Repackaging the Bush agenda, just with austerity, is not the path to prosperity.
Romney economic adviser Glenn Hubbard apparently has a very short memory.
In a Wall Street Journalop-ed making the case for Romney's economic agenda, Hubbard presents a strikingly ahistorical account of the past few years -- not to mention sprinkling in one big questionable assumption. Let's take a tour of some of the lowlights.
"We are currently in the most anemic economic recovery in the memory of most Americans."
Does the memory of most Americans go back a decade? If it does, then they can remember a more anemic recovery -- at least when it comes to jobs. The post-2001 recovery had the slowest job growth of any postwar recovery. It also had the slowest private sector growth of any postwar recovery. It's puzzling that Hubbard doesn't remember this, considering that he was the chair of President George W. Bush's Council of Economic Advisors from 2001 to 2003.
Now, the economy did grow faster then than it has now. But that's because the government grew as much as it did then; it's shrinking now. Really. So why does this weak recovery feel weaker than that weak recovery? Well, the tech bubble recession was much milder than the housing bubble recession -- in other words, we're in a deeper hole this time around. All else equal, we would expect a better recovery from a worse recession, but all else is not equal. As Harvard professor Kenneth Rogoff has shown with over 800 years of data, recoveries from financial crises are long, slow slogs. It's doubtful that recycling Bush-era policies will get us out of this ditch faster. It didn't ten years ago.
"[U]ncertainty over policy--particularly over tax and regulatory policy--slowed the recovery and limited job creation. One recent study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago found that this uncertainty reduced GDP by 1.4% in 2011 alone."
Well, that certainly sounds bad. When did all of this uncertainty peak? Let's look at the paper. August of 2011. Hmmm. What happened in August of 2011? Oh, that's right. The debt ceiling debacle. Why don't we let the authors speak for themselves. Here's why they said uncertainty was so elevated in 2011:
A series of later developments and policy fights - including the debt- ceiling dispute between Republicans and Democrats in the summer of 2011, and ongoing banking and sovereign debt crises in the Eurozone area - kept economic policy uncertainty at very high levels throughout 2011.
In other words, a debt crisis the Republicans manufactured and a debt crisis the Europeans manufactured drove uncertainty in 2011. Granted, tax uncertainty has been bad -- but so has monetary policy uncertainty. And have you noticed what we haven't talked about yet? The authors conclude that healthcare and financial regulation uncertainty were "much less pronounced" than all of the above questions.
And according to the Congressional Budget Office, the large deficits codified in the president's budget would reduce GDP during 2018-2022 by between 0.5% and 2.2% compared to what would occur under current law. [...]
The governor's plan would reduce federal spending as a share of GDP to 20%--its pre-crisis average--by 2016. This would dramatically reduce policy uncertainty over the need for future tax increases, thus increasing business and consumer confidence. [...]
The Romney plan would reduce individual marginal income tax rates across the board by 20%, while keeping current low tax rates on dividends and capital gains. The governor would also reduce the corporate income tax rate--the highest in the world--to 25%. In addition, he would broaden the tax base to ensure that tax reform is revenue-neutral.
Hubbard says that 1) Medium-run deficits are bad for medium-run growth, 2) Romney will cut public spending, which will increase private spending, and 3) Romney will lower tax rates and eliminate tax loopholes while keeping tax revenues the same. Individually, these might make sense. Together, they're the economic equivalent of saying two plus two equals five.
Let's unpack this fiscal mess. Romney wants to cut taxes, but he also wants to cut medium-run deficits too. That's a problem. His answer: He won't cut taxes, but tax rates -- while cutting spending too. But this creates new problems. For one, it means his tax plan will raise taxes on the bottom 95 percent, while cutting them for the top 5 percent. For another, it leaves Romney stuck embracing spending cuts that will hurt the economy.
Expansionary austerity is a myth, at least in the short-term. That was the conclusion the IMF reached in a 2011 paper that examined 173 cases of fiscal retrenchment over the past 30 years. On average, cutting the deficit by 1 percent of GDP led to a 0.5 percentage point increase in unemployment -- with private spending falling in tandem with public spending. Austerity can work over the longer-term, as long as interest rates or the currency falls to offset the fall in government spending. But interest rates are already at zero, and Republicans aren't too keen about quantitative easing or that whole "dollar depreciation" thing. That leaves the Romney camp with one final reason why cutting government spending would lead to more spending overall: Ricardian equivalence. It's the idea that the private sector spends less when the public sector borrows more, because households know that eventually the government will have to raise taxes to pay for that borrowing. The empirical evidence on this is mixed -- after all, few households 1) know enough about the deficit to predict what will happen to their taxes, or 2) have enough disposable income or access to borrowing to smooth their lifetime spending. That's not to say that there isn't something to it, but that it's a flimsy hope for the catch-up growth we need.
I don't mean to pick on Glenn Hubbard. He has plenty of good ideas about how to get the economy moving again -- like mass refinancing for mortgages owned by Fannie and Freddie. But repackaging the Bush agenda, just updated with austerity, is not the path to prosperity.
The blunt power of the gatekeeper is the ability to enforce not just artistic, but also financial, exile.
When the Harvey Weinstein story broke, I thought of something my mother told me when I was a little girl. She said: To be a free woman, you have to be a financially independent woman. She wasn’t wrong. I studied economics in college and went to New York to become an investment banker.To be blunt, I wanted the freedom money can buy.
I had a sudden change of heart while working at Goldman Sachs as a summer analyst. I decided that if the world required me to sell the hours of my life in exchange for access to what had long ago been free—food, water, shelter—I wanted to at least be doing something that stirred my soul. This is, granted, a privileged position. But as a young woman that was the conclusion I came to.
The country’s elites are desperate to figure out what they got wrong in 2016. But can they handle the truth?
It was the hippies who drove Nancy Hale over the edge. She had spent three days listening respectfully to the real people of Middle America, and finally she couldn’t take it any longer.
She turned off the tape recorder and took several deep breaths, leaning back in the passenger seat of the rented GMC Yukon. The sun had just come out from behind a mass of clouds, casting a gleam on the rain-soaked parking lot in rural Wisconsin.
Hale, who is 65 and lives in San Francisco, is a career activist who got her start protesting nuclear plants and nuclear testing in the 1970s. In 2005, she was one of the founders of Third Way, a center-left think tank, and it was in that capacity that she and four colleagues had journeyed from both coasts to the town of Viroqua, Wisconsin, as part of a post-election listening tour. They had come on a well-meaning mission: to better understand their fellow Americans, whose political behavior in the last election had left them confused and distressed.
Find the right environment, and very little effort is necessary.
Happiness is an active process, not something you get by sitting back and waiting. It’s something to be grabbed by the horns or more vulnerable areas and then conquered. At least, this is the gist of the message from Tony Robbins and gurus of his ilk.
Many also say happiness is not something we can buy, or steal, or work too hard to acquire. If you work too hard at it, you end up obsessing over your own state of mind—Am I happy? ... Really though? And like love, if you have to ask, the answer is no.
So what’s the right way to think about effort and happiness? Should I be trying for “happiness” per se—or something more magnanimous, like purpose or meaning?
Or money? Is happiness actually all about money? That would be a real twist.
The president reescalated the ongoing debate over his condolences to Gold Star families by contradicting the widow of a fallen Special Forces sergeant.
“You know, when I was a kid growing up, a lot of things were sacred in our country,” White House Chief of Staff John Kelly said Thursday. Among those were Gold Star families: “I just thought—the selfless devotion that brings a man or woman to die on the battlefield, I just thought that that might be sacred.”
But Kelly acknowledged that might no longer be true: “Gold Star families, I think that left in the convention over the summer.”
Then on Monday morning, Kelly’s boss decided to prolong a feud with the widow of a fallen American soldier:
I had a very respectful conversation with the widow of Sgt. La David Johnson, and spoke his name from beginning, without hesitation!
First came the denials. Then came the apologies. Now, the mogul is claiming “a different recollection of the events.”
“Brit Marling is a super talented actress and writer. Mr. Weinstein has a different recollection of the events.’’
That was Harvey Weinstein’s spokesperson, Sallie Hofmeister, offering a statement to The Atlantic in response to Marling’s essay that shares her experience—an invitation to shower, an offer of a massage, in a form now eerily familiar—of a 2014 encounter with Weinstein.
Two things have been true so far in 2017: The news cycle keeps spiraling downward, and the stock market keeps going up.
Consider a brief review of the year’s chaos. In domestic news, Washington’s legislative machine is even more broken than normal, and President Donald Trump—tweeting furiously, while under investigation for possible collusion and obstruction—has oscillated between sympathy for white nationalists and recklessness toward North Korea. A series of historic natural disasters have ravaged Houston, Florida, the U.S. Virgin Islands, Puerto Rico, and northern California. Abroad, the U.K. is sleepwalking toward divorce with Europe, a crisis with a Middle East ally is brewing, and a missile flew over Japan.
Emma Perrier was deceived by an older man on the internet—a hoax that turned into an unbelievable love story.
Emma Perrier spent the summer of 2015 mending a broken heart, after a recent breakup. By September, the restaurant manager had grown tired of watching The Notebook alone in her apartment in Twickenham, a leafy suburb southwest of London, and decided it was time to get back out there. Despite the horror stories she’d heard about online dating, Emma, 33, downloaded a matchmaking app called Zoosk. The second “o” in the Zoosk logo looks like a diamond engagement ring, which suggested that its 38 million members were seeking more than the one-night stands offered by apps like Tinder.
She snapped the three selfies the app required to “verify her identity.” Emma, who is from a volcanic city near the French Alps, not far from the source of Perrier mineral water, is petite, and brunette. She found it difficult to meet men, especially as she avoided pubs and nightclubs, and worked such long hours at a coffee shop in the city’s financial district that she met only stockbrokers, who were mostly looking for cappuccinos, not love.
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.”
When Chris Lowe first saw the buck stoop to lick the small, silver-speckled fox, he thought his eyes might be playing tricks on him. He’d just gotten back from a run on Santa Catalina, a remote Southern Californian island where he studies sharks, and came upon the two animals in the scrub. Mule deer and island foxes, the rascally miniature descendants of gray foxes, are everyday sights on Catalina’s grassy hills. But to see them nuzzling was downright weird.
Was the buck simply nibbling on a plant behind the fox? Had the fox happened to hop in front of the buck’s face? Lowe dashed into his apartment to grab his camera, and made it to the window to catch the deer taking another lick. The fox, docile in the shade of its antlered friend, wasn’t just tolerating the apparent cleaning, Lowe realized. “It looked like it was actually enjoying this,” he says.
Catalonia and Kurdistan show demands for self-determination aren’t enough.
What is a country? Is it a place like the United States that is recognized by all other countries and is a member of the United Nations? Is it, like Kosovo, a place that is recognized by most of the world’s powers but isn’t a UN member? Where does Taiwan, which has its own government and its own military despite being claimed by China, fit? And where does all this leave places like Catalonia and Iraqi Kurdistan, many of whose citizens have voted to secede over the objections of the countries they’re currently part of?
“Really, when we’re talking about a country, we’re talking about a political territory with a population, a government, and legally recognized boundaries that indicate or grant sovereignty,” Rebecca Richards, a lecturer in international relations at Keele University in the U.K., said in an email. “They are the legally determined shapes on a map.”