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.
Ivana Trump’s new book is a parenting memoir—and an ode to being better than everyone else.
There’s a story Ivana Trump tells in Raising Trump, her new memoir of parenting, work, and marriage. It was New Year’s Eve, 1977; she and Donald Trump were together in the hospital room after their first child had been born, discussing the matter of what name to give their new infant. Ivana suggested that the son should be named after the father: Donald Trump Jr. Donald, however, balked at this.
“What if he’s a loser?” he said.
Ivana got her way, in this instance as in many she describes in Raising Trump, which begins and ends with the premise that none of the three children Ivana and Donald Trump created together have been consigned to a life of loserdom. The book may be a parenting memoir; it may feature practical tips about punishments and allowances and the compulsory writing of thank-you notes; it may even feature a curated selection of awkward family photos and treasured family recipes; but it is about parenting, as most people practice it, in only the most superficial sense. By virtue of its core characters—a man who becomes the American president, a daughter who becomes his advisor, a son-in-law who becomes responsible for criminal justice reform and opioid crisis managementand bringing peace to the Middle East—Raising Trump is less a straightforward memoir than it is a teasing exploration of the workings of the presidential family. Here are the oft-discussed “Trump family values,” as explained by the woman who helped to create them.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
The staggering scope of the country’s infrastructure initiative—and what it means for the international order
The Pakistani town of Gwadar was until recently filled with the dust-colored cinderblock houses of about 50,000 fishermen. Ringed by cliffs, desert, and the Arabian Sea, it was at the forgotten edge of the earth. Now it’s one centerpiece of China’s “Belt and Road” initiative, and the town has transformed as a result. Gwadar is experiencing a storm of construction: a brand-new container port, new hotels, and 1,800 miles of superhighway and high-speed railway to connect it to China’s landlocked western provinces. China and Pakistan aspire to turn Gwadar into a new Dubai, making it a city that will ultimately house 2 million people.
China is quickly growing into the world’s most extensive commercial empire. By way of comparison, after World War II, the Marshall Plan provided the equivalent of $800 billion in reconstruction funds to Europe (if calculated as a percentage of today’s GDP). In the decades after the war the United States was also the world’s largest trading nation, and its largest bilateral lender to others.
The director is blaming the critical aggregator for dooming more complex films, but the deeper problem is studio neglect.
Last weekend, Professor Marston and the Wonder Women, a drama about the creator of the famed comic-book character, became the latest mid-budget casualty. It was marketed on the back of its connection with Wonder Woman, one of the biggest hits of the year. It received a moderately wide release and got strong reviews, but its three-day box-office total was just $736,883—a flimsy average of $600 per theater, which essentially doomed any future chance of success. Critics and industry insiders alike have lamented for years the decline of modestly budgeted movies aimed at grownups, the sort of film that was once the backbone of Hollywood.
Professor Marston would likely have at least one sympathizer in Martin Scorsese, who recently wrote an op-ed for The Hollywood Reporter on how many good, artistic movies are struggling to find receptive audiences in this new era for the industry. “Box office is the undercurrent in almost all discussions of cinema, and frequently it’s more than just an undercurrent,” said the Academy Award-winning director, who also works tirelessly in the field of film preservation. Indeed, in most cases, a movie is judged a flop or a hit within the first few days of its release. Box-office prognosticators can predict a film’s final grosses almost immediately, and there’s very little chance for word-of-mouth to help build up hype, except in the cases of certain smaller independent works.
About 10 years ago, after I’d graduated college but when I was still waitressing full-time, I attended an empowerment seminar. It was the kind of nebulous weekend-long event sold as helping people discover their dreams and unburden themselves from past trauma through honesty exercises and the encouragement to “be present.” But there was one moment I’ve never forgotten. The group leader, a man in his 40s, asked anyone in the room of 200 or so people who’d been sexually or physically abused to raise their hands. Six or seven hands tentatively went up. The leader instructed us to close our eyes, and asked the question again. Then he told us to open our eyes. Almost every hand in the room was raised.
And there could be far-reaching consequences for the national economy too.
Four floors above a dull cinder-block lobby in a nondescript building at the Ohio State University, the doors of a slow-moving elevator open on an unexpectedly futuristic 10,000-square-foot laboratory bristling with technology. It’s a reveal reminiscent of a James Bond movie. In fact, the researchers who run this year-old, $750,000 lab at OSU’s Spine Research Institute resort often to Hollywood comparisons.
Thin beams of blue light shoot from 36 of the same kind of infrared motion cameras used to create lifelike characters for films like Avatar. In this case, the researchers are studying the movements of a volunteer fitted with sensors that track his skeleton and muscles as he bends and lifts. Among other things, they say, their work could lead to the kind of robotic exoskeletons imagined in the movie Aliens.
The last seventy-five years of American foreign policy are not the story of a country consistently pursuing democratic ideals, only to see them undermined now by a fearful “blood and soil” isolationism.
Being a liberal in the Donald Trump era is tricky. On the one hand, you’re grateful for any conservative who denounces the president’s authoritarian lies. On the other, you can’t help but notice that many of the conservatives who condemn Trump most passionately—Bill Kristol, Bret Stephens, Michael Gerson, Jennifer Rubin—remain wedded to the foreign policy legacy of George W. Bush. And in criticizing Trump’s amoral “isolationism,” they backhandedly defend the disastrous interventionism that helped produce his presidency in the first place.
The godfather of this brand of hawkish, anti-Trump conservatism is John McCain. Sure, McCain—being a Republican Senator—doesn’t condemn Trump as forthrightly as his “neoconservative” allies in the press. But the terms of his critique are similar.
The foundation of Donald Trump’s presidency is the negation of Barack Obama’s legacy.
It is insufficient to statethe obvious of Donald Trump: that he is a white man who would not be president were it not for this fact. With one immediate exception, Trump’s predecessors made their way to high office through the passive power of whiteness—that bloody heirloom which cannot ensure mastery of all events but can conjure a tailwind for most of them. Land theft and human plunder cleared the grounds for Trump’s forefathers and barred others from it. Once upon the field, these men became soldiers, statesmen, and scholars; held court in Paris; presided at Princeton; advanced into the Wilderness and then into the White House. Their individual triumphs made this exclusive party seem above America’s founding sins, and it was forgotten that the former was in fact bound to the latter, that all their victories had transpired on cleared grounds. No such elegant detachment can be attributed to Donald Trump—a president who, more than any other, has made the awful inheritance explicit.
In the media world, as in so many other realms, there is a sharp discontinuity in the timeline: before the 2016 election, and after.
Things we thought we understood—narratives, data, software, news events—have had to be reinterpreted in light of Donald Trump’s surprising win as well as the continuing questions about the role that misinformation and disinformation played in his election.
Tech journalists covering Facebook had a duty to cover what was happening before, during, and after the election. Reporters tried to see past their often liberal political orientations and the unprecedented actions of Donald Trump to see how 2016 was playing out on the internet. Every component of the chaotic digital campaign has been reported on, here at The Atlantic, and elsewhere: Facebook’s enormous distribution power for political information, rapacious partisanship reinforced by distinct media information spheres, the increasing scourge of “viral” hoaxes and other kinds of misinformation that could propagate through those networks, and the Russian information ops agency.
A pair of key senators has reached a deal to stabilize the law, but Republican leaders in Congress—not to mention President Trump—could still sink its prospects.
Updated on October 17 at 5:42 p.m. ET
When it comes to the Affordable Care Act, Congress may fix what President Trump tried to break.
Senators Lamar Alexander of Tennessee and Patty Murray of Washington state announced a tentative agreement on Tuesday that would shore up Obamacare’s shaky insurance exchanges, offering the first glimmer of bipartisan dealmaking after months of GOP attempts to rip out the law.
The accord between Alexander, the Republican chairman of the Senate health committee, and Murray, the panel’s top Democrat, would restore for two years the payments to insurance companies that Trump canceled last week. And in what Senate Minority Leader Chuck Schumer described as “anti-sabotage provisions,” the deal would also force the administration to spend $106 million in funds that it cut from outreach programs to encourage enrollment in the health law’s exchanges.