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.
A scientist and a monk compare notes on meditation, therapy, and their effects on the brain
Can training the mind make us more attentive, altruistic, and serene? Can we learn to manage our disturbing emotions in an optimal way? What are the transformations that occur in the brain when we practice meditation? In a new book titled Beyond the Self, two friends—Matthieu Ricard, who left a career as a molecular biologist to become a Buddhist monk in Nepal, and Wolf Singer, a distinguished neuroscientist—engage in an unusually well-matched conversation about meditation and the brain. Below is a condensed and edited excerpt.
Matthieu Ricard: Although one ﬁnds in the Buddhist literature many treatises on “traditional sciences”—medicine, cosmology, botanic, logic, and so on—Tibetan Buddhism has not endeavored to the same extent as Western civilizations to expand its knowledge of the world through the natural sciences. Rather it has pursued an exhaustive investigation of the mind for 2,500 years and has accumulated, in an empirical way, a wealth of experiential ﬁndings over the centuries. A great number of people have dedicated their whole lives to this contemplative science.
The GOP succeeded in delivering on many of its promises. But the new code, which Congress will vote on this week, will not be as lasting, or as simplified, as they’d hoped.
The legislation congressional Republicans finalized on Friday and are likely to enact next week delivers on many of the party’s—and President Trump’s— promises for a landmark overhaul of the tax code. But the rush to pass the bill through a narrow Senate majority and without Democratic support forced the GOP to sacrifice some of their long-held aspirations for tax reform.
The final bill permanently reduces the corporate tax rate all the way from 35 percent to 21 percent, nearly matching the 20 percent goal House Republicans set in their 2016 campaign plan (though not as low as the 15 percent Trump ran on). It cuts taxes sharply for business owners, and companies will be able to write off costly purchases of new equipment and buildings.
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.
Such tips as "don't hand out cash to dinner guests" reveal what foreign tourists find surprising about coming to America.
Such tips as
"don't hand out cash to dinner guests" reveal what foreign tourists find
surprising about coming to America.
The United States is the second greatest tourist draw in the
world, with 60-million-plus
visitors in 2010 alone (France, number one, attracted almost 80 million).
Flipping through a few of the many English-language tourist guides provides a
fascinating, if non-scientific and narrow, window into how people from the outside world perceive America,
Americans, and the surprises and pitfalls of spending time here.
Of the many pieces of advice proffered, four of the most common
are: eat with your fingers (sometimes), arrive on time (always), don't drink
and drive (they take it seriously here!), and be careful about talking politics
(unless you've got some time to spare). But they say more than that.
Progressive clergy are pushing a new movement that’s unapologetically political—and deeply rooted in textual traditions.
Since Donald Trump was elected one year ago, I’ve heard from a number of rabbis who feel caught. They’re not sure how to speak into this moment of intense partisan division, nasty rhetoric, and outrage; how to console and advise those who are devastated while not alienating congregants who support the president. This conundrum is sharpest in the Orthodox world, where a strong majority of Jews lean Republican. But even liberal Jewish leaders—those in the Reconstructionist, Reform, and Conservative movements—many feel hemmed in by board members, funders, or their own sense of clerical propriety.
Sharon Brous does not agree. The senior rabbi at IKAR, a non-denominational spiritual community in Los Angeles, believes this is not a normal moment in American politics, and Jewish leaders need to speak out. The models of Jewish movement-building are also changing, she says: Gone are the days when the president of the Union of Reform Judaism or the Conservative movement’s Rabbinical Assembly are the only voices who can speak for American Jews. A new generation of rabbis, working outside of traditional, hierarchical structures, are building followings and defining a new, often politicized, way of expressing Judaism.
Content moderators review the the dark side of the internet. They don’t escape unscathed.
Lurking inside every website or app that relies on “user-generated content”—so, Facebook, YouTube, Twitter, Instagram, Pinterest, among others—there is a hidden kind of labor, without which these sites would not be viable businesses. Content moderation was once generally a volunteer activity, something people took on because they were embedded in communities that they wanted to maintain.
But as social media grew up, so did moderation. It became what the University of California, Los Angeles, scholar Sarah T. Roberts calls, “commercial content moderation,” a form of paid labor that requires people to review posts—pictures, videos, text—very quickly and at scale.
Roberts has been studying the labor of content moderation for most of a decade, ever since she saw a newspaper clipping about a small company in the Midwest that took on outsourced moderation work.
The pressure to achieve academically is a crime against learning.
I’ve known the mother sitting in front of me at this parent-teacher conference for years, and we have been through a lot together. I have taught three of her children, and I like to think we’ve even become friends during our time together. She’s a conscientious mother who obviously loves her children with all of her heart. I’ve always been honest with her about their strengths and weaknesses, and I think she trusts me to tell her the truth. But when she hits me with the concern that’s been bothering her for a while, all I can do is nod, and stall for time.
“Marianna’s grades are fine; I’m not worried about that, but she just doesn’t seem to love learning anymore.”
A conversation with Nikole Hannah-Jones about race, education, and hypocrisy.
Public schools in gentrifying neighborhoods seem on the cusp of becoming truly diverse, as historically underserved neighborhoods fill up with younger, whiter families. But the schools remain stubbornly segregated. Nikole Hannah-Jones has chronicled this phenomenon around the country, and seen it firsthand in her neighborhood in Brooklyn.
“White communities want neighborhood schools if their neighborhood school is white,” she says. “If their neighborhood school is black, they want choice.” Charter schools and magnet schools spring up in place of neighborhood schools, where white students can be in the majority.
“We have a system where white people control the outcomes, and the outcome that most white Americans want is segregation,” she says.
Russia's strongman president has many Americans convinced of his manipulative genius. He's really just a gambler who won big.
I. The Hack
The large, sunny room at Volgograd State University smelled like its contents: 45 college students, all but one of them male, hunched over keyboards, whispering and quietly clacking away among empty cans of Juicy energy drink. “It looks like they’re just picking at their screens, but the battle is intense,” Victor Minin said as we sat watching them.
Clustered in seven teams from universities across Russia, they were almost halfway into an eight-hour hacking competition, trying to solve forensic problems that ranged from identifying a computer virus’s origins to finding secret messages embedded in images. Minin was there to oversee the competition, called Capture the Flag, which had been put on by his organization, the Association of Chief Information Security Officers, or ARSIB in Russian. ARSIB runs Capture the Flag competitions at schools all over Russia, as well as massive, multiday hackathons in which one team defends its server as another team attacks it. In April, hundreds of young hackers participated in one of them.