“Hawks Crying Wolf”: The Usual Republican Inflation Suspects Are Saying The Usual Things
According to a recent report in The Times, there is dissent at the Fed: “An increasingly vocal minority of Federal Reserve officials want the central bank to retreat more quickly” from its easy-money policies, which they warn run the risk of causing inflation. And this debate, we are told, is likely to dominate the big economic symposium currently underway in Jackson Hole, Wyo.
That may well be the case. But there’s something you should know: That “vocal minority” has been warning about soaring inflation more or less nonstop for six years. And the persistence of that obsession seems, to me, to be a more interesting and important story than the fact that the usual suspects are saying the usual things.
Before I try to explain the inflation obsession, let’s talk about how striking that obsession really is.
The Times article singles out for special mention Charles Plosser of the Philadelphia Fed, who is, indeed, warning about inflation risks. But you should know that he warned about the danger of rising inflation in 2008. He warned about it in 2009. He did the same in 2010, 2011, 2012 and 2013. He was wrong each time, but, undaunted, he’s now doing it again.
And this record isn’t unusual. With very few exceptions, officials and economists who issued dire warnings about inflation years ago are still issuing more or less identical warnings today. Narayana Kocherlakota, president of the Minneapolis Fed, is the only prominent counterexample I can think of.
Now, everyone who has been in the economics business any length of time, myself very much included, has made some incorrect predictions. If you haven’t, you’re playing it too safe. The inflation hawks, however, show no sign of learning from their mistakes. Where is the soul-searching, the attempt to understand how they could have been so wrong?
The point is that when you see people clinging to a view of the world in the teeth of the evidence, failing to reconsider their beliefs despite repeated prediction failures, you have to suspect that there are ulterior motives involved. So the interesting question is: What is it about crying “Inflation!” that makes it so appealing that people keep doing it despite having been wrong again and again?
Well, when economic myths persist, the explanation usually lies in politics — and, in particular, in class interests. There is not a shred of evidence that cutting tax rates on the wealthy boosts the economy, but there’s no mystery about why leading Republicans like Representative Paul Ryan keep claiming that lower taxes on the rich are the secret to growth. Claims that we face an imminent fiscal crisis, that America will turn into Greece any day now, similarly serve a useful purpose for those seeking to dismantle social programs.
At first sight, claims that easy money will cause disaster even in a depressed economy seem different, because the class interests are far less clear. Yes, low interest rates mean low long-term returns for bondholders (who are generally wealthy), but they also mean short-term capital gains for those same bondholders.
But while easy money may in principle have mixed effects on the fortunes (literally) of the wealthy, in practice demands for tighter money despite high unemployment always come from the right. Eight decades ago, Friedrich Hayek warned against any attempt to mitigate the Great Depression via “the creation of artificial demand”; three years ago, Mr. Ryan all but accused Ben Bernanke, the Fed chairman at the time, of seeking to “debase” the dollar. Inflation obsession is as closely associated with conservative politics as demands for lower taxes on capital gains.
It’s less clear why. But faith in the inability of government to do anything positive is a central tenet of the conservative creed. Carving out an exception for monetary policy — “Government is always the problem, not the solution, unless we’re talking about the Fed cutting interest rates to fight unemployment” — may just be too subtle a distinction to draw in an era when Republican politicians draw their economic ideas from Ayn Rand novels.
Which brings me back to the Fed, and the question of when to end easy-money policies.
Even monetary doves like Janet Yellen, the Fed chairwoman, generally acknowledge that there will come a time to take the pedal off the metal. And maybe that time isn’t far off — official unemployment has fallen sharply, although wages are still going nowhere and inflation is still subdued.
But the last people you want to ask about appropriate policy are people who have been warning about inflation year after year. Not only have they been consistently wrong, they’ve staked out a position that, whether they know it or not, is essentially political rather than based on analysis. They should be listened to politely — good manners are always a virtue — then ignored.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 21, 2014
“Not A Single GOP Ripple”: So Much For Politics Stopping At The Water’s Edge
We talked earlier about Sen. Rand Paul (R-Ky.), who brought three television cameras, three photographers, six reporters, a political aide, two press secretaries, and far-right activist David Bossie to Guatemala for a “stage-managed political voyage.” But it appears that wasn’t the only reason for the trip.
Sen. Rand Paul (R-Ky.) told the Guatemalan president the surge of child immigrants flooding the U.S. border this year is a result of President Obama’s policies, not problems in Central America.
“I told him, frankly, that I didn’t think the problem was in Guatemala City, but that the problem was in the White House in our country, and that the mess we’ve got at the border is frankly because of the White House’s policies,” Paul told Brietbart News in an article published Thursday.
According to the report in The Hill, the Kentucky Republican sat down with Guatemalan President Otto Perez Molina for 45 minutes, and the senator discussed politics with the foreign head of state.
“I think what’s happened at the border is all squarely at the president’s lap,” Paul said. “The problem and the solution aren’t in Guatemala. The problem and solution reside inside the White House.”
As a substantive matter, the senator’s position is tough to defend or even understand. President Obama didn’t sign the 2008 human-trafficking measure into law; he didn’t create awful conditions in Central American countries; and he didn’t encourage anyone to lie to desperate families about what would happen to their children. If there’s a coherent explanation for why the White House is to blame, it’s hiding well.
But even putting that aside, since when is it kosher for U.S. officials to travel abroad to condemn U.S. leaders like this?
In fairness, it’s hard to say with certainty exactly what Rand Paul told President Molina during their discussion. I haven’t seen a video of the meeting and all we have to go on is the senator’s own claims.
But if Paul is telling the truth, he traveled abroad, visited with a foreign leader, and spent time trashing the president of the United States.
I seem to remember a time when there were norms that deemed actions like this unacceptable.
Under traditional American standards, some considered it inappropriate to criticize the president when he was overseas. More importantly, when U.S. officials were outside the country, norms called on those officials to refrain from criticizing America’s elected leaders.
I guess that doesn’t apply anymore? These standards were certainly in place during the Bush/Cheney era.
Here’s what happened in 2006 when Al Gore gave a speech at a conference in Saudi Arabia in which he criticized Bush policies towards the Muslim world – as summarized by The New York Times’ Chris Sullentrop:
“As House Democrats David Bonior and Jim McDermott may recall from their trip to Baghdad on the eve of the Iraq war, nothing sets conservative opinionmongers on edge like a speech made by a Democrat on foreign soil. Al Gore traveled to Saudi Arabia last week, and in a speech there on Sunday he criticized ‘abuses’ committed by the U.S. government against Arabs after the attacks of Sept. 11, 2001. A burst of flabbergasted conservative blogging followed the Associated Press dispatch about the speech… The editorial page of Investor’s Business Daily accused Gore of ‘supreme disloyalty to his country’….”
The Wall St. Journal’s James Taranto accused Gore of “denouncing his own government on foreign soil” and quoted the above accusation of “disloyalty.” Commentary was abundant all but accusing Gore of treason for criticizing the U.S. in a foreign land.
I’ll concede that such niceties may be antiquated, and maybe no one cares about this anymore. But if presidential criticism abroad was outrageous in the Bush/Cheney era, why does it barely cause a ripple now?
Update: Just to flesh this out further, in 2010, then-House Minority Leader Eric Cantor (R-Va.) traveled to Israel in the hopes of undermining U.S. foreign policy towards Israel. At the time, this caused quite a stir in foreign-policy circles – it seemed extraordinary for an elected American official to travel abroad in order to work against his own country’s position.Perhaps now, with the Rand Paul example in mind, the practice is becoming more common.
For even more context, note that in 2007, then-House Speaker Nancy Pelosi (D-Calif.) met with Syrian officials in Syria. Republicans, including Cantor, suggested Pelosi may have violated the Logan Act, “which makes it a felony for any American ‘without authority of the United States’ to communicate with a foreign government to influence that government’s behavior on any disputes with the United States.”
One wonders who, if anyone, will raise similar allegations against Rand Paul.
By: Steve Benen, The Maddow Blog, August 22, 2014
“Taking Cover Behind What’s Left Unsaid”: The GOP’s Midterm Strategy Is As Hollow As Their Ideas Are
The most interesting thing about Senator Mark Pryor’s decision to tout his support for the Affordable Care Act in a well-financed, statewide television ad isn’t that he stands apart from other embattled Democrats this election cycle. It’s that Republicans scrambled to spin the story, insisting to reporters that Pryor couldn’t possibly be running on Obamacare if he won’t refer to the law by name.
This was poorly disguised Calvinball, a standard that Republicans invented for the special case of the ACA. Literally no other members of Congress are expected to refer to the laws they’ve helped pass by name or nickname. Republicans in the aughts weren’t expected to refer to the “Economic Growth and Tax Relief Reconciliation Act,” or “EGTRRA,” or “the Bush tax cuts,” or “the Bush tax cuts for the rich,” no matter how unpopular the moniker became. They ran on having cut taxes, and wanting to renew those tax cuts. And sure enough when President Obama set about trying to let “the Bush tax cuts” expire, he conveniently omitted the popular ones. Which is to say, the vast majority of them. He made those permanent.
Nevertheless, several reporters fell into line. And good for the ref workers. Score one for them.
But if Obamacare is a huge liability for Democrats, why are conservatives and GOP operatives desperate to control the narrative surrounding Pryor’s decision to run on the law? If your opponent’s stepping on rakes, why not just stand back and let him?
The answer is that with respect to both Obamacare and other issues Republicans must rely on diversions from policy and outcomes when expressing their substantive and strategic views. We’ve reached a point in the fight over Obamacare where the best thing Republicans have on their side is the law’s unpopular brand. Particularly in states like Arkansas, where President Obama is widely loathed but his signature law has cut the uninsurance rate nearly in half. It’s deeply silly to argue that Pryor isn’t running on Obamacare unless he refers to it using one of two unpopular slogans. But that’s the argument.
Instead, Pryor says, “I helped pass a law that prevents insurance companies from canceling your policy if you get sick or deny [sic] coverage based on pre-existing conditions.” Maybe he shouldn’t have said anything about “a law” at all, but that’s a niggling, semantic critique. That Republicans working to defeat Pryor are asking reporters to squeeze the word “Obamacare” into this sentence is an admission that they’ve lost the policy fight. They criticize Pryor for eschewing the label, because the label’s just about the only thing they’re comfortable assailing. In this way, they resemble Democrats six and eight years ago, running against the Bush tax cuts (for the rich), knowing that they had no intention of letting anything but the most regressive of those tax cuts expire.
In that sense, the GOP’s obsession with the moniker, and only the moniker, is excellent news for Obamacare’s political durability. But only if the people who cover politics are clear about the implications of the GOP’s rhetoric. Unlike Democrats, who were generally clear about the fact that they planned to make most of the Bush tax cuts permanent, Pryor’s opponent, Representative Tom Cotton, acknowledges that the pre-Obamacare status quo, in which insurers denied coverage to people with pre-existing health conditions, was “broken,” but nevertheless maintains that his goal is to repeal the law that makes that practice illegal.
Cotton repeated that mantra just this week, on the trail with Mitt Romney, who, in an amusing twist, tried to save Cotton from himself. “Tom Cotton is going to make sure that we change Obamacare, making sure that people can keep insurance and those that have pre-existing conditions can have coverage,” Romney said, “but he doesn’t want to see the federal government telling people in Arkansas what kind of insurance they have to have or making it more expensive.” Those are remarkably accommodating priorities. They’re just not ones Cotton is prepared to espouse just yet.
In this way, the politics of Obamacare in Arkansas mirror the politics of legislative brinksmanship in Kentucky. Just two days ago, Mitch McConnell, the embattled Senate minority leader who hopes to become majority leader next year, vowed to lard up appropriations bills with partisan policy riders and allow the president to choose between a veto, precipitating a government shutdown, and a bitter pill. A classic take it or leave it proposition.
McConnell said it would be up to the president to decide whether to veto spending bills that would keep the government open.
Obama “needs to be challenged, and the best way to do that is through the funding process,” McConnell said. “He would have to make a decision on a given bill, whether there’s more in it that he likes than dislikes.”
It wouldn’t be much of a challenge to Obama if McConnell plans to cave the moment the president whips out his veto pen. So the threat is pretty clear. Nevertheless, McConnell’s campaign wasn’t pleased by the ensuing deluge of stories about how a GOP majority would embrace high-stakes confrontations and potentially shut down the government again. And in a very narrow sense they have a point—McConnell never said he’d shut down the government. Political scientist Jonathan Bernstein, no McConnell partisan, was among those who defended McConnell on this score.
But much like Cotton can’t credibly claim to support protections for people with pre-existing medical conditions when his plan is to repeal Obamacare, McConnell can’t sidestep the implications of his publicly declared strategy. He can’t say “when we’re in power, we’re going to put two and two together,” and then get angry when the headlines say, “McConnell promises four.”
That won’t stop him from trying to, though. And to an unappreciated extent, the broader Republican strategy heading into November is to speak in abstractions, and take cover behind what’s left unsaid.
By: Brian Beutler, The New Republic, August 22, 2014
“The New Credential For 2016”: For Republicans, “Come And Get Me, Coppers”, More Politically Acceptable Than Expressing Contrition
We’ve heard the argument before with respect to Chris Christie and Scott Walker that the abuse-of-power investigations they’ve faced could actually help them as presidential candidates, so long as they stay out of the slammer and can blame their persecution on the godless liberals. But now that Rick Perry has joined the Shadow-of-the-Hoosegow club, RealClearPolitics’ Scott Conroy offers a general theory that they’ll all benefit from a presumption that legal problems mean The Left is afraid of them and wants them hauled off in chains before they can roar through the primaries like avenging angels.
It’s a strategy that may pay dividends in a 2016 primary fight, as all three would be courting conservative voters who will likely see the investigations as badges of honor.
Bob Haus, who helmed Perry’s 2012 campaign in Iowa and is poised to reprise that role in 2016, said the “overwhelming response” from activists in the nation’s first voting state has been strongly supportive.
“They see the actions against Governor Perry for what they are: raw politics,” Haus said. “I would also say that Governor Perry has shown great strength and resolve in this matter. He and his team have managed this issue exceptionally well, and have shown they will fight this aggressively.”
In other words, “come and get me, coppers!” is a more politically effective response than anything expressing contrition or an openness to a slap on the wrist.
Now this has to be deeply frustrating to other candidates seeking 2016 traction who don’t have the credential of being threatened with imprisonment. Consider Bobby Jindal, who’s tried every stunt imaginable to get whipped-up Con-Con activists interested in his presidential availability. As it happens, Bobby was just handed a judicial setback by a state judge who issued an injunction to block Jindal from killing implementation of Common Core education standards in Louisiana–he was the state’s premier Common Core supporter until he became its premier opponent, of course–pending a trial. You have to wonder if Bobby’s brain trust has discussed ways to secure a contempt of court charge to spice things up–you know, the governor entering the courtroom brandishing a Bible and shrieking “Get thee behind me, Satan!” at the judge or something. It honestly wouldn’t surprise me.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, August 21, 2014
“A Conversion On Political Rhetoric”: The Fascinating Political Evolution Of Paul Ryan
Paul Ryan’s new book The Way Forward is meant to be bought, not read.
You buy a book like this because you’re in a conservative book club, or you’re a big Paul Ryan fan, and you feel obliged. It’s like voting, but it costs money. Publishers commission these books hoping to get a big payoff if and when the author is nominated for president and suddenly a much larger share of the country feels obliged to vote, er, buy Ryan.
But there’s more to The Way Forward than that, largely because Ryan is an increasingly important and intriguing figure in Republican politics. His persona evolves — often, it seems — in tandem with the felt-needs of the GOP. Ryan has always been a little further to the right than the average elected Republican. But that didn’t stop him from corralling votes for Medicare Part-D when George W. Bush needed them. Then when the GOP constituents needed someone who looked good under a green eyeshade, he became a much sterner budget watcher, and strenuous fiscal conservative.
The first half of the Ryan book is a biography as starched and colorless as his collars. But the second half of The Way Forward is fascinating. It gives a view of what Ryan wants to be now and over the next two years, possibly as he contemplates a run for the presidency. And make no mistake: Ryan is transformed.
No longer is Paul Ryan the P90X-ripping, budget-slashing devotee of Ayn Rand that Democrats gleefully caricatured as someone who wanted to push grandma off a cliff. Today he’s the geeky white guy dancing badly at a black church, and then biting his lip and nodding to signal how much he is listening, and learning. He’s putting in an effort to expand his horizons personally. He is undergoing a political conversion, or at least a conversion on political rhetoric.
Quite literally, Paul Ryan experiences a kind of Come-To-Frank-Luntz moment when someone asks him who he is talking about when he refers to some people as “takers.” Ryan had in the past adopted the language of “makers and takers” to describe people who are paying more in taxes than they receive in benefits, and people who are receiving more benefits than what they pay. Ryan says this language was just in the air at the time he adopted it. And it was. A Nation of Takers was the scorching title to a sobering (and sober) book by Nicholas Eberstadt about the shape of America’s entitlement state. Eberstadt’s book is exactly the kind of doomsday look into the spreadsheets that Ryan was getting into then.
Today, Ryan won’t disavow the math, exactly, but he has discarded the implied insult he attached to it.
[W]hile the problem it depicts is real and worrisome, the phrase “makers and takers” communicated a lot more than just the dilemma I was trying to describe. That day at the fair was the first time I really heard the way it sounded. As I stood there, listening to the guy from the Democrats’ tent lay into me, I thought, “Holy cow. He’s right.” [The Way Forward]
Ryan also talks about his experiences of reaching out to constituencies where there aren’t many Republicans. In what is probably the most substantive political point in the book, Ryan says what many already suspect, that the 2012 election proved that “focusing heavily on simply turning out our traditional coalition is a losing strategy.”
Ryan does what a politician in this position should do — he takes his lumps just by showing up for constituent events among people who are not naturally aligned to him. Black constituents often tell him to his face that they disagree with him. “[A]t least they were telling me, personally, instead of just some pollster canvassing the neighborhood,” he writes. He says that these events communicate that a person who has conservative politics can still care enough to show up and talk to minority constituents.
This is the right thing politically, but it’s also the right thing to do, period. The GOP should follow Ryan’s example. It would be good for the country. Citizens deserve the competition for their votes that gerrymandering and polarization deny. No major party should effectively ignore an entire demographic or geographic group of Americans.
Now, there are no great revelations in this book. It’s filled with easy-to-understand anecdotes about the malfunctioning of the health-care system before and after ObamaCare, and the efficiency of market-oriented solutions. These will be repeated many, many times by Ryan in the medium-term of his political life.
Ryan also repeats Jack Kemp’s name over and over again, almost as much as he does Reagan’s. Kemp was a Republican who worked hard to make GOP principles appealing to urban and minority voters. He was HUD secretary under George H.W. Bush and Bob Dole’s vice presidential candidate. Kemp is an odd figure, combining the supply-side politics of a Dan Quayle with the social idealism of a George Romney. He referred to himself as a “bleeding-heart conservative.”
And a bleeding-heart conservative sounds great in theory. In a way, it’s what George W. Bush attempted with his “compassionate conservative” brand. But Kemp was never really a national figure, and his unique policy ideas never really got purchase among their supposed beneficiaries. He was admired more than followed. He made Republicans feel better about themselves, without winning great victories. Maybe the time is ripe for a return to Kempism. But I have my doubts.
By: Michael Brendan Dougherty, The Week, August 21, 2014
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 