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.
Orr: “Sometimes a thing happens. Splits your life. There’s a before and after. I got like five of them at this point.”
This was Frank offering a pep talk to the son of his murdered former henchman Stan in tonight’s episode. (More on this in a moment.) But it’s also a line that captures this season of True Detective so perfectly that it almost seems like a form of subliminal self-critique.
Remember when Ray got shot in episode two and appeared to be dead but came back with a renewed sense of purpose and stopped drinking. No? That’s okay. Neither does the show: It was essentially forgotten after the subsequent episode. Remember when half a dozen (or more) Vinci cops were killed in a bloody shootout along with dozen(s?) of civilians? No? Fine: True Detective’s left that behind, too. Unless I missed it, there was not a single mention of this nationally historic bloodbath tonight.
Educators seldom have enough time to do their business. What’s that doing to the state of learning?
It’s common knowledge that teachers today are stressed, that they feel underappreciated and disrespected, and disillusioned. It’s no wonder they’re ditching the classroom at such high rates—to the point where states from Indiana to Arizona to Kansas are dealing with teacher shortages. Meanwhile, the number of American students who go into teaching is steadily dropping.
A recent survey conducted jointly by the American Federation of Teachers and Badass Teachers Association asked educators about the quality of their worklife, and it got some pretty harrowing feedback. Just 15 percent of the 30,000 respondents, for example, strongly agreed that they’re enthusiastic about the profession. Compare that to the roughly 90 percent percent who strongly agreed that they were enthusiastic about it when they started their career, and it’s clear that something has changed about schools that’s pushing them away. Roughly three in four respondents said they “often” feel stressed by their jobs.
How a radical epilepsy treatment in the early 20th century paved the way for modern-day understandings of perception, consciousness, and the self
In 1939, a group of 10 people between the ages of 10 and 43, all with epilepsy, traveled to the University of Rochester Medical Center, where they would become the first people to undergo a radical new surgery.
The patients were there because they all struggled with violent and uncontrollable seizures. The procedure they were about to have was untested on humans, but they were desperate—none of the standard drug therapies for seizures had worked.
Between February and May of 1939, their surgeon William Van Wagenen, Rochester’s chief of neurosurgery, opened up each patient’s skull and cut through the corpus callosum, the part of the brain that connects the left hemisphere to the right and is responsible for the transfer of information between them. It was a dramatic move: By slicing through the bundle of neurons connecting the two hemispheres, Van Wagenen was cutting the left half of the brain away from the right, halting all communication between the two.
A controversial treatment shows promise, especially for victims of trauma.
It’s straight out of a cartoon about hypnosis: A black-cloaked charlatan swings a pendulum in front of a patient, who dutifully watches and ping-pongs his eyes in turn. (This might be chased with the intonation, “You are getting sleeeeeepy...”)
Unlike most stereotypical images of mind alteration—“Psychiatric help, 5 cents” anyone?—this one is real. An obscure type of therapy known as EMDR, or Eye Movement Desensitization and Reprocessing, is gaining ground as a potential treatment for people who have experienced severe forms of trauma.
Here’s the idea: The person is told to focus on the troubling image or negative thought while simultaneously moving his or her eyes back and forth. To prompt this, the therapist might move his fingers from side to side, or he might use a tapping or waving of a wand. The patient is told to let her mind go blank and notice whatever sensations might come to mind. These steps are repeated throughout the session.
Has the Obama administration’s pursuit of new beginnings blinded it to enduring enmities?
“The president said many times he’s willing to step out of the rut of history.” In this way Ben Rhodes of the White House, who over the years has broken new ground in the grandiosity of presidential apologetics, described the courage of Barack Obama in concluding the Joint Comprehensive Plan of Action with the Islamic Republic of Iran, otherwise known as the Iran deal. Once again Rhodes has, perhaps inadvertently, exposed the president’s premises more clearly than the president likes to do. The rut of history: It is a phrase worth pondering. It expresses a deep scorn for the past, a zeal for newness and rupture, an arrogance about old struggles and old accomplishments, a hastiness with inherited precedents and circumstances, a superstition about the magical powers of the present. It expresses also a generational view of history, which, like the view of history in terms of decades and centuries, is one of the shallowest views of all.
Some experts say the normal effects of severe adversity may be misdiagnosed as ADHD.
Dr. Nicole Brown’s quest to understand her misbehaving pediatric patients began with a hunch.
Brown was completing her residency at Johns Hopkins Hospital in Baltimore, when she realized that many of her low-income patients had been diagnosed with attention deficit/hyperactivity disorder (ADHD).
These children lived in households and neighborhoods where violence and relentless stress prevailed. Their parents found them hard to manage and teachers described them as disruptive or inattentive. Brown knew these behaviors as classic symptoms of ADHD, a brain disorder characterized by impulsivity, hyperactivity, and an inability to focus.
When Brown looked closely, though, she saw something else: trauma. Hyper-vigilance and dissociation, for example, could be mistaken for inattention. Impulsivity might be brought on by a stress response in overdrive.
Anti-discrimination statutes are coming into conflict with laws designed to preserve freedom of conscience, especially in the private sector.
Last week, the Equal Employment Opportunity Commission dropped an astounding ruling: By a 3-2 vote, it concluded that “sexual orientation is inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.”
This is a big deal: The Commission’s recommendations shape rulings on federal employees’ workplace-discrimination claims, and its field offices deal with claims made by employees at private organizations, as well. But the ruling is also a reminder of how complicated—and unresolved—the post-Obergefell legal landscape is. The Supreme Court’s ruling in favor of same-sex marriage at the end of June has set the country up for two new waves of discrimination claims: those made by same-sex couples and LGBT workers, and those made by religious Americans who oppose same-sex marriage. The two may seem distinct or even opposed, but they’re actually intertwined: In certain cases, extending new rights to LBGT workers will necessarily lead to religious-freedom objections, and vice versa.
Companies that overvalue alpha-male behavior need to change—both to retain female talent and for the bottom line.
When it comes to gender equality in the workplace, the research on its economic benefits is clear: Equality can boost profits and enhance reputation. And then there’s also the fact that it’s more fair. But the progress of women in the workplace is so far inadequate: Women are woefully underrepresented in executive positions, the pay gap persists, and the motherhood penalty is very real.
Barbara Annis is the founder of the Gender Intelligence Group, a consultancy that works with executives at major firms (including Deloitte, American Express, BMO Financial Group, and eBay) to create strategies to transform their work cultures into ones that are friendly to both men and women.
I recently spoke with Annis about her work and the challenges to achieving gender parity. The following transcript of our conversation has been edited for clarity.
There's an eerie foreshadowing to some of the author's musings from 54 years ago.
Aldous Huxley—author of the classic Brave New World, little-known children's book wordsmith, staple of Carl Sagan's reading list—would have been 118 today. To celebrate his mind and his legacy, here is a rare 1958 conversation with Mike Wallace—the same masterful interviewer who also offered rare glimpses into the minds of Salvador Dalí and Ayn Rand—in which Huxley predicts the "fictional world of horror" depicted in Brave New World is just around the corner for humanity. He explains how overpopulation is among the greatest threats to our freedom, admonishes against the effects of advertising on children, and, more than a century before Occupy Wall Street, outlines how global economic destabilization will incite widespread social unrest.