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May 2010

The Future Is Not Evenly Distributed, But It Is Very Definitely Here

Joel Johnson:

The iPad Is Such A Great Travel Computer I'm Selling My Laptop: Nothing about this story is inherently all that shocking. More or less I just told you: "I used an iPad." But the real-life experience hammered home how useful this form factor really is, primarily because of its ridiculously good battery life. I went nearly 24 hours without charging my iPad, watching four hours of video, reading books for a couple of hours, getting in a few rounds of Strategery, and still had a bit less than half of my battery life left when I hit the ground three planes later. That longevity changes the experience profoundly, more than making up for the iPad's deficiencies for me. Except for editing video, there's not a single thing in my workflow that I can't do on the iPad, and I haven't even begun to experiment using VNC or other screen sharing tools to connect back to my iMac to access its "real" computing power.

Naturally, what works for me may not work for you. I'm not advocating that everyone ditch their laptops immediately. There are plenty of tasks a touch tablet just doesn't do as well as a traditional laptop.... But I returned from this trip convinced that this form factor has legs. (And everything I came to appreciate about the iPad's merit as a travel computer should apply to Android and WebOS tablets, if and when those actually make it to market with a consumer-friendly level of UX refinement.) Since I have a power-guzzling traditional computer on my desktop to do all the heavy lifting when I'm home, I don't see a place for my laptop in my life right now...

Hal Varian says: Google's I/O 2010 is tomorrow and Thursday...

Department of "Huh?!"

Marc Ambinder is unaware that there was ever such a person as George W. Bush:

Why Blumenthal's Not a Liar: In the United States,  military service is sacral; it conveys an instant authority, a pedigree, a cultural backstop for character. Lying about it, even exaggerating about it, is therefore instantly disqualifying...

Hoisted from Comments: SomeCallMeTim Reports from Portland


It's Like Ra-a-a-a-ain on Graduation Day!: Ha! We've only had dribs and drabs of sun, and last week the weather catchphrase was 'March weather in May - unusual, but not unheard of.' Also, don't forget that 'sunbreaks' was popularized here in the Willamette Valley decades ago, as a way to celebrate 2 minutes of sun or very bright clouds on an otherwise thick gray blanket day in November-midJune.

[I wouldn't wish this weather on the Bay Area - I have fond memories of two weeks a month of sun all through the winter in Berkeley and Oakland.]

PS Sent more prozac and full spectrum lighting!

Department of "Huh?!"

Newt Gingrich:

Newt Gingrich: The secular-socialist machine represents as great a threat to America as Nazi Germany or the Soviet Union once did...

Fox News:

Fox News: Gingrich said that he stands by his argument that the "secular-socialist machine" represents as great a threat to America as Nazi Germany or the Soviet Union...

As I have said before, no American patriot has any business giving money to, working for, or voting for these clowns who run the Republican Party. Nobody. No way. No how.

Exit Polls Say MItch McConnell's Faction of Republicans Is Going to Lose...

Mitch McConnell could have spent the past three and a half years (i) trying to make American government work, and run for re-election as the can-do Minority Leader who helped make America work and made sure that all the moonbatty things the Democrats wanted to pass were amended and modified so that as passed they are actually good for the country.

Mitch McConnell could have spent the last three and a half years (ii) trying to keep American government from working, and run for re-election as the new broom that needs to be brought in to sweep out the Democrats, who (iii) have been unable to accomplish anything.

But it now looks as though enough of Kentucky's voters think that Mitch McConnell has (i) been trying to make American government work, but that actually government (iii) has been unable to accomplish anything--and that his Republicans are some of the garbage that needs to be swept out.

Josh Green:

Rand Paul Wraps Up in Kentucky: Rand Paul... GOP voters will decide in a closed primary whether to anoint him their Senate nominee.... Paul reiterated the idea that the Tea Party has a mainstream message that revolves around term limits, balanced budget laws, fiscal discipline, and assorted other particulars meant to appeal to the angry and aggrieved. "There's a tidal wave coming," Paul told the crowd, "its' already gotten to Utah, and tomorrow it's coming to Kentucky."... "If we win tomorrow," he said, "it will be the first victory for a Tea Party candidate, and we will define the direction of the Republican Party."

In my talks with voters on the campaign trail today and yesterday, the idea that the Republican Party is as complicit as the Democratic Party in what ails the country is something I heard again and again.... [R]egistered Republican voters... frustration with Mitch McConnell, Kentucky's senior senator and the Senate Minority Leader, seemed indistinguishable from--or perhaps better to say, "was a large part of"--the general frustration with Washington. "Republicans in Washington, D.C. are just playing 'follow the leader,' Janice Cox told me at a rally in Paducah earlier today, to which she'd brought her daughter, grandchildren, and a jumbo-sized American flag. "We need a true constitutional conservative."... Trey Grayson wants to balance the budget eventually, but Paul wants to do it in a single year. Grayson wants to rein in earmarks without banishing them outright (Kentucky benefits greatly from earmarks, especially given McConnell's seniority), Paul wants to do away with them altogether. It's almost unfair to Grayson that this is costing him so dearly--he is being responsible in saying that the budget is not going to get balanced in one year (it's not), and he's looking out for the state's interests by wanting to bring home the pork. But it's clear, just as it was in Utah last week when Sen. Bob Bennett lost, that voters are angry and far more interested in a candidate who speaks in absolutes.

Oh, excellent! A meeting where the most important person has a hard deadline and this we have a hard closing time!

Winston Churchill Liveblogs World War II: May 18, 1940

Winston Churchill: May 18, 1940:

Former Naval Person to President Roosevelt:

I do not need to tell you about the gravity of what has happened. We are determined to persevere to the very end, whatever the result of the great battle raging in France may be. We must expect in any case to be attacked here on the Dutch model before very long, and we hope to give a good account of ourselves. But if American assistance is to play any part it must be available soon.

links for 2010-05-17

  • RB: "More jobs might be created this year than during George W. Bush's entire presidency"
  • PK: "With a unified currency, adjustment to differential shocks requires adjustments in relative wage.... At this point, wages in Greece/Spain/Portugal/Latvia/Estonia etc. need to fall something like 20-30 percent relative to wages in Germany.... How hard will it be to achieve this? Look at Latvia, which has pursued incredibly draconian austerity. Unemployment has risen from 6 percent before the crisis to 22.3 percent now — and wages are, indeed, falling. But even in Latvia labor costs have fallen only 5.4 percent from their peak; so it will take years of suffering to restore competitiveness. The official answer is that this just shows the need for more flexible labor markets. But this was a subject we all batted back and forth in the initial debate about the euro, circa 1990: nobody has labor markets that flexible. If the euro isn’t workable without highly flexible nominal wages, well, it isn’t workable. Anyway, this is my morning euro rant."
  • MY: "[T]here’s a nearly universal consensus in the literature that immigration grows the economy and increases... the wages of the average American worker... a negative impact on the wages of people who don’t have a high school degree, although some researchers dispute even that.... [T]he negative impact... concentrated on... other immigrants.... [T]hese are all pretty intuitive.... If two percent of the population was irrevocably teleported at random to Mexico... Monday... that would lead to a decline in overall living standards.... [In] a peasant society with a fixed supply of arable land... 80 percent... working in agriculture... things might look different, but that’s not the case. Even “unskilled” people have some skills, and adding to the pot makes us better off, especially because some “unskilled” people actually possess skills that are quite rare... But cohorts of immigrants have very similar skills to each other so pulling up the gate might help recent Mexican immigrants."
  • DTA&NHM: "Using micro data on more than 130,000 individuals from 69 countries, we analyze the extent to which joblessness of the individuals and the prevailing unemployment rate in the country impact perceptions of the effectiveness of democracy. We find that personal joblessness experience translates into negative opinions about the effectiveness of democracy and it increases the desire for a rouge leader. Evidence from people who live in European countries suggests that being jobless for more than a year is the source of discontent. We also find that well-educated and wealthier individuals are less likely to indicate that democracies are ineffective, regardless of joblessness. People’s beliefs about the effectiveness of democracy as system of governance are also shaped by the unemployment rate in countries with low levels of democracy. The results suggest that periods of high unemployment and joblessness could hinder the development of democracy or threaten its existence."
  • JG: "I've only read through Beinart's essay quickly... and I think it is in many ways analytically valid, if unsympathetic to some of the existential challenges faced by Israelis. But the essay's placement, in the New York Review of Books, the one-stop shopping source for bien-pensant anti-Israelism, is semi-tragic. If Beinart's goal is to talk to the great mass of American Jews who support the institutions of American Jewry but who are troubled by certain trends in Israeli politics, this is not the way to do it. Who is he trying to convince? Timothy Garton Ash? Peter should have published this essay on Tablet, or some other sort of publication not associated with Tony Judt's disproportionate hatred of Jewish nationalism..."
  • JB-A: "Peter Beinart has written what I hope will be a powerful wake-up call to the leadership of the American Jewish establishment. J Street shares Beinart’s deep concern over the consequences of the course that leadership has chosen: blind support of Israel ‘right-or-wrong’ and demonization and black-listing of those who disagree with Israeli policy. Beinart - with his impeccable pro-Israel credentials - is hopefully an effective messenger to convince the American Jewish establishment that it is not simply enabling self-destructive Israeli behavior that is damaging American interests, it is sowing the seeds for the end of the American Jewish community as we know it."

Why We Need a New and Very Different Opposition to the Democrats than We Actually Have

Thoreau watches Tom Campbell pretend to be a wingnut:

Damnit! § Unqualified Offerings: Once upon a time I remember Tom Campbell saying vaguely sane things about drug policy.  That’s more than you can get from most politicians in either party, especially those who aren’t on the fringes with Ron Paul and Dennis Kucinich.  So I was all set to vote in the GOP primary in a few weeks (as a registered independent I have the option to vote in a major party primary here).  And then I read this. Now, I could handwave it away as being pretty tame by GOP standards, since he doesn’t call for torture or not holding a trial.  He just says that the questioning should take place without the official warnings.  Still, we all know how this goes, we all know that when you start loosening the rules binding the government it usually bodes pretty poorly for our freedom (or our security, for that matter).  It doesn’t matter if things work out great in some Ideal Platonic Miranda-free interrogation, because in Real Actual interrogations cops who are told “Don’t worry about the rules” tend to do pretty bad things.

I was never a fan of  the GOP, but I used to think that there might be a few sane people in that party.  Alas, even one of The Good Ones has gone bad...

Why We Need a New and Very Different Opposition to the Democrats than the One We Have

William A. Galston and Thomas E. Mann:

The GOP's grass-roots obstructionists: For decades, the operational core of bipartisanship in Congress was the overlap between the parties. Through a long process triggered by the politics of the 1960s, that core has disappeared.... What The Post's editorial missed, however, is that these developments have not produced two mirror-image political parties. We have, instead, asymmetrical polarization.... More than 70 percent of Republicans in the electorate identify themselves as conservative or very conservative, while only 40 percent of rank-and-file Democrats call themselves liberal or very liberal....

Consider the episode that The Post cited as Exhibit A for polarization: Sen. Robert Bennett's commendable work with Democratic Sen. Ron Wyden to develop a bipartisan health bill, which was used against him by conservative Utah activists to deny him renomination. The Post failed to note, however, that Senate Republican leader Mitch McConnell pulled the plug on the Wyden-Bennett initiative well before health reform was taken up last year. Bennett and other Republican co-sponsors of this bipartisan bill were told in no uncertain terms that the party strategy was to block every major domestic policy initiative of the new administration and not to engage in substantive negotiations that could produce bipartisan majorities on the floor. During the lengthy health debate, not one Senate Republican spoke in support of the Wyden-Bennett bill. Tea Party activists outraged at Republican incumbents for cavorting with the enemy (i.e., Obama and the Democrats) took their cue from Republican Party leaders.

Under these conditions of asymmetrical polarization, Congress can become a haven for obstruction and gridlock rather than deliberation and compromise.... [W]hen the people are divided, the most strident voices tend to dominate, and Congress reverts to the all-too-familiar pattern of behavior that has driven its public esteem to a record low. And a Republican Party dominated at the grass roots by angry rejection of all bipartisanship -- and of all but the most limited government -- may win support in the short term, but it will be hard put to cooperate productively in the serious tasks of governance.

The Sun on the Meadow Is Summery Warm...

We need another, very different, center-right alternative to the Democrats--not the alternative we have now.

Paul Krugman:

Going to Extreme: Utah Republicans have denied Robert Bennett, a very conservative three-term senator, a place on the ballot, because he’s not conservative enough. In Maine, party activists have pushed through a platform calling for, among other things, abolishing both the Federal Reserve and the Department of Education.... [P]ower within the G.O.P. rests with the ranting talk-show hosts.

News organizations have taken notice: suddenly, the takeover of the Republican Party by right-wing extremists has become a story (although many reporters seem determined to pretend that something equivalent is happening to the Democrats. It isn’t.) But why is this happening? And in particular, why is it happening now?... I’d like to offer two alternative hypotheses.... Republican extremism was there all along — what’s changed is the willingness of the news media to acknowledge it.... [T]he power of the party’s extremists really is on the rise [because] it’s the economy, stupid....

[T]he new Maine platform is if anything a bit milder than the Texas Republican platform of 2000.... Somehow, though, the radicalism of Texas Republicans wasn’t a story in 2000, an election year in which George W. Bush of Texas, soon to become president, was widely portrayed as a moderate. Or consider those talk-show hosts. Rush Limbaugh hasn’t changed.... What’s changed is his respectability: news organizations are no longer as eager to downplay Mr. Limbaugh’s extremism as they were in 2002, when The Washington Post’s media critic [Howard Kurtz] insisted that the radio host’s critics were the ones who had “lost a couple of screws,” that he was a sensible “mainstream conservative” who talks “mainly about policy.”

So why has the reporting shifted? Maybe it was just deference to power....

To be fair... extremism... has more adherents now.... Why?... [A] troubled economy.

True, that’s not how it was supposed to work. When the economy plunged into crisis, many observers — myself included — expected a political shift to the left. After all, the crisis made nonsense of the right’s markets-know-best, regulation-is-always-bad dogma. In retrospect, however, this was naïve: voters tend to react with their guts, not in response to analytical arguments — and in bad times, the gut reaction of many voters is to move right.... The rise of the Tea Party, in other words, was exactly what we should have expected in the wake of the economic crisis.

So where does our political system go from here? Over the near term, a lot will depend on economic recovery. If the economy continues to add jobs, we can expect some of the air to go out of the Tea Party movement. But don’t expect extremists to lose their grip on the G.O.P. anytime soon. What we’re seeing in places like Utah and Maine isn’t really a change in the party’s character: it has been dominated by extremists for a long time. The only thing that’s different now is that the rest of the country has finally noticed.

And Doug Henwood:

Recessions: Better for Right than Left: For a long time, I’ve been critical of... radicals [who] have fantasized that a serious recession—or depression—would lead to mass radicalization.... I’ve long thought that was nonsense, and now there’s empirical support for my position.... Markus Brückner and Hans Peter Grüner showing that recessions boost the vote for extreme right-wing and nationalist parties.... Krugman’s little summary was tantalizing, so I tracked down the original.... 16 European countries... 1970 to 2002.... Brückner and Grüner speculate that a major selling point of far-right parties is “nontraditional” redistribution—not so much from rich to poor, but away from ethnic, occupational, or regional minorities. They don’t say why the appeal of “traditional” redistribution—from rich to poor—might not reflect the business cycle. Whatever the reason, recessions are not good for the left and are good for the right. A major exception, of course, was the U.S. in the 1930s, but that one took the unemployment rate up to 25%. And that Great Depression didn’t do much for the left in Europe. So please, let’s put this one away and stop hoping for the worst.

William Galston Asks: "My Question Is Not Whether Larry Summers Is a Brilliant Brain but Whether There Is Anyone Who Has the Ability to Challenge His Point of View"

The answer is "yes." Tim Geithner, Peter Oszag, and Christy Romer can certainly Challenge Larry Summers. Jared Bernstein probably could, but he may not have realized that, as Christy Romer puts it, "it is a sign of respect when Larry argues with you. Far better than being ignored." And there is no f---ing doubt that Rahm Emmanuel can f---ing stand up to Larry Summers any f---ing time he wants.

Galston appears to me to simply be off-base.

Ed Luce surveys the terrain:

America: A middle course: According to Barack Obama’s liberal critics, the US president betrayed the progressive cause before inauguration day by selecting a bunch of Clinton-era advisers to run his economic team... the most experienced and market-friendly Democratic economists available.... Eighteen months later, they argue, the president is a prisoner of the authors of the late 1990s Wall Street deregulation that paved the way for the 2008 crisis. Worse, he is suffering from Stockholm syndrome – a captive who loves his jailers....

Mr Obama’s presidency will stand or fall on the success of his economic policies. Does he have the best people around him? And, having quenched the fires of the financial crisis, can they build an economy for the 21st century? Mr Obama has a core economic team of five people whom he meets each morning for about 45 minutes. Headed by Mr Summers... Tim Geithner, Treasury secretary and a former protégé of Mr Summers; Peter Orszag, the budget director, who served in the Clinton White House; Christina Romer, who chairs the Council of Economic Advisers, an in-house think-tank, and was an academic at University of California, Berkeley; and Jared Bernstein, economic adviser to Joe Biden, vice-president, and the most liberal participant.... Rahm Emanuel, his chief of staff; Valerie Jarrett, a senior adviser; Mr Axelrod; and Mr Gibbs... sometimes joined by Jason Furman or Diana Farrell, Mr Summers’ deputies; Neal Wolin, deputy Treasury secretary; or Austan Goolsbee, Ms Romer’s deputy.

All the signs are that Mr Obama wants to keep the team he has – indeed, he recently persuaded Mr Orszag to stay on. In spite of his ebullient style, Mr Summers, whose ambition to head the Federal Reserve was thwarted last August when Mr Obama reappointed Ben Bernanke as chairman, is highly valued by the president. “There are times when Larry and I have shocked non-academic colleagues by arguing as we would in an economic seminar,” says Ms Romer. “But it’s a sign of respect when Larry argues with you. Far better than being ignored.”

Mr Summers is the intellectual driving force of the group.... “While this administration is very much driven by the inner circle of political advisers, Summers has clearly emerged as Obama’s economic [Henry] Kissinger,” says David Rothkopf, a former Clinton official.... Summers describes the president as: “Pragmatic, non-ideological and market-oriented but not fundamentalist”. For Mr Orszag, he is “pragmatic but centrist and pro-free market”. Ms Romer says: “The key thing is pragmatism – his philosophy is not ideological but he is truly pro-market.” Mr Bernstein, who converted to Buddhism some years ago, says the adjectives he would use “are balanced, pragmatic, Zen”.... [A]ll emphasise that Mr Obama found no pleasure in taking temporary ownership of General Motors, the carmaker, or stakes in the troubled banks. In addition, the president’s economic advisers point out that they have done far more in the past year than put out the fire. The enactment in March of Mr Obama’s 10-year $1,000bn healthcare reform was a key foundation stone in America’s new economic building, they argue. Mr Summers, initially sceptical about pushing such a big reform in the midst of a crisis, ended up arguing for retention of the full bill when others suggested slimming it down following the loss of the late Ted Kennedy’s Senate seat in Massachusetts in January. Both Mr Summers and Ms Romer were also enthusiastic about the bill’s potential to reduce future deficits. “There were strong economic reasons why you could not get half the bill at half the price,” says Mr Summers.

But scepticism persists.... While conceding Mr Summers is probably the best economic brain available as an adviser, critics question his enthusiasm for the other half of his job – running the inter-agency process. “Whether President Obama is a guy who appreciates the importance of the structural process that produces the best possible input into the economic conversation – well, you’d have to say it doesn’t seem like it,” says John Podesta, a former chief of staff to Mr Clinton.... William Galston... highlight[s] a different problem: the fact that Mr Summers is unchallenged as the “alpha brain” in the room.... “My question is not whether Larry Summers is a brilliant brain but whether there is anyone who has the ability to challenge his point of view,” says Mr Galston. “I know in my case that when I hear a fluent, and seemingly unimpeachable argument, what I want to hear next is an equally fluent rebuttal. Does President Obama have that? Brilliant brains also get it wrong.”

Questions have also arisen about the extent to which the inner circle overrides advice from the economic team....

Yet the president has confounded critics before. “Over the last five years, anyone who has shorted Obama has lost money,” observes one economist. Many hope he will unleash a more creative phase of economic policymaking after November’s midterm elections.... After that, optimists hope, the president will have a freer hand to propose more radical solutions to cut through America’s fiscal conundrum by confronting the runaway entitlements inflation and even by taking on bloated defence outlays, hitherto considered off limits. “We have 11 aircraft carrier formations and three different platforms to fire nuclear weapons at the USSR,” says Mr Frank. “It doesn’t make much sense to me.”...

As the saying goes, Mr Summers serves at the president’s pleasure. For the time being, that pleasure appears to be mutual.

The Garance on the Kagan Thesis

Garance Franke-Ruta:

Kagan theses to be available online: The White House announced Monday that it would make Supreme Court nominee Elena Kagan's Princeton senior thesis available for online publication. Her Oxford graduate thesis would also be made available for online posting, a White House official said, as "a demonstration of our commitment to transparency." Permission... will be granted when the White House sends the Senate Judiciary Committee Kagan's responses to questions from the panel about her background.... Princeton University had sent news organizations and blogs copies of the thesis for research and personal use purposes -- hence the many excerpts from it in news stories -- but objected when a conservative blog posted the full document online late last week. The university... [said] Friday that only Kagan could give that permission because she was the copyright holder on the 1981 document detailing the collapse of the Socialist Party in New York.

Asked by The Post for permission to publish the document Friday, the White House said it would review the matter. Other major media outlets also requested permission last week to publish the paper. Access to the senior thesis... threatened to become a point of controversy after conservative blog published it online Thursday, only to receive a letter Friday from Princeton demanding that it be taken down. RedState complied, but over the weekend liberal blogger and economist Brad DeLong also objected to the university's stringent defense of its former student's copy rights and published the thesis, sparking anew attention to the question of why Princeton was seeking to keep the full document out of the public record.

Blog Infidels Are Cool also had published the thesis Thursday and on Friday a Washington state man uploaded it onto Scribd, further demonstrating the difficulty of keeping documents off the Web once they have been formatted electronically, especially in a media environment in which small, nontraditional outlets routinely flout copyright laws and citizens have access to powerful document-sharing technology. By opening access to the theses, the White House seemed to be signaling that it recognized the theses would be less of an issue -- conservative bloggers have seized on the Princeton thesis to argue that Kagan, and by extension Obama, are socialists -- if made freely available to the public.

I have two points:

First, as I wrote before:

Elena Kagan's Undergraduate Thesis: UPDATE: Elena Kagan's thesis does not seem to have brought any clarity of thought. Interpretations of it seem to depend on whether the phrase "those who" (in "those who, more than half a century after socialism's decline, still wish to change America [in a radical way]") means "people like my advisor Sean Wilentz and my brother" or "people like my advisor and my brother and me."

I believe it is much more likely than not that "those who" carries the first meaning. Remember, she was crafting the thesis to resonate with those who would grade it--with Sean Wilentz and his colleagues. I think it highly probable that if she had placed herself among "those who" she would have used a different phrase: "we who."

I think that her takeaway from her thesis was Clintonian (and Obamaian): radicals in America need to shut up, take their place at an oar, and row like hell for minor reformist victories.

The thesis is, I believe, mostly an argument against Glenn Greenwald and his fears that Elena Kagan is really John Roberts in disguise...

Second, Princeton's letter:

Daniel J. Linke of Princeton University Writes to Erick Son of Erick:

From: Daniel J. Linke
Subject: Kagan senior thesis copyright violation
Date: May 14, 2010 3:04:42 PM EDT


Dear Sir or Madam:

It has been brought to my attention that you have posted Elena Kagan’s senior thesis online. (See: Copies provided by the Princeton University Archives are governed by U.S. Copyright Law and are for private individual use only. Any electronic distribution is prohibited, as noted on the first page of the copy that is on your website. Therefore I request that you remove it immediately before further action is taken.

Please notify me as soon as possible that you have removed it from your web site.

Sincerely yours,
Daniel J. Linke

University Archivist and Curator of Public Policy Papers
Seeley G. Mudd Manuscript Library
Princeton University

is misleading in two respects:

  • it does not say "electronic distribution is prohibited without the permission of the copyright holder, Elena Kagan"; it says "electronic distribution is prohibited."
  • it does not say "I request that you remove it or we will inform the copyright holder, Elena Kagan, that you may be in violation of her copyright"; it says "I request that you remove it immediately before further action is taken."

I don't think that either of those misleading statements is misleading by accident.

Elena Kagan's Undergraduate Thesis

UPDATE: Elena Kagan's thesis does not seem to have brought any clarity of thought. Interpretations of it seem to depend on whether the phrase "those who" (in "those who, more than half a century after socialism's decline, still wish to change America [in a radical way]") means "people like my advisor Sean Wilentz and my brother" or "people like my advisor and my brother and me."

I believe it is much more likely than not that "those who" carries the first meaning. Remember, she was crafting the thesis to resonate with those who would grade it--with Sean Wilentz and his colleagues. I think it highly probable that if she had placed herself among "those who" she would have used a different phrase: "we who."

I think that her takeaway from her thesis was Clintonian (and Obamaian): radicals in America need to shut up, take their place at an oar, and row like hell for minor reformist victories.

The thesis is, I believe, mostly an argument against Glenn Greenwald and his fears that Elena Kagan is really John Roberts in disguise...

From the introduction:

Ever since Werner Sombart first posed the question in 1905, countless historians have tried to explain why there is no socialism in America. For the most part, this work has focused on external factors--on features of American society rather than of American socialist movements. Socialists and non-socialists alike have discussed the importance of the frontier... the fluidity of class lines... the American labor force's peculiarly heterogeneous character, which made concerted class action more difficult than it might otherwise have been. In short, most historians have looked everywhere but to the American socialist movement itself for explanations of U.S. socialism's failure. Such external explanations are not unimportant but neither do they tell the full story. They ignore or overlook one supremely important fact: Socialism has indeed existed in the United States.... The Socialist Party increased its membership from a scanty 10,000 in 1902 to a respectable 109,000 in the early months of 1919... a party press that included over three hundred publications with an aggregate circulation of approximately two million....

The success of the socialists in establishing a viable--if minor--political party in the early twentieth century suggests that historians must examine not only external but also internal factors if they hope to explain the absence of socialism from contemporary American politics. The effects of the frontier, of class mobility, of an ethnically divided working class may explicate why the Socialist Party did not gain an immediate mass following; they cannot explain why the growing and confident American socialist movement collapsed....

We are, then, left with three ultimately inadequate explanations of the sudden demise of a growing socialist movement. The otherworldliness of the socialists, the expulsion of Haywood in 1912, the Russian Revolution of 1917--none will satisfactorily explain the death of social- ism in America. What, then, was responsible? In attempting to answer this question, this thesis will focus almost exclusively on the history of the New York City local of the Socialist Party....

The collapse of New York socialism, although sudden, had deep roots indeed. From its first days, the New York SF was both divided within itself and estranged from many of its trade-union followers. Among the party's members, a right-left cleavage arose early--a cleavage based not on the minutiae of dogma but on the very fundamentals of socialism itself. What was the proper class composition of a socialist party? What trade-union and electoral policies should the party follow? What attitude should the party take toward distinctly non-radical reform measures?... At the end of 1918, old disputes quickly reappeared, but this time in even fiercer form. For years, large numbers of the SP's members and large blocs of its trade-union support had expressed deep dissatisfaction with socialist leadership. Now, the Russian Revolution set the spark... and the Socialist Party burst into flames. In 1919, the SP split into two.... Intra-party sectarianism had previously weakened the socialist movement; inter-party sectarianism now finished the job...

And from the conclusion:

In our own times, a coherent socialist movement is nowhere to be found in the United States. Americans are more likely to speak of a golden past than of a golden future, of capitalism's glories rather than of socialisms greatness. Conformity overrides dissent; the desire to conserve has overwhelmed the urge to alter. Such a state of affairs cries out for explanation. Why, in a society by no means perfect, has a radical party never attained the status of a major political force? Why, in particular did the socialist movement never become an alternative to the nation's established parties?

In answering this question, historians have often called attention to various charcteristics of American society... an ethnically-divided working class, a relatively fluid class structure, an economy which allowed at least some workers to enjoy what Sombart termed "reefs of roast beef and apple pie"--prevented the early twentieth century socialists from attracting an immediate mass following. Such conditions did not, however, completely checkmate American socialism.... Yet in the years after World War I, this expanding and confident movement almost entirely collapsed.... [T]he experience of New York.... From the New York socialist movement's birth, sectarianism and dissension ate away at its core. Substantial numbers of SP members expressed deep and abiding dissatisfaction with the brand of reform socialism advocated by the party's leadership. To these left-wingers, constructive socialism seemed to stress insignificant reforms at the expense of ultimate goals. How, these revolutionaries angrily demanded, could the SP hope to attract workers if it did not distinguish itself from the many progressive parties, if it did not proffer an enduring and radiant ideal? How, the constructivists angrily replied, could the SP hope to attract workers if it did not promise them immediate benefits, if it did not concern itself with their present burdens?...

Through its own internal feuding, then, the SP exhausted itself. forever.... The story is a sad but also a chastening one for those who, more than half a century after socialism's decline, still wish to change America. Radicals have often succumbed to the devastating bane of sectarianism; it is easier, after all, to fight one's fellows than it is to battle an entrenched and powerful foe. Yet if 'the history of Local New York shows anything, it is that American radicals cannot afford to become their own worst enemies. In unity lies their only hope.

Obama Fail: Why Cass Sunstein Should Not Repeat NOT Repeat NOT!! Be Director of OIRA. Never. No Way. No How

Umm... This ain't rocket science. This really ain't rocket science at all...

Benjamin Wallace-Wells:

Cass Sunstein Wants to Nudge Us: In OIRA’s cost-benefit calculations, the government’s willingness to spend depends on how expensive the damage will be — on what economists call the social cost of carbon. Sunstein and others in the government have spent several months trying to define this cost, and he talked me through the process. One of the most important issues is the discount rate — the depreciation of money over time. All else being equal, if given a choice between paying $1 million now and $1 million five years from now, economists will choose to pay later. After all, if money depreciates at say, 3 percent a year, then spending $1 million today is the equivalent of spending only about $860,000 of today’s dollars five years from now. Over very long periods, like those involved in climate change, the discount rates that are applied to short-term problems like budgets build toward absurdity: using one common method, spending $1 million today to forestall climate change would be the equivalent of spending $2,300 in 2100. Calculations like this seem to argue against doing anything now. The problem, Sunstein says, is that we might do irreversible damage to the planet while blithely waiting for the price of action to drop just enough.... As an academic, Sunstein seemed to side with economists like William Nordhaus at Yale, who set the discount rate at about 5 percent, which would counsel patience. “It’s not clear what direction the risk of error cuts in,” he told me. “If we err, 7 percent could be bad,” he said, but “if we err, 1 percent could be bad also.” A low a discount rate might protect the environment by spurring us to sacrifice now — while damaging the economy, increasing poverty and putting more people out of work. The difficulty is that the experts are lined up “out the door and down the block on both sides of this issue,” one economist told me...

Here we have yet another example of why law professors should simply not be allowed to practice law and economics or moral philosophy without a license--and of how Cass Sunstein has never bothered to do the work necessary to acquire a license to practice law and economics.

First, "irreversible damage": we are doing irreversible damage to the environment every day in that every day human activity brings more species closer to extinction, and natural or artificial selection would never be able to resurrect them no matter how much money we would spend trying to do so. The question that must be asked: is how much we care--how damaging is the "irreversible damage," and what other goods are we willing to forego in order to avoid it? What Sunstein implies--that "irreversible damage" is something that must be avoided and that trumps cost-benefit calculations--is simply incoherent, and does nothing other than perform the function of getting him onto Obama administration message without admitting that he does not understand why the cost-benefit analysis tools he loves so much are leading him to what is for an Obama administration official an off-message conclusion.

Second, the cost-benefit analysis tools Cass Sunstein loves so much are leading him to an off-message conclusion only because Sunstein does not understand how to use them. Nick Stern's Climate Change Report uses the same tools and leads to a very different conclusion than "argu[ing] against doing anything now." The shortcut way to understand why is that there are actually three discount rates to be used in cost-benefit analysis here--(i) a nominal interest discount rate to be used for money values, (ii) a real interest discount rate to be used for real values, and (iii) a human discount rate to be used for human lives and their quality. (Plus there are risk adjustments that I won't go into here.) We tend to read the money-discount and the real-discount rates off of the market yields on long-term Treasury bonds and on long-term TIPS. But neither is appropriate if what is at stake is human lives and their quality--then something more like the TIPS yield minus the expected rate of growth of labor productivity is appropriate.

At the moment the real TIPS yield is 1.79% per year. The expected labor productivity growth rate is something north of 1.6% per year. That calls for a human-lives-and-their-quality discount rate, to be applied to global warming expenditures now, of 0.19% per year AT MOST.

Wallace-Wells's and Sunstein's 3% per year discount rate would be the right one if the human, life, and welfare cost of a given tragedy were the same in inflation-adjusted dollars in 2100 as it is today--if the amount of real value we would wish to spend to avoid a chance of 10,000,000 Bengalis drowning in 2110 would be the same as the real value we would spend to avoid a chance of 10,000,000 Bengalis drowning in the next hurricane season. But it won't be: we expect technology to progress over the next ninety years, and thus for us to be capable of and want to and be willing to spend much more money to guard against human catastrophes a century hence. Today we have 6 billion people on the world with income per capita of $7,000 a year. In 2110 we expect to have 9 billion people on the world with income per capita of $56,000 per year. Thus we expect that inasmuch as they will be richer than we are that they will value human lives and high quality lives more highly in real values and be willing to spend more to preserve and enhance them than we are.

To argue that they will not be--that avoiding a 1% chance of 10,000,000 drowned Bangalis will be worth spending no more in real value on in 2110 than it is today--is to be a moral monster.

Or a cost-benefit analyst who does not understand how to use his tools.

Hoisted from Comments: Robert Waldmann on Peter Beinart, Formerly of The New Republic

Hoisted from Comments: Robert Waldmann writes:

links for 2010-05-16:Beinart's essay is eccelent and moving. However, I was particularly struck by the fact that it was written by a former TNR editor and sometimes hawk on Iraq. I'd say that Beinart has utterly abjured the false prophet Martin Peretz. I'd say he is truly repentent and may be welcomed back into the liberal church and that his self-criticism was adequate and he may be readmitted into the Party.

However, given his tone, he earned only an honorary membership in the order of the shrill.

The main point is that his essay might actually achieve something. I'm not even Jewish[*] and I almost decided to join Beinart's effort, until I remembered that I think it is hopeless.

[*]I was Zionist in 1967 when I was 6 years old.

I, by contrast, reject Peter Beinart's self-criticism as insufficient. His [essay] lacks one key component: the answer to the question "And where were you when all this was going on?" What was Peter Beinart doing while as he writes in his [essay]((, the American Jewish establishment (it's his phrase! not mine!!) and the organizations they bossed:

the leading institutions of American Jewry... refused to foster—indeed... actively opposed—a Zionism that challenges Israel’s behavior in the West Bank and Gaza Strip and toward its own Arab citizens. For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door.... Morally, American Zionism is in a downward spiral. If the leaders of groups like AIPAC and the Conference of Presidents of Major American Jewish Organizations do not change course, they will wake up one day to find a younger, Orthodox-dominated, Zionist leadership whose naked hostility to Arabs and Palestinians scares even them, and a mass of secular American Jews who range from apathetic to appalled. Saving liberal Zionism in the United States—so that American Jews can help save liberal Zionism in Israel—is the great American Jewish challenge of our age. And it starts... by talking frankly about Israel’s current government, by no longer averting our eyes...

The answer is that Peter Beinart was being a good little apparatchik, practicing to suceed the chiefs of the American Jewish establishment, and averting his eyes with the best of them.

Self-criticism does recall criticism of self, after all. It doesn't entail going out for a drink, and then coming back and pretending to view the situation for the first time with fresh eyes...

Eleanor Roosevelt Liveblogs World War II: May 17, 1940

Eleanor Roosevelt:

The President is asking today for a great increase in our national defenses.... One has but to read the record of what happened to Holland's Army—one-fourth wiped out—to realize why we must have modern weapons of war. This, of course, we must face and must pay for.... [I]f democracy is to survive it must be because it meets the needs of its people. Anyone who knows this country knows that there are some people to whom the form of government under which they live might easily seem immaterial because of the difficult economic situations they have faced.... We need a united front here as well as the more tangible front of creating war materials. It requires greater cooperation and it will require greater self-sacrifice really to make democracy something for which every citizen will feel he will willingly die because with its loss will go economic as well as intellectual freedom.

Much has been said in this country about not wanting to participate in foreign wars, and people who have said it must now face the fact that foreign wars come very close to our own shores. We will always have not only the religious groups but many groups who feel that war is wrong. I cannot imagine how anyone could feel otherwise.... But when force not only rules in certain countries but is as menacing to all the world, as it is today, one cannot live in a Utopia which prays for different conditions and ignores those which exist...

links for 2010-05-16

  • PB: "For several decades, the Jewish establishment has asked American Jews to check their liberalism at Zionism’s door, and now, to their horror, they are finding that many young Jews have checked their Zionism instead. Morally, American Zionism is in a downward spiral. If the leaders of groups like AIPAC and the Conference of Presidents of Major American Jewish Organizations do not change course, they will wake up one day to find a younger, Orthodox-dominated, Zionist leadership whose naked hostility to Arabs and Palestinians scares even them, and a mass of secular American Jews who range from apathetic to appalled. Saving liberal Zionism in the United States—so that American Jews can help save liberal Zionism in Israel—is the great American Jewish challenge of our age. And it starts where Luntz’s students wanted it to start: by talking frankly about Israel’s current government, by no longer averting our eyes."
  • PK: "A funny thing has been happening on Capitol Hill: lately, the Democrats have started exceeding expectations. Health reform, pronounced dead by all the usual suspects, happened (all hail Nancy Pelosi, arguably the greatest Speaker ever.) Now financial reform seems set to pass, in a stronger version than almost anyone expected.... If Democrats hold the House, which is still a big if but is starting to look possible, the 111th Congress — and, yes, Obama’s first two years — will go down in history as an epic success."
  • PK: "So, via Joe Romm, the NASA-GISS data show that the past 12 months were the hottest 12-month period on record.... So much for the “global cooling” talking point. What I’m wondering is what excuse the deniers will come up with. They could argue that temperatures fluctuate, that one shouldn’t make too much of a particular peak — which is actually true. But that would get them in trouble, since the whole global cooling thing has been about taking the 1998 peak — visible in the chart — plus a bit of bad data to claim, literally, that up is down. Any statistical fix, like looking at multi-year averages, would just confirm that the temperature trend is up. Now, I’m sure that the climate deniers will find a way to ignore the latest facts. But I’m not sure what that way will be."

Daniel J. Linke of Princeton University Writes to Erick Son of Erick

D.J. Linke:

Princeton Demands We Not Show You Elegan [sic] Kagan’s Socialist Thesis | RedState:

From: Daniel J. Linke
Subject: Kagan senior thesis copyright violation
Date: May 14, 2010 3:04:42 PM EDT

Dear Sir or Madam:

It has been brought to my attention that you have posted Elena Kagan’s senior thesis online. (See: Copies provided by the Princeton University Archives are governed by U.S. Copyright Law and are for private individual use only. Any electronic distribution is prohibited, as noted on the first page of the copy that is on your website. Therefore I request that you remove it immediately before further action is taken.

Please notify me as soon as possible that you have removed it from your web site.

Sincerely yours,
Daniel J. Linke

University Archivist and Curator of Public Policy Papers
Seeley G. Mudd Manuscript Library
Princeton University

Is Daniel J. Linke asserting that Princeton University holds copyright over the thesis? I thought it was copyright 1981 to Elena Kagan. Is Daniel J. Linke asserting that he is acting as Elena Kagan's agent in requesting the take-down?

Winston Churchill Liveblogs World War II: May 16, 1940

Winston Churchill: May 16, 1940:

When he stopped there was a considerable silence. I then asked: "Where is the strategic reserve?" and, breaking into French, which I used indifferently (in every sense): "Ou est la masse de manoeuvre?" General Gamelin turned to me and, whith a shake of the head and a shrug, said: "Aucune." There was another long pause. Outside in the garden of the Quai d'Orsay clouds of smoke arose from long bonfires, and I saw from the window venerable officials pushing wheel-barrows of archives on to them. Already therefore the evacuation of Paris was being prepared.

links for 2010-05-15

  • M: "If, therefore, I altogether ignore our merits – our charm, our intelligence, our unworldliness, our affection I can see us as water-spiders gracefully skimming, as light and reasonable as air, the surface of the stream without any contact at all with the eddies and currents underneath. And if I imagine us as coming under the observation of Lawrence's ignorant, jealous, irritable, hostile eyes, what a combination of qualities we offered to arouse his passionate distaste; this thin rationalism skipping on the crust of the lava, ignoring both the reality and the value of the vulgar passions, joined to libertinism and comprehensive irreverence, too clever by half for such an earthy character as Bunny, seducing with its intellectual chic such a portent as Ottoline, a regular skin-poison. All this was very unfair to poor, silly, well-meaning us. But that is why I say that there may have been just a grain of truth when Lawrence said in 1914 that we were 'done for'."
  • PK: "Most people who look at the IMF report will... read it as telling a tale of government profligacy.... But... the report... says that the financial crisis has made us permanently poorer... and governments have to tighten their belts to make up for that loss.... [D]o we really believe that a financial crisis permanently depresses the trend line of economic growth? Yes, I know that the IMF has statistical analyses that seem to say that; but it’s not clear what the mechanism is.... Second... isn’t the real message of this report that we should respond to these crises with a maximum effort to prevent damage to the economy?... isn’t this an argument for more aggressive — not less aggressive — fiscal policy?... [I]f you take the IMF’s model of the effect of slumps on potential output seriously... increasing government spending in a slump more or less pays for itself: it leads to higher output not just in the short run but in the long run

Megan McCardle Says _____. But That's Really Not Right...

is, as Nylund says, "as close to a universal truth as one can get."

Here's Ezra Klein

Ezra Klein - Discretionary spending is not the same as 'new spending': Megan McArdle has a post up saying that health-care reform is "already at least a hundred billion dollars in the hole." That's really not right...

He continues:

[I]t's certainly true that the CBO's estimate suggesting $115 billion in discretionary costs confused a lot of people. But let me just quote CBO Director Doug Elmendorf, who's doing his best to clear up the confusion.

The potential discretionary costs identified two days ago include many items whose funding would be a continuation of recent funding levels for health-related programs... $39 billion authorized for Indian health services that already receive appropriations... the amounts authorized for those items exceed $86 billion over the 10-year period (out of the roughly $105 billion total shown in the table provided yesterday).... CBO’s discretionary baseline... already accounts for much of the potential discretionary spending under PPACA...

So that knocks out more than $86 billion of the $115 billion. What's leftover is about $15 billion for administration and $10 billion in possible new discretionary spending. That spending may or may not happen, and if it does, it will need another vote in Congress, and it will have to be offset elsewhere in the budget.

As Elmendorf writes at the bottom of his post, this is why the CBO doesn't include discretionary spending numbers in their normal estimates. Discretionary spending is not "new spending that the bill has passed into law." Most of it's old spending that may or may not continue, and a bit of it is new spending that may or may not happen, but would need another vote and an offset.

Dude, If You Aren't Going to Do This, I Am

Eric Rauchway blogs:

Dude, I invented the monopoly. Ever heard of it? « The Edge of the American West: Who needs Fake Steve Jobs when real Steve Jobs is so, well, acerbically interactive? It makes one wish for a Gilded Age mogul to have a blog. Or even better, for a passel of Gilded Age moguls to get together and establish an oliblogopoly. What would John D. Rockefeller blog?

Dude, if you aren't going to do this, I am. Facebook, Twitter, Typepad, or Wordpress? And what's the title: Robber Barons, The Four Hundred, Gilded Age, or Wearing the Morgan Collar?

Winston Churchill Liveblogs World War II: May 15, 1940

Winston Churchill: May 15, 1940:

At half-past seven... I was woken... M. Reynaud was on the telephone at my bedside.... "We have been defeated." As I did not immediately respond he said again: "We are beaten; we have lost tghe battle." I said: "Surely it can't have happened so soon?" But he replied: "The front is broken near Sedan; they are pouring through in great numbers with tanks and armoured cars"--or words to that effect. I then said; "All experience shows that the offensive will come to an end after a while. I remember the 21st of March, 1918. After fifve or six days they have to halt for supplies, and the opportunity for counter-attack is presented. I learned all this from the lips of Marshal Foch himself." Certainly this was what we had always seen in the past and what we ought to have seen now...

links for 2010-05-14

  • H: "In other words: the detainees, having been interrogated by people pretending to be lawyers, asked for proof that the attorneys assigned to represent them were who they said they were; the attorneys got this proof; and then the government both dragged its feet about clearing it and said that if the detainees didn't agree to be represented by these attorneys, with or without the proof, they would forfeit their right to counsel."
  • BB: "To be sure, the means by which revenues are raised is critical. Raising income tax rates more than already projected would be a bad idea, although new research by Anthony Atkinson and Andrew Leigh suggests that there is still a lot of potential revenue available from taxing the rich even accounting explicitly for Laffer Curve effects. The IMF suggests—and I agree—that it would nevertheless be preferable to raise additional revenue by taxing consumption. The best way of doing so would be by imposing a value-added tax. The IMF estimates that 10 percent VAT could raise revenues equal to 4.5 percent of GDP. If we don’t raise the additional revenue that is inevitably going to be raised in this way, it is a certainty that it will be raised in ways that will be far more debilitating to growth."
  • JG: "Apple is testing whether a tightly controlled and managed app console platform will succeed or fail based on its own merits, as determined by customers. There are different levels of competition. Apple has made its choice about how it wants to compete, and there’s nothing Adobe can do about it — other than proving Apple wrong by shipping compelling excellent software for Android."
  • MY: "Austerity not working out so well for Spain.... I don’t mean to deny the need for some governments to get their budget situations under control including, in the medium-term, the United States. But across the world, this only works if monetary authorities are taking vigorous measures to ensure growth.... I keep hearing that central banks are on the verge of losing their credibility as inflation fighters, but people should look at what’s actually going on. Nothing in the economy that would occur if there were inflation expectations is happening. Instead, you’re seeing the consequences of a belief that the future will hold anemic growth and flat-to-falling prices. US policy in this regard isn’t all it could be, but it’s much better than European or Japanese policy and consequently we’re going to do much better."
  • JG: "This is how the designers and engineers at Apple roll: They roll. They take something small, simple, and painstakingly well considered. They ruthlessly cut features to derive the absolute minimum core product they can start with. They polish those features to a shiny intensity. At an anticipated media event, Apple reveals this core product as its Next Big Thing, and explains—no, wait, it simply shows—how painstakingly thoughtful and well designed this core product is. The company releases the product for sale. Then everyone goes back to Cupertino and rolls. As in, they start with a few tightly packed snowballs and then roll them in more snow to pick up mass until they’ve got a snowman. That’s how Apple builds its platforms. It’s a slow and steady process of continuous iterative improvement—so slow, in fact, that the process is easy to overlook if you’re observing it in real time. Only in hindsight is it obvious just how remarkable Apple’s platform development process is."

Martin Wolf on the Legacy of Gordon Brown

A smart man, a dedicated public servant, a guy whom history will judge much more favorably than the press is judging him now.

Martin Wolf on Gordon Brown:

The economic legacy of Mr Brown: In a column on May 9, my friend, Niall Ferguson, referred to Gordon Brown’s stewardship as a “disaster”. But was Mr Brown alone responsible? Hardly. I would argue his big underlying mistake was to put too much trust in the orthodoxies of contemporary economists and financiers. The Brown era started with hubris about ending Tory “boom and bust” and duly finished with an even bigger bust. But the underlying belief in what economists called “the Great Moderation” was held on both sides of the Atlantic. Mr Brown trusted such economists, poor man.

It is evident, again, that the “light touch” regulatory regime promoted by the Financial Services Authority was a huge error.... The Tories have concluded from this that regulation of banks should be handed back to the Bank of England. On balance, I think this is correct. But, given the temper of the times, would the Bank have done better as a regulator? I doubt it. In retrospect, the government also trusted too readily in the stability of contemporary finance. Would a Tory government have been much more distrustful? If you believe that, I have a bridge to sell you.

Mr Brown also followed the best professional opinion in making the Bank operationally independent in pursuing an inflation target. I agree that this was a wise decision. Yet belief in a tight link between control over inflation and macroeconomic stability turned out to be false. Mr Brown bought this remedy from top economists, who, again, exaggerated the efficacy of their ideas....

Can we not at least blame Mr Brown for the bloated public spending and grotesque fiscal deficits? Yes, but also only up to a point.... Mr Brown must take a share of the blame for Labour’s failure to ensure the extra spending would be well managed. Yes, Mr Brown made big errors. But more significant is how wrong the conventional wisdom on which he relied turned out to be. Mr Brown is an easy scapegoat.... But it is dangerous to heap blame on a departed leader without asking what caused his mistakes.

Moreover, Mr Brown made some decisions that were clearly correct... right in his determination to resist... the eurozone... deserves credit for taking the correct decisions when the severity of the financial crisis at last became evident in the last quarter of 2008....

The truth, I would argue, is that his biggest error was to believe in the conventional wisdom about the prospects for durable economic stability, the robustness of modern financial markets and, surprisingly perhaps, the strength of the post-Thatcher UK economy. He then doubled up on this bet by building his plans for public spending on the assumption that the good times would roll on forever...

Gamma-Ray Imaging Beneath the Gulf of Mexico

Joshua Green:

Science and Tech: W]hen it comes to government disaster response, the Bush years marked a low point and right now we're experiencing a high point. For a vivid illustration of this disparity, look no further than the Gulf. During Katrina, FEMA director Michael Brown secured his place history as the poster boy for government incompetence. Now consider Chu, the Nobel Prize Winner who has been at BP headquarters in Houston with a team of government scientists.... I talked to Chu this afternoon about the government's response to the disaster. As a mental exercise, try and imagine what these answers would sound like if "Brownie" or some other top Bush officials were still overseeing disaster relief in the Gulf.

JG: I understand you just got back from Houston? What were you doing there?

SC: We went there Tuesday night, we were in Houston in the morning with BP, then visited for three or four hours with the manufacturers of the blowout preventers [the equipment that should have stopped the leak].... I was talking about a week and a half ago to some of the Department of Energy folks... There was a several hour phone call Sunday where a few of the national lab directors, I, and the people we had at the site were talking about what we can do to help BP, and we thought that we could perhaps help them specifically by imaging the state of the BOP, the blow-out-prevention valve, with high-energy gamma rays.... BP... seem to be very open to having brainstorming sessions.... The idea was to bring in very smart people who also have great connections to the larger engineering and scientific community. The national lab director who's been engaged in this from the beginning, Tom Hunter, and I and four other scientists and engineers went down there.

JG: How is it that you know enough about gamma rays and oil spill technology to be helpful? I wasn't aware that that was an area you'd worked in before you were secretary?

SC: Oil spills were not something I've worked on, but I do know about gamma rays.... I'm a physicist. And I dabble.... I kept in my brain certain nuclear sources and what their energies were and I knew what the ranges were for how penetrating gamma rays could be. Very high-energy gamma rays can penetrate several inches of steel.

JG: And that's the challenge at the bottom of the ocean? To penetrate the steel and see the condition of the equipment?

SC: Yeah. Think of a dental X-ray. You have the source that can penetrate through material and you expose something on the backside. If you want to go through not flesh, but steel of a very high density, you need higher energy, electromagnetic particles--the higher the energy, the more penetrating it can be without being scattered or absorbed.... To the extent BP wants it, we can give advice on how to think through these things. What you're doing in a situation like this is dealing with probabilities--you don't know the exact state of something. For example, in the final hours we were saying, "Well, what if this thing happened?" There's a small probability, but if it does happen, what do you do? And if this other thing happens what do you do? You're chasing down answer about what to do should something unforeseen happen, even though it might be a very small possibility. You still want to go down those paths. Instead of approaching it as, "Oops, this happened--now what do we do?"... [Y]ou want a set of fresh eyes, people who can propose potential out-of-the-box solutions, who might foresee what might go wrong. If you're an expert and you're used to certain things done certain ways, that limits your ability to cast a wider net, and so one of the most important things that we're doing at the national laboratories is putting together these scientific teams, many of whom would be considered non-experts. In times like this, those are many of the people you want. BP and the oil industry have the lion's share of the experts that are exactly germane to this. So this is how we think we can best add value.... [W]e know more about the blowout preventer, we know more about its condition, there are things on it that have worked. So I think there's a path forward. But as everyone knows, it ain't over till it's over, to quote the great American philosopher of the 20th century. And meanwhile oil is continuing to spill. So we are very focused on trying to stop that as quickly as possible. And the government is also focused on the downstream things to mitigate its environmental impact...

John Gruber on Apple Computer's Strategy for World Domination

John Gruber:

This is how Apple rolls | Tablets | Macworld: That brings us to the iPad. Initial reaction to it has been polarized.... I’m supposed to explain how the truth lies somewhere between these two extremes. But I can’t. The iPad really is The Big One: Apple’s reconception of personal computing.... The designers and engineers at Apple aren’t magicians; they’re artisans. They achieve spectacular results one year at a time. Rather than expanding the scope of a new product, hoping to impress, they pare it back, leaving a solid foundation upon which to build. In 2001, you couldn’t look at Mac OS X or the original iPod and foresee what they’d become in 2010. But you can look at Snow Leopard and the iPod nanos of today and see what they once were. Apple got the fundamentals right. So of course this iPad—the one which, a few years from now, we’ll refer to off-handedly as the “original iPad”—does less than we’d hoped. That’s how the people at Apple work. While we’re out here poking and prodding at the iPad, they’re back at work in Cupertino. They’ve got a little gem of a starting point in hand. And they’re beginning to roll.

Clive Crook Tells Us That the U.S. Is Not Like Greece--But That Greece Is Like Greece, and That Is Plenty Bad All on Its Own

Laura Tyson points us to Clive Crook, who does a better job than David Leonhardt in asking and answering the question: Is the U.S. like Greece?:

Clive Crook: At the end of last week, the US looked hard at Greece and was scared. So tiny an economy should not be bringing all of Europe low and even threatening to explode the euro, but it is.... What, Americans began to wonder, did Europe’s problems tell them about their own? The cause of the present turmoil, Greek public debt, has aroused fears of a wider sovereign-debt crisis and heightened concern about US government borrowing. More immediately, investors are asking, what if the European Union keeps making a hash of the problem? Will there be a second European banking crisis, and would it infect the US financial system? Even if the answer is no, the US recovery is still fragile. The economy would not be immune to another slump in EU demand.... [F]ears do not have to be well-reasoned to make a bad situation worse and justify themselves...

And Crook answers: No, the U.S. is not like Greece:

The least substantial line of alarm is Greece as fiscal harbinger...

Even California is unlikely to become like Greece:

The US might not be Greece, say pessimists, but California could be.... Could California do for the US what Greece is doing for the EU? Unlikely, is the answer.... [I]ts debts and deficits are puny compared with Greece’s. Other defences and safety-valves, notably lacking in Europe, are to hand...

The real, justified worries are elsewhere:

[T]he greater worry for the US at the moment is not that Europe shows where it is heading but that secondary effects from Greece and any widening emergency will squash its fledgling recovery.... A flight to safety from European markets brings investors back to US bonds and pushes US interest rates lower... depresses the euro, which makes US exports less competitive.... Financial contagion is the other big risk.... Up to now, the US has wanted to think that Greece was a European problem that could be left to the EU to solve. Both parts of that supposition have turned out to be wrong....

The EU-IMF adjustment programme for Greece improves on the previous EU position that Greece must bear all the costs of its troubles alone – but not by much.... [T]he new plan is nearly as delusional as the old one. As Arvind Subramanian argued on this page last week, it implies three years of crippling austerity, at the end of which Greece’s flattened economy will have to support a far larger public debt than today’s. (This is assuming things go well.) The plan resolves nothing. It is a delaying action at best, and a pretty desperate one at that. Default looks ever more likely. This can be planned, with some hope of keeping things orderly – though the best chance of that has now been missed. Or it can be unplanned, after a further period of denial.... The harder question is whether even a Greek default will resolve Europe’s difficulties. My bet would be no. Greece has a huge primary budget deficit. At least for a time after a debt restructuring it would struggle to find lenders. So even with its debts written down to nothing, it faces a period of fiscal austerity that will be wrenching at best and politically impossible at worst – with no central bank to support demand, and no currency of its own to devalue. The EU says that default must be avoided at any cost. I say default will happen. The EU says exit from the euro is not an option. I would not count on that, either. In any event, the US had better brace itself.

links for 2010-05-13

  • BR: "You will note that the CRA is not part of this sequence. I could find no evidence that they were a cause or even a minor factor. If they were, the housing bubbles would not have been in California or S. Florida or Ls Vegas or Arizona — Harlem and South Philly and parts of Chicago and Washington DC would have been the focus. Nor do I blame Fannie and Freddie. Now understand, there is no love lost between myself and the GSEs.... But even I cannot reconcile the movement to place all of the world’s troubles at the feet of the GSEs. Not, at least, according to the data. That lack of evidence, however, doesn’t stop ideologues from making the attempt. Consider this attempt at rewriting the causes of the credit crisis by Kevin Hassett..."
  • MP: "As I have said many times before, I suspect we will see a lot of discontinuity in policymaking this year – amid lots of panicking – and recent events show just how. In the past few months Beijing seems to have become so worried about signs of overheating that, after trying unsuccessfully many times to pare growth carefully, it has given up the scalpel and has brought out the sledgehammer."
  • TM: "Kevin is puzzled as to why the media back in 1983 (pre-Fox, pre-Rush) felt comfortable bashing Reagan, that stupid heartless conservative cowboy. Yet today, the media is giving a pass to Obama, determined not to give aid and comfort to the racist tea-baggers who question his economic policies. Gosh, I wonder what's going on. Couldn't be media bias, since in LibWorld that doesn't exist - they are owned by evil corporations, some supported the invasion of Iraq, and anyway, Fox News, Wall Street Journal, Rush Limbaugh, neener, neener, neener."

Winston Churchill Liveblogs World War II: May 13, 1940

Winston Churchill reports to the House of Commons:

Winston Churchill: On Friday evening last I received from His Majesty the mission to form a new administration. It was the evident will of Parliament and the nation that this should be conceived on the broadest possible basis and that it should include all parties. I have already completed the most important part of this task. A war cabinet has been formed of five members, representing, with the Labour, Opposition, and Liberals, the unity of the nation. It was necessary that this should be done in one single day on account of the extreme urgency and rigor of events. Other key positions were filled yesterday. I am submitting a further list to the king tonight. I hope to complete the appointment of principal ministers during tomorrow.

The appointment of other ministers usually takes a little longer. I trust when Parliament meets again this part of my task will be completed and that the administration will be complete in all respects. I considered it in the public interest to suggest to the Speaker that the House should be summoned today. At the end of today's proceedings, the adjournment of the House will be proposed until May 21 with provision for earlier meeting if need be. Business for that will be notified to MPs at the earliest opportunity.

I now invite the House by a resolution to record its approval of the steps taken and declare its confidence in the new government. The resolution:

That this House welcomes the formation of a government representing the united and inflexible resolve of the nation to prosecute the war with Germany to a victorious conclusion.

To form an administration of this scale and complexity is a serious undertaking in itself. But we are in the preliminary phase of one of the greatest battles in history. We are in action at many other points-in Norway and in Holland-and we have to be prepared in the Mediterranean. The air battle is continuing, and many preparations have to be made here at home. In this crisis I think I may be pardoned if 1 do not address the House at any length today, and I hope that any of my friends and colleagues or former colleagues who are affected by the political reconstruction will make all allowances for any lack of ceremony with which it has been necessary to act.

I say to the House as I said to ministers who have joined this government:

I have nothing to offer but blood, toil, tears, and sweat.

We have before us an ordeal of the most grievous kind.

We have before us many, many months of struggle and suffering.

You ask, what is our policy? I say it is to wage war by land, sea, and air. War with all our might and with all the strength God has given us, and to wage war against a monstrous tyranny never surpassed in the dark and lamentable catalogue of human crime.

That is our policy.

You ask, what is our aim? I can answer in one word:


Victory at all costs - Victory in spite of all terrors - Victory, however long and hard the road may be, for without victory there is no survival.

Let that be realized. No survival for the British Empire; no survival for all that the British Empire has stood for; no survival for the urge, the impulse of the ages, that mankind shall move forward toward his goal.

I take up my task in buoyancy and hope. I feel sure that our cause will not be suffered to fail among men. I feel entitled at this juncture, at this time, to claim the aid of all and to say, "Come then, let us go forward together with our united strength."

links for 2010-05-12

  • RG: "By failing to embrace the immigrant, those Republicans are making themselves largely irrelevant in a new era.... The hard work of my parents, along with God’s providence, plus some luck here and there, fulfilled our American dreams, and ensured that we wanted not. I went to Princeton University for my undergraduate education, followed by Stanford Law School. My brother attended Washington University in St. Louis both for undergrad and medical school, his medical school financed with a full ride scholarship. My sister recently graduated from Stanford undergrad, and my other sister is in the midst of her own Princeton education. Six Mexicans thrust into Tucson, Arizona, having little money and knowing little English, somehow made it.... The Rush Limbaughs and Chris Simcoxs of the world embarrass the party, and it pains me even more to think that the party of Lincoln, Goldwater, and Reagan, is dragged down in anti-immigrant rancor."
  • RA: "Degree is important here. America's trend growth rate is higher than Greece's. Its political system is less dysfunctional. Its economy is overwhelmingly on the books and taxed. Its labour markets are more flexible, its public sector is smaller, and its unions are less powerful. It's currency floats, and its monetary policy is its own. The bottom line is that it's not clear that there is any set of policies Greece can adopt which will prevent default.... There are many different ways that America could close its budget gap; it's merely having an intense political debate over which way is the best way. This could potentially be a problem, but it's a different problem from the one in Greece. The Greeks have a massive current primary deficit that markets no longer want to fund. The Americans have a political debate over how to rein in the growth of health costs over the next three decades. Ultimately, casting the American fiscal situation in a Greek light obscures..."
  • RA: "I think that one is left focusing on the distribution of unemployment, which has hit hardest among geographically dispersed and anonymous fields like construction and business services. The manufacturing devastation in the early 1980s was geographically focused and concentrated on industries with a loud voice in Washington. That's not the most satisfactory explanation, but it's the best I can do for now."
  • MY: "As I noted in my previous post on this controversy, I find it a bit curious that strident defenders of Israeli foreign policy [like Jonathan Goldberg and Jon Chait] take a harder line on Richard Goldstone’s apartheid-era conduct than does Nelson Mandela and the leadership of the African National Congress. It’s almost enough to make you think that some of these attacks on Goldstone are offered in bad faith, and are more motivated by dislike for his conclusions about Israeli conduct during the Gaza war than genuine concern about his past conduct. Sasha Polakow-Suransky has more on this..."
  • MY: "I read the WSJ sometimes. But it’s going to be a cold day in hell before I voluntarily surrender money to firm controlled by Rupert Murdoch when there are alternatives. So here’s a word of advice on how to read WSJ articles you see linked to on blogs without paying. What you need to do is click the link, then your browser will go to an article stub featuring a headline. Then copy the headline and paste it into Google. The article should pop up as your top search result, and if you click that link you’ll see the story free and clear."
  • MY: "If you had asked me in 2006 about the political reaction to 10 percent unemployment I would have said “total freak out!” Heck, as late as 2009 I would have said “total freak out.” After all, the Obama administration was projecting 10 percent unemployment as a nightmare scenario.... Well now here we are at 10 percent unemployment and there’s an eerie calm.... Brad DeLong.... "A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America? The collapse of the union movement and thus of the political voice of America’s sellers of labor power? I don’t know what the cause is."... Two additional considerations... the recession itself has been incredibly unequal.... It’s... the out-of-power party’s job to complain about poor economic performance, but the GOP is ideologically committed to the view that less stimulus and tighter money are preferable..."

Martin Feldstein on the Road to Damascus

Allow all the Bush tax cuts to expire, he says, in a couple of years when the recovery is well-established.

It's very nice to see. He is right, of course.


Martin Feldstein: Extend the Bush Tax Cuts—For Now: Although it is important to avoid increasing the current tax rates until the recovery is well established, the enormous budget deficits that are now projected for the rest of the decade must not be allowed to persist. While legislation to reduce future government spending or faster-than-expected income growth could shrink the out-year deficits, it would be dangerous to depend on either of them. It would be wrong therefore to commit to the permanent reduction in tax rates for all taxpayers below the top brackets that is called for in the Obama budget. Changing the Obama budget proposal to limit all tax cuts to two years would reduce the total deficits over the next decade by more than $2 trillion. No single policy change could do as much to limit the future deficits and the national debt.

Such a limit on the future tax cuts should be combined with policies to slow the growth of spending....

Failure to cut future deficits would mean a weaker recovery and slower long-term growth.... The fragility of the economic recovery means that it would be dangerous to allow any taxes to rise in 2011. The inherent uncertainty about the out-year deficits means that it would be unwise to enact tax cuts that stretch beyond the next two years. Congress should move quickly to reassure taxpayers and financial markets that the current tax rates will be preserved for two years but that further tax cuts will depend on the future fiscal outlook.

Alan Blinder on Raghuram Rajan in 2005

In the interest of keeping our eye on the ball in FinReg, let me present Alan Blinder stating that incentives in banks that are too big to fail simply must be totally and completely broken and misaligned:

I’d like to defend Raghu a little bit against the unremitting attack he is getting here for not being a sufficiently good Chicago economist and just emphasize the sentence in his paper which says, “There is typically less downside and more upside risk from generating investment returns.” This is very mildly said. The way a lot of these funds operate, you can become richer than Croesus on the upside, and on the downside you just get your salary. These are extremely convex returns. I’ve wondered for years why this is so. You don’t need to have public regulatory concerns to worry about it. Take the perspective from inside a big company. The traders don’t own the capital. The traders are taking all this risk and putting the company’s capital at enormous risk. I don’t quite understand why the incentives are as they are.

I remember a discussion I had with—I won’t name him—one of the principals of the LTCM, while it was riding high. He agreed with me that the skewed incentives are a problem. But they weren’t solving it, obviously. So far, that is just an internal problem to the firm. What can make it a systemic problem is herding, which Raghu mentioned, or bigness, which is related to the discussion that Fraga raised, and so on. If you are very close to the capital—for example, if the trader is the capitalist—then you have internalized the problem. So, it may be that bigness has a lot to do with whatever systemic concerns we have. Thus, I’d draw a distinction between the giant organizations and the smaller hedge funds. Whether that thinking leads to a regulatory cure, I don’t know. In other domains, we know, bigness has been dealt with in a regulatory way.

DeLong Smackdown Watch: Robert Waldmann: "On Proletarian Internationalism and the Renegade DeLong"

Robert Waldmann:

Should We Ban Naked CDSs? - Grasping Reality with Both Hands: Oh my oh my, Brad DeLong prof Noise Trader Risk ... himself seems to have left noise traders completely out of the story. Point 3 (used to be point 4 and I'm still throwing the same cow)

People who have done research and learned information about the structure and likely evolution of the market can bet on their knowledge: they win because they make their positive expected-value bets"

In the real world half of them win and the other half lose. The assertion as quoted assumes that all people have rational expectations so bets by people who have done research must be positive expected-value bets. So why did the average pension fund underperform the S&P 500 even though the average pension fund beta was 1 ? (I'm citing our co-author Andrei). If you abandon your new found faith in rational expectations (which you absolutely assume in the quoted passage) you must agree that it is an empirical question whether super smart people who try to beat the market reduce or increase the mean squared (or mean absolute) deviation of prices from fundamentals. The answer seems to be totally obvious to me. There has been a huge increase in research and active trading and employment of braniacs in finance and asset price volatility has increased. Asset prices are much much too volatile to reflect rational updating. I look at the rough correlation and guess that the hard working smart people trying to beat the market are driving prices further from fundamentals. OK so you will bring up Luskin and say that they just can't overcome the effects of the idiots. However, you can't explain how more developed etc financial markets can make it easier for a rational investor (if one exists) to affect prices without making it more easy for Luskin to affect prices. Oh and if you type "market selection" then I will rethink my atheism, since demonic possession would be the only possible explanation.

As far as naked CDS shorts are concerned, they make it easier for pessimistic noise traders and pessimistic fundamentals traders to affect prices. Optimistic noise traders and optimistic fundamentals traders can already affect prices--they go long CDSs, take on risk, and so lead to the construction of new houses.

The question of whether more developed financial markets are more or less vulnerable to noise trading is a hard one, and I'm not sure that it is as clear-cut--that more sophisticated financial jobs do a worse job of sending price signals to the real economy--as Robert suggests...

The Contrast in Mood Between Today and 1983

The most astonishing and surprising thing I find about Washington DC today is the contrast in mood between DC today and what DC was thinking a generation ago, in 1983, the last time the unemployment rate was kissing 10%. Back then it was a genuine national emergency that unemployment was so high--real policies like massive monetary ease and the eruption of the Reagan deficits were put in place to reduce unemployment quickly, and everybody whose policies wouldn't have much of an effect on jobs was nevertheless claiming that their projects were the magic unemployment-reducing bullet.

Today.... nobody much in DC seems to care. A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America? The collapse of the union movement and thus of the political voice of America's sellers of labor power? I don't know what the cause is. But it does astonish me.