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.
In the primaries, he avoided policy debates by promising to build a wall—but the general election is forcing him into specifics.
The biggest political story of the last week has been Donald Trump’s flip-flop on deporting undocumented immigrants. This Sunday on CNN, Mike Pence filibustered his way through the subject for almost seven minutes before Jake Tapper finally declared, “You did not address the issue” and moved on. Chris Christie on ABC and Kellyanne Conway on CBS were no more coherent. The Daily Beast summed up the morning with the headline, “Immigration Flip-Flop Leaves Trump Campaign Flailing on Sunday Shows.”
But focusing on Trump’s “flip-flop” misses the point. Trump’s real problem isn’t that he’s changed his position on immigration. It’s that he’s trying to formulate one at all.
What the commentary of the last few days has generally overlooked is that while immigration was key to Trump’s success in the Republican primary, Trump never actually offered an immigration policy. To the contrary, his success rested in large measure on his ability to avoid one. Trump’s strategy on immigration, as on other key issues, was to cut through the Gordian knot of public policy with aggressive, quick fix solutions. Terrorism? Ban Muslims. ISIS? Bomb the hell out of them and take their oil. Loss of manufacturing jobs? Slap massive tariffs on companies that outsource American jobs.
As pay TV slowly declines, cable news faces a demographic cliff. And nobody has further to fall than the merchant of right-wing outrage.
October 7, 2016, will be the 20th birthday of the Fox News Channel, and at the moment, the network is experiencing the soap-operatic highs and lows typical of any teenager on television. In many ways, the summer of 2016 may go down in Fox News history as the company’s nadir. Its founder and leader Roger Ailes has been dishonorably dispatched, the remaining executives are dealing with a flurry of sexual harassment lawsuits, and one of its most public faces, Sean Hannity, has ignominiously remodeled himself as a gutless Trump whisperer.
And yet Fox News’ fortunes are ascendant, at least in the most quantifiable sense. The network’s annual profit in 2015 soared by about 20 percent. For the first time ever, Fox News has been the most-watched cable network among both primetime and daytime viewers for several months, with a larger audience than its nominal rivals, CNN and MSNBC, combined. Led by “The O'Reilly Factor,” Fox News doesn’t just have the best-rated news show on cable television; according to The Wrap, it has the 13 best-rated news shows on cable television.
We asked education experts how much time they think kids should spend in class. Here's what they had to say.
Nothing is perfect, but what if it could be?
Back-to-school season is in full swing, and despite the crispness of new notebook paper and the allure of Friday night lights, it’s hard to ignore the serious inequities, debates, and issues currently hampering America’s education system. Students will walk down hallways they haven’t seen since June with questions of segregation raging around them. Teachers will greet their pupils as public-school systems around the country are flailing. And administrators will continue on as innovative ideas about how best to reach learners emerge. And so, it’s no surprise that many are entering the school year with both aspiration and trepidation.
With that in mind, we asked a variety of prominent voices in education—from policy makers and teachers to activists and parents—what their vision of a perfect school system would be. We asked them to look beyond laws, politics, and funding to imagine a utopian system of learning. We wanted to know how these men and women would critically examine the most macro and micro aspects of school and reform these elements in a perfect world. They went back to the drawing board—and the chalkboard—to build their educational Garden of Eden. We’ll be publishing their answers to one question every day this week. The responses have been lightly edited for clarity and length.
A new anatomical understanding of how movement controls the body’s stress response system
Elite tennis players have an uncanny ability to clear their heads after making errors. They constantly move on and start fresh for the next point. They can’t afford to dwell on mistakes.
Peter Strick is not a professional tennis player. He’s a distinguished professor and chair of the department of neurobiology at the University of Pittsburgh Brain Institute. He’s the sort of person to dwell on mistakes, however small.
“My kids would tell me, dad, you ought to take up pilates. Do some yoga,” he said. “But I’d say, as far as I’m concerned, there's no scientific evidence that this is going to help me.”
Still, the meticulous skeptic espoused more of a tennis approach to dealing with stressful situations: Just teach yourself to move on. Of course there is evidence that ties practicing yoga to good health, but not the sort that convinced Strick. Studies show correlations between the two, but he needed a physiological mechanism to explain the relationship. Vague conjecture that yoga “decreases stress” wasn’t sufficient. How? Simply by distracting the mind?
In the name of emotional well-being, college students are increasingly demanding protection from words and ideas they don’t like. Here’s why that’s disastrous for education—and mental health.
Something strange is happening at America’s colleges and universities. A movement is arising, undirected and driven largely by students, to scrub campuses clean of words, ideas, and subjects that might cause discomfort or give offense. Last December, Jeannie Suk wrote in an online article for The New Yorker about law students asking her fellow professors at Harvard not to teach rape law—or, in one case, even use the word violate (as in “that violates the law”) lest it cause students distress. In February, Laura Kipnis, a professor at Northwestern University, wrote an essay in The Chronicle of Higher Education describing a new campus politics of sexual paranoia—and was then subjected to a long investigation after students who were offended by the article and by a tweet she’d sent filed Title IX complaints against her. In June, a professor protecting himself with a pseudonym wrote an essay for Vox describing how gingerly he now has to teach. “I’m a Liberal Professor, and My Liberal Students Terrify Me,” the headline said. A number of popular comedians, including Chris Rock, have stopped performing on college campuses (see Caitlin Flanagan’s article in this month’s issue). Jerry Seinfeld and Bill Maher have publicly condemned the oversensitivity of college students, saying too many of them can’t take a joke.
What to do if you’re a Hillary fan seated next to a Trump supporter at a wedding
When America is finally great again, they’ll make the latte with soy milk like you asked.
All those political cracks, not to mention earnest proclamations, mean that for the next 10 weeks, many casual interactions run the risk of erupting into full-blown partisan warfare. It’s more of a danger for those with family members or close friends who support opposing candidates and views. But on Facebook, hot-button scuffles can break out between almost anyone. (I recently witnessed a college friend who lives in Europe arguing about gun rights with a random guy from my high school in Texas, whom I myself have spoken with only a few times in person.)
One reason Americans find the other side’s views so inflammatory is that increasingly, they view their political party as more of a tribe than a checkbox. “People start seeing themselves or their political views as the main representation of their values, and what is right and wrong,” said Emanuel Maidenberg, a clinical professor of psychiatry and biobehavioral sciences at UCLA.
An increasing number of respondents are checking “Some Other Race” on U.S. Census forms, forcing officials to rethink current racial categories.
Something unusual has been taking place with the United States Census: A minor category that has existed for more than 100 years is elbowing its way forward. “Some Other Race,” a category that first entered the form as simply “Other” in 1910, was the third-largest category after “White” and “Black” in 2010, alarming officials, who are concerned that if nothing is done ahead of the 2020 census, this non-categorizable category of people could become the second-largest racial group in the United States.
Among those officials is Roberto Ramirez, the assistant division chief of the Census Bureau’s special population statistics branch. Ramirez is familiar with the complexities of filling out the census form: He checks “White” and “Some Other Race” to reflect his Hispanic ethnicity. Ramirez joins a growing share of respondents who are selecting “Some Other Race.” “People are increasingly not answering the race question. They are not identifying with the current categories, so we are trying to come up with a (better) question,” Ramirez told me. Ramirez and his colleague, Nicholas Jones, the director of race and ethnic research and outreach at the Census Bureau, have been working on fine-tuning the form to extract detailed race and ethnic reporting, and subsequently drive down the number of people selecting “Some Other Race.”
The bishop of Rome and the CEO of Facebook met at the Vatican on Monday.
Pope Francis hosted a special guest at the Vatican on Monday: Mark Zuckerberg, the founder and CEO of Facebook. Zuckerberg and his wife, Priscilla Chan, spoke with Francis about“how to use communications technology to alleviate poverty, encourage a culture of encounter, and to communicate a message of hope, especially to the most disadvantaged,” according to the Vatican.
It’s difficult to imagine two more different world leaders hanging out together. Zuckerberg was raised in a Jewish home, identifies as an atheist, and professes a profound respect for Buddhism. His social-media company claims to have a mission oriented toward creating social good, but in practice, it often leverages its immense influence over the way people use the internet for profit and political power. By his own description, the Facebook founder is interested in saving the world through technology: its use, its development, its spread.
The first contest is weeks away, and Gary Johnson and Jill Stein are still pushing to be included.
After sponsoring presidential debates for several cycles in the late 1970s and 1980s, the League of Women Voters quit—with harsh words for a new organization, established by the two major parties, that had worked to minimize its role.
League president Nancy Neuman accused the Commission on Presidential Debates of carefully choreographing an upcoming debate behind the League’s back, thus minimizing political risk for the candidates and creating a dishonest experience for viewers.
“We have no intention of becoming an accessory to the hoodwinking of the American public,” Neuman said at a 1988 press conference.
Nearly 30 years and some half-dozen election cycles have since passed. But U.S. third parties say the commission is still hoodwinking voters. Hampered by the group’s debate-qualifying criteria, third-party candidates have difficulty making the stage, and they accuse the commission of purposefully keeping them out to protect the two major parties. A third-party candidate hasn’t been included since 1992, and at the first general-election debate of 2016, chances are the most viable third-party candidates, the Green Party’s Jill Stein and Libertarian Gary Johnson, won’t be there either.
Women engage in indirect aggression and slut-shaming, even in clinical research studies. Why?
One day in Ontario, 86 straight women were paired off into groups of two—either with a friend or a stranger—and taken to a lab at McMaster University. There, a researcher told them they were about to take part in a study about female friendships. But they were soon interrupted by one of two women.
Half the participants were interrupted by a thin, blond, attractive woman with her hair in a bun, dressed in a plain blue t-shirt and khaki pants, whom the researchers called “the conservative confederate."