command study combed through 600,000 pages of captured documents about Saddam Hussein's support for terrorism throughout the years. It documents, in great detail, precisely that. But the label "terrorism" is a misleading category. The study refutes the idea that there was any "direct connection" between Saddam and Al Qaeda. Saddam's support for terrorism was largely limited to Palestinian, anti-Kurdish and anti-Gulf state terrorist groups. (See the JFC's Executive Summary here, another excerpt here and conclusions.)

About as close as anything could come to linking Saddam to Al Qaeda was a memo from one Saddam's intelligence services "written a decade before Operation Iraqi Freedom." It says: "In a meeting in the Sudan we agreed to renew our relations with the Islamic Jihad Organization in Egypt." That organization would eventually merge with Al Qaeda in the late 1990s, long after the apparent meeting in Sudan. It also says that for a time in the mid-1990s, Saddam and Al Qaeda had "indirect cooperation" by offering "training and motivation" to some of the same terror organizations in that country.

Out of this thin gruel, Hayes attempted to make a meal in the Standard's pages this week. He lifted as many bullet points from the report as he could that, out of context, seemed to bolster his theory. He then went about attacking reporters who accurately wrote that the study found no direct connection between Saddam and Al Qaeda. Hayes tacitly promised his readers that history will ultimately vindicate him, writing that "as much as we have learned from this impressive collection of documents, it is only a fraction of what we will know in 10, 20 or 50 years." And he expressed puzzlement that an administration with an obvious credibility problem had not "done anything to promote the study."

How stupid do you have to be to be the the official stenographer for the stupidest f------ guy on earth? Pretty f------ stupid.

And PGL of Angry Bear:

Angry Bear: Jonan Goldberg must omniscient as he pens a stinging review of Scott McClellan’s What Happened even though:

I have not read the book. I will once I finish eating the contents of my sock drawer (which ranks slightly higher on my to-do list).

Now if you think the second sentence in this quote is juvenile – don’t bother reading the rest of Goldberg’s rant. OK, I lied. It is not a stinging review. In fact, it is about as idiotic as anything from this worthless pundit. But please consider this:

McClellan’s only legitimate beef seems to be his unjust treatment during the Valerie Plame investigation.

Really? The book has no other legitimate complaints? How on earth would Jonah know if he hasn’t even bothered to read anything? I guess his mommy told him so.

And special Bob Dole is the last one in the Republican Party bonus:

Jonathan Martin's Blog: Bob Dole unloads on McClellan - Politico.com: Bob Dole yesterday sent a scalding email to Scott McClellan, excoriating the former White House spokesman as a "miserable creature" who greedily betrayed his former patron for a fast buck.... "There are miserable creatures like you in every administration who don’t have the guts to speak up or quit if there are disagreements with the boss or colleagues," Dole wrote in a message sent yesterday morning. "No, your type soaks up the benefits of power, revels in the limelight for years, then quits, and spurred on by greed, cashes in with a scathing critique."... "In my nearly 36 years of public service I've known of a few like you," Dole writes, recounting his years representing Kansas in the House and Senate.  "No doubt you will 'clean up' as the liberal anti-Bush press will promote your belated concerns with wild enthusiasm. When the money starts rolling in you should donate it to a worthy cause, something like, 'Biting The Hand That Fed Me.' Another thought is to weasel your way back into the White House if a Democrat is elected. That would provide a good set up for a second book deal in a few years"

Dole assures McClellan that he won't read the book --  "because if all these awful things were happening, and perhaps some may have been, you should have spoken up publicly like a man, or quit your cushy, high profile job. That would have taken integrity and courage but then you would have had credibility and your complaints could have been aired objectively," Dole concludes.  "You’re a hot ticket now but don’t you, deep down, feel like a total ingrate?"

In any other industry, the two of them would now be running the show. Only in journalism does failure of the magnitude of America's Washington press corps manage to perpetuate itself on such a gigantic scale.

Here is what they have to say:

Blog: Nukes & Spooks: Until now, we've resisted the temptation to post on former White House press secretary Scott McClellan's new book, which accuses the Bush White House of launching a propaganda campaign to sell the war in Iraq. Why? It's not news. At least not to some of us who've covered the story from the start. (Click here, here and here to get just a taste of what we mean).

Second, we find it a wee bit preposterous -- and we are being diplomatic here -- that a man who slavishly - no, robotically! -- defended President Bush's policies in Iraq and elsewhere is trying to "set the record straight" (and sell a few books) five years and more after the invasion, with U.S. troops still bravely fighting and dying to stabilize that country. But the responses to McClellan from the Bush administration and media bigwigs, history-bending as they are, compel us to jump in. As we like to say around here, it's truth to power time, not just for the politicians but also for some folks in our own business. Bush loyalists have responded in three ways:

1. Scott, how could you?  This conveniently ignores the issue of what Bush did or didn't know and do about intelligence on Iraq, converting the story line into that of wounded leader and treasonous former aide. (That canard was the sole focus of a CBS news radio report Wednesday night).

2. Invading Iraq was the right thing to do. Okay. When do Bush, Secretary of State Condoleezza Rice, et al not say that?  Dog bites man.

3. It was an intelligence failure. The CIA gave us bad dope on WMD and, well, they're the experts. More on this in a second.

The news media have been, if anything, even more craven than the administration has been in defending its failure to investigate Bush's case for war in Iraq before the war. Here's ABC News' Charles Gibson: "I think the questions were asked. It was just a drumbeat of support from the administration. It is not our job to debate them. It is our job to ask the questions.” And “I’m not sure we would have asked anything differently." Really?

Or this from NBC's Brian Williams: “Sadly, we saw fellow Americans — in some cases floating past facedown (after Katrina). We knew what had just happened. We weren’t allowed that kind of proximity with the weapons inspectors [in Iraq]. I was in Kuwait for the buildup to the war, and, yes, we heard from the Pentagon, on my cell phone, the minute they heard us report something that they didn’t like. The tone of that time was quite extraordinary.” And this: "“It’s tough to go back, to put ourselves in the mind-set. It was post-9/11 America." So the Pentagon tells the media what kind of reporting is in- and out-of-bounds? Hogwash. Hogwash! HOGWASH.

We confess that here at McClatchy, which purchased Knight Ridder two years ago, we do have a dog in this fight. Our team - Joe Galloway, Clark Hoyt, Jon Landay, Renee Schoof, Warren Strobel, John Walcott, Tish Wells and many others - was, with a few exceptions, the only major news media organization that before the war consistently and aggressively challenged the White House's case for war, and its lack of planning for post-war Iraq. Here are Bill Moyers and Michael Massing on the media's pre-war performance.

Enough self-aggrandizing trumpet-blowing. OK, Scott, What Happened?

Here's what happened, based entirely on our own reporting and publicly available documents:

• The Bush administration was gunning for Iraq within days of the 9/11 attacks, dispatching a former CIA director, on a flight authorized by Deputy Defense Secretary Paul Wolfowitz, to find evidence for a bizarre theory that Saddam Hussein was responsible for the first World Trade Center attack in 1993. (Note: See also Richard Clarke and former Treasury Secretary Paul O'Neill on this point).

• Bush decided by February 2002, at the latest, that he was going to remove Saddam by hook or by crook. (Yes, we reported that at the time).

• White House officials, led by Dick Cheney, began making the case for war in August 2002, in speeches and reports that  not only were wrong, but also went well beyond what the available intelligence said at that time, and contained outright fantasies and falsehoods. Indeed, some of that material was never vetted with the intelligence agencies before it was peddled to the public.

• Dissenters, or even those who voiced worry about where the policy was going, were ignored, excluded or punished. (Note: See Gen. Eric Shinseki,  Paul O'Neill, Joseph Wilson and all of the State Department 's Arab specialists and much of its intelligence bureau).

• The Bush administration didn't even want to produce the National Intelligence Estimate on Iraq's weapons of mass destruction programs that's justly received so much criticism since.  The White House thought it was unneeded. It  actually was demanded by Congress and slapped together in a matter of weeks before the congressional votes to authorize war on Iraq.

• The October 2002 NIE was flawed, no doubt. But it contained dissents questioning the extent of Saddam's WMD programs, dissents that were buried in the report. Doubts and dissents were then stripped from the publicly released, unclassified version of the NIE.

• The core of the administration's case for war was not just that Saddam was developing WMDs, but also that, unchecked, he might give them to terrorists to attack the United States. Remember smoking guns and mushroom clouds? Inconveniently, the CIA had determined just the opposite: Saddam would attack the United States only if he concluded a U.S. attack on him was unavoidable. He'd give WMD to Islamist terrorists only "as a last chance to exact revenge."

• The Bush administration relied heavily on an Iraqi exile, Ahmed Chalabi, who had been found to be untrustworthy by the State Department and the CIA. Chalabi and his Iraqi National Congress were given millions, and produced "defectors" whose tales of WMD sites and terrorist training were false, fanciful and bogus. But the information was fed directly to senior officials and included in official White House documents.

• The same INC-supplied "intelligence" used in the White House propaganda effort (you got that bit right, Scott) also was fed to dozens of U.S. and foreign news organizations.

• It all culminated in a speech by Secretary of State Colin Powell to the U.N. Security Council in February 2003 making the case against Saddam. Virtually every major allegation Powell made turned out later to be wrong. It would have been even worse had not Powell and his team thrown out even more shaky "intelligence" that Cheney's office repeatedly tried to stuff into the speech.

• The Bush administration tried to link Saddam to al Qaida and, by implication, to the 9/11 attacks. Officials repeatedly pushed the CIA for information on such links, and a seperate intel shop was set up under Defense Under Secretary Douglas Feith to find "proof" of such ties. Neither the CIA nor anyone else ever found anything resembling an operational relationship between Saddam and al Qaida.

• An exhaustive review of Saddam Hussein's regime's own documents, released in March 2008, found no operational relationship between Saddam and al Qaida.

• The Bush administration failed to plan for the rebuilding of postwar Iraq, as we were perhaps the first to report. The White House ignored stacks of intelligence reports, some now available in partially unclassified form, warning before the war about the possibilities for insurgency, ethnic warfare, social chaos and the like.

We could go on, but the rest, as they say, is history.

That's what happened.

Impeach George W. Bush. Impeach him now.

And shut down NBC, ABC, CBS, the Post, the Times, Time, Newsweek, and the rest of them--and replace them with news organizations like McClatchy that actually report the news.

For a president to be so unpopular that congressman who represent highly rural parts of the prarie would rather spend time with their families than go to Bucyrus, Kansas to be photographed with the president--that is an impeachable offense.

Robert Waldmann makes the catch from Scout Finch of the Daily Kos:

Robert's Stochastic Thoughts: The "time with his family" is so excellent...

Here is Scout Finch, who notes:

Perhaps the most interesting aspect of the Bush appearance is who isn't there. The KC Star notes who is absent and their list of cough previous commitments...

Here is teh story:

Sam Hananel: [T]he state's top Republicans are skipping the event. Both of the state's Republican senators are taking a pass, as are both GOP congressmen.... Sen. Pat Roberts will be in California.... Sen. Sam Brownback... will be traveling in southwest Kansas.... Rep. Jerry Moran, a Republican who represents western Kansas, will be at another event.... Wichita-area Republican Rep. Todd Tiahrt plans to spend time with his family...

Where people are coming from today:

• The Daily Kos http://www.dailykos.com/
• Marginal Revolution http://www.marginalrevolution.com
• Crooked Timber http://www.crookedtimber.org
• Matthew Yglesias http://matthewyglesias.theatlantic.com/
• Paul Krugman http://krugman.blogs.nytimes.com
• Mark Thoma http://economistsview.typepad.com

The top seven current posts on this weblog are:

• Alma Mater Blogging http://delong.typepad.com/sdj/2008/05/alma-mater-blog.html: How effectively is Harvard University using its immense resources? Not well...
• John Scalzi Drums Up Business http://delong.typepad.com/sdj/2008/05/a-new-kind-of-s.html: For writer Daniel Abraham and his story "The Cambist and Lord Iron," which shows a fine sensitivity to the concept of opportunity cost...
• Why Aren't More Americans Going to College? http://delong.typepad.com/sdj/2008/05/why-arent-more.html: We do not know. They should be. The rewards are great...
• Keeping U.C. at the Top http://delong.typepad.com/sdj/2008/05/economic-princi.html: It's a difficult task. A comment on a column by David Warsh...
• David Brin's The Transparent Society Book Ten Years Later http://delong.typepad.com/sdj/2008/05/cfp-panel-on-th.html: A Computers, Freedom, and Privacy conference panel organized and run by Michael Froomkin...
• Berkeley Law Professor John Yoo's Torture Memo and Academic Freedom http://delong.typepad.com/sdj/2008/05/the-torture-mem.html: I write this as a consequence of reading what Boalt Dean Chris Edley calls the “Torture Memo” of Professor John Yoo--which horrified me. I write to ask you to appoint a special committee... members of the faculty with expertise in moral philosophy, the role of the university, international relations, human rights, and constitutional law. I ask you to instruct this committee to write of a public report to the Academic Senate no later than this Labor Day, advising the Senate of the pros and cons of actions that the Academic Senate might or might not take in the matter of Professor John Yoo...
• Let Them Hate Us as Long as They Fear Us http://delong.typepad.com/sdj/2008/05/oderint-dum-met.html: [I]t is important that presidential candidates fear economists.... Republican politicians have not feared their economists since... the Eisenhower administration... and so Republican economic policy is overwhelmingly lousy. Democratic politicians... fear.... And so their campaign rhetoric is less out-to-lunch. And their post-election policies are better...

Here: preliminary and incomplete http://www.j-bradford-delong.net/2008_pdf/20080530_stolper.

The beginning:

One of the basic building blocks of the political economy of international trade is the Stolper-Samuelson result: the shift from no trade to free trade is good for the owners of the abundant factor of production, but bad for the owners of the scarce factor of production.

This accounts for why support for free trade tends to be stronger in democratic than in authoritarian regimes. The scarce factor of production tends to be, well, scarce. Hence not many potential voters own a lot of it. Hence the political support for trade protection in any system of government that gives weight to broad as opposed to strong preferences will tend to produce trade liberalization.

In the United States, and to some degree in western Europe, things are widely thought to be different--or so the argument goes, The abundant factors of production are things like capital, organization, and technology, which have concentrated ownership. The scarce factor of production is labor. Hence free trade tends to be politically unpopular because it is not in the interest of the majority of potential voters.

This argument of an inconsistency between free trade and the well-being of the majority of potential voters rests substantially on the two-factor example of the Stolper-Samuelson result. The theory does not fare too well when we generalize to a situation in which there are a number of different factors...

Somebody must have done this before. But I cannot find it anywhere...

Duncan Black has commanded us to spend tomorrow celebrating our great good fortune in having geniuses like Thomas Friedman shaping our foreign policy thinking, and wonderful newspapers like the New York Times to publish them.

Here's Duncan:

Tomorrow is the 5th anniversary of Tom Friedman going on Charlie Rose and telling the world that the Iraq war was fought to tell Iraqis to "Suck On This"... because we could! I hope some of you will find your own creative ways to celebrate this most special of days.

Friedman: I think it [the invasion of Iraq] was unquestionably worth doing, Charlie.... We needed to go over there, basically, um, and um, uh, take out a very big state right in the heart of that world and burst that [terrorism] bubble, and there was only one way to do it.... What they needed to see was American boys and girls going house to house, from Basra to Baghdad, um and basically saying, "Which part of this sentence don't you understand?" You don't think, you know, we care about our open society, you think this bubble fantasy, we're just gonna to let it grow? Well, Suck. On. This. Okay. That Charlie was what this war was about. We could've hit Saudi Arabia, it was part of that bubble. We coulda hit Pakistan. We hit Iraq because we could...

Days late and megabucks short, says Ezra:

EzraKlein Archive | The American Prospect:

"The White House would prefer that I not talk openly about my experiences... I have a higher loyalty than my loyalty necessary to my past work. That's a loyalty to the truth -- Scott McClellan.

There are no revelations in Scott McClellan's new book.... Just the tinny bleatings of a man who abetted a lying, disastrous presidency because it seemed like a good gig, but doesn't want his name maligned by the historians....

Richard Clarke... broke with the administration when it was powerful and popular. They smeared his name, of course, Implied that he was lying. They asked, "why, all of a sudden, if he had all these grave concerns, did he not raise these sooner? This is one-and-a-half years after he left the administration. And now, all of a sudden, he's raising these grave concerns that he claims he had."

Those words, of course, were Scott McClellan's.

George W. Bush is now the most unpopular president since the advent of modern polling. His disapproval rating passed 70 percent last week, higher than any leader before him. It has been 40 months since a majority of the country supported his presidency. And now, now Scott McClellan tells of us of his dedication to the truth, and his disgust with the propaganda used to sell the war. But he was there. He was there in 2000, when Bush ran for president, He was there in 2002, when the war was sold. He was there in 2004, when the president sought reelection. And through all of it, he was an eager soldier. History will do with him as it will. This doesn't come close to clearing his name.

The Harvard Crimson writes:

Would you be free either tomorrow or Friday for an interview? If so, what time would work best for you?

I reply:

Don't know what I can say that I haven't already said:

The population of people qualified and wanting to go to elite American colleges has multiplied between five and tenfold over the past half century. During that time the University of California has scaled itself up roughly from 4,000 to 40,000 undergraduates a year. Harvard has received roughly $15 billiion or so in gifts to carry out its mission as a charitable philanthropy and yet has only managed to scale up from roughly 1200 to 1600 undergraduates a year.

As an alumnus, I think that pretty much speaks for itself.

I had a very good time as a Harvard undergraduate because I found a niche in it--Social Studies--that functioned like a small liberal arts college and because I very quickly found my way as a sophomore into the graduate economics classes (which I had the math to handle). But many others I know did not, and my years as a junior faculty member and as head tutor of economics make me think that there is an enormous disproportion between resource inputs and educational outputs. This is a place where the ethos of the senior Arts and Sciences faculty--well, I remember one dinner at one New England college where a political science professor just back from a semester visiting Harvard said that his first week there Harvey Mansfield had stopped by, looked into his office, and said: "You should close your door. If you don't, undergraduates may wander in."

I would suggest that you talk to the ex-presidents: Bok, Rudenstine, and Summers. Ask them how things looked from Massachusetts Hall over the past forty years, and why they made the choices they did. It would be interesting to hear...

Yours,

Brad DeLong

Marcy Wheeler writes:

Emptywheel » George Bush Authorized the Leak of Valerie Wilson’s Identity: We have evidence that George Bush ordered Libby to respond to Joe Wilson on June 9, 2003. We now have Bush's own confirmation [to Scott McClellan] that he authorized the leak Libby made to Judy Miller on July 8, 2003--which included the leak of Valerie Wilson's identity. We know on July 10, Condi told Stephen Hadley that Bush "was comfortable" with the response the White House was making towards Wilson. And we know that--when Cheney forced Scottie McC to exonerate Libby publicly that fall, he did so by reminding people that "The Pres[ident] [asked Libby] to stick his head in the meat-grinder." We know that Libby's lawyers tried desperately to prevent a full discussion of the NIE lies to be presented at trial. And we know that--after those NIE lies did not come out, for the most part (though one juror told me that NIE story was obviously false, even with the limited information they received)--the President commuted Libby's sentence on July 2, 2007...

So George W. Bush did send a signal to the CIA: if we don't like what your relatives say, we will burn your covert agents.

Impeach George W. Bush. Impeach him now.

Anybody have a report on this morning's EPI income inequality event?

EPI Ideas: Rising Economic Insecurity: May 29, 2008 10:00 AM - 1:00 PM. Please join us on Thursday, May 29, for an Economic Policy Institute forum with noted authors, journalists and thinkers who will discuss their latest findings on the current challenges to American families' economic security.

Moderator: Louis Uchitelle. Panelists: Jacob Hacker, Elisabeth Jacobs, Peter Gosselin, Brink Lindsey.

A catch by Matt Stoller:

Open Left:: Bush Reelect eCampaign Director:"McClellan savaged for saying what everyone knows to be true":

Feeling for Scott McLellan. Nice getting savaged for saying what everyone knows to be true anyway.

That was Bush-Cheney eCampaign Director Mike Turk, 16 hours ago on his Twitter feed.

Twitter is a social network that limits people's messages to 140 characters.  The thoughts are partial, groggy, sometimes witty, useful, casual.  And so Turk, who worked at the RNC after the reelection of Bush and then for the cable industry, is tossing off what has pervaded the mid-level operative class of the Republican Party.

Steven Greenhouse, The Big Squeeze. Kim Bobo writes

Dispatches from the Workplace: The Big Squeeze: Steven Greenhouse[']... The Big Squeeze: Tough Times for the American Worker is the best book to be written on the crisis of low-wage work.... The book begins with the stories of workers like Mike Mitchell, who was fired after being injured on the job in order to minimize worker’s comp bills, and Dawn Eubanks, who is required to work “off the clock” in order to keep her job. Then there's John Arnold, who works under a two-tier contract earning a little more than half what colleagues working right next to him earn, and Antonia Lopez Paz, who isn’t allowed to leave her poultry line even to go to the bathroom. Finally we meet retiree Don Jensen, who has had to take a $10 an hour job as a bank teller after his retirees’ health [cost] went from $180 to $8,280 a year, and Myra Bronstein, who was required to train her own replacement from India in order to qualify for severance.

Greenhouse then provides an overview of what’s going on for workers:

One of the least examined but most important trends taking place in the United States today is the broad decline in the status and treatment of American workers—white-collar and blue-collar workers, middle-class and low-end workers—that began nearly three decades ago, gradually gathered momentum, and hit with full force soon after the turn of this century. A profound shift has left a broad swath of the American workforce on a lower plane than in decades past, with health coverage, pension benefits, job security, workloads, stress levels, and often wages growing worse for millions of workers...

And my copy of Peter Gosselin's High Wire just arrived yesterday...

From Calculated Risk:

Calculated Risk: Scatter Graphs: Months of Supply vs. House Prices: [There] is a limited amount of data (since Q1 1994), but this does suggest a relationship between price changes and Months of Supply... when there are more than 7 months of supply, nominal prices will decline.... In April, the existing homes Months of Supply hit 11.2 months, and will probably be over 12 months this summer. This suggests nominal price declines of over 5% in Q2.

I think he is wrong about advertiser pressure: I don't think advertisers care (much). I think it is that owning a media outlet is a way for rich people to have fun--and once you own it you want to play with it, and make sure that it reflects your not-terribly-informed and self-advancing view of the world:

Seeing the Forest: It comes from the top: From Glenn Greenwald:

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: I think the press corps dropped the ball at the beginning. When the lead-up to the war began, the press corps was under enormous pressure from corporate executives, frankly, to make sure that this was a war that was presented in a way that was consistent with the patriotic fever in the nation and the president's high approval ratings.

And my own experience at the White House was that, the higher the president's approval ratings, the more pressure I had from news executives -- and I was not at this network at the time -- but the more pressure I had from news executives to put on positive stories about the president....

[Media critics] tend to be too willing to slip into the "Heathers" or "Villagers" explanation. Supposedly the media are staffed by a bunch of silly, shallow, people who only talk to each other and who, for example, did what they did to sabotage Al Gore's Presidential run because he annoyed their silly little high school sensibilities.

I've always believed that it was a management problem.... This does not mean that the Heathers are not silly people.... [This] doesn't mean that they're not culpable. But the people whose names we see are quite literally hirelings and lackeys.... They give management what it wants.

Greenwald gives... a long list of reporters whose newspaper careers ended or dead-ended because of excessively accurate reporting -- Seymour Hersh is the most eminent of them.... All I claim is that management manages, and that reporters can be hired, fired, promoted, and demoted.... As for management's motives, I have no way of knowing that. My present guess is that the owners and managers of the big media favor war and low taxes (and the ending of the estate tax, which is a major factors for the few family-owned publications: see here) and are responsive to the normal kinds of favors that the federal government can hand out. They are not right wing on other issues, but the Bush administration really isn't either -- by now they've double-crossed most of their conservative ideological constituencies by now. (That is to say, nativists, cultural conservatives, fiscal conservatives, and above all little-government conservatives.)

I'm sure that organized winger pressure is a factor too, but public opinion isn't the reason: the big media have always been more hawkish and more anti-tax than public opinion. I much bigger factor is advertiser pressure...

Ackerman likes him:

Attackerman - Commentary of Spencer Ackerman » Over There: This is for my friends who have served in Iraq and Afghanistan. For their buddies and their soldiers and Marines who’ve been wounded and died. For the mental and physical health of the survivors. For those that hate the wars and those proud of the wars and those who feel all of that at the same time. For the promise that happiness can follow this experience, and so can greatness, and so can a mundane life of quiet. For the idea that your life is yours and it is not to be toyed with. For the many more I’ll never meet. For the Fobbits too, dammit. Thank you.

What follows is an excerpt from Jim Webb’s 1991 novel Something To Die For. In it, Col. Bill Fogarty, commander of a Marine Expeditionary Unit ordered to relieve a French battalion pincered between a Cuban armor division and a Soviet warship in an Eritrean port city, reflects on his impending mission.

He started a letter to his mother, and then began to worry. She had been ill, and in the passel of letters he had received upon returning to the Saipan was one from his sister, hinting that his mother might be dying. Any mention of combat might kill her. So he threw it away, vowing he would write her a long note when they pulled him and his marines back out of Edd. He wrote a short note to his wife Linda, again not mentioning what was about to happen, but instead writing of the islands he had seen and of the heat, and lamenting rather moonfully that he probably would not be in California in time for Thanksgiving or Christmas again this year. He ended lamely, almost admitting his dread by asking her to please tell the kids how proud he was of them, and how much he loved them.

He even started one to the President, an angry note that ended, “Just remember I died in a place called Edd.” But it seemed melodramatic and tasteless, so he threw it into the trash bin also. And then he was ready.

I am not so sure. I remember Webb as the Reagan Administration Navy Secretary who was too effective at fighting for an increased share of the Pentagon budget for the navy during the Cold War. Ronnie didn't seem to understand that the Soviet Union was a land power, and Webb appears to have put his service first. Not a new thing in the Pentagon, but still...

Basically, Hertzberg says that Chris Matthews is a great American because... because... because... it's not clear why, other than that Chris Matthews was good to Rick Hertzberg when Rick Hertzberg was young.

Digby:

Hullabaloo: The Villagers Defend The Perimeter: There are times lately when I feel as if I'm back in 2003. I'm being told that up is down and black is white and that what i'm seeing just isn't real. It's actually much more disorienting than it was then because this time it's coming from the left side of the dial.

For instance:

Those of us who love Chris Matthews have to rate this near the apex of our Top Ten Matthews Moments list. In the unlikely event you missed it: [insert Youtube of Matthews humiliating a random wingnut radio talk show host on the word "appeasement]

[...]

Now for the “full disclosure.”

I have more reasons than most to love Chris Matthews. When I first met him, thirty or so years ago, his hair was a different color, he was skinnier, and his neckties were more random, but he was otherwise pretty much the same political jabber machine he is today. The biggest difference is that back then I was able to spend ten hours a week listening to him talk without recourse to electronic gadgetry. Nowadays that pleasure requires the use of a television set.

It goes on to describe their long friendship and what a great guy Matthews was back in the day. Apparently Rick gave Chris his first big break in "journalism" when he published in TNR his brilliant insight that Ronald Reagan's first calling was actually as an announcer instead of an actor, which means that he was "host" for the whole country. (I'm serious.)

Anyway, Hertzberg does acknowledge that his pal went off the rails a tiny bit for a while:

In my opinion, Chris went kind of haywire during the Clinton years. I have my own theories about why. Theory one: he and Clinton are too much alike. Same age, same size, same crazed gregariousness, same gift of gab, same manic energy, same thirst for attention, roughly similar political views and non-élite backgrounds. (A similar this-town-ain’t-big-enough-for-both-of-us dynamic, this one focussing on rival good-ol’-boy personae, poisoned the relationship between Howell Raines, then the editorial page of the Times, and Clinton. In my opinion.) Civil wars are always the bitterest.

Theory two: it had something to do with the difference between Irish Catholic and Southern Baptist views of sin and forgiveness. As many people noticed at the time, the Lewinsky brouhaha drove not just Chris but also Michael Kelly, Tim Russert, and Maureen Dowd completely round the bend. For the Catholics, sins are to be confessed in the privacy of a closed booth to a priest who is the bottom rung on a ladder of long-established authority that runs upward through the hierarchy, the Pope, the saints, and only then to the Supreme Judge of the Universe. Forgiveness is administered via prescribed rituals sanctified by centuries of uninterrupted use. For low-church Protestants like Clinton (and Jimmy Swaggart and Jim Bakker), confession usually comes after you get caught, is noisily public, and is so bound up with high-profile damage control that its sincerity cannot be assumed.

Right, yeah. Whatever. I guess it's fine that the country was held hostage to a group of elites' religious differences. But this is where it gets good:

Chris was a mildly conservative Democrat when I met him, and he still is. His Lewinsky-era anti-Clintonism built ratings for “Hardball,” but I don’t believe for a moment that it was a calculated or cynical move. Chris was quite clearly against the Iraq War when that position was unpopular with Americans in general and cable blowhards in particular. Yes, he is prone to hyperbole. Yes, he is apt to tell a guest that he or she is a “great American” whose current collection of ill-researched columns is “a great book.” Yes, his obsession with cultural-populist tropes, especially the horseshit assumption that the ideal male, maybe even the default human being, is a fortyish white non-intellectual in a baseball cap holding a can of beer, is annoying at best. Yes, the internal censor that keeps most peoples’ ids in check functions rather intermittently in his case. But that reckless freedom of his yields at least as many brilliant connections and startling metaphors as it does howlers. And his “liberal” outbursts are at least as numerous as his “conservative” ones, and maybe more heartfelt. Admittedly, I don’t have a file full of examples at hand. Nor are there any among the three hundred and fifty-two items in Media Matters’ Matthews dossier. (The clip at the top of this post, for example, doesn’t make the cut.) But it’s my impression, subjective and biased by friendship though it may be, that, certainly in the past five years or so, Matthews has been considerably tougher on the right than on the left. He was fierce on the Swift Boat slanderers. And on the war he has been magnificent.

The fact that he voted for Bush notwithstanding, of course.

And yes, on the war, he certainly has been magnificent:

• As Media Matters noted, Matthews was chief among the cheerleaders when Bush delivered a nationally televised speech from the deck of the USS Abraham Lincoln on May 1, 2003, in which he declared that "[m]ajor combat operations in Iraq have ended," all the while standing under a banner reading: "Mission Accomplished." Despite lingering questions over the continued violence in Iraq, the failure to locate weapons of mass destruction, and the whereabouts of Saddam Hussein, Matthews fawned over Bush: "He won the war. He was an effective commander. Everybody recognizes that, I believe, except a few critics. ... He looks for real. ... [H]e didn't fight in a war, but he looks like he does. ... We're proud of our president. ... Women like a guy who's president. Check it out. The women like this war. I think we like having a hero as our president."
• On the January 31, 2005, edition of Hardball, while praising that month's Iraqi election, Matthews falsely claimed that no insurgent attacks had occurred at polling places on Election Day. In fact, attacks on Iraqi polling places were widely reported during the January 30 elections.
• Before Bush had even delivered his November 30, 2005, speech at the U.S. Naval Academy laying out a "Strategy for Victory in Iraq," Matthews used variations of the word "brilliant" twice to describe it, while deriding Democratic critics of the Iraq war as "carpers and complainers." Media Matters noted at that time that Matthews's over-the-top praise for Bush included his claim that "[e]verybody sort of likes the president, except for the real whack-jobs" and his statement that Bush sometimes "glimmers" with "sunny nobility."
• On the December 16, 2005, edition of Hardball, Matthews stated, "If [Bush's] gamble that he can create a democracy in the middle of the Arab world" is successful, "he belongs on Mount Rushmore."
• On the July 31 edition of Hardball, Matthews stated that if Democratic critics recognize that Bush made a "smart decision" to invade Iraq, then Bush "deserves to have a place in history" because "[y]ou can't say he did the right thing but he didn't quite do it right."
• During a roundtable discussion about the August 8 Democratic senatorial primary in Connecticut, Matthews accused Sen. Hillary Rodham Clinton (D-NY) of having employed a "bob and weave" with her position on the Iraq war, contrasting her with Sen. Joseph I. Lieberman (D-CT), who Matthews said "hasn't cut and run." In doing so, Matthews adopted the terminology employed by the Bush administration, and repeated by many in the media, to attack Democratic critics who have called for a timetable for withdrawal of U.S. troops from Iraq -- a position polls show most Americans support.
• In recent months, Matthews and his guests on Hardball and the NBC-syndicated Chris Matthews Show have repeatedly gushed over McCain and Giuliani as potential presidential candidates in 2008, even though both have been supporters of the war and Bush. For example, Matthews stated on the May 10 edition of Hardball that he was "still hanging in there for a McCain-Giuliani ticket."

I'm sure that everyone in the Village is thrilled to welcome Matthews and his "celebrity heat" (born, by the way, on the back of mindless sexism as Eric Boehlert demonstrates here ) on to the "A" list. After all, his only fault was that he was a good Catholic boy who couldn't forgive presidential fellatio. Who doesn't agree with that? On pretty much everything else, he's been great.

Hertzberg ends his column with this:

Chris Matthews is a net plus for American politics and American society. If he decides to pack it in and run for office, I plan to max out.

You know, I hear a lot about the need for change in our politics --- that we need to turn the page and inject the system with some new blood. And I hear a lot of it from allegedly liberal pundits like Hertzberg and Matthews who, without irony, tell tales of their earlier flights on Carter's Airforce One and recount their adventures in the Reagan years and the crazed politics of the 90s. And it never occurs to anybody that it's the liberal punditocrisy that's stale and tired and most in need of changing.

If we are now believing that Chris Matthews is a "net plus" for American politics, then the reality based community has followed the Bush administration straight down the rabbit hole.

Oh, and as for the "appeasement" humilation that everyone took so much pleasure in, I'm sorry, but it reminded me a great deal of an earlier episode this year where Matthews browbeat Texas state senator Kirk Watson for several minutes because he couldn't name Obama's legislative accomplishments. Let's just say that I'd be a lot more impressed with Matthews' pitbull routine if he used it, just once, on somebody with some real clout instead of low level nobodies who don't appear on TV regularly. Bullying people without power just doesn't impress me much, especially when you have people on the show every day who actually have some and you kiss their asses with gusto. Sorry, not impressed.

Outsourced to Ezra Klein:

EzraKlein Archive | The American Prospect: William Kristol, columnist for The New York Times's once-respected op-ed page, informed me this morning that "we are on course to win the Iraq war." He explains:

This past weekend, a friend forwarded an e-mail message from a Marine helicopter pilot who has done tours in Afghanistan and Iraq. (Because he’s on active duty, I’m not naming him.) He’s now stationed in the U.S., training pilots who are about to deploy to Iraq:

[...]

The Marine major concluded: “May has been ridiculously quiet everywhere.”

“Ridiculously quiet everywhere” is Marine-like hyperbole, of course. And even though May has been very encouraging, there will be upticks of violence and occasional setbacks over the next months.

Elsewhere in the paper, I learn that:

But the tactical success of the surge should not be misconstrued as making Iraq a safer place for American soldiers. Last year was the bloodiest in the five-year history of the conflict, with more than 900 dead, and last month, 52 perished, making it the bloodiest month of the year so far. So far in May, 18 have died.

Encouraging! What's interesting is that that latter analysis comes from an article that laments the media's recent inattention to the war. It did not, sadly, have much to say about prominent media personages who have spent the last five or so years lying about the war, and misrepresenting stasis as progress and chaos as mere growing pains.

Abi Sutherland sends us to

Element naming controversy: Finally in 1997, the following names were agreed on the 39th IUPAC General Assembly in Geneva, Switzerland: 104 - rutherfordium; 105 - dubnium; 106 - seaborgium; 107 - bohrium; 108 - hassium; 109 - meitnerium.

In 1999, Glenn T. Seaborg died, still disputing the name change for #105 and adamant about it remaining known as hahnium. His reason concerning Dubna in Russia was that he believed that they had made a false claim about discovering the element for which they had been credited. When the Dubna group finally did release some additional data on the experiment, Seaborg claimed that it was a misreading of the decay pattern of their product. Even then, the Dubna group still refused to remove their claim. Some people in the Berkeley group and some others still refer to it as hahnium.

Huh. I had thought that they had taken Glenn Seaborg's name away from him--that all he was left with was a room in Berkeley's Faculty Club and the Lafayette Library. Now I feel better.

When they keep admitting by accident that left-wing Democrats are right, about everything, always.

Outsourced to Matthew Yglesias:

Matthew Yglesias: You Don't Say: On the one hand, it's a huge deal that former White House press secretary Scott McClellan is now out there admitting that the Iraq War was a mistake sold with lies. But on the other hand, it's sort of banal. We've known this for years. It's a shocking truth about our current state of affairs, but not a truth that any longer has the capacity to shock me.

On the other hand, this from Byron York was interesting:

One of the main reasons John McCain is facing such an tough job today is that we are now in the sixth year of a war that the president of his own party started by mistake. That's a major headwind when you're running for president; an error of that magnitude will exact a political price. Would anyone be surprised if voters say that they've had enough?

That all seems reasonable enough to me, but what York is missing is that McCain doesn't think it was a mistake. One would think the virtue of nominating a guy who doesn't have close personal ties to the Bush administration would be that McCain could say something like "hey, I think liberalism is wrong and conservatism is good, but that doesn't mean I'm a sociopath who loves war so much that he still thinks the invasion of Iraq was a good idea." But he doesn't say that, presumably because he doesn't believe it. At even a time when the chief propagandists of the Bush administration are willing to admit that there BS was BS, he's a true believer.

"Lord, now may thy servant depart in peace, for mine eyes have seen the salvation."

Something that I thought I would never see has come to pass: Republican thug Karl Rove has denounced former Bush press secretary Scott McClellan as the equivalent of "a left-wing weblogger."

Let me say that I have never been prouder to be a left-wing weblogger:

Loyal Bushies Smear McClellan: ‘Disgruntled,’ ‘Self-Serving,’ ‘Sounds Like A Left-Wing Blogger’: In an explosive new memoir, former White House press secretary Scott McClellan writes that the Bush administration engaged in a “political propaganda campaign” to sell the Iraq war and that it misled him on the Valerie Plame scandal. Today, White House spokeswoman Dana Perino slammed McClellan today as a “disgruntled” employee; former press secretary Ari Fleischer said he was “heartbroken.”

Other former White House officials started the smear campaign last night. Karl Rove, interviewed on Hannity and Colmes, asserted that McClellan sounded more like “a left-wing blogger” than himself. Former Homeland Security adviser Frances Townsend, interviewed on CNN’s Anderson Cooper 360, called McClellan “self-serving” and “disingenuous.”... McClellan is experiencing the same automatic smear response the White House deploys against former allies who dare to criticize the administration, including former Fed Chairman Alan Greenspan or former head of faith-based initiatives John DiIulio. Some other lowlights:

Former Treasury Secretary Paul O’Neill: WROTE: Bush planned in invade Iraq before 9/11 and was like a blind man in a roomful of deaf people” during Cabinet meetings. SMEAR: “We didn’t listen to [O’Neill’s] wacky ideas when he was in the White House, why should we start listening to him now?” — A senior official who informed Bush of O’Neill’s comments, 1/12/04

Former Campaign Chief Strategist Matthew Dowd: SAID: Bush has “become more, in my view, secluded and bubbled in”; that “our leaders have to understand what they [the American public] want. They’re saying, ‘Get out of Iraq.’” SMEAR: “He’s going through a lot of personal turmoil but also he has a son who is soon to be deployed to Iraq. That could only impact a parents’ mind as they think through these issues.” — Dan Bartlett, 4/1/07

Former Counter-Terrorism Chief Richard Clarke: WROTE: Bush “ignored terrorism for months”; sought to tie 9/11 to Iraq immediately. SMEAR: “He wanted to be the deputy secretary of the Homeland Security Department after it was created.... He did not get that position, someone else was appointed to it.... His best friend is Rand Beers, who is the principal advisor to the Kerry campaign.” — Scott McClellan, while serving as press secretary, 3/22/04

According to the Politico, a “former colleague” said of McClellan: “It looks like a fairly pathetic attempt to restore his reputation by junking the only positive attribute people saw in him — loyalty”...

J. Bradford DeLong (2008), "Capital and Its Complements: International Capital Mobility and Economic Growth in the Twenty-First Century" http://www.j-bradford-delong.net/2008_pdf/20080521_capital.pdf

The old "write a paper to figure out what you think about an issue" trick has gone wrong: I still don't know what I think about the issues at hand...

Digby alerts us to David Paul Kuhn writing for the Stupidest Publication Alive, the Politico:

GOP strategists mull McCain ‘blowout’: [M]any top GOP strategists believe [McCain] can defeat Barack Obama... by a margin exceeding President Bush’s Electoral College victory in 2004.... [T]hose same GOP strategists are reticent to publicly tout the prospect of a sizable McCain victory for fear of looking foolish.... [T]he thinking is that he could win by as many 50 electoral votes. By post-war election standards, that margin is unusually small. Yet it’s considerably larger than either Bush’s 2004 victory or his five-electoral-vote win in 2000...

I think we can stop there: a "margin [that] is unusually small" is not a "blowout."

Duncan Black asks the natural question: "Is There Any Limit? I mean, is there any dictation that Politico won't take down from Republicans? Is nothing too absurd for them to pass it on?" The answer is that there is not.

Andrew Biggs has a weblog, Notes on Social Security Reform, that is well worth reading...

The Bush administration has, he believes, embezzled $15 billion:

The Bush Administration's Teapot Dome | Capital Gains and Games: Discussions about the federal budget like the ones we often engage in here at CG&G, typically focus on "formulation," that is, on the process and politics of putting the budget together and getting it enacted.  That's the part we all generally agree is broken, not working properly, overly politicized, and...well...you get the picture.

But this story from Friday's Washington Post, which talks about $15 billion in spending on Iraq that can't be accounted for properly, or in some cases at all, shows that the other stage of federal budgeting -- implementation -- is similarly broken, not working properly, and...well...you certainly get this picture as well.

In fact, it appears as if virtually every procedure and law designed to prevent just this type of malfeasance was circumvented.... The Pentagon's own inspector general confirmed that this lack of concern for procedural safeguards was blatant and commonplace.  That makes it hard to come to any conclusion other than that they were ignored rather than expedited or poorly executed. It's also hard to come to any conclusion other than that the spending of taxpayer funds in Iraq bordered on, or actually was, simple and straightforward corruption. 

Given the magnitude of the spending involved, Iraq may be the Bush administration's contribution to the biggest public corruption scandals of all time like Boss Tweed in New York, James Michael Curley in Boston, and Teapot Dome.

My question is whether any one, that is, any individual, will be prosecuted for their actions.  The hearing at which the Pentagon IG testified was designed to put the focus on the Bush administration's despicably bad implementation of the Iraq spending.  That obviously had political overtones but was also, and very obviously given the IG's finding's, completely deserved. But the laws and spending rules were broken by individuals and there are three reasons why they should be cirninally prosecuted.

First, we need to know whether they were ordered to ignor the laws and regulations.... Second... the Antideficiency Act... calls for civil penalties and jail time.... Third, not prosecuting the individuals and instead allowing this situation to be nothing more than a political scandal will encourage others to do this again, or keep doing it now...

Impeach George W. Bush. Impeach him now.

From his steel-and-glass headquarters in Alternate Universe, PA, he writes:

TPMCafe | Talking Points Memo | Liberal Pundits Offer Unprecedented Apology: Alternate Universe Washington, DC (AUP)--An influential group of liberal pundits and political commentators has formed a new organization to apologize for their columns on Ned Lamont's 2006 challenge to Joe Lieberman (R - Forallintentsandpurposes) and to call for their own resignations.

The organization, "Repentant Villagers," announced today that it would be issuing formal apologies to hundreds of liberal bloggers, including Duncan Black, Jane Hamsher, Markos Moulitsas Zuniga, Glenn Greenwald, and "Digby," acknowledging that the progressive blogosphere was right about Lieberman after all. "No one could have anticipated the breach of the party," said Jonathan Chait, senior editor of the New Republic. "But Lieberman's recent op-ed, calling the Democratic Party insufficiently pro-American, is just sheer barking lunacy. I could never have seen this coming two years ago when I was calling Lieberman's critics 'a pack of crazed, ignorant ideological cannibals,' and I'm deeply sorry. It looks like I turned out to be the truly ignorant one in the end."

Time magazine columnist Joe Klein sounded a similar note, saying, "it's true what that Eschatros guy says on his blog--we really do live in a village*, and we really do listen only to each other. I just never realized what a hermetic little clique I inhabit until I started reading around in the fever swamp of the blogosphere--and now I wonder, frankly, what makes my commentary any better than the bloggers'. Because I was clearly so clueless on Lamont-Lieberman that I really need to check myself. Now I wonder whether my columns on FISA were any good, or whether I was just making stuff up."

Perhaps the most scathing self-critique came from Jacob Weisberg, who called for himself to step down as editor of the prominent online journal Slate. "I just don't believe in myself anymore," said Weisberg. "When I wrote that Lamont's victory would spell disaster for the Democrats because it would represent the triumph of McGovernite peaceniks and Communist symps, I must have been on acid or something. Seriously. Look at what I actually wrote:

Whether Democrats can avoid playing their Vietnam video to the end depends on their ability to project military and diplomatic toughness in place of the elitism and anti-war purity represented in 2004 by Howard Dean and now by Ned Lamont.

"And now Lieberman is out there playing that 'toughness' card for John McCain. I just can't believe it. Back in 2006, I looked at Ned Lamont and I saw George McGovern. I looked at his supporters and I saw thousands of Abbie Hoffmans--almost like a pack of crazed, ignorant ideological cannibals. And you know what's really trippy about that? I was only eight years old in 1972. But that's the way I was taught to see liberal challengers to people like Lieberman, and that's the way all my friends in the industry were writing. There's something deeply wrong with all of us, no question. So today I say: up against the wall! If you're not part of the solution, you're part of the problem. And I have definitely been part of the problem."

Weisberg immediately rejected his call for his resignation, however, explaining that it would only embolden America's enemies and that the next six months would be a critical time for Slate.

Outsourced to Hilzoy, who watches Adam Nagourney and his editors go into the tank and splash around:

The Washington Monthly: The NYT has a story headlined 'Worries in G.O.P. About Disarray in McCain Camp'. It contained this rather astonishing passage:

The string of departures from the campaign was prompted by questions about lobbying activities by aides and advisers to Mr. McCain and a new policy, which he dictated, that active lobbyists not be allowed to hold paying jobs in the campaign. Mr. Schmidt said that policy was an example of how Mr. McCain would take tough action, part of a contrast he said they would draw with Mr. Obama for “giving great speeches” but having no record of accomplishment.

Let me get this straight. Obama has refused, from the outset, to take money from lobbyists and PACs. He has also refused to have lobbyists on his paid staff. When the RNC has tried to catch him in hypocrisy, it has had to resort to such claims as: he lets lobbyists give him free advice! He has people on his staff who used to be lobbyists!

By contrast, until quite recently, John McCain's campaign was full of lobbyists:

For years, Sen. John McCain (R-Ariz.) has railed against lobbyists and the influence of "special interests" in Washington, touting on his campaign Web site his fight against "the 'revolving door' by which lawmakers and other influential officials leave their posts and become lobbyists for the special interests they have aided.

But when McCain huddled with his closest advisers at his rustic Arizona cabin last weekend to map out his presidential campaign, virtually every one was part of the Washington lobbying culture he has long decried. His campaign manager, Rick Davis, co-founded a lobbying firm whose clients have included Verizon and SBC Telecommunications. His chief political adviser, Charles R. Black Jr., is chairman of one of Washington's lobbying powerhouses, BKSH and Associates, which has represented AT&T, Alcoa, JPMorgan and U.S. Airways.

Senior advisers Steve Schmidt and Mark McKinnon work for firms that have lobbied for Land O' Lakes, UST Public Affairs, Dell and Fannie Mae. (...)

Even as Black provides a private voice and a public face for McCain, he also leads his lobbying firm, which offers corporate interests and foreign governments the promise of access to the most powerful lawmakers. Some of those companies have interests before the Senate and, in particular, the Commerce Committee, of which McCain is a member.

Black said he does a lot of his work by telephone from McCain's Straight Talk Express bus."

Yep: McCain's senior political advisor was running a lobbying firm which was registered as an agent for several foreign governments as well as a whole host of corporations, from McCain's campaign bus. But when it turned out that two of McCain's people had lobbied for the odious Government of Myanmar, McCain suddenly saw the wisdom of adopting Obama's approach, and started shedding lobbyists. (Not, however, Charlie Black: while he has resigned from his lobbying firm, the fact that he has represented Ferdinand Marcos, Mobutu Sese Seko, Mohamed Siad Barre, Jonas Savimbi, and Ahmed Chalabi is apparently not a problem.)

And the fact that Obama spotted the problems with having lobbyists working for his campaign from the outset and avoided it, while McCain let it fester until it blew up in his face, is supposed to show that McCain "takes tough action" while Obama just gives speeches? Sounds like a winning argument to me.

Outsourced to Felix Salmon:

Ben Stein Watch: May 25, 2008 - Finance Blog - Felix Salmon - Market Movers - Portfolio.com: Ben Stein is worried about oil prices. We know this because he uses words in his column this week like "frightening", "extreme hardship", "overwhelming trouble", "peak oil" (twice), "true crisis", and "emergency". Plus:

If we keep acting as if the landscape were more important than human life, we will make ourselves the serfs of the oil producers and eventually reduce our country to poverty and anarchy.

Yes, in Ben Stein's fevered brain, oil = human life, the biggest opponents of oil human life are environmentalists, and "the great Mad Max movies" are a prescient and truthful warning of what will happen if those environmentalists get their way. (Maybe Stein should ask the director of those films, George Miller, what he thinks their message is, and what he thinks of environmentalism. Here's a clue: Miller also spent four years directing Happy Feet, an anti-global-warming 2006 film about penguins.)

Stein's solutions to this "true crisis" do not, of course, involve mothballing his "mighty Cadillac STS-V", since that would involve no more "hurtling along I-10 toward Rancho Mirage at 130 m.p.h.". I'm no expert on cars, but I'd love it if someone could tell me - and Stein - what kind of fuel economy the STS-V gets at 130mph; my guess it would make the average Hummer driver feel positively virtuous.

Instead, Stein has a novel solution to the problem of the US using too much oil: drill more! Has he forgotten his father's famous dictum that if something can't go on forever, it won't?

Stein idiosyncratically defines "peak oil" as "that point at which we have pumped out more than half the oil on the planet". (More commonly it's defined as the point at which oil production stops increasing and starts declining.) But let's stick with Stein's definition: if he's right that we're close to peak oil, then drilling more will only serve to accelerate the rate at which we draw down what reserves the world has left. But that seems to be exactly what Stein wants: environmentally catastrophic "development" of Canada's tar sands, "incentives" for big oil companies, drilling for more oil on the continental shelf.

Stein doesn't, of course, explain how any of these things will avert the "true crisis" he talks of - probably because they wouldn't. The man who regularly advises his readers to live within their means is simultaneously advising the United States as a whole to do the opposite, on the energy front: not whittle down demand to something sustainable, but rather plunder what's left of the world's fossil fuel resources. (Maybe Stein's anti-Darwinism has something to do with his seeming inability to grasp that fossil fuels are not replaceable.)

He also doesn't understand that oil is fungible. "If Venezuela stopped sending us oil," he writes, "there would be extreme hardship" - as though we wouldn't simply import our oil from somewhere else instead. Yes, Venezuela is closer to the US than most other oil exporters - but that's not a huge consideration, affecting little more than marginal shipping costs. Then again, at least he didn't resuscitate his silly theory that it matters what currency oil is denominated in.

In Stein's beloved Mad Max 2, there are two main kinds of people in the world: gas hogs, on the one hand, who seek to slake their insatiable demand by going after obvious sources of fresh oil; and frugal oil conservers, on the other, who try to live within their means. Stein should watch it again, to see which turns out to be the smarter strategy.

An assignment for my intermediate macro class this semester that I was never able to put together/find time to actually assign during the semester.

If you want to use this, please link back to this webpage, and drop me a note at [email protected]:

Exercise: Replicating the Estimate of the Capital Share in Mankiw, Romer, and Weil (1992) by J. Bradford DeLong is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Based on a work at www.jstor.org.

Here is Table VI from a paper on the reading list: the cross-country growth regression paper of N. Gregory Mankiw, David Romer, and David N. Weil (1992), "A Contribution to the Empirics of Economic Growth," Quarterly Journal of Economics 107:2 (May), pp. 407-437 http://www.jstor.org/stable/info/2118477?seq=1:

We are going to take a look at the estimate of α, the capital share in the production function, for the "intermediate sample" over 1960-85.

Mankiw, Romer, and Weil assume that the economies' production function is:

And derive an approximate equation for the convergence of economies to their respective balanced growth paths from initial values given as of time 0:

with Y being the level and y being the log of output, L being the level and l being the log of the labor force, E being the level of the efficiency of labor, K being the physical capital stock, H being the human capital stock, α and β being fixed parameters of the production function, n being the labor force growth rate, g being the efficiency-of-labor growth rate, δ being the joint depreciation rate of physical and human capital, s_k being the physical capital savings-investment share of output, s_h

Suppose one assumes that δ+g = 0.05, and then runs a cross-country regression on the global productivity distribution as of time t in order to estimate the c parameters:

(1) What is the relationship between the various c parameters estimated by the regression and the parameters of the model? Specifically, solve for α, β, and λ as functions of the c's.

(2) Suppose that you don't have knowledge of the true human capital savings-investment share of output, but you are willing to assume that this share is proportional to the percentage of the working-age population currently attending secondary school. How does this change your interpretation of the coefficients?

(3) Download the data given in http://www.j-bradford-delong.net/2008_xls/MRW_REPLICATE.xls and attempt to replicate the intermediate-sample regression reported by Mankiw, Romer, and Weil in their Table VI. Compare the results of your replication to the regression results in their table. Compare the data you have downloaded to the data in the appendix to their paper at <>. Account for the differences between your estimates and theirs.

(4) Derive estimates of the parameters of the model--especially α, β, and λ. Derive approximate 95% confidence intervals for those parameters.

(5) According to the model, there should be a relationship between the average λ in the sample and the other parameters of the model:

Is it sensible to attempt to use this relationship as a testable restriction to evaluate the model? Why or why not?

(6) The production function assumed by MRW has the somewhat odd implication that vastly more of the factor of production human capital is produced when a working-age person from a rich country attends secondary school than when a working-age person from a poor country does. Suppose we take an alternative, Mincerian specification of the role of education and assume the production function:

that is, education amplifies the efficiency of labor beyond its current baseline value E_t by a factor equal to the share of the working-age population h attending secondary school raised to the power of the parameter b. What regression does this model suggest that you run? How do the results of running this regression differ from your replication of MRW? How does your interpretation differ from your interpretation of the results of MRW?

(7) MRW "assume that the rates of saving and population growth are independent of country-specific factors shifting the production function." How might this assumption go wrong? How the possibility that this assumption has gone wrong alter your interpretation of your (and their) results?

N.B.: http://www.j-bradford-delong.net/2008_xls/MRW_REPLICATE_ANS.xls

One of the things that middle-aged white people do is that they gradually, room by room, pay someone to replace the 1980 wall-to-wall carpeting that came with the house with stained oak floors. And then they have to buy oriental carpets to put on top of the new oak floor to render the overwhelming bulk of it invisible.

"Why not just put oak down around the edge of the room?" I asked. "And leave plywood where the rugs are going to go?"

"You think you are funny," said one of our floor guys, "and I laugh because you are paying me. But if you ever buy new construction, check--especially it the rugs are tacked down, and especially always check if there are runners on the stairs."

Oh.

So we journey to the Macy's Furniture Warehouse Outlet at 1200 Whipple Road in Union City:

View Larger Map

And we discover that in the past five years the number of handmade oriental carpets at 1200 Whipple Road has greatly shrunk--instead, they now have lots of very attractive (and attractively priced) machine-made Karastans. Nevertheless, we return with 220 square feet of carpet: a "Ziegmahal" and a "Khyber"--and no real idea of what tradition the rugs come out of: to my knowledge "Khyber" is not a rug-making tradition, and I can find no trace of "Ziegmahal" anywhere.

But making them took a lot of work http://www.jacobsenrugs.com/effort.htm, and they should wear like iron.

Theodore Roosevelt is not a good role model for a Democratic politician. And "take on" does not mean cutting and raising taxes in such a way as to leave oil companies' finances unchanged.

The Wall Street Journal's Washington Wire watchesthe continuing train wreck:

Washington Wire - WSJ.com : Clinton: Teddy Would Take On Big Oil: Hillary Clinton, trying to catch up to Barack Obama in the hunt for the Democratic nomination, continues to press a long-shot plan to put the federal gas tax on hiatus and make up for lost revenue with an additional tax on oil companies’ profits.

In recent days, the New York senator has begun stressing some of the more symbolic aspects of the plan, even nodding to a certain turn-of-the-20th-century, macho-man Republican: Theodore Roosevelt.

“It’s not only that I want to give you some immediate relief,” she said during a town-hall style Q&A at a Portland television station Friday night. “I want to begin to lay the groundwork for people to understand what Teddy Roosevelt understood … You’ve got to have the oil companies in some way, reigned in, because they are all-powerful. They have too much control over our economy and over what everything costs in the economy. So I think both in terms of immediate relief and in terms of laying down some markers about going after the oil companies, I have a responsible position.”

Earlier in the day, while taking questions at a private residence in Junction City, near Eugene, Clinton made a similar point: “I think it’s time for us to start taking on the oil companies. A hundred years ago, Teddy Roosevelt took on the oil trusts, and, you know, really broke them up … . Now it’s time to take them on again.”

While Clinton has often expressed admiration for the accomplishments of Franklin Roosevelt, it’s hard to know how far she’ll carry her affection for Teddy. Washington Wire will alert readers if she starts sporting pince-nez spectacles.

This is beyond embarrassing.

Jodi Kantor of the New York Times should clearly find another, very different profession.

Outsourced to Matthew Yglesias:

Matthew Yglesias: A Chosen Drift: Looks like contra Jodi Kantor, Jewish voting behavior has been trending left over the past several cycles. It's curious, then, that The New York Times would run an article stating that "in recent presidential elections, Jews have drifted somewhat to the right"...

John Sides has a graph:

The Monkey Cage: Are Jews Drifting to the Right?: I took the state-level exit polls for each presidential election from 1988-2004 and combined them into one big file for each election year. This produces relatively large samples of Jewish voters (~1,000 each year). Here is the percentage of Jewish voters choosing the Democratic candidate:

Unexpectedly early to a lunch in Greenwich Village:

View Larger Map

I halt the cab at the Flatiron Building

to see if can possibly finally meet a Nielsen Hayden or two in the flesh. And whom do I also find there sitting in a semi-lotus position but New York Times bestselling author Cory Doctorow of BoingBoing on tour for his brand-new (and excellent) book Little Brother, who proceeds to:

• give me his five-minute lecture on why he finds David Brin's The Transparent Society too optimistic,

• and then hands me a pre-sale copy of Jo Walton's Half a Crown for me to read on the plane back to San Francisco.

(I had expected to meet Doctorow at CFP on Thursday, but he was then in San Francisco signing books).

Now off to lunch with Nouriel Roubini at the Mercer Kitchen...

Me: May I please get an iphone-to-usb cable? I crushed mine in the door getting out of a limo, and need a replacement...

Apple Store Employee: Certainly...

Ann Bartow of Feminist Law Professors:

Feminist Law Professors: Why I Love Being A Law Prof, Blogging Edition: I’m listening to Jack Balkin (of Balkinization) give a talk, whilst sitting next to one of my very favorite law prof bloggers, Michael Froomkin (of Discourse.net), and next to him is Brad DeLong (of Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong). Nearby is James Grimmelmann (of The Laboratorium). Yesterday I was on a panel that also included Bill McGeveran (of Info/Law) and Frank Pasquale (of Madisonian.net and Concurring Opinions). I’ve heard presentations by very smart people like Wendy Seltzer (of Legal Tags), and Andrea Matwyshyn (Jurisdynamics Idol) and gotten to catch up a little with the wonderful Susan Crawford (of Susan Crawford blog) and Chris Hoofnagle (of Chris Hoofnagle.com).

There are lots of great non-bloggers too! The weather here stinks but the pizza is great. As some of you may have already guessed, I’m in New Haven. Next week I’ll get to hang out in Montreal with Bridget Crawford (of this blog of course!), Sudha Setty (of The Title IX Blog) and Christine Hurt (of The Conglomerate) at the LSA Annual Meeting, because we are all on a panel about Blogging As Feminist Legal Method, along with Alison Stein, author of the very cool article discussed here. Life is good, especially during the summer conference season!

Shades of David Lodge's Small World...

Matthew Yglesias on our two examples of following wingnut-McCain policies of not negotiating:

Matthew Yglesias: Distorting: Washington Post correctly says that John McCain is "distorting history" as he criticized Barack Obama's pro-negotiations position. The United States really only has two experiences with a sustained effort at the Bush/McCain approach to diplomacy. One would be our effort to deny recognition to Communist China during the Truman, Eisenhower, Kennedy, and Johnson administrations. This, it's generally acknowledged, was a strategic fiasco that denied us the opportunity to gain leverage vis-à-vis the Soviet Union. Indeed, it was a fiasco of such enormous proportions that Richard Nixon's role in undoing it actually manages to stack up in a non-trivial way against his otherwise terrible record in office.

The other is our fifty year effort to starve the people of Cuba into rebelling against Fidel Castro. McCain actually defends continuing this policy, but everyone with a functioning brain understands that it's been a ludicrous failure. So that's the path Bush has been taking with Syria and Iran and used to take with North Korea. McCain wants to keep on taking it, put North Korea back under the interdict, and perhaps add Russia to the disfavored list. Like McCain's apparent belief that it would be better if we'd spent another decade or two fighting in Vietnam, it really calls into question whether he has any understanding of what he's talking about.

Tom Keene's show:

Bloomberg Podcasts: DeLong Expects Dollar to Fall Versus Asian Currencies: May 20 (Bloomberg) -- Bradford DeLong, an economics professor at the University of California, Berkeley, talks with Bloomberg's Tom Keene in San Francisco about the outlook for the U.S. dollar versus Asian currencies, Federal Reserve monetary policy and the battle between Democratic U.S. presidential candidates Hillary Clinton and Barack Obama.

http://media.bloomberg.com/bb/avfile/Economics/On_Economy/vKpRex1Ueuy0.mp3

The Pro-Tourism Terminator speaks on gay marriage:

Think Progress: Schwarzenegger: Gay marriage may boost California’s economy.: Speaking in San Francisco yesterday, Gov. Arnold Schwarzenegger (R) said he hopes that the state Supreme Court’s recent ruling allowing gay marriage will lead more couples to come to the state to be wed:

You know, I’m wishing everyone good luck with their marriages and I hope that California’s economy is booming because everyone is going to come here and get married.

The San Francisco Convention and Visitors Bureau also expects a tourism boom this summer, and its website now “promotes a gay travel section” and “explains that same-sex couples are ‘officially allowed to marry in the state of California.’” Schwarzenegger has promised to oppose any amendments banning gay marriage.

Michael Froomkin:

"The Transparent Society:" Ten Years Later - CFPWiki: This year marks the 10th anniversary of the publication of David Brin's controversial book, "The Transparent Society". The book argues that in the face of the explosion of sensors, cheap storage, and cheap data processing we should adopt strategies of vision over concealment. A world in which not just transactional information, but essentially all information about us will be collected, stored, and sorted is, Brin says, inevitable. The only issue left to be decided is who will have access to this information; he argues that freedom, and even some privacy, are more likely to flourish if everybody - not just elites - has access to this flood of data.

The book remains controversial and much-talked-about. The panel will explore how Brin's claims hold up ten years later and whether (or how far) we're on the road to a Transparent Society.

Other useful readings:

• David Brin's Statement
• Brad Delong's Statement
• Brin's Transparent Society Page
• Bruce Schneier's critique of The Transparent Society
• David Brin's reply
• Citations to 'The Transparent Society' (from the Westlaw Database)

Here is my presentation:

I am a sidelight. I am here as a tame economist. The political and sociological questions are, I think, more important. Nevertheless I have a question to address: does turning the cameras not on Big Brother but on the other brothers--all the other brothers that are economic actors--help?

The first and most important of the not-Big Brothers for you--for each instantiation of "you"--is your particular employer. That is Medium-Sized Brother. The answer is that it isn't going to help, or not much. Employees of financial service firms will find their employers going through their trash in search of evidence of insider trading, and in the process employers will pick up every piece of information they could want and more. Cash-register operators in grocery stores find that their scanning frequency data plus the cameras on the cash registers give the store manager information about every gossip episode--and how costly it is in terms of items not scanned in that minute. There will be Taylorism, Taylorism rampant, Taylorism rampant in nearly every job where you have a boss.

Now this has an upside and a badside. The upside: My seventeen-year-old is a lifeguard. You clock in at the start of your shift, using nineteenth-century punch-card surveillance techology. You clock out at the end of your shift. But you don't clock out for breaks--hence some lifeguards shade their thirty-minute breaks into fifty-minute breaks, and the others grumble but don't want to be snitches, and morale falls, and the efficiency with which lifeguarding services are provided drops. Cheap cameras and infinite videotape scanned by artificially-intelligences vast, cold, and unsympathetic will allow the boss to see which lifeguards are pulling their weight and which are not, and so produce better morale and better outcomes Taylorist regimentation and restriction of individual employees' autonomy, discretion, and ability to goof off are, one might say, going to be used where they are good: where they lead to a lower-cost and a higher-quality outcome bosses will use them, and where they don't bosses won't. These Coasian arguments are trumps within economics, they are powerful, but they may not be right.'

The downsides of Medium-Sized Brother watching you: First of all, corporate bureaucracies are not rational and rationalized entities--the will to dominate and the desire to cover your butt make it certain that its surveillance powers will be badly used. Second, the coming of surveillance tools to the boss greatly alters the balance of power between bosses and workers, and eliminates a great deal of what we might think of as capillary income redistribution from rich bosses to poorer workers.

Here David Brin's solution to what are largely political problems--turn the cameras on the powerful so that the hive mind can look up at Big Brother looking down--does not, I think, apply. Absent a strong union, the boss simply does not care. Perhaps the hive mind looking up will be able to rank employers as to their relative desirability, and this will put some pressure on bosses to play nice. Perhaps not.

Then there are all the call them Little Brothers--the people who want to sell you things that you may need to be persuaded against your better judgment to buy. And then there are the people who want to figure out whether you will be a more expensive customer to serve--your health insurer, for example--so that they can decide not to let you be a customer.

Here the problem is that you--all of the yous out there--need an aggregator. Little Brothers can figure out how to use the raw data that the cameras spit out to determine what they want to know about how to sell or not sell to you, about how to manage you. The yous have a harder time figuring out how to use the information the cameras spit out to figure out how to manage the Little Brothers--you don't have a big interest in putting in the time and analytical effort to figure out how to manage one Little Brother, even though all the yous together do. Where these aggregators come from so that the yous can analyze the Little Brothers is not so clear...

David Brin wrote, I think, a wonderful book. And complaining that his solution--turn the cameras around--doesn't solve all problems is like complaining that the portions of the free ice cream aren't large enough. Nevertheless, I do complain.

And let me stop there.

From Michael Perelman:

Two Degrees of Separation: Reflections on Stolper and Schumpeter « unsettling economics: A few months ago, I was asked to write an article about my experiences as an undergraduate student of Wolfgang Stolper, probably based on a conversation that I had with Mike Scherer. After I submitted it, the editors told me that they wanted details about Stolper’s relationship with Schumpeter, when my conversation with Mike had concerned my lack of any real knowledge of the subject — as the following note will prove.

---

First of all, I am flattered to be even vaguely associated with such world-class intellectuals as Mark Perlman, Wolfgang Stolper, and Joseph Schumpeter. I learned about the relationship between Wolfgang Stolper and Joseph Schumpeter as a very young, naïve, and certainly unpromising student. I switched majors every year, a symptom of both my entirely unsystematic manner of learning and my hunger for new ideas.

I only took one international economics class with Professor Stolper in 1959. The course was the most unique educational experience of my life. More often than not he would begin class by handing out papers, explaining that if he were actually going to talk about economics, this is what you would say today. Instead, he would tell us about an upcoming event on campus, whether it was E. Power Biggs, who was going to play Bach on the great organ, or Paul Tillich, who was going to lecture on theology. The rest of the class would be devoted to alerting us to the fine points of the forthcoming presentation ‑‑ its context, its importance, and most important what to look for while attending.

Someone told us that Professor Stolper had made his living for awhile writing Ph.D. theses for wealthy students in various disciplines. I have no idea if this story was true, but judging from his performance, I would not doubt it for a minute. In any case, this class was ideally suited for an enthusiastic student like me. Needless to say, virtually everything in his lectures was over our heads, yet we were keenly interested in what he said, realizing that it was significant. Although I was not a bashful student by any means and I found his information fascinating, for some reason the idea never entered my head to approach him to ask for elaboration or clarification of any of his classes. I do not recall any of the other students talking with him after class either.

Perhaps, he just seemed to be too important to be approachable, even though he never projected any Old World standoffishness. Months later, and sometimes even after years, students from the class would encounter each other with the greeting, “I finally figured out what Stolper was saying about X.” However, one recurrent theme in the class is etched in my memory. Professor Stolper often spoke of one person of great importance about whom none of us had ever heard. He probably wrongly assumed that students educated enough to be admitted to the University of Michigan would certainly be familiar with the name Joseph Schumpeter. Of course, we were not. I have no recollection of any theoretical analysis of Schumpeter ‑‑ only that he was a denizen of Old Europe who led a remarkable life.

Professor Stolper told us riveting anecdotes about Schumpeter, including his three great ambitions to be the greatest economist, the greatest horseman, and the greatest lover. Something that sounded so outlandish was sure to capture undergraduates’ attention. One particular story that was firmly imprinted in my mind concerned Professor Stolper’s departure from Europe with Schumpeter. He told us that when Schumpeter was about to depart for Harvard, a man limped up to embrace him, telling him something like, “I can never thank you enough Professor Schumpeter. You, a captain in the cavalry, were willing to duel with me, only a lieutenant in the infantry.” Professor Stolper explained that Schumpeter had made some disparaging remarks about the service that the librarian had given his students, so the librarian challenged him to a duel.

I later read accounts of the duel, but nothing about either the wound or the final embrace. Maybe Professor Stolper embellished a bit, but it was certainly an excellent teaching technique to make students take an interest in more important matters. I suspect all the other students in the class would also still have a strong memory of the story. If you were to ask me what, in particular, we learned in the class, I would not be able to offer you much. Yet I feel confident that like other fellow students I benefited by unconsciously soaking up ideas, without any recollection of their source. For example, I have absolutely no recollection about any of Schumpeter’s theories being discussed in class. Yet, decades later, I found strong parallels between Schumpeter’s way of looking at the world and my own.

For example, I became fascinated by the way that the leading economists in the United States analyzed railroads, and other capital-intensive industry. Afterwards, I realized that their analysis was almost identical to that of Schumpeter, especially the Schumpeter of Capitalism, Socialism, and Democracy ‑‑ so much so that I was led to believe that they may have been an unacknowledged source of his work. Of course, both Schumpeter and the American economists were well schooled in the work of the German historical school, which may just as well explain the commonality.

I did find that one of these economists, David A. Wells, a name well known at Harvard, did clearly anticipate the theory of creative destruction (see Perelman 1995, p. 192). For Wells, the measure of success of an invention is the extent to which it can destroy capital values. He offered as an example “[t]he notable destruction or great impairment in the value of ships consequent upon the opening of the [Suez] Canal” (Wells 1889, p. 30). Wells asserted that each generation of ships becomes obsolete in a decade. From here, he concluded, “nothing marks more clearly the rate of material progress than the rapidity with which that which is old and has been considered wealth is destroyed by the results of new inventions and discoveries” (Ibid., p. 31). Wells claimed no originality for his work, writing:

by an economic law, which Mr. [Edward] Atkinson, of Boston, more than others, has recognized and formulated, all material progress is affected through the destruction of capital by invention and discovery, and the rapidity of such destruction is the best indicator of the rapidity of progress. [Wells 1885, p. 146; see also, p. 238; and Atkinson 1889]

Of course, Schumpeter may well have unconsciously assimilated Wells’s notions just as I have done with those of Schumpeter and Professor Stolper. A few years ago, Professor Stolper stopped by the History of Economics Conference. I told him how inspiring his class was. He seemed a bit embarrassed, or even puzzled, telling me that my response was surprising because people had told him that his teaching was not very good. How wrong he was! I like to imagine that if Stolper imbued the essence of Schumpeter, my brief and distant encounter with Stolper while sitting in the second or third row of a dingy room in Ann Arbor provided a vague and distant relationship with both great economists.

I am Brad DeLong from Berkeley Economics...

A question for Professors Balkin and Haq with respect to the need for "separation of powers" inside the executive branch and within executive branch oversight given the failure of congressional oversight...

It seems to me that Professors Balkin and Haq's vision of within-executive separation and oversight is--well, it is the Justice Department's Office of Legal Counsel. Yet considered as an oversight body to ensure quality and responsibility and, indeed, legality and morality the Justice Department's Office of Legal Counsel has been somewhat... unsuccessful... in the current administration.

To say that congressional oversight is broken, hence we need new mechanisms, raises the question of why the congressional oversight process broke--and what will keep internal executive accountability mechanisms from breaking.

I would put the institutional breakdown's causes in the election of 1994 taught the Republican legislators of Capitol Hill that their jobs are at risk if they fail to support the president of their own party. Hence we now have all the defects of a parliamentary system--lock-step partisan support for the deeds of the executive--and none of its principal advantage which is the vetting of the executive by the experienced legislators of the ruling party.

It seems to me that within-the-executive-branch oversight mechanisms suffer from this problem much more strongly than does congress: if congress fails, the within-executive oversight mechanisms are going to fail faster and more completely. I want you to give me a reason to believe that I am wrong, that in fact within-executive mechanisms will in fact do better. And I would also want you to give me a pony with blue ribbons in its hair...

A reconstruction:

Jared Diamond, Easter Island's End: The first Polynesian colonists found themselves on an island with... all the prerequisites for comfortable living. They prospered and multiplied... began erecting stone statues on platforms, like the ones their Polynesian forebears had carved. With passing years, the statues and platforms became larger and larger, and the statues began sporting ten-ton red crowns--probably in an escalating spiral of one-upmanship.... [S]ociety was held together by a complex political system to redistribute locally available resources and to integrate the economies of different areas.

Eventually Easter's growing population was cutting the forest more rapidly than the forest was regenerating.... Life became more uncomfortable--springs and streams dried up, and wood was no longer available for fires. People also found it harder to fill their stomachs, as land birds, large sea snails, and many seabirds disappeared. Because timber for building seagoing canoes vanished, fish catches declined.... Crop yields also declined, since deforestation allowed the soil to be eroded.... By around 1700, the population began to crash toward between one-quarter and one-tenth of its former number. People took to living in caves for protection against their enemies. Around 1770 rival clans started to topple each other's statues, breaking the heads off. By 1864 the last statue had been thrown down and desecrated. As we try to imagine the decline of Easter's civilization, we ask ourselves, "Why didn't they look around, realize what they were doing, and stop before it was too late? What were they thinking when they cut down the last palm tree?"

I suspect, though, that the disaster happened not with a bang but with a whimper.... The forest the islanders depended on for rollers and rope didn't simply disappear one day--it vanished slowly, over decades... any islander who tried to warn about the dangers of progressive deforestation would have been overridden by vested interests of carvers, bureaucrats, and chiefs, whose jobs depended on continued deforestation....

Gradually trees became fewer, smaller, and less important. By the time the last fruit-bearing adult palm tree was cut, palms had long since ceased to be of economic significance. That left only smaller and smaller palm saplings to clear each year, along with other bushes and treelets. No one would have noticed the felling of the last small palm...

Needless to say, most societies--or at least most societies that we are aware of because they hang around for long enough to leave stone, pottery, or papyrus trails--do not behave this way. They evolve a social institution called private property to give individuals both control over scarce and exhaustible resources and an incentive to ensure wise and balanced extraction and careful and efficient use.

It appears that the Easter Island people somehow failed to do so...

It can be shown http://delong.typepad.com/sdj/2007/05/a_teaching_note.html that the "right" way to value the stock market is with the price-earnings equation:

P = E/[r - (1/θ - 1)ρ]

Where E are the earnings--the sustainable permanent cyclically-adjusted, and correctly accounted for Haig-Simons earnings--paid on the index, r is the appropriate real rate at which to discount cash flows of the riskiness of the stock market, θ is the payout ratio of dividends to earnings, andρ is the wedge (which may be posititive or negative) between the appropriate external real interest rate r and the internall rate of return the firm can earn on its reinvested earnings.

If we are willing to assume that ρ is close to zero, than this equation is approximately:

P/E = 1/r

The price-to-permanent earnings ratio is one divided by the market's expected discount rate.

Mark Gongloff presents the ratio of prices to a ten-year lagging average of earnings for the S&P 500--the idea being that the ten-year moving average irons out transitory fluctuations in profits and gives you permanent earnings.

This is not quite right. This gives you permanent earnings five years ago. To get permanent earnings today you have to grow the average by five years of the trend growth rate of real earnings--which has been 6% per year over the past twenty years. The current value of 28 for the price-to-moving-average-of-lagged-earnings ratio corresponds to a price-to-permanent-earnings ratio today of roughly 21, and to a current r of4.8% per year.

That looks pretty good when compared to current Treasury TIPS real interest rates of 0.6% per year for five years, 1.31% per year for ten years, and 1.81% per year for twenty years. It's not the six percent per year average equity premium of days of yore. It is, however, at least half that. If you are a buy-rebalance-and-hold investor--and you should be--equities are still looking good.

But that's not the way the mind of Wall Street works. Exhibit: Mark Gongloff:

Ahead of the Tape - WSJ.com: [A] look at a stalwart measure of cheapness -- the price-to-earnings ratio -- from various vantage points suggests stocks might be dear.... The Standard & Poor's 500-stock index trades at 15 times forecast operating earnings this calendar year. But that's not much of a deal when compared with the 60-year average of about 12.... Other takes on P/E lead to a still-more-bearish conclusion. When measured against the past 12 months' reported earnings, the S&P 500's P/E ratio jumps to about 21, above its 60-year average of roughly 16.

Benjamin Graham and David Dodd... suggest weighing prices against earnings averaged over a period of as long as 10 years. On that basis, the S&P 500 today trades at roughly 28 times reported earnings. That's lower than the peak of about 48 at the height of the dot-com bubble, but hardly a bargain; for the past 60 years, that P/E ratio has averaged about 21....

James Montier, global equity strategist at Société Générale, said his screening had uncovered a rich vein of short-selling opportunities. "If one finds lots of shorts, and not many longs, it suggests that the market is generally overvalued," Mr. Montier says....

"Are there securities where valuations are high? Absolutely," says Tim Ghriskey, chief investment officer at Solaris Asset Management. "But we do not have the risk we had in 2000, where valuations were at historic extremes."

Surely not. But we're not at a low extreme, either.

It's just worth pointing out that whenever the stock market is at valuation ratios that Gongloff and company consider "normal" then equities are an absolutely amazing deal relative to all kinds of bonds