Harvard professor Ken Rogoff has not had a good week (Reuters)
For an economist, the five most terrifying words in the English language are: I can't replicate your results. But for economists Carmen Reinhart and Ken Rogoff of Harvard, there are seven even more terrifying ones: I think you made an Excel error.
Listen, mistakes happen. Especially with Excel. But hopefully they don't happen in papers that provide the intellectual edifice for an economic experiment -- austerity -- that has kept millions out of work. Well, too late. As Mike Konczal of the Roosevelt Institute reported, Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst, have found serious problems with Reinhart and Rogoff's austerity-justifying work. That work, which shows that countries with public debt of 90 percent of GDP or more tend to grow slower, omitted data for five of its 19 countries, and used the wrong data for another. The former was, embarrassingly enough, due to an Excel misadventure, and the latter an unrelated issue. If you use all of the (right) numbers, it turns out growth does slow when debt is high, but not nearly as much as Reinhart and Rogoff -- hereafter, R-R -- claimed.
In other words, there is no evidence for anything resembling a growth tipping point when debt hits 90 percent of GDP.
This is the academic's version of the dream where you're naked in public. Except it's not a dream. It's the mortifying reality for R-R, who have admitted that they forgot to drag their Excel formula down five more cells. But it's worse than mortifying for everybody else. It's been a catastrophe. Not that R-R made a pretty galling mistake; rather, that such a flawed paper gave the intellectual ballast to an idea that has failed everywhere it's been tried the past few years. Now, policymakers would have pursued austerity regardless, but R-R gave them a reason (and seemingly a bright red 90 percent of GDP line) to do so sooner. If too much debt is associated with too little growth, then there's no time to lose for slashing deficits.
Those are important words: "associated with". As I pointed out before, the best argument against taking R-R as austerity's gospel truth was it was just a correlation. Of course a ratio tends to increase more when its denominator increases less. That's how fractions work. But it doesn't prove that the rising ratio causes the stagnating denominator. If anything, the causality runs the other way -- lower growth tends to cause higher debt, as tax revenue falls and safety-net spending rises during a slump. Indeed, as you can see below, Arindrajit Dube of the University of Massachusetts, Amherst, found that debt-to-GDP predicts past GDP growth much better than future GDP growth. In other words, higher debt doesn't cause lower growth as much as lower growth causes higher debt.
Of course, this hasn't stopped deficit hawks from touting R-R's work as proof that we must tackle the long-term debt and we must tackle it now. Including, sometimes, R-R themselves. Now, in their paper, R-R are careful to say the relationship between higher debt and lower growth is just that: a relationship. In fact, that's been their defense: they never said it was anything more than a correlation, and that correlation still holds after correcting for all their mistakes, albeit not as strongly.
That's true ... if you only look at what they said in their paper, and ignore what they said about their paper. For example, here's what they said in Bloomberg View back in July 2011:
Our empirical research on the history of financial crises and the relationship between growth and public liabilities supports the view that current debt trajectories are a risk to long-term growth and stability, with many advanced economies already reaching or exceeding the important marker of 90 percent of GDP....
The biggest risk is that debt will accumulate until the overhang weighs on growth....
Those who remain unconvinced that rising debt levels pose a risk to growth should ask themselves why, historically, levels of debt of more than 90 percent of GDP are relatively rare and those exceeding 120 percent are extremely rare (see attached chart 2 for U.S. public debt since 1790). Is it because generations of politicians failed to realize that they could have kept spending without risk? Or, more likely, is it because at some point, even advanced economies hit a ceiling where the pressure of rising borrowing costs forces policy makers to increase tax rates and cut government spending, sometimes precipitously, and sometimes in conjunction with inflation and financial repression (which is also a tax)?
To be fair, R-R do say that they only found that higher debt and lower growth are "associated" and that there's no "bright red line" (even if policymakers interpret it that way) at 90 percent. But they also make it quite clear that they think their correlation is more than just a correlation. They think higher debt causes lower growth, and, after a little throat-clearing, they're not too shy about saying so.
In a series of academic papers with Carmen Reinhart - including, most recently, joint work with Vincent Reinhart ("Debt Overhangs: Past and Present") - we find that very high debt levels of 90% of GDP are a long-term secular drag on economic growth that often lasts for two decades or more....
Of course, there is two-way feedback between debt and growth, but normal recessions last only a year and cannot explain a two-decade period of malaise. The drag on growth is more likely to come from the eventual need for the government to raise taxes, as well as from lower investment spending. So, yes, government spending provides a short-term boost, but there is a trade-off with long-run secular decline.
It's the same pattern: a few caveats, and then a semi-speculative overselling of their results. But their biggest overselling didn't come in the media. It came behind closed doors -- in Congress. Tim Fernholz of Quartz flagged the following passage from Senator Tom Coburn's recent book about the time R-R briefed members of Congress in April 2011, a few months before the debt ceiling debacle:
Johnny Isakson, a Republican from Georgia and always a gentleman, stood up to ask his question: "Do we need to act this year? Is it better to act quickly?"
"Absolutely," Rogoff said. "Not acting moves the risk closer," he explained, because every year of not acting adds another year of debt accumulation. "You have very few levers at this point," he warned us.
Reinhart echoed Conrad's point and explained that countries rarely pass the 90 percent debt-to-GDP tipping point precisely because it is dangerous to let that much debt accumulate. She said, "If it is not risky to hit the 90 percent threshold, we would expect a higher incidence."
R-R whisper "correlation" to other economists, but say "causation" to everyone else. Now, they don't always say it outright -- at least not at first. Rather, they say "this isn't definitely causation ... but come on, what else could it be?" That's been more than enough for the austerians who have been desperate for any kind of justification to forget about unemployment and worry about debt instead.
The boring reality is the relationship between public debt and growth isn't clear. As Justin Fox of Harvard Business Review points out, there simply isn't enough data. Some countries run up big debts fighting wars, and then grow fine. Some countries run up big debts fighting financial crises, and then grow slowly as the private sector deleverages. Some countries run up big debts as a matter of course, and then grow slowly as rising rates crowd out private investment. And even the few data points we do have don't always tell us all that much. Indeed, as Paul Krugman points out, it shouldn't surprise us that the U.S. has averaged negative growth during its high debt years, because most of those years came during the World War II demobilization. In other words, it's impossible to say anything dispositive about debt and growth more broadly.
But that hasn't stopped R-R from trying. This kind of overhyping is why Joe Weisenthal called them "the most dangerous economists in the world" back in 2011. And it's a far more damning error than anything they did with Excel.
Hillary Clinton’s realistic attitude is the only thing that can effect change in today’s political climate.
Bernie Sanders and Ted Cruz have something in common. Both have an electoral strategy predicated on the ability of a purist candidate to revolutionize the electorate—bringing droves of chronic non-voters to the polls because at last they have a choice, not an echo—and along the way transforming the political system. Sanders can point to his large crowds and impressive, even astonishing, success at tapping into a small-donor base that exceeds, in breadth and depth, the remarkable one built in 2008 by Barack Obama. Cruz points to his extraordinarily sophisticated voter-identification operation, one that certainly seemed to do the trick in Iowa.
But is there any real evidence that there is a hidden “sleeper cell” of potential voters who are waiting for the signal to emerge and transform the electorate? No. Small-donor contributions are meaningful and a sign of underlying enthusiasm among a slice of the electorate, but they represent a tiny sliver even of that slice; Ron Paul’s success at fundraising (and his big crowds at rallies) misled many analysts into believing that he would make a strong showing in Republican primaries when he ran for president. He flopped.
Thenew Daily Show host, Trevor Noah, is smooth and charming, but he hasn’t found his edge.
It’s a psychic law of the American workplace: By the time you give your notice, you’ve already left. You’ve checked out, and for the days or weeks that remain, a kind of placeholder-you, a you-cipher, will be doing your job. It’s a law that applies equally to dog walkers, accountants, and spoof TV anchormen. Jon Stewart announced that he was quitting The Daily Show in February 2015, but he stuck around until early August, and those last months had a restless, frazzled, long-lingering feel. A smell of ashes was in the air. The host himself suddenly looked quite old: beaky, pique-y, hollow-cheeky. For 16 years he had shaken his bells, jumped and jangled in his little host’s chair, the only man on TV who could caper while sitting behind a desk. Flash back to his first episode as the Daily Show host, succeeding Craig Kilborn: January 11, 1999, Stewart with floppy, luscious black hair, twitching in a new suit (“I feel like this is my bar mitzvah … I have a rash like you wouldn’t believe.”) while he interviews Michael J. Fox.
The championship game descends on a city failing to deal with questions of affordability and inclusion.
SAN FRANCISCO—The protest kicked off just a few feet from Super Bowl City, the commercial playground behind security fences on the Embarcadero, where football fans were milling about drinking beer, noshing on $18 bacon cheeseburgers, and lining up for a ride on a zip line down Market Street.
The protesters held up big green camping tents painted with slogans such as “End the Class War” and “Stop Stealing Our Homes,” and chanted phrases blaming San Francisco Mayor Ed Lee for a whole range of problems, including the catchy “Hey Hey, Mayor Lee, No Penalty for Poverty.” They blocked the sidewalk, battling with tourists, joggers, and city workers, some of whom were trying to wheel their bikes through the crowd to get to the ferries that would take them home.
I coined the term—now I’ve come back to fix what I started.
O reader, hear my plea: I am the victim of semantic drift.
Four months ago, I coined the term “Berniebro” to describe a phenomenon I saw on Facebook: Men, mostly my age, mostly of my background, mostly with my political beliefs, were hectoring their friends about how great Bernie was even when their friends wanted to do something else, like talk about the NBA.
In the post, I tried to gently suggest that maybe there were other ways to advance Sanders’s beliefs, many of which I share. I hinted, too, that I was not talking about every Sanders supporter. I did this subtly, by writing: “The Berniebro is not every Sanders supporter.”
Then, 28,000 people shared the story on Facebook. The Berniebro was alive! Immediately, I started getting emails: Why did I hate progressivism? Why did I joke about politics? And how dare I generalize about every Bernie Sanders supporter?
Overly persistent pursuit is a staple of movie love stories, but a new study shows that it could normalize some troubling behaviors.
Romantic comedies are supposed to be escapist—a jaunt into a better, more colorful world where journalists can afford giant New York apartments and no obstacle to love is too great to overcome.
Except that when you think about it, some of the behavior portrayed as romantic in these movies is, objectively, creepy. The Love Actually sign guy was totally out of line, and honestly, Lloyd Dobler from Say Anything was pushing it with his famous jukebox. Even the supposedly “pure” love of cute baby-faced Joseph Gordon Levitt as Cameron in 10 Things I Hate About You involves teaching himself just enough French that he can pose as a tutor and hang out with his beloved. Oh, and hiring a guy to go out with her sister.
Bernie Sanders doggedly pursued his one big idea about reforming American politics, while Hillary Clinton detailed her many proposals for change.
With the New Hampshire primaries just days away, Democrats Hillary Clinton and Bernie Sanders met on a debate stage in Durham on Thursday. In their first one-on-one matchup, the duo seemed determined to illustrate Archilochus’s classic binary between the fox, who knows many things, and the hedgehog, who knows one important thing. Sanders knows that what the country needs—the only thing it needs—is a political and economic revolution. Clinton knows the country needs progressive policies on a range of matters and a pragmatic, realistic strategy to implement them.
That divide was clear from their opening statements, with Sanders immediately jumping to his familiar mantra about a rigged economy and a corrupt campaign-finance scheme. Clinton’s answer was not so laser focused, discussing a general need for the nation to “live up to our values in the 21st century,” and checking off not just the economy, but racism, sexism, and more. This split is not new, of course, but with Martin O’Malley off the stage and out of the race, and the Democratic contest tighter than ever, the division has never been so clear. It led to an unusually interesting debate, with the two candidates frequently addressing each other directly and delving into detail.
I agree with David Graham’s summing up of the “hedgehog-vs.-fox” nature of the Democratic debate last night, and with nearly all of the Atlantic liveblogging that is now collected below David’s piece. (I missed the liveblogging boat because I hadn’t thought I’d see the debate. When I did, I sent out penséeson Twitter.)
Three points about the debate:
1) As an exchange of ideas—and as a display of contrasting outlooks, casts of mind, temperament, goals, frames of reference, theories of politics, etc — these two hours were more valuable than all the previous stretches of “debate” put together.
More simply, this one actually was a debate, in contrast to the previous Survivor-style contests for attention or Wrestlemania-style displays of posturing. (By the way, if you haven’t seen the video of Donald Trump shaving Vince McMahon’s head in a wrestling ring, watch it soon.) The others have been side-by-side displays of putdowns, talking points, and pleas for attention. This one was two people arguing about policies, past records, and future plans.
What happened when 11 exiles armed themselves for a violent night in the Gambia
In the dark hours of the morning on December 30, 2014, eight men gathered in a graveyard a mile down the road from the official residence of Yahya Jammeh, the president of the Gambia. The State House overlooks the Atlantic Ocean from the capital city of Banjul, on an island at the mouth of the Gambia River. It was built in the 1820s and served as the governor’s mansion through the end of British colonialism, in 1965. Trees and high walls separate the house from the road, obscuring any light inside.
The men were dressed in boots and dark pants, and as two of them stood guard, the rest donned Kevlar helmets and leather gloves, strapped on body armor and CamelBaks, and loaded their guns. Their plan was to storm the presidential compound, win over the military, and install their own civilian leader. They hoped to gain control of the country by New Year’s Day.
The most surreal moment in the Democratic debate came when one of America’s most powerful insiders took umbrage at an accurate characterization of who she represents.
Last week, I flagged Damon Linker’s column lamenting the fact that so many members of the Republican establishment are in denial about their place. “By thinking of themselves as perennially outside the Republican power-structure,” he argued, they “exempt themselves from the need to admit and learn from their own mistakes. It’s always someone else’s fault. The Iraq War and its outcome may be the most egregious and disgraceful example of such shirking, but it’s not the only one.”
I applied his logic to Rush Limbaugh, who gets invited to the White House every time a Republican is elected, socializes with GOP power brokers, has their ear five days a week, and yet speaks about them as if describing a bitter enemy totally alien to him.
The country has experienced nursing shortages for decades, but an aging population means the problem is about to get much worse.
Five years ago, my mother was rushed to the hospital for an aneurysm. For the next two weeks, my family and I sat huddled around her bed in the intensive-care unit, oscillating between panic, fear, uncertainty, and exhaustion.
It was nurses that got us through that time with our sanity intact. Nurses checked on my mother—and us—multiple times an hour. They ran tests, updated charts, and changed IVs; they made us laugh, allayed our concerns, and thought about our comfort. The doctors came in every now and then, but the calm dedication of the nurses was what kept us together. Without them, we would have fallen apart.
Which is just one reason why the prospect of a national nursing shortage is so alarming. The U.S. has been dealing with a nursing deficit of varying degrees for decades, but today—due to an aging population, the rising incidence of chronic disease, an aging nursing workforce, and the limited capacity of nursing schools—this shortage is on the cusp of becoming a crisis, one with worrying implications for patients and health-care providers alike.