Zombie ideas are much scarier than actual zombies. For one, zombie ideas are real. For another, nothing can kill them. Not even a bullet to the intellectual head.
Just look at the austerians.
It was only a week ago that the cult of deficit-cutting was in quick retreat. Harvard professors Carmen Reinhart and Ken Rogoff, the authors of the austerity ur-text, admitted to making a number of errors, including one with a spreadsheet formula, that made their seemingly dramatic results much less so. As Owen Zidar points out, growth doesn't hit some kind of tipping point when public debt hits 90 percent of GDP, as Reinhart and Rogoff claimed, but rather falls at a steady rate between debt levels of 50 and 200 percent of GDP. A bit of simple math, which Brad DeLong goes through, shows that this relationship between higher debt and lower growth isn't anything approximating an argument against more stimulus. As long as interest rates are zero and unemployment is high, there's a strong case for doing more.
In other words, L'Affaire Excel has once again left austerity as a policy without justification. Now, the spreadsheet error wasn't that significant, but it called attention to the bigger one: Reinhart and Rogoff oversold correlation as causation. That's become harder to do now that the correlation has become weaker. Even Euro Commissioner Olli Rehn, who thought austerity would work if those pesky Keynesians would just stop pointing out that it wasn't, has given up on it. Here's how Rehn framed the budget debate back in March:
And it is widely acknowledged, based on serious research, that when public debt levels rise about 90 percent they tend to have a negative economic dynamism, which translates into low growth for many years.
The precise causal relationship between debt levels and growth is a complex one. There is no hard-and-fast rule; it is affected also by many country-specific factors.
But this ray of realism aside, the real high priests of austerity have not given up on fiscal rectitude as the one true path to economic salvation. Those are the austerians at the European Central Bank (ECB). As Ryan Avent of The Economist points out, euro-debtor countries can only spend as much as the ECB lets them. The ECB pushed down their borrowing costs last year by explicitly backstopping them, but it can just as easily push them back up by removing the backstop -- which it will do if they backslide on deficit-cutting. Indeed, ECB Executive Board member Jörg Asmussen was back to touting ... Latvia as a shining example just last week:
Latvia is the leading example of how to adjust through internal devaluation, and it is a model for others in the euro area. Its "V-shaped" economic recovery illustrates what can be done with a strong consensus to undo the excesses of the past. After an initial fall in GDP of almost 18% in 2009, GDP increased by more than 11% from 2010 to 2012, and unemployment has fallen by almost 7 percentage points from its peak.
Latvia followed a familiar script: boom, bust, and bailout. At its peak in both 2006 and 2007, Latvia was borrowing over 22 percent of its GDP from abroad -- a private-sector binge that fueled a massive housing bubble. When the money music suddenly stopped after Lehmangeddon, this fragile web of debt imploded, and with it, the entire economy. Latvia only managed to avoid national bankruptcy by going to the EU and IMF for a bailout, which allowed it to keep its currency pegged to the euro -- but at the cost of promising deep austerity. This combination of tight money and tight budgets sent Latvia into a historic slump: GDP fell over 25 percent, and unemployment hit 20.7 percent.
But Latvia's depression isn't quite so great anymore. Its economy has grown 5.5 percent each of the past two years, and unemployment is just under 14 percent. Is this proof that there can be gain after pain? Yes. Is it vindication? No. Economically, it never made sense for Latvia to keep its currency peg (though it did politically due to Russophobia) or to cut spending amidst a slump. As Paul Krugman point out, Latvia's GDP is still far below its pre-crisis peak, and even more so than exemplars like Greece, Ireland, Italy, Portugal, and Spain are below theirs. It's not that much better on the jobs front. Now, Latvia does have much lower unemployment than Greece and Spain, but that's in part due to how many people have left Latvia. As you can see below, Latvia only recently passed Greece and Spain in total jobs relative to their peaks.*
(Note: Latvia rebenchmarked its data in 2011, so I had to adjust the numbers for 2012. I took the numbers from Latvia's Central Statistical Bureau, calculated the quarterly percent changes in 2012, and used those to project what the 2012 numbers would have been under the old system. All other data is from Eurostat and St. Louis FRED).
There was never much to learn from Latvia. As Martin Wolf points out, it's a small, open economy of two million people with lots of foreign-owned banks it never has to bail out. In other words, it's not exactly replicable. But why would we want to replicate it? Deep cuts to public sector wages and spending in Latvia turned a severe recession into a deep depression. Its "successes" today only highlight how far it fell. GDP is growing quickly, in part, because of how low its base was after the slump; and unemployment is falling quickly, in part, because of how many people emigrated during the slump. Meanwhile, the U.S., which did do countercyclical fiscal and monetary stimulus, didn't fall nearly as far, and has just as much, relative to the trough.
But zombie ideas do not die, especially in the euro zone. Nothing will convince the ECB that Latvia isn't a success story -- unless it's more convenient to claim Estonia is instead. Regardless of the fact, the ECB will keep pushing southern Europe into perma-slump as the path to prosperity.
Now that's scary.
* The original version of this story mistakenly used the re-benchmarched data for Latvia from Eurostat, instead of the original 2011 numbers and adjusted 2012 numbers. I got the new, unbenchmarked numbers from Latvia's Central Statistical Bureau, but they only go back to 2002, instead of 2000, so I cut back my sample by two years. I also removed Lithuania from the sample, because I was worried about the possibility of a similar benchmarking issue.
“People skills” are almost always assumed to be a good thing. Search employment ads and you will find them listed as a qualification for a startling array of jobs, including Applebee’s host, weight-loss specialist, CEO, shoe salesperson, and (no joke) animal-care coordinator. The notion that people smarts might help you succeed got a boost a quarter century ago, when the phrase emotional intelligence, or EI, entered the mainstream. Coined in a 1990 study, the term was popularized by Daniel Goleman’s 1995 book . Since then, scores of researchers have shown how being in touch with feelings—both your own and other people’s—gives you an edge: compared with people who have average EI, those with high EI do better at work, have fewer health problems,and report greater life satisfaction.
Orr:Wait a minute. There’s a royal wedding—and nobody dies a horrible death? A man is beheaded—and we can all agree that it was for the best? What the hell show am I watching? I came here for Game of Thrones, baby, not Wizards of Waverly Place.
I kid, of course. Given David Benioff and D.B. Weiss’s tendency to take George R. R. Martin’s material and render it even more bloody than it already was, I’m actually mildly relieved that they didn’t throw in a random homicide just to spice up the nuptials of Margaery and young Tommen, First of His Name.
Take a walk along West Florissant Avenue, in Ferguson, Missouri. Head south of the burned-out Quik Trip and the famous McDonalds, south of the intersection with Chambers, south almost to the city limit, to the corner of Ferguson Avenue and West Florissant. There, last August, Emerson Electric announced third-quarter sales of $6.3 billion. Just over half a mile to the northeast, four days later, Officer Darren Wilson killed Michael Brown. The 12 shots fired by Officer Wilson were probably audible in the company lunchroom.
Outwardly, at least, the City of Ferguson would appear to occupy an enviable position. It is home to a Fortune 500 firm. It has successfully revitalized a commercial corridor through its downtown. It hosts an office park filled with corporate tenants. Its coffers should be overflowing with tax dollars.
Freddie Gray's death on April 19 leaves many unanswered questions. But it is clear that when Gray was arrested in West Baltimore on the morning of April 12, he was struggling to walk. By the time he arrived at the police station a half hour later, he was unable to breathe or talk, suffering from wounds that would kill him.*
Gray died Sunday from spinal injuries. Baltimore authorities say they're investigating how the 25-year-old was hurt—a somewhat perverse notion, given that it was while he was in police custody, and hidden from public view, that he apparently suffered injury. How it happened remains unknown. It's even difficult to understand why officers arrested Gray in the first place. But with protestors taking to the streets of Baltimore since Gray's death on Sunday, the incident falls into a line of highly publicized, fatal encounters between black men and the police. Meanwhile, on Tuesday, a reserve sheriff's deputy in Tulsa, Oklahoma, pleaded not guilty to a second-degree manslaughter charge in the death of a man he shot. The deputy says the shooting happened while he was trying to tase the man. Black men dying at the hands of the police is of course nothing new, but the nation is now paying attention and getting outraged.
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.
Hours after a major earthquake wreaked havoc across his country, Nepali Information Minister Minendra Rijal appeared at a news conference on Saturday to announce that schools would be closed for the next five days. "We never imagined we'd face such devastation," he said.
But for geologists, Saturday's disaster—which has claimed over 2,400 lives—was sadly predictable.
"Physically and geologically what happened is exactly what we thought would happen," James Jackson, head of the earth-sciences department at the University of Cambridge, told the Associated Press.
Blessed with stunning natural scenery, Nepal is a popular tourist destination that attracts hundreds of thousands of travelers each year. But the source of the country's beauty is what makes it particularly vulnerable to earthquakes. Much of Nepal's population lives in a valley beneath the Himalayas, a mountain range formed by collisions between the Indian and Central Asian tectonic plates. These collisions—which occur when the Indian plate slides underneath its much larger neighbor—are what cause earthquakes. According to The Washington Post, a chunk of the earth measuring 75 by 37 miles shifted 10 feet in 30 seconds on Saturday, destroying much of what lay atop the surface.
After a five-month delay, Loretta Lynch made history last week. On Thursday, the Senate confirmed Lynch as the next U.S. attorney general, the first African American woman ever to hold this Cabinet position. Her long-stalled nomination sometimes seemed in doubt, held hostage to partisan jockeying between Democrats and Republicans. But one political bloc never gave up, relentlessly rallying its support behind Lynch: the black sorority.
During her initial hearing, the seats behind Lynch were filled with more than two dozen of her Delta Sigma Theta Sorority sisters arrayed in crimson-and-cream blazers and blouses, ensuring their visibility on the national stage. These Delta women—U.S. Representatives Marcia Fudge and Joyce Beatty among them—were there to lend moral support and show the committee that they meant business. The Deltas were not alone. The Lynch nomination also drew support from congressional representatives from other black sororities: Alpha Kappa Alpha members Terri Sewell and Sheila Jackson Lee took to the House floor to advocate for a vote while Sigma Gamma Rho members Corinne Brown and Robin Kelly and Zeta Phi Beta member Donna Edwards used social media and press conferences to campaign on Lynch’s behalf.
A magnitude 7.8 earthquake struck Nepal early on Saturday, centered 10 miles below the surface, less than 50 miles from the capital of Kathmandu. As many as 3,700 have been killed by the quake and subsequent avalanches triggered in the Himalayas. Historic buildings and temples were destroyed, leaving massive piles of debris in streets as rescue workers and neighbors work to find and help those still trapped beneath rubble. Below are images from the region of the immediate aftermath of one of the most powerful earthquakes to strike Nepal in decades. (Editor's note, some of the images are graphic in nature.)
In her new book No One Understands You and What To Do About It, Heidi Grant Halvorson tells readers a story about her friend, Tim. When Tim started a new job as a manager, one of his top priorities was communicating to his team that he valued each member’s input. So at team meetings, as each member spoke up about whatever project they were working on, Tim made sure he put on his “active-listening face” to signal that he cared about what each person was saying.
But after meeting with him a few times, Tim’s team got a very different message from the one he intended to send. “After a few weeks of meetings,” Halvorson explains, “one team member finally summoned up the courage to ask him the question that had been on everyone’s mind.” That question was: “Tim, are you angry with us right now?” When Tim explained that he wasn’t at all angry—that he was just putting on his “active-listening face”—his colleague gently explained that his active-listening face looked a lot like his angry face.
Doctors aren’t entirely sure what triggers rheumatoid arthritis, a disease in which the body turns on itself to attack the joints, but an emerging body of research is focusing on a potential culprit: the bacteria that live in our intestines.
Several recent studies have found intriguing links between gut microbes, rheumatoid arthritis, and other diseases in which the body’s immune system goes awry and attacks its own tissue.
A study published in 2013 by Jose Scher, a rheumatologist at New York University, found that people with rheumatoid arthritis were much more likely to have a bug called Prevotella copri in their intestines than people that did not have the disease. In another study published in October, Scher found that patients with psoriatic arthritis, another kind of autoimmune joint disease, had significantly lower levels of other types of intestinal bacteria.