Grasping Reality on TypePad, by Brad DeLong

Here is the context of my statement back in 2007 that "In my view, Robert Samuelson is a bad person". I stand by every word, as appropriate, and responsible, and civil:

Mark Thoma does an evil deed by telling me that somebody should take note of Robert Samuelson. And he's right: somebody should. But why does it have to be me? First, some history: The last time we tried to put a "Pigou tax" on carbon emissions--back in 1993 with the Gore BTU tax proposal--Robert Samuelson opposed it:

Congress should... deliver a firm message: We won't pass this [energy] tax... [without] more spending cuts. This would give Congress more time to evaluate the energy tax and put more pressure on the White House to cut spending.... Congress... [should not] be stampeded.

Remember that: Robert Samuelson did not want Congress to be "stampeded" into including a carbon tax in the 1993 reconciliation bill.

Economists believe that things work well when the incentives individuals face--the good or ill that their actions cause for themselves--match up to the good or ill of the impact that their actions have on society as a whole. Thus our liking for energy taxes as the best way to start controlling global warming: individuals don't feel the harm that their greenhouse gas emissions do to other people via their effect on the climate, but a tax on carbon makes them feel that harm in their pocketbook and so matches up individual incentives with social outcomes. That's what the Gore BTU tax proposal was trying to do. There are in general two ways that you can match private incentives with social outcomes. The first is to take individuals' preferences over material goods as given, and use taxes and subsidies to raise the prices of goods that have negative and lower the prices of goods that have positive "externalities," as economists call them. The second is to try to shift individuals' preferences: appeal to altruism, or to the moral sense, or to the mirror neurons to get people to feel good about doing deeds that have positive externalities, and rearrange social markers of status and approval to shift people's preferences over goods without changing their material characteristics or prices. Economists generally prefer to work on the tax-and-subsidy side rather than on the preferences side, out of a disciplinary commitment to the idea that cash-on-the-barrelhead is strong and pats-on-the-back are weak. But we do what we can: if we cannot pass a BTU tax, telling people who fund carbon offsets or drive fuel-efficient cars that they are good, responsible, moral people is a perfectly orthodox and constructive thing to do.

But somehow Robert Samuelson doesn't think so today. Attempts to work on the preferences side by saying "good for you!" to Prius drivers get him really, really angry:

Robert J. Samuelson: Prius Politics: My younger son calls the Toyota Prius a "hippie car."... [L]ike hippies, [Prius drivers] are making a loud lifestyle statement: We're saving the planet; what are you doing?... Prius politics is... showing off, not curbing greenhouse gas emissions. Politicians pander to "green" constituents who want to feel good.... California Gov. Arnold Schwarzenegger is the champ of Prius politics, having declared that his state will cut greenhouse emissions to 1990 levels by 2020.... However, the policies to reach these goals haven't yet been formulated; that task has been left to the California Air Resources Board. Many mandates wouldn't take effect until 2012, presumably after Schwarzenegger has left office. As for the 2050 goal, it's like his movies: make-believe. Barring big technological breakthroughs, the chances of reaching it are zero.

But it's respectable make-believe. Schwarzenegger made the covers of Time and Newsweek. The press laps this up; "green" is the new "yellow journalism."... Even if California achieved its 2020 goal (dubious) and the United States followed (more dubious), population and economic growth elsewhere would overwhelm any emission cuts. In 2050, global population is expected to hit 9.4 billion.... [H]ere's what Congress should do... gradually increase fuel economy standards for new vehicles... raise the gasoline tax over the same period by $1 to $2 a gallon... eliminate tax subsidies... for housing.... But practical politicians won't enact these policies, except perhaps for higher fuel economy standards. They'd be too unpopular.

Prius politics promises to conquer global warming without public displeasure.... Deep reductions in emissions... might someday occur if both plug-in hybrid vehicles and underground storage of carbon dioxide from coal-fired power plants become commercially viable.... Prius politics is a delusional exercise in public relations that... [is] not helping the environment [and] might hurt the economy.

In my view, Robert Samuelson is a bad person: when a carbon tax was on the agenda and we had a real window of opportunity, he fought it; now when the only things on the agenda are preference-shaping tools that I regard as very weak compared to a carbon tax, he's against them as well on the grounds that "hippie... Prius politics is... showing off" and that a carbon tax would be good. A little intellectual three-card-monte here, doncha think?

Let me contrast Robert Samuelson's sneering at the "hippies" who want to take the weak "Prius politics" steps at fighting global warming we can take now with one of the favorite stories of somebody I once knew--somebody whose place on the ideological spectrum was the same as Robert Samuelson, but who I think was a good person--the late Lloyd Bentsen, who liked to tell this story and claimed he'd gotten it from John F. Kennedy when they were freshmen in the House of Representatives together:

If you travel through Lorraine, between Neufchateau, Toul, Epinal, and Nancy you find the Chateau de Thorey-Lyautey, retirement home of the French Marshal Louis Hubert Gonzalve Lyautey. Around 1930 the nearly eighty year-old Marshal had a conversation with his landscaper:

Lyautey asked his landscaper if he would on the next day start planting a row of oaks to line the road up to the chateau.

"But Mon Marechal," said the gardener, looking at the aged Lyautey. "The trees will take more than fifty years to grow."

"Oh," said the Marshal. "In that case, we have no time to lose. Plant them this afternoon!"

In my view, if I have anything to answer for it is not in my claim that "Robert Samuelson is a bad person", but in my claim that Mark Thoma commits evil deeds.

But is Chuck Lane satisfied? No! He comes back for more:

"Michael Kinsley gets off on other people's suffering." (2)

— Charles Lane (@ChuckLane1) December 12, 2013

Once again, I stand by every word of Seven Howlers from Michael Kinsley's Very Misguided War Against Paul Krugman as appropriate, and civil:

Why oh why can't we have a better press corps? Michael Kinsley is really confused:

People who favor austerity are “austerians,” a clever Krugman coinage that makes adherents sound like aliens from another planet…

Ummm… If you Google "first use of austerian" Google tells you about first uses of "Australian". If you Google "first use of austerian -Australian" Google tries to send you to first uses of "Austrian" that do not contain "Australian". If you tell Google you are serious, it sends you to WordSpy, which says:

"Remember, the political idea being expressed a year ago was that because the GOP interpreted its 1994 mandate as a call to budget-balancing austerity, the electorate would never give the White House to the GOP if its nominee was also a root-canal austerian." —Jude Wanniski, "Reminder from Forbes… Crossroads for Dole," The Washington Times, March 20, 1996.

So not Paul Krugman. Jude Wanninski. Howler #1.

Kinsley goes on:

It’s easier to describe what the anti-austerians believe than the austerians themselves. Anti-austerians believe that governments around the world need to stop worrying about their debts for a while and continue pouring money into the economy until the threat of recession or worse is well and truly over. Austerians want the opposite. But what is the opposite? Is President Barack Obama, for example, an austerian? To Republicans and conservatives, yes…

These two howlers--ascription of "austerian" to Krugman instead of Wanninski, and "yes" where he means "no", indicate that this is a first draft: neither checking-of-facts nor reading the ms. aloud to be sure that there are no "yeses" where there should be "noes".Which raises the question of what value is being added by the New Republic's editorial staff here, but I digress…

On to substance, rather than fact-checking and proofreading:

"Austerians" have been those advocating "Austerian" policies: that even the most credit-worthy sovereigns need to shift policy, starting right now, to:

• cut their spending,
• raise their tax rates,
• even though economies are depressed,
• even though interest rates--and thus the costs of carrying debt--are extraordinarily low as far into the future as the eye can see.

Supporters of these "Austerian" policies believe that such policies are:

• the best road to boosting employment and production now (Alesina-Ardagna);
• the best road to avoiding a very large drag on growth even with very low interest rates should debt-to-annual-GDP exceed the magic 90% threshold (Reinhart-Rogoff); and
• necessary lest the United States, Britain, Germany, and Japan "turn into Greece" (Ryan).

There is no puzzle here: these are the policies that have been labeled "Austerian". "Austerians" support these policies. They are the opposite of what people like Paul Krugman, Larry Summers, Ben Bernanke, Olivier Blanchard, me, and many others believe: that as long as interest rates stay low and economies stay depressed, more government spending now will produce a healthier economy in the short run and is highly likely to produce a lower long-term debt burden in the long run, for the debt-to-annual-GDP ratio has a denominator as well as a numerator.

Kinsley professes to be one of the few remaining people who is puzzled about what "Austerian" policies are. That is howler #3: if you have done your homework, no puzzlement can arise.

And howler #4 comes later on when Kinsley turns around and says that he knows what "Austerian" policies are, and:

You know what they say: Disputes in academia are especially vicious because the stakes are so small. The stakes in the austerity debate—the actual differences of opinion—get smaller and smaller even while the argument itself gets larger and louder.

That is simply, completely, and totally false. The stakes are not small. They are no smaller now than they were three years ago.

Howler #5 comes when Kinsley claims that: "the lessons of Paul Volcker" are that "the Great Stagflation of the late 1970s" was caused by fiscal "Stimulus" which "is strong medicine--an addictive drug--and you don’t give the patient more than you absolutely have to." Was he not alive in the late 1970s and early 1980s? Does he not remember that the large fiscal deficits of the 1970s and 1980s came not during the Great Stagflation of the 1970s, but in the 1980s after the Volcker Disinflation? The historical confusion, the lack of memory of his own lived career, and the lack of fact-checking…

And when I read things like: "I'm not sure how relevant the experiences of Greece and Iceland, as described in this paper, are to the United States", my immediate reaction is: Howler #6. If that is the case, then shouldn't you raise both hands, step away slowly from your keyboard, and wait until you arrive at a view before you write? But once again, I digress…

Let me close with the biggest howler: howler #7. Krugman's principal criticism of Austerians is that they are suffering from a bug in their wetware:

Everyone loves a morality play. “For the wages of sin is death” is a much more satisfying message than “Shit happens.” We all want events to have meaning. When applied to macroeconomics, this urge to find moral meaning creates in all of us a predisposition toward believing stories that attribute the pain of a slump to the excesses of the boom that precedes it—and, perhaps, also makes it natural to see the pain as necessary, part of an inevitable cleansing process…

Austerians are thus, Krugman thinks, adopting a moral stance, because it makes them feel good, rather than doing their proper job and conducting a technocratic analysis. Sometimes the wages of sin is death--sometimes pain is necessary to repair past mistakes--and sometimes it isn't, and technocratic analyses like DeLong and Summers (2012) make what I, at least, believe is an overwhelming case that right now it is not: past sins of the bankers do not require a "lost decade" of elevated unemployment for the population at large.

Kinsley says that Krugman is wrong: he says that Austerians are conducting their own technocratic analyses--that:

Austerians don’t get off on other people’s suffering. They, for the most part, honestly believe that theirs is the quickest way through the suffering. They may be right or they may be wrong…

But he doesn't quote or link to any of them.

Funny that.

But the most fascinating thing, for me, is that Kinsley's claim that "Austerians don’t get off on other people’s suffering" comes in the middle of a passage in which… well, Michael Kinsley gets off on other people's suffering:

Krugman also is on to something when he talks about paying a price for past sins. I don’t think suffering is good, but I do believe that we have to pay a price for past sins, and the longer we put it off, the higher the price will be…. The problem is the great, deluded middle class--subsidized by government and coddled by politicians. In other words, they are you and me. If you make less than $250,000 a year, Obama has assured us, you are officially entitled to feel put-upon and resentful. And to be immune from further imposition…. Austerians deserve credit: They at least are talking about the spinach, while the Krugmanites are only talking about dessert.

If writing that the "great, deluded middle class--subsidized by the government and coddled by politicians" needs to experience a decade-long siege of high unemployment isn't "get[ting] off on other people's suffering", I don't know what "getting off on other people's suffering" could possibly mean.

Paul Krugman: 6-0, 6-0, 6-0.

And is Lane satisfied? No!:

"Why We Loathe Jonathan Weisman" (3)

— Charles Lane (@ChuckLane1) December 12, 2013

And this is what Lane is referring to: Why We Loathe Jonathan Weisman:

Jonathan Weisman ✔ @jonathanweisman

Funny thing about the VA SEN race: Maybe the closest in the country w/ the 2 most careful pols running. Just not terribly exciting.

It's not about you and your entertainment, Jonathan. It's about the future of public policy, our collective destiny, and whether Kaine or Allen will be Senator from Virginia for the next six years.

And yes, David Leonhardt, I am going to have to take action for your retweeting this...

Once again, I find this to be a completely appropriate and civil response to Jonathan Weisman's tweet. I stand by it.

And there is more!:

"After a career spent whining 'opinions of shape of earth differ,' Fred Hiatt finally writes something not false." (4)

— Charles Lane (@ChuckLane1) December 12, 2013

Which is a reference to: Fred Hiatt: Five Years Late and Many Dollars Short:

After a career spent whining "opinions of shape of earth differ," Fred Hiatt finally writes something not false:

The Republican self-deception that draws the most attention is the refusal to believe that Barack Obama is American-born....

When President George W. Bush and Congress lowered taxes in 2001, the justification, unlikely as it seems today, was a budget surplus. When the surplus melted away, that didn’t affect the ideology....

In Ryan’s vision, all federal spending other than Medicare, Medicaid, Social Security and interest payments will decline from 12 percent of the national economy (GDP) in 2010 to 6 percent in 2022 to 3.5 percent in 2050. “For comparison, spending in this category has exceeded 8 percent of GDP in every year since World War II,” the CBO said. “The proposal does not specify the changes to government programs that might be made in order to produce that path.” Of course not — because they are changes that few Americans would ever support.

The climate change denialism is a newer part of the catechism. Just a few years ago, leading Republicans — John McCain, Sarah Palin, Mitt Romney, Newt Gingrich and Tim Pawlenty among them — not only accepted global warming as real but supported some kind of market-based mechanism to raise the cost of burning fossil fuels....

Pawlenty similarly acknowledged on “Meet the Press” last year that “the climate is changing,” but added that “the more interesting question is how much of that is man-made versus natural causes.” When I asked last week how Pawlenty would answer that “interesting question,” his spokesman responded by e-mail: “We don’t know [the] cause of climate change.”... But if you asked 1,000 scientists, 998 of them would say that climate change is real and that human activity — the burning of oil, gas and coal — is a significant contributor. But Pawlenty’s supposed uncertainty is convenient, because if we don’t know the cause, then there’s little point in looking for a cure. And any cure is going to cost money, or votes, or both.... To say that Republican irresponsibility makes it more difficult for Democrats to speak honestly is not an excuse. But it is a partial explanation. And while Obama may wish the climate change conversation would go away between now and 2012, he at least is not pretending the phenomenon is fiction.

Does Pawlenty believe what he says now?... As recently as 2008 he was supporting congressional action to limit greenhouse gas emissions. I do not believe that he believes those 998 scientists are wrong. Which leads to another question: Should we feel better if a possible future president is not ignorant about the preeminent environmental danger facing our planet, but only calculating or cowardly? To paraphrase Pawlenty, I don’t know the answer to that one.

What Hiatt's piece is missing is the part where he apologizes for not writing this piece five or ten or fifteen years ago. What Hiatt's piece is missing is the part where he resigns, donates all his wealth to the poor, and takes up a life of anonymous service to others in partial atonement for the abominable atrocity of an editorial page that he has run.

I confess that some might find this a little harsh. But only a little. I agree that it is not civil. But I do not think that it is appropriate to be civil to Fred Hiatt. I think few do think it appropriate. Am I wrong?

And Chuck Lane won't let up:

Clive Crook "was either too dishonest to report straight what Summers meant or too stupid to follow the thread of the speech." (5)

— Charles Lane (@ChuckLane1) December 12, 2013

That is a reference to my Bonus Thursday Idiocy Department: Clive Crook Misreports Larry Summers, a comment on Clive Crook's No, Larry Summers, We Don’t Need More Bubbles. Since Summers does not say or imply or believe that we do need more bubbles, my statement that Crook was "either too dishonest to report straight what Summers meant or too stupid to follow the thread of the speech" is a simple statement of fact.

And there is one more:

"Dana Milbank Tries to Win This Year's Stupidest Man Alive Contest" (6)

— Charles Lane (@ChuckLane1) December 12, 2013

The quote from me is a headline I put on Paul Krugman's Orwellian Centrism:

I don’t usually bother looking at the Washington Post. But I’m inside the Beltway right now, so I spared a peek — and for my sins ended up reading Dana Milbank, who praises Obama for punching the hippies. So far, so usual. But then I read this:

This is a hopeful sign that Obama has learned the lessons of the health-care debate, when he acceded too easily to the wishes of Hill Democrats, allowing them to slow the legislation and engage in a protracted debate on the public option. Months of delay gave Republicans time to make their case against “socialism” and prevented action on more pressing issues, such as job creation. Democrats paid for that with 63 seats.

Um, that’s not what happened — and I followed the health care process closely. The debate over the public option wasn’t what slowed the legislation. What did it was the many months Obama waited while Max Baucus tried to get bipartisan support, only to see the Republicans keep moving the goalposts; only when the White House finally concluded that Republican “moderates” weren’t negotiating in good faith did the thing finally get moving.

So look at how the Village constructs its mythology. The real story, of pretend moderates stalling action by pretending to be persuadable, has been rewritten as a story of how those DF hippies got in the way, until the centrists saved the day.

My patience is now exhausted. If Chuck Lane wants to reform, use the <strike>...</strike> tag appropriately on his backlist, cease dealing in out-of-context misrepresentations, and join the technocratic conversation, he will be welcome.