Atlas Shrugged: The Mocking

Friday, July 8, 2011

Countdown To Doom: Day 351


We are thrilled to announce that we are almost at the one year anniversary of Megan McArdle's promise to give us the second part of her two-part series on Elizaabeth Warren. On July 22, 2010, McArdle told us her famous critique was the first of two posts. Let's enter Mr.Peabody's Wayback Machine once again to see what she said a few days after making her promise.

Megan McArdle says:
Monday, July 26, 2010 at 15:26
As I’m going to write in the next few days, the thing I don’t like about Warren is that she’s sloppy with data, and also that her mistrust manifests itself in paternalism. It’s one thing to think consumers would be better off without certain kinds of credit; it’s another thing to be positively certain that you’ll be making them better off by making such credit unprofitable.


Since McArdle had an entire year to work on her magnum opus we know it will be spectacular.

44 comments:

Myles said...

Or presumably, as Elizabeth Warren doesn't have a snowball's chance of being confirmed, for her to write such a post would be superfluous and self-publicizing.

Syz said...

If it was merely superfluous and self-publicizing, McMegan would be all over it.

The truth is, Megan's first post backfired so badly that she does not want to embarrass herself again.

Susan of Texas said...

Myles, if you reread the post you will see McArdle said "As I’m going to write in the next few days...."

Myles said...

Myles, if you reread the post you will see McArdle said "As I’m going to write in the next few days...."

Well, it's a gain for everyone that she didn't write it, then. Her takedown of Warren was misdirected and ineffective.

There's a very genuine case to be made against Warren, but McArdle is not articulating it effectively. In any case, Congress seems to be doing a pretty good job of ending her nomination, case or no case, so it's a moot point anyhow.

Syz said...

There's a very genuine case to be made against Warren

No. There really isn't. And that is Megan's problem.

Coldtype said...

There's a very genuine case to be made against Warren

The details of which you fail to make of course.

Myles said...

I suppose I could try to do research and try to make a case against someone who is now irrelevant, if such a case can be made. But whatever it is, cases have preceded me, and Warren is no longer an issue. Briefly, my gripe is: she seems discomfited by the idea of an economy where financial services organizations earn a lot of the profit.

Whereas my stance is that whatever the merits of financial services organizations, better financial services than manufacturing. You are more than welcome to disagree with this.

Myles said...

events have preceded me.* Sorry.

The broad idea I am trying to get at is that as the economy progresses technologically and in many other ways, we will become less manufacturing-focused and more services-focused. Financial services will be a part of the latter mix.

There's a weird thing where a lot of people who have an emotional attachment to a manufacturing-centred economy (which is really not economically given) are also the most enthusiastic backers of Warren. Which is really kind of unsettling.There's a sense that people don't so much want to regulate finance as to reduce it, shrink it until it can be drowned in a bathtub. I can't say I find the vision very appealing, and although one should not judged on the basis of one's supporters, Warren is a case where she's repeatedly made hay of her public support and thus it should to some extent be taken into account.

Susan of Texas said...

No facts, no evidence, poor logic, airy pronouncements that we are supposed to accept on faith.

Either back up what you say or don't waste everyone's time.

nate said...

Yeah, it's not like "innovation" in the financial services industry caused the greatest transfer of wealth out of the economy since the great depression or anything! Excellent point, Myles.

I wonder, though, why do you suppose Germany and Japan have worked so very hard to hang on to their manufacturing? They probably just don't have the sophistication to really make use of CDCs like we do.

Mr. Wonderful said...

The broad idea I am trying to get at is that as the economy progresses technologically and in many other ways, we will become less manufacturing-focused and more services-focused. Financial services will be a part of the latter mix.

The "technological progress" of the economy is not why we are becoming less manufacturing-focused. It's the globalization of the economy that's doing it--the fact that WidgetCo can have its goods manufactured in China or etc., in effect "hiring" workers who make a dollar a day rather than a decent middle-class (union-won) American standard of living.

To the extent that those savings don't go to stockholders and executive compensation, and do go into expanding the business, they simply go into paying more Chinese, etc., workers. And that's what we have today: corporations doing well, the stock market bouncing back, and the middle class in free-fall.

Meanwhile, back at the ranch, what threatens in the US is a self-perpetuating cycle: fewer middle class jobs means fewer middle class families, which means fewer middle class consumers, which (since the Amer. economy is driven by something like 70% [or more] by consumption, means a further contraction of the economy.

What looms, then, is Brazil in the 1980s with cable and iPads: a plutocracy at the top and a swarm of lower class, replaceable, pension-less, perennially insecure "ordinary people" at the bottom whose lifestyle--iPads aside--gets worse, not better.

What is to be done? I have no idea. Tariffs. The cancellation of tax breaks for companies that ship jobs overseas. Centralized (gov't. run) infrastructure projects. A better safety net paid for by millionaires and billionaires in exchange for the society that makes them filthy rich not deteriorating into Dickensian squalor. Because if that happens, while the rest of the non-obese, non-stupid world finds a working balance between capitalism and social democracy, it will bring a whole new and undesirable meaning to the term "American exceptionalism."

Anonymous said...

I don't thing mcmegs should accuse others of sloppiness with data. That trait is one of meg's hallmarks.

Myles said...

I hesitate to be so trite about it, but scratch a left-winger, you get a protectionist.

I'm amazed that protectionism is still a running political idea more than a hundred years (Corn Laws!) after it had been debunked.

Syz said...

The more Myles bloviates, the more he demonstrates his ignorance:

No, Warren is not opposed to profitable banks. (See my link above.)

No, financial innovation is not progress. (See financial crisis, circa 2008.)

And no, liberals are not knee-jerk protectionists. Democrats are at this very moment trying to eliminate a number of protectionist government subsidies.

Apart from being wrong in every detail, Myles then admits that he doesn't know if there is a case to be made against Warren because he has not done the research. (Megan would be so proud!)

Myles said...

Democrats are at this very moment trying to eliminate a number of protectionist government subsidies.

And failing to submit the free trade agreements with South Korea, Colombia, and Panama for ratification by the Senate, for which the Senate Republicans have (in my opinion, rightly) refused to confirm the new Commerce Secretary. (After all, this defeats the purpose of having a commerce department.)

Syz said...

As usual, you are being dishonest.

The Democrats blocked the bill because they want to attach a job retraining program for workers who may be adversely impacted. There is no indication that they object to the underlying bill.

By your logic, Republicans have no interest in raising the debt ceiling and want to destroy the economy.

Myles said...

By your logic, Republicans have no interest in raising the debt ceiling and want to destroy the economy.

That's a bad analogy, isn't it? I can hardly tell what the Republicans want from the debt ceiling negotiations.

Syz said...

Precisely. Politics are complicated and it would be juvenile to suggest that Democrats oppose free trade based on negotiations in progress on a specific bill. Nevertheless, that was your (silly) argument.

In addition, you failed to mention that the free trade bills are strongly backed by the (Democratic) White House.

You also failed to mention that one of the free trade agreements in questions expired because Senator Jeff Sessions - a Republican - wanted to protect a sleeping bag manufacturer in his home state. ((Seriously.)

To be fair, you could have said that all politicians are protective of their home constituencies. Of course, that is obvious and hardly worth mentioning.

Myles. said...

I don't think it's an incredible argument to suggest that a lot (perhaps most) of Democrats probably would try to slither out of the free-trade agreements if they could, and are only holding up worker re-training as a human shield. The only thing holding a lot of them back isn't genuine belief in free trade, but the lack of intellectual respectability and cover for blatant protectionism from people who would usually provide intellectual ballast for Democratic policies.(Presumably the Democrats can't rouse even Paul Krugman, who made his career as a free-trader, or Romer, to support protectionist instincts, although Jamie Galbraith is trending in the direction where he might actually do something that credibility-destroying.)

Of course, if it were up to me I would trade worker re-training for free trade in a flash. I have no objection to realizing Pareto efficiency gains in situations that yield potential Pareto improvements. Some Republicans do, of course, but the argument I would make (and this is a fairly precise one) is that the voices in the GOP advocating protectionism and refusing to compromise in order to advance free trade are not as dispositive of final results.

Myles said...

(That link is behind the paywall.)

DocAmazing said...

I think we can pretty well determine Myles' grasp of reality by his use of the phrase "free-trade agreements".

Anyone who has lived through the fallout of NAFTA and the subsequent implosion of both Mexico and the US manufacturing sector and who can refer to such globaloney as "free trade" isn't getting out of the house much.

Myles said...

NAFTA seems to have worked out fine, although not without faults, for Canada.

Syz said...

Both links are from the New York Times. They let you look at 20 articles before they lock you out. I guess you have read a bunch of articles already this month.

Syz said...

Basically, Myles, your argument is that when the Democrats offer a deal to get the bills passed, they don't really want to pass them. But when the Republicans actually block the bills from passing, they are not really *cough* dispositive about them.

The actual behavior of politicians is irrelevant to you when it contradicts your world view. Facts are nothing against the concreteness of your theorizing. In short, you are arguing from your conclusion. And yes, that is another technique covered heavily in McMegan University.

Syz said...

As recently as last month, Republicans fought to keep agricultural subsidies - Corn Laws! - for wealthy farmers. Indeed, Repulicans have a long history of favoring agricultural subsidies. But that does not fit your world view, so you probably forgot...

Mandos said...

I am a Canadian living in the USA---and I am an unabashed protectionist. Yes, under present circumstances, any philosophy that values democracy and social justice will ABSOLUTELY have to include protectionism in its tool box.

Free trade is a scourge, and Canada is going to pay the price of gluttony for it.

Mandos said...

The "benefits" of free trade---as in trade unimpeded by democracy---have NOT accrued to creating healthier and more economically just and economically democratic societies, not in Canada, and not in the USA. It has failed the test of economic morality spectacularly.

For example, Canada enjoyed a good run of manufacturing and entertainment exports to the USA because of the low dollar, at the cost of becoming a even more branch plant economy than it was. Now the football is being taken away, and quite predictably and inevitably Canada is becoming a petro-sheikhdom in short order, and not even one smart enough to build a sovereign wealth fund.

It's very difficult for me to express how much of a catastrophe this is---a very predictable catastrophe.

The game-theoretic models of mainstream economics rarely apply in any empirical way to the political and moral systems that underlie economic outcomes. Even if they did, they don't excuse the breaking of the social contract that the increase in class inequality represents.

Until the proponents of free trade* can ensure that a fair and sustainable distribution of its benefits can be found, there is no reason to listen to them, because it inevitably ends in the economic and environmental death spiral we are seeing now.

*A propagandistic term that really should be called "protected investment" in its Real Existing incarnation.

Myles said...

As recently as last month, Republicans fought to keep agricultural subsidies - Corn Laws! - for wealthy farmers. Indeed, Repulicans have a long history of favoring agricultural subsidies. But that does not fit your world view, so you probably forgot...

Oh yes, I noticed. The deadweight loss, i.e. pure loss to society, of farm subsidies in the U.S. is something like $4-billion a year (probably more now). I'm all for changing this, but no party, neither GOP nor Democrats, seems intent on doing so. I think there's a pragmatic argument to be made that given the small size of the agricultural sector, this is a bribe we pay to keep some quite potentially activist sectors of society on the free-trade boat. I'm not happy about it, obviously, but farm subsidies will the last thing to go when it comes to market distortions.

Basically, Myles, your argument is that when the Democrats offer a deal to get the bills passed, they don't really want to pass them. But when the Republicans actually block the bills from passing, they are not really *cough* dispositive about them.

I haven't seen enough of the proposed amendment in regard to work re-training to determine whether it's a wrecking amendment (i.e. poison pill). Wrecking amendment is a fairly standard technique when it comes to legislation that one otherwise finds difficult to oppose. (For example, Edward Leigh in the UK tried to wreck the Civil Partnership Act by amending the text to extend civil partnership status to siblings who've lived together for more than 12 years.) If you can provide me a link to the summary of the amendment, I can perhaps determine this.

Myles said...

For example, Canada enjoyed a good run of manufacturing and entertainment exports to the USA because of the low dollar, at the cost of becoming a even more branch plant economy than it was.

The term brand-plant economy refers to the state when you have little, identical copies of the elements of a bigger economy but at what is essentially an uneconomic scale, so that for the smaller copies to be viable they necessarily have to become dependent subsidiaries of the larger elements int he bigger economy across the border. Thus, perversely enough, Canadian protectionism intentionally its branch-plant economy status, contrary to the intention of Canadian protectionism in the first place. As Canada has become more economically open and international since NAFTA, it has in fact become less dependent on the American economy and culturally it is now much less of an American hinterland.

With the orientation of the economy on its sectors of comparative advantage (possibly the examples of entertainment and manufacturing exports you mentioned), it attains the scale to be economically viable on its own independent of subsidiary ownership by a larger organization in a bigger economy. In fact, this is what happened in the real world. As Canadian auto parts exports have surged, so did Magna, the Canadian-owned automotive industrial company (it's now one of the two largest in the world, and it is still Canadian-controlled and owned), to an extent that it was recently floated as a possible buyer for GM's European operations under (Vauxhall-)Opel. Think about that! A solidly Canadian company being floated as a buyer for (a big chunk, and the R&D core, of) General Motors! The fruit of free trade is that Canada is taking over American industry. And all it came about because with Canada's comparative advantage in auto components, Frank Stronach was able to build a company founded right here in Canada into what one of, if not the best and biggest of its kind in the world.

This, not your preconceived notions about free trade, is the result of NAFTA. Stronger Canadian ownership. Stronger Canadian companies. Stronger Canadian independence.

Myles said...

By the way, if Canada, a small country that has historically struggled with maintaining its independence, strengthening its independence and sovereignty through free trade is not just and moral, I don't know what is.

Free trade does not necessarily reward the mighty. It does not necessarily shower its benedictions on Goliath, but rather on David. Canada has been a shining example of this.

KWillow said...

...[if]... free trade is not just and moral, I don't know what is..

Sums it up well.

Syz said...

I said: To be fair, you could have said that all politicians are protective of their home constituencies.

You said: I'm all for changing this, but no party, neither GOP nor Democrats, seems intent on doing so.

You have the conceded the point.

Why are you still arguing?

Myles said...

Why are you still arguing?

Because Mandos argued that free trade is bad for Canada. When Canada is as close to a perfect case for free trade as it gets. (Not only does free trade benefit Canada in potential Pareto terms, it benefits Canada in, largely speaking, actual Pareto terms. This is why polls indicate that 71% of Canadians support free trade with Europe.)

http://cupe.ca/ceta/canadians-support-trade-deal-eu-costs

(This is a link on the Canadian Union of Public Employees website.)

NĂ¡mo Mandos said...

In other words, when you leave out everything that makes a real existing free trade deal worth signing to other countries, Canadian support free trade.

No kidding!

"Would you like a bag of chips?"

"Yes."

"So then would you like me to stuff several kilos of poop-flavoured chips down your throat?"

"Um..."

Susan of Texas said...

Myles, I think you have confused a comedy blog that discusses economics with an economics blog.

Mandos said...

Frank bleeping Stronach? You realize that there's a reason why that didn't go through. There's a reason why the USA protected GM---because it would have left a lot of middle age people with school-age children with no future.

What Frank Stronach has built is quintessentially Canadian---the cheaper manufacturer of someone else's designs, someone else's creativity. What positive benefits that accrued from NAFTA were like the very first hit of heroin in a future addict's system---the cheap Canadian dollar artificially inflating the advantages.

Well, guess what: now is the time to pay the piper by once again becoming hewers of wood and carriers of water...well, this time sifters of poisonous tar sands. There old Ottawa tech scene has a shadow of its former self, and even the remaining Canadian R&D crown jewel, RIM, is in trouble with no one else waiting in the wings.

And do you know what one of the most successful Canadian policies was in the past decade: the restraints on bank behaviour.

It's all boringly predictable. Instead of choosing a sustainable, well-managed growth pattern, Canada fired the single shot of NAFTA and is now no longer economically sovereign, and now it will be buffeted about by the winds of fortune until it gives up these ephemeral neoliberal ideologies.

Myles said...

Myles, I think you have confused a comedy blog that discusses economics with an economics blog.

Oops, sorry.

Myles said...

Frank bleeping Stronach? You realize that there's a reason why that didn't go through. There's a reason why the USA protected GM---because it would have left a lot of middle age people with school-age children with no future.

End-note: the reason that the GM-Opel sale didn't go through is because the American government unfairly engaged in industrial strategy and protectionism. That's not a valid reason; that's a pathetic excuse for pretty vile, underhanded behaviour.

Had the market operated normally (and had the relevant jurisdictions respected the will of the German workers who actually make the Opel products, and had Angela Merkel had a back-bone and told the U.S. gov't to stuff it), it would have gone to Stronach and Magna would likely have created a competitive brand from Opel, to be eventually marketed on the N. American market. The fact that someone cheated doesn't meant that the world should operate around cheating.

OK, that's the end of my rant. No more about free trade for now.

Pete said...

confused a comedy blog

Indeed he has. At least I'm confused. I think the "Myles" character must be meant as performance art — no one would argue first and then look up the subject later (11:51 a.m.), or concede the point and keep arguing (ibid.), if they were not attempting to satirize an economist, would they? If only the schtick were funnier.

DocAmazing said...

A free-trade joke:

Two editors of the Economist go in on a lottery ticket and hit a big win. They go out drinking to celebrate their good fortune. Walking from bar to bar, one spots a piece of brick in the road and says to the other, "I'll give you ten thousand pounds if you throw that brick trough a shop window!" The second editor grabs the brick and throws it, and both run off laughing. Several blocks later, the second editor spots a chunk of rock in the road and says to the first editor, "I'll give you ten thousand pounds if you throw that brick through the window of that house there!" The first editor picks up the rock and throws it through the window, and again the pair run off laughing. The second one says to the first,"We should be rewarded! We were just responsible for twenty thousand dollars worth of trade!"

Mandos said...

End-note: the reason that the GM-Opel sale didn't go through is because the American government unfairly engaged in industrial strategy and protectionism. That's not a valid reason; that's a pathetic excuse for pretty vile, underhanded behaviour.

...

The fact that someone cheated doesn't meant that the world should operate around cheating.


That's not cheating: for once, the American government did its sovereign democratic duty and protected the lives and futures of the workers in its auto industry.

It would have been vile and anti-democratic for it to have done otherwise: a sure sign of oligarchy, on top all the others.

I suppose the oligarchs don't pay Myles; anyone they paid would be less of a lickspittle.

Anonymous said...

Slightly embarrassing that you guys don't know that the NYT paywall consists of added code after the ? in the url... if you just delete that, the article show up fine.

NonyNony said...

Myles doesn't believe that economics and morality have anything to do with each other.

He's a monster. He outed himself as a monster long ago. If you want to keep poking the monster for comedic value by all means keep at it, but he's proven himself to be a worthless human being via just his comments here. He's either a troll who doesn't believe a single thing he says and just posts to get people's dander up or, worse, he's an actual monster who believes everything he writes and is an utterly abominable human being who is one of the living incarnations of the phrase "the banality of evil."

Either way he's a troll - don't expect to have any kind of meaningful discussion with a monster like that.

Anonymous said...

Myles believes in the inherent goodness of all bankers. He also seems to be under the impression that when they get home at night they occupy their time with things such as reading Catullus in the original Latin. Really.