Repackaging the Bush agenda, just with austerity, is not the path to prosperity.
Romney economic adviser Glenn Hubbard apparently has a very short memory.
In a Wall Street Journalop-ed making the case for Romney's economic agenda, Hubbard presents a strikingly ahistorical account of the past few years -- not to mention sprinkling in one big questionable assumption. Let's take a tour of some of the lowlights.
"We are currently in the most anemic economic recovery in the memory of most Americans."
Does the memory of most Americans go back a decade? If it does, then they can remember a more anemic recovery -- at least when it comes to jobs. The post-2001 recovery had the slowest job growth of any postwar recovery. It also had the slowest private sector growth of any postwar recovery. It's puzzling that Hubbard doesn't remember this, considering that he was the chair of President George W. Bush's Council of Economic Advisors from 2001 to 2003.
Now, the economy did grow faster then than it has now. But that's because the government grew as much as it did then; it's shrinking now. Really. So why does this weak recovery feel weaker than that weak recovery? Well, the tech bubble recession was much milder than the housing bubble recession -- in other words, we're in a deeper hole this time around. All else equal, we would expect a better recovery from a worse recession, but all else is not equal. As Harvard professor Kenneth Rogoff has shown with over 800 years of data, recoveries from financial crises are long, slow slogs. It's doubtful that recycling Bush-era policies will get us out of this ditch faster. It didn't ten years ago.
"[U]ncertainty over policy--particularly over tax and regulatory policy--slowed the recovery and limited job creation. One recent study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago found that this uncertainty reduced GDP by 1.4% in 2011 alone."
Well, that certainly sounds bad. When did all of this uncertainty peak? Let's look at the paper. August of 2011. Hmmm. What happened in August of 2011? Oh, that's right. The debt ceiling debacle. Why don't we let the authors speak for themselves. Here's why they said uncertainty was so elevated in 2011:
A series of later developments and policy fights - including the debt- ceiling dispute between Republicans and Democrats in the summer of 2011, and ongoing banking and sovereign debt crises in the Eurozone area - kept economic policy uncertainty at very high levels throughout 2011.
In other words, a debt crisis the Republicans manufactured and a debt crisis the Europeans manufactured drove uncertainty in 2011. Granted, tax uncertainty has been bad -- but so has monetary policy uncertainty. And have you noticed what we haven't talked about yet? The authors conclude that healthcare and financial regulation uncertainty were "much less pronounced" than all of the above questions.
And according to the Congressional Budget Office, the large deficits codified in the president's budget would reduce GDP during 2018-2022 by between 0.5% and 2.2% compared to what would occur under current law. [...]
The governor's plan would reduce federal spending as a share of GDP to 20%--its pre-crisis average--by 2016. This would dramatically reduce policy uncertainty over the need for future tax increases, thus increasing business and consumer confidence. [...]
The Romney plan would reduce individual marginal income tax rates across the board by 20%, while keeping current low tax rates on dividends and capital gains. The governor would also reduce the corporate income tax rate--the highest in the world--to 25%. In addition, he would broaden the tax base to ensure that tax reform is revenue-neutral.
Hubbard says that 1) Medium-run deficits are bad for medium-run growth, 2) Romney will cut public spending, which will increase private spending, and 3) Romney will lower tax rates and eliminate tax loopholes while keeping tax revenues the same. Individually, these might make sense. Together, they're the economic equivalent of saying two plus two equals five.
Let's unpack this fiscal mess. Romney wants to cut taxes, but he also wants to cut medium-run deficits too. That's a problem. His answer: He won't cut taxes, but tax rates -- while cutting spending too. But this creates new problems. For one, it means his tax plan will raise taxes on the bottom 95 percent, while cutting them for the top 5 percent. For another, it leaves Romney stuck embracing spending cuts that will hurt the economy.
Expansionary austerity is a myth, at least in the short-term. That was the conclusion the IMF reached in a 2011 paper that examined 173 cases of fiscal retrenchment over the past 30 years. On average, cutting the deficit by 1 percent of GDP led to a 0.5 percentage point increase in unemployment -- with private spending falling in tandem with public spending. Austerity can work over the longer-term, as long as interest rates or the currency falls to offset the fall in government spending. But interest rates are already at zero, and Republicans aren't too keen about quantitative easing or that whole "dollar depreciation" thing. That leaves the Romney camp with one final reason why cutting government spending would lead to more spending overall: Ricardian equivalence. It's the idea that the private sector spends less when the public sector borrows more, because households know that eventually the government will have to raise taxes to pay for that borrowing. The empirical evidence on this is mixed -- after all, few households 1) know enough about the deficit to predict what will happen to their taxes, or 2) have enough disposable income or access to borrowing to smooth their lifetime spending. That's not to say that there isn't something to it, but that it's a flimsy hope for the catch-up growth we need.
I don't mean to pick on Glenn Hubbard. He has plenty of good ideas about how to get the economy moving again -- like mass refinancing for mortgages owned by Fannie and Freddie. But repackaging the Bush agenda, just updated with austerity, is not the path to prosperity.
In a 60-page ruling, a U.S. district-court judge stopped enforcement of a law providing religious exemptions for LGBT discrimination.
Why doesn’t anyone care about Mississippi?
This spring, the state’s legislature passed H.B. 1523, an extensive law written to protect people who believe any of the following: that marriage is between a man and a woman; that sex should only happen in the context of marriage; and that the words “male” and “female” refer to “an individual’s immutable biological sex as objectively determined by anatomy and genetics at time of birth.” The law claim these protections are a form of religious freedom.
It provides that religious organizations can refuse to rent out their social halls for a same-sex wedding, for example, and that clergy can refuse to perform a same-sex marriage ceremony. These groups can also fire a single mother who gets pregnant, or, in the case of religious adoption agencies, decline to place a child with a same-sex couple. Doctors and psychologists can refuse to get involved with gender-reassignment procedures or take cases that would violate their religious beliefs. Schools and other public agencies can create “sex-specific standards” for dress code, bathrooms, and more. State employees can also refuse to sign same-sex-marriage licenses, and they can’t be fired for saying they believe homosexuality is wrong, for example.
“This western-front business couldn’t be done again.”
On this first day of July, exactly 100 years ago, the peoples of the British Empire suffered the greatest military disaster in their history. A century later, “the Somme” remains the most harrowing place-name in the annals not only of Great Britain, but of the many former dependencies that shed their blood on that scenic river. The single regiment contributed to the First World War by the island of Newfoundland, not yet joined to Canada, suffered nearly 100 percent casualties that day: Of 801 engaged, only 68 came out alive and unwounded. Altogether, the British forces suffered more than 19,000 killed and more than 38,000 wounded: almost as many casualties in one day as Britain suffered in the entire disastrous battle for France in May and June 1940, including prisoners. The French army on the British right flank absorbed some 1,600 casualties more.
They say religious discrimination against Christians is as big a problem as discrimination against other groups.
Many, many Christians believe they are subject to religious discrimination in the United States. A new report from the Public Religion Research Institute and Brookings offers evidence: Almost half of Americans say discrimination against Christians is as big of a problem as discrimination against other groups, including blacks and minorities. Three-quarters of Republicans and Trump supporters said this, and so did nearly eight out of 10 white evangelical Protestants. Of the latter group, six in 10 believe that although America once was a Christian nation, it is no longer—a huge jump from 2012.
Polling data can be split up in a million different ways. It’s possible to sort by ethnicity, age, political party, and more. The benefit of sorting by religion, though, is that it highlights people’s beliefs: the way their ideological and spiritual convictions shape their self-understanding. This survey suggests that race is not enough to explain the sense of loss some white Americans seem to feel about their country, although it’s part of the story; the same is true of age, education level, and political affiliation. People’s beliefs seem to have a distinctive bearing on how they view changes in American culture, politics, and law—and whether they feel threatened. No group is more likely to express this fear than conservative Christians.
Boris Johnson stabbed David Cameron in the back. Michael Gove stabbed David Cameron in the back. Michael Gove stabbed Boris Johnson in the back. It’s very simple.
“We have really everything in common with America nowadays,” Oscar Wilde wrote in the Canterville Ghost, “except, of course, language.” And, apparently, political intrigue.
In the United States, the political class has been stunned by the rise of a candidate who bested more than a dozen better-qualified rivals, partly by means of rhetoric as simplistic as monikers like “Little Marco” and “Lyin’ Ted.” But that’s amateur hour. The political machinations on display across the Atlantic in the wake of Britain’s historic vote to leave the European Union are far more sophisticated, and if politics is a game, America’s would be checkers to the U.K.’s three-dimensional chess.
On Thursday, Boris Johnson, the former London mayor who championed and ultimately won the vote for “Brexit,” stunned the political establishment by saying he wouldn’t seek to replace David Cameron as head of the ruling Conservative Party (and, consequently, take the prime ministership). But that only happened after Michael Gove, Johnson’s friend and ally in the “leave” campaign, put forth his own leadership bid instead. It was, as many on Twitter pointed out, a twist worthy of House of Cards (which, after all, was a British show to begin with). The British media, of course, found a way to class that reference up, with one headline saying Gove had “done a double Brutus.”
Sharing platforms are meant to scale seamlessly throughout the world, but they’ve faced a different knotty set of rules in nearly every city they’ve colonized.
For years now, Airbnb, the popular home-sharing platform, has featured this line of copy at the end of a company mission statement that mostly pledges to promote a sense of adventure and discovery: “And with world-class customer service and a growing community of users, Airbnb is the easiest way for people to monetize their extra space and showcase it to an audience of millions."
It’s a business model condensed into a coda, casually set off with an “And.” The subtext is that the revenue-making potential of the platform is an afterthought, which implies that its appeal lies in its ease of use. Sign up and rent out your apartment or guest room. It’s easy.
Easy, that is, unless you live in Chicago, where regulations passed last week will require hosts to register with the city, impose a tax on each transaction to pay for the city’s homeless services, and limit the number of apartments that can be rented out in a particular building, depending on its size. Or in San Francisco, Airbnb’s hometown, where a law that went into effect in 2015 limits the total number of days an apartment can be rented out per year and similarly requires hosts to register with the city. (This week, the company, which coincidentally helped draft the 2014 law, decided to sue the city over it.) Months after San Francisco imposed those limits, Santa Monica passed regulations requiring hosts to get business licenses and restricted them from renting out entire properties.
It happened gradually—and until the U.S. figures out how to treat the problem, it will only get worse.
It’s 2020, four years from now. The campaign is under way to succeed the president, who is retiring after a single wretched term. Voters are angrier than ever—at politicians, at compromisers, at the establishment. Congress and the White House seem incapable of working together on anything, even when their interests align. With lawmaking at a standstill, the president’s use of executive orders and regulatory discretion has reached a level that Congress views as dictatorial—not that Congress can do anything about it, except file lawsuits that the divided Supreme Court, its three vacancies unfilled, has been unable to resolve.
On Capitol Hill, Speaker Paul Ryan resigned after proving unable to pass a budget, or much else. The House burned through two more speakers and one “acting” speaker, a job invented following four speakerless months. The Senate, meanwhile, is tied in knots by wannabe presidents and aspiring talk-show hosts, who use the chamber as a social-media platform to build their brands by obstructing—well, everything. The Defense Department is among hundreds of agencies that have not been reauthorized, the government has shut down three times, and, yes, it finally happened: The United States briefly defaulted on the national debt, precipitating a market collapse and an economic downturn. No one wanted that outcome, but no one was able to prevent it.
How much do you really need to say to put a sentence together?
Just as fish presumably don’t know they’re wet, many English speakers don’t know that the way their language works is just one of endless ways it could have come out. It’s easy to think that what one’s native language puts words to, and how, reflects the fundamentals of reality.
But languages are strikingly different in the level of detail they require a speaker to provide in order to put a sentence together. In English, for example, here’s a simple sentence that comes to my mind for rather specific reasons related to having small children: “The father said ‘Come here!’” This statement specifies that there is a father, that he conducted the action of speaking in the past, and that he indicated the child should approach him at the location “here.” What else would a language need to do?
U.S. Education Secretary John King will argue that interactions with children from different backgrounds prepare students for the workforce.
Perhaps no U.S. education secretary has had more personal experience with the power America’s public-school system has to lift up students who have the odds stacked against them than John King. At least when it works as intended.
A Puerto Rican and African American whose parents had both passed away by the time he was 12, King has repeatedly credited New York public schools for saving his life and shaping its trajectory. King attended P.S. 276 in Canarsie and Mark Twain Junior High School in Coney Island, at the time both diverse schools that exposed him not only to high-quality curriculum, but to students and teachers from backgrounds and cultures wildly different from his own.
“As a kid, it gave me a sense of different cultural experiences that people had and different traditions that people had, and as a parent, that has been an important part of thinking about the schools for my daughters,” King said during an interview at his Washington, D.C., office.
On Wednesday on CNN, Marco Rubio said the Islamic State, which Turkish officials believe carried out this week’s attack at Istanbul’s Ataturk airport, had two motivations. First, “they ultimately want them to be a part of the caliphate.” Sure, but “ultimately,” ISIS wants every place on earth to be part of its caliphate. That doesn’t explain why the organization struck Turkey now. Rubio’s second explanation was more convincing: “They’re looking to punish Turkey for allowing U.S. airstrikes to be conducted from an airbase within Turkey. … They’ve made that abundantly clear.”
Yes, they have. ISIS may eventually wish to conquer the entire world. But in the here and now, it generally attacks countries that are attacking it. The Georgetown University terrorism expert Daniel Byman has noted that until the U.S. and its allies began bombing the Islamic State in the summer of 2014, the group “focused first and foremost on its immediate theater of operations” in Iraq and Syria. A study by the Norwegian Defence Research Establishment detected only four ISIS-related plots in the West from January 2011 to May 2014. Then, between July 2014 and June 2015, the number spiked to 26.
University leaders and observers discuss the intersection of student protests, free speech and academic freedom.
In a Thursday debate titled “Academic Freedom, Safe Spaces, Dissent, and Dignity,” faculty or administrators from Yale, Wesleyan, Mizzou, and the University of Chicago discussed last semester’s student protests and their intersection with free speech. They shared the stage at the Aspen Ideas Festival, co-hosted by the Aspen Institute and The Atlantic, with Jonathan Greenblatt of the Anti-Defamation League; Kirsten Powers, author of The Silencing: How the Left Is Killing Free Speech; and Greg Lukianoff, who leads the Foundation for Individual Rights in Education.
My colleague Jeffrey Goldberg was the moderator.
The most interesting exchange involved Stephen Carter, a law professor at Yale, and Michael S. Roth, the president of Wesleyan University.