The welfare state is dead. Long live the welfare state!
It's getting hard to keep track of which countries aren't Greece anymore.
First, Ireland wasn't Greece. Then it kind of was. Then it was Portugal's turn to not be Greece. Then it was Portugal's turn to be Greece. Next, Spain wasn't Greece. But now it might be. At the very least it's Ireland. Although Uganda looks like it's in the clear. It's not Spain, which could be Greece. That's better than Cyprus can say. They're pretty much Greece. And, of course, Greece is almost certainly Greece. That goes without saying.
But there's one country that definitely isn't Greece. That's the United States.
Let's step back. What makes a country "Greece"? It's become shorthand for wild government overspending -- especially on entitlements. Paul Ryan says we don't have long to avoid the same fate. Neither does the terrifyingly successful investor Michael Burry. They think that absent drastic reform -- read: cuts -- to the social safety net, we'll end up in penury like the Greeks.
It's a scary story. But it's just a scare story. Yes, we have a long-term healthcare spending problem. But that doesn't make us Greece. Heck, Greece isn't even Greece. At least not the "Greece" that's become such a political football. The evidence -- or lack thereof -- is in the chart below. It compares each country's average social spending since 1999, via the OECD, against its current borrowing costs. See the pattern?
There is none. Europe's biggest social spenders don't have any problems. And Europe's biggest problem countries don't spend that much on social programs. The death knell of the welfare state this is not.
Here's the dirty little secret of the euro debt crisis. There is no euro debt crisis. There is a euro crisis. The debt is a symptom of the crisis of the common currency.* Europe's bailed out countries all saw piles of capital pour in during the boom, only to pour out during the bust. They were left with inflated, uncompetitive wages -- and that's sent them into deep slumps. That's been despite lower social spending than their northern euro neighbors. Germany, Austria, Finland, Finland, the Netherlands, Belgium and -- at least for now -- France have all been able to sustain more generous safety nets thanks to the magic of competitive wages.
It's the same story for Europe's non-euro nations. Sweden, Denmark, Norway, Switzerland and the Czech Republic are all lucky enough to not be passengers on the Titantic members of the common currency. (Denmark has pegged its krone to the euro, but they still have their own central bank). Most of them spend more on social programs than the so-called PIIGS, but all of them can borrow for almost nothing. Investors are actually paying the Swiss and Danish governments for the privilege of lending to them short-term. Think about that. What's going on? Well, if things ever get rough, they can just print money or devalue their currencies. In other words, they can never run out of money.
But Greece can. Being in the euro means never being able to print your own money. And that turns each euro country into a bank. Imagine a bank run. Fear becomes self-fulfilling. Depositors try to pull their money out before everyone else because they're worried the bank will collapse -- which, of course, causes the bank's collapse. Very Oedipal -- minus the parent love. It's the same with Greece. Investors worry that Greece will run out of euros. That's a very rational fear right now. So they try to sell-off their bonds, which pushes up Greece's borrowing costs -- and makes it more likely that Greece will run out of euros. This kind of panic is why Italy -- which has a primary surplus! -- is flirting with trouble too. Only the ECB can stop this.
Notice that I didn't talk about debt at all in the previous paragraph. The PIIGS have too-high wages, too little growth, and face crippling crises of confidence. Austerity won't cure any of that. It'll make things worse. It has. It kneecaps growth. And investors are more worried about growth right now than they are deficits.
Also notice that none of this applies to the United States. We never have to worry about self-fulfilling prophesies of bankruptcy because we can never run out of dollars. As the Boomers retire, we'll spend more on entitlements. That's not the end of the world. Unless you think Sweden is the end of the world. Yes, we need to rein in healthcare inflation, and, yes, we need to raise some more revenue. The former might already be happening. The latter is a political choice. Neither makes us Greece.
So don't believe the rumors of the welfare state's death. They're greatly exaggerated.
* Caveat: Greece is sui generis. They really did just spend too much money. They're not pictured here, because their 10-year bond yield is -- wait for it -- off the chart. Fitting their 27 percent borrowing costs onto this graph makes it too hard to see anything else. But Greece's average social spending is only 21.4 percent of GDP.
When President Obama left, I stayed on at the National Security Council in order to serve my country. I lasted eight days.
In 2011, I was hired, straight out of college, to work at the White House and eventually the National Security Council. My job there was to promote and protect the best of what my country stands for. I am a hijab-wearing Muslim woman––I was the only hijabi in the West Wing––and the Obama administration always made me feel welcome and included.
Like most of my fellow American Muslims, I spent much of 2016 watching with consternation as Donald Trump vilified our community. Despite this––or because of it––I thought I should try to stay on the NSC staff during the Trump Administration, in order to give the new president and his aides a more nuanced view of Islam, and of America's Muslim citizens.
Meet the protesters who tricked conference attendees into waving Russian flags.
Two men made trouble—and stirred up a social-media frenzy—on the third day of the Conservative Political Action Conference by conducting a literal false-flag operation.
Jason Charter, 22, and Ryan Clayton, 36, passed out roughly 1,000 red, white, and blue flags, each bearing a gold-emblazoned “TRUMP” in the center, to an auditorium full of attendees waiting for President Trump to address the conference. Audience members waved the pennants—and took pictures with them—until CPAC staffers realized the trick: They were Russian flags.
The stunt made waves on social media, as journalists covering CPAC noticed the scramble to confiscate the insignia.
Long after research contradicts common medical practices, patients continue to demand them and physicians continue to deliver. The result is an epidemic of unnecessary and unhelpful treatments.
First, listen to the story with the happy ending: At 61, the executive was in excellent health. His blood pressure was a bit high, but everything else looked good, and he exercised regularly. Then he had a scare. He went for a brisk post-lunch walk on a cool winter day, and his chest began to hurt. Back inside his office, he sat down, and the pain disappeared as quickly as it had come.
That night, he thought more about it: middle-aged man, high blood pressure, stressful job, chest discomfort. The next day, he went to a local emergency department. Doctors determined that the man had not suffered a heart attack and that the electrical activity of his heart was completely normal. All signs suggested that the executive had stable angina—chest pain that occurs when the heart muscle is getting less blood-borne oxygen than it needs, often because an artery is partially blocked.
Millions of Americans are worried that Donald Trump is an ominous figure. Investors have another theory: maybe not.
Donald Trump so permeates the collective consciousness of the country that it is hard to imagine now living in a world without him. But there is one place where the president seems to be relatively invisible—the U.S. stock market.
The Dow, S&P, and Nasdaq have set record highs in the months after Trump’s election. On Thursday, the Dow has its tenth consecutive record closing in a row, at 20,810. This is happening, despite the fact that investors seemed terrified of a Trump presidency in the general election campaign. Trump came into office promising to antagonize America’s allies and economic partners while crushing the international establishment. None of this is particularly favorable to multinational corporations. Even worse, Trump’s first few weeks in office were a maelstrom of hasty lawmaking and furious backtracking, exactly the sort of behavior one might consider a threat to the all-important “certainty” that markets ostensibly crave. What’s more, mainstream economists are nearly united in their certainty that Trump’s core policies, like scrapping free trade agreements while severely limiting immigration, would be bad for the country.
“No… it’s a magic potty,” my daughter used to lament, age 3 or so, before refusing to use a public restroom stall with an automatic-flush toilet. As a small person, she was accustomed to the infrared sensor detecting erratic motion at the top of her head and violently flushing beneath her. Better, in her mind, just to delay relief than to subject herself to the magic potty’s dark dealings.
It’s hardly just a problem for small people. What adult hasn’t suffered the pneumatic public toilet’s whirlwind underneath them? Or again when attempting to exit the stall? So many ordinary objects and experiences have become technologized—made dependent on computers, sensors, and other apparatuses meant to improve them—that they have also ceased to work in their usual manner. It’s common to think of such defects as matters of bad design. That’s true, in part. But technology is also more precarious than it once was. Unstable, and unpredictable. At least from the perspective of human users. From the vantage point of technology, if it can be said to have a vantage point, it's evolving separately from human use.
The preconditions are present in the U.S. today. Here’s the playbook Donald Trump could use to set the country down a path toward illiberalism.
It’s 2021, and President Donald Trump will shortly be sworn in for his second term. The 45th president has visibly aged over the past four years. He rests heavily on his daughter Ivanka’s arm during his infrequent public appearances.
Fortunately for him, he did not need to campaign hard for reelection. His has been a popular presidency: Big tax cuts, big spending, and big deficits have worked their familiar expansive magic. Wages have grown strongly in the Trump years, especially for men without a college degree, even if rising inflation is beginning to bite into the gains. The president’s supporters credit his restrictive immigration policies and his TrumpWorks infrastructure program.
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New research suggests it’s how parents talk to their infants, not just how often, that makes a difference for language development.
A few weeks ago, I was eating lunch with my family at a pancake house when a small blond head popped over the top of the booth next to ours.
Somewhere in the ballpark of a year old, the boy said something unintelligible—maybe baby babbling, maybe real words muffled by pancake—and gave a high-pitched giggle. He waved a tiny-syrup smeared arm in my direction.
“He’s such a flirt,” his mother said apologetically.
“He is,” cooed my own mother, who can befriend anything that will stand still long enough. “Hiiiiii.” She kicked me under the table.
“Oh—hi,” I said. I waved back. But men are fickle creatures, and our neighbor only frowned, turned around and sat back down to his food.
The administration admits to asking the bureau’s deputy director to help it knock down a damaging story about the Trump campaign’s Russia contacts.
The White House’s admission that it asked the Federal Bureau of Investigation to publicly dispute stories in the New York Times describing contacts between the Trump campaign and Russian officials raises serious ethical questions, according to former Justice Department officials.
"It's quite inappropriate for anyone from the White House to have a contact with the FBI about a pending criminal investigation, that has been an established rule of the road, probably since Watergate," said Michael Bromwich, a former Department of Justice inspector general and director of the Bureau of Ocean Energy Management under Obama. "When I was in the Department in the ‘90s, that was well understood to be an inviolable rule."
His death has punctured the myth of the Kims' holy bloodline.
As the first son of Kim Jong Il, the late leader of the Democratic People’s Republic of Korea, Kim Jong Nam always posed a threat to Kim Jong Un, his half brother and North Korea’s current leader. Before falling out of favor with his father and going into exile soon after, paving the way for Kim Jong Un’s ascent, Kim Jong Nam was the heir apparent. With the execution in 2013 of Jang Sung Tak, the second in command and the eldest son’s staunchest supporter, Kim Jong Nam was unprotected, with little hope of ever returning home.
On February 13, Kim Jong Nam was murdered in Kuala Lumpur airport by two hired killers. The fascination surrounding the killing has centered on its sensational circumstances: that one ofthe killers smeared a poisonous toxin, reportedly VX gas, across Kim’s face; that one of them wore a T-shirt with the acronym “LOL” printed across the front; that the other reportedly mistookthe hit for a comedy stunt. Malaysian police have detained five people allegedly connected to the killing, and remain on the hunt for others—including several North Koreans—linked to it.
The state legislature nearly reversed Governor Sam Brownback’s signature policy after a voter rebellion. His economic legacy, one GOP lawmaker says, “is going down in flames.”
It was only two months ago that Governor Sam Brownback was offering up the steep tax cuts he enacted in Kansas as a model for President Trump to follow. Yet by the time Republicans in Congress get around to tax reform, Brownback’s fiscal plan could be history—and it’ll be his own party that kills it.
The GOP-controlled legislature in Kansas nearly reversed the conservative governor’s tax cuts on Tuesday, as a coalition of Democrats and newly-elected centrist Republicans came within a few votes of overriding Brownback’s veto of legislation to raise income-tax rates and eliminate an exemption for small businesses that blew an enormous hole in the state’s budget. Brownback’s tax cuts survive for now, but lawmakers and political observers view the surprising votes in the state House and Senate as a strong sign that the five-year-old policy will be substantially erased in a final budget deal this spring. Kansas legislators must close a $346 million deficit by June, and years of borrowing and quick fixes have left them with few remaining options aside from tax hikes or deep spending cuts to education that could be challenged in court. The tax bill would have raised revenues by more than $1 billion over two years.