Grasping Reality on TypePad, by Brad DeLong

Janet:

Econbrowser: Janet Yellen on risks and prospects for the U.S. economy: Unfortunately, it appears to me that there are at least three reasons for thinking that housing prices have further to fall... the ratio of house prices to rents... still remains quite high... inventories of unsold homes remain at elevated levels.... futures market for house prices predicts further declines....

The ongoing fall in house prices has important implications for the financial markets.... [T]he market for private-label securitized mortgages of even the highest quality remains moribund. These securities were the primary source of financing for nonconforming residential mortgages.... Jumbo mortgages for prime borrowers are available, but at historically high spreads.... With hindsight, it is clear that [the] originate-to-distribute model suffered severe incentive problems--the originator had insufficient incentive to ensure the quality of the loans.... Before private-label mortgage securitization can recover, financial markets must design mechanisms to align the incentives of originators with the interests of the ultimate investors.... [T]here was a widespread failure of risk management... excessive reliance on what turned out to be flawed assessments of risk by rating agencies.... Investors, even large sophisticated financial institutions, did not take adequate steps to assess risk independently.... The encouraging news is that large commercial banks, investment banks, and mortgage specialists have, to some extent, been able to issue new equity capital and to rebuild capital positions.... My expectation is that market functioning will improve markedly by 2009. But things could get worse before they get better....

[B]ooming economic activity in developing countries has boosted their appetite for commodities... since 2000, world demand for oil has increased by roughly 11 million barrels per day, with China accounting for roughly 30 percent of this increase, and other developing countries accounting for another 60 percent.... On the supply side... major discoveries are increasingly difficult to find.... I am not yet persuaded that speculation, rather than the fundamentals of global supply and demand, has played an important role....

Between September and April, the [Federal Open Market] Committee reduced the federal funds rate by 3-1/4 percentage points to its current rate of 2 percent. With core consumer inflation running at about the same rate, the real funds rate is now around zero.... [R]ecent data... suggest that my biggest fears on the downside have, so far, been avoided.... But maximum sustainable employment is only one of our mandates. The other is low and stable inflation. In the wake of rapid increases in prices for gasoline and food, consumer survey measures of longer term inflation expectations have turned up... [but] other surveys, such as the Survey of Professional Forecasters, show little erosion in long-term inflation expectations... the anecdotes I hear are more consistent with credibility than with an upward wage-price spiral.... I still see inflation expectations as reasonably well anchored.... We cannot and will not allow a wage-price spiral to develop...

I still think that my best moment in the Clinton administration was passing out individual sheets of paper to individual members of the House estimating how many of their constituents would benefit from expanding the Earned Income Tax Credit. But I now think doing the staffwork for getting Janet Yellen into the Federal Reserve was almost as positive a public service.

UPDATED July 8, 2008:

Cr--! Robert Pear of the New York Times called, looking for asoundbite on McCain's budget policy. I blathered on, while the perfect soundbite was waiting in my email inbox, unread.

It was:

Underpants Gnomes.

You all remember the plan of the Underpants Gnomes from South Park:

1. Collect underpants.
2. ?
3. Profit!

That's the perfect analogy for John McCain's budget policy:

1. Cut taxes and spend more on the military.
2. ?
3. Balanced budget!!

Memo to self: read email from persons known to be witty before talking to reporters, not after...

Let's see if Pear's story is up yet...

Yes. Ah, nice informative lead that tells it straight--with all the "to be sures..." placed at the end:

Skepticism on McCain Plan To Balance Budget by 2013: The package of spending and tax cuts proposed by Senator John McCain is unlikely to achieve his goal of balancing the federal budget by 2013, economists and fiscal experts said Monday.

“It would be very difficult to achieve in the best of circumstances, and even more difficult under the policies that Senator McCain has proposed,” said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan budget watchdog group.

Mr. McCain, the presumptive Republican presidential nominee, is proposing billions of dollars in tax cuts. But advisers to Mr. McCain said those costs would be more than offset by savings from slower growth in spending.

In his proposal, Mr. McCain said he would hold overall spending growth to 2.4 percent a year. That is a tall order because federal spending has been growing an average of more than 6 percent a year in the last five years.

Mr. McCain said he would also slow the growth of Social Security, Medicare and Medicaid, and fiscal experts agree that he would need to do that to achieve his goal. But Mr. McCain did not give details of how he would alter those benefit programs, which have powerful constituencies, including older Americans, a huge health care industry and state and local government officials.

A longtime foe of pet projects known as earmarks, Mr. McCain said he would stop such spending. The Bush White House says earmarks this year total $17 billion, a comparatively small share of a $2.9 trillion budget.

Mr. McCain proposed a one-year freeze in most domestic spending subject to annual appropriations, “to allow for a comprehensive review.” This proposal would affect education, scientific research, law enforcement and scores of other programs.

Mr. Bush’s battles with Congress suggest it would be extremely difficult for Mr. McCain to win approval for such a freeze.

Mr. McCain said he was counting on “rapid economic growth” to help reduce the deficit. While a growing economy generates additional revenue, several of Mr. McCain’s tax proposals would be costly, experts said.

He would “phase out and eliminate” a provision of the tax code known as the alternative minimum tax, which has ensnared a growing number of middle-class Americans in recent years.

By his own account, repealing this tax “will save middle-class families nearly $60 billion in a single year.” That is $60 billion that would presumably not be available to the Treasury.

Mr. McCain also wants to extend many of the Bush tax cuts, scheduled to expire by Jan. 1, 2011. That could reduce tax collections below the levels assumed under current law, and it could widen the deficit, many economists said.

In January, the Congressional Budget Office estimated that extending the Bush tax cuts would cost more than $700 billion in the next five years.

Since January, the economy has been weaker than expected, making the goal of a balanced budget more difficult to achieve. The budget deficit in the current fiscal year is running much higher than in the previous year.

Other McCain proposals, like doubling the personal tax exemption for dependents and cutting the corporate income tax rate, would also reduce revenues, economists said.

C. Eugene Steuerle of the Urban Institute, who worked in the Reagan administration, said Mr. McCain “may well be committed to balancing the budget in five years, but does not tell you how he would reach that goal.”

J. Bradford DeLong, a professor of economics at the University of California, Berkeley, who worked at the Treasury under President Bill Clinton, said, “Senator McCain and his advisers want to claim they will balance the budget by 2013, but they have given us no clue and no plan to meet all the commitments he has made and still get there.”

On the other hand, history shows the deficit sometimes shrinks faster than experts expect.

That happened in 1998 in the Clinton administration, when the government ran a surplus for the first time in nearly three decades. And Mr. Bush cut the deficit in half faster than he or many fiscal experts had predicted.

My line used to be that John McCain was the best possible Republican candidate--he was, after all, the only one not enthusiastically in favor of torture. But Jed Lewison has now convinced me that McCain is worse than I could previously have imagined. How has he done this. By firing up the Wayback Machine and taking us back to 2002 to listen to John McCain on the virtues of preemptive wars:

McCain's chilling defense of preemptive war against Iraq - The Jed Report: If you're like me, it can be hard to get fired up about something John McCain says, but earlier this evening I spent twenty-something minutes watching John McCain's October, 2002 Senate floor speech in favor of launching a preemptive war against Iraq. It was chilling... his foreign policy judgment is both terrifying and dangerous.... [I]t's impossible to... [avoid] the conclusion that he is a trigger-happy war monger....

What stunned me most was that oil played a crucial role in McCain's rationale. Speaking of Saddam Hussein, he said: "his ambitions lie not in Baghdad, or Tikrit, or Basra, but in the deserts of Kuwait and Saudi Arabia." Explaining the reluctance of other powers to support the war, McCain said that Saddam had dangled "the prospect of oil contracts for friendly foreign powers." Finally, McCain said, "We contemplate military action to end his rule because allowing him to remain in power, with the resources at his disposal, would intolerably and inevitably risk American interests in a region of the world where threats to those interests affect the whole world."

Here are key quotations....

It is a question of...whether our morality and security give us cause to fire the first shot in this battle...

[Saddam Hussein's] ambitions lie not in Baghdad, or Tikrit, or Basra, but in the deserts of Kuwait and Saudi Arabia...

[Saddam Hussein] is using opponents of war in America, including well-intentioned individuals who honestly believe inspections represent an alternative to war, to advance his own ends, sowing divisions within our ranks that encourage reasonable people to believe he may be sincere...

The burden is not on America to justify going to war. The burden is Saddam Hussein's, to justify why his regime should continue to exist as long as its continuing existence threatens the world. Giving peace a chance only gives Saddam Hussein more time to prepare for war - on his terms, at a time of his choosing, in pursuit of ambitions that will only grow...

It's a safe assumption that Iraqis will be grateful to whoever is responsible for securing their freedom. Perhaps that is what truly concerns some of our Gulf War allies: that among the consequences of regime change in Iraq might be a stronger demand for self-determination from their own people...

We contemplate military action to end his rule because allowing him to remain in power, with the resources at his disposal, would intolerably and inevitably risk American interests in a region of the world where threats to those interests affect the whole world...

Failure to end the danger posed by Saddam Hussein's Iraq makes it more likely that the interaction we believe to have occurred between members of al Qaeda and Saddam's regime may increasingly take the form of active cooperation to target the United States...

By voting to give the President the authority to wage war, we assume and share his responsibility.... We have a choice. The men and women who wear the uniform... and... might lose their lives in service... do not. They will do their duty, as we see fit to define it for them...

Former WSJ executive Marcus Brauchli has agreed to take over the Washington Post:

The Post's New Executive Editor Once Headed Wall Street Journal: Brauchli's challenge is particularly acute because he has never lived in Washington, a city with a unique culture and customs, and he has not dealt with local news.... Brauchli said The Post must straddle its dual roles as "the best source of information" for local news while providing a "definitive" account of national politics and policy.... "My mantra has been, we are not defined by medium, we are defined by our approach to journalism. If The Washington Post, which has a very strong brand, can reach people who want sound, thoughtful, balanced journalism -- free of cant, free of slant -- they will come to The Post in print, online, on mobile phones, expecting those qualities."

This is, I think, a huge mistake for him and his reputation. For the Post as it is today is not for "people who want sound, thoughtful, balanced journalism -- free of cant, free of slant." In fact, the opposite.

To see this, all you have to look at is page A1 of this morning's paper--at the article by Perry Bacon, Jr., who has already written what the Columbia Journalism Review judged the worst article of the 2008 campaign. The headline of the article is:

Candidates Diverge on How to Save Social Security

The echo of Paul Krugman's 2000 joke:

If Bush said that the world was flat, the headline on the news analysis [the next day] would read 'Shape of Earth: Views Differ'

is clear. But nobody at the Washington Post gets the joke.

And the substance of the article is as bad as the headline. Let's turn the microphone over to Hilzoy:

Obsidian Wings: Candidates Diverge: This is a very puzzling article. Here's the lede:

Sens. Barack Obama and John McCain are both proposing dramatic changes to Social Security, taking on the financially fragile "third rail of American politics" that Congress and recent presidents have been unable to repair."

Here's Matt Yglesias' comment on it:

This is a great lead except for the fact that Obama is not proposing dramatic changes to Social Security. Well, there's also the fact that the projected deficits for Social Security are smaller and more manageable than those projected for the other entitlement programs (Medicare and Medicaid) and that the non-entitlement portion of the budget is running a huge deficit right now. Under the circumstances, Social Security would seem to be the least financial fragile aspect of the federal budget. And one more thing -- to say "that Congress and recent presidents have been unable to repair" Social Security implies that recent presidents and Congresses have been trying to repair it when, in fact, George W. Bush's Social Security proposals were, like John McCain's, aimed at phasing the program out. I think I'm afraid to read past the lede of that particular story...

I, however, am willing to rush in where even Matt fears to tread: The story continues:

McCain's aides said he favors a bipartisan approach and is open to working with Congress on finding a solution to the long-term solvency of the New Deal-era program, indicating he could support an array of ideas such as raising the retirement age, reducing scheduled increases in benefits and allowing younger workers to put money they currently pay for Social Security taxes into personal savings accounts. President Bush floated a similar idea for private accounts in 2005, but polls found it had little public support.

Obama has been even more specific. The Democrat from Illinois has proposed raising taxes on upper-income Americans to address projected shortfalls in Social Security.... Under current law, income up to $102,000 a year is taxed for Social Security, and Obama would create a "doughnut hole" by not imposing new Social Security taxes on income between $102,000 and $250,000. His aides said income exceeding $250,000 would be taxed at a rate of 2 percent to 4 percent.... Experts predict that proposal would make up less than half of the $4.3 trillion shortfall Social Security is expected to face over the next 75 years."

There follows a lengthy discussion of Obama's proposal.... [E]ven though the article's headline is "Candidates Diverge on How to Save Social Security", only one candidate's proposals are seriously discussed.... [H]ere's the entire discussion of McCain's plans:

McCain supported [private] accounts in 2005 and has spoken positively about them in his campaign, but aides emphasize that he would seek consensus on the issue. "John McCain is committed to honoring the promise of Social Security and believes that his bipartisan record will serve him well as he works across the aisle to ensure the long-term solvency of the program," said Tucker Bounds, a McCain spokesman. Aides said McCain would not support a tax increase to address the solvency of the program, but they did not give further details. Damien LaVera, a spokesman for the Democratic National Committee, described McCain's plan as a "decision to repackage President Bush's failed and flawed plan to privatize Social Security." Maya MacGuineas, a budget expert at the New America Foundation who advised McCain on Social Security in 2000, said of his proposal: "In terms of details, there is so much to be filled in.""

Not very substantive... reason is obvious: McCain does not... have... a "plan" for fixing Social Security.

Personally, I don't think that fixing Social Security is a particularly urgent problem. But McCain seems to. Moreover, yesterday, McCain promised (pdf) to balance the budget by the end of his first term. This promise met with considerable skepticism: McCain has proposed a whole bunch of costly tax cuts and spending proposals, and next to nothing about how he would pay for them. One of the few things he did say (pdf), however, was that "In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid." (p. 4). One might have hoped, therefore, that he would have said something about what, exactly, he intends to do to "reform" Social Security (or, for that matter, Medicare or Medicaid), and how this will help to balance the budget. No such luck....

John McCain will fight to save the future of Social Security, and he believes that we may meet our obligations to the retirees of today and the future without raising taxes...

There are... two ways to put Social Security on a firmer financial footing, supposing one thinks that needs to be done. One is to raise taxes; the other is to cut benefits.... McCain says he does not think he will need to raise taxes. That leaves benefit cuts.... I would be more than happy to concede that I am wrong: that McCain has plans for raising revenues or cutting [other] spending that I haven't taken into account. But in order to do that, I'd have to see some concrete proposals from him. And the truth is: there aren't any.... And that, in the final analysis, is why the Post article looks as odd as it does. One candidate has proposed something quite specific: taxing income over $250,000 a year at 2-4%. The Post therefore asks various experts what they think of this, and gets a variety of opinions. Another candidate -- oddly enough, the one who has put a lot more weight on "reforming" Social Security -- offers nothing more than the claim that he will "fight to save Social Security", that he will "reach across the aisle", and that he will "act".... Imagine that you are talking to John McCain, and you're burning to hear about his plan to save Social Security. What does it involve? "Action." How will he save Social Security? By "reaching across the aisle". What will he do to save it? "John McCain will fight". Now you know all about John McCain's plan to fix Social Security.

Needless to say, none of this is in Perry Bacon's article.

Matthew Yglesias has had enough of the Washington Post:

Matthew Yglesias: Southpaw asks:

There's been a lot of talk about the unbalanced media environment in this election, and how it benefits McCain. What should Democrats actually do to counteract that advantage? (aside from opting out of the public financing system and running a buttload of paid media.)

I think that what Democrats should do is the same as what ordinary citizens should do -- support good media, punish bad media. If you subscribe to The Washington Post stop, and explain to them in a detailed letter why you're stopping. Subscribe to The American Prospect, and The Nation, and Mother Jones...

At a lunch of eight people I was at last week--former cabinet secretaries, newspaper executives, deans, et cetera--somebody (not me) asked what learning-about-the-world reason there was to read the Washington Post. There was silence. Then, after a while, somebody said "the Style section." And then there was more silence.

My call for people to nominate reliable reporters--those whose bylines tell you that you can trust the truth, the importance, and the relevance of the matters asserted by the reporter--working for the print Washington Post has come up with:

Walter Pincus, Daniel Froomkin (who doesn't work for the print edition), Joel Achenbach, Dana Priest, Barton Gellman, Gene Weingarten, Philip Carter (who doesn't work for the print edition), and William Arkin (who doesn't work for the print edition). UPDATE: Steven Pearlstein.

That's it. Those are the only nominations I have received.

The rest... Well, the presumption now is that they are like Perry Bacon, Jr.: either in the tank to please their sources or their editors, or unqualified to cover the material they are writing about. It is a great mystery why the Post has come to this pass--why we lament "why oh why can't we have a better press corps?" But it is a fact that we have.

And this fact, I think, makes Marcus Brauchli's task impossible. There is no base of reader credibility and no ethic of journalistic responsibility in the newsroom to build upon.

From Greg Robb at Marketwatch:

Bernanke cautiously pushes for new powers for Fed: Federal Reserve chairman Ben Bernanke stuck his toe into the shark-infested waters of Washington regulatory battles and cautiously suggested that the Fed be given new powers to oversee financial markets. In a speech at a FDIC conference, Bernanke said Congress would have to give the Fed new powers if it wanted to give the central bank the job to limit the impact of financial market turmoil on the economy. Bernanke bent over backwards to suggest rather than demand any new powers from Congress. In a major development on another topic, Bernanke said the Fed was considering extending its emergency loans to broker-dealers beyond 2008 to help stabilize the market. The Fed's emergency primary dealer credit facility is now set to expire in mid-September.

If we were back in the late nineteenth century, there would be no question--back then, banks were banks. Anything that promised liquidity, borrowed short, and invested long was a bank. And central banks existed to watch over them.

It's only in our more legalistic age that we have non-banks that aren't shepherded by the central bank...

But we liberal webloggers want more! We will not let Douthat evade the key question: What, exactly, is Ross Douthat's position on "To His Coy Mistress" and "A Horatian Ode Upon Oliver Cromwell's Return from Ireland"?

We will not be denied.

We do, however, wish Ross luck as he tries to construct a decent non-Helmsian anti-Limbaughian right in America:

Ross Douthat: The Case of Jesse Helms: The liberal blogosphere wants to know: Why have conservatives lined up to say kind things about the late Jesse Helms?... [L]argely because Helms was an sometimes-effective, always-steadfast champion of conservative causes for decades, and there's a sense on the right that the liberal case against Helms-the-awful-bigot is really just the latest manifestation of the long-running liberal attempt to argue that... "the essence of conservatism is and always has been Dixiecrat-ism ... [and] that everything that conservatism has accomplished and stood for since 1965--Reagan, the tax revolt, law-and-order, deregulation, the fight against affirmative action, the critique of the welfare state...everything--is the poisoned fruit of the poisoned tree."

Regular readers will know that I... [am] sensitive to the way that liberals cry "racism!" in an effort to disarm conservative arguments.... I should note that I'm not convinced that Helms' famous "white hands" ad merits the sort of outraged denunciations that Andrew and Max Boot have offered up today....

But a specific ad is one thing; Helms himself is another. He simply was an awful bigot, and worse he was an awful bigot who never expressed a shred of remorse, so far as I know, for his toxic approach to issues ranging from civil rights to HIV to foreign affairs. Far from being the sort of politicians who conservatives ought to defend, out of a sense of issue-by-issue solidarity, he's the sort of politician conservatives ought to carefully distance themselves from, because his political style brought (and continues to bring) intellectual disrepute to almost every cause with which he was associated. Inherent to conservatism is the responsibility to stand up and say to bien-pensant opinion: Just because a bigot opposes something doesn't mean it's a good idea. But the necessity (and difficulty) of making that case, whether the issue is affirmative action or "comprehensive" immigration reform or the NEA and Piss Christ, is all the more reason for conservatives to keep their distance from actual bigots, even (or especially) when they're representing the great state of North Carolina in the U.S. Senate....

I'm happy to defend Helms' views on a variety of issues, but the man himself has no business in the right-wing pantheon, and the conservatives who have used his death as an occasion to argue that he does are doing their movement a grave disservice.

Let us speak ill of the editors of National Review, who write:

The Editors on Jesse Helms on National Review Online: Jesse Helms died on the Fourth of July — a fitting end for a true American patriot. He was one of the most consequential conservatives of his generation.... It is easy to rattle off a long list of what Senator No opposed. First and foremost was Communism. As a member of the Senate Foreign Relations Committee, he was an aggressive and outspoken critic of the Soviet Union. He refused to overlook the evils of Fidel Castro’s regime in Cuba. During the 1980s, he led efforts to support Nicaragua’s contra rebels against the Sandinistas and their incipient totalitarianism.

He was against many other things as well: federal funding of obscene art, ineffective aid to foreign governments, and the continual encroachments of Big Government on everyday life. One of the things he was against in the 1960s was, alas, civil rights. His defense of segregation was of course deeply misguided. But is it fair for this error to have been placed in the first sentence of the New York Times’s obituary of him?...

One of the things that Jesse Helms was against was the teaching of seventeenth-century poetry:

To Their Coy Senator | OurFuture.org: Rick Perlstein: Here's a New York Times article from October of 1966:

CHAPEL HILL, N.C, Oct. 22—"To His Coy Mistress"... by Andrew Marvell, one of the great poets of the Puritan period in England, has risen to stir a tempest on the campus of the University of North Carolina. An instructor has been transferred from teaching to research duties. Students are mounting protests. Faculty members are disturbed. Chancellor Carlyle Sitterson, who recommended the transfer, has had to issue a clarifying statement in justification for his stand.

The clouds began to gather when Michael Paull, an instructor in freshman English, assigned his class to write a theme on the subject of "To His Coy Mistress," a poem that appears in many college textbooks.... One of the students apparently wrote her parents... the parents brought it to the attention of WRAL-TV, a television station in Raleigh with right-wing views that has been a frequent critic of liberalism at the university....

All 22 of Mr. Paull's students signed petitions requesting his return to teaching duties. Between 200 and 300 students and faculty members, organized into the Committee for Free Inquiry, met and asked that Mr. Paull be reinstated and that a review board be set up in the English department 'to determine whether or not Mr. Paull's effectiveness as a teacher been damaged to such a degree as to necessitate his reassignment to nonteaching functions."

Some newspapers expressed concern. The Greensboro Daily News declared, "The spectacle of a great university 'reassigning' its instructors at the behest of a bullying television pundit is hardly believable." The Daily Tar Heel, campus newspaper, headed its editorial, Who's afraid of Jesse Helms? The university—that's who"...

BONUS!!

Ramesh Ponnuru on Jesse Helms:

RAMESH PONNURU: [Jesser Helms] was willing to stop a lot of things that had a lot of bipartisan support. For, you know, just one small example of that, William Weld, the Republican governor of Massachusetts, had been nominated late in the Clinton administration to be ambassador to Mexico, had huge bipartisan support. He was a Republican, after all. Jesse Helms said no and single-handedly blocked it....

[But] he was also to work with people, like Paul Wellstone and Madeleine Albright, who actually became quite [interrupted]...

He was a throw-back to an older era of conservatism, a much more combative type of conservatism than you have today...

David Brooks on Jesse Helms:

[nothing]

David Frum on Jesse Helms:

[nothing]

Douglas Holtz-Eakin gained a lot of credibility working to stop the budget insanity first inside the Bush White House and then as Director of the Congressional Budget Office. He is now burning that credibility very rapidly:

McCain camp hits Obama on taxes - First Read - msnbc.com: The McCain campaign also sent out a memo.... "This year, Barack Obama returned to the United States Senate twice to vote in favor of a budget resolution which raises income tax rates by three percentage points for the 25, 28 and 33 percent tax brackets," Holtz-Eakin writes in the memo. "This would mean a tax increase for those earning as little as $32,000. While Barack Obama campaigns on a promise of no tax hikes for anyone but the rich, we once again find that his words are empty when it comes time to act.  In both March and June, Barack Obama could have put the force of his vote behind his words. Instead, he decided that 'rich' now means those making just $32,000 per year."

But NBC’s Ken Strickland spoke with a Democratic aide at the Senate Budget Committee who said there was never a budget vote that said: Let's raise taxes. What the budget vote did do was estimate how much additional revenue would be needed, and then it would go to the Finance Committee to determine how to raise that amount (raise taxes, close loopholes, etc).   The aide thinks what the McCain campaign has seized on is this revenue growth -- and has taken one of the possible ways to get there: by raising taxes among all income groups. But the budget vote never called for raising taxes, the aide said.

On the call, Holtz-Eakin said, “Sen. Obama can say what he wants this week… but this is about his record. It reveals what his true values are” -- that he voted for something that would raise taxes on low-income voters, Holtz-Eakin claimed...

This is, I think, a bad mistake for Doug Holtz-Eakin. If McCain wins in November, Holtz-Eakin will need credibility with Democratic as well as Republican senators. And if McCain doesn't win in November, Holtz-Eakin will need credibility with Democratic as well as Republican economists.

Why oh why can't we have a better press corps? Yet another edition in the New York Times death spiral watch.

The ethics-free New York Times reporter who should be fired is Zev Chafets. The ethics-free editor of the New York Times Magazine who should be fired is Gerald Marzorat. The Deputy Managing Editor who should be fired is Jonathan Landman. The Managing Editors who should be fired are Jill Abramson and John Geddes. The Executive Editor who should be fired is Bill Keller.

Outsourced to Ezra Klein:

EzraKlein Archive | The American Prospect: If you happened to be unaware that there's a guy named Rush Limbaugh who hosts a popular program on AM radio, then this New York Times's profile will be an incredibly illuminating read. But if you happen to be aware of that guy already, and are wondering about the implications of the most popular radio host in America being a global warming denialist and self-described "defender of corporate America," then the piece stands as an extraordinary act of editorial cowardice.

The profile reads a bit like Gadsby, the famed novel written entirely without the letter "e." Here, the Times appears to have challenged itself to write 8,000 words on Limbaugh without saying anything that could be even remotely interpreted as critical.... [T]hey wrote a puff piece. See? Liberals can be fair and balanced too!

But deep within the article are glimmers of a more interesting profile about Limbaugh and the state of contemporary conservatism. Limbaugh -- and Karl Rove, and Jay Nordlinger, and a host of others -- believe Limbaugh to be the intellectual soul of contemporary conservatism. Liberals learn about conservatism from David Brooks, but conservatives learn conservatism from Rush. And we're talking two entirely different conservatisms. Here, for instance, is what Limbaugh describes as his presidential platform:

1. Open the continental shelf to drilling. Ditto the Arctic National Wildlife Refuge.
2. Establish a 17 percent flat tax.
3. Privatize Social Security.
4. Give parents school vouchers to break the monopoly of public education.
5. Revoke Jimmy Carter’s passport while he is out of the country.
6. Abandon all government policies based on the hoax of man-made global warming.

If liberalish conservative intellectuals seek a Sam's Club Conservatism, then #2 and #3 are the more traditional variant: Mercedes conservatism. #4 is a bad public policy idea, but it is a public policy idea. But #1 #5, and #6... [a] bankrupt movement: They're pure resentment politics mixed with a toxic distaste for empiricism. The stereotypical liberal loves the environment, so Limbaugh will drill up the shelf, a policy that won't do much to increase the oil supply, but will presumably piss off Al Gore. And you know what will really piss off Al Gore? Doing nothing about global warming. Denying its very existence. Oh, and for good measure, screw Jimmy Carter.

So what does this mean for conservatism? Who cares!? The point of this piece was to leave Limbaugh relatively happy once it was published. In that, the Times succeeded. But Limbaugh fits into an interesting and long-running tension in the conservative movement: Where is its soul? Was it Jesse Helms, a stone-cold racist and bigot? Liberals, in good faith, sort of assumed Helms a marginal figure, and have been informed, in recent days, that he was in fact a key figure. Were Limbaugh to drop dead tomorrow, the obituaries would no doubt extol him as a leading conservative thinker and actor. What does that say about conservatism?

Paul Krugman sends us to a figure from the Center for Budget and Policy Priorities on the weakness of the 2001-2007 economic expansion:

And writes:

Op-Ed Columnist - Behind the Bush Bust - Op-Ed - NYTimes.com: By huge margins, Americans think the economy is in lousy shape — and they blame President Bush.... But is the public right to be so disgusted with Mr. Bush’s economic leadership? Not exactly. We really do have a lousy economy, a fact of which Mr. Bush seems spectacularly unaware. But that’s not the same thing as saying that the bad economy is Mr. Bush’s fault. On the other hand, there’s a certain rough justice in the public’s attitude. Other politicians besides Mr. Bush share the blame for the mess we’re in — but most of them are Republicans.

First things first: pay no attention to apologists who try to defend the Bush economic record. Since 2001, economic conditions have alternated between so-so and outright bad: a recession, followed by one of the weakest expansions since World War II, and then by a renewed job slump that isn’t officially a recession yet, but certainly feels like one. Over all, Mr. Bush will be lucky to leave office with a net gain of five million jobs, far short of the number needed to keep up with population growth. For comparison, Bill Clinton presided over an economy that added 22 million jobs.

And what does Mr. Bush have to say about this dismal record? “I think when people take a look back at this moment in our economic history, they’ll recognize tax cuts work.” Clueless to the end. Yet even liberal economists have a hard time arguing that Mr. Bush’s cluelessness actually caused the poor economic performance on his watch. Tax cuts didn’t work, but they didn’t create the Bush bust. So what did? At the top of my list of causes for the lousy economy are three factors: the housing bubble and its aftermath, rising health care costs and soaring raw materials prices. I’ve written a lot about housing, so today let’s talk about the others....

One of the underemphasized keys to the Clinton boom, I’d argue, was the way the cost disease of health care went into remission between 1993 and 2000. For a while, the spread of managed care put a lid on premiums, encouraging companies to expand their work forces. But premiums surged again after 2000, imposing huge new burdens on business. It’s a good bet that this played an important role in weak job creation. What about raw materials prices? During the Clinton years basic commodities stayed cheap by historical standards. Since then, however, food and energy prices have exploded, directly lopping about 5 percent off the typical American family’s real income, and raising business costs throughout the economy.

Much of this pain could have been avoided. If Bill Clinton’s attempt to reform health care had succeeded, the U.S. economy would be in much better shape today. But the attempt failed — and let’s remember why.... Republicans in Congress who blocked reform, as Newt Gingrich pursued a strategy of “coagulation” designed to “clot everyone away” from Mr. Clinton....

[O]il prices wouldn’t be as high as they are, and the United States would have been much less vulnerable to the current price spike, if we had taken steps in the past to limit our oil consumption. Mr. Bush certainly deserves some blame here.... Still, in energy as in health care the biggest missed opportunities came 15 or more years ago, when Mr. Gingrich and other conservative Republicans in Congress, aided by Democrats with ties to energy-intensive industries, blocked conservation measures.

So here’s the bottom line: Mr. Bush deserves some blame... [but the real] blame lies with other, earlier political figures, who squandered chances for reform. As it happens, however, most though not all of the politicians responsible for our current economic difficulties were Republicans. And bear in mind that John McCain has gone to great lengths to affirm his support for Republican economic orthodoxy...

David Leonhardt - The New York Times:

Dispelling the Myths of Summer

By DAVID LEONHARDT

The current economic downturn has no one dominant mythology, and several are making the rounds. Many of these fictions will get good air time this summer.

July 2, 2008

High Medicare Costs, Courtesy of Congress

By DAVID LEONHARDT

Medicare pays $110 for a walker that Wal-Mart sells for $60, and medical equipment makers like it that way.

June 25, 2008

ECONOMIC SCENE; High Costs, Courtesy Of Congress

By DAVID LEONHARDT

David Leonhardt Economic Scene column on US House passage of sprawling Medicare bill that would throw out initial bidding results for some durable medical equipment, rather than basing prices for those items on 'fee schedule' set by Congress; says bidding program would lead to significant savings for Medicare; says bill was introduced by Rep John Dingell and John Boehner; says fight in Congress is example of how small group of constituents can potentially beat back policy that is clearly in pub...

June 25, 2008

Three Questions for McCain

By DAVID LEONHARDT

There are some unanswered questions about John McCain’s economic plans. And we in the media have largely overlooked those questions so far.

June 18, 2008

Big Vehicles Stagger Under the Weight of $4 Gas

By DAVID LEONHARDT

The growing costs of auto ownership are leading Americans to change their driving habits quickly.

June 4, 2008

ECONOMIC SCENE; In the Bubble Years, The Wise Decision Was to Let the Landlord Carry the Burden

By DAVID LEONHARDT

David Leonhardt Economic Scene column on decision to buy home in Washington, DC, when he and his wife move this summer instead of renting apartment, which he has done most of his adult life; cites some reasons why it is advantageous to buy home now that prices are falling; map; chart; photo

May 28, 2008

As Home Prices Drop Low Enough, a Committed Renter Decides to Buy

By DAVID LEONHARDT

As housing prices slowly come back to reality, buying has again started to make sense for more people.

May 28, 2008

A Diploma’s Worth? Ask Her

By DAVID LEONHARDT

Women, who in the past few decades have become vastly more educated, answer the question of the value of a college education in a not-s0-subtle way: the return on investment has been excellent.

May 21, 2008

Fearing Red Herring in the Data

By DAVID LEONHARDT

What are we supposed to make of the latest batch of better-than-expected economic news?

May 14, 2008

Seeing Inflation Only in the Prices That Go Up

By DAVID LEONHARDT; DONNA ANDERSON CONTRIBUTED TO THIS COLUMN. E-MAIL: [email protected]

Inflation really has gotten worse recently it was only 2 percent a year and a half ago but it’s not as bad as it feels.

May 7, 2008

To John McCain's promises to (a) wage more wars abroad and (b) cut taxes for the rich while (c) limiting domestic spending cuts to waste, fraud, and abuse he has now added a promise to balance the budget by 2013--a promise that his substantive policy advisorrs had been trying to keep him from making all winter and spring. Their view was that George H.W. Bush's promise in 1988 not to raise taxes had brought him little short run political gain and had done so at the price of making his presidency a failure (cf Richard Ben Cramer, What It Takes).

How does America's press react? Well, in a way that makes me say: "Why oh why can't we have a better press corps?" For today we have an edition of the Politico Death Spiral Watch...

Mike Allen writes, apropos of John McCain:

McCain promises to balance budget: McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact...

Mike Allen is on record on what the role of a journalist is. As Matthew Yglesias reported:

He Said / She Said: [Reporters,] I said, aren't... giving... "just the facts, ma'am."... Rather, they're trying to act as neutral arbiters between contending parties.... [C]ontroversy about a basically factual subject ("what's the effect of X on the deficit?")... goes unresolved by [the] news writer.... [who] gives us a set of meta-facts -- "Joe says 'X' but Sam says 'Y.'" Bloggers... think the facts are partisan. When I say that the Bush Social Security plan involves a huge quantity of transition debt that risks provoking a fiscal crisis, I'm trying to state some facts... not offering "opinions" as such....

Allen took issue.... He said that news writers are trying to present both sides' points-of-view, hence the "he said, she said" quality to it, but that they're trying to present these points-of-view in such a way so that a discerning reader can tell who's right based on reading the story...

Is McCain's newfound "emphasis on balancing the budget" a joke, to which the only proper response is derision and laughter, or it is a serious statement of policy intentions that should excite fiscal conservatives like me who think the budget should be much closer to balance?

Let's see how Mike Allen does at planting clues in his article so that a "discerning reader" can tell who is right:   

Paragraph 1: Sen. John McCain (R-Ariz.) plans to promise on Monday that he will balance the federal budget by the end of his first term by curbing wasteful spending and overhauling entitlement programs, including Social Security, his advisers told Politico...

No clues as to who is right here...

Paragraph 2: The vow to take on Social Security puts McCain in a political danger zone that thwarted President Bush after he named it the top domestic priority of his second term...

No clues as to who is right here...

Paragraph 3: McCain is making the pledge at the beginning of a week when both presidential candidates plan to devote their events to the economy, the top issue in poll after poll as voters struggle to keep their jobs and fill their gas tanks...

No clues as to who is right here...

Paragraph 4: “In the long-term, the only way to keep the budget balanced is successful reform of the large spending pressures in Social Security, Medicare, and Medicaid,” the McCain campaign says in a policy paper to be released Monday.

No clues as to who is right here...

Paragraph 5: “The McCain administration would reserve all savings from victory in the Iraq and Afghanistan operations in the fight against Islamic extremists for reducing the deficit. Since all their costs were financed with deficit spending, all their savings must go to deficit reduction.”

No clues as to who is right here...

Paragraph 6: The pledge is a return to an earlier position he'd later backed away from. On April 15, McCain backed off a February pledge to balance the budget in his first term when asked about it by Michael Cooper of  The New York Times, who reported that McCain said “at a news conference … that ‘economic conditions are reversed’ and that he would have a balanced budget within eight years.”

No clues as to who is right here...

Paragraph 7: McCain advisers admit that the document is a repackaging of previous policies, without dramatic new initiatives. Some Democratic officials had thought McCain might try to make a splash by proposing a bold middle-class tax cut.

No clues as to who is right here...

Paragraphs 8-9: Jason Furman, Obama's economic policy director, called McCain's pledge “preposterous." Furman pointed out that the Congressional Budget Office now estimates a 2013 deficit of $443 billion, assuming the Bush tax cuts are extended. And he estimated that McCain would have to cut discretionary spending--including defense--by roughly one-third to bring the budget into the black by then. "McCain would have to pay for all of his new tax cuts and other proposals and then, on top of that, cut an additional $443 billion from the budget--which is 81 percent of Medicare spending or 78 percent of all discretionary spending outside of defense," Furman said.

Let's come back to these later...

Paragraph 10: McCain’s tour of swing states is designed to relaunch his candidacy after a high-stakes shakeup last week in his campaign organization, which has been widely criticized as soft and slow compared to the Obama machine.

No clues as to who is right here...

Paragraph 11: Sen. Barack Obama (D-Ill.) also is spending the week emphasizing economic issues, and plans to tout the family-friendly, bottom-up benefits of his proposals.

No clues as to who is right here...

Paragraph 12: Obama begins the week in Charlotte, N.C., with what his campaign calls “a discussion on economic security for America’s families.”

No clues as to who is right here...

Paragraph 13: The Obama campaign sought to steal McCain’s thunder by holding a conference call Sunday to portray McCain as out of touch and not up to the job on economic matters.

No clues as to who is right here...

Paragraph 14: McCain’s emphasis on balancing the budget is likely to excite conservatives, who have remained skeptical of his candidacy, and provoke derision from Democrats, who will argue that it’s a warmed-over version of proposals that President Bush failed to enact.

No clues as to who is right here...

Paragraph 15: The budget was in surplus when Bush took office but now is deeply in the red—$410 billion, the White House projects, blaming the demands of war and homeland security.

No clues as to who is right here...

Paragraph 16: McCain begins his tour in Colorado, then goes on to Pennsylvania, Ohio Michigan and Wisconsin—five of this year’s 10 most closely contested states.

No clues as to who is right here, and that carries us to the end of Allen's first page. Pages two and three of the article are pure stenography--summaries of the "plan."

Now let's go back to paragraphs eight and nine...

Now I carry much of the federal budget around in my head 25/8. And the first of my bookmarks is to Peter Orszag and company's summary "The Budget and Economic Outlook: Fiscal Years 2008 to 2018" http://www.cbo.gov/ftpdocs/89xx/doc8917/01-23-2008_BudgetOutlook.pdf. I know that the CBO baseline projects (assuming spending subject to appropriations growing at the same pace as the economy) the federal goverment spending $3.7T (nominal) on our behalf in 2013--20.2% of GDP in an $18T (nominal), $12,000 per capita. I know that Jason Furman's $443 extension baseline deficit is based on a lowballed forecast of spending subject to appropriations: assuming spending subject to appropriations growing at the same pace as the economy and assuming extension of the Bush tax cuts and of standard one-year tax system patches produces a projected deficit of $580B--3.3% of GDP--and a projected on-budget deficit of $820B--4.5% of GDP, $2,600 per capita--once one recognizes that borrowings from the Social Security Trust Fund do have to be paid back. I know that spending on domestic uses that is allocated by annual appropriations--the park service, the courts, et cetera--peaked at 4.8% of GDP in 1978, was cut to 3.4% of GDP by 2002, was cut to 3.1% of GDP by 2000, and has risen since then to 3.5% of GDP. I know that McCain's defense policy rhetoric is not consistent with defense spending growing more slowly than the economy as a whole. I know that cutting more from spending subject to appropriations has proven impossible both politically and substantively: Americans like and expect federal support for education, their interstate highways, veterans' benefits, their FBI, their courts, TANF, the EPA, the national parks, NASA, et cetera.

In short, I am much more than a "discerning reader." I know a lot of things that tell me that Jason Furman has (a) constructed a scenario that is relatively favorable to the Bushies McCainites, (b) allowed the McCainites to count the Social Security Trust Fund surplus as current tax money to be spent rather than as a fund to be saved in a lockbox to pay for future Social Security deficits, and (c) even so the cuts in spending needed to hit McCain's target are politically impossible and substantively unwise. But I knew this before I started reading Allen.

What would a "discerning reader" who doesn't have CBO's current-law and alternative baselines:

engraved on their brain make of these two paragraphs? Such a discerning reader would note that:

• Jason Furman throws numbers around with facility and ease...
• What these numbers mean is unclear, but there sure are a lot of them...
• Jason Furman is not a neutral arbiter here: he is Barack Obama's economic policy director...
• Nevertheless, Mike Allen pushes Jason onstage and gives him the microphone: Mike does not offer an alternative rebuttal quote from some "fiscal conservative" "excited" about McCain's plans to balance the budget...

Such a "discerning reader" might reason as follows: "that Mike Allen gives Barack Obama's economic policy director a large, unrebutted, my-eyes-glaze-over two-paragraph quote reasonably high up in an article about McCain tells me that Allen wants me to think that the McCain campaign is bulls---ting me." And I do, in fact, think that that is how Mike Allen hopes his discerning readers will reason.

But how many "discerning readers" are there? How many of those who read Mike Allen's stuff have ears sensitive enough to pick up the message of this dog-whistle journalism? I guarantee you that McCain's spinmasters this morning are happy with Mike Allen's article--have probably boxed up and sent him a new pair of kneepads--because they think the number of readers who pick up the dog-whistle journalism is very small, and that the takeaway for the overwhelming number of eyeballs that see the article is the headline: "McCain promises to balance budget."

I should note that Jason Furman likes and respects Mike Allen. As Jason wrote me in an email back in 2005:

Mike Allen is a great reporter and a very smart guy. If anything, he's more willing to "make the call" than a lot of other reporters. For years I've been frustrated when budget reporters write "pox on your houses" stories. [Allen is] one of the rare exceptions...

From my perspective, the bar is low.

UPDATE: I am reminded that P. O'Neill had something smart to say about Mike Allen:

There is another defence of Allen, not specifically related to the econ stories. He broke the Schiavo Republican talking points story, and had to endure two week of getting trashed by Powerline, Michelle Malkin, and Mickey Kaus, and even when he was proven right they still trashed him. He managed to stick to his line but it's dissipating to be up against the War on Facts crowd all the time. Probably contributes to a bit of gun-shyness on other stories...

Here is the execrable Mickey Kaus trashing Allen, yet another reason that friends don't let friends read Slate:

Mickey Kaus: March 30, 2005: Blogging in Print: According to de facto MSM Damage Controller Howie Kurtz, WaPo's Mike Allen is apparently now admitting what has been obvious to everyone else who has followed the controversy over those alleged "GOP Talking Points": the Post's stories were not entirely "accurate and carefully worded" (Kurtz's words), nor is it true that Allen "stuck to what we knew to be true and did not call them talking points or a Republican memo." Instead, he let an early version of his story ship out containing the unsupported claim that the memo was "distributed to Republican senators by party leaders."... Obviously at some point Allen thought or assumed the memo was a GOP leadership document, and before he'd nailed that down he temporarily let his scooplust get the better of him. This is a perfectly forgivable mistake. At least I hope it is--I make it all the time. You get all excited thinking you have a great story and then when you think more about it you realize you have a not-quite-as-great story, so you go back and make it "carefully worded"!...

Here is Allen's final word on the Schiavo memo:

washingtonpost.com: Counsel to GOP Senator Wrote Memo On Schiavo: The legal counsel to Sen. Mel Martinez (R-Fla.) admitted yesterday that he was the author of a memo citing the political advantage to Republicans of intervening in the case of Terri Schiavo, the senator said in an interview last night. Brian H. Darling, 39, a former lobbyist for the Alexander Strategy Group on gun rights and other issues, offered his resignation and it was immediately accepted, Martinez said. Martinez, the GOP's Senate point man on the issue, said he earlier had been assured by aides that his office had nothing to do with producing the memo.... The mystery of the memo's origin had roiled the Capitol, with Republicans accusing Democrats of concocting the document as a dirty trick, and Democrats accusing Republicans of trying to duck responsibility for exploiting the dying days of an incapacitated woman.... The document was provided to ABC News on March 18 and to The Post on March 19.... At the time, other Senate Republican aides claimed to be familiar with the memo but declined to discuss it on the record and gave no information about its origin...

She speaks ill of all those conservatives who praise Jesse Helms, that is:

I haven't written anything about Jesse Helms' death, since I don't like speaking ill of the dead. However: every so often, conservatives wonder: why oh why do people think that the Republican party, and/or the conservative movement, is bigoted? I think that the conservative response to Helms' death ought to settle that debate once and for all.

More below the fold. Note that I have largely restricted myself to conservatives' own words (and not random bloggers, but people and magazines with some standing in conservative circles), and to Helms' words and actions.

For my part, I'll just echo Matt:

"Conservatives are taking a line that I might have regarded as an unfair smear just a week ago, and saying that Helms is a brilliant exemplar of the American conservative movement.

And if that's what the Heritage Foundation and National Review and the other key pillars of American conservatism want me to believe, then I'm happy to believe it. But it reflects just absolutely horribly on them and their movement that this is how they want to be seen -- as best exemplified by bigotry, lunatic notions about foreign policy, and tobacco subsidies."

And Ezra:

"Some of my conservative friends often complain about the difficulty of constructing a "usable history" out of the movement's recent past, and I sympathize with their plight. When leading exemplars of your political tradition were trying to preserve segregation less than four decades ago, it's a bit hard to argue that your party, which is now electorally based in the American South, is really rooted in a cautious empiricism and an acute concern for the deadweight losses associated with taxation. That project would really benefit, however, if more of them would step forward and say that Helms marred the history of their movement and left decent people ashamed to call themselves conservative. The attempt to subsume his primary political legacy beneath a lot of pabulum about "limited government and individual liberty" (which did not apparently include the liberty of blacks to work amongst whites or mingle with other races) is embarrassing. But if it goes unchallenged, what are those of us outside the conservative movement to think?"

Some conservative reactions:
George W. Bush:

"Throughout his long public career, Senator Jesse Helms was a tireless advocate for the people of North Carolina, a stalwart defender of limited government and free enterprise, a fearless defender of a culture of life, and an unwavering champion of those struggling for liberty. Under his leadership, the Senate Foreign Relations Committee was a powerful force for freedom. And today, from Central America to Central Europe and beyond, people remember: in the dark days when the forces of tyranny seemed on the rise, Jesse Helms took their side.

Jesse Helms was a kind, decent, and humble man and a passionate defender of what he called "the Miracle of America." So it is fitting that this great patriot left us on the Fourth of July. He was once asked if he had any ambitions beyond the United States Senate. He replied: "The only thing I am running for is the Kingdom of Heaven." Today, Jesse Helms has finished the race, and we pray he finds comfort in the arms of the loving God he strove to serve throughout his life."

John McCain:

"At this time, let us remember a life dedicated to serving this nation."

Mitch McConnell:

"Today we lost a Senator whose stature in Congress had few equals. Senator Jesse Helms was a leading voice and courageous champion for the many causes he believed in."

Trent Lott:

"He was one of the giants of the '80s and '90s in the United States Senate"

Bob Dole:

“He was a conservative icon,” Bob Dole, the former senator and Republican presidential candidate, said in an interview on CNN. “He was a good, decent human being.”

The Corner:

"Death of a Conservative Great [Mark R. Levin]

I wish the Helms family peace, and I thank Jesse Helms for helping to ensure the election of Ronald Reagan, being a warrior against the Soviet Union and for the release of Soviet Jews and other abused minorities, and being a voice for millions of unborn babies.

I have noticed some of the smears lobbed at William Buckley in other places since his death; Jesse Helms is in for even more of it. Other prominent conservatives will face the same. Unfortunately, such is the nature of these things now."

The Weekly Standard reposted this article in response to Helms' death:

"Reagan, as candidate and president, was conservatism with a happy face. Helms is conservatism with a stiffened spine. Reagan's success as a conservative leader, however, wouldn't have happened without Helms's bracing him. The Republican party needs another duo like that. What's missing, obviously, is a new Reagan. Helms is still here, operating at full tilt."

The Heritage Foundation blog:

"Jesse Helms, U.S. Senator and Conservative Champion, Dies

Conservative Sen. Jesse Helms, 86, a truly great American and champion of freedom, died at 1:15 a.m. today. Helms, who gave our country three decades of service as a U.S. senator from North Carolina, was ill in recent years.

Heritage President Ed Feulner (pictured at right with Helms and his wife Dorothy) presented Helms in 2002 with the Clare Boothe Luce Award, Heritage’s highest honor, calling him a “dedicated, unflinching and articulate advocate of conservative policy and principle.”"

John Fund, WSJ:

"If Ronald Reagan was the sunny and optimistic face of modern conservatism, the uncompromisingly defiant exemplar of it was Jesse Helms, who died yesterday at age 86."

The American Conservative's blog cites, without comment, someone saying:

"On Capitol Hill, conservatives had no finer champion than Jesse Helms, the longtime Republican senator from North Carolina."

Commentary's blog reposts an old article (pdf), which says, among other things:

"Yet the "racism" of which Helms is accused turns out on inspection to consist of nothing more than an opposition to quotas and other forms of racial preferences."

Commentary's blogger adds:

"His controversial political career has been chronicled in numerous obituaries, but few recall the severity of the demonization to which Helms was subjected by many liberals–who accused him of being a one-man “pantheon of evil.”"

See below to judge Helms' racism, and whether he was just a "controversial figure" who was "demonized" by the left. The quotes below might also provide some useful background for judging this, from The Corner:

"The first sentence of the NYT obit:

Jesse Helms, the former North Carolina Senator whose courtly manner and mossy drawl barely masked a hard-edged conservatism that opposed civil rights, gay rights, foreign aid and modern art, died early Friday.

He "opposed civil rights"? Uh, no. He opposed a particular vision of them."

And, of course, RedState:

"He was a warrior and a patriot. The date of his death is fitting indeed."

***

Here are quotes by Jesse Helms himself. As you read them, bear in mind all those lovely quotes above, the ones about how he's a conservative champion, a fighter for conservative ideals, etc. They said it, not me. Like Matt Yglesias, I would have thought it was a completely unjust smear against conservatism to have said any such thing. [UPDATE: To be clear, what I would have thought was unfair was not to take him as a part of the conservative movement, but to think of him as an exemplary figure or a champion. END UPDATE.]

On respect for the President:

"Just days after Mr. Helms, a Republican from North Carolina, created a furor by saying that President Clinton was not up to the job of Commander in Chief, he told The News and Observer, a newspaper in Raleigh: "Mr. Clinton better watch out if he comes down here. He'd better have a bodyguard.""

On race:

"From the beginning, Helms was schooled in the political device of using race to propel white conservatives to the polls. As news director for WRAL radio, Helms supported Willis Smith in his 1950 Senate campaign against Frank Porter Graham, the former president of the University of North Carolina. The campaign theme was that Graham favored interracial marriages. "White people, wake up before it is too late," said one ad. "Do you want Negroes working beside you, your wife and your daughters, in your mills and factories? Frank Graham favors mingling of the races."

The campaign's further contribution to political notoriety was a handbill that showed Graham's wife dancing with a black man. (...)

But before long, Helms found his real calling as a nightly television commentator for WRAL in North Carolina, a post he held from 1960 to 1972. He blasted the "pinkos" and "Yankees" in Washington, and criticized King's inner circle of civil rights leaders for "proven records of communism, socialism and sex perversion." He railed against Social Security, calling it "nothing more than doles and handouts." (...)

In the 1972 race, pitted against a Democratic congressman from Durham, Helms used code words that enraged liberals. The congressman's name was Nick Galifianakis. Helms' slogan: "Elect Jesse Helms -- He's One of Us.""

And:

"Helms warned that, "Crime rates and irresponsibility among Negroes are a fact of life which must be faced."

He suggested that the Rev. Martin Luther King Jr. was a communist dupe and refused, even decades after King's death, to honor the Nobel Peace Prize winner.

He dismissed the civil rights movement as a cabal of communists and "moral degenerates."

As the movement gathered strength -- and as murderous violence against activists in particular and African-Americans in general increased -- Helms menacingly suggested to non-violent civil rights activists that, "The Negro cannot count forever on the kind of restraint that's thus far left him free to clog the streets, disrupt traffic, and interfere with other men's rights.""

A personal favorite, worth remembering when you read things about how courteous Helms was in person:

"When Carol Moseley-Braun of Illinois became the first African-American woman to sit in the Senate, Helms followed Moseley-Braun into an elevator, announcing to Utah Senator Orrin Hatch: "Watch me make her cry. I'm going to make her cry. I'm going to sing 'Dixie' until she cries."

Then, emphasizing the lines about how "good" things were before the Civil War ended slavery, Helms sang "Dixie.""

And another:

"His disdain for people of color (exemplified by his "humorous" habit, in private, of referring to any black person as "Fred") continues to find ways of expressing itself. He is the Senate's most reliable opponent of any measure aimed at securing the rights or improving the conditions of African-Americans. In 1994, when Nelson Mandela visited the Capitol, Helms ostentatiously turned his back on him."

Humorous? Referring to any black person as "Fred"??

And (Helms himself, h/t Majikthise):

“No intelligent Negro citizen should be insulted by a reference to this very plain fact of life. It is time to face honestly and sincerely the purely scientific statistical evidence of natural racial distinction in group intellect. ... There is no bigotry either implicit or intended in such a realistic confrontation with the facts of life. ... Those who would undertake to solve the problem by merely spending more money, and by massive forced integration, may be doing the greatest injustice of all to the Negro.”

And:

"Crime rates and irresponsibility among Negroes are a fact of life which must be faced."

And:

“To rob the Negro of his reputation of thinking through a problem in his own fashion is about the same as trying to pretend that he doesn't have a natural instinct for rhythm and for singing and dancing.”

And:

""Martin Luther King repeatedly refers to his 'non-violent movement.' It is about as non-violent as the Marines landing on Iwo Jima.""

And:

"I was a senior when Martin Luther King Jr. was assassinated in 1968. Roughly 2,000 of us joined a vigil on the quad for several days. (...) Jesse Helms came on the television and said that all of the students sitting on the quad at Duke should ask their parents if it would be all right for their son or daughter to "marry a Negro" (Duke students were practically all white in those days). Unless the student's parents approved of that prospect, Helms advised, he or she should go back to class."

And:

"As a television commentator before running for the Senate, Helms said, "Dr. (Martin Luther) King's outfit ... is heavily laden at the top with leaders of proven records of communism, socialism and sex perversion, as well as other curious behavior." He called the Civil Rights Act of 1964 "the single most dangerous piece of legislation ever introduced in the Congress.""

Later, his views had not changed. (This is a transcription of a video; it doesn't say when the interview it shows is from, but I'd guess the late 80s or 90s, from his appearance. It's the video linked under Martin Luther King.)

"I thought it [the Civil Rights Act] was very unwise. It was taking liberties away from one group of citizens and giving them to another. I thought it was bad legislation then, and I have had nothing to change my mind about it."

Helms also "staged a filibuster against the establishment of a national holiday to mark the birthday of Martin Luther King, having called King a communist and a sex pervert", and "was one of a small number of senators who opposed extending the Voting Rights Act in 1982, eventually giving up a filibuster when then-Majority Leader Sen. Howard Baker, a Tennessee Republican, said the Senate would not take up any other business until it acted on the extension."

And:

"Appearing on “Larry King Live” in 1995, Jesse Helms, then the senior senator from North Carolina, fielded a call from an unusual admirer. Helms deserved the Nobel Peace Prize, the caller gushed, “for everything you’ve done to help keep down the niggers.” Given the rank ugliness of the sentiment — the guest host, Robert Novak, called it, with considerable understatement, “politically incorrect” — Helms could only pause before responding. But the hesitation couldn’t suppress his gut instincts. “Whoops, well, thank you, I think,” he said."

One of his home state papers sums it up:

"Helms was an unceasing foe of the 20th century's social movements -- the drives for equality by blacks, women and gays. While others saw groups striving for a piece of the American dream, Helms saw threats to the social fabric.

Along with former gubernatorial candidate I. Beverly Lake Sr., Helms was a leading voice for segregation in North Carolina. Unlike other well-known segregationists, such as Alabama Gov. George Wallace and Thurmond, Helms never repudiated his views or reached out to black voters.

He portrayed the civil rights movement as being planned in Moscow, dismissed Martin Luther King Jr. as a Marxist and a pervert, and called racial integration a phony issue."

On gays:

"He fought bitterly against federal financing for AIDS research and treatment, saying the disease resulted from “unnatural” and “disgusting” homosexual behavior.

“Nothing positive happened to Sodom and Gomorrah,” he said, “and nothing positive is likely to happen to America if our people succumb to the drumbeats of support for the homosexual lifestyle.”"

And:

"Helms practically invented the modern conservative politics of sexuality, along with the electoral mobilization of white conservative evangelicals, starting back in the 1970s. In 1977, he seized on Anita Bryant's successful campaign to overturn a gay rights ordinance in Miami and began building a national backlash against antidiscrimination laws. As early as 1979, he was making speeches about the terrible threat of "secular humanism" to Christianity, making the wonky Aspen Institute of Humanistic Studies an unlikely villain. When the AIDS epidemic emerged in the 1980s, Helms began an extended and violently worded campaign to "protect" Americans from the "perverts" whose "disgusting" habits were responsible for AIDS, while attacking efforts to find effective treatments. (...)

But other aspects of Helms's personality cannot be ignored, particularly his venomous assault on Martin Luther King Jr.'s legacy and his virulent hatred of gays and lesbians. For years, as part of his campaign against the NEA, this "courtly" Christian carried around portfolios of homoerotic Mapplethorpe photos and showed them to reporters and (male) citizens with the question, "How do you like them apples?" And as late as 1995, when an old friend wrote him to recommend compassion for people like her gay son, who had died of AIDS, Helms wrote back to say, "I wish he had not played Russian roulette with his sexual activities.""

And:

"1993: On the nomination of a gay rights activist to a federal post: “She’s not your garden-variety lesbian. She’s a militant-activist-mean lesbian, working her whole career to advance the homosexual agenda. Now you think I’m going to sit still and let her be confirmed by the Senate? … If you want to call me a bigot, go ahead.”"

And:

"As a senator, he explained that he voted against Roberta Achtenberg, President Clinton's nominee for a Housing and Urban Development position, "because she's a damn lesbian." When Helms encountered protesters during a visit to Mexico in 1986, he remarked: "All Latins are volatile people. Hence, I was not surprised at the volatile reaction." In 1990, Helms stayed away in protest when Nelson Mandela addressed a joint session of Congress."

And:

"The Bible is unmistakably instructive on the sin of sodomy," he declared in 1994. "I confess I regard it as an abomination." Aids, he suggested, was acquired through "deliberate, disgusting, revolting conduct" and he became an ardent opponent of government funding for Aids research and education. In 1987 he described Aids prevention literature as "so obscene, so revolting, I may throw up."

In his own words:

"The government should spend less money on people with AIDS because they got sick as a result of deliberate, disgusting, revolting conduct."

And:

"Over the years Helms has declared homosexuality "degenerate," and homosexuals "weak, morally sick wretches." (Newsweek, 12/5/94) In a tirade highlighting his routine opposition to AIDS research funding, Helms lashed out at the Kennedy-Hatch AIDS bill in 1988: "There is not one single case of AIDS in this country that cannot be traced in origin to sodomy." (States News Service, 5/17/88)"

(Take that, Ryan White!)

On foreign affairs, he was an almost wholly malign force:

"His obstinacy in foreign policy, where pragmatism often guides debate, was remarkable. Few administrations escaped his wrath. He condemned President Nixon's historic 1972 trip to Beijing as "appeasing Red China." He castigated President Carter, saying he "gave away the Panama Canal." And after the newly elected President Clinton proposed that gays be allowed to serve openly in the military, Helms said that Clinton "better have a bodyguard" if he visited North Carolina. (...)

Because of Helms, several major treaties never became law: The Kyoto Protocol against global warming, the Comprehensive Test Ban Treaty, the proposed land mine treaty -- all were stopped at his insistence."

He also had a thing about governments with death squads, and the appallingly brutal South African-funded guerilla groups in Angola and Mozambique. He supported the apartheid regime in South Africa.

***

And here's a random quote from 1966 (cited in the Boston Globe, 11/21/1994), just because I like it:

"The nation has been hypnotized by the swaying and the gesturing of the Watusi and the Frug."

Jesse Helms is dead. We will not speak of him. We will speak ill of the living--of all the living "conservatives" who are currently lionizing Helmls.

Matthew Yglesias and Ezra Klein sum it up.

Matt:

Matthew Yglesias: One might expect that Helms' death would prompt from conservatives the sorts of things that I might say if, say, Al Sharpton died -- that he and I had some overlapping beliefs and I don't regard him as the world-historical villain that the right does, but that he's a problematic guy... marginal to American liberalism. But... conservatives are... saying that Helms is a brilliant exemplar of the American conservative movement.... [I]f that's what the Heritage Foundation and National Review and the other key pillars of American conservatism want me to believe, then I'm happy to believe it. But it reflects just absolutely horribly on them and their movement that this is how they want to be seen... bigotry, lunatic notions about foreign policy, and tobacco subsidies.

Ezra:

EzraKlein Archive | The American Prospect: Jesse Helms... was an awful bigot with a secondary interest in destroying international institutions and increasing tobacco subsidies.... Some of my conservative friends often complain about the difficulty of constructing a "usable history" out of the movement's recent past.... When leading exemplars of your political tradition were trying to preserve segregation less than four decades ago, it's a bit hard to argue that your party, which is now electorally based in the American South, is really rooted in a cautious empiricism and an acute concern for the deadweight losses associated with taxation.... [So why don't] more of them would step forward and say that Helms marred the history of their movement and left decent people ashamed to call themselves conservative?] The attempt to subsume his primary political legacy beneath a lot of pabulum about "limited government and individual liberty" (which did not apparently include the liberty of blacks to work amongst whites or mingle with other races) is embarrassing... and] it goes unchallenged, [so] what are those of us outside the conservative movement to think?

Outsourced to Nate of FiveThirtyEight.com:

FiveThirtyEight.com: Electoral Projections Done Right: Irresponsible Journalism Alert: It took more than four months, but something finally beat out the Vicki Iseman story for its sheer chutzpah and utter irresponsibility. The culprit is [Joe Stephens's] piece from the Washington Post, which alleges that Barack Obama received a "discount" on his 30-year home mortgage when he purchased his house in Hyde Park in 2005. Obama's mortgage rate was 5.625 percent; the Washington Post cites databases stating that the average rate on comparable properties was 5.93 percent.

So Obama's rate was 30 basis points better than the average. However, the amount of the loan and the nature of the property are not the only factors that determine a mortgage rate. Another major consideration is the creditworthiness of the borrower. According to current rate quotes from myFICO.com, a borrower with very good credit can expect a mortgage rate about 30 basis points better than someone with pretty good credit, and a borrower with excellent credit can expect about a 50 basis point discount.

Unless the Washington Post has access to Obama's FICO score -- and unless it has rented an apartment to him, it probably doesn't -- it is missing a pretty important piece of information on what Obama's mortgage rate ought to have been. What was Obama's FICO score? I don't know, but considering that...

• Obama had just gotten a $2.27 million book deal from Random House -- about $1 million more than the value of the mortgage.
• The Obamas each had exceptionally secure jobs that paid them a combined annual salary of about $500,000 per year.
• The Obamas had just sold their condo, on which they had realized a $137,500 profit.
• The Obamas were prominent public figures whose political futures depended in part on maintaining a reputation for responsibility and trustworthiness.
• The Obamas are known to be relatively thrifty and have no credit card debt but substantial savings.

...I would think that the Obamas were exceptionally creditworthy. So indeed, Obama received a "discount" -- the same discount that any borrower in his position would have received.

And, yes, I apologize for being a little off-subject (and running three media-bashing pieces in a row), but one of the things that ties together my work over here and my work at Baseball Prospectus is that I want the media to be smarter and more accountable when they cite statistical information, be it mortgage rates or polling numbers or batting averages. This article was neither smart nor accountable. It's the equivalent of noting that Alex Rodriguez has a batting average 40 points better than the league average, and using that to infer that the umpires were biased in his favor.

Joe Stephens, this alone http://www.washingtonpost.com/wp-dyn/content/article/2008/07/01/AR2008070103008_pf.html is enough to ask you to please report to the animal cosmetics testing laboratory...

But let's look on the bright side. Walter Pincus is a good reporter still working for the print Washington Post. Is there anybody else at the Washington Post you would trust? Whose articles you would take as reliable without taking special steps to verify?

Will McLean writes:

A Commonplace Book: Buying Power of 14th Century Money: In the second half of the 14th century, a pound sterling would:

• Support the lifestyle of a single peasant laborer for half a year, or that of a knight for a week. Or buy:
• Three changes of clothing for a teenage page (underclothes not included) or
• Twelve pounds of sugar or
• A carthorse or
• Two cows or
• An inexpensive bible or ten ordinary books or
• Rent a craftsman’s townhouse for a year or
• Hire a servant for six months

Think of a world in which a pound of sugar costs two weeks' wages...

From Barry Ritholtz:

The Big Picture | Unemployment Reporting: A Modest Proposal (U3 + U6): U6, on the other hand, is the broadest measure of Unemployment: It includes those people counted by U3, plus marginally attached workers (not looking, but want and are available for a job and have looked for work sometime in the recent past), as well as Persons employed part time for economic reasons (they want and are available for full-time work but have had to settle for a part-time schedule).... Here is a modest proposal for all of the poor scribes (like me) who slog through the monthly NFP report: For the sake of more accurately describing the conditions in the labor market, let's begin reporting two measures of Unemployment: U3 as well as U6.

One of the big problems of the world is these wishy-washy centrists who offer us milk tea and weak toast. Here Matthew Yglesias identifies a problem:

Ross Douthat: I was watching Star Wars IV: A New Hope last night on television, and somehow it occurred to me for the first time that a new generation who watches... starting with The Phantom Menace is going to wind up with a very different perception of the story... that whole thing about Darth Vader being Luke's father... also in terms of some broader atmospheric points. The beginning [of] A New Hope is cloaked in a sense of mystery. For all we know old Ben Kenobi really is just a crazy old man and Han Solo's skepticism about "hokey religions" is justified. The audience rides along with Luke throughout the film, learning to trust in the power of the Force. New audiences won't have that experience, they'll already know much much more than Luke does about the Jedi, the Empire, the Skywalker clan, etc...

But Ross Douthat's proposed solution will do only half of what needs to be done:

Ross Douthat: I can promise you this much: In the Douthat household, the prequels don't exist - not now, and certainly not in a future where I'm charged with introducing a new generation to the Skywalker universe. Indeed, I intend to carefully vet all of my children's friends to ensure that there's absolutely no risk of a playdate or sleepover bringing them in contact, even fleetingly, with Jar Jar Binks, Count Dooku, the midichlorians and Padme Amidala, Queen of frickin' Naboo...

If he were a proper man he would go farther, and not pretend that half-measures will salvage the situation. There is a remaining problem bigger than all the rest: Ewoks. Enough said.

The only proper way to watch Star Wars is this: "A New Hope" followed by "The Empire Strikes Back" and the first third of "Return of the Jedi." The saga properly ends with the death of Boba Fett and Jabba the Hut, and oru last image of our heroes should be them looking forward into their unknown future struggle with the empire.

Can there be any conceivable, possible reason for a newspaper in good faith to publish this:

Maureen Dowd, July 2, 2008: [Barack Obama] would like to kid around with reporters for a minute, but knows he’s going to be peppered with on-the-record minutiae designed to feed the insatiable maw of blogs and Internet news.... He’s an American who has climbed to the most rarefied stratosphere of American life, only to find that he has to make a major speech arguing that he loves his country.... He’s a man happily married to a strong professional woman who has to defend his wife, as he says, for being “feisty”...

and this:

Maureen Dowd, April 25, 2007: I love the dynamics of a cheeky woman puncturing the ego of a cocky guy.... So why don’t I like it with Michelle and Barack? I wince a bit when Michelle Obama chides her husband as a mere mortal.... Michelle came on strong.... "There’s Barack Obama the... amazing orator, Harvard Law Review, or whatever it was, law professor, best-selling author, Grammy winner. Pretty amazing, right? And then there’s the Barack Obama that lives with me in my house... his 5-year-old is still better at making the bed than he is.”... [P]eople I talked to afterward... worried that her chiding was emasculating, casting her husband — under fire for lacking experience — as an undisciplined child...

?

From Atrios, apropos of the press's treatment last week of General Clark:

Eschaton: So Predictable: This past week gave us a look at how things will be going forward. The McCain campaign will inject a narrative, and the donut & BBQ loving press will dutifully type it up, completely making up facts to do so if necessary.

And we're going to have to start creating 360 degree s---storms around them when they do.

Correspondents have been asking me why I have given up setting out my periodic markers on the internet warning people that more often than not National Review's Donald Luskin simply does not know what he is talking about. The truth is that I just haven't the heart: it's simply too depressing to surf on over there...

But here is one sent me a month or so ago:

The Conspiracy to Keep You Poor and Stupid: KRUGMANOMICS: MAKING IT UP AS HE GOES ALONG: Here's the incisive economic analysis of Paul Krugman, from his New York Times column today. Hey, mom and dad, if you're spending $50,000 a year to send your kid to Princeton to learn this, then here's my economic analysis for you: save your money. When it serves his purpose to ignore the facts... he does so.... [W]hen people's beliefs interfere with his agenda, he comes up with some convenient "facts":

[C]onsumers are, for the first time in decades, telling pollsters that they expect a sharp rise in prices over the next year. Fair enough. But where are the unions demanding 11-percent-a-year wage increases?.... In fact, wage growth actually seems to be slowing...

Hasn’t he been telling us for 7 years that wages have been going down? How then is wage growth suddenly slowing?

The answer, of course, is simple: Measured real wages--that is, the number of dollars you have paid divided by the price level--have been at best flat or falling for almost this entire decade. That is because measured nominal wages--how many dollars you get paid--have been growing more slowly than prices. And just now the rate of nominal wage growth has been falling.

If you understand that real wages and nominal wages are two different things, you don't get confused.

Does Luskin understand this? I think not.

I remember a similar mistake from the past: Luskin's attempt to compute the real exchange rate:

on which Luskin commented:

The chart... shows the real exchange rate of the US dollar for a decade before the 1982 memo, and then through the end of the Reagan presidency. It did drift slightly lower for the first couple of years after the memo. But then it took off to new highs -- nothing resembling anything like [Summers's and Krugman's late 1982 prediction of] a "return to approximately their historical levels."

when the actual real exchange rate was:

(Parenthetically, Paul and Larry look pretty smart and dead on: after one more upward leap in the exchange rate bubble of 1984-85, the real exchange rate did indeed go back to its historical level. There's a reason that people pay attention to them.)

It looks like what Luskin did was to take the nominal price of a basket of foreign currencies in nominal dollars and then multiply that by the U.S. price level--instead of taking the nominal exchange rate (the value of the dollar in terms of foreign countries) and then multiplying that by the U.S. and dividing that by the average foreign price level. He (i) takes the inverse of what he wants, (ii) does a transformation that turns the measure he is using into total garbage, and (iii) forgets that you have to adjust for changes in foreign price levels as well. This demobnstrates a truly rare degree of confusion between nominal and real magnitudes...

The Honorable Vaughan R. Walker:

Judge Rejects Bush’s View on Wiretaps: A federal judge in California said Wednesday that the wiretapping law established by Congress was the “exclusive” means for the president to eavesdrop on Americans, and he rejected the government’s claim that the president’s constitutional authority as commander in chief trumped that law....

The Justice Department... citing the president’s constitutional power as commander in chief to order wiretaps without a warrant from a court under the agency’s program. But Judge Walker, who was appointed to the bench by former President George Bush, rejected those central claims.... He said the rules for surveillance were clearly established by Congress in 1978 under the Foreign Intelligence Surveillance Act, which requires the government to get a warrant from a secret court.

“Congress appears clearly to have intended to — and did — establish the exclusive means for foreign intelligence activities to be conducted,” the judge wrote. “Whatever power the executive may otherwise have had in this regard, FISA limits the power of the executive branch to conduct such activities and it limits the executive branch’s authority to assert the state secrets privilege in response to challenges to the legality of its foreign intelligence surveillance activities”...

An unexpected mental collision, as my reading and thinking about speculation crashes into my reading and thinking about "why oh why can't we have a better press corps?"

Let me back up. Back in 2001, Paul Krugman hit the point that deliberate and illegal market manipulation--artificial supply restrictions--were the principal factor driving California's energy crisis no less than seven times in less than five months. As he deservedly patted himself on the back last month:

Various notes on speculation: During that whole period, I was pretty much the only voice in a major news outlet even suggesting that market manipulation might be a central factor...

And indeed, market manipulation somehow escaped mention in the very same section of the very same paper he was writing for--in articles written by news-division reporters like Joseph Kahn and Tim Egan that I can find. Maybe it's the fault of the NYTimes search engine, but all it finds is reporters like Kahn and Egan giving "he said-she said" accounts--charges of market manipulation by PUC Chairs balanced by claims from energy companies that they simply "played by the rules" with no way for non-expert readers to evaluate them.

Exhibit A: New York Times reporter Timothy Egan in May 2001 on the California energy crisis:

Timothy Egan, May 11: Many Utilities Call Conserving Good Business: Hundreds of miles to the south [of Seattle], the city-run utilities in Los Angeles and Sacramento, have generally managed to avoid the rolling blackouts of recent months by opting out of the state's deregulation experiment and promoting conservation with near-religious fervor.... When Vice President Dick Cheney said last week that conservation could not be a centerpiece of energy policy, he left some utilities -- those that have spent 20 years trying to prove just the opposite -- feeling as though their efforts had been undermined. In his speech, he said, "Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy."...

These guys in the Bush administration are doing this manly stuff, putting their horns on to make it sound like conservation is for sissies," Mr. Royer said. "But we know from experience that conservation equals generation. They are the same." Other utilities, even some that embrace conservation, agree with the Bush administration that the nation cannot conserve its way to energy independence....

S. David Freeman, the man named by Gov. Gray Davis to oversee the state's response to its power crisis, said that conservation remained a way not only to get through the difficult summer ahead but also to meet long-term energy needs.... Tom Eckman, the conservation manager of the Northwest Power Planning Council, which was created by Congress to guide major power decisions in this region. "It's common sense. If you can get something for 10 cents, why pay a dollar for it?"...

Mr. Cheney said that the Bush administration would oppose any measure based on a premise that people should do more with less. His remark was echoed this week by Ari Fleischer, the White House spokesman. Asked on Monday if Mr. Bush believed that Americans should change their lifestyles in the face of a power crisis, Mr. Fleischer dismissed the idea of people using less energy as one solution. "That's a big no," said Mr. Fleischer. "The president believes that it's an American way of life, and it should the goal of policy makers to protect the American way of life. The American way of life is a blessed one. And we have a bounty of resources in this country"...

Exhibit B: Paul Krugman writing thirteen days before on the California energy crisis:

Paul Krugman: The Real Wolf: [E]vidence has convinced Mr. Wolak that "power generators use forced outages strategically to withhold capacity from the market."... [The FERC's] emergency price caps are full of loopholes, offering extensive opportunities for what Mr. Wolak calls "megawatt laundering" -- selling power to affiliated companies that for one reason or another are exempted from the price controls (for example, the controls do not apply to "imports" from neighboring states), then selling it back into the California market. Severin Borenstein of the University of California Energy Institute adds that because the allowed price depends on the cost of generation at the least efficient plant, generators will have a clear incentive to produce inefficiently: "I predict we will find some plants we never heard of before that are suddenly operating again, and they will be pretty inefficient."... [T]his is not a serious plan. There are serious proposals to mitigate the crisis out there -- indeed, last fall Mr. Wolak submitted a proposal that was well received by other experts -- but FERC has ignored all of them. The charitable interpretation is that FERC still doesn't get it.... The uncharitable interpretation is that last week's action was meant to fail. The Medley Report, an online newsletter, calls the FERC plan "a grand exercise in posturing without substance... a very clever temporary move by the Bush administration to deflect any political fallout"...

Exhibit C: Today New York Times reporter Timothy Egan is very angry on his weblog about energy market manipulation in 2001:

Timothy Egan: [T]he West Coast... phony energy crisis of 2000 and 2001... the great energy heist... an extended bad dream, part “Twilight Zone” and part “Chinatown.”... The price of energy spiked — tenfold, a hundredfold — despite low demand. Californians became the most efficient users of power in the nation, and still suffered through dozens of rolling blackouts. None of it added up. And into the worst energy crisis since the Arab oil embargo of 1973 came Vice President Dick Cheney, blasting conservation as a sissy virtue and saying the nation needed to build a new power plant every week for the next 20 years...

Exhibit D: Today New York Times reporter Timothy Egan is very angry on his weblog at the assembled weblogs of America:

Save the Press: [A]nyone who cheers the collapse of the newspaper industry should consider... the larger principle of healthy democracies needing informed citizens. Last week, almost 1,000 jobs were eliminated in the American newspaper industry... layoffs and buyouts is edging toward closures and bankruptcies....

[O]nline advertising accounts for only about 10 percent of total ad revenue, newspapers are hemorrhaging money.... [T]he Web format will never generate enough money to keep viable reporting staffs.... [T]here’s plenty of gossip, political spin and original insight on sites like the Drudge Report or The Huffington Post... built on the backs of the wire services and other factories of honest fact-gathering.... Web info-slingers will find that you can’t produce journalism without journalists....

And just how much do most contributors at the The Huffington Post make? Nothing!... [T]he Brentwood bold-face types who grace HuffPo’s home page can afford to work for free, but it’s un-American, to say the least.... If any of those guys on the docks heard that I was now part of a profession that asked people to labor for nothing, they’d laugh... then probably shut The Huffington Post down.... We could be left with a national snark brigade, sniping at the remaining dailies in their pajamas, never rubbing shoulders with a cop, a defense attorney or a distressed family in a Red Cross shelter after a flood.... [P]erhaps a nation can function without newspapers. But it would be a confederacy of dunces.

And when Exhibits (A)-(D) combine inside my brain, they collide. And my first and instinctive reaction is: Karma.

Egan could have given Paul much more backup in 2001. Indeed, he could have called Frank and Severin, et cetera, and put something like Exhibit (B) high up in his Exhibit (A) article. He didn't.

This is, I think, a huge problem for the New York Times's--in fact, its biggest problem. I know that the people writing for the Huffington Post are smart people trying their best to tell it to me as they see it. I don't know that about the New York Times. I'm pretty sure that they know or suspect important things that they are not telling me, or are soft-peddling for internal bureaucratic or external source-maintenance reasons. I see: New York Times. I think: Judy Miller, Elizabeth Bumiller, Sheryl Gay Stolberg, Maureen Dowd, David Brooks, William Kristol, John Tierney, Adam Nagourney, Ben Stein, Bill Keller, David Shipley, Jim Rutenberg.

Thus the Wheel of Karma turns. The suspicion that reporters like Tim Egan identified with the New York Times brand know important things about the issues they are writing about that they are not telling me is a huge hurdle in today's world: a world in which electrons are cheap, attention is scarce, and reputation is valuable.

And the Wheel of Karma grinds fine, for the way for Tim Egan to have reputation now is for him to have, back in 2001, provided Paul Krugman with extra backup when Paul was trying to tell the California energy crisis story wie es eigentlich gewesen. Egan didn't. And today time machines are scarcer than attention...

Appendix: Egan "he said-she said" California energy stories from 2001:

• http://query.nytimes.com/gst/fullpage.html?res=9D00E3DA1031F932A25751C0A9679C8B63&sec=&spon=&pagewanted=print
• http://query.nytimes.com/gst/fullpage.html?res=9F07E1D7103BF932A25756C0A9679C8B63&sec=&spon=&pagewanted=print
• http://query.nytimes.com/gst/fullpage.html?res=9F0DE6DB143AF936A25756C0A9679C8B63&sec=&spon=&pagewanted=print
• http://query.nytimes.com/gst/fullpage.html?res=9806E4DA1739F937A35752C1A9679C8B63&sec=&spon=&pagewanted=print

Gail Sheehy:

Hillaryland at War: Politics & Power: vanityfair.com: Hillary [Rodham Clinton]... surround[ed] herself with a tight cabal of loyalists... survivors of the Clinton White House bunker. “People who go through a battle together basically bond. They know their survival rests with staying together,” explains Leon Panetta, Bill Clinton’s former chief of staff, but he adds, “It probably diminishes their efficacy as staff, because they’re more like family.”...

[T]the real flaw in Hillary’s presidential campaign was the lack of any clear lines of authority. Her “team of rivals,” as she thought approvingly of them, assured she would remain in total top-down control. But it is often necessary to tell a candidate what she doesn’t want to hear in a cold, hard, neutral manner. With Hillary, the word among her staff was “I don’t want to get spanked by Mama.”...

It was impossible to find anyone who could lay out the hierarchy of Hillary’s campaign. Almost everybody had veto power, but no one could initiate. The group was about as effective as the U.N. Security Council. After Super Tuesday and Obama’s remarkable run of February victories, it was clear their arrogantly defended strategies had failed. They became consumed with trading personal invective, hurling expletives, and trashing one another in print...

Once again, I don't know what a staff that becomes "consumed with trading personal invective, hurling expletives, and trashing one another in print" is called, but I would not call them "loyalists." HRC was badly served.

Matthew Yglesias reads David Broder:

David Broder: I have not worried about the fundamental commitment of the American people since 1974. In that year, they were confronted with the stunning evidence that their president had conducted a criminal conspiracy out of the Oval Office. In response, the American people reminded Richard Nixon, the man they had just recently reelected overwhelmingly, that in this country, no one, not even the president, is above the law. They required him to yield his office. That is not the sign of a nation that has lost its sense of values or forgotten the principles on which this system rests...

And Yglesias worries:

Matthew Yglesias: I don't think anyone can seriously dispute that the current President of the United States violated the Foreign Intelligence Surveillance Act or any number of legal commitments to refrain from torture. Some people think these violations were good policy. Many of those who regard those violations as good policy, also maintain that higher constitutional principles grant the President the right to break the law. Which is precisely what you could say on behalf of Richard Nixon.... But Bush won't be hounded out of office. I'm not exactly sure what accounts for the difference.... I have a vague sense that at that time America's elites operated with some sense of conscience and dignity, and it was taken for granted even among Republican leaders that one couldn't just break the law. These days, a misleading deposition taken in the course of a frivolous lawsuit aimed at avoiding the revelation of an affair is a grave national crisis, but it's taken for granted that only a lunatic would believe that Bush or any of his henchmen should be held accountable in any way for repeated violations of the law. I don't really know what changed, or why David Broder and other gatekeepers of elite consensus can't see that something's gone wrong here, but I'm not happy about it...

I think Matt is (a) right to be worried, but (b) wrong in thinking that things were very different back in 1974. His problem is that he assumes that David Broder does not casually lie--that back in 1974 David Broder really was pleased at the prospect of "the American people remind[ing] Richard Nixon... that in this country, no one, not even the president, is above the law..." and really was worried "about the fundamental commitment of the American people," but has not been worried since is simply a lie.

Broder wasn't.

He seems to have thought that it would be exciting if impeachment would fail, and looked forward to the prospect of Richard Nixon getting his political revenge.

Let's roll the videotape:

David Broder, July 10, 1974: David S. Broder (1974), "If Congress Refuses to Impeach..." Washington Post (July 10), p. A 30: [T]he case of Richard Nixon is moving... toward... the House vote on impeachment.... Suppose... few Republican defections... enough Democrats cross the line to exonerate Mr. Nixon...?... The cloud over Mr. Nixon's future would disappear... go back to being a full-time President. Congress could go back to legislating. Messrs. Doar, Jenner, and St. Clair could return to their firms.

But politically, the fireworks would just be starting.... [T]he anti-impeachment majority [would] lash... out against the Judiciary Committee members for spending $1.5 million and uncounted thousands of manhours.... [T]he tidal wave of public sentiment... sweep over the Congress... the White House charge [that the impeachment investigation was nothing but a partisan assault on the integrity of the presidential office] would surely have been proven.... The President's supporters in the country would cry vengeance....

Democratic candidates would find themselves on the defensive... a 93rd Congress which did little but posture on impeachment.... Resurgent Republicans... vindicated President... predictable public reaction against the press and the Democratic Congress....

Republican congressmen... who had broken ranks to vote for impeachment would find themselves pariahs.... If they managed to escape repudiation by the voters this year, they would be guaranteed strong pro-Nixon primary opponents in 1976. Many of them would undoubtedly wonder whether there was any way to remain in public office as Republicans.... Political scientists would... [ask] whether the friends and foes of President Nixon would not constitute themselves into separate parties, obliterating past affiliations.

All this is well within the realm of possibility. All that has to happen is for the House to exonerate the President by voting no bill of impeachment.

Note what Broder does not say: he does not say that it would be a bad thing for a majority in congress to vote that Nixon's crimes--illegal as they were--did not warrant impeachment, and thus to vote that the president was in a sense above the law. He doesn't say that at all. If he was worried "about the fundamental commitment of the American people" back in 1974, he did not think those worries were worth sharing with the Washington Post's readers.

When dealing with the Post these days, you simply have to fact-check everything.

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

From Blaise Zerega:

What Hath Open Source Wrought?: Five years ago this month, economist Brad DeLong asked a question central to the value of information technology. If the industrial age yielded the assembly line, what, he pondered, will the information age yield? "From a historical perspective," wrote DeLong in a Wired magazine column, "it's not at all surprising that we are thrashing about, still trying to figure out how to use these new tools most effectively." By tools, he was referring to computers, software, and of course, the web. The answer, he hinted, was to be found in open source software.

Fast forward to the present. It's obvious to anyone who has paid attention not just to advances like open source software, but to crowd-sourcing and to the importance of user-generated-mass-production. While we still have some thrashing about to do, it's going to be a glorious thrashing about. And you know a development is real when McKinsey gets involved. In June, the firm published The Next Step In Open Innovation (free registration required). The authors cite such examples as LEGO, the LAMP stack, and the design of the ATLAS particle detector. It's definitely worth a read this holiday weekend.

Oh, and the report offers up an answer to DeLong's thorny question: the authors dub the phenomenon he described as distributed co-creation. Gotta love it.

From Jacques Bughin, Michael Chui, and Brad Johnson:

next step in open innovation: For most companies, innovation is a proprietary activity conducted largely inside the organization in a series of closely managed steps. Over the last decade, however, a few consumer product, fashion, and technology businesses have been opening up the product-development process to new ideas hatched outside their walls....

Suppose that a wireless carrier, say, were to orchestrate the design of a new generation of mobile devices through an open network of interested customers, software engineers, and component suppliers, all working interactively with one another... open-source platforms developed through distributed cocreation, such as the “LAMP” stack (for Linux, Apache, MySQL, and PHP/Perl/Python), have become standard components of the IT infrastructure at many corporations. What facilitates this new approach to innovation is the rise of the Web as a participatory platform....

Distributed cocreation is too new for us to draw definitive conclusions about whether and how companies should implement it. But our research into these online communities and our work with a number of open-innovation pioneers show that it isn’t too soon for senior executives to start seriously examining the possibilities....

In nearly every sector, many of the ideas and technologies that generate products emerge from a number of participants in the value chain... suppliers understand the technology and manufacturability of their pieces of the end product better than the OEMs do.... The benefits of specialization and collaboration seem obvious today.... The example of Wikipedia suggests that companies can take even greater advantage of specialization by ceding more control over decisions about the content of products to networks of participants (suppliers, customers, or both) who interact with one another. Does this seem far-fetched? IBM apparently doesn’t think so: it has adopted the open operating system Linux for some of its computer products and systems, drawing on a core code base that is continually improved and enhanced by a massive global community of software developers, only a small fraction of whom work for IBM....

While distributed cocreation does seem promising, it isn’t entirely clear what capabilities companies will need (or how they will organize those capabilities) to make the most of it....

Many cocreating online communities assume that “crowds”5know more than individuals do and can therefore create better products; as the open-source-software expert Eric S. Raymond has said, “Given enough eyeballs, all bugs are shallow.” It is far too early to know with certainty if this idea holds true across all kinds of products, but a growing consensus maintains that in software development, at least, distributed cocreation is a ticket to quality.... Apache runs more than half of all Web sites and that eight of the ten most reliable Internet hosting companies run Linux....

Research that we and others have conducted on consumers participating in online communities demonstrates that most cocreators recognize that the brand—not they—will own the resulting intellectual property. Why then do they get involved? Rewards and fame were certainly motivators, but participants are largely interested in making a contribution and seeing it become a reality.... In choosing between competing ones, brand affinity is the most important factor for users willing to cocreate, and 40 percent of would-be cocreators will refuse to cocreate with companies they don’t like or trust...

Brad DeLong:

http://www.wired.com/wired/archive/11.07/view.html?pg=5: In the spring of 1994, I wiped the game Civilization off my office computer. I wiped it off my home PC. I wiped it off my laptop. I threw away the original disks on which it had come. It was clear to me that I had a choice: I could either have Civilization on my computers, or I could be a deputy assistant secretary of the US Treasury. I could not do both. It wasn't that my boss ordered me to - she herself played a mean game of computer solitaire. In this, I was the boss, and I had decided that with Civilization on DeLong's hard disk, DeLong's productivity would be unacceptably low.

Computers are tremendous labor-saving devices. They give us power to accomplish extraordinary amounts of work in extraordinarily short intervals of time: financial analysis, data mining, design automation. But they also give us the capability to do things like play solitaire. Or send instant messages. Fiddle with fonts. Futz with PowerPoint. Twiddle with images. Reconfigure link rollovers. At the organizational level, however, the uses of high tech that might be valuable for an individual can be pointless or counterproductive. Consider a meeting to decide between two courses of action. Often, the same decision would be made whether weeks were spent preparing overheads or no overheads were prepared at all. It's easy to see that, from the company's point of view, all the hours spent on PowerPoint slides are dissipated waste.

Now, I don't want to say that computers and communications haven't increased productivity. They have. They've tripled the underlying rate of productivity growth since the bad old days of the Carter, Reagan, and Bush Sr. economies. Large investments in computers and communications seem necessary for rapid, industry-level productivity growth. Still, there is a strong sense that computers are less of an asset to the economy than they might be if we truly knew what they were good for and how to use them.

McKinsey and its brethren tell horror stories of companies investing heavily in computers that were of no more use than doorstops: Kmart applied computers everywhere except in preparing to handle fluctuating sales volumes; automated check-imaging systems wound up saving banks neither time nor money. (McKinsey will also tell you that the best way to avoid such organizational dysfunction is - surprise! - to hire McKinsey.)

Meanwhile, we are a long way from the old-fashioned version of white-collar control, where you sat at your desk and either stared into space or did your work. Most often you stared, until you got so bored that your work seemed interesting. Today, white-collar workers want to use their machines to be more productive and impress their bosses, but also to do things like shop and read blogs, which make their lives happier and their workdays more interesting.

From a historical perspective, it's not at all surprising that we are thrashing about, still trying to figure out how to use these new tools most effectively. As Stanford's Paul David was the first to point out, much the same thing happened a century ago when the electric motor came to American manufacturing. New general-purpose technologies work well only if they are the base of a system, or form a cluster of reinforcing and self-sustaining changes in the way work is organized. With electric motors, the important gains arrived only when engineers used them to reorganize factory layouts to improve workflow, giving birth to mass production.

We do not yet know what will be to the information age as mass production was to the electricity age. Detailed monitoring of every keystroke, every word entered, every image viewed? A more relaxed workplace that accepts the mix of activities that fill our lives? Successful automation that makes jobs more interesting by off-loading the boring tasks onto microprocessors in a more thorough and comprehensive way?

Those who work for large organizations will likely face a future of increasing surveillance - in which managers know hour-by-hour how many items have been scanned through the register, how many keystrokes have been made in writing a legal brief, how many directory assistance calls have been answered, and in which modern technologies distinguish those who just look busy from those who are busy. If this happens, bosses can step up the pace and reduce the on-the-job leisure that we all enjoy.

The underlying ideology of the large company - that your time is its time - will, for a while, make the idea of using surveillance technologies irresistible to high-level managers. I hope this proves inefficient and counterproductive, that after a decade or a generation, such bosses will realize detailed, hour-by-hour surveillance simply doesn't boost output...

Like many people, I am still somewhat puzzled and confused by Christian Broda and John Romalis:

China and cheap imports: Champions of equality: The U.S. presidential campaign has sometimes sounded like a contest to prove who despises trade the most.... This public debate has taken for granted that inequality... has risen as a result of globalisation. But has it really?.... How rich you are depends on two things: how much money you have and how much the goods you buy cost. If your income doubles but the prices of the goods you consume also double, then you are no better off. Unfortunately, the conventional wisdom on US inequality is based on official measures that only look at the first....

Inflation differentials between the rich and poor dramatically change our view of the evolution of inequality in America. Inflation of the richest 10 percent of American households has been 6 percentage points higher than that of the poorest 10 percent over the period 1994 – 2005..... Why has inflation for the poor been lower than that for the rich? In large part it is because of China and Wal-Mart!

Poor families in America spend a larger share of their income on goods whose prices are directly affected by trade... the higher your income, the more you spend on services, which are less subject to competition from abroad....

This trend can partly be explained by China. In U.S. stores, prices of consumer goods have fallen the most in sectors where Chinese presence has increased the most.... The expansion of superstores – like Wal-Mart and Target – has also played an important role in accounting for the inflation differentials between rich and poor. Superstores sell the same products as traditional shops at much lower prices....

What is really worrying is that, despite these facts, we have had a backlash against China and Wal-Mart in America.... We need to remind politicians and the public that the gains from trade are broadly shared. Every time the discussion over trade is diverted towards the problems facing specific producers, be they farmers in France or textile workers in the U.S., we miss the central point. Trading allows everyone, and especially the poor, to buy things that they could not otherwise afford...

Let's run through the Heckscher-Ohlin logic:

Set the prices of luxuries as numeraire. Then the relationship between changes in log wages w and profits log r depends on changes in the log price p of necessities and on the shares of capital in the production of luxuries and necessities according to:

This means that the change in the wages of workers as a function of the change in the prices of necessities will be:

The real incomes of wage-earners depend not just on what happens to wages but what happens to the prices of things they buy, and so if a share θ_w of their income is spent on necessities:

And here's the catch. The necessities-share θ_w of wage-earners has to be less than one, but the change in log wages is greater than the change in log prices. So wage earners' real income goes in the same direction as necessities prices--no matter how fast the prices of necessities are falling:

When Broda and Romalis assert that trade is causing the prices of tradeable necessities to fall rapidly, they are either (a) breaking the H-O framework in some way, or (b) implicitly asserting that capital is the scarce factor in the United States and thus the factor of production whose returns are reduced by globalization.

It is not clear to me how they propose to break the H-O framework. And I do not find (b) plausible.

I prefer http://www.j-bradford-delong.net/2008_pdf/20080530_stolper to break the H-O framework in a Smithian division-of-labor direction: asserting that the scarce factors that lose from trade are organizational and technological expertise and that there is substantial implicit and explicit cross-ownership of factors that together make trade nearly win-win. But I don't see Broda and Romalis going there...

J. Bradford DeLong (2008), "Why We Should Presume Free Trade Is Win-Win: A Multisector Stolper-Samuelson Finger Exercise"

They disturb Jonathan Weil quite a bit:

Bloomberg.com: Lehman's Hedge-Fund Deals Leave Public in Dark: July 3 (Bloomberg) -- So let's say you're a big shot at Lehman Brothers Holdings Inc., trying to keep your firm from becoming the next Bear Stearns Cos. The stock has tanked. The market has doubts about your balance sheet. What do you do? One step to avoid would be any action that might create needless public uncertainty about your company's finances, because investors' greatest fear is of the unknown. So what does Lehman do? It sells billions of dollars of assets to a newly formed hedge fund that:

1. counts Lehman as a significant investor;
2. is run by seven recently departed Lehman executives;
3. is operating out of Lehman's office space, three floors down from the office of Lehman's corporate secretary....

Lehman isn't providing much information about its dealings with R3.... Here are the basic facts....

As of June 12, one fund managed by R3 had raised $1.08 billion from a single unidentified investor and was seeking to raise $4 billion more from others, according to a Form D disclosure.... Lehman has invested about $1 billion in R3, said Thor Valdmanis.... R3 said it is a wholly independent fund and has raised money from a variety of outside investors'' and that Lehmanis one of several passive, minority investors in the fund.'' A Lehman spokeswoman, Catherine Jones, declined to say whether Lehman was the unidentified investor cited in R3's SEC filing. Jones said Lehman has sold approximately $4.5 billion of assets to R3 since its inception in May 2008,'' all of whichwere previously managed by R3 Capital team members when they worked at Lehman.'' Jones declined to say whether the $4.5 billion was how much R3 paid for the assets or the value at which Lehman had been carrying them on its balance sheet. She also declined to say whether Lehman will treat R3 as a related party for accounting purposes....

So, what are we supposed to make of all this? Beats me....

As for the space R3 occupies on the 39th floor of the Time & Life Building in midtown Manhattan, it's in the middle of a 10- floor block Lehman began subleasing from Time Inc. last year. R3 and Lehman say the fund is paying rent to Lehman at market rates...

Is the Federal Reserve too volatile and hair-trigger? Or is the ECB too sluggish?

The employment situation. On the establishment side, down 62K jobs. On the household side, the unemployment rate held steady because 144K of the 155K fall in household-survey unemployment left the labor force.

Dean Baker is first out of the gate with his take on these June job numbers:

Employment Rate Drops as Economy Sheds 62,000:

The employment to population ratio (EPOP) ratio fell to 62.4 percent in June, its lowest level in more than three years, as the economy lost another 62,000 jobs in June. This was the sixth consecutive month in which the economy lost jobs. The private sector lost 91,000 jobs in June. With the April and May numbers revised down by 76,000, the job loss in the private sector over the last three months has been 273,000, an average of 91,000 a month. The private sector has now shed 578,000 jobs since employment peaked in November.

Job loss continues to be led by construction and manufacturing.... Employment in residential construction has fallen by 15.8 percent since its peak in February of 2006. By comparison, real spending is down by almost 50 percent over this period. The fact that employment has fallen so much less than production undoubtedly reflects the fact that many undocumented workers never showed up in the employment data.

Manufacturing lost 33,000 jobs in June....

The temporary help and the larger employment services sectors are both shedding jobs at rapid rates, losing 30,400 and 56,900 jobs, respectively in June. These two sectors, which are often seen as harbingers of future employment trends have, respectively, lost 150,000 and 200,000 jobs since January....

The news in the household survey is consistent with the weak picture in the establishment data. The June EPOP is a full percentage point below the peak hit in December of 2006. It is 2.3 percentage points below the peak hit in April of 2000, a difference that corresponds to 5.4 million fewer people having jobs.

The biggest falloff has been among teenagers, who have seen a drop of 4.5 percentage points in their EPOPs. (The EPOP for black teens fell to 19.6 percent, the lowest rate since March of 1984.)... The economy has entered a slow motion recession. It is not seeing the dramatic plunges in jobs that characterized prior recessions, but the collapse of the housing bubble is slowly sinking more and more sectors of the economy.

Private sector job gains in the Bush years may fall below 3 million by November.

Greg Robb:

U.S. June ISM services falls sharply to 48.2%: WASHINGTON (MarketWatch) -- Nonmanufacturing sectors of the U.S. economy contracted in June, the Institute for Supply Management reported Thursday. The ISM nonmanufacturing index fell to 48.2% from 51.7% in May. The decrease was below forecasts. Economists were looking the index to inch lower to 51.0%. Inflation pressures intensified. The price index rose to 84.5% from 77.0% in the previous month. The employment index fell to 43.8% from 48.7% in the previous month.

Walter Jon Williams's sword-and-singularity novel ("which sense of singularity?" you ask; that would be telling) Implied Spaces is highly recommended.

<minor spoilers>

</minor spoilers>

Jim Hamilton writes:

Econbrowser: Recession and the oil shock of 2008: [T]his seems to be unfolding according to [the] script. The dramatic abandonment of gas guzzlers by American consumers continues, with last month's sales of domestically manufactured light trucks (which includes the once almighty SUV category) down 28% from June 2007. Sales of imported SUVs, which had been holding up better, plunged even more dramatically. For the lighter car category, sales of domestics fell 13%, while imported cars, which tend to get better mileage, eked out a 4% gain....

The shift is a necessary change in the long run, but in the short run will definitely put additional strains on the U.S. economy, as it's precisely this kind of disruption in domestic spending that appears to be responsible for the contribution that historical oil price shocks have made to previous U.S. economic recessions. FT conveys some of the gloom:

The US car market is heading for its worst year in more than a decade as Americans turn their backs on large, gas-guzzling vehicles, according to June sales data due out today.

The figures come as the big US carmakers scramble to adapt to the dramatic shift in demand to more fuel-efficient cars and crossover vehicles. Chrysler yesterday said it would close a US minivan assembly plant and cut one of two shifts at a pick-up truck site. Chrysler's move will result in 2,400 job losses at the plants, both in St Louis. There are even dark murmurs that GM, once the biggest company in America, could conceivably be forced into bankruptcy...

This makes me think that is time to start sending out more stimulus checks--advances on next April's refund checks.

Tim Burke reminds us of what may have been the worst article published by the Atlantic Monthly, ever:

Easily Distracted: Political Notes: I keep flashing back to Mark Bowden’s willingness to be a front man for security functionaries eager to normalize torture. Bowden’s article assured readers that “harsh interrogation” had reached a point of trust-worthy technocratic professionalism in Israel and now potentially the United States. Don’t worry, he said: professionals only use it when they need to, only against those individuals who have knowledge that our trusted leaders must have. It’s won’t be as if some sweaty thug in a filthy gulag is ripping off fingernails just to intimidate a political dissident, that’s only a danger with unprofessional regimes that torture unnecessarily. I mean, it’s not as if we’d be doing something that an infamous authoritarian regime used extensively against dissidents. Besides, who needs moral capital when you’ve got stealth bombers, right?

Felix Salmon is puzzled by Roger Lowenstein:

The Economics and Politics of Trade: More subtly, but also more substantively, it's hard to know what to make of this:

in recent years, Congress soured on trade. Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, laments, "The consensus is gone." Even some economists have begun to suggest that trade is playing a major role in widening the income gap between rich Americans and poor -- especially as more of our imports now originate in low-wage countries...

All discussions of the victims of trade ignore the considerable benefits: the exports we sell and the lower prices for consumers at home. Since poorer Americans spend a higher proportion of their incomes on low-wage imports (shoes from China, for instance), trade can also be seen as favoring the less well off.

Who are these economists who think that imports from low-wage countries are exacerbating US inequality? Lowenstein doesn't say. He doesn't even spell out their argument - maybe it's meant to be self-evident that poor Americans are the same as the "minority of Americans in threatened industries" whom Lowenstein says are the only people who benefit from protectionism. I might be misreading the article, but the impression I get is that Lowenstein thinks his anonymous economists are wrong, and that globalization doesn't exacerbate inequality within the US. The problem is, he never quite comes out and make that case. My gut feeling is that globalization, at the margin, decreases inequality between countries while slightly increasing inequality within countries.... A smart take on trade and globalization might well involve going forwards with the Doha round while at the same time doing a lot of work on reinforcing a social safety net which is currently failing a lot of blue-collar Americans. Just scaling back the protectionist farm bill would free up an enormous amount of money to spend on retraining, wage insurance, and other means of softening the blow to globalization's losers. And reducing agricultural tariffs would help reduce food inflation, too.

But of course these things don't fall cleanly on the left-right political spectrum that Lowenstein talks about.... The big problem is electoral politics: no one wants to antagonize the sugar and orange-juice lobby in Florida, or the corn lobby in Iowa. This isn't a case of left-wing politics versus right-wing politics, it's a case of economics versus politics. And, as usually happens in such cases, politics, at the moment, is winning...

Dani Rodrik is puzzled by--various of his past selves, I guess:

Dani Rodrik's weblog: Stolper-Samuelson for the real world: Warning: This is a long and wonkish entry, aiming at self-comprehension, and the product of one too many long plane ride. The Stolper-Samuelson theorem... [has] a version... that is remarkably general and powerful. It says that regardless of the number of goods and factors, at least one factor of production must experience a decline in real income from trade as long as trade induces the relative price of some domestically produced good(s) to fall (and as long as the productivity benefits from trade are restricted to the traditional, inter-sectoral allocative efficiency improvements, about which more later).... The stark implication is that someone will lose, even if the nation as a whole becomes richer.... The loser in question could be the wealthiest group in the land. But if the [imported] good in question is highly intensive in unskilled labor, there is a strong presumption that it is unskilled workers who will be worse off.  And before you curse economic theory, note that this is really accounting--not economics at all.

I have been thinking about this result in connection with Broda and Romalis's remarkable finding that:

the rise of Chinese trade has helped reduce the relative price index of the poor by around 0.3 percentage points per year. This effect alone can offset around 30 percent of the rise in official inequality we have seen over this period.

The puzzle here, at least on the face of it, is that one would expect China's trade to have had the largest price impact on labor-intensive goods. And if so, wages of unskilled workers must have fallen even more, along the lines of the Stolper-Samuelson logic sketched out above. Can we still say that trade with China has helped reduce U.S. inequality?...

[If my] line of reasoning is correct, the main threat to workers is not a Stolper-Samuelson type permanent compression in wages, but the more temporary (and limited) wage losses incurred by displaced workers.  This is the kind of problem that wage insurance is ideally suited for.

John F. Harris of the Politico, formerly of the Washington Post, confesses that he doesn't even try to do his job of informing Americans about which politicians would make good presidents and legislators--furthest thing from his mind:

Media hype: How small stories become big news: The signature defect of modern political journalism is that it has shredded the ideal of proportionality. Important stories, sometimes the product of months of serious reporting, that in an earlier era would have captured the attention of the entire political-media community and even redirected the course of a presidential campaign, these days can disappear with barely a whisper. Trivial stories — the kind that are tailor-made for forwarding to your brother-in-law or college roommate with a wisecracking note at the top — can dominate the campaign narrative for days... modern journalism as hyperkinetic child — overstimulated by speed and hunger for a head-turning angle that will draw an audience. The truth about what Clinton said — and any fair-minded appraisal of what she meant — was entirely beside the point....

On Friday afternoon, I heard my colleague, Politico reporter Jonathan Martin, bellow in excitement as he called me over to his desk. Martin was furiously typing away, not looking up as he told me the latest: Clinton had given an interview to the editorial board of the Argus Leader newspaper in South Dakota in which she answered inquiries into why she is staying in the race by citing the fact that it’s only May, and RFK had been shot and killed in June. Here is what I was thinking: Wow. Maybe she has come unhinged?... for Clinton to give public voice to such a scenario is bizarre. This is going to be a big story.... Here is what I said: Martin, quick get that item up! He needed no prompting....

The way to build traffic on the Web is to get links.... The way to get links is to be first.... We are unapologetic in our premium on high velocity... we are not different from nearly all news sites these days, not just new publications but established ones like The New York Times.... Martin was quick getting the item about Clinton’s Argus Leader comment up on his Politico blog.... I urged Martin to keep his foot on the gas: Be the first to post reaction....

Perhaps half an hour after the story broke Martin called me back over to his desk. It turned out the Argus Leader had video of its big interview. I huddled over Martin’s computer as we watched. It was a deflating experience. The RFK remarks were deep in a 20-minute clip of an otherwise routine conversation... hardly an electric moment. Clinton does indeed mention the Kennedy assassination, speaking in a calm and analytical tone... Clinton’s error was not in saying something beyond the pale but in saying something that pulled from context would sound as if it were beyond the pale.... It is a small story if Clinton said something like this: “Everyone talks like May is incredibly late, but by historical standards it is not. Think of all the famous milestones in presidential races that have taken place during June.” It seems pretty obvious that the latter is what Clinton meant, and not too far from what she actually said. It was not surprising that the Argus Leader’s executive editor, Randall Beck, put out a statement saying, “Her reference to Mr. Kennedy’s assassination appeared to focus on the time line of his primary candidacy and not the assassination itself.”...

Clinton’s clumsiness does not excuse news media clumsiness in making a minor story seem like a major one.... Keeping one’s journalistic bearings amid a hype storm is a challenge.... In the early months of this publication... a short news item broken by Ben Smith about John Edwards’ $400 haircut became one of our most-trafficked stories... we handled that news nugget with a decent sense of proportion. The item, for instance, never led our site.... Velocity is a virtue in the Web world, and we are not going to stop trying to be fast off the mark — for relevant and fairly reported stories. What Clinton said about Robert Kennedy, whether it was cold or just a bit clueless, was newsworthy, and Martin’s original blog post was responsible in framing the context of her remark. He was equally quick to post her clarification and apology. The uproar was never the lead of our site....

Once, the elite papers and network news set the agenda, and others followed suit, following up on what these establishment pillars deemed important. Now it’s just the opposite. The conservative old voices increasingly take their cues from the newer, more daring ones... a news culture in which — like the amplifiers for “Spinal Tap” that go up to 11 — everything is exaggerated may not seem like a big deal.

But the consequences are more serious than meets the eye.... Only a news media with the focus and discipline to distinguish a big story from a small one can hold politicians accountable — and produce the work that deserves an audience.

I do wonder how he can look at himself in the mirror in the morning. It is a mystery.

Troll Threat Condition Red:

Making Light: Got it in one: #1 ::: Teresa Nielsen Hayden ::: (view all by) ::: July 01, 2008, 10:51 AM: I'm hereby declaring open season on anything unfamiliar that comes through the door. Newbies: behave or die.

From Publius of Obsidian Wings:

Obsidian Wings: Noted Without Further Comment: The insufferable Michael Gerson:

But it is hard to avoid the feeling that Obama has gained the nomination without fully earning it. Unlike Clinton or Bush, his intellectual contributions have been slight.

George W. Bush - a regular Horatio Alger story. A Hegelian hero.

It's hard, reading the Post these days, to believe that they are even trying to be a newspaper. They aren't even going through the motions anymore.

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

In my inbox:

Solar Taxi: Around the World to Promote Alternative Energy

Monday, July 14
290 Hearst Memorial Mining Building, UC Berkeley
10:30 a.m. lecture
11:30 a.m. demonstration and rides

Come win a chance to ride in the Solar Taxi! If you would like to get on the group's agenda, please send mail to [email protected].

For the first time in history, a solar-powered car is driving around the world without any carbon emissions. Swiss adventurer Louis Palmer is taking a small blue environmentally-friendly taxi around the world. The solar-electric two-seat taxi with attached trailer is an attempt to call attention to global warming while providing solutions for oil independency.

With a full component of batteries, the Solar Taxi has an autonomy of almost 200 miles. With additional energy from the solar cells on a sunny day, it can travel almost 260 miles. The vehicle has a top speed of 60 miles an hour and needs no gasoline at all.

By the time the Solar Taxi travels the Earth, it will have been to 40 different countries upon five continents, including the United States.

Read more about this project at http://www.solartaxi.com/mission/.

http://www.citris-uc.org/solartaxi

Megan McArdle:

Being a stay at home mom is hard, cont'd: There are a couple of commenters and emailers who declare that I have no idea what's involved in being a stay at home mom--not merely the childcare, but the cleaning, the laundry, the bills, the scheduling, arranging for repairs, and so forth. These people seem to be under the impression that I have a staff of ten or twelve, or perhaps live in the magical fairy world of single people where my air conditioner has not just broken, and the bill-paying gnomes show up once a month to organize my personal finances and regrout the bathtub....

I have put in my time as both a remunerated and an unpaid childcare worker. I am familiar with the operations involved, and rest assured, I can do all of them except breastfeed (right now, anyway). And just to put everyone's mind at ease, I do know at least enough to put the formula in the bottle and the strained peaches in the dish that your child is about to throw onto the floor.

I have, believe you me, endless respect for the fantastic amount of labor required to care for a child, and my hat is off to each and every one of you who has voluntarily undertaken this herculean task. But it is not "skilled" labor in the sense of "something comparatively few people know--or can quickly learn--how to do." It is particularly not "skilled" when we are talking about childcare, rather than parenting. Their job is to tend to your child's physical needs and keep him or her occupied. You still have to do the trickiest part of raising a decent human being.

There is a disconnect here. But looking after children is (a) physically demanding, (b) emotionally wearing, (c) mentally challenging, (d) easy to do badly with small lapses of attention, and yet (e) badly remunerated. In this it differs from nearly all other occupations that fit one or more of (a) through (d), which are relatively well paid because getting the work done is important and few people can do it well. But looking after children is different--very many people can do it well, not because it is easy to do but because it is one of our core human competences: we are driven to learn how to do it well at a deep, basic, powerful level to an even greater degree than we are driven to learn how to throw rocks to hit small moving animals. Thus looking after children is different from skilled occupations--it pays poorly because the supply of people who can do it is not small. And looking after children is different from unskilled occupations--it is hard to do because it is (a) physically demanding, (b) emotionally wearing, (c) mentally challenging, (d) easy to do badly with small lapses of attention.

Gary Farber:

We've always known that our current torture regime came from back-engineering the SERE (Survival, Evasion, Resistance and Escape) training given some U.S. military personnel intended to enable them to resist the horrible tortures used by the KGB, Chinese Communists, and other historical enemies of the U.S. whose morality we condemned for their willingness to engage in torture. That's old news. Now we have documentation of exactly whom we've copied: yes, the Chinese Communists. Isn't that lovely? Scott Shane reports:

The military trainers who came to Guantánamo Bay in December 2002 based an entire interrogation class on a chart showing the effects of “coercive management techniques” for possible use on prisoners, including “sleep deprivation,” “prolonged constraint,” and “exposure.”

What the trainers did not say, and may not have known, was that their chart had been copied verbatim from a 1957 Air Force study of Chinese Communist techniques used during the Korean War to obtain confessions, many of them false, from American prisoners.

The recycled chart is the latest and most vivid evidence of the way Communist interrogation methods that the United States long described as torture became the basis for interrogations both by the military at the base at Guantánamo Bay, Cuba, and by the Central Intelligence Agency....

The 1957 article from which the chart was copied was entitled “Communist Attempts to Elicit False Confessions From Air Force Prisoners of War” and written by Alfred D. Biderman, a sociologist then working for the Air Force, who died in 2003. Mr. Biderman had interviewed American prisoners returning from North Korea, some of whom had been filmed by their Chinese interrogators confessing to germ warfare and other atrocities....

Mr. Biderman’s 1957 article described “one form of torture” used by the Chinese as forcing American prisoners to stand “for exceedingly long periods,” sometimes in conditions of “extreme cold.” Such passive methods, he wrote, were more common than outright physical violence. Prolonged standing and exposure to cold have both been used by American military and C.I.A. interrogators against terrorist suspects. The chart also listed other techniques used by the Chinese, including “Semi-Starvation,” “Exploitation of Wounds,” and “Filthy, Infested Surroundings,” and with their effects: “Makes Victim Dependent on Interrogator,” “Weakens Mental and Physical Ability to Resist,” and “Reduces Prisoner to ‘Animal Level’ Concerns.”

The only change made in the chart presented at Guantánamo was to drop its original title: “Communist Coercive Methods for Eliciting Individual Compliance”...

How evil have we become?

The abyss has drilled fracking laser holes through us with its stare.

Remind me why we were the good guys in the Cold War, and WWII, again? The guys who wrote the Nuremberg Principles?

Please tell me; I really could use a reminder now.

And I'd like to know how we can regard ourselves as the same people any more. I'd really, really, like to know.

From Deborah Solomon:

Real Time Economics: Paulson to Putin: You Say Potato, I Say Sovereign Wealth Fund: Treasury Secretary Henry Paulson, in Russia for high-level talks with top officials, found himself locked in a game of semantics with Prime Minister Vladimir Putin.

Paulson, at a meeting in the Kremlin that was open to reporters, told Putin his discussions with Russian Finance Minister Alexei Kudrin were productive, including their talks about Russia’s sovereign wealth fund.

“We don’t have a sovereign wealth fund,” Putin interrupted, telling Paulson that he must be confusing Russia with someone else.

Russia is sitting on vast reserves of money, buoyed by rising oil and gas prices, and is looking for places to invest those resources. While there’s no dictionary definition of a sovereign-wealth fund, they are generally described as government-owned or controlled assets that are often invested overseas...

Non-market actors in a market economy: a historical parable:

Trade around the Indian Ocean before 1500 was a largely peaceful, stable process. Empires, kingdoms, sultanates, and emirates ruled the lands around the ocean, but they did not have the naval strength or the orientation to even think of trying to control the ocean's trade. Pirates were pirates--but only attacked weak targets, and needed bases, and for the land-based kingdoms providing bases for pirates disrupted their own trade.

Then came 1500, and a new entity appeared in the Indian Ocean: the Portuguese seaborne empire.

The European Seaborne Empires I: "To Serve God, to Win Glory for the King, and to Become Rich

From David Abernethy (2000), The Dynamics of Global Dominance: European Overseas Empires 1415-1980 (New Haven: Yale), p. 242 ff: Malacca... located on the Malayan side of the narrow strait... the principal center for maritime trade among Indian Ocean emporia, the Spice Islands, and China.... Because of monsoonal winds, vessels sailing from the Indian Ocean to China (and vice versa) had to lay over for a few months before continuing the journey. An alternative was for ships to unload their wares in Malacca, returning to their respective home ports with goods from the others' ships as well as gold, spices, and precious woods from the offshore islands. The city and strait of Malacca were extraordinarily cosmopolitan places....

The Chinese government's impact on Malacca was far more limited in scope and duration than might be expected given the country's wealth and size. Zheng He's armada of hugh junks, with thousands of well-armed soldiers aboard, was designed to ensure attention and respectful deference to China's rulers from elites elsewhere.... But the admiral was unwilling to use the military might at his disposal to conquer Malacca, there being no plans to administer distant lands.... The emperor politely received the king of Malacca when the king later journeyed to Beijing, bearing tribute. But assertion of China's superior political status was made by the inferior party visiting the Celestial Court, not by the latter reaching out aggressively beyond its borders....

China's private sector had a more substantial and long-lasting impact on Malacca... the existence... of a separate section of the city reserved for Chinese merchants.... That many Chinese merchants in Malacca were long-term residents did not signify that they were overseas agents of Chinese power... they tried to avoid contact with Chinese officials rather than to work with them.... The Chinese did not carry a missionary religion to Malacca because they had none....

Arabs visited Malacca as long-distance merchants, staying in a quarter of the town set aside for Muslims.... [T]hey did bring a missionary religion.... Malacca's rulers had been Muslim for about a century before the Portuguese arrived. One may thus speak of an alliance between Arab mercantile and religious interests resembling the European pattern. But Arabs in teh Indian Ocean basin were not like Europeans. First, they were not... agents of a polity eager to assert itself overseas.... Their prospects for profitable trade were most favorable if none of [the Arab city states] advanced political claims beyond its immediate domain. Traders and sailors moved on monsoonal winds from one trading center to another, intermediaries among several autonomous units rather than agents of any particular one....

The limited, functionally diffuse character of Chinese and Arab/Muslim relations with Malacca posed an isoluble dilemma for the city's sultan when he encountered Europeans.... The sultan faced toward Mecca when praying and toward Beijing when oferring tribute. But for quite different reasons he could count on neither to help counter the new foe....

As Muslim merchants predicted, the Portuguese launched a tripole assault on Malacca. The city was captured in 1511... fifteen hundred soldiers... Viceroy Afonso d'Alburquerque... permanent political control.... Construction of a stone fortress was begun as soon as the battle was won, and it was kept well supplied with soldiers and cannon. The city was a Portuguese possession until the Dutch took it in the seventeenth century... an integral part of a grand scheme to capture gains from Indian Ocean trade. Political control of enclaves throughout the ocean basin was considered a necesary as well as desirable mans to an economic end. Albuquerque appealed to the profit motive as explicitly as one could: "If we take this trade of Malacca out of [the Moors'] hands, Cairo and Mecca are entirely ruined, and to Venice will no spiceries go except that which her merchants go and buy in Portugal."...

[R]eligious dimension.... Albuquerque waited to launch his attack until the day of Saint James.... Non-Muslims were spared following the battle. But "of the Moors, [including] women and children, there died by the sword an infinite number, for no quarter was given to any of them.".... The Portuguese were unlike the Chinese and Arabs in the number and variety of sectoral institutions at their disposal, in the stretch of these institutions far from their home base, and in the way agents of different sectors worked together.... Portugal's grand strategy in the Indian Ocean was to capture gans from a lucrative seaborne trade that had functioned for a long time. Malacca was valued as an enclave... profits literally floated past in the form of ships carryhg spices, precious stones, textiles, chinaware, carvings, and so on through a narrow strait. There was no economic or strategic reason for Albuquerque to invade the Malayan interior.... Not until the nineteenth century did Europeans consider the Malayan interior worthy of their attention. Under British direction, exports from rich tin mines were increased and rubber plantations laid out... a plant Europeans had found in the New [World]... a mode of production perfected earlier in the Americas...

From <>:

Asian macro policy is out of kilter: The new development... is the acceleration of inflation [in Asia]. In April headline inflation in Asia ex Japan was 7.5%, a 10 year high.... As for where this inflation came from, it came mainly from the United States. Starting last summer, in response to the subprime crisis, the Fed cut interest rates sharply.... The Asian economy was growing full out in 2007. The last thing it needed was lower interest rates. But that’s what it got, given the habit of limiting the fluctuation of Asian currencies against the dollar. Allowing Asian interest rates to rise more sharply against US rates would have caused Asian currencies to appreciate against the dollar more strongly... not something that Asian governments and central banks were prepared to countenance.

As a result, Asian economies that needed demand restraint got demand stimulus instead....

What should Asian central banks do now? They should raise rates.... It makes no sense when most Asian countries are growing at or near capacity that they should have negative real interest rates. Negative real rates are an unhealthy subsidy for borrowing by households and firms. They encouraged inefficient investment and excessive leverage in Asia in the first half of the 1990s, and we all know what followed....

Critics of inflation targeting will say that central banks have a dual mandate not just to fight inflation but also to foster growth and that Asian central banks have no business raising rates in a deteriorating growth environment. But the fact of the matter is that they now face a very serious test of their credibility.... The alternative to painful interest rate increases now will be even more painful increases later.... Higher interest rates will push up the exchange rate and damp down inflation. Tax cuts and increases in public spending on locally-produced goods will limit the contraction of aggregate demand....

I am aware that what I am arguing Asia needs now – monetary tightening, currency appreciation and fiscal stimulus – is the same thing that the Bush Administration has been arguing for three years. But the fact that the advice is old hat and that it comes with unwelcome associations should not lead to its rejection...

It is safe to say that Peter Beinart makes a very serious, thoughtful, argument that has never been made in such detail or with such care:

Balancing Act: The Other Wilsonianism The contrast with the development of modern conservative foreign policy is instructive. When William F. Buckley, James Burnham, and the other founding editors of National Review set out in the 1950s to devise a conservative approach to the Cold War, they did so in the full knowledge that their views were wildly outside the political mainstream. (In fact, Buckley and Burnham did not even live in Washington.) Yet they continued to elaborate and refine them, making few concessions to political necessity, until in 1976 and 1980, when Ronald Reagan brought first the Republican Party, and then the entire country, around to their worldview...

Burnham's and Buckley's foreign policy was "Rollback": a titanic Manichean struggle of total Cold War against a totalitarian adversary that could not be softened or negotiated with or contained--that was Buckley's and Burnham's critique of Harry S Truman, Dean Acheson, George F. Kennan, George Marshall, and the other graduates of what Nixon called "Acheson's Cowardly College of Communist Containment."

What was Ronald Reagan's foreign policy? Well, let's roll the videotape, from 1985:

Remarks to the Students and Faculty at Fallston High School As you know, Nancy and I returned almost 2 weeks ago from Geneva where I had several lengthy meetings with General Secretary Gorbachev of the Soviet Union. I had more than 15 hours of discussions with him, including 5 hours of private conversation just between the two of us. I found him to be a determined man, but one who is willing to listen. And I told him about America's deep desire for peace and that we do not threaten the Soviet Union and that I believe the people of both our countries want the same thing -- a safer and better future for themselves and their children. You know, people don't start wars, governments do. Our meeting should be of special importance to all of you. I know you're concerned about the future, about the growth in nuclear arsenals, about injustice and persecution of fellow human beings, and about threats to peace around the world. Well, it's because I shared that concern that I went to Geneva to begin a dialog for peace with Mr. Gorbachev....

We were realistic going into these meetings with the Soviets. The United States and the Soviet Union are as different as any two nations can be. These differences are based on opposing philosophies and values and no differences could be more profound or meaningful. It is virtually impossible for us to understand their system and how, over these -- what -- 70 years, it has imposed a way of thinking on their people. So, we didn't expect miracles. But we wanted these talks, if possible, to plant the seeds of hope in our relationship, the hope that some day, perhaps, might blossom into a real peace, a lasting peace, resting upon the only foundation on which a true peace can be built -- the indestructible foundation of human freedom. And I was determined to see if we could begin to narrow some of our differences and even come to some agreements where there was common ground. I believe that we've made a good start.

This is the mission I've come to speak to you about. One of the most exciting developments to come out of Geneva was Mr. Gorbachev's agreement to people-to-people exchanges. We're still negotiating the specifics, and it remains to be seen how much the Soviets will be willing to open up their closed society. But our objective is massive exchange programs between private citizens in both countries -- between people, not government bodies. Let's allow the people of the Soviet Union and the people of the United States to get to know each other, without governments getting in the way. And that's one reason I'm here today -- to encourage young people like you from across the country to take part in these people-to-people exchanges as never before in our history. I believe such contacts are an essential part of our building a lasting foundation for peace, because true peace must be based on openness and people talking to each other rather than about each other, and the peace must also be based on understanding....

Mr. Gorbachev, as the leader of the Soviet Union -- the new leader -- has held out the promise of change. He has said that he wants better relations between our two nations....

I couldn't help but -- one point in our discussions privately with General Secretary Gorbachev -- when you stop to think that we're all God's children, wherever we may live in the world, I couldn't help but say to him, just think how easy his task and mine might be in these meetings that we held if suddenly there was a threat to this world from some other species, from another planet, outside in the universe. We'd forget all the little local differences that we have between our countries, and we would find out once and for all that we really are all human beings here on this Earth together. Well, I don't suppose we can wait for some alien race to come down and threaten us, but I think that between us we can bring about that realization...

Once George Shultz, Nancy Reagan, and Nancy Reagan's astrologer had wrested control of the Reagan administration foreign policy apparat from Alexander Haig and Jeanne Kirkpatrick, Reagan (and even more so George H.W. Bush) was squarely in the "Containment"--not the "Rollback"--tradition.

To Peter Beinart's claim that Reagan's foreign policy was "Buckley['s and] Burnham['s]... conservative approach to the Cold War," all I can do is laugh and say: "Klaatu Barada Nikto!!"

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

Economist Mom:

Obama Speaks of the “Virtuous Cycle” of Fiscal Responsibility: My favorite part of his speech last night [June 3]...

Change is building an economy that rewards not just wealth, but the work and workers who created it. It’s understanding that the struggles facing working families can’t be solved by spending billions of dollars on more tax breaks for big corporations and wealthy CEOs, but by giving the middle-class a tax break, and investing in our crumbling infrastructure, and transforming how we use energy, and improving our schools, and renewing our commitment to science and innovation. It’s understanding that fiscal responsibility and shared prosperity can go hand-in-hand, as they did when Bill Clinton was president...

That last sentence refers to the “virtuous cycle” of fiscal responsibility which I researched and wrote about in President Clinton’s final Economic Report, in Chapter 2, pages 79-93.  (I was the Council of Economic Advisers’ senior economist for budget and tax policy for that last year of the Clinton Administration and the first 100 days of the Bush Administration.)  I think it’s good to read this and reflect on how much the fiscal outlook has changed since January 2001.  In particular, if you read the last subsection on “The Importance of Maintaining Fiscal Discipline,” it’s clear how little the advice from the outgoing Clinton Administration was heeded by the incoming Bush Administration.

Sigh...

Jared Bernstein tells us that Mark Schmitt writes, apropos of the execrable David Brooks:

Brooks also completely mishandles the analysis of Obama's donors that is at the heart of the column. First,he makes it sound like Obama is lying:

When he is swept up in rhetorical fervor, Obama occasionally says that his campaign is 90 percent funded by small donors. He has indeed had great success with small donors, but only about 45 percent of his money comes from donations of $200 or less...

It's not that complicated: 90 percent of his donors are <$200 and they account for 45% of the money. Either number is staggering, totally unprecedented, as is the ratio.

But because these smaller donors are not required to provide occupational information, they don't figure at all in Brooks' analysis of $ from commercial bankers, hedge funds, etc. So when he says, "the real core of [Obama's] financial support is the rising class of information professionals," he should be clear that he's only talking about 10% of his donors. In fact, all the categories he identifies, including "professors and other people who work in education," put together amount to less than 20% of Obama's total of $290 million.

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

John Timmer:

Why Judy can't add: gender inequality and the math gap: [T]here's a gender gap in performance on tests of basic skills: boys tend to perform better at math, while girls get superior reading scores. It has been suggested that these gaps are the result of biological differences.... But a new study suggests that, when it comes to math, we can forget biology.... A total of over 275,000 students in 40 countries took the PISA exam as 15-year-olds.... [T]he math gap wasn't consistent between countries. For example, it was nearly twice as large as the average in Turkey, while Icelandic girls outscored males by roughly 2 percent. The general pattern of these differences suggested to the authors that the performance differences correlated with the status of women....

Scandinavian countries such as Norway and Sweden score very high on gender equality measures; in these nations, the gender gap on math performance is extremely small. In contrast, nations at the other end of the spectrum, such as Turkey and Korea, had the largest gender gap....

The frightening thing, from a male perspective, is that a lack of gender equality also seems to be holding down girls' reading scores. Female superiority in reading tests is slightly lower than average in Turkey, but the gap is actually wider in countries with greater equality between the sexes. In Iceland, for example, girls outscore boys by well over 10 percent.

The math gender gap thus joins a long list of differences in test scores that were once ascribed to biology, but now appear to be caused by social influences. The study, however, leaves us with yet another question of this sort: why do boys appear to read so poorly? We clearly can't ascribe it to social inequality, but that doesn't mean it isn't due to some other social factor.