Elections are about choices, and 2012 looks to be a big one.
It's not just a philosophical debate over the proper size and role of government. It's an economic one about stimulus versus austerity. President Obama thinks we need to make smart investments -- just don't call it stimulus! -- to get the economy moving again. Governor Romney thinks we need a smarter tax code -- just don't ask what deductions he'd eliminate -- and less spending to get the economy moving again.
In other words, Romney seems to subscribe to the doctrine of "expansionary austerity" -- that prosperity is just a few spending cuts around the corner. It's an idea that has failed rather spectacularly in Europe the past few years. And it's one that even the orthodox International Monetary Fund has warned against, at least for now.
But that seems to be news to Mitt Romney's top economic advisers. Glenn Hubbard, a professor at Columbia University and a veteran of the Bush administration, recently took to the pages of the Financial Times to apparently argue that trimming the deficit will spur growth. Emphasis on apparently. Here's what Hubbard said:
Gradual fiscal consolidation may also be stimulative in the short term. Research by Hoover Institution economists concludes that reducing federal spending relative to GDP to pre-financial crisis levels over a decade would increase GDP in the short and long term. This outcome reflects lower future tax rates and the boost from lower interest rates to investment and net exports.
Plentyof people considered this a loud (and perhaps wise) defense of austerity. It's not.
How would less government spending translate into more spending overall? The question answers itself: If the other parts of the economy subsequently spend more. Those other parts of the economy are the private sector and net exports. And what would make them spend more? Answer: Lower interest rates. When borrowing costs are lower, the private sector is --tautology alert -- more willing to borrow and invest. Think about it this way. If the cost of capital is low, the return on capital doesn't have to be that high for companies to want to invest. Lower interest rates also tend to mean a weaker dollar -- and a weaker dollar is good for trade.
That leaves one big question. Why would interest rates fall when the government spends less? There are two stories here. First, there's less "crowding out". When the government competes with the private sector to borrow money, the private sector ends up paying more to borrow. Less competition from the government means paying less to borrow. And second, the Federal Reserve might be more likely to do more if Congress does less. There are plenty of examples of this kind of austerity working -- like the United States in the 1990s.
But there's a problem. Interest rates have neverbeenlower. Cutting spending won't lower interest rates any further. For one, there isn't any crowding out now. The private sector would rather sit on cash than borrow. For another, the Fed isn't likely to do all that much more given its current paralysis. Austerity will shrink the economy in the world we live in now.
Hubbard is smart. He knows that austerity won't work without lower interest rates. And he knows that interest rates couldn't be much lower than they already are. In other words, he knows that cutting the deficit too much too soon would be a very bad idea today.
Don't let the rhetoric confuse you. Romney might say he's an austerity candidate, but his top economic advisors quietly admit that this might not be wise.
It's almost like Romney might flip flop on this if he wins.
Conservatives once warned that Obamacare would produce the Democratic Waterloo. Their inability to accept the principle of universal coverage has, instead, led to their own defeat.
Seven years and three days ago, the House of Representatives grumblingly voted to approve the Senate’s version of the Affordable Care Act. Democrats in the House were displeased by many of the changes introduced by Senate Democrats. But in the interval after Senate passage, the Republicans had gained a 41st seat in the Senate. Any further tinkering with the law could trigger a Republican filibuster. Rather than lose the whole thing, the House swallowed hard and accepted a bill that liberals regarded as a giveaway to insurance companies and other interest groups. The finished law proceeded to President Obama for signature on March 23, 2010.
A few minutes after the House vote, I wrote a short blog post for the website I edited in those days. The site had been founded early in 2009 to argue for a more modern and more moderate form of Republicanism. The timing could not have been worse. At precisely the moment we were urging the GOP to march in one direction, the great mass of conservatives and Republicans had turned on the double in the other, toward an ever more wild and even paranoid extremism. Those were the days of Glenn Beck’s 5 o’clock Fox News conspiracy rants, of Sarah Palin’s “death panels,” of Orly Taitz and her fellow Birthers, of Tea Party rallies at which men openly brandished assault rifles.
The House abandoned its legislation to repeal and replace the Affordable Care Act, handing President Trump and Speaker Paul Ryan a major defeat.
Updated on March 24 at 6:28 p.m. ET
To a man and woman, nearly every one of the 237 Republicans elected to the House last November made the same promise to voters: Give us control of Congress and the White House, and we will repeal and replace the Affordable Care Act.
On Friday, those lawmakers abandoned that effort, conceding that the Republican Party’s core campaign pledge of the last seven years will go unfulfilled. “I will not sugarcoat this: This is a disappointing day for us,” House Speaker Paul Ryan said at a press conference after he informed Republicans that he was ditching the American Health Care Act.
“We did not have quite the votes to replace this law,” Ryan said. “And, so yeah, we’re going to be living with Obamacare for the foreseeable future.”
Speaking after the collapse of the Republican health-care bill, the president assigned blame to plenty of parties but cast himself as a mere bystander.
Speaking in the Oval Office Friday afternoon, President Trump surveyed the wreckage of the Obamacare repeal effort and issued a crisp, definitive verdict: I didn’t do it.
The president said he didn’t blame Speaker Paul Ryan, though he had plenty of implied criticism for the speaker. “I like Speaker Ryan. He worked very hard,” Trump said, but he added: “I'm not going to speak badly about anybody within the Republican Party. Certainly there's a big history. I really think Paul worked hard.” He added ruefully that the GOP could have taken up tax-reform first, instead of Obamacare—the reverse of Ryan’s desired sequence. “Now we’re going to go for tax reform, which I’ve always liked,” he said.
The Obama years left Republicans with excellent ratings from the Heritage Foundation, and no idea how to whip a vote.
The Republican Party’s marquee legislative initiative had just imploded in spectacular, and humiliating, fashion Friday afternoon when Paul Ryan stepped up to a podium on Capitol Hill. The beleaguered house speaker wasted no time in diagnosing the failure of his caucus. “Moving from an opposition party to a governing party comes with some growing pains,” he said. “And, well, we’re feeling those growing pains today.”
Ryan wasn’t wrong. The GOP’s inability to maneuver a health-care bill through the House this week—after seven years of promising to repeal and replace Obamacare—is, indeed, emblematic of a deeper dysfunction that grips his party. But that dysfunction may not be as easy to cure as Ryan and other GOP leaders believe.
Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead
During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry.
If the lobbyist’s work did indeed “greatly benefit the Putin Government,” the contract wouldn’t be especially out of the ordinary for an American lobbyist—or for Russia.
MOSCOW—The reports that former Trump campaign manager Paul Manafort had had a contract for tens of millions of dollars to “greatly benefit the Putin Government” were not exactly news here. And, in a certain sense, they didn’t have to be news in Washington, either.
Manafort, who has reportedly just volunteered to testify in the House Intelligence Committee’s investigation of Russian meddling in the U.S. election, had been a lobbyist, a notorious one, for decades. His work for less-than-democratic governments, including various African strongmen and the Marcos family of the Philippines, had been well-known in Washington and reported over the last year. It is also not uncommon for lobbyists and political operatives waiting out an administration of the opposite party to work abroad, helping foreign governments of whatever stripe sharpen their political game. Democratic operatives who had worked on the Obama and Clinton campaigns, for example, have done work advising politicians in Britain, Ukraine, and Georgia. Manafort seemed to have fewer moral qualms and filters than others—the only ticket to access his political skills, it seems, was the right amount of money—but it was all part of the swamp the Donald Trump campaign, with Manafort at the helm for about five months, promised to drain.
May is Celiac-Disease Awareness Month. Which might seem unnecessary, if the superfluity of “gluten free” labels and advertisements were any indication of people’s awareness of the disease. Gastroenterologist Norelle Rizkalla Reilly believes it’s quite clearly not.
In the business world, a catastrophic deal can be forgotten. The president may find it’s not that easy in politics.
In 1985, Donald Trump bought West Side Yards*, a huge real-estate parcel on the West Side of Manhattan. (Actually, it was his second try at the property, which he’d failed to develop in the 1970s.) Trump paid $115 million to buy the parcel, with huge plans to create a sparkling center on one of the few remaining undeveloped parts of the island.
It didn’t work. Trump quarreled with Mayor Ed Koch, failed to start the work, and steadily lost tens of millions of dollars. In 1989, he declined an offer to sell the land for a more than $400 million profit. Five years later, he finally threw in the towel, selling it for just $82 million—and on condition that the buyer take on a quarter of a billion in debt. But Trump was right about the commercial potential of West Side Yards. The developers who bought the land from him sold it for $1.8 billion in 2005, the largest residential real-estate deal in New York history. A sparkling new neighborhood is finally rising on the site.
Four hundred years after her death, misperceptions of the Native American icon continue to shape the cultural image of indigenous peoples—though that’s starting to change.
On March 21, 1617, a 21-year-old woman from Virginia’s Pamunkey tribe died at Gravesend, England. She went by many names—Matoaka, Amonute, and, at her passing, Rebecca—but she’s best remembered today as Pocahontas. Her death was unexpected: Pocahontas had arrived in England the previous June and spent months touring the country, celebrated by the press as an “Indian princess.” Pocahontas’s tale of trans-Atlantic travel, her marriage to the Englishman John Rolfe, and her alleged conversion to Christianity became part of a compelling cultural narrative that helped promote white colonial interests, especially in the Virginia Company.
Despite the brevity of her life and the mystery surrounding the cause of her death, Pocahontas remains one of the most recognizable Native icons in American culture today. Hollywood movies have portrayed her as royalty—or as Smith referred to her in his 1616 letter to Queen Anne, “Lady Pocahontas”—whose dramatic act of self-sacrifice saved the lives of Smith and the settlers at Virginia’s Jamestown colony. This story of romantic heroism—the stuff of legend—has defined Pocahontas’s image for centuries. Crucially, these early 17th-century descriptions of the young Pamunkey woman established a cultural template for European and white American representations of Native Americans. Whether Pocahontas, or Lewis and Clark’s faithful guide Sacagawea, or the quintessential sidekick Tonto, indigenous people have appeared in a variety of cultural productions as mere props in the larger drama of colonialism in North America.