Bundesbank chief Jens Weidmann gets basic facts wrong and thinks his colleagues are the devil.
Have you heard of "inflation"? Good. Have you heard that "inflation" can make your borrowing costs appear ... inflated? Yes? Congratulations, you know more about money than Bundesbank president Jens Weidmann.
As Germany's member of the European Central Bank's (ECB) governing council, Weidmann has opposed doing anything to solve the euro crisis. Because, inflation! (Pay no attention to the core inflation behind the curtain of 1.5 percent in September). Weidmann is one of those people who thinks it's always 1923 -- that Weimar hyperinflation is always just around the corner. Despite this preoccupation with anything resembling a price increase, Weidmann mysteriously develops amnesia about inflation when it comes to figuring out real government borrowing costs. Here's what he had to say about rising bond yields in Europe's periphery, via Linda Yueh of Bloomberg.
Government borrowing costs over 7 percent haven't caused the end of world in the past and the euro zone wouldn't fall apart if some had to temporarily pay such rates.
This is just a basic fallacy. Weidmann is confusing real and nominal rates. It's easy to pay 7 percent to borrow when inflation is high, but not so much when inflation is low. The chart below compares unadjusted and inflation-adjusted Spanish borrowing costs since 1978.
(Note: I used headline CPI as the deflator).
I'm not sure how many words this picture is worth, but there are two big stories here. First, Spain used to pay much more than 7 percent to borrow in nominal terms, but that was back in its pre-euro days when inflation was much higher. Second, Spain even used to pay more than 7 percent to borrow in real terms, but that was back when it actually had real growth. It's a bit harder to pay 7 percent when growth and inflation have both flatlined.
In other words, you can't pay your debts if you have no income. The chart below looks at Spain's borrowing costs less its nominal GDP growth rate -- that is, real growth and inflation together. When the blue line runs up, borrowing outpaces income growth. Spain today is what insolvency looks like.
Now, positive rates here aren't themselves a sign of doom. Far from it. We did for much of the Great Moderation. But rates above 5 percent? That's doom territory. It sets off a debt trap. Spain's national income can't support its borrowing costs, so they have to do austerity -- austerity that only pushes its income down and its borrowing costs up even more.
Weidmann doesn't think this is a problem. The opposite, actually. He thinks it's a good thing, because it pushes Spain to do the austerity and labor market reforms the ECB wants it to do. But the ECB thinks this austerity is a punishment. Weidmann thinks it's actually a medicine. In other words, the ECB thinks austerity is the price Spain should pay for the ECB to push its borrowing costs down, and Weidmann thinks austerity alone will push its borrowing costs down. The former has become the ECB's de facto policy -- a policy it's fair to say Weidmann does not like. He implied it shows the ECB is now under the influence of the devil. As in the one with the pitchfork.
That's not the kind of argument you make when the facts are on your side.
Defining common cultural literacy for an increasingly diverse nation.
Is the culture war over?
That seems an absurd question. This is an age when Confederate monuments still stand; when white-privilege denialism is surging on social media; when legislators and educators in Arizona and Texas propose banning ethnic studies in public schools and assign textbooks euphemizing the slave trade; when fear of Hispanic and Asian immigrants remains strong enough to prevent immigration reform in Congress; when the simple assertion that #BlackLivesMatter cannot be accepted by all but is instead contested petulantly by many non-blacks as divisive, even discriminatory.
And that’s looking only at race. Add gender, guns, gays, and God to the mix and the culture war seems to be raging along quite nicely.
Be kind, show understanding, do good—but, some scientists say, don’t try to feel others’ pain.
In 2006, then-senator Barack Obama gave a commencement speech offering what seemed like very sensible advice. “There’s a lot of talk in this country about the federal deficit,” he told Northwestern’s graduating class. “But I think we should talk more about our empathy deficit—the ability to put ourselves in someone else’s shoes; to see the world through those who are different from us—the child who’s hungry, the laid-off steelworker, the immigrant woman cleaning your dorm room.”
In the years since then, the country has followed Obama’s counsel, at least when it comes to talking about empathy. It’s become a buzzword, extolled by Arianna Huffington, taught to doctors and cops, and used as a test for politicians. "We are on the cusp of an epic shift,” according to Jeremy Rifkin’s 2010 book The Empathetic Civilization. “The Age of Reason is being eclipsed by the Age of Empathy."
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Former Senator Jim Webb is the fifth Democrat to enter the race—and by far the most conservative one.
In a different era’s Democratic Party, Jim Webb might be a serious contender for the presidential nomination. He’s a war hero and former Navy secretary, but he has been an outspoken opponent of recent military interventions. He’s a former senator from Virginia, a purple state. He has a strong populist streak, could appeal to working-class white voters, and might even have crossover appeal from his days as a member of the Reagan administration.
In today’s leftward drifting Democratic Party, however, it’s hard to see Webb—who declared his candidacy Thursday—getting very far. As surprising as Bernie Sanders’s rise in the polls has been, he looks more like the Democratic base than Webb does. The Virginian is progressive on a few major issues, including the military and campaign spending, but he’s far to the center or even right on others: He's against affirmative action, supports gun rights, and is a defender of coal. During the George W. Bush administration, Democrats loved to have him as a foil to the White House. It’s hard to imagine the national electorate will cotton to him in the same way. Webb’s statement essentially saying he had no problem with the Confederate battle flag flying in places like the grounds of the South Carolina capitol may have been the final straw. (At 69, he’s also older than Hillary Clinton, whose age has been a topic of debate, though still younger than Bernie Sanders or Joe Biden.)
For centuries, experts have predicted that machines would make workers obsolete. That moment may finally be arriving. Could that be a good thing?
1. Youngstown, U.S.A.
The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.
For much of the 20th century, Youngstown’s steel mills delivered such great prosperity that the city was a model of the American dream, boasting a median income and a homeownership rate that were among the nation’s highest. But as manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.
A European heat wave, lightning over California, a building made of 8,500 beer bottles, shrimp fishing on horseback in Belgium, the first-ever White House Campout, mine detection rats in Cambodia, and much more.
A European heat wave, lightning over California, a building made of 8,500 beer bottles, cosplay in Paris, shrimp fishing on horseback in Belgium, the first-ever White House Campout, mine detection rats in Cambodia, a train wreck in Pakistan, an airshow over St. Petersburg, Russia, and much more.
People labeled “smart” at a young age don’t deal well with being wrong. Life grows stagnant.
At whatever agesmart people develop the idea that they are smart, they also tend to develop vulnerability around relinquishing that label. So the difference between telling a kid “You did a great job” and “You are smart” isn’t subtle. That is, at least, according to one growing movement in education and parenting that advocates for retirement of “the S word.”
The idea is that when we praise kids for being smart, those kids think: Oh good, I'm smart. And then later, when those kids mess up, which they will, they think: Oh no, I'm not smart after all. People will think I’m not smart after all. And that’s the worst. That’s a risk to avoid, they learn.“Smart” kids stand to become especially averse to making mistakes, which are critical to learning and succeeding.
The retired general and former CIA director holds forth on the Middle East.
ASPEN, Colo.—Retired U.S. Army General David Petraeus pioneered America’s approach to counterinsurgency, led the surge in Iraq, served as director of the CIA for a year, and was sentenced to two years probation for leaking classified information to his mistress. On Wednesday at the Aspen Ideas Festival, he was interviewed by my colleague, Jeffrey Goldberg, about subjects including efforts to stop Iran’s nuclear program; the civil war in Syria; ISIS and the threat it poses to the United States; and the Iraq War.
Here are several noteworthy moments from their conversation, slightly condensed:
The Risks of Attacking Iran
Jeffrey Goldberg: So you believe that, under certain circumstances, President Obama would still use military force against Iran?
David Petraeus: I think he would, actually. I know we’ve had red lines that didn’t turn out to be red lines. ... I think this is a different issue, and I clearly recognize how the administration has sought to show that this is very, very different from other sort of off-the-cuff remarks.
Goldberg: How did the Obama administration stop Israel from attacking Iran? And do you think that if this deal does go south, that Israel would be back in the picture?
Petraeus: I don’t, actually. I think Israel is very cognizant of its limitations. ... The Israelis do not have anything that can crack this deeply buried enrichment site ... and if you cannot do that, you’re not going to set the program back very much. So is it truly worth it, then?
So that’s a huge limitation. It’s also publicly known that we have a 30,000-pound projectile that no one else has, that no one else can even carry. The Massive Ordinance Penetrator was under design for almost six years. ... If necessary, we can take out all these facilities and set them back a few years, depending on your assumptions.
But that’s another roll of the iron dice, as Bismarck used to say, and you never know when those dice are rolled what the outcome is going to be. You don’t know what risks could materialize for those who are in harm’s way.
You don’t know what the response could be by Iran.
There’s always the chance that there will be salvos at Israel, but what if they decide to go at the Gulf states, where we have facilities in every single one.
This is not something to be taken lightly, clearly.
Many veterans are suffering from a condition similar to, but distinct from, PTSD: moral injury, in which the ethical transgressions of war can leave service members traumatized.
Amy Amidon has listened to war stories on a daily basis for almost a decade.
As a clinical psychologist at the Naval Medical Center in San Diego, she works with a multi-week residential program called OASIS, or Overcoming Adversity and Stress Injury Support, for soldiers who have recently returned from deployments. Grief and fear dominate the majority of the conversations in OASIS: Amidon regularly hears participants talk about improvised explosive devices claiming the lives of close friends; about flashbacks of airstrikes pounding cities to rubble; about days spent in 120-degree desert heat, playing hide and seek with a Taliban enemy. Many veterans in the program are there seeking treatment for post-traumatic stress disorder.