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We Won’t Always Have Paris

Although we’ve always been skeptical about the more alarmist claims of the anthropogenic global warming theory, and were opposed to President Barack Obama’s signing of the Paris Climate Accords, we’re nonetheless also skeptical about President Donald Trump’s decision to withdraw from the agreement.
There are strong arguments to be made on both sides of the matter, and we expect they’ll take up much of the next several days of news. That will push aside all the talk about Kathy Griffin and covfefe, at least, and barring any bigger-than-usual bombshell about the Russia thing with Trump and Russia it might even overshadow that. The arguments will be about science and economics and diplomacy and domestic politics, too, with plenty of good points being made on both sides of each of them, and for now we’ll not bother to listen to anyone who claims to have all the answers.
Those opposed to Trump’s decision will reflexively insist that the science is settled, but that’s not quite persuasive to us. They’re right that most scientists accept the anthropogenic global warming theory, and although it’s almost certainly not the 96 percent they always claim it might well be enough to comprise the consensus of scientific opinion they always claim, but science is not settled by majority rule and the consensus of scientific opinion has often proved objectively wrong over the past many millennia.
There does seem to be a relatively recent-in-the-grand-scheme-of-things warming trend on the planet, and there’s also evidence that it seems to have stalled for the last few relatively-blink-of-an-eye decades, and it’s awful tricky figuring out how the latest trends compare to all those millennia before Daniel Fahrenheit started measuring temperatures not so long ago so in the 1700s, and nobody denies that temperatures have gone up and down over the long history of the universe. We’ll not deny that all the carbons humankind has undeniably been emitting into the atmosphere over the past couple of brief centuries are bound to have some effect, but anyone arguing in good faith will admit that the almighty sun and it’s changing cycles are also influential, and all the computer models that underly the theory that it’s all man’s fault did fail to predict the recent pause, so at this point we’re skeptical of anybody’s projections for the next few hundred years or so.
There’s also a dauntingly complex argument about what humankind should do about it. All those carbon emissions come courtesy of an expanding post-Industrial Revolution global economy that has not only averted a Malthusian catastrophe for the planet’s seven billion or so inhabits but has also dramatically raised their collective quality of life, so those quantifiable advantages have to be weighed against the still-theoretical disadvantages of all that carbon-emitting. At this moment almost all the people in the world who are aghast by Trump’s decision are still going to drive in automobiles and fly in jets and log in to electric-powered entertainments and otherwise enjoy the extravagant-by-historical standards luxuries of the modern carbon-emitting age, and for now they don’t have a persuasive argument that they can have their environmental cake and eat it’s industrialist deliciousness too. They’d be hard-pressed to make the case that cockamamie Paris agreement somehow squares that circle, but that doesn’t mean the world wouldn’t be better off with a little less carbon-emitting.
Except for Syria and Nicaragua and now the United States everyone is in agreement with that Paris accord, and although the consensus of global political opinion has also often proved objectively wrong over the many millennia that also seems well worth taking into account. Whatever the hard-to-calculate environmental and economic effects of Trump’s decision, the immediate diplomatic consequences are not likely to be helpful. We’d probably be more supportive of any other Republican president’s decision to withdraw from the Paris boondoggle, but any other other Republican president probably wouldn’t have spent the preceding weeks antagonizing the rest of the North Atlantic Treaty Organization and the seven most industrialized and post-industrial nations of the west, and made the credible case to the international community that the Paris accords were flawed for all of the world’s seven billion or so inhabitants.
Trump only made his campaign-style “America First” case for the decision, and it remains to be seen how that plays out in our domestic politics. He made a convincing case that any restriction on carbon-emitting would hamper an economy that thrives on them, even if he characteristically overstated it and invited all the plausible arguments about how an alliterative energy economy might thrive, and we don’t doubt that it will be welcomed by those folks who already support him. Annoying all those euro-trash and other global elites is another added benefit, as far as Trump’s most ardent supporters are concerned, but the president will probably have to make case to the rest of the country to nudge his poll numbers past their 40 percent or so, and so far he hasn’t shown much of a knack for that.
Any other Republican president and most of the plausible Democratic possibilities probably would have stayed signed on and did what the rest of the countries do, which is mouth the required platitudes and then let their economies expand to whatever carbon-emitting levels it might reach, and although that’s pretty damned cynical it seems a smart move. America is asserting its sovereignty by withdrawing from the accord, as Trump rightly notes, but sovereign nations often enter into international agreements, as Obama and every other president did, including all the presidents who were on board with that NATO deal and all the other agreements Trump has lately been undermining, and how that plays out in domestic politics is anybody’s guess.
In any case we expect both the planet and our domestic politics will somehow survive Trump’s decision, and that the Russia thing with Trump and Russia will soon be back in the news again, and that some D-list celebrity or incomprehensible presidential “tweet” will once again intrude on  the conversation.

— Bud Norman

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The Greeks and the Rest of Us

The situation in Greece seems hopeless, no matter how its citizens vote on an emergency referendum Sunday, and the rest of the world seems in pretty sorry shape as well.
Apparently nobody in Greece can understand the 72-word question being put to the voters, assuming that the government is able to print up enough ballots and get them distributed to all the polling places on time, and it’s certainly Greek to us. So far as we can gather, however, a “yes” vote is for accepting the European Union’s seemingly generous offer to continue the loans that have been keeping the Greek economy barely afloat, although in exchange for draconian budget cuts and other austerity measures that will almost certainly be painful to the already pained average Greek, and a “no” vote likely means a Greek exit — or “Grexit,” as it’s become known — from the EU and its onerous demands as well as extravagant promises of continued government largesse, although in reality it will more likely cause the complete collapse of the Greek economy and start causing all those ample government checks to bounce right out of the last of the country’s failing banks.
The very young and stupid Greek Prime Minister and his socialist party are backing the “no” vote, on the argument that it will allow him to negotiate an even more generous deal with his EU creditors, but only the most rash would predict how that might turn out. Germany’s Chancellor Angela Merkel and that the rest of the EU elite would obviously prefer not to lose a charter member of their club, which might bolster the growing number of Eurosceptics in Britain and other important countries as well, and make it embarrassingly clear that their essential organizing policy of a one-size-fits-all currency for a fissiparous coalition of 28 countries that still stubbornly cling to some sense of national interest and have very differently-sized economies was unworkable all along. On the other hand, Greece has become so unproductive and such a pain in the EU’s economic posterior that the club might well decide it is best rid of it, and that if Greece instead becomes a client of Moscow that it would be a small victory for what remains of the West in the renewed Cold War.
In any event, the Greeks will still wind up broke and rioting in the streets against the reality that they can’t forever keep on sending out retirement checks to 50-year-olds and unemployment checks to the more than 50 percent of the 20-somethings who are without jobs and taxing the in-betweens to such an extent that they’ve all stopped paying taxes and produce children and future taxpayers at a dwindling rate and have it all total up to about half the country’s gross domestic product, even if has seemed to work just fine up to now. These schemes always work out for while, and it’s so great when they do that the mean-spirited fuddy-duddies who warned that it would all come to a bad end are thoroughly discredited, but eventually reality intrudes and it does come to bad end and there’s nothing for the idealistic and generous to do but riot in the streets. One is tempted to shake his head in pity and disgust at the Greeks, who once upon a long-ago time gave the world Plato and Aristotle and Euripides and Aristophanes and Sappho and all sorts of intriguing ideas about human nature, but those same long-ago Greeks have taught us to notice that such weakness to temptation is by no means a uniquely Greek thing.
While the Eurocentric American media has mostly paid attention to Greek’s travails, a few stories have leaked out that Puerto Rico is also on the verge of default and bankruptcy. The same sort of extravagant promises made by politicians, and eagerly believed a majority of the country’s voters, have led a large portion of the island’s residents to take advantage of its immigration relationship with the United States and move mainland, which of course has contracted the economy and increased the need for government relief and raised the debt and further hindered the economy and forced more people to flee. Greeks and Puerto Ricans are relatively minor players in the world economy, but Chicago, the third-largest city of the first or second largest economy depending on your accounting methods, whose municipal bonds are now rated as junk, is finding that the promises made to and believed by its vast number of its public servants were a few billion dollars more extravagant than its dwindling number of taxpayers could keep. Similar situations prevail in numerous other American cities and counties and states, as well, and of course the the debt of the federal government is keeping a relative pace with that of Greece. Unlike Greece in its post-Drachma days the United States can keep printing greenbacks to service that debt, and unlike the Euro or the Drachma the greenback is the world’s reserve currency, which seems to be working up to now, but only the rash would predict how that’s likely to turn out.
Lest we sound unduly pessimistic about America so soon before the Fourth of July, we would also note that China, which is the first or second largest economy in the world depending on which accounting method you believe, also has its debt woes. Even in the still more-or-less Communist country felt obliged to make extravagant promises to the people, the people were eager to believe, and now they’re stuck with the gargantuan tab for giant ghost cities and other ambitious make-work projects. Similar examples of human beings succumbing to human nature be found all over the globe, and probably in at least one of the countless tax jurisdictions where you live, and at various points throughout human history.
In between those various points of human history when the clash extravagant promises and economic reality turned out very badly, there were periods of prosperity and the self-sufficiency of citizens and the resultant improvement in human achievement that resulted from the lessons that had been so painfully learned. They all ended when enough time had past that the lessons were forgotten and the extravagant promises became all the more enticing, but the process tends to repeat itself.
There’s some faint hope, we suppose, that here in America these lessons will be re-learned from the examples of Greece and Puerto Rico and China and Chicago and the rest of the bankrupt parts of the world, and that perhaps the inevitable crisis can be forestalled until the next presidential election when the people will choose correct course. Only the most rash would predict how that might turn out, though. Our guess is that the next presidential election will more likely be about homosexual marriage and the latest celebrity’s sex-change operation and subsidized condoms the Confederate battle flag and whatever shiny objects the media might find, and of course the extravagant promises that politicians always make the people are always eager to believe. For now, at least, it all seems to be working out, or at least well enough to make those further extravagant promises sound plausible.

— Bud Norman

Economics Makes You Mean

We’ve been poring over the latest economic data, and find them unsatisfactory. The number of jobs created in March was half of what was expected and the worst in 15 months, estimates for the previous two months were revised downward to bring the annual rate to the levels of two years ago, the unemployment rate stayed at a desultory 5.5 percent only because people continue joining the record of number of idled workers who are outside the labor force and are therefore not counted, retails sales fell, manufacturing activity slowed, wages declined, and the Federal Reserve Board’s revised estimate for first quarter growth is a mere 0.1 percent annualized rate. This strikes us as just awful, but perhaps that just because we’ve made an informal study of economics and are therefore greedy anti-social types who cheat, lie, steal, and hate the poor.
That’s the suspicion, at any rate, of Occidental College’s sociology professor Lisa Wade, who recently wrote that “Yep. Economics majors are more anti-social than non-econ majors. And taking econ classes also makes people more anti-social than they were before. It turns out, there’s quite a bit of research on this, nicely summarized here. Econ majors are less likely to share, less generous to the needy, and more likely to cheat, lie and steal.” We’re disinclined to take seriously any work of scholarship that begins with “yep,” especially when it ends with a such an obviously inane conclusion, but Wade is a sociology professor, and at a college where President Barack Obama once matriculated, and there is a certain circular logic to her argument, so maybe she’s on to something and we’re just too blinded by greed to see.
As proof that people who understand economics are greedy, Wade cites an experiment by two economists, oddly enough, who found that economic majors at the University Washington were less likely than other students to contribute to a “left-leaning public interest group” and a “non-partisan group that lobbies to reduce tuition rates.” An alternative explanation for this might be that people who study economics are more likely to believe that a “left-leaning public interest group” is likely to do more harm than good for the needy, and that the supposedly non-partisan group lobbying to reduce tuition rates hopes to accomplish that by sticking taxpayers with the bill rather than kicking out all the unnecessary administrators and compliance officers and phony-baloney sociology professors who have been driving up the cost of a college education, and that their reluctance to donate is therefore motivated by altruism rather than greed, but that kind of thinking isn’t going to get a modern academic tenured. The economists also conducted experiments with students asked to play the “prisoner’s dilemma” and other role-playing games that involve a choice between the communal good and self-interest, and were unsurprised to find that those who had studied economics were more likely to choose the latter. To their credit they acknowledge the possibility that the more economically savvy understand that if everyone pursues their own self-interests it will result in a greater communal good, but of course they are too kind and selfless to countenance such crazy talk.
The rest of the “quite a bit of research” Wade cites is another sociologist who argues that economics majors simply aren’t exposed to all of the “conflicting pro-social views” being offered in political science, philosophy, and of course sociology classes. Presumably these other disciplines have found a refutation of the laws of supply and demand and the rest of soul-deadening science found in the economics classes, and once an economics major has been sufficiently indoctrinated by the rest of the faculty he will come to see that their preferred ideas work better after all.
“It’s an issue of grave seriousness,” Wade warns in her final paragraph, “as the criminal and immoral behavior of our financial leaders is exactly what triggered a Great Recession once … and could again.” She’s referring to the financial meltdown of 2008, of course, which was caused by all the bad mortgage loans that banks had extended to borrowers with bad credit histories, which was encouraged and often mandated by government policies that were supposed to bring fairness and equality and social justice and all those good things to a heartless economic system that preferred not to loan money to borrowers with bad credit histories, just as efforts to bring fairness and equality and social justice and all those good things have so often proved counter-productive, but we only say that because we have a rudimentary understanding of economics, and are therefore bad people. The kinder, gentler approach might prove disastrous, but what are results compared to good intentions?

— Bud Norman

Happy Equal Pay Day

Tuesday was “Equal Pay Day,” by presidential proclamation, but we did not mark the occasion an appropriate observance. By habit we try not to pay anybody for anything, and on those occasions when we find it unavoidable we seem to wind up shelling out at least as much to women as to men, so there was no opportunity to address the sexist economic inequality that the president hoped to address with the holiday. We could have baked a cake, we suppose, but at the moment we don’t know any sufficiently put-upon women in need of the gift.
Still, we enjoyed watching the president make a fool of himself with his ostentatiously designated day. The day was so designated as a way to hype the president’s signing of an executive order to address a supposed gap in the pay between women and men, as the distaff side is supposedly making only 77 centers for every dollar earned by the more brutish sex, but even the ost reliably news outlets were disinclined to play along.
That hackneyed 77 cents statistic has been thoroughly debunked, for one thing, by numerous commonsensical economists who immediately noticed that it does not take into account the typically longer years that tend to be worked by men or the other relevant factors. Worse yet, the White House’s hapless spokespeople were forced to admit as mud when even the likes of The New York Times and The Cable News Network were asking about an American Enterprise Institute study that found the White House was paying its women only 88 cents to the dollar earned by its is menfolk. The sputtering responses are priceless bits of political humor, and probably not at all what the president intended.

They could boast that least they were better than that nasty old private sector, but the stench of hypocrisy was still easily divisible. The president had earlier given a speech about how the pay gap is “not a myth, it’s math,” but underlings with the unenviable chore of answering questions couldn’t rely on such catchy turns of phrase. The same math that yields the 77 percent figure for the economy at large yields the 88 percent figure for the White House, leaving the press secretary to protest that you need to take into account all those other factors that render the 77 percent figure absurd.

All of this was impolitely acknowledged even in the mainstream news reports, where it was also noted how neatly it plays into the “Republicans’ War on Women” theme that has served the Democratic party in recent years, but we’d like to get a few more far-right kicks in. It should be noted that sexual discrimination in pay has been illegal since Mary Richards griped about it to Lou Grant on the “Mary Tyler Moore Show” way back in the ’70s, and that the president’s bold executive order does little more than nibble at the edges of the statute of limitations on job-killing lawsuits. Any put-upon women in need of our cakes already have plenty of legal recourses.

— Bud Norman

The Wide World and Sports

Maybe it was because the stock markets and the politicians and the culturati took the day off in honor of Martin Luther King Jr., but the all the big news on Monday seemed to be about sports. At this unhappy moment in our history even the sports pages can’t offer refuge from economics and politics and culture, however, so reality seems to have intruded on all the stories.
The Winter Olympics are about to begin, for instance, and thus far the headlines have mostly been about the possibility of a terror attack. Although there are always worries about security at any international gathering the last significant terror attack on the games took place in Munich back in ’72 and was directed against the Israeli athletes, who are for obvious reasons not prominent in the winter events except for their Russian émigré figure skaters, but because these games are taking place in Russia there are understandable worries that Islamist nutcases will want to take revenge for that country’s efforts at self-defense in Chechnya and other Islamic outposts of its past empire. This time around there is a specific threat from the “Black Widow,” a deranged woman whose terrorist husband was killed in his deadly efforts, and one can only hope that Russia’s security forces will live up to their reputation for ruthless efficiency.
Winter sports have no appeal to us, as skiing is not a common activity here in Kansas and the Arkansas and Little Arkansas Rivers rarely freeze solid enough for figure skating or ice hockey, but we wish all the participants well. The other big story from these games concerns the Russian government’s recent attempts to discourage homosexuality, which has annoyed the west’s left far more than the Ukrainian famine or the purges or the gulags or anything the country’s former communist regime ever did, but here’s hoping that even the biathletes have a safe and successful competition.
As in every January, another big story is the Super Bowl. This year’s match-up features some team from Denver and another from Seattle, neither of whom are the Kansas City Chiefs, so we’ve paid little attention to all the Xs and Os and other minutiae of the pre-game analyses, but as always it provides plenty of manufactured social implications. The cheeky fellows at The Drudge Report dubbed the game “The Pot Bowl” to draw attention to the fact that both contestants reside in states that have recently liberalized their marijuana laws, but we suspect this might be mere coincidence. If legal marijuana truly does produce championship football we expect that Texas will quickly make pot-smoking mandatory, and that all the states with teams in the collegiate Southeast Athletic Conference will soon follow suit, so we await a definitive scientific judgment on the matter.
Another prominent piece of the pre-Super Bowl hype was a Seattle player’s on-air rant against one of the San Francisco squad that fell in the National Football Conference play-off game. We missed most of the game while attending a friend’s birthday party and have no idea what he was going on about, but we caught the post-game interview and it was vituperative enough to worry us that the fellow might do a drive-by shooting at whoever it was that had “dissed” him. Perhaps it was justified, as professional football is a rough game, but it seemed a unpleasant reminder of the kinds of deplorable people that America venerates each fall and winter, as well as the even more consequentially deplorable people that rule our economy, politics, and culture throughout the year.
Ah well, at least all three of our big-time Kansas universities are among the ranked teams in college basketball. The Wichita State University Wheatshockers are in the coaches’ top four, and there is hope for the world in the sports pages.

— Bud Norman

The Good News is Killing Us

On Wednesday the experts at the Federal Reserve once again reported that the  economy is not at all well, something plainly obvious to all the non-experts who have given up all hope of finding a job, and the stock markets celebrated with yet another record-setting close. In the convoluted world we now live in, bad news is good news.
The bad news that the economy is sputtering and will likely continue to do so is good news for the stock markets, because it means that the Fed will continue to flood the economy with newly-printed dollars that have nowhere to go in our low-interest world except Wall Street. That record number of former workers now resigned to long-term idleness is good news, too, as they’re no longer counted among the unemployed and thus unemployment rate is falling. Should the bad news ever get so good that economy comes grinding to a complete halt that will also be good news, as America’s carbon emissions will also come to an end and we’ll all be saved from global warming, although the stock market might see that differently no matter how many dollars are printed onto recycled paper.
Those of a more glum disposition might think that the good news about an over-inflated stock market is actually bad news, or will be when the Fed is at long last forced by economic reality to stop printing money and the bubble is inevitably popped, and that a 7.3 percent unemployment rate is insufficient compensation for the lowest work force participation rate in decades, but that is why they aren’t editors or producers at the big news media outlets. The cheerier sorts of people who do get those jobs are content to report a record closing at the stock market and a declining unemployment, then move on quickly to the latest murder spree or celebrity divorce. Much of the public is therefore unaware of what the Federal Reserve is or what it’s been up to or what the consequences might ultimately be, and we’ve doubt they’re cheerier yet.
Many of the public officials who have to worry about this stuff as a requirement of their jobs are more concerned with other matters, judging by the debate about who will be the new boss at the Fed. Current Chairman Ben Bernanke is coming to the end of legally-limited term, during which he has been so obliging to the stock markets, and some of the Senators who will be voting on his successor seem more interested in the applicants’ race and gender than their monetary theories. President Barack Obama had hoped to appoint former Treasury Secretary, White House economic advisor, president of Harvard, and lifelong white male Larry Summers to the post, but so many Democrats objected to Summers’ past friendliness to business and his white maleness that he politely declined to be considered.
One of the leading foes was Sen. Elizabeth Warren of Massachusetts, the fake Indian and bona-fide left-wing nutcase, who was serving on the Harvard faculty during Summers’ presidency there and apparently developed a personal dislike for him. Much has been made about Obama’s inability to get a high-level appointment past his own party, with some seeing it as another encouraging indication of his weakened political standing, but even the shrewdest politician would find it difficult to placate a personally offended Ivy League professor.
There are good reasons that Larry Summers shouldn’t be the Fed chairman, but his whiteness, maleness, and insufficient anti-capitalism are not among them. The poor fellow has a strange record of being fired for the wrong reasons, though, and was pushed out of his post at Harvard by the likes of Warren not because he had badly mismanaged the school’s finances but because he quite reasonably stated that the Harvard math faculty was mostly male for reasons other than sexism. This is how positions of responsibility are now filled and vacated, though, and it looks likely the next several years of monetary policy will be determined by the same sort of silly identity politics.
The two most likely candidates are now Janet Yellen, currently a vice chairman of the Fed but invariably described as someone “who could become the Fed’s first woman chairman,” and Roger Ferguson, a former Obama advisor who is invariably described as someone “who could become the Fed’s first black chairman.” There are no doubt good reasons that either should Fed chairman, even if that “former Obama advisor” line on Ferguson’s resume is distressing, but their femaleness are blackness are not relevant qualifications any more than another candidate’s maleness or whiteness would be. Any applicant who is invariably described as “most likely to keep the foot on the pedal even after the car has gone flying over the cliff” would be the clear frontrunner for the gig, and you’ll want to be in the market on the day that good news is announced.

— Bud Norman

High Taxes and Happy Days

When it comes to waging class warfare, President Obama is practically a pacifist compared to Paul Krugman. For pure Jacobin zeal even Francois Hollande, the admittedly Socialist president of France, pales in comparison to the New York Times’ columnist.
Obama only wants to raise the taxes on the highest earners by a few mere percentage points, and makes it a point to politely describe the multi-billion-dollar heist as “asking the wealthiest Americans to give a little bit more.” Hollande, who has stated with a more admirable French frankness that “I hate rich people,” only wants to help himself to 75 percent of the earnings of his most fortunate countrymen. Krugman scoffs at such extravagant government largesse toward the wealthy, and insists that they fork over a full 91 percent of what they earn.
The idea will no doubt have wide appeal, people being prone by nature to envy and all sorts of economic craziness, and Krugman’s prestigious endorsement will no doubt give such avarice an added intellectual respectability. We don’t mean that there’s any prestige attached to being a New York Times columnist, of course, but we refer rather to his Nobel prize in economics, an award which some people still take seriously for some reason. Those people should note that a Nobel prize in economics was also bestowed upon Friedrich Hayek, who believed in limiting the size of government to the point it could easily get along without 91 percent of anyone’s money, so at least one of these laureates is wrong about everything.
Perhaps sensing that his credentials are in insufficient to persuade a properly skeptical reader, Krugman wraps his class resentments in a widespread nostalgia for the 1950s. Most people fondly recall the decade as an age of tail fins, pony skirts, and danceable records, but in Krugman’s rhapsodic telling the decade was a halcyon era defined by Twinkies, powerful labor unions, and sky-high federal tax rates. As it hard as it may be for conservatives to admit, given their lingering fondness for Eisenhower, Krugman is quite correct on every count. The Age of Ike did indeed bring the invention of the artificially flavored snack cake, a historic peak in union membership, and the same 91 percent top tax rate that Krugman proposes to restore.
If Krugman hopes to return to ‘50s-era tax rates, though, he’ll have to replicate every other facet of the ‘50s-era economy as well. That would involve a global war that left the industrial infrastructure of every other advanced country in shambles, a federal government that spent only 25 percent of the gross domestic product, with no EPA or OSHA or EEOC or countless other regulatory agencies, a very strong dollar, a president who was widely ridiculed for his obsession with balanced budgets, most women staying home to tend to their multiple children, men smoking heavily at their three-martini lunches, and aggressive enforcement of global order. Liberals aren’t as enthusiastic about these sorts of things, but they might just be willing to put up with it in return for confiscatory tax rates on the rich.
While liberals such as Krugman wax nostalgic about the ‘50s as a time of enforced economic equality, they also tend to decry the culture of the decade as a dark age of suburban conformity and repressed sexuality. Somehow they square this with the invention of rock ‘n’ roll and the baby boom, but they fail to consider that the much hated old-fashioned morality of the era was also an important facet of the ‘50s economy. The young folks might not believe it, but in the ‘50s out-of-wedlock births were quite rare and intact families provided most of the services now performed by the social welfare agencies. The social culture also celebrated self-sufficiency and stigmatized dependence to much greater extent than today, judging by the music, movies, television, and presidential speeches of then and now, and the modern liberal is unlikely to embrace such archaic notions along with a soak-the-rich tax hike.
There was also poverty in the ‘50s, or at least enough of it that liberals felt obliged to wage a war on it in the ‘60s. That was the beginning of the social welfare state that supplanted the nuclear family for millions of Americans, with the unhappy results fully on display in the police reports of your local newspapers, but it seems unlikely Krugman has learned anything from the past five decades of social deterioration. The economy has grown since the ‘50s, rapidly following John Kennedy’s tax cuts for the rich and even more rapidly after Ronald Reagan’s even deeper tax cuts for the rich, but Krugman seems not to have noticed that, either.
Alas, Krugman is also correct in assuming that the fact tax rates did reach 91 percent back in the ‘50s will make it seem more acceptable. People associate the decade with a wholesome all-Americanism, either from their own recollections or the endless re-runs of “Happy Days,” and it is often assumed that anything that happened then — other than racial segregation, the Cold War, and chastity — is therefore non-controversial. The ‘50s aren’t coming back, though, no matter how much both conservatives and liberal desire it for their very different reasons. If any of it is to be revived, let it be rockabilly music or oversized Cadillacs, not some dumb plan to run all the money out of the country.

— Bud Norman

The Chicken Run to the Fiscal Cliff

Those who share our fondness for the cinema of long ago might recall a certain scene in “Rebel Without a Cause.” James Dean’s crazy mixed-up kid character was challenged by a snooty rich guy to a “chicken run,” a test of teenage bravado in which the contestants hurtle their parents’ automobiles toward a cliff at top speed and whichever driver hits the brakes or bails out first is deemed the lose, and the result was predictably tragic.
That harrowing contest is brought to mind whenever we read about the “fiscal cliff” that has lately dominated the economic news. The tax rates enacted during the George W. Bush administration are set to expire early next year, and barring action by the congress and the president the country will revert to higher rates for nearly every taxpayer while a slew of automatic budget cuts simultaneously go into effect. Although most economists agree that the results would be catastrophic an agreement is by no means a certainty, as the Republicans who control the House of Representatives are adamant that the tax cuts be retained for everyone while the Democratic president and his allies who control the Senate are just as determined that the top 2 percent of be hit with the old higher rates. Both sides have indicated they are willing to drive over the fiscal cliff rather than relent to the opposition.
The Republicans have the better argument. Sticking the top 2 percent with the higher rate will only add $22.35 billion to the federal coffers next year, according to the Joint Committee on Taxation, and that’s a hopeful projection based on the assumption that the hike won’t have any effect on economic activity, so it won’t make a dent in the projected $1.1 trillion deficit, much less than $16 trillion of accumulated debt. Sucking that same amount of money out of the moribund private sector, especially through the investing class, will likely make a bigger dent in economic growth, and even if there were no economic consequences at all we would still prefer to start making cuts from an ever-expanding government that treads ever further upon the liberties of the people.
Alas, the better argument often has little to do with the way things are done in Washington. It certainly has little effect on the Democrats, who regard it as a matter of sacred principle that the government should take money away from rich people regardless of the economic consequences. Liberals we know are so embittered about the current tax rates for the rich, and the hated Bush administration that brought them about, that we have no doubt about their willingness to inflict a massive recession on the country rather than endure them further. There is no reason to believe that Obama and the Democrats in the Senate are any less reckless, and they have every reason to believe that they will not be held accountable if the country does go over the cliff.
Many conservative commentators have been urging that the House Republicans refuse to relent on the matter, but we prefer that at some point just before the fiscal cliff they be willing to hit the brakes. As much as we hate to see anybody’s taxes increased, even a wealthy class that for some reason or another voted mostly for Obama, tactical retreat is probably the best option. No matter how harmful the tax hikes on the rich might be, the effects of a tax increase for the rich and everybody else would certainly be far worse, and the Democrats’ intransigence does not permit the best solution. Worse still, the Republicans would be widely blamed for the resulting recession and less effective in staving off the inevitable further attempts for more taxation and spending.
Some pundits cite polls showing that a majority of Americans do not wish to impose taxes on any of their fellow citizens, even the rich ones, but those polls don’t reflect the choice most Americans would make between a severe recession and “asking the rich to give a little more.” That it is the Democrats who are forcing that choice will be overwhelmed by all the same media noise that has so successfully obscured their role in all of the nation’s economic woes, and any Republicans who doubt this would be advised to check the recent election results. What’s left of the establishment media will still be able to portray the Republicans as the snooty rich guy who wound up going over the cliff in “Rebel Without a Cause,” and Obama can be typecast as the crazy mixed-up kid who bailed out of the car just in time and became the epitome of cool.
Even if the inevitable debt crisis brings the American economy to its knees within the next four years, the Democrats and their media allies will argue that it was all the Republicans for hobbling the country with low tax rates and preventing Obama from spending even more. The Republican party will need to be standing strong enough to refute such nonsense, and they won’t be able to make that stand from the bottom of a cliff.

— Bud Norman

Doing Badly by “Doing Fine”

How nice it was to hear President Barack Obama report to the nation on Friday that the private sector of the American economy is “doing fine.” Not because the statement is true, or even remotely believable, but rather because it was so obviously another self-inflicted blow his re-election campaign.

Obama made the comment during a rare news conference, demonstrating why he so rarely faces the press, then went on to say that what’s needed for an economic recovery is more money pouring into the public sector. The Romney campaign immediately responded with a scathing rebuttal by the candidate and then, just a few hours later, an advertisement running on the internet. Conservative pundits were as quick to heap scorn on the president’s claims, and even his more loyal media allies were wincing as they struggled to downplay the remark. By day’s end the president was issuing a clarification, explaining that his statement shouldn’t be misconstrued as meaning that the private sector is “doing fine,” but it was too little and too late to prevent the gaffe from dominating the weekend’s political conversation.

Most of the criticism concerned the president’s apparent lack of awareness of economic reality as most Americans experience it, or his being “out of touch” in the current political parlance, and the point is well-made. A slew of readily available statistics demonstrate that the economy is far from fine, and anyone who regularly listens to average Americans will hear frequent reminders of that fact, so Obama’s sanguine attitude toward the private sector does suggest a worrisome perspective on his part.

Worse yet, though, is what the statement reveals about Obama’s economic philosophy. It apparently has not occurred to him that if the private sector were indeed doing fine the public sector, which always helps itself to a sizeable share of whatever wealth the private sector creates, would also be doing fine. Nor does he seem to have considered the possibility that the public sector’s bloated size and staggering debt have had a deleterious effect on the private sector. He also seems to believe that handing over large amounts of federal money to states and localities — preferably ones with a majority of Democratic voters — to forestall necessary changes in their budgets will somehow spur economic growth.

This is bad economics, as the past three-and-a-half years have proved, but there’s reason to hope that it’s also becoming bad politics. The public sector was recently pitted against the private sector in Wisconsin, the oh-so-progressive state that the public sector union chose as a battleground for the fight, and even there a clear majority sided with the non-government workers. Obama tried to clarify his way out of the “doing fine” mistake, he hasn’t backed off his contention that more spending, more debt, and more government are what’s needed to get the economy track, and that’s looking like a very hard sell.

— Bud Norman

Obamanomics Explained

For more than three years, ever since President Barack Obama was elected on a promise of hope and change, America has been waiting for the speech that reveals his bold economic vision and precisely explains what kind of transformational change he hopes to effect. That speech finally arrived last week when Obama told an Arizona audience that he envisions “an America where we build stuff, and make stuff, and sell stuff all around the world.”

We have no fancy-schmantzy economics degree, and are therefore only vaguely familiar with such technical terms as “build,” “make,” “sell,” and “stuff,” but we suspect that Obama might be on to something. Counter-intuitive as it might seem, an economy based on both building and making things, and then selling them, could be viable. Indeed, now that the idea has been laid out in the crystalline prose that has earned Obama a reputation as the greatest orator since Demosthenes, one is left wondering why nobody ever thought of it before.

While speaking a day later at a campaign event in Las Vegas, Nev., a city that somehow survives on a markedly different economic model, Obama elaborated on his so-crazy-it-just-might-work scheme by saying that he wants an America “where we’re making stuff and selling stuff and moving it around and UPS trucks are dropping things off everywhere.” This plan omits the building of stuff but retains the making of it, an elegant simplification, then adds the brilliant idea of moving the stuff around, perhaps to the people who bought it, although Obama was not clear on this point.

We assume that the moving around of the stuff will be done exclusively in UPS trucks because that company’s workforce is more heavily unionized than that of its main competitor, Federal Express, and yet not as inefficiently government-run as the United States Postal Service, but we hope that future Obama orations will answer a few nagging questions that remain

In both of the aforementioned speeches Obama devoted much time to his call for a higher tax on the wealthiest Americans. Apparently the current rates prevent the building, making, selling, and moving around of stuff, but Obama did not explain why this is so. We do know that Obama’s insistence on higher taxes for the rich is not intended to exploit any envy of the rich, however, because he assured us that “Nobody envies the rich.” He sounded genuinely baffled by the suggestion that anyone does envy the rich, as it is a well-known fact that all people regard them with pity. The rich have to eat all that caviar, ride around in fancy automobiles, and consort with glamorous women, after all, and thus will never know the simple pleasures of ground beef, aging pick-ups, and a drunken peroxide blonde at closing time.

We’re also wondering who will decide what stuff to build and make, who to sell it to, and at what price, and except for the part about the unionized UPS trucks we’re not clear who will determine how and where the stuff is to be moved around. Such weighty decisions cannot be left to the people who are doing the building, making, selling, and moving around, of course, so we suggest that a government agency be formed to ensure that any building, making, selling, or moving around of stuff is strictly regulated by at least one regulator per builder, maker, seller, or moving around person. This would not only help to achieve full employment, but the agency could also make sure that the building, making, selling, and moving around of stuff is done only by individuals or corporations or that have made the correct campaign contributions, as with Solyndra.

Having already told us that “At some point, you’ve made enough money,” Obama should also let us know when we’ve built, made, sold, and moved around enough stuff, and can get back more spiritually rewarding pursuits such as community organizing. We expect that at some point in Obama’s post-presidential career as a speaker, writer and corporate board member we’ll find out exactly how much money is enough, and expect that it will prove a very large sum, but he should set a limit now so that no one will be in danger of expending any excess energy.

Building, making, selling, and moving around stuff is darned hard work, after all, just like figuring out this economics stuff.

— Bud Norman