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“Decisions, Decisions”: Why Cruz Is Worse Than Trump

On economics, that is. On other issues — well, who was worse, Mussolini or Torquemada? Decisions, decisions.

But on economics, Trump is a big protectionist, while Cruz is a devotee of the gold standard. And we know quite a lot about what these policies would do.

Protectionism makes economies less efficient, but it does not, in general, destroy jobs. Put a tariff on imports and people will spend less on imports — but they will normally spend more on other things instead. So a worldwide turn toward protectionism would both reduce everyone’s exports and reduce their imports, with the overall effect on spending and hence on employment more or less a wash.

Yes, I know there’s a Moody’s study claiming that Trumponomics would be a yuuge job destroyer, but I really don’t know where they got that result; the best guess seems to be that they’re assuming that former spending on imports just goes away, which is not a good assumption.

And no, protectionism didn’t cause the Great Depression. It was a consequence, not a cause — and much less severe in countries that had the good sense to leave the gold standard.

Which brings us to Cruz, who is enthusiastic about the gold standard — which did play a major role in spreading the Depression.

The problem with gold is, first of all, that it removes flexibility. Given an adverse shock to demand, it rules out any offsetting loosening of monetary policy.

Worse, relying on gold can easily have the effect of forcing a tightening of monetary policy at precisely the wrong moment. In a crisis, people get worried about banks and seek cash, increasing the demand for monetary base — but you can’t expand the monetary base to meet this demand, because it’s tied to gold. On top of that, a slump drives interest rates down, increasing the demand for real assets perceived as safe — like gold — which is why gold prices rose after the 2008 crisis. But if you’re on a gold standard, nominal gold prices can’t rise; the only way real prices can rise is a fall in the prices of everything else. Hello, deflation!

So on economics, again, Trump is ignorant and unpredictable — but Cruz knows what isn’t so, and would lead us to predictably dire results.

 

By: Paul Krugman, The Conscience of a Liberal, Opinion Pages; The New York Times, April 8, 2016

April 10, 2016 Posted by | Donald Trump, Monetary Policy, Ted Cruz | , , , , , , | 2 Comments

“Domain Specific Intelligence”: The Truth About Ben Carson; Smart People Can Believe Crazy Things

The mystery of Ben Carson is that he’s a startlingly intelligent man with an inspiring life story who repeatedly makes unhinged assertions that are divorced from reality—and who, as we now know, unnecessarily embellishes his life story. About Carson’s braininess there can be no doubt: He’s not just a doctor, nor is he just a brain surgeon, he’s also performed astonishing medical breakthroughs. In 1987, he was the first surgeon to successfully separate twins conjoined at the head, not a feat that you can do unless you are extraordinarily talented. Yet Carson’s impressive medical accomplishments are puzzling in light of the many absurd things he’s said, notably that Charles Darwin was inspired by Satan and that the pyramids were created by the Hebrew slave Joseph to store grain (as against what Carson thinks is the belief of many “scientists” that they were created by space aliens).

There’s no gainsaying the undisputed facts of Carson’s life, which are genuinely elevating. He really did go from a ghetto childhood to Yale to medical school to being a world-class surgeon. Why then has Carson felt the need to gild the lily with apparently tall tales of being a violence-prone kid who nearly murdered a friend, and being offered a scholarship to West Point? Reporting by CNN and Politico has made it clear that these central claims in his autobiographical account of himself are almost surely false.

To solve the mystery of Ben Carson, it’s important to realize two facts: First, great intelligence doesn’t immunize a person from indulging in magical thinking or pseudo-science. Second, even very smart and accomplished people can be fantasists.

A key text for understanding the Carson phenomenon is science journalist Michael Shermer’s Why People Believe Weird Things: Pseudoscience, Superstition, and Other Confusions of Our Times (originally published in 1997 and revised in 2002). In a chapter titled “Why Smart People Believe Weird Things,” Shermer notes that “intelligence is … orthogonal to the variables that go into shaping beliefs.” What this means is that the factors that make someone believe unusual and non-scientific or pseudo-scientific ideas—everything ranging from ESP to myths about Atlantis to oddball Shakespearean authorship theories to outright holocaust denial—are independent of intelligence. These are beliefs that very smart people as well as the far less intellectually gifted are prone to.

“Another problem is that smart people might be smart in only one field,” Shermer notes. “We say that their intelligence is domain specific.” Carson clearly has a “domain-specific” intelligence—which he freely applies to fields outside his ken (not just Egyptian Archaeology but also American politics, foreign policy, economics, evolutionary biology, and many others).

But there’s a further factor at work: In our educational meritocracy, smart people like Carson are likely to have high social status, which makes them more self-assured and willing to think they are smarter than the experts in other fields. Or smart enough, in Carson’s case, to believe they’re qualified for the presidency.

In some respects, being as intelligent and well-educated as Carson makes you more vulnerable to what Shermer calls weird beliefs. The smarter and better-educated you are, the more powerful you are at coming up with arguments to justify your positions. In effect, intelligence and education give you the skills at becoming entrenched in motivated reasonings. In Shermer’s words, “smart people believe weird things because they are skilled at defending belief they arrived at for non-smart reasons.” This explains the engineers who become 9/11 truthers, the Supreme Court justices who think the Earl of Oxford wrote Shakespeare’s plays, the distinguished mathematicians who think HIV is not the cause of AIDS. It also explains Ben Carson.

But aside from his proclivity toward weird ideas (often connected to his right-wing ideology), we now know that Carson is also a fantasist. His inspirational tales about his life seem to be filled with fibs, moments where he takes perhaps a kernel of truth and turns it into an outright untruth.

Here again, we have to recognize that intelligence and accomplishment are no guard against moral failings. Whatever qualities make someone into a fabulist—perhaps a love of powerful stories, perhaps an inability to distinguish between fact and fiction—can be found in the gifted as well as the ordinary. Two distinguished historical figures prefigure Carson in this regard: the novelist Ford Madox Ford and the political theorist Harold Laski. Ford wrote wonderful novels like The Good Soldier (1915), and Laski was a seminal figure in the Fabian movement, yet both inexplicably felt the need to spruce up their life stories. Ford was genuinely friends with figures like Joseph Conrad and Henry James, but made up stories about them in his autobiographical books. Laski was active in the heart of British politics, yet his letters and private conversations were filled with untrue stories about meeting famous people and doing extraordinary things.

Ben Carson is fast becoming a tragic figure. He’s a man of genuine merit, yet he’s tarnished his reputation through his inability to resist fantastic ideas—and to make up fantasies about his own life. He stands as proof of the fact that intelligence is unconnected to morality.

 

By: Jeet Heer, Senior Editor at The New Republic; November9, 2015

November 11, 2015 Posted by | Ben Carson, GOP Presidential Candidates, GOP Primary Debates | , , , , , , , , , | 1 Comment

“Joe Scarborough Is A Total Hack”: But Don’t Take My Word For It

In his latest salvo in his back-and-forth with Paul Krugman over the significance of the national debt, Joe Scarborough, writing in POLITICO today, displayed such a foul misunderstanding about economics, Krugman must have choked on his oatmeal laughing as he read it.

In “Paul Krugman is wrong – but don’t take my word for it,” the MSNBC host made the following point:

Investors may be growing skittish about U.S. government debt levels and the disordered state of U.S. fiscal policymaking.

From the beginning of 2002, when U.S. government debt was at its most recent minimum as a share of GDP, to the end of 2012, the dollar lost 25 percent of its value, in price-adjusted terms, against a basket of the currencies of major trading partners. This may have been because investors fear that the only way out of the current debt problems will be future inflation.

It also may have been because space aliens raided the Treasury in the dead of night because Nicholas Cage and Chuck Norris were off duty, having been contracted by the Navy to fight a flotilla of krakens in the Caribbean the week before. Scarborough may as well have argued that, because it would have displayed a better understanding of how foreign exchange markets actually work. The value of the dollar is determined by foreign countries’ demand for it and our supply of foreign exchange. And while foreign investors in 2002 may have begun to fear widening debt that was eventually caused by a recession in 2008 — despite the fact that the housing bubble was far from inflated in 2002 and that these investors eventually failed to foresee the crash itself — it’s more likely that the value of the dollar fell because our current account deficit essentially doubled between 2002 and 2006 (but don’t take my word for it).

Scarborough continued to make arguments that could be debunked by a remedial high school economics teacher shortly after:

More troubling for the future is that private domestic investment—the fuel for future economic growth—shows a strong negative correlation with government debt levels over several business cycles dating back to the late 1950s. Continuing high debt does not bode well in this regard.

While it’s true that government borrowing can “crowd out” private investment by bidding up interest rates, it isn’t currently happening — interest rates remain low. Furthermore, investors seem to have more confidence in U.S. Treasuries than they do in the market (but don’t take my word for it, “investors continue to buy U.S. government debt as a refuge against a renewal of turmoil in global financial markets and concern the U.S. recovery may falter”). The real reason that private investment and government debt appear to have an inverse relationship, both now and during any recession, is that economic contraction causes both tax revenue and private investment to fall.

So whose word should we take?

If you believe that I am wrong and Paul Krugman is right…then take it up with the RAND Corporation whose senior economist wrote everything you have read here other than this concluding paragraph. The debt crisis is real and waiting another decade to fix it is not an option. Anyone who suggests it is operates well outside the mainstream of where serious economists reside.

If the recent financial crash has taught us anything, it’s that “the mainstream of where serious economists reside” is less credible than a bootleg DVD salesman convention. But what’s even more troubling about Scarborough’s column — and POLITICO’s decision to publish it — is that he doesn’t even say whose words we should take or what those words actually are. Scarborough names neither the “senior economist” nor the study or studies that he is citing. Nor does the RAND Corporation even have a single “senior economist” — a search for “senior economist” on RAND’s website indicates that the think tank has at least a dozen “senior economists” on staff. So we can’t even debunk the man inspiring Scarborough to spew such noxious filth. At least we can debunk him.

 

By: Samuel Knight, Washington Monthly Political Animal, February 16, 2013

February 17, 2013 Posted by | Budget, Deficits | , , , , , , , | Leave a comment

Religion, Patriotism And Freedom: Ayn Rand Vs. America

Ayn Rand has a large and growing influence on American politics. Speaking at an event in her honor, Congressman Paul Ryan said, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.”

A few weeks ago, Maureen Fiedler, the producer of the weekly radio show, Interfaith Voices, asked me to participate in a debate with Onkar Ghate, a senior fellow at the Ayn Rand Institute. I eagerly accepted. I wanted to hear how a follower of Rand would defend proposals to cut Medicare, Medicaid, and food stamps while exempting the wealthy from paying their fair share.

In one sense there was agreement. Maureen, a Sister of Loretto, argued that Republican budget proposals turned their back on Christ’s admonition to care for “the least among us,” the hungry, the sick, the homeless. Ghate did not dispute that. Rand, he said, was an atheist who did not believe in government efforts to help those in need.

Ghate countered Sister Maureen’s religious position with a moral argument. He maintained that redistribution of wealth was unfair to the rich and weakened the ambition of the rest. I wasn’t surprised by this position, since I’d heard it repeatedly during the fight on welfare reform.

What I did find startling was Ghate’s insistence that just as there should be a separation of church and state, so there should be a separation of economics and state. That notion really got me thinking.

I’ve always understood that one’s loyalty to God should take precedence over one’s patriotic duty. Churches are exempt from taxation, and conscientious objectors aren’t required to serve in war. Our high regard for the First Amendment shows the preeminence of faith in the American consciousness.

But to place economics on the same level as religious freedom seemed to me almost blasphemous. Are we really to believe that the freedom to make money should stand on the same level of religious liberty? Are the words of Milton Friedman equal to the Sermon on the Mount?  I don’t think so. But maybe in the eyes of Ayn Rand and Paul Ryan, they are.

Ayn Rand’s biography goes a long way toward explaining her animus to government. Her first-hand experience of communism showed her how the state can crush people, kill dissent, and exile lovers of freedom to the gulag. Horrified by what government power could do, she was determined to shrink it to the point of impotence.

America was the perfect place for Rand’s single-minded celebration of the individual. After all, this was the nation that inspired intrepid emigrants to leave behind country, family, and friends with little more than the shirt on their back to make a new life. Here they wouldn’t be judged by what they were before or who their parents were but by what they could made of themselves.

America was a beacon of freedom from its earliest days. But the freedom to earn one’s living is not the same as the freedom to emasculate government. It’s a mistake to enshrine individual liberty without acknowledging the role that a good government plays in preserving and promoting it. Look at places like Haiti, Somalia, and the Congo to see what happens when governments aren’t around much.

When government is marginalized, it’s not just individual freedom that suffers; the economy suffers too. A vibrant capitalism requires a legal system: contracts must be honored, fraud punished. Markets have to work, and for that we need a strong infrastructure of roads, rail, energy, and water and sewage systems.

Good government sets us free to spend our days in fruitful endeavors, not evasive action motivated by fear and distrust. Government regulations reassure us that speeding drivers will be arrested, that the financial products we buy won’t cheat us, and that it will be safer to put our money in banks than under our pillows. If we can’t trust our food to be healthy, our drugs to be safe, or our planes to fly without crashing, we’ll waste a lot of productive time.

During the debate, I also raised the point that the separation of economics and state implies that businesses and the people who run them are under no obligation to be patriotic.

In the 19th century, the Rockefellers, Carnegies, Fricks, and J.P. Morgans wanted America to do well because their own fortunes were tied to American prosperity. They made America a great economic power by creating jobs and technological advances right here at home. They knew that their own fortunes were bound up with the well-being of their fellow Americans.

In Ayn Rand’s America, the first obligation of CEOs is to their shareholders, not to citizens. Their business is global, not local. Why should they care if they send jobs overseas? Why should they be concerned if American kids can’t do math or write a sentence? They’ll just outsource the work. Why should they worry that the next generation of Americans is going to have a tough time? Their own kids will do just fine. And in the meantime, they’re doing just fine themselves.

Andy Grove, the former CEO of Intel, sees a problem with this view. He writes, “You could say, as many do, that shipping jobs overseas is no big deal because the high-value work–and much of the profits–remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work–and masses of unemployed?”

Don Peck makes a similar point in his new book, Pinched, and in an Atlantic cover story. “Arguably,” he writes, “the most important economic trend in the United States over the past couple of generations has been the ever more distinct sorting of Americans into winners and losers, and the slow hollowing-out of the middle class.”

Besides this economic problem, I also see a moral issue with Ayn Rand’s insistence that all of us, CEOs included, should be totally free of the ties that bind. I especially disagree when it comes to CEOs. As I wrote here a few months ago, the wealthy have a special responsibility. Much will be asked of those to whom much has been given. Participating in government and civic life, serving in war, helping the less fortunate, and–yes–paying a fair share of taxes are inescapable responsibilities for all Americans, especially for those who have realized the American dream that inspires us all.

I doubt there was anything I could have said in the debate that would have induced Onkar Ghate to view the meaning of freedom in a different light. I suppose he might say the same of me. Still, I can’t see how one can be free in a vacuum. Freedom takes work, by each of us, and by our government, to create the place where each of us can prosper. The freedom to sleep under a bridge is no freedom at all. We can only be free when we work together for the well-being of all Americans–including the least among us.

By: Kathleen Kennedy Townsend, The Atlantic, August 23, 2011

August 26, 2011 Posted by | Capitalism, Class Warfare, Congress, Conservatives, Corporations, Democracy, Democrats, Equal Rights, Freedom, GOP, Government, Human Rights, Ideologues, Ideology, Immigrants, Liberty, Medicaid, Medicare, Middle East, Politics, Regulations, Religion, Rep Paul Ryan, Republicans, Right Wing, Taxes, Teaparty, Wealthy | , , , , , , , , , , , , , | Leave a comment

“Christian Economics” Meets The Anti-Union Movement

Gary North was nearly impossible to track down. He did not return multiple e-mails, and when finally reached by phone, he refused to talk and hung up.

But if you know where to look, he is everywhere.

Mr. North, a onetime aide to Representative Ron Paul of Texas, a possible 2012 Republican presidential candidate, is the leading proponent of “Christian economics,” which applies biblical principles to economic issues and the free market.

Largely unknown to the broader public, Mr. North is an influential figure on the American far right. He has written dozens of books, blogs prolifically and is on the curriculum of Christian home-schoolers across America.

He may even have turned up among the antiunion protesters in Madison, Wis., this year.

Not literally, of course (and who would have recognized him if he had been there?). But Christian conservatism and free-market conservatism meet in Mr. North’s writings. A small but vigorous part of the conservative movement has absorbed his view that the Bible is opposed to organized labor, and especially to organized public employees.

“Not only do Reconstructionists believe that public employees should not have the right to organize, they believe that almost all of them should not be public employees,” writes Julie Ingersoll, of the University of North Florida, in the Web magazine Religion Dispatches. “Most of the tasks performed by those protesting the Wisconsin state budget would, in the biblical economics of North,” be privatized.

These “Reconstructionists” are believers in Christian Reconstructionism, the philosophy of R. J. Rushdoony, who died in 2001. According to Reconstructionism, a Christian theocracy under Old Testament law is the best form of government, and a radically libertarian one. Biblical law, they believe, presupposes total government decentralization, with the family and church providing order. Until that day comes, Reconstructionists believe the rights to home-school and to worship freely at least provide the barest conditions of liberty.

Mr. North, who is Mr. Rushdoony’s son-in-law but was not on speaking terms with him from 1981 until Mr. Rushdoony’s death, focuses on how that biblical libertarianism applies to economics. He concluded that the Bible forbids any welfare programs, is opposed to all inflation, and requires a gold-coin standard for money.

“God has cursed the earth,” Mr. North writes, alluding to the Book of Genesis in his 1973 book “Introduction to Christian Economics. “This is the starting point for all economic analysis. The earth no longer gives up her fruits automatically. Man must sweat to eat.” Mr. North writes that no form of government assistance “will escape the ethical limits” of the Apostle Paul’s dictum, in II Thessalonians, that “if any would not work, neither should he eat.”

And evidence that God would prefer gold money to paper can be found throughout the Old Testament, according to Mr. North. There are more than 350 references to gold in Strong’s famous Bible concordance, he writes. Gold is used in worship, godly wisdom is compared to gold and the Hebrew prophets used the debasement of metals as a metaphor for immorality.

Home-schoolers can download Mr. North’s economics textbook free from his Web site. And his thinking may have influenced Representative Paul, who briefly employed Mr. North as a speechwriter, working on monetary policy, in 1976.

Michael J. McVicar, who teaches at Ohio State and wrote a doctoral dissertation on Mr. Rushdoony, said Mr. North discovered Mr. Rushdoony’s writing as a young man in Southern California, shortly after he became, along with his parents, an evangelical Christian.

“He corresponded with Rushdoony and made this his livelihood: to generate some synthesis between biblical law and libertarian economics,” Mr. McVicar said. “Eventually Rushdoony took him under his wing and became a sort of surrogate father for North, who married one of Rushdoony’s daughters.”

The two men’s “spectacular break,” as Mr. McVicar calls it, split Reconstructionism into two camps. The break was partly over the kind of theological minutiae that would impress even a rabbinical scholar. In fact, one issue might pique the interest of real rabbinical scholars.

“It was about North’s interpretation of, of all things, Passover and the Israelites’ marking the doorposts with the blood of the lamb,” Mr. McVicar said. “North made this argument, that because of the doorpost’s structure, that this was an indication of hymenal blood from the marriage bed, and tied it into what Rushdoony called this ‘fertility cult’ mentality. And Rushdoony took a much more common-sense approach to the blood.

“The subtext is, it’s a father-son spat,” Mr. McVicar concluded.

The deeper one looks into the obsessions of Mr. North — who was born in 1942 and who as of 2007 lived in Horn Lake, Miss. — the harder it is to spot his influence in Wisconsin. The main themes of the Wisconsin budget battles were union influence, the distribution of wealth and the public fisc; Mr. North, by contrast, is associated with his own brand of far-right Presbyterianism, gun-owners’ rights, home-schooling and the gold standard for money.

Mr. McVicar believes that Professor Ingersoll’s attempted connection between Christian economics and the rallies in Madison is a bit tenuous. “Her insight has to be in my mind so heavily qualified as to make it almost nothing,” he said. But he concedes that it “has the most basic essence of truth,” given how widely Mr. North’s teachings have been disseminated on the Christian right.

Professor Ingersoll concedes it is difficult to prove direct connections between Mr. North’s writings and Wisconsin antiunion conservatism. On the other hand, Mr. North might like to think he has influenced the Wisconsin debate, and he has written in vociferous support of Gov. Scott Walker.

And, as Professor Ingersoll cautions, influence does not always announce itself:

“I like to say, ‘How many Christians know who is Augustine is, and how he influenced them?’ ”

By: Mark Oppenheimer, The New York Times, April 29, 2011

May 1, 2011 Posted by | Collective Bargaining, Conservatives, Democracy, Government, Ideologues, Ideology, Liberatarians, Politics, Religion, Right Wing, Union Busting, Unions, Wisconsin | , , , , , , , , , , , , , , , , | Leave a comment

   

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