Austerians have had their worst week since the last time GDP numbers came out for a country that's tried austerity.
But this time is, well, different. It's not "just" that southern Europe is stuck in a depression and Britain is stuck in a no-growth trap. It's that the very intellectual foundations of austerity are unraveling. In other words, economists are finding out that austerity doesn't work in practice or in theory.
What a difference an Excel coding error makes.
Austerity has been a policy in search of a justification ever since it began in 2010. Back then, policymakers decided it was time for policy to go back to "normal" even though the economy hadn't, because deficits just felt too big. The only thing they needed was a theory telling them why what they were doing made sense. Of course, this wasn't easy when unemployment was still high, and interest rates couldn't go any lower. Alberto Alesina and Silvia Ardagna took the first stab at it, arguing that reducing deficits would increase confidence and growth in the short-run. But this had the defect of being demonstrably untrue (in addition to being based off a naïve reading of the data). Countries that tried to aggressively cut their deficits amidst their slumps didn't recover; they fell into even deeper slumps.
Enter Carmen Reinhart and Ken Rogoff. They gave austerity a new raison d'être by shifting the debate from the short-to-the-long-run. Reinhart and Rogoff acknowledged austerity would hurt today, but said it would help tomorrow -- if it keeps governments from racking up debt of 90 percent of GDP, at which point growth supposedly slows dramatically. Now, this result was never more than just a correlation -- slow growth more likely causes high debt than the reverse -- but that didn't stop policymakers from imputing totemic significance to it. That is, it became a "fact" that everybody who mattered knew was true.
Except it wasn't. Reinhart and Rogoff goofed. They accidentally excluded some data in one case, and used some wrong data in another; the former because of an Excel snafu. If you correct for these very basic errors, their correlation gets even weaker, and the growth tipping point at 90 percent of GDP disappears. In other words, there's no there there anymore.
Austerity is back to being a policy without a justification. Not only that, but, as Paul Krugman points out, Reinhart and Rogoff's spreadsheet misadventure has been a kind of the-austerians-have-no-clothes moment. It's been enough that even some rather unusual suspects have turned against cutting deficits now. For one, Stanford professor John Taylor claims L'affaire Excel is why the G20, the birthplace of the global austerity movement in 2010, was more muted on fiscal targets recently.
The discovery of errors in the Reinhart-Rogoff paper on the growth-debt nexus is already impacting policy. A participant in last Friday's G20 meetings told me that the error was a factor in the decision to omit specific deficit or debt-to-GDP targets in the G20 communique.
The UK and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not. You've got to spend money.Bond investors want growth much like equity investors, and to the extent that too much austerity leads to recession or stagnation then credit spreads widen out -- even if a country can print its own currency and write its own checks. In the long term it is important to be fiscal and austere. It is important to have a relatively average or low rate of debt to GDP. The question in terms of the long term and the short term is how quickly to do it.
Growth vigilantes are the new bond vigilantes. Gross thinks the boom, not the slump, is the time for austerity -- which sounds an awful lot like you-know-who.
The austerity fever has even broken in Europe. At least a bit. Now, eurocrats can't say that austerity has been anything other than the best of all economic policies, but they can loosen the fiscal noose. And that's what they might be doing, by giving countries more time and latitude to hit their deficit targets. Here's how European Commission president José Manuel Barroso framed the issue on Monday:
While [austerity] is fundamentally right, I think it has reached its limits in many aspects. A policy to be successful not only has to be properly designed. It has to have the minimum of political and social support.
That's not much, but it's still much better than the growth-through-austerity plan Eurogroup president Jeroen Dijsselbloem was peddling on ... Saturday.
Now, Reinhart and Rogoff's Excel imbroglio hasn't exactly set off a new Keynesian moment. Governments aren't going to suddenly take advantage of zero interest rates to start spending more to put people back to work. Stimulus is still a four-letter word. Indeed, the euro zone, Britain, and, to a lesser extent, the United States, are still focussed on reducing deficits above all else. But there's a greater recognition that trying to cut deficits isn't enough to cut debt burdens. You need growth too. In other words, people are remembering that there's a denominator in the debt-to-GDP ratio.
But austerity doesn't just have a math problem. It has an image problem too. Just a week ago, Reinhart and Rogoff's work was the one commandment of austerity: Thou shall not run up debt in excess of 90 percent of GDP. Wisdom didn't get more conventional. What did this matter? Well, as Keynes famously observed, it's better for reputation to fail conventionally than to succeed unconventionally. In other words, elites were happy to pursue obviously failed policies as long as they were the right failed policies.
But now austerity doesn't look so conventional. It looks like the punchline of a bad joke about Excel destroying the global economy. Maybe, just maybe, that will be enough to free us from some defunct economics.
What would the American culture wars look like if they were less about “values” and more about Jesus?
Evangelical Christianity has long had a stranglehold on how Americans imagine public faith. Vague invocations of “religion”—whether it’s “religion vs. science” or “religious freedom”—usually really mean “conservative, Protestant, evangelical Christianity,” and this assumption inevitably frames debates about American belief. For the other three-quarters of the population—Catholics, Jews, other Protestants, Muslims, Hindus, secular Americans, Buddhists, Wiccans, etc.—this can be infuriating. For some evangelicals, it’s a sign of success, a linguistic triumph of the culture wars.
But not for Russell Moore. In 2013, the 43-year-old theologian became the head of the Ethics and Religious Liberty Commission, the political nerve center of the Southern Baptist Convention. His predecessor, Richard Land, prayed with George W. Bush, played hardball with Democrats, and helped make evangelicals a quintessentially Republican voting bloc.
The winners of the 27th annual National Geographic Traveler Photo Contest have just been announced.
The winners of the 27th annual National Geographic Traveler Photo Contest have just been announced. Winning first prize, Anuar Patjane Floriuk of Tehuacán, Mexico, will receive an eight-day photo expedition for two to Costa Rica and the Panama Canal for a photograph of divers swimming near a humpback whale off the western coast of Mexico. Here, National Geographic has shared all of this year’s winners, gathered from four categories: Travel Portraits, Outdoor Scenes, Sense of Place, and Spontaneous Moments. Captions by the photographers.
An activist group is trying to discredit Planned Parenthood with covertly recorded videos even as contraception advocates are touting a method that sharply reduces unwanted pregnancies.
Abortion is back at the fore of U.S. politics due to an activist group’s attempt to discredit Planned Parenthood, one of the most polarizing organizations in the country. Supporters laud its substantial efforts to provide healthcare for women and children. For critics, nothing that the organization does excuses its role in performing millions of abortions––a procedure that they regard as literal murder––and its monstrous character is only confirmed, in their view, by covertly recorded video footage of staffers cavalierly discussing what to do with fetal body parts.
If nothing else, that recently released footage has galvanized Americans who oppose abortion, media outlets that share their views, and politicians who seek their votes. “Defunding Planned Parenthood is now a centerpiece of the Republican agenda going into the summer congressional recess,” TheWashington Postreports, “and some hard-liners have said they are willing to force a government shutdown in October if federal support to the group is not curtailed.”
Many psychiatrists believe that a new approach to diagnosing and treating depression—linking individual symptoms to their underlying mechanisms—is needed for research to move forward.
In his Aphorisms, Hippocrates defined melancholia, an early understanding of depression, as a state of “fears and despondencies, if they last a long time.” It was caused, he believed, by an excess of bile in the body (the word “melancholia” is ancient Greek for “black bile”).
Ever since then, doctors have struggled to create a more precise and accurate definition of the illness that still isn’t well understood. In the 1920s, the German psychiatrist Kurt Schneider argued that depression could be divided into two separate conditions, each requiring a different form of treatment: depression that resulted from changes in mood, which he called “endogenous depression,” and depression resulting from reactions to outside events, or “reactive depression.” His theory was challenged in 1926, when the British psychologist Edward Mapother argued in the British Medical Journal that there was no evidence for two distinct types of depression, and that the apparent differences between depression patients were just differences in the severity of the condition.
Blame Prohibitionists, German immigrants, and factory workers who just wanted to drink during their lunch break.
Today’s discerning beer drinkers might be convinced that America’s watery, bland lagers are a recent corporate invention. But the existence of American beers that are, as one industry executive once put it, “less challenging,” has a much longer history. In fact, Thomas Jefferson, himself an accomplished homebrewer, complained that some of his country’s beers were “meagre and often vapid” nearly 200 years ago.
Jefferson never lived to see the worst of it. Starting in about the mid-1800s, American beer has been defined by its dullness. Why? The answer lies in a combination of religious objections to alcohol, hordes of German immigrants, and a bunch of miners who just wanted to drink during their lunch break, says Ranjit Dighe, a professor of economics at the State University of New York at Oswego.
Paul faced danger, Ani and Ray faced each other, and Frank faced some career decisions.
This is what happens when you devote two-thirds of a season to scene after scene after scene of Frank and Jordan’s Baby Problems, and Frank Shaking Guys Down, and Look How Fucked Up Ray and Ani Are, and Melancholy Singer in the Dive Bar Yet Again—and then you suddenly realize that with only a couple episodes left you haven’t offered even a rudimentary outline of the central plot.
Before it became the New World, the Western Hemisphere was vastly more populous and sophisticated than has been thought—an altogether more salubrious place to live at the time than, say, Europe. New evidence of both the extent of the population and its agricultural advancement leads to a remarkable conjecture: the Amazon rain forest may be largely a human artifact
The plane took off in weather that was surprisingly cool for north-central Bolivia and flew east, toward the Brazilian border. In a few minutes the roads and houses disappeared, and the only evidence of human settlement was the cattle scattered over the savannah like jimmies on ice cream. Then they, too, disappeared. By that time the archaeologists had their cameras out and were clicking away in delight.
Below us was the Beni, a Bolivian province about the size of Illinois and Indiana put together, and nearly as flat. For almost half the year rain and snowmelt from the mountains to the south and west cover the land with an irregular, slowly moving skin of water that eventually ends up in the province's northern rivers, which are sub-subtributaries of the Amazon. The rest of the year the water dries up and the bright-green vastness turns into something that resembles a desert. This peculiar, remote, watery plain was what had drawn the researchers' attention, and not just because it was one of the few places on earth inhabited by people who might never have seen Westerners with cameras.
What if Joe Biden is going to run for the Democratic nomination after all?
Most Democrats seem ready for Hillary Clinton—or at least appear content with her candidacy. But what about the ones who who were bidin’ for Biden? There are new signs the vice president might consider running for president after all.
Biden has given little indication he was exploring a run: There’s no super PAC, no cultivation of a network of fundraisers or grassroots organizers, few visits to early-primary states. While his boss hasn’t endorsed Clinton—and says he won’t endorse in the primary—many members of the Obama administration have gone to work for Clinton, including some close to Biden.
But Biden also hasn’t given any clear indication that he isn’t running, and a column by Maureen Dowd in Saturday’s New York Times has set off new speculation. One reason Biden didn’t get into the race was that his son Beau was dying of cancer, and the vice president was focused on being with his son. But before he died in May, Dowd reported, Beau Biden tried to get his father to promise to run. Now Joe Biden is considering the idea.
It’s impossible to “solve” the Iranian nuclear threat. This agreement is the next best thing.
Having carefully reviewed the lengthy and complex agreement negotiated by the United States and its international partners with Iran, I have reached the following conclusion: If I were a member of Congress, I would vote yes on the deal. Here are nine reasons why.
1) No one has identified a better feasible alternative. Before negotiations halted its nuclear advance, Iran had marched relentlessly down the field from 10 years away from a bomb to two months from that goal line. In response, the United States and its partners imposed a series of sanctions that have had a significant impact on Iran’s economy, driving it to negotiate. That strategy worked, and resulted in a deal. In the absence of this agreement, the most likely outcome would be that the parties resume doing what they were doing before the freeze began: Iran installing more centrifuges, accumulating a larger stockpile of bomb-usable material, shrinking the time required to build a bomb; the U.S. resuming an effort to impose more severe sanctions on Iran. Alternatively, Israel or the United States could conduct military strikes on Iran’s nuclear facilities, setting back the Iranian program by two years, or perhaps even three. But that option risks wider war in the Middle East, an Iran even more determined to acquire a bomb, and the collapse of consensus among American allies.
In the footage, secretly recorded by an anti-abortion-rights group, an official from the organization discusses the procurement and cost of intact fetuses.
Planned Parenthood’s handling of fetal tissue for research is the subject of a fresh video released Tuesday by an anti-abortion group.
In the latest video, the fifth released by Irvine, California-based Center for Medical Progress, an official from Planned Parenthood discusses the procurement and cost of intact fetuses. The video, we should warn you, is graphic.
Planned Parenthood calls the videos a “smear campaign.” It says the footage is highly edited, misleading, and takes discussions out of context.
The Center for Medical Progress has faced two court orders that block the release of future videos, but those orders are limited to footage recorded at meetings of the National Abortion Federation and those dealing with a tissue procurement company. Fox News adds: “Tuesday’s release, purely reliant on video taken inside a Planned Parenthood clinic, would not seem to violate either order.”