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.
When the government shuts down, the politicians pipe up.
No sooner had a midnight deadline passed without congressional action on a must-pass spending bill than lawmakers launched their time-honored competition over who gets the blame for their collective failure. The Senate floor became a staging ground for dueling speeches early Saturday morning, and lawmakers of both parties—as well as the White House and political-activist groups—flooded the inboxes of reporters with prewritten statements castigating one side or the other.
Led by President Trump, Republicans accused Senate Democrats of holding hostage the entire government and health insurance for millions of children over their demands for an immigration bill. “This is the behavior of obstructionist losers, not legislators,” the White House said in a statement issued moments before the clock struck midnight. In a series of Saturday-morning tweets, Trump said Democrats had given him “a nice present” for the first anniversary of his inauguration. The White House vowed that no immigration talks would occur while the government is closed, and administration officials sought to minimize public anger by allowing agencies to use leftover funds and by keeping national parks and public lands partially accessible during the shutdown—in effect, by not shutting down the government as fully as the Obama administration did in 2013.
Allegations against the comedian are proof that women are angry, temporarily powerful—and very, very dangerous.
Sexual mores in the West have changed so rapidly over the past 100 years that by the time you reach 50, intimate accounts of commonplace sexual events of the young seem like science fiction: You understand the vocabulary and the sentence structure, but all of the events take place in outer space. You’re just too old.
This was my experience reading the account of one young woman’s alleged sexual encounter with Aziz Ansari, published by the website Babe this weekend. The world in which it constituted an episode of sexual assault was so far from my own two experiences of near date rape (which took place, respectively, during the Carter and Reagan administrations, roughly between the kidnapping of the Iran hostages and the start of the Falklands War) that I just couldn’t pick up the tune. But, like the recent New Yorker story “Cat Person”—about a soulless and disappointing hookup between two people who mostly knew each other through texts—the account has proved deeply resonant and meaningful to a great number of young women, who have responded in large numbers on social media, saying that it is frighteningly and infuriatingly similar to crushing experiences of their own. It is therefore worth reading and, in its way, is an important contribution to the present conversation.
The website made a name for itself by going after Aziz Ansari, and now it’s hurting the momentum of #MeToo.
Fifteen years ago, Hollywood’s glittering superstars—among them Meryl Streep— were on their feet cheering for Roman Polanski, the convicted child rapist and fugitive from justice, when he won the 2003 Academy Award for Best Director. But famous sex criminals of the motion picture and television arts have lately fallen out of fashion, as the industry attempts not just to police itself but—where would we be without them?—to instruct all of us on how to lead our lives.
The Golden Globes ceremony had the angry, unofficial theme of “Time’s Up,” which quickly and predictably became unmoored from its original meaning, as excited winners tried to align their entertaining movies and TV shows with the message. By the time Laura Dern—a quiver in her voice—connected the nighttime soap opera Big Little Lies to America’s need to institute “restorative justice,” it seemed we’d set a course for the moon but ended up on Jupiter: close, but still 300 million miles away. And then Oprah Winfrey climbed the stairs to the stage, and I knew she wouldn’t just bat clean-up; she’d bring home the pennant.
In transcending left-right divides, the French president may be creating a monster of a different sort.
Foreigners are fascinated by French President Emmanuel Macron. And why shouldn’t they be? He’s the youngest-ever president of the French Republic, elected with no party and no previous electoral experience, a virtual nobody just two years before he leaped to the forefront of the French political scene. Of course people are curious.
But there’s another reason my non-French friends bombard me with questions about my president. Like myself, most of them have advanced degrees and upper-middle-class backgrounds. This sort of socioeconomic status correlatesstrongly with affection for Macron.
His views mirror those held by most of this “elite” class. He thinks the left-right divide should be transcended. He doesn’t care about outworn ideologies, but about solutions that work, wherever they come from. He thinks startups are cool and the economy should be generally entrepreneurship-friendly, but he also wants some sort of welfare state. He’s got no problem whatsoever with gay marriage. He believes immigration is desirable for both economic and moral reasons.
New research shows that the best humor is both a little bit wrong and a little bit right. Is there something about comedians that makes them better at subversion?
Immediately after 9/11, comedy ground to a halt. The Daily Show went off the air for nine days. Saturday Night Live, whose 27th season started 18 days later, featured a somber cold-open with Lorne Michaels asking New York mayor Rudy Giuliani, "Can we be funny?"
The staffers of The Onion, the satirical paper that had just relocated to New York, weren’t sure how to answer that question. Even three weeks after the attack, the comedian Gilbert Gottfried was publicly hissed at for joking that he was taking a flight that would make a stop at the Empire State Building.
The Onion staffers agonized, but they eventually settled on publishing an entire paper devoted to 9/11 on September 26. As described by psychologist Peter McGraw and journalist Joel Warner in their upcoming book, The Humor Code, the issue was smash hit. The Onion writers aimed their bile at the hijackers, whom they depicted being tortured by “tusked, asp-tongued demons” in Hell. One headline read, “God Angrily Clarifies 'Don't Kill' Rule.”
Stories of gray areas are exactly what more men need to hear.
The story of Aziz Ansari and “Grace” is playing out as a sort of Rorschach test.
One night in the lives of two young people with vintage cameras is crystallizing debate over an entire movement. Depending on how readers were primed to see the ink blot, it can be taken as evidence that the ongoing cultural audit is exactly on track—getting more granular in challenging unhealthy sex-related power dynamics—or that it has gone off the rails, and innocent men are now suffering, and we are collectively on the brink of a sex panic.
Since the story’s publication on Saturday (on the website Babe, without comment from Ansari, and attributed to a single anonymous source), some readers have seen justice in Ansari’s humiliation. Some said they would no longer support his work. They saw in this story yet another case of a man who persisted despite literal and implied cues that sex was not what a woman wanted.Some saw further proof that the problems are systemic, permeating even “normal” encounters.
How NASA scales down to a skeleton crew when Congress misses a big budget deadline
As the wheels of the U.S. government ground to a halt Friday at midnight, thousands of federal employees prepared to face days or weeks without work or pay until their offices reopened.
Some employees will continue working through the government shutdown, however, including the three with the longest commute: NASA astronauts Mark Vande Hei, Joseph Acaba, and Scott Tingle. Despite the political tussle that closed most of the government on Saturday, the American part of the International Space Station remains open for business. Mission control staff, considered “essential” personnel, will keep working, too, to support the astronauts.
Phew. And, well, obviously! After all, NASA can’t exactly press pause on the work of keeping humans alive in microgravity 200 miles above Earth, even if Congress missed the deadline for the government running out of money.
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.”
In November testimony, Fusion GPS’s Glenn Simpson outlined a potential scheme to the House Intelligence Committee, but it hasn’t pursued the line of investigation.
So far, the release of transcripts of Fusion GPS founder Glenn Simpson’s interviews with the House Intelligence and Senate Judiciary committees have provided rich detail to obsessives but few major headlines for the average reader. The interviews give some more clarity on how Fusion came to investigate Donald Trump; who was paying the company; and how it gathered information, but they offer much help in assessing the Trump dossier.
Perhaps the most interesting thread is Simpson’s suggestion that the Trump Organization could have been used by Russians to launder money—an arrangement that would have both allowed Kremlin-linked figures to scrub cash and would have created possible blackmail material over the now-president, since the Russian government would be aware that a crime had been committed.
An infamous gap in Interstate 95 will finally be closed this summer.
PENNINGTON, N.J.—The past few years have been thick with promises of shiny new infrastructure and the revival of American greatness.
Funny, then, that so little has been made of a quiet victory for U.S. infrastructure due later this year. By September 2018, one of the country’s most famous civil-engineering projects will finally complete construction, six decades after work on it began.
Interstate 95, the country’s most used highway, will finally run as one continuous road between Miami and Maine by the late summer. The interstate’s infamous “gap” on the Pennsylvania and New Jersey border will be closed, turning I-95 into an unbroken river of concrete more than 1,900 miles long. In so doing, it will also mark a larger milestone, say transportation officials—the completion of the original United States interstate system.