## Ten Pieces Worth Reading, Mostly Economics: February 25, 2010

1) SPECIAL BONUS STUPIDEST MAN ALIVE EVER CONTEST: The Stupidest Man Alive contest is now closed for all time. The winner--who should make his apologies to the Emperor immediately--is Clark Hoyt of the New York Times for saying:

The story says O’Keefe dressed up as a pimp and trained his hidden camera on Acorn counselors. It does not say he did those two things at the same time.

The Edge of the American West: This nonsense from Clark Hoyt cracked me up.... Really brings me back. In grad school, I taught introductory logic courses, and one of the standard things we did was cover basic propositional logic and natural deduction. The idea is to teach formal logic by showing students how to work in an artificial language made of up of atomic propositions (symbolized with p, q, etc.) and truth-functional connectives (&, v, -, etc.). A connective is truth-functional just in case the truth value of a compound sentence made with this connective is determined entirely by the truth values of the component sentences and the way the connective works. For example, suppose we’re dealing with “&” in our artificial language. p&q is true just in case p is true and q is true: that is, all you need to know is the truth values of p and q, and you’ll know what the truth value of p&q is.

And here the Hoyt-type examples come in. I used to use examples where temporal relations mattered to suggest that the artificial language “&” is not really the same as the ordinary-language “and.” It’s kind of like a crude approximation. A classic:

(i) John and Mary got married and had a baby

is different from

(ii) John and Mary had a baby and got married

The natural language version either says or suggests that the events happened in that order, while our “&” doesn’t care about that--all that matters is the truth values of “John and Mary got married” and “John and Mary had a baby.” The lesson to take from this is that our artificial language is different from spoken English in just this way: only the artificial connectives are truth-functional. It’s great to see this old chestnut of a point in the news. Next: Clark Hoyt wonders about justified true belief!

(There are some debates about whether the ordering is just an implicature or part of the truth conditions of the ordinary language sentence. Some people will die in the last ditch arguing for the the truth-functionality of the English “and,” but, if the best the public editor can do is to say “we didn’t print something false; we printed something that was, strictly speaking, true, that we knew ordinary readers would misunderstand,” well, he’s still lousy.)

President Barack Obama is in a difficult position when it comes to deficits. Today's high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What's a president to do? The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead. The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t. But this is rarely accurate....

With more than a fifth of the work force expected to be unemployed or underemployed in 2010, there is an economic and a moral imperative to take action. Persistently high unemployment drives poverty up, makes it harder for families to find decent housing, increases family stress and, ultimately, harms children’s educational achievement. For young workers entering the workforce, the current jobs crisis reduces the amount they will earn over their lifetime. In deep recessions, businesses tend to make fewer critical investments in research and development that can improve our economy’s productive capacity over the long term. Entrepreneurs usually find credit hard to obtain if they want to start a new business. These factors hurt U.S. global competitiveness and growth potential. That’s why we agree that job creation must be a short-term priority. Job creation plans must be targeted so we can get the greatest return on investment. They must be timely, creating jobs this year and next. And they must be big enough to substantially fill the enormous jobs hole we’re in. They must also be temporary — affecting the deficit only in the next couple of years, without exacerbating our large and growing structural deficits in later years....

For all the disagreement in Washington, we both know that, like us, there are many who see the critical importance of addressing these challenges. We must accept higher deficits in the short-term in order to put people back to work.

At the same time, we must take immediate steps to agree on a path and a process for reducing the structural deficits that lie ahead.

Peter Orszag, the high-energy director of the White House Office of Management and Budget, recently shared some good news with Politico. No, he hasn't solved the country's economic problems. But he's learned that his genetics won't be crimping a caffeine habit that fuels 80-hour work weeks spent trying to erase a trillion-dollar deficit. While attending a conference, Orszag learned from biologist Craig Venter that he could get screened for a genetic marker that can raise the risk of heart disease when lots of caffeine is consumed. Orszag, who drinks vast amounts of Diet Coke, went ahead with the test. Luckily for him he's in the clear. "If that test had come out the wrong way, you would not have wanted to be around me afterwards, because to give up caffeine would have been very painful," Orszag told Politico reporter Mike Allen. The Office of Managament and Budget said that Orszag was traveling today and couldn't provide additional details-including whether he'd learned anything about his genetic predisposition to other diseases. But ScienceInsider guesses that he was referring to a single nucleotide polymorphism (SNP) called rs762551 that modulates a caffeine metabolizing enzyme in the liver. Those with a "slow" metabolizing version who drink a few cups of coffee a day are at a higher risk of heart attacks.

I am thrilled, as are many others, that Congress has found a way to actually move forward on an issue. I refer to the apparent progress of the \$15-billion job-creation bill. Unfortunately, as I've explained before, I'm pretty sure the legislation won't have as much of an impact as we're hoping for.... Seems what businesses really want is more demand for their products and services. Duh, right? Government spending would drum up demand in plenty of industries, but I guess more government spending creates a political problem....

Here's another idea. What about funneling more money to state and local governments? A whole lot of police officers and teachers didn't lose their jobs this past year because of the stimulus bill of early 2009. Maybe those would be some good jobs to save...

In Kentucky, GOP establishment candidate and secretary of state Trey Grayson is running against insurgent challenger Rand Paul, the son of Rep. Ron Paul (R-TX), in a contentious GOP Senate primary. With the margin between the two closing, and some polls even showing Paul leading Grayson, the secretary of state issued a desperate attack ad this week, taking aim at Paul for a speech he made in 2008. Grayson’s complaint? Paul acknowledged to the assembled crowd that coal “is a very dirty form of energy,” and thus, “one of the least favorable types of energy.” Watch it: Of course, Paul is right. According to the American Lung Association, nearly 24,000 Americans die every year from illnesses directly related to pollution from coal-fired plants, and coal is the largest source of human-generated mercury pollution. By challenging the myth of “clean coal,” Paul joins Sen. Lamar Alexander (R-TN), who last year admitted that coal “is a dirty business.”

Ben Bernanke, Federal Reserve chairman, on Wednesday told Congress that although the US was experiencing a “nascent economic recovery”, interest rates would remain at their extremely low current levels. “The Federal Open Market Committee continues to anticipate that economic conditions...are likely to warrant exceptionally low levels of the federal funds rate for an extended period,” Mr Bernanke told the House financial services committee. Mr Bernanke was testifying on Capitol Hill for the first time since his confirmation last month to a second term as Fed chairman. “A sustained recovery will depend on continued growth in private-sector final demand for goods and services,” Mr Bernanke said, highlighting a recent pick up in consumer spending and “tentative signs of stabilisation” in the US labour market, which is still suffering from an unemployment rate of 9.7 per cent.... Mr Bernanke’s insistence that rate hikes were still far away will dampen fears that last week’s increase in the discount rate - at which commercial banks can borrow emergency cash from the central bank - from 0.5 per cent to 0.75 per cent - is a precursor to a swifter tightening of monetary policy. “These adjustments [to liquidity policies put in place during the crisis] are not expected to lead to tighter financial conditions for households and businesses and should not be interpreted as signalling any change in the outlook for monetary policy, which remains about the same as it was at the time of the January meeting of the FOMC,” Mr Bernanke said.

Mr Bernanke said that “at some point” the Fed would have to tighten monetary policy in order to avert a spike in inflation, which he described as “subdued”. The Fed has this month laid out its vision for the sequence of measures it expects to take in order to shrink the money supply. “We are confident that we have the tools we need to firm the stance of monetary policy at the appropriate time,” Mr Bernanke said...

6) DELONG SMACKDOWN OF THE DAY: wcw, on my claim that Cowgirl Creamery Red Hawk Is the Best Cheese in the World:

No, it isn't. It may not even be the best in Petaluma (try Bellwether Farms). It is, however, very good cheese, and it may well be the best triple-cream made in Petaluma. In the world. Sheesh. You have heard of this place called 'Europe', right?

7) GRAPH OF THE DAY: Via Paul Krugman, who got it somewhere else:

Note: I think O'Brien (1982) is more right than Maddison (1995).

8) BEST NON-ECONOMICS THING I HAVE READ TODAY: Matthew Yglesias: Coleman & Holtz-Eakin on the Need for the American Action Network:

With regard to my question of why existing right-wing think tanks aren’t good enough and there’s a need instead to create a new American Action Network, my colleague Victor Zapanta actually went to the launch event today and asked.... The main theme seems to be the idea that ANA will have a kind of rapid-response capability that existing outfits lack. But the Heritage Foundation does a lot of this stuff on its blog where you can find, e.g., lots of quick reactions to the White House health care bill. At any rate, Holtz-Eakin has historically taken some unorthodox policy positions. He thinks global warming is real and should be combatted with a cap-and-trade policy, for example, though he succeeded in making up some rationalization for opposing Waxman-Markey. Is he going to stick with those views, or will he follow his old boss into incoherent efforts to fall into line with the orthodoxy?

This is one of the least credible displays of disingenuousness ever seen on this blog, which is saying something. Do you seriously expect these people to answer, “AEI and Heritage are so discredited by their association with failed, unpopular ideas that we see a space for a new organization that can rebrand these the way CAP temporarily rebranded warmed over neoliberalism as something new and appealing”?

9) STUPIDEST THING I HAVE READ TODAY: Ron Fournier of the Washington Post, as observed by Digby: Lies And Damned Bloggers:

Ron Fournier wrote in yesterday's WaPo about the lying rightwingers at CPAC and the equally dishonest liberal activists who hate them. His theme is that Real Americans are sick of all this lying by the partisans of both sides and just want the truth. He then takes an example of each side's lies to illustrate this. The first is Mitt Romney... front runner for the Republican nomination, at CPAC. He points out that Romney lied about the Democrats' policies on taxes, jobs, deficits, tort reform, and the treatment of terrorist suspects....

For the Democrats he used as an example an anonymous diarist at DKos who wrote that Dick Cheney was a "self-confessed war criminal," insisting that's a lie because Cheney has not been charged with a war crime, nor has he confessed to one. Aside from the bizarre asymmetry of a top tier presidential candidate and an anonymous blogger being used as equal examples of bipartisan lying, he didn't even get it right. It's true that Cheney has never been formally charged with a war crime, but Dick Cheney did go on national television just a week ago and blithely admit, “I signed off on it; others did, as well, too,” when he was asked about waterboarding. Waterboarding is a war crime. Here's just one example out of many that have been prosecuted:

Chase J. Nielsen, one of the U.S. airmen who flew in the Doolittle raid following the attack on Pearl Harbor, was subjected to waterboarding by his Japanese captors. At their trial for war crimes following the war, he testified "Well, I was put on my back on the floor with my arms and legs stretched out, one guard holding each limb. The towel was wrapped around my face and put across my face and water poured on. They poured water on this towel until I was almost unconscious from strangulation, then they would let up until I'd get my breath, then they'd start over again... I felt more or less like I was drowning, just gasping between life and death." Cheney can say that he doesn't believe that waterboarding should be a war crime but that doesn't mean it isn't one.... But hey, by all means, let's pretend that Mitt Romney's lies and this anonymous blogger's truth are both to blame for the fact that the country has no faith in politicians. Luckily we have the village arbiters of reality to help us work our way through it.

10) HOISTED FROM THE ARCHIVES: DeLong (2006): The Indian Economy Blog » Nick Kristof on India Vs China:

English will remain the most widely spoken language of the world, not because of a larger American population, but because of rising numbers of Indians who use it.