The welfare state is dead. Long live the welfare state!
It's getting hard to keep track of which countries aren't Greece anymore.
First, Ireland wasn't Greece. Then it kind of was. Then it was Portugal's turn to not be Greece. Then it was Portugal's turn to be Greece. Next, Spain wasn't Greece. But now it might be. At the very least it's Ireland. Although Uganda looks like it's in the clear. It's not Spain, which could be Greece. That's better than Cyprus can say. They're pretty much Greece. And, of course, Greece is almost certainly Greece. That goes without saying.
But there's one country that definitely isn't Greece. That's the United States.
Let's step back. What makes a country "Greece"? It's become shorthand for wild government overspending -- especially on entitlements. Paul Ryan says we don't have long to avoid the same fate. Neither does the terrifyingly successful investor Michael Burry. They think that absent drastic reform -- read: cuts -- to the social safety net, we'll end up in penury like the Greeks.
It's a scary story. But it's just a scare story. Yes, we have a long-term healthcare spending problem. But that doesn't make us Greece. Heck, Greece isn't even Greece. At least not the "Greece" that's become such a political football. The evidence -- or lack thereof -- is in the chart below. It compares each country's average social spending since 1999, via the OECD, against its current borrowing costs. See the pattern?
There is none. Europe's biggest social spenders don't have any problems. And Europe's biggest problem countries don't spend that much on social programs. The death knell of the welfare state this is not.
Here's the dirty little secret of the euro debt crisis. There is no euro debt crisis. There is a euro crisis. The debt is a symptom of the crisis of the common currency.* Europe's bailed out countries all saw piles of capital pour in during the boom, only to pour out during the bust. They were left with inflated, uncompetitive wages -- and that's sent them into deep slumps. That's been despite lower social spending than their northern euro neighbors. Germany, Austria, Finland, Finland, the Netherlands, Belgium and -- at least for now -- France have all been able to sustain more generous safety nets thanks to the magic of competitive wages.
It's the same story for Europe's non-euro nations. Sweden, Denmark, Norway, Switzerland and the Czech Republic are all lucky enough to not be passengers on the Titantic members of the common currency. (Denmark has pegged its krone to the euro, but they still have their own central bank). Most of them spend more on social programs than the so-called PIIGS, but all of them can borrow for almost nothing. Investors are actually paying the Swiss and Danish governments for the privilege of lending to them short-term. Think about that. What's going on? Well, if things ever get rough, they can just print money or devalue their currencies. In other words, they can never run out of money.
But Greece can. Being in the euro means never being able to print your own money. And that turns each euro country into a bank. Imagine a bank run. Fear becomes self-fulfilling. Depositors try to pull their money out before everyone else because they're worried the bank will collapse -- which, of course, causes the bank's collapse. Very Oedipal -- minus the parent love. It's the same with Greece. Investors worry that Greece will run out of euros. That's a very rational fear right now. So they try to sell-off their bonds, which pushes up Greece's borrowing costs -- and makes it more likely that Greece will run out of euros. This kind of panic is why Italy -- which has a primary surplus! -- is flirting with trouble too. Only the ECB can stop this.
Notice that I didn't talk about debt at all in the previous paragraph. The PIIGS have too-high wages, too little growth, and face crippling crises of confidence. Austerity won't cure any of that. It'll make things worse. It has. It kneecaps growth. And investors are more worried about growth right now than they are deficits.
Also notice that none of this applies to the United States. We never have to worry about self-fulfilling prophesies of bankruptcy because we can never run out of dollars. As the Boomers retire, we'll spend more on entitlements. That's not the end of the world. Unless you think Sweden is the end of the world. Yes, we need to rein in healthcare inflation, and, yes, we need to raise some more revenue. The former might already be happening. The latter is a political choice. Neither makes us Greece.
So don't believe the rumors of the welfare state's death. They're greatly exaggerated.
* Caveat: Greece is sui generis. They really did just spend too much money. They're not pictured here, because their 10-year bond yield is -- wait for it -- off the chart. Fitting their 27 percent borrowing costs onto this graph makes it too hard to see anything else. But Greece's average social spending is only 21.4 percent of GDP.
The First Lady took to the stage at the Democratic National Convention, and united a divided hall.
Most convention speeches are forgotten almost before they’re finished. But tonight in Philadelphia, Michelle Obama delivered a speech that will be replayed, quoted, and anthologized for years. It was as pure a piece of political oratory as this campaign has offered, and instantly entered the pantheon of great convention speeches.
Obama stepped out onto a stage in front of a divided party, including delegates who had booed almost every mention of the presumptive nominee. And she delivered a speech that united the hall, bringing it to its feet.
She did it, moreover, her own way—forming a striking contrast with the night’s other speakers. She did it without shouting at the crowd. Without overtly slamming Republicans. Without turning explicitly negative. Her speech was laden with sharp barbs, but she delivered them calmly, sometimes wryly, biting her lower lip, hitting her cadence. It was a masterful performance.
A 30-step review of the mayhem in Philadelphia, and what Clinton’s convention says about the future of the American political system.
Hillary Clinton, her advisers, and their allies at the Democratic National Committee watched Donald Trump’s nominating convention in Cleveland with smug satisfaction.
Team Trump had insulted Ohio’s governor, approved a Melania Trump speech that plagiarized Michelle Obama, lied about the plagiarism, and allowed Ted Cruz to expose party divisions in a prime-time speech.
“Hey @Reince,” Democratic National Committee chairwoman Debbie Wasserman Schultz tweeted GOP chairman Reince Priebus. “I’m in Cleveland if you need another chair to keep your convention in order.”
Schultz reflected the Democratic establishment’s false sense of security. Headed to their convention in Philadelphia, Democrats felt more united than Republicans, better organized, and less vulnerable to the long-term disruption of a populist insurgency.
All hell broke loose.
WikiLeaks released 20,000 emails stolen from DNC computers, proof of the worst-kept secret in Democratic politics: The party worked against socialist-populist Bernie Sanders to ease Hillary Clinton’s path to the nomination. The FBI said it would investigate whether Russia hacked the DNC to influence the U.S. election.
All hell broke loose.
“Lock her up!” chanted Democratic activists in the streets of Philadelphia. These Sanders supporters carried signs and wore T-shirts that called for Clinton’s indictment, channeling those GOP delegates in Cleveland who drew rebukes for defying old rules of political decorum.
Schultz cut a deal with the Clinton team to resign, effective upon the conclusion of the convention. She planned to open and close the gathering with remarks lauding her leadership.
All hell broke loose.
Addressing delegates from her home state of Florida, Shultz chastised an unruly crowd carrying signs reading “Division!” and “EMAILS.” She said, “We know that the voices in this room that are standing up and being disruptive, we know that is not the Florida we know.”
“Shame! Shame! Shame!” crowd members chanted. Schultz scurried out of the room.
Sanders himself tried to prevent a show of disunity on the convention floor, pleading with his supporters to back Clinton. Having promised his followers “a revolution,” he now fed them bitter pragmatism. “Brothers and sisters,” Sanders said, “this is the real world that we live in.”
All hell broke loose.
While the streets filled with a sweaty mass of angry Sanders supporters—mostly young and white and disconnected from the political system—the Clinton team told Shultz she couldn’t address the convention.
Sanders sent his supporters a text message, urging them not to protest on the convention floor.
All hell broke loose.
As the convention came to order, hundreds of Democrats protested outside. “No, no, DNC—we won’t vote for Hillary!”
Inside, Cynthia Hale mentioned Clinton’s name during the opening prayer. Some delegates booed, others chanted for Sanders.
There would be more protests.
Eventually, Clinton likely will regain control of her convention. Like in Cleveland, the desire to defeat a hated enemy will overcome internal differences. The blues will line up against the reds, Wall Street will support both teams, Clinton will win in November, and the status quo will declare victory over change. Populist unrest will broaden and intensify.
Or Trump will win. He won’t keep his promises, because he never does. He won’t make America any greater than it already is. He might make it worse. The status quo will declare victory over change. Populist unrest will broaden and intensify.
Whether it’s Clinton or Trump, historians will note how a billionaire celebrity took over the GOP with an anti-trade, anti-immigration nativism, setting fire to the political playbook that guided campaigns for the last half of the 20th century and the first decade of the 21st.
Today will be long remembered, too. Sanders couldn’t calm the churning of his supporters and, as in a mutiny aboard a pirate ship, the deckhands have seized control from the captain.
This could be the start of something big inside the Democratic Party. What if, for instance, Sanders’s coalition banded together with Black Lives Matters to create Tea Party-like takeover of the Democratic Party?
People have witnessed disruption in the retail, entertainment, and financial industries—in virtually every institution except for government and politics. In an era of choice and technological efficiency, the American voter is given a binary choice and gridlocked government.
Most Americans want something better than what the Democratic-Republican duopoly crams down their throats.
They’re mad as hell and, as evidenced in Cleveland and Philadelphia, they’re just starting to realize how powerful they are. They don’t need to take it anymore.
Hillary Clinton is running as the candidate of continuity—but Bernie Sanders, Elizabeth Warren, and most white Democrats think America is headed in the wrong direction.
Many commentators, watching the two party’s conventions, have noted that Democrats and Republicans seemed to describing different countries. But if you listened carefully last night, you heard two groups of Democrats describing different countries too.
The night began with Michelle Obama, who said, “I wake up every morning in a house that was built by slaves. And I watch my daughters—two beautiful intelligent black young women—play with the dog on the White House lawn. And because of Hillary Clinton, my daughters and all of our sons and daughters now take for granted that a woman can be president of the United States. Don't let anyone ever tell you that this country is not great. That somehow we need to make it great again. Because this right now is the greatest country on Earth.”
The Vermont senator closed the first night of the Democratic National Convention in Philadelphia with a show of unity, but his supporters weren’t necessarily with him.
After a contentious start to the Democratic convention, Bernie Sanders took the stage at the end of the night on Monday, to an adoring crowd. By the time he left, he did not seem to have succeeded in convincing his most ardent supporters to stand with Hillary Clinton.
Sanders framed the election as a clear choice between the threat of Donald Trump in the White House, and the far better outcome of a President Hillary Clinton. “We need leadership, which brings our people together and makes us stronger—not leadership which insults Latinos, Muslims, women, African Americans, and veterans and divides us up,” Sanders warned. “By these measures, any objective observer will conclude that—based on her ideas and her leadership—Hillary Clinton must become the next president of the United States. The choice is not even close.” The line met with loud cheers and applause.
The pressures of national academic standards have pushed character education out of the classroom.
A few months ago, I presented the following scenario to my junior English students: Your boyfriend or girlfriend has committed a felony, during which other people were badly harmed. Should you or should you not turn him or her into the police?
The class immediately erupted with commentary. It was obvious, they said, that loyalty was paramount—not a single student said they’d “snitch.” They were unequivocally unconcerned about who was harmed in this hypothetical scenario. This troubled me.
This discussion was part of an introduction to an essay assignment about whether Americans should pay more for ethically produced food. We continued discussing other dilemmas, and the kids were more engaged that they’d been in weeks, grappling with big questions about values, character, and right versus wrong as I attempted to expand their thinking about who and what is affected—and why it matters—by their caloric choices.
For the party elders, day one of the convention was about scolding the left back together.
Against a restive backdrop, the party’s top lieutenants were forced into the role of prime time peacemakers, tasked with encouraging Democratic unity in a party that has only lately acquiesced to tenuous detente. They did so through a combination of alarmist truth telling—borne from the reality of a Trump-Clinton matchup that has lately gotten tighter—and cold-water scolding about party division—driven equally by frustration and exhaustion.
Ask yourself, is all that wasted time really rewarding? And other tips from Charles Duhigg, who wrote the book on productivity.
Why is it that the more work I have to do, the more the Internet beckons me into its endless maw of distraction? Oh Lord, I will say, appealing both to myself and to whatever blog-God might be listening, I have an hour to finish this article.
But first, isn’t this Tasty video fascinating? I’ve never thought about making buffalo-fried cheese nuggets before, but now that I’ve watched a pair of disembodied hands prepare them so expertly, I should definitely head over to Amazon and Prime me some buffalo sauce.
This is how I found myself, exhausted after leaving work at 8 p.m. one day recently, flopping onto my bed, still in my pencil skirt, and clicking open a horrific, traffic-mongering slideshow linked from the bottom of an article I was reading. It was about Stars Without Makeup or What Child Stars Look Like Now or some other rancid meat for my hungry lizard brain.
Older men without a college degree are the core of Trump’s constituency. Perhaps it’s worth seeing how their younger selves are doing now.
In February 2011, the Washington Postpublished a survey it conducted with the Kaiser Family Foundation and Harvard University on the U.S. economy. Although black and Hispanic families were hurt by the Great Recession, it was the "non-college whites" who held the darkest view of the country. These men used to the the backbone of an economy built by brawn and rooted in manufacturing jobs. But now, nostalgic and despondent in equal measure, more than half said that America’s best days were past, and 43 percent said "hard work and determination are no guarantees of success.”
The survey feels portentous now that the category of “non-college whites” has become the core demographic of Donald Trump’s astonishingly strong coalition. Trump’s support is driven by racism, xenophobia, and other varieties of cultural unease, but it is also a reflection of a lost generation of men, enraged and adrift in an economy where a college degree is one of the few dependable life rafts.
The president’s belief in policies that can benefit all Americans is being repudiated by voters, in favor of a vision of politics as a zero-sum game.
The 2016 presidential race represents a vivid rejection of the Obama style. This is easy to miss: His approval ratings are climbing, and Hillary Clinton won the Democratic primary by running as his successor. But the two most dramatic and portentous campaigns of the year, Donald Trump’s vertiginous win and Bernie Sanders’s astonishing insurgency, both flew in the face of the Obama era’s premises.
The Obama style had two pillars. He brought to apotheosis the American political tradition of redemptive constitutionalism. This is the creed of Abraham Lincoln’s Gettysburg Address and Second Inaugural, Martin Luther King Jr.’s “I Have a Dream” speech, and Lyndon Baines Johnson’s nationally televised speech on the Voting Rights Acts of 1965, in which he promised, “we shall overcome.” Redemptive constitutionalism holds that democracy and equal freedom really are the nation’s foundations, that slavery and Jim Crow were terrible deviations from these principles, and that, if we manage to take them seriously, to live by them, Americans will finally be free together.
Close your eyes and imagine that ahacking group backed by Russian President Vladimir Putin broke into the email system of a major U.S. political party. The group stole thousands of sensitive messages and then published them through an obliging third party in a way that was strategically timed to influence the United States presidential election. Now open your eyes, because it looks like that’s what just happened.
On Friday, Wikileaks published 20,000 emails stolen from the Democratic National Committee. They reveal, among other things, thuggish infighting, a push by a top DNC official to use Bernie Sanders’s religious convictions against him in the South, and attempts to strong-arm media outlets. In other words, they reveal the Washington campaign monster for what it is.