Some scattered links I squirreled away during the previous week:
John Cassidy: Paul Ryan in Wonderland: Chapter Six: Loosely following Brad DeLong's quote:
Having wandered back into writing about U.S. politics for the past eighteen months or so, I sometime wonder how the full-time Washington correspondents, the lifers, do it: cover the same old junk year after year. The key to career longevity and job satisfaction, I suppose, is to buy into the notion, assiduously promoted by the politicians and their flacks, that what they are doing is serious. Budgets, national security, energy policy, health policy -- these things matter. . . . .
Sorry folks. After watching Representative Paul Ryan launch his much-anticipated budget for the fiscal year 2014, I can't keep up the pretense. The plan is a joke . . . and nobody should pay much attention to it, except as another exhibit in the indictment of latter-day Republicanism. Ryan's numbers don't add up. His proposals -- cutting domestic programs, converting Medicare to a voucher program, returning Medicaid to the states, reducing the top rate of income tax to twenty-five per cent -- were roundly rejected by the voters just five months ago. And the philosophy his plan is based upon -- trickle-down economics combined with an unbridled hostility toward government programs designed to correct market failures -- is tattered and shop worn. . . .
In a more just world, Ryan and his visionary shtick would have been jeered off the stage after last year's Presidential campaign, when, apart from ensuring that Mitt Romney didn't face any blowback from the right at the Convention in Tampa, his presence added virtually nothing to the G.O.P. ticket, and, arguably, handicapped it. . . .
I can't let a few things pass without comment. Ryan's proposal to reduce the top rate of income tax to twenty five per cent would be a huge giveaway to the rich. How big? . . . people earning more than a million dollars a year would each gain, on average, $264,970.
DeLong also links to Ezra Klein on the budget proposed by House Progressives, which has no chance but would actually do some good for the economy (and not just the people who own it). Also, DeLong catches Tyler Cowen going 0-for-4 on "standard stuff" economics. Cowen is arguing against public spending on public goods and basically trying to run up the perceived costs so you don't do anything like that. DeLong knocks those costs down, rightly, but doesn't go near the main point, which is the value of public goods.
DeLong also quotes Paul Krugman, on the stock market (and other things):
Stocks are high, in part, because bond yields are so low, and investors have to put their money somewhere. It's also true . . . that . . . corporate profits have staged a strong recovery . . . workers [are] failing to share in the fruits of their own rising productivity [and] hundreds of billions of dollars are piling up in the treasuries of corporations that, facing weak consumer demand, see no reason to put those dollars to work. . . . What the markets are clearly saying, however, is that the fears and prejudices that have dominated Washington discussion for years are entirely misguided. And they're also telling us that the people who have been feeding those fears and peddling those prejudices don't have a clue about how the economy actually works.
Ed Kilgore: The Anti-Choice Olympics: Somehow he missed Kansas.
Ever since the 2010 elections, Republican legislators and governors have been in a competition to see who can enact the most blatantly unconstitutional -- at least according to existing precedents -- laws on abortion in the country. The first batch, typically banning abortions after around 20 weeks of pregnancy, were keyed to dubious claims that this is the stage when a fetus could experience pain. Earlier this month the Arkansas legislature picked up the pace with a bill banning abortions after 12 weeks of pregnancy, this time making the alleged earlier point of detection of a fetal heartbeat the rationale. That bill was passed over Gov. Mike Beebe's veto.
Now North Dakota -- a state with just one abortion clinic -- is springing into action with a bill (just sent to Republican Gov. Jack Dalrymple) banning abortions after just 6 weeks of pregnancy, based on an even earlier assumption about the advent of a fetal heartbeat. Also under consideration in one chamber of the legislature is a bill emulating Mississippi's efforts (temporarily held up in the courts) to harrass abortion providers out of the state via bogus medical certification requirements, and a couple of bills adopting the "personhood" principle (giving a fertilized ovum the full protections of the law). So I guess Dalrymple will have the opportunity to sign the 6-week bill as a"compromise."
With Republican-controlled legislatures all over the South talking about emulating Arkansas' law (which may already be behind the times if North Dakota trumps it), the rather transparent purpose of this trend (other than bragging rights) is to force a fresh Supreme Court review of Roe v. Wade and Planned Parenthood v. Casey, the decisions banning state prohibitions on pre-viability abortions.
Ed Kilgore: Costs of a "War of Choice":
Most Americans are vaguely familiar with the number of U.S. combat troops killed in Iraq: 4,488. Less well-known is that another 3,418 U.S. contractors were killed, plus 318 troops from other allied countries, and 10,819 Iraqi government troops. Maybe Americans don't care about the 36,400 Iraqi insurgents killed, but we should care about the 134,000 Iraqi civilians who perished, which doesn't count the hundreds of thousands who died of war-related diseases. All told the direct human costs of the war are estimated at 189,000.
The Brown study predicted the ultimate cost of the war to U.S. taxpayers at $2.2 trillion dollars -- a bit higher than the initial U.S. government estimates of $50 to $60 billion issued in 2002 -- and that doesn't count another $1.7 trillion in interest costs associated with borrowing to cover war spending.
It would appear that the conclusions in Joseph E. Stiglitz/Linda J. Bilmes, The Three Trillion Dollar War: The True Cost of the Iraq Conflict (2008, WW Norton) were in fact too conservative.
Paul Krugman: Ten Years Later:
And there's a very big [tenth] anniversary coming up next week -- the start of the Iraq war. So why does there seem to be so little coverage?
Well, it's not hard to think of a reason: a lot of people behaved badly in the runup to that war, and many though not all people in the news media behaved especially badly.
It's hard now to recall the atmosphere of the time, but there was both an overpowering force of conventional wisdom -- all the Very Serious People were for war, don't you know, and if you were against you were by definition flaky -- and a strong current of fear. To come out against the war, let alone to suggest that the Bush administration was deliberately misleading the nation into war, looked all too likely to be a career-ending stance. And there were all too few profiles in courage.
The war, then, was a big test -- a test of your ability to cut through a fog of propaganda, but also a test of your moral and to some extent personal courage. And a lot of people in the media failed.
This remind me that I should go back to March 2003 and check what I wrote at the time (may be good for a mid-week post). Meanwhile, see Corey Robin: Bush Did Not Simply Lie in the Run-up to the Iraq War.
Also, a few links for further study:
Michael Hudson: The Big Threat to the Economy Is Private Debt and Interest Owed on It, Not Government Debt: From 1980 on, Americans have built ignored stagnant wages and built the illusion of an improving lifestyle on credit, which reached a peak just before the 2008 crash and is unlikely to ever recover. For other reasons, businesses have accumulated ever more debt -- here, tax deductability of interest has rewarded owners, especially private equity scavengers, for converting equity to debt. All this debt overhang is dead weight dragging down the economy. On the other hand, as long as government debt can be financed at low rates, it is no problem at all [emphasis below in original]:
The problem is that "fiscal responsibility" is economically irresponsible, as far as full employment and economic recovery are concerned. less government spending shrinks the circular flow between the private sector's producers and consumers. [ . . . ] What really is responsible is for the government to spend enough money into the economy to keep employment and production thriving.
Instead, the government is creating new debt mainly to bail out the banks and keep the existing debt overhead in place -- instead of writing down the debts.
So governments from the United States to Europe face a choice: to save the economy, or to save the banks and bondholders from taking a loss by keeping the debt overhead in place and re-inflating real estate prices to a level high enough to cover the debts attached to the property whose underwater mortgages are weighing down the banking system. [ . . . ]
Second, on that flow chart, you will see that for every half a trillion in federal deficit spending since the 2008 crisis, the Federal Reserve and Treasury have spent twice as much -- $1 trillion -- in providing new credit to the banks.
President Obama announced that he hoped the banks would lend it out. So the solution by his advisors, including some here today, is for the economy to "borrow its way out of debt." The aim of the Fed and Treasury subsidies of the commercial banks is to re-inflate housing prices, stock and bond prices -- on credit. That means on debt.
This obviously will make matters worse. But what will make them worse of all is the demand that the government "cure" the public-sector deficit by spending less generally, and specifically by cutting Social Security and Medicare. As in the case of the recent FICA withholding ostensibly to fund Social Security, the effect of less public spending into the economy is to force the private sector more deeply into debt.
Phillip Longman: The Republican Case for Waste in Health Care: Fearful that knowledge might make government programs more effective, the health care industry (helped by Republicans) "slipped language into Obamacare banning cost-effectiveness research." (As I recall, there is a similar prohibition against research that might prove troublesome for the gun industry.)
In its final language, the ACA specifically bars policymakers from using cost-effectiveness as a basis for even recommending different drugs and treatments to patients. In practical effect, the ACA ensures that such research won't even be done, let alone be used as a criterion for guiding how the nearly $2.6 trillion the U.S. spends on health care each year might be put to best use. Here's what you need to know to understand how the fix was put in behind the scenes and why correcting it must become a high priority for health care reformers.
Of course, cost-effectiveness research is fallible, especially at the level of the individual, who may be unstudied or simply the exception. Doctors and patients should be able to carve out space for exceptions, but they should do so on the basis of the best available information, not the least. Moreover, one needs to look at the expense side of the ledger. Major cost differences are often the result of patents or other forms of rent-seeking. Take those rents away and the costs will matter much less, making it easier to evaluate results on their merits.
Dylan Matthews: Washington Hates Deficits. Why It Hates Them Is Less Clear: Several charts, including a scatter of "Debt vs Interest Rates, 2008-2011" which shows that highly indebted Eurozone countries are indeed in trouble, but hardly anyone else is. We're told we should fear a high debt/GDP ratio because such a thing would bring high interest rates, but Japan's ratio is 218 percent and its interest rate is 0.67%, so? James Galbraith offers a scenario where government debt could keep growing indefinitely with no real adverse effects.
MJ Rosenberg: My Position on a Fair Solution to the Israeli-Palestinian Conflict:
It's time Israel read the handwriting on the wall. It should stop any expansion of settlements and fully end the blockade of Gaza, as first step towards acknowledging its new situation. Those actions alone would restore its friendship with Turkey. And it should acknowledge through words and deed that it is ready for negotiations based on the Arab League Initiative.
Negotiations won't start now, in the midst of the current turbulence in Syria and elsewhere. But Israel needs to be ready as soon as the dust settles. Additionally, it should end its threats toward Iran and let the Obama administration know that it favors lifting sanctions in return for tangible steps by Iran toward ensuring that its nuclear program is a civilian program and will remain one. Currently it supports "crippling sanctions" until Iran give up its right to any form of nuclear development. That simply won't fly.
All those who care about the survival and security of Israel should encourage it to take these steps. It is no act of friendship to encourage Israel to dig in when the tides of history are running against it.
I've been thinking about this issue a lot lately. My bottom line is that I'm agreeable to anything Israel might conceivably agree to that ultimately provides for equal rights for everyone somewhere. That could be the Arab League plan, and there is good reason adopting it because most of the concessions Israel could reasonably ask for have already been included. Or it could be something else, maybe something way out of the box. But it isn't going to happen, because Israel doesn't feel the need to agree to anything, because they feel like they're in charge, and they're convinced time is working for them. (Richard Ben Cramer had a story about a rabbi who promised to teach a dog to talk, who keeps begging for more time even though he knows he can't do it. Why, in the face of such a hopeless task, do you stall for time, he is asked? The answer: well, maybe the dog will die.)
You can imagine Israel as being split between two types of Jews. One follows only their own counsel, convinced that the world is ultimately against them, and that "only what the Jews do matters." Such people are condemned to fight forever, and they see any attempt to accommodate the rest of the world as letting their guard down, inviting destruction. The other feels that Israel can be part of a world at peace, at least with the support of critical allies. Indeed, Israel has depended on foreign support throughout the history of the Zionist movement: first from Britain, then Russia, France, and finally the United States. That group of Jews can be pressed into concessions if the world, especially the US, applies enough pressure. (Of course, there is also a third group of Jews -- those with a conscience -- but they don't seem to have any practical influence within Israel, even though the number of people who would like to think of themselves as in this group may be substantial.)
What's happened, at least since Bush came to power in 2001, is that the second group hasn't experienced any pressure to come around, so they've naturally deferred to the first group. Nor has Clinton or Obama been able or willing to apply any real pressure -- the fact that both primarily operated through an Israeli flack name of Dennis Ross attests to their lack of seriousness, erudition, and even self-respect. Meanwhile, first group leaders like Sharon and Netanyahu learned to feign enough flexibility to deflect half-hearted US efforts, all the while digging in deeper.
It is clear that world public opinion is turning against Israel. What isn't clear is whether as opinion turns there will be a moment when the US and Europe resolve to put effective pressure on Israel to make peace, nor is it clear that the second group of Israeli Jews can coalesce and take charge of Israel to do what needs to be done. If either fails the long run will be bleak indeed, with the first group controlling an Israel that is estranged from the world and locked in mortal combat with those it tramples, and the world as a whole will be a far nastier place.
Rosenberg has the right idea here -- not so much the details as the notion that it is urgent for constructive groups both in Israel and the US to come forward, otherwise they're likely to perish under the hawks that currently dominate both. (I also think it is fair to say that the Palestinians have never been more accomodating in their search for peace -- unless you insist on inequal treatment and denying their human rights, they are not at present the problem.)