Posts Tagged ‘The Economist’

Must-Reads of the Week: American Power, Inequality, 1 Billion Heartbeats, Hacking Life, Anthora Cups, Structural Deficit, Financial Doomsedays and Crises, China, the Tea Party’s Views on Immigration, and Lady Gaga

Friday, April 30th, 2010

There were a lot of good articles and posts I came across this week — so brace yourself…

1. The American Power Act. David Brooks makes the case for progressive reform — specifically the American Power Act regarding climate change:

When you read that history, you’re reminded that large efforts are generally plagued by stupidity, error and corruption. But by the sheer act of stumbling forward, it’s possible, sometimes, to achieve important things…The energy revolution is a material project that arouses moral fervor — exactly the sort of enterprise at which Americans excel.

Matt Yglesias had earlier this week critiqued Brooks (among others) for taking the exact opposite stance of the one he was adopting here:

Oftentimes in the Obama Era the difference between “reasonable” conservatives (David Brooks and Greg Mankiw often leading the charge) and reasonable liberals has been that reasonable liberals look at flawed legislation that would improve on the status quo and support it while “reasonable” conservatives look at flawed legislation that would improve on the status quo and oppose it, while claiming to support alternative flawed proposals that they don’t actually lift a finger to organize support for within their own ideological faction.

2. Inequality, social mobility, and the American Dream. The Economist had a good piece that can serve as a starting point for a post I’ll be writing soon on inequality, social mobility, and the American dream:

The evidence is that America does offer opportunity; but not nearly as much as its citizens believe.

Parental income is a better predictor of a child’s future in America than in much of Europe, implying that social mobility is less powerful.

3. The Science of Life. Jonah Lehrer for Seed magazine has a brilliant piece on how cities are like living organisms. As a side matter, he notes this beautifully poignant data point:

[A]n animal’s lifespan can be roughly calculated by raising its mass to the 1/4 power. Heartbeats scale in the opposite direction, so that bigger animals have a slower pulse. The end result is that every living creature gets about a billion heartbeats worth of life. Small animals just consume their lives faster.

4. Fine-tuning life. Gary Wolf for the New York Times Magazine explains how the accessibility of computers is creating data about every aspect of our lives — and of the efforts of some people to begin to catalog and find insights in their own data. Surprisingly, Lifehacker was never mentioned.

5. The Anthora Cup. Margalit Fox of the New York Times writes the obituary for Leslie Buck, the designer of the Anthora cup:

It was for decades the most enduring piece of ephemera in New York City and is still among the most recognizable. Trim, blue and white, it fits neatly in the hand, sized so its contents can be downed in a New York minute. It is as vivid an emblem of the city as the Statue of Liberty, beloved of property masters who need to evoke Gotham at a glance in films and on television.

6. Unified Theory of the Financial Crisis. Ezra Klein synthesizes various narratives into a unified theory of the financial crisis.

7. The Structural Deficit. Donald B. Marron provides a coherent and reality-based conservative look at America’s structural deficit. Absolutely a Must-Read.

8. The Financial Doomsday Machine. Martin Wolf dedicated his column in the Financial Times last week to describe the “financial doomsday machine“:

[T]he financial sector has become bigger and riskier. The UK case is dramatic, with banking assets jumping from 50 per cent of GDP to more than 550 per cent over the past four decades…The combination of state insurance (which protects creditors) with limited liability (which protects shareholders) creates a financial doomsday machine. What happens is best thought of as “rational carelessness”. Its most dangerous effect comes via the extremes of the credit cycle.

9. Realism on China. Stephen Walt explains his take on China’s strategic ambitions — and its inevitable rivalry with the United States and other regional powers.

10. The Tea Party & Immigration. Radley Balko explains his take on the widespread support among the Tea Party for the massive government power grab that is Arizona’s new immigration law:

It also makes a mockery of the media narrative that these are gathering of anti-government extremists. Seems like in may parts of the country they’re as pro-government as the current administration, just pro-their kind of government.

Coincidentally, I made that exact point about the Tea Party back in September 2009 entitled: These Protests Aren’t Against Big Government, But About Liberals Running the Government.

Andrew Sullivan piles on:

Worse, on the fiscal front, they’re total frauds. They have yet to propose any serious cuts in entitlements and want far more money poured into the military-imperial complex. In rallies, the largely white members in their fifties and older seem determined to get every penny of social security and Medicare. They are a kind of boomer revolt – but on the other side of that civil conflict, and no longer a silent majority. In fact, they’re now the minority that won’t shut up.

More and more, this feels to me like an essentially cultural revolt against what America is becoming: a multi-racial, multi-faith, gay-inclusive, women-friendly, majority-minority country.

11. Sovereign Debt Crisis. Felix Salmon and Paul Krugman are both very pessimistic about how Greece will get out of this crisis — and what it means for the global economy.

12. Lady Gaga’s Ambition. Brendan Sullivan for Esquire chronicles the life and ambitions of Lady Gaga:

“There is a musical government, who decides what we all get to hear and listen to. And I want to be one of those people.” The girl who said that didn’t yet have the number-one hits (although she had already written most of them).

She was not yet the creative director of the Haus of Gaga, which is what she calls the machine of more than a hundred creative people who work for her. She didn’t make that statement in an interview or from the stage. She made it in 2007, when she was a go-go dancer sewing her own outfits and I was her DJ. She wrote it in one of my notebooks…

Lady Gaga is a student of fame, and the fame she studies most is her own — being famous seems to both amuse and fascinate her.

[1st image by me; 2nd image by LarindaME licensed under Creative Commons.]

The Economist’s Podcast Entitled “The Democrats lose Massachusetts” Is “an insult to people’s intelligence.”

Friday, January 22nd, 2010

The Economist is far and away one of my favorite magazines – providing insightful commentary and analysis from a normally steady perspective on the world as well as America. But the podcast I heard today entitled, “The Democrats lose Massachusetts” featuring a conversation between Adrian Wooldridge and Christopher Lockwood was atrocious – combining terrible analysis with factual inaccuracies – suggesting that the participants hadn’t actually paid any attention to the health care debate they were commenting upon, but instead had gathered clichés from the 1990s to bat around.

The single most frustrating portion of the conversation was this description of what how Obama approached the Republicans during the health care negotiations:

Had Obama not got himself into a position to ram health care through on a straight party line vote using his 60 seats in the senate and saying, “Okay, fine, we’ll do it without any Republican votes.” There might have been the possibility of making a deal but essentially he’s the man who says, “I’m not going to pay attention to you. I’m going to do it my way. Oops, I can’t. Can we come back and do it your way now?” And they say, “Sorry, you had your chance. You could have dealt with us. You could have given us more of what we wanted: proper cost control, and things like tort reform. But they didn’t do that.” And now for them to turn around and say, “Well, okay, sorry, we got that wrong.” They are more likely to say, “It’s too late for that. The midterms are on their way. Why should we get you out of the hole in which you dug yourself?”

This is wrong on so many levels! Most dramatically, Obama bumped his first deadline in order to satiate the demands from Republicans that he slow down. He courted Chuck Grassley, Orrin Hatch, Olympia Snowe and any other Republican senator who showed a willingness to support legislation. The administration was willing to re-write the bill to get their support. Max Baucus crafted a bill largely with these Republicans – cutting out the progressives in the Senate from the process. And in all of this, even the more progressive House bill is a slightly beefed up version of what Republicans have been suggesting all along – a bill focused primarily on cost control. But Orrin Hatch stopped negotiating. And then Grassley began to continue to negotiate in private while condemning the bill in public – declaring that he wouldn’t support the bill even if he got everything he wanted in it if the party wasn’t behind him. Even then, Democrats continued to negotiate with him. And finally, Snowe remained on the fence until the Republican leadership chased her back into the fold. It was at this point that Obama finally decided to say, “Okay, fine, we’ll do it without any Republican votes.” After the bill had been amended to satisfy Olympia Snowe – and Chuck Grassley – and Ben Nelson – and Joe Lieberman. But the pressure on the Republicans was too great – so they bolted.

It is also claimed that, Democrats said: “We’re not willing to annoy one of our constituencies – the tort lawyers – for the public good.” Yet the Democrats and Obama explicitly said they were willing to do this if Republicans would only support some form of the bill – and even without their support offered pilot programs to test different methods of government intervention into this area. To attack a component of their base while Republicans offered them no support would be political suicide!

And then of course, there was the inexplicable statement that, “To say you need to have pilot programs and study it is just really an insult to people’s intelligence.” This is an incredible comment coming from an organization that supports limited government. Pilot programs are exactly the modest approach that the Economist should be supporting – as they can help determine what works and what doesn’t with the minimum disruption to the market. Would they rather Obama offer bold ideas and implement them nationally, with fingers crossed hoping that the unanticipated consequences don’t do more harm than good? The type of tinkering that pilot programs are indicative of are exactly what a capitalist, free market approach should support – especially as they later deride the Obama administration as consisting of, “pointy-headed intellectuals with their big social engineering plans.” Eliminating or curbing the rights of patients to sue regarding their medical care is right wing social engineering – which the Economist apparently has no problem with because of who it will benefit.

So, in conclusion, Woolridge and Lockwood of the Economist maintain that Obama’s health care plan was too big and ambitious and so should be scrapped and that it wasn’t big enough to do what they wanted; that they are mystified how Obama took so long to pass health care reform as he rode roughshod over the Republicans. The first is contradictory – and the second betrays that they weren’t paying attention to health care until recently. Which perhaps explains why they come to the conclusion that the Democratic response to the election of a “conservative Republican” (actually a moderate Republican who is pro-choice and supported the Massachusetts model of health care that Obama’s plan is similar to) is that: “They have to overinterpret this result!” and abandon reform.

[Image by Arenamontanus licensed under Creative Commons.]

The Un-American Pledge, Nietzsche (Republican), Islamists, Anti-Statism, Health Care Reform (again), and Abortion Politics

Wednesday, November 25th, 2009

Today, I present to you an early addition of the best reads for the long Thanksgiving weekend…

1. The Un-American Pledge. Michael Lind explains why the Pledge of Allegiance is un-American.

2. Nietzsche was a Republican. The Economist’s Democracy in America discusses Medicare and Nihilism. As it is undeniable that America’s population is aging, and that this accounts for the massive projected deficits in the future, and as everyone also acknowledges that such deficits are unsustainable, something must be done. The health care plans proposed by the Democrats include – along with various experimental measures to restrain health care spending – a Medicare commission “empowered to make decisions that automatically become law unless Congress comes up with equivalent savings” that will reduce spending as much. Republicans and the blandly smiling wise men and women of the pundit class have made it a point of conventional wisdom that Congress won’t be able to push through the cuts, and will find a way to circumvent this mandate. DiA, echoing a point Ezra Klein has been making repeatedly for the past few weeks, challenges those criticizing the plan to come up with something better:

If you don’t think an independent Medicare commission empowered to make decisions that automatically become law unless Congress comes up with equivalent savings will do the trick, then you have a responsibility to suggest something that will. Otherwise you’re just placing a bet that America’s government is going to self-destruct—a tenable argument, certainly, but not very helpful.

3. Learning from former islamists. Everyone else seemed to recommend this article a few weeks ago when it came out, but I just got to it recently myself. Johann Hari interviewed a number of former islamists who have recently renounced islamism and have begun to fight for their version of a “secular Islam” in Great Britain. He portrays this group as a vanguard. One of the islamists, Maajid Nawaz was a recruiter for an islamist group in Egypt for a time. Nawaz’s description of factors affecting recruitment seems to coincide with both intelligence agencies’ and liberals’ judgments, and to contradict the right-wing understanding:

“Everyone hated the [unelected] government [of Hosni Mubarak], and the US for backing it,” he says. But there was an inhibiting sympathy for the victims of 9/11 – until the Bush administration began to respond with Guantanamo Bay and bombs. “That made it much easier. After that, I could persuade people a lot faster.”

Eventually, Nawaz was imprisoned in Egypt. He was abandoned by the islamist group that he was working for. The only forces protecting him, as a British citizen, were forces he considered “colonial” and corrupt:

“I was just amazed,” Maajid says. “We’d always seen Amnesty as the soft power tools of colonialism. So, when Amnesty, despite knowing that we hated them, adopted us, I felt – maybe these democratic values aren’t always hypocritical. Maybe some people take them seriously … it was the beginning of my serious doubts.”

4. Anti-Statism: As American as Apple Pie. John P. Judis of The New Republic delves into the undercurrent of anti-statism in the American psyche.

5. Getting depressed about the public option. Timothy Noah depressed me more than anyone else with his ruminations on the public option.

6. Feeling better about health care reform. These pieces by Ron Brownstein and Andrew Sullivan though have made me feel much better about health care reform in general. Brownstein’s piece is especially helpful in looking at the various cost-cutting measures in the bill, and has a rather optimistic take. President Obama has apparently made that post “required reading” among White House staff. I’ll be following these posts up at a later date.

7. Abortion politics. The New Yorker had an extraordinary interview about abortion politics with Jon Shields. Shields seems to be, himself, pro-choice, but he seems to have reached an understanding of abortion as an issue which contradicts the propagandistic rhetoric that passes for most liberal commentary on abortion, which presents its opponents as being mainly concerned with keeping women in their place.

[Photo by road fun licensed under Creative Commons.]

What Do Matt Yglesias, Ezra Klein, and Che Guevera Have in Common?

Friday, July 31st, 2009

 Answer: Not much.

But Democracy in America’s anonymous blogger seems to think that some of liberal bloggers Ezra Klein’s and Matt Yglesias’s recent posts suggest a new and profound (indeed revolutionary) disenchantment with our means of governance. DiA cites Klein who recently wrote:

[Health care] like climate change, is a litmus test for our government. Both are serious, foreseeable and solvable threats to our society. One threatens to bankrupt the country. The other threatens irreversible damage to the planet we live on. Responding to such threats is the test of a political system. And our system will fail it. We will not avert catastrophic climate change. We will not protect ourselves from health-care inflation.

Yglesias recently wrote this post I’ve noted before explaining how our current media-political system can be manipulated so easily by people acting in bad faith – and how that leads to bad policy outcomes.

DiA tries to summarize this generation of pundits and policy wonks – led by Klein and Yglesias:

Mr Klein exemplifies the generation of young left-leaning policy wonks, journalists and activists who have been formed politically by the reaction against Bush-era conservatism, and for whom the Obama presidency represents the first experience of wielding political power. Like Mr Klein, many of these young progressives are fundamentally moderate, process-oriented wonks who, long before the Obama campaign even began, had accepted that the pragmatic limitations of real-world American politics rule out any utopian, or even first-best, solutions to most public-policy problems. They have happily dedicated themselves to figuring out what kinds of reform are possible within the constraints of corporate and interest-group lobbying, ideological and partisan divisions, and America’s kludgey, creaking 220-year-old machinery of government.

But now, DiA suggests, they have abandoned this moderation and want a revolution – that they have become disillusioned about our media-political processes due to Obama’s lack of success.

Certainly, Klein and Yglesias are extremely critical of the processes by which policy is created and by which the public views and understands policy debates. They believe that this system is broken. But both believed this before Barack Obama’s recent troubles – as Yglesias himself pointed out in response to DiA.

What DiA is missing is that reformists (towards both the right and left, but here I will look only at the left) have long been extremely critical of our media-political process works. Just two days ago, in The American Prospect, executive editor Mark Schmitt wrote:

[T]he idea that America’s “existing democratic institutions are strong enough to deliver accountability ” flies in the face of all observed reality. For at least eight years, those institutions consistently failed to deliver accountability, and the Department of Justice and courts likewise failed to punish some of the greatest abuses of power in our history…

As Al Gore wrote in his book describing The Assault on Reason:

American democracy is now in danger—not from any one set of ideas, but from unprecedented changes in the environment within which ideas either live and spread, or wither and die. I do not mean the physical environment; I mean what is called the public sphere, or the marketplace of ideas.

It is simply no longer possible to ignore the strangeness of our public discourse. I know I am not alone in feeling that something has gone fundamentally wrong.

Or look at Lawrence Lessig’s lecture on Corruption – which eloquently makes the case for “disinterestedness” as one of America’s key founding principles which has been since lost. Read Glenn Greenwald’s blog – which constantly points out the deep and serious faults in our media-political processes. Obama himself made a number of these arguments. Virtually every intellectual reformist has a “theory of what’s wrong” – and what none of them seem to disagree with is that something is wrong.

While in other times, reformers may have focused more on accomplishing something regarding important issues – temperance, Wall Street greed, environmental issues, discrimination – today, the central problem facing reformers is how to reform the system itself. This is the essence of the reform movement today – from Obama to Gore, Lessig to Yglesias, Klein to van Heuvel.

Reformers have presented compelling critiques of how the media presents issues; of how Congress deals with issues; of how long-term problems such as an increasing number of uninsured, spiraling health care costs, climate change, copyright expansion, and many others are ignored or marginalized because any attempt to address these issues involves significant obstacles and risks in the present for an uncertain future benefit. One of the key beliefs that makes reformers reformers today is their understanding that America’s political system is broken and that our traditional democratic institutions just aren’t up to the job of managing serious and difficult areas and making rational, long-term decisions when the payoff only comes after policy-makers are out of office.

This idea was the basis of my post yesterday discussing Obama’s focus on outsourcing authority to independent, technocratic institutions as a way of getting around our broken media-political system.

(more…)

The Financial Crisis as a Bawling Baby

Tuesday, January 6th, 2009

Adam Gopnik in The New Yorker:

Far from adjusting our expenditures to the needs of the moment, it seems, we tend to wildly overswing, according to our mood. The difference between the provident ant, who cautiously saves up for winter, and the carefree grasshopper, dancing and hopping, is a matter of what Keynes called “animal spirits.” It is better for the common lot if each of us is a hopper (and a shopper) rather than a hoarder. Being a nation of grasshoppers is allied to being a nation of hope.

That bit reminds me of one of the most insightful things written in the midst of the opening panic in September, this blog post by Megan McCardle about some cognitive errors that contributed to the crisis. But then Gopnik takes a very different route than McCardle, bringing the financial crisis to life by invoking a holiday classic:

In “It’s a Wonderful Life,” George Bailey’s Building & Loan is, let us recall, the reckless banker of Bedford Falls, giving what would now be called subprime mortgages to people like Mr. Martini, who would be better off renting. And it is mean, miserable old Mr. Potter who berates Bailey for the practice. “And what does that get us?” Potter asks. “A discontented, lazy rabble instead of a thrifty working class.”

Gopnik sees value in both George Bailey’s and Mr. Potter’s views – with George calling on people to sacrifice for the greater good and Potter acting in his own selfish interest and assuming others will as well. (Another recent column I read – somewhere – pointed out that the dystopia of Pottersville would have survived the industrial decline of upstate New York much better than the Bedford Falls George Bailey protected.)

But for Gopnik – as for Caldwell, and as for most observers – the crisis demonstrates the fickleness of the market itself, and the extent to which it is dominated by what an economist might have once called “animal spirits”:

An economy is not a rational model; it’s an emotional muddle. It depends on how you feel about your neighbors, about next year’s hopes, and about Mr. Martini. Which is why another new President once warned against fearing fear, and why the only thing that can cause us to panic now is panic. There is something faintly encouraging, just barely hopeful, in the human familiarity of the counsel being given by the Keynesian economists. For what they are telling us is just what the parent, in that long bad moment, wishes for the child: Take a deep breath. Look at the ornaments! Don’t cry.

The Financial Crisis as a Mood

Tuesday, January 6th, 2009

Christopher Caldwell in The Weekly Standard (via David Brooks):

Neither Barack Obama nor John McCain had much of value to say about the financial crisis as it raged through the headlines this fall. Rather than shred their campaign strategies, they played it safe, as most politicians would have. But in the name of justice we ought to recall that there was one candidate who did foresee our predicament with considerable accuracy when it still lay far in the future. Ron Paul, in almost every speech he made during the Republican primaries, spoke of bubbles, reckless credit growth, and the “unsustainability” of present policy. So why isn’t there more demand for the common-sense solutions he put forward? Because common sense is not much use in a financial panic.

This was the great discovery of Walter Bagehot, the prolific 19th-century essayist and journalist, who was editor of the Economist from 1860 to 1877. (His name rhymes with gadget.) Ninety-nine percent of the time, common sense is a synonym for practicality. But in a serious banking crisis, doing the commonsensical thing–hunkering down and counting your pennies–has proved to be not practical at all.

And:

So the “cultural contradictions of capitalism” run deeper than we thought. The classic idea, as laid out in their different ways by the economist Joseph Schumpeter and the sociologist Daniel Bell, is that capitalism rewards diligence; diligence produces wealth; wealth begets idleness; and idleness undermines capitalism. But when, as now, push comes to shove, we can ask whether there is really anything particularly capitalist about the virtues of diligence and self-restraint. The real capitalist virtues appear to be optimism and luck. From a central-banking perspective, the cultural contradictions are not results of capitalism but elements of it.

The problem with central banking is that it reacts to a system that has been mismanaged by rewarding the managers.

But this closing is what really gets me:

To be blunt, credit is successfully reestablished when financial elites say, “When.” Credit is close to a synonym for the mood of the ruling class. To say an economy is based on credit is to say it is based on animal mysteries. Glamour, prestige, élan, sprezzatura, cutting a figure .  .  . that is what the economy is made of. It is a rather terrifying thought.

Credit as a synonym for the mood of the ruling class – how frightening yet illuminating. But read the rest of the piece too. Caldwell – whose work I haven’t usually enjoyed – gives conservatism a good name with this piece. It also slipped by me though that Caldwell, while giving a generally conservative justification for the extreme government intervention of a central bank and government during a crisis, subtly invokes John Maynard Keynes. Keynes wrote in The General Theory of Employment, Interest and Money that:

Even apart from the instability due to speculation, there is the instability due to the characteristic of human nature that a large proportion of our positive activities depend on spontaneous optimism rather than mathematical expectations, whether moral or hedonistic or economic. Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits – a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities. [my emphasis]

As Hans O. Melberg summarizes the passage: ” It is clear that Keynes believes economic fluctuations can be partly explained by spontanous (or exogenous) shifts in moods (optimism or pessimism).”

If Caldwell is any indication, it seems that liberals and conservatives can now largely agree about the instability of markets.