The Progressive Path

I agree unreservedly with Ian Welsh's 44 Explicit Points on Creating a Better World, because they all lead us away from our current winner-take-all version of capitalism and because they are based on sharing power, not hoarding it. I do not believe that we cannot change our future, the future will change no matter what we do or do not do. We must attempt to push the course of our country into the right direction, not by giving our personal power to an authority, but keeping it for ourselves and magnifying it through the weight of numbers.

In A brief note on why the progressive blog movement failed, Welsh points out that progressive blogs did not have the money or backing to succeed, the ultimate problem of any group trying to enact policies hated by the rich.

The nail in the coffin was the 2008 primaries.  To put it simply, Obama bypassed the blogging gatekeepers. Commenters, whether free or bought (and yes, I believe many were on the payroll) capsized DKos and other major blogs.  Obama did not need the gatekeepers, he simply bought out the movement.  The bloggers were irrelevant.  At least one major blogger acted as a conduit for Obama hits: was fed oppo, and put that oppo out there.

Unlimited money in politics means that movements are bought and sold like baseball cards. The Tea Party was a few wingnuts and Ron Paul supporters until the Koches bought themselves their very own political machine, bypassing the right's politicians. In 10 months Ted Cruz made the leadership look weak and powerless. He used his bought-and-paid-for power to advance himself in his party at the expense of the leadership's power. He acted, for how would he know how much power he had unless he flexed it? And Boehner was afraid to use his power against Cruz until the economic elite made it very clear that the Tea Party was going too far and the money people were worried that the suffering they wished to impose on others might actually affect them as well. So Boehner lost power.

The Tea Party, say what you will about them, gets a great deal of obeisance from Republicans for one simple reason: they will primary you if they don’t like how you’ve been voting, and they’ll probably win that primary.  They are feared.  Progressives are not feared, because they do not believe enough in their ostensible principles to act on them in an effective fashion. 

That is why the progressive revolution of the early 2000s failed.  If you want the next left wing push to succeed, whatever it is called, learn the lessons of the last failure. 

(Note: I poured years of my life into the movement. Its failure is my failure, and I take no pleasure in it at all.)

If progressives want to actually enact progressive policies, instead of policies that simply are not as bad as the Republicans' policies, they must bypass the power elite. "Everyone" says this will not work because the left does not have enough power, but the left will never have enough power because they will not take that power from those who have it. This will be a dangerous and ugly fight, but the progressives will win because people who refuse to use their power always lose.

Then And Now

Megan McArdle, when she wants DC to stop regulating her car service and food trucks:

The more complicated the process, the less we are likely to notice when the federal government screws up. That doesn't mean we're doing fine; it may just mean that the federal government tends to be in charge of regulating the more complex, far-flung market processes.  

Because the disputes are hard to understand, the reaction to regulations at the federal level tends to line up on purely tribal affiliation: if you're a conservative, you assume that any new EPA regulation is a disaster, and if you're a liberal, you assume that it must be pretty swell. Among wonky liberals like Matt, I think there's the mirror tendency to assume that because the economy is not obviously being driven into the toilet by this stuff, the federal government must be doing a pretty okay job.  

But this may just be the broken window fallacy in action: we see the distortions of the local government, but the distortions of the federal government remain invisible precisely because they're so effective at destroying innovation. The more national the rules, the harder it is to tell whether they're bad. The economy would not be destroyed if we had federal laws against Uber and food trucks; we'd all just be a little worse off.   

The problem is, if the rules were national, none of us would even know that we were worse off. No one would ever have tried to start a food truck, so Matt and I wouldn't even know that there was this great thing we were missing. We may be assuming that the Federal rules work pretty well precisely because they have entirely foreclosed a bunch of great possibilities that we'd really enjoy.  

Then there are the things that federal rules don't entirely eliminate, but just make difficult and more expensive. Matt argues that there are things which the government should make difficult and more expensive, like dumping mercury into the air. I agree! But we should always remember that those rules frequently make it difficult and more expensive even for people who have no intention of dumping mercury into the air, because the rules frequently require that you take affirmative steps to ensure--and demonstrate--that you're not doing whatever is forbidden. And at this point, the list of these things is so long that compliance is becoming impossible, particularly for small shops.

Megan McArdle, when insufficient regulation might let the Chinese poison her dog:




So now she tells us that market equilibrium doesn't work. I thought we didn't need regulation because the market was self-correcting.

More Hysterical Megan

Shorter Megan McArdle: A bad website will lead to death! Weeks of website repair is terrifying!! It's not time to panic but it's nearly time to panic!!! It's not impossible to buy insurance but it's nearly impossible to buy insurance!! Free riders!! Burning boats!!!  I may sound Apocalyptic but I really don't sound Apocalyptic!!!!11!!

Yes, that was much, much shorter.

Food Trivia

Let us imitate Our Heroine and take a (belated) moment to discuss macaroni and cheese. Macaroni and cheese is a rather personal thing. It is a child-friendly dish and many of us tend to prefer the type of mac and cheese we had as kids. So when Megan McArdle, in her continuing quest to confer upon her self an elite Foodie status, states that she just adores macaroni and cheese that has been baked until most of the sauce has dried up and the macaroni dries out, we will just chalk it up to different tastes. However, a few items are worthy of note.

Back in 2008, McArdle had a little cooking contest with her friends and made macaroni and cheese. She later published the recipe. For one pound of pasta, it included:

12 tablespoons butter, softened
6 tablespoons of flour
2 cups of whole milk
1-2 cups of heavy cream (you may replace one cup of the cream with 1 small container of sour cream)
2 pounds of good sharp cheddar, grated
1/2 pound of gruyere, grated
3 Kraft American singles
2 slices of Kraft provolone

The blogosphere was left to wonder if McArdle was attempting to block arteries to gin up more revenue for drug companies. After a while the laughing died down and more bland and badly designed recipes followed.

Which brings us to her new macaroni and cheese recipe.

First, I made one box of elbow macaroni, cooked according to instructions. Then, I prepared the standard white sauce that is the base for all my macaroni and cheese creations:

At some point McArdle quietly sought out a new recipe; her standard changed into a new standard. Foodies weigh their ingredients so the new recipe is metric and has much less fat.

80 grams butter  

120 grams flour  

1/2 teaspoon salt  

1 kilogram milk (Yes, I weighed it, because that’s how my recipe works. It comes out to something over 1 liter.)

Heh. One kilogram of milk, because that's just the way she rolls. Without a kilogram of milk, the recipe just wouldn't work. It's not like you can measure out a liter of milk! Only some ignorant lower class person, the type who doesn't even make her own white sauce, would measure a liquid using liquid measurements!

Does she tell P. Suderman to bring home a pound of milk after work?

So what would this recipe look like to a non-Foodie? Several helpful conversion sites helped translate McArdle's recipe into American.

about 5 1/2 Tablespoons butter  

about 3/4 cup flour  

about 4 cups milk  

about 20-22 ounces (1 1/4 to 1 1/2 lb.) cheese

Which is very heavy on flour and will result in an extremely thick sauce. The better to evaporate away, I guess. Twelve ounces of that cheese is mild white cheese, unlike most recipes, which mostly use cheddar cheese because they actually want their mac and cheese to have some flavor.

But the elite know best, and no doubt young libertarian hostesses will rush to provide their guests with the latest taste sensation, straight from the kitchen of the hostess with the most-ess.

The Greed Of The Lower Classes

Megan McArdle bursts out with a religion-based crazy-lady rant just like the Congressional one.

Recently, I’ve been seeing a lot about fast-food workers and public assistance, after a study from the University of California at Berkeley Labor Center came out arguing that these workers get billions in public benefits. Several of my readers have hinted that I, as a welfare-hating libertarian type, should be outraged at all this free-riding.  

I don’t think this argument works for a bunch of reasons. We’re about to see a lot more fast-food workers on public benefits, because of the Affordable Care Act. (Assuming it doesn’t implode, of course.) Do companies really have a moral obligation to raise wages every time the public passes a new entitlement? That doesn’t seem as if it can possibly be right. Does Obamacare give you a moral obligation to pay your lawn guy more? Do you think it might be hard to pass new public programs if it did?

Our Megan is incensed! True, the fast food industry pays so little that its workers must go on public assistance. Unfortunately they now have the ability to buy health insurance with subsidies, the moochers. But just because some people get help buying health insurance doesn't mean that corporations should have to pay them a living wage and here I am, with my six-figure salary and full bennies, to tell you why.

If the public decides to give people a new benefit, then the public should be responsible for paying it. That is how it should be -- a system where one party gets to order the dinner, but send the bill to someone else who's not even at the table, is a bad system. But it’s also what’s best for the poor. Jason Furman, now President Barack Obama's top economic adviser, explained this very lucidly, seven years ago:

Does anyone really think that food stamps, Medicaid, and housing vouchers allow Wal-Mart to line its pockets by paying its workers less? Why don't you tell me which of the following two thought experiments make the most sense to you: · Wal-Mart is a nice, caring company. It wants its workers to have enough money to afford food, rent, and medical care, so it pays them $20,000 annually. Now along comes the government to give the workers $5,000 in food stamps, housing vouchers, and Medicaid, so now Wal-Mart only needs to chip in $15,000 to ensure its workers can live half decently.

Do you hear that, low-wage workers? Your bountiful pay of $20,000 a year ($384 a week!) is so generous that Wal-Mart could easily cut it to $15,000 a year if you complain about their second-hand subsidies. Sure, you can only live "half decently," but what else do the lice and scum non-producers deserve?

· Wal-Mart is an amoral company that wants to pay its workers as little as it possibly can while still attracting, retaining, and motivating enough workers to operate the business and make a profit. If the government makes food stamps and housing vouchers available, workers will take more time to find a high-paying job and greater leverage to press for higher wages. Wal-Mart will need to pay higher wages to attract the smaller pool of applicants and motivate them more now that the threat of firing someone carries somewhat less weight. (Economics aficionados should note that the EITC, which is only available to people who work, is a somewhat different story.)

Because jobs for people with no other options are plentiful and we have so few poor people and so many well-paying jobs.

So, hopefully you agree with me that Wal-Mart's workers are getting the direct benefits of these public programs and indirectly are probably getting higher wages as well.

No, I don't. McArdle does, however. More Furman:

But there's more good news for you: Most of the tab is being picked up by the wealthy, since the top 1 percent of Americans pay 39 percent of federal income taxes.

That's rich. That should be embroidered on a pillow. The people who vacuumed up 95% of the post-crash income gains and have almost all the money are your benefactors because they will now pay 39.6% on taxable income over $400,000.

Let's compare this to imposing a living wage. For the sake of argument, ignore efficiency and the impact on employment (not a bad assumption at Kennedy's proposed $7.25 an hour, but to benefit any Wal-Mart workers you would need to support $10 or $15 an hour, at which point it would be a terrible assumption). Where do you think this living wage would come from? It's too late to get the money from the Walton fortune, which in any event would only be enough to raise wages by $1 an hour (annualized). We could eliminate Lee Scott's salary and use the money to pay an extra 1 cent per hour to Wal-Mart's employees. You would have no way to legislate that Wal-Mart takes this money out of its profits, even if you thought these profits were sufficient. (And it's far from obvious that they are: Wal-Mart's profits per employee are lower than the economy-wide average. For example, Slate's owner, the Washington Post Company, makes $19,000 from each employee. Wal-Mart only makes $6,000 from each employee.)

Wal-Mart is the biggest employer in the US. To compare it to the Post is deeply dishonest. The Waltons have more wealth than the bottom 30% of Americans.

You shouldn't have any problem believing that what you think is an immoral corporation will pass most of the costs on to its consumers. Now, you might say it's only a 2 percent increase in prices. Given Wal-Mart's $250 billion in annual sales, this works out to $5 billion of "your money" (and more if you add more companies to your list). And "your money" is a more apt term in this case because the top 1 percent of Americans is not picking up 39 percent of this tab.

You don't want to have to pay 6 cents more for milk so a single mother can buy her kids shoes, do you?

The next paragraphs are McArdle in all her living glory. Sure, studies show that paying someone enough for them to survive doesn't increase unemployment, but I happen to have some (imaginary/hypothetical/wingnut-funded) studies right here that say the exact opposite!

Moreover, the living wage risks reducing employment, particularly among the least experienced and productive workers. The Earned Income Tax Credit and other similar benefits don’t. Yes, I’m familiar with research showing that the disemployment effects are small, or even nothing. Other studies suggest they’re larger. And even the studies that show no impact are very short-term -- they have to be, because in long-term studies, other factors can swamp the effect of wage changes. So they don’t capture long-term decisions, like whether to open a new fast-food outlet, or to invest in equipment that lets you get by with fewer workers.  

I’m a big fan of the EITC because it helps people who are willing to work, but whose work isn’t quite productive enough to support them in the minimum style that we think decent for a modern-day American. More of our safety net should be structured toward that goal. The implication of this Berkeley study that's making waves is that we should have a system more like the old European safety nets: Set a very high wage, so that no one in work needs benefits -- then provide lots of benefits to all the people who can’t get work at the higher wages. I think that’s a fundamental mistake, and so do a lot of European governments, who have been trying to reform those systems with varying degrees of success.

And that is why working people should be forced to depend on charity for survival. A handful of the richest people in the world might have to make a smaller profit or lower wages even further.

As entertaining as this crazy-lady rant is, it needs visuals. McArdle should have P. Suderman, boy ratf*cker, make a Tea Party video in support of Wal-Mart. He can get his buddies at Reason to play the part of Wal-Mart workers who are furious at this attack on Free Market Capitalism and wave around angry signs in support of their ersatz employers.


ADDED: See more about the issue at Naked Capitalism.

Dropping Dead

Much, much, much shorter Megan McArdle: "Obamacare Needs A Drop Dead Date"--The poor rollout of "Obamacare" is just the beginning of its "death spiral" and we should delay it for a year.

In response I will quote Jon Schwarz (via Digby) who wrote an article on his experience with cancer and "Obamacare":

So you can understand why I've been closely following the GOP's attempts to defund Obamacare. I'm suddenly much more interested in everything about healthcare policy, in the same way you're suddenly much more interested in the safety instructions in the seat back in front of you when the pilot announces you're ditching in Lake Superior. And every time Ted Cruz has gone on TV, what I've heard him say is: "I very much want to kill you, Jon Schwarz."  

That's because Obamacare requires insurance companies for the first time to cover everyone, regardless of any preexisting conditions. There's no more disqualifying condition than cancer; without Obamacare, I would now almost certainly be uninsurable if someday in the future I try to get insurance on the individual market. And we know what happens to people without health insurance in the United States: they die.  

This doesn't mean that I don't understand Obamacare's grievous flaws. But they're not flaws of going too far, they're flaws of not going nearly far enough. Almost every day now I think about the tens of thousands of Americans walking around with undiagnosed, early melanomas who could be cured in ten minutes. Some of them think something might be wrong but aren't doing anything because they have no insurance or bad insurance. Is it you, 28-year-old woman in jeggings who's clearly spent too much time at a tanning salon? Or maybe it's you, middle-aged dad I saw carting around three kids at the grocery store while getting instructions on your cell phone on what brand of spaghetti to buy. Or you, the 60-year-old cashier at the Indian restaurant who gave me the extra order that someone else never picked up. These thoughts about this unnecessary suffering torment me. If that sounds overwrought to you, I'm guessing you've never looked at a pathology report with your name on it that says "diagnosis: malignant."  

And the awful truth is that while Obamacare will save some of those people, it won't save them all – because although it will help nearly everyone get some kind of insurance, it won't help everyone get good insurance, the kind that saved me. Some of them will look at their strange asymmetric mole and their $2000 deductible and won't be $2100 worth of worried until it's too late. [snip] I didn't have to pay anything to see a doctor, and because of that it cost the healthcare system about $5,000 to treat me. If I'd delayed because I had to pay, it easily could have ended up costing the system $500,000 worth of interferon, CT scans and radioimmunotherapy, plus the additional downside of me being dead. Multiply that by millions of people and you'll understand why the right's crusade against health insurance is more than just evil and cruel, it's evil, cruel and incredibly stupid. 

So we don't have to just beat Ted Cruz so hard he flees back to Alberta. We have to get rid of the parts of Obamacare that may help the private insurance industry keep squeezing us like an anaconda. And we have to keep and improve the good parts, so the Affordable Care Act is just the first step to the only system that's ever worked anywhere on earth: universal, high-quality health insurance and healthcare for everyone. And while we're working on this, seriously – please please use lots of sunscreen and don't skimp on dermatologist appointments.

Read it all, as they say.

McArdle wants "Obamacare" to have a drop-dead date. If some people drop dead in the process, well, that's just the price they'll have to pay for Freedom.

ADDED: There could be no greater praise than to be burped up retweeted by Jonah!

A Passion For Destruction

The is no question that Ted Cruz is smart. Yet he is doing a very dumb thing by threatening America's economic stability. Something is guiding him besides reason and logic, and it is not too difficult to figure out what.

Cruz's father, who was born in 1939 in Matanzas, Cuba,^[14][13] "suffered beatings and imprisonment for protesting the oppressive regime"^[13][18] of dictator Fulgencio Batista. He fought for communist revolutionary Fidel Castro in the Cuban Revolution^[19][20] when he was 14 years old, but "didn't know Castro was a Communist." A few years later he became a staunch critic of Castro when "the rebel leader took control and began seizing private property and suppressing dissent."^[13][21] The elder Cruz fled Cuba in 1957 at the age of 18, landing in Austin^[18] to study at the University of Texas, knowing no English and with only $100 sewn into his underwear.^[22][23] His younger sister fought in the counter-revolution and was tortured by the new regime.^[20] He remained regretful for his early support of Castro, and emphatically conveyed this remorse to his young son over the following years.^[13][20]
...

Cruz attended high school at Faith West Academy in Katy, Texas,^[26] and later graduated from Second Baptist High School in Houston as valedictorian in 1988.^[11] During high school, Cruz participated in a Houston-based group called the Free Market Education Foundation where Cruz learned about free-market economic philosophers such as Milton Friedman, Friedrich Hayek, Frédéric Bastiat and Ludwig von Mises.^[20] The program was run by Rolland Storey and Cruz entered the program at the age of 13.^[18]

I went to public school in Katy for a number of years. It is a small town that originated as a train stop on the Kansas-Texas railroad and became rice farms; the soil is a few inches of topsoil over clay, the land is flat, and rain is plentiful. By the time I moved there suburbs had sprung up in the relatively cheap land between Katy and Houston, and now most of the rice fields are covered with houses and strip shopping centers. It is relatively easy to live in a bubble there, especially if you only go to religious schools.

Like Ayn Rand, Ted Cruz learned a very valuable lesson at a young age: governments can be agents of oppression and fear and destroy lives. Also like Ayn Rand, Cruz viewed his family's experiences through the filter of his own personality and life experiences, and determined that the only way to deal with possibility of oppressive governments is to destroy them before they can destroy you.
Back in February Frank Bruni wrote this about Cruz:

Ted Cruz, a Republican freshman in the Senate who has been front and center in his party’s effort to squash Chuck Hagel’s nomination as secretary of defense, has a problem. He’s an ornery, swaggering piece of work. Just six weeks since his arrival on Capitol Hill, he’s already known for his naysaying, his nit-picking and his itch to upbraid lawmakers who are vastly senior to him, who have sacrificed more than he has and who deserve a measure of respect, or at least an iota of courtesy. Courtesy isn’t Cruz’s métier. Grandstanding and browbeating are.

He sits on the Senate Armed Services Committee, and during its final meeting on Tuesday about Hagel’s nomination, he made such nefarious and hectoring insinuations about Hagel’s possible corruption by foreign influences that McCain, who’d gleefully raked Hagel over the coals himself, more or less told Cruz to cool it. It was an unforgettable moment, and one that Republicans shouldn’t soon forget, because Cruz, 42, isn’t simply the latest overeager beaver to start gnawing his way through the halls of Congress. He’s a prime illustration of what plagues the Republican Party and holds it back.  

A fascinating illustration, too. On the surface, he should be part of the solution: young, Latino, with a hardscrabble family story including his father’s imprisonment in Cuba and escape to the United States. But Republicans who look to him and see any kind of savior overlook much of what drags the party down, which isn’t merely or even principally the genealogy of their candidates. It’s the intransigent social conservatism, the whiff of meanness and the showy eruptions. It’s what Cruz, who rode a wave of Tea Party ardor to victory in Texas in November, distills.

[snip]

One voter tells the pollster that he’d be more kindly disposed toward Republicans if they could “be more pro-science.” Cruz has expressed skepticism about climate change, a position perhaps in tune with his hyperconservative base and his state’s oil interests but at odds with his apparently keen intellect.

He has an impressive academic résumé: an undergraduate degree from Princeton, followed by law school at Harvard. I’ve talked with his fellow students at Harvard and with his former colleagues from George W. Bush’s 2000 presidential campaign. All of them mention how fiercely smart he is.

But the flattery stops there. They remember him as arrogant, sour and self-serving, traits that apply to his brief time in the Senate so far. In questioning Hagel during the nominee’s confirmation hearing, he took a surprisingly, audaciously contemptuous tone.

Separately, in front of an audience of conservatives, he smirked dismissively as he griped that Hagel and John Kerry were “less than ardent fans of the U.S. military.” Those two men fought in Vietnam, and earned Purple Hearts; Cruz never served in the institution he purports to regard so much more highly than they do.

ONLY three senators voted against Kerry’s confirmation as secretary of state. Cruz was among them.

He has an affinity for opposing, a yen for obstructing. He belonged to the minority of 22 senators who voted against the Violence Against Women Act, which passed with 78 votes. He also voted against suspending the debt ceiling for three months and against aid to victims of Hurricane Sandy.

He has already flagged his disagreement with the immigration reform proposal by a bipartisan panel of senators. He has already indicated antipathy to the new push for meaningful gun control. During an appearance on NBC’s “Meet the Press,” when he was twice asked about the broadly reviled National Rifle Association ad that brought the president’s daughters into the debate on guns, he more or less defended it.

He’s been quick to seize spotlights like the one presented by “Meet the Press,” and while newly minted senators often keep a relatively low profile, he reportedly holds forth in Senate conferences at great and off-putting length. And he’s drawing unusual admonitions from senior Republicans.

“I think he’s got unlimited potential,” Senator Lindsey Graham told Politico. “But the one thing I will say to any new senator — you’re going to be respected if you can throw a punch but you also have to prove you can do a deal.”

Indeed, the challenge for Republicans now — a challenge that, to limited and varying degrees, Rubio and even Eric Cantor are beginning to grasp — is to be seen and to act as a constructive force, as a party that’s for things, that wants to be inclusive and that operates with a generosity of spirit, not an overflow of spite. With his votes and his vitriol, Cruz undermines that. He brings himself plenty of attention. He’ll bring Republicans nothing but grief.

 Bruni was absolutely correct, of course, and now here we are in an unnecessarily precarious position. Cruz doesn't want to be constructive; he wants to be destructive. Like Megan McArdle, he wants to destroy "Obamacare" to save America and he is absolutely positive he is smart enough to do it. Cruz has a plan for destruction. He does not have a plan for what will happen after he pulls down the government, because reconstruction or reformation is not his goal.

Ted Cruz faced a barrage of hostile questions Wednesday from angry GOP senators, who lashed the Texas tea party freshman for helping prompt a government shutdown crisis without a strategy to end it.

At a closed-door lunch meeting in the Senate’s Mansfield Room, Republican after Republican pressed Cruz to explain how he would propose to end the bitter budget impasse with Democrats, according to senators who attended the meeting. A defensive Cruz had no clear plan to force an end to the shutdown — or explain how he would defund Obamacare, as he has demanded all along, sources said.      

 

Things got particularly heated when Cruz was asked point-blank if he would renounce attacks waged on GOP senators by the Senate Conservatives Fund, an outside group that has aligned itself closely with the Texas senator.
[snip]

“It seems that there is nothing the media likes to cover more than disagreements among Republicans, and apparently some senators are content to fuel those stories with anonymous quotes,” Cruz told POLITICO. “Regardless, my focus — and, I would hope, the focus of the rest of the conference — is on stopping Harry Reid’s shutdown, ensuring that vital government priorities are funded, and preventing the enormous harms that Obamacare is inflicting on millions of Americans.”

But as the government shutdown heads into day three, a number of Republican senators privately blame the Texas freshman for contributing to the mess their party finds itself in. And now that they’re in it, they say it’s up to Cruz to help find a solution.

“It was very evident to everyone in the room that Cruz doesn’t have a strategy – he never had a strategy, and could never answer a question about what the end-game was,” said one senator who attended the meeting. “I just wish the 35 House members that have bought the snake oil that was sold could witness what was witnessed today at lunch.”

Obviously Cruz believes or pretends to believe the Megan McArdle of his party, who warn that "Obamacare" will bankrupt the US and kill millions of Americans. Most of all, Cruz seems to believe the McArdles  who warn that "Obmacare" will bring the end of Freedom (TM). 

Once the government gets into the business of providing our health care, the government gets into the business of deciding whose life matters, and how much.  It gets into the business of deciding what we "really" want, where what we really want can never be a second chocolate eclair that might make us a size fourteen and raise the cost of treating us.

 

I realize that to most people, these are airy-fairy considerations that should be overridden by the many "practical" considerations of the awesomenes of central health care.  Well, I'm actually pretty underwhelmed by that awesomeness, for reasons I'll happily elaborate elsewhere.  But not here, because fundamentally, to me, the effect on the tax code and the relative efficiency of various sorts of bureaucracy are mostly beside the point.  The real issue is the effect on future lives, and future freedom.  And in my opinion, they way in overwhelmingly on the side of stopping further government encroachments into health care provision.

And if it's a choice between freedom and fascist oppression, collateral damage doesn't matter. So what if a few thousand furloughed  people lose their homes or can't feed their kids? It's better than the total destruction of the US. True, McArdle does not want the government to shut down because it would hurt the financial industry, but it's a little too late to put that horse back in the stable. She convinced a lot of people that millions would die with "Obamacare" and now it's too late to rein them in. Ted Cruz doesn't care what Megan McArdles want and he can be just as self-serving, spiteful and argumentative as she can.

But personal satisfaction is only part of the story. By forcing a shutdown, Cruz  has proven to the world that Rafael Edward Cruz is a very powerful man. He has been in office only 10 months and nearly has brought the government to its knees. If you cannot use your power you do not have any, which is why the right is so desperate to get any concession, no matter how minor. Power confers authority and authoritarians will follow anyone with power. (And will stop following them when their power wanes.) Cruz will lead them right over a cliff. His ideology demands it, his career will profit from it, and he will reap all the benefits of increased personal power. The consequences of his actions are irrelevant since he will not be facing them.

In Buffy The Vampire Slayer, Buffy's boyfriend, Angel, turns evil and decides to create a Hell on earth. When he was a (human) child, Angel was belittled and criticized constantly by his overbearing father. He grew up to be a vainglorious drunk, whose needs drove him to attempt to create a brave new world that would compensate for all the miseries of his past. In this world he would be big, important, admired, respected, feared. When he was "good," these impulses drove him to be hero, a leader who helps the helpless and inspires others to do the same. As an evil vampire, it drove him to attempt to end the world. Which did not sit well with the other Republicans vampires, who did not want to destroy the world to "save" it.

SPIKE:  We like to talk big.  Vampires do. ‘I’m going to destroy the world.’  That’s just tough guy talk.  Strutting around with your friends over a pint of blood.  The truth is, I like this world. 
You’ve got . . . dog racing, Manchester United.  And you’ve got people.  Billions of people walking around like Happy Meals with legs.  It’s all right here.  But then someone comes along with a vision.  With a real . . . passion for destruction.  Angel could pull it off.  Goodbye, Piccadilly.  Farewell, Leicester Bloody Square.  You know what I’m saying?

A passion for destruction is a very dangerous thing. McArdle does not have the stomach for destruction; like Spike she enjoys the world the way it is, despite her constant undermining of its institutions. She likes shopping on the internet and bar-hopping and libertarian wingnut welfare. She doesn't want to eliminate the billions of people who need her guidance and instruction via high-paying media gigs. But Ted Cruz is ambitious. Ted Cruz has (part of) a plan. And Ted Cruz, thanks to the short-sided and underhanded tactics of his tribe, has the power to bring about the Apocalypse.

Atlas Shrugged had a plan for America after it was destroyed; it would be rebuilt by the elite for the elite, using nearly free natural resources. Ted Cruz doesn't even have that; after the deluge comes nothing. Just his absolute confidence that remaking the world in his own image will no doubt be a gloriously successful enterprise (for him, at least), no matter how much destruction is created.

Thrilling Update!:

Cruz Won’t Hold Up Vote on Reopening Government

By Sterling Beard & Andrew Johnson

Ted Cruz told reporters he will not hold up a vote on the newly announced plan to reopen the government and raise the debt ceiling, but expressed his dissatisfaction with the deal.
“Unfortunately, once again, it appears, the Washington establishment is refusing to listen to the American people,” Cruz said. The Texas senator commended the House for keeping up the fight over the past few weeks, but sharply criticized the Senate for “doing nothing to respond to the suffering that Obamacare is causing millions of Americans.”

While Cruz vowed to continue fighting Obamacare through different means, he would not delay the current plan. ”There’s nothing to be gained from delaying this vote one day or two days,” he said.

If this is true we commend Cruz on his belated Come To Jesus moment. God only knows what disaster he will come up with next. Also, I would watch my back if I were a Senate Republican. All that spite and ambition did not just go away.

Priorities

Speak of the devil and the devil appears.

As the shutdown grinds into its second week, I thought it might be useful to lay out why I think Republicans should look for a graceful exit as quickly as possible, rather than trying to use the shutdown -- or God forbid, the debt ceiling -- to extract unlikely concessions.

Coincidentally, Ms. Megan McArdle decided to write about the shutdown yesterday, the better to educate and guide her devoted followers. When the financial industry is at risk, Bankgirl is always there to lend a hand.  But remember, folks, Bankgirl is a libertarian. She hates evil government giveaways. And don't get her started on student loans, when they are taken out by people who are not Megan McArdle. She is not some schmuck Republican, with their tacky religious tchotchkes and polyester pants and state college diplomas decorating their tiny suburban offices. She follows her own, elite, rules.

I know that many of my conservative readers do not believe this, but I share many of your goals. I would like a smaller government that does less stuff. I oppose the Affordable Care Act.

I do solemnly swear that if McArdle were to find it financially advantageous to sign up for "Obamacare," she would do it in an instant. Just as she (almost) voted for Obama despite his advocation of health insurance reform before he took office.   Yes, McArdle "would like a smaller government that does less stuff" for other people. She, herself, has no problem taking what her nation offers her. She just doesn't want to do anything in return.

Yet I am opposed to the shutdown because I think it does real institutional damage to the country, and because I don’t think it will work. It is damaging the Republican Party’s prospects, while not noticeably increasing the chances that government will shrink.  

I understand the frustration. Government is much bigger, and stupider, than it would be in a world designed by me.

The biggest problem with our wannabe elite today is that they really believe that. Matthew Yglesias thinks that he can make decisions for us. Megan McArdle thinks that she can run major organizations more efficiently. P. Suderman, boy gamer extraordinaire, in between movie reviews thinks he can cogently analyze the health care industry. If everyone would just get out of their way, they could do everything, be anyone, have anything. If only....

It does too much, and too little of it well. Democrats are working on a huge expansion of an entitlement state that we already can’t afford.  

But -- as I frequently say to liberals who get huffy about my opposition to Obamacare -- the fact that there is a problem does not mean that there is a solution.

Video or it didn't happen. We are supposed to believe that liberals frequently flounce over to Megan McArdle and get all huffy in her grill about "Obmaacare," only to be schooled on their political naiveté and fuzzy thinking. By Megan McArdle.

The fact that you are really angry about what has happened over the last four years and passionately wish to undo some of the damage does not mean that a way exists for you to do so. Do not fall prey to that fatal political syllogism: 

1. Something must be done.
2. This is something.
3. Therefore, this must be done. 

That logic is, after all, what brought us the giant Rube Goldberg apparatus of Obamacare.

I thought the Heritage Foundation brought us the giant Rube Goldberg apparatus of Obamacare?

McArdle goes on to earn her daily bread by taking us along on a ride on her train of thought, which is less a Taggart Transcontinental Express and more a choo-choo you would find at a petting zoo.

Reason the First: People wouldn't like a shutdown. The mean old liberal media blames the right, so the right is losing politically, the poor innocent babies.

Reason the Second: Obama will shut down the government before he gives up on "Obamacare." The right will be standing by helplessly, of course, unable to stop Obama from refusing to stop them.

Reason the Third: We should be attacking "Obamacare" as it is rolled out, not the national debt. Priorities, people! Reducing the debt doesn't put money in her pocket. Attacking "Obamacare" does.

Reason the Fourth: The markets will get spooked and lose money. Can't have that. McArdle has a 401k.

Reason the Fifth: People wouldn't like it when they become affected by a shutdown. This presupposes that the government is helping people and that they want it to continue helping them, which only makes sense but pretty much invalidates the entire raison detre  of the Republican party.

The question, then, is how to do it gracefully. My advice, for what it’s worth, is to ask for something you can get, and then settle for that. Be realistic about what Democrats are going to agree to -- and the answer is not “completely dismantling Obamacare,” however wonderful that would be.

McArdle does not understand the mindset of her own people. She is thrilled to get anything, no matter how much or how little. The sheer pleasure of accumulating wealth and possessions is enough for her. Other people, however, cannot afford retail therapy and therefore are a little more demanding of their political party. They want what McArdle already has, and if she and her fellow elite suffer financial pain in the process, well, suffering is good for the soul.

I'm Not Here

I thought I'd just pop in to remind us all that Megan McArdle is married to a tea-bagger, which no doubt has nothing to do with her decision to ignore the Republican tea-baggers' attempts to knee-cap the economy so the government will collapse into little fiefdoms that must beg for funds from billionaires. Since personal connections to tea-baggers and the various and assorted Koch-created or supported venues that funneled money to our little blogger princess are not the reason, I suppose the biggest economic and political story of the moment simply does not interest her.

However you might say that McArdle is desperate to avoid the subject, going by the feebleness of her recent posts. She still has a grudge against Argentina, which defaulted instead of lining the pockets of the business elite, the way God and nature intended. She warned us that "infrastructure" might not mean what everyone thinks it means and business people are too greedy to trust, at least when they are being paid by the government. She opined thinkishly but vaguely about Asia's economic problems without discussing any actual problems excepting China's no doubt tragic dalliance with reform. And McArdle discussed credit and young adults without addressing the credit cards' bombardment of young people; they are "getting themselves credit cards and then getting themselves into big trouble."

Her only nod to the shutdown is a few posts of the awfulness of "Obamacare." But the old Megan magic does pop up its little head when her personal interests are involved. The free market is not doing its job properly, you see, and Miss Megan might be inconvenienced. The company that makes her bike-share bikes might be going under and a bailout attention must be paid!

Sure, I’d rather it wasn’t subsidized by the government, but this wouldn’t even make it onto my list of Top 100 Inappropriate Subsidies From the Government of the District of Columbia. So my conscience does not pang me too much as I glide through the bike lanes of our nation’s capital.

That's our special little princess.

People are spending a lot of time trying to figure out what the tea-baggers want.  It's not that difficult.


I want a feast.
I want a bean feast!

Cream buns and doughnuts and fruitcake with no nuts
So good you could go nuts
 I want a ball
I want a party
Pink macaroons and a million balloons
And performing baboons and ...
Give it to me
Now!

I want the world
I want the whole world
I want to lock it all up in my pocket
It's my bar of chocolate
Give it to me
Now!

I want today
I want tomorrow
I want to wear 'em like braids in my hair
And I don't want to share 'em

I want a party with room fulls of laughter
Ten thousand tons of ice cream
And if I don't get the things I am after
I'm going to scream!

I want the works
I want the whole works
Presents and prizes and sweets and surprises
Of all shapes and sizes
And now
Don't care how
I want it now
Don't care how
I want it now



Why do they want all these things? Because they want to make you give it to them. They want to see you submit to them. That's all. Just total submission. They want Black people to be afraid to look them in the eyes. They want women to stay in their place. They want to know the police will keep the scary people away, and they want lots of guns because everyone know the police are not respectful of their status as the pinnacle of civilization. They want everyone to bow before their god and his image on Earth.

But that's all deep in the background, the kind of thoughts that only surface at night before they fall asleep. We must live in this world whether we want to or not, so in the mean time they will be satisfied with any little old display of power. Complete control over their children is a very satisfying substitution. Forcing women to obey their latest whim if they want reproductive services. Undermining schools that mostly benefit the poor and lower middle class, complaining about the poor and their servants, stiffing the waiter--oh, there are a million ways to flex one's power muscles.

Don't care how
I want it now
Don't care how
I want it now

Thank You, God

I want pie video. McArdle has complained so often of the difficulty of pie crust that her pie video will assuredly become an instant classic.

Lady Ga-Ga

Poor Kathryn Jean Lopez is so shocked by the news that she can't force everyone to obey Catholic doctrine that she is even less coherent than usual.

By HHS count, they received over 400,000 comments on this previously proposed rule, but were clearly not moved by the pleas. Eric Rassbach, deputy general counsel at the Becket Fund calls it “more of the same.” If you provide insurance, you have to provide employees the means to an abortion end. It’s about facilitating the obtaining an abortion. The government says employers have to, period, he said on a call just now.

That's the first time I've ever see words flounce in indignation.

Of course it's not just about abortion, as K-Lo so very c a r e f u l l y spells out every time she mentions the HHS ruling, which she calls the "abortion/contraception/sterilization HHS mandate controversy." K-Lo is every bit as eager to outlaw birth control, in-vitro fertilization, tube-tying, and vasectomies. Every woman must be willing at all times to accept or be denied God's miraculous gift of life because every act of sexual intercourse is not just between a man and a woman.

K-Lo believes that each act is actually a Sacred Threesome, in a which a man and women and God all unite to bring new life into the world. While the man and women are making sacred marital love, God is also always present. After all, the Catholics say that each use of contraception interferes with God's plan for the couple and we must all obey the Catholics. (The Catholics told us so.) If he wants to inseminate the woman with a human soul, God needs to be free to do so whenever he wants or does not want, for infertility is God's will as well. Since God is present at every single copulation of every single man and woman at every single minute of every single day, of course birth control is against God's will.

(It's a good thing he's omniscient or all that porn might turn him into a sex maniac. The Catholics told us that too.)

But here we are. Employers with religious objections to abortion, contraception, sterilization have no religious-freedom claim in the eyes of the Obama administration, despite pleas, despite good-faith discussions, despite assurances by the administration.  

And, yes, the president and the vice president insisted this problem was all solved before their reelection. They lied. Because in this world of increased secularization and sexual revolutionary values, some churches’ teachings on human dignity have no place in the public square (the public square including evangelical schools, Catholic hospitals, religious soup kitchens). Or so the goverment mandates.

This is what happens when people never the leave the Catholic bubble: They begin to believe that their bubble encloses the entire world, instead of their own head. After that happens, reality is purely subjective. You just know that K-Lo talks to her crucifix every night and that Jesus talks back.

Breaking! Gravity Gone Wonky! Failures Rise Upwards!

We at The Hunting of the Snark are thrilled to announce that Mrs. Megan "Such is blogging" McArdle has once again clawed her way up another rung on the ladder to success. Bloomberg View is pleased to announce that McArdle has joined them as a blogger, the better to spread her wit and wisdom to its clientele.  FishbowlDC announced:

Washington, D.C.-based writer for Newsweek/Daily Beast and blogger Megan McArdle is joining the ranks of Bloomberg View, where she will be a columnist covering the economy, business, politics and national affairs.

“Megan is an extraordinary writer and thinker,” said David Shipley, Executive Editor of Bloomberg View in a morning statement. “Few people have done a better job chronicling the economic, corporate and technological disruptions of the last decade. She’s going to make a lot of readers — those who have followed her for years and those who will discover her at Bloomberg — smarter and happier. We’re thrilled that she’s joining the team.”

And who wouldn't be thrilled to hire McArdle? She chronicled the economic disruptions by alternately denying they existed, ignoring them when they occurred, and attempting to hide the consequences of the events. Her coverage of corporate America could not have been more attentive; every time they wanted anything from the public or government, McArdle leaped to defend and support them. And her knowledge of the technical disruptions of the last decade were epitomized by her posts regaling her readers with her camp-out on the streets to be the first in line to buy an expensive new phone.

Let's not forget her extraordinary thinking skills. Her analytical ability, her nuance while navigating tricky moral issues, and most of her keen grasp of logic and reason. These skills enabled her to decide to vote for Bush twice, botch the biggest economic disaster of our times, come out against gay marriage and abortion while claiming to be socially liberal, and never, ever fail to be wrong about practically everything.

Good luck, McArdle!

Evolution Of An Opinion

As many people have said, when people don't want to talk about the facts they talk about their feelings. They explain at great length how offended or hurt or puzzled they are when others are so unkind and uncivil as to refuse to agree with them. They also use emotion to manipulate debates; if they can discuss their feelings they don't have to discuss the inconvenient facts. The revelations following Edward Snowden's whistleblowing have forced authoritarians to come out of the closet and take a stand on the side of obedience to authority.

Naturally our Megan McArdle is out in front of the pack, which is only her due as a libertarian elite in a time of security abuses. Mrs. McArdle took the unwelcome intrusion and, as is her wont, did her darndnest to use the nation's troubles to advance the careers of herself and her friends.

In "Big Brother Is Watching Your Cell Phone," McArdle declares that government abuses are not the fault of the people who actually commit those abuses for their personal/political benefit. The abuses are not the work of a relatively small group of elite. No, it is our fault, we citizens of the US, because we have traded freedom for safety. Of course we do bear responsibility for our own decisions, including supporting those who are in power and practice abuses, but McArdle's history of supporting the elite over the individual make her meaning plain. The powerless are to blame for the abuses of the powerful.

However fear is even stronger than greed, and while she always eagerly inserts her tribe into the narrative, McArdle, her head a bran mash of popular fiction and schoolroom classics, has no desire to end up in an Orwellian nightmare.

Libertarians have been saying for years that the surveillance state has gotten out of hand, but on their own they are not enough of a political force to make any change. The liberal civil liberties movement lost a lot of its fire (and most of its political power) when a Democratic president was elected, and on the conservative side, there never was much political power to begin with. And so, just as libertarians predicted, the government has extended and consolidated its surveillance powers. Fifteen years ago, all of us would have laughed at the notion that the government would assert the right to know about every phone call made by ordinary American citizens suspected of no crime—that's something that East Germany would do, not the American government. How have we gotten so comfortable with the panopticon state in little more than a decade?  

y greatest fear is not that this surveillance will turn out to be more widespread. My greatest fear is that we will find out they are spying on us, and the American public will yawn. And in some secret room, bureaucrats and politicians will note that the American public does not care, and turn to discussing how much more spying they can get away with.

In "Internet Companies Deny They're Helping the NSA Collect User Data. Should We Believe Them?," McArdle quotes fellow libertarian Julian Sanchez, who thoughtfully informs us that sometimes people don't say what they mean. McArdle's own concern is that lying corporations might suffer a backlash from consumers. Or maybe not. However as time passes, so does McArdle's new fear, as she settles back into her more familiar concern, random death from one of those foreign people who hate us for our freedom.

In "We Shouldn't Treat Terrorism The Way We Treat Bathroom Falls," McArdle quotes libertarian Conor Friedersdorf's concern about security abuses but is swayed in the end by Jeffrey Goldberg's fear-mongering about al-Quaeda, a childishly easy task. She decides that the fight must go on to keep her America safe, libertarian concerns be damned!

McArdle's latest post explaining why we should submit to authority because whistleblowers are weird will be covered in a separate post.

Do As I Say, Not As I Do

Shorter Megan McArdle: We need to change our culture to pressure poor women to marry young, before they have illegitimate children. We also need to change our culture to pressure wealthier women to marry and reproduce when younger, so they will be able to reproduce as much as they want. I, however, married late and did not reproduce at all, which was the right choice for me.

An Unhappy Juxtaposition

Compare and contrast: Garance Franke-Ruta's very informative article on the IRS commissioner's trips to "the White House" and Megan McArdle's fact-free attempt to gin up even more controversy to smear Obamacare and Obama, her seventh article on the evils of the IRS in the last month.

Dancin' With Who Brought You

It is laughable to see organizations such as National Review pretend they are morally offended by, for example, John Derbyshire's proud and blatant racism. These organizations were founded by racists, pay for racist propaganda, hire racists, and send racists on cruises to mingle with other wealthy racists, where they all can finally indulge in racist conversations without fear of public disgust.

Scaife-Funded Network Works Hard to Kill Immigration Reform by Katie Lorenze

With immigration reform advancing through Congress, an anti-immigrant network funded by a small group of right-wing foundations is trying to kill reform by pressuring moderate Republicans and appealing to the party’s xenophobic wing. The groups could stymie efforts by some Republicans to appeal to the country's growing Latino population by moving to the center on immigration.  

The anti-immigration Federation for American Immigration Reform (FAIR) and others are using shoddy research methods to claim that immigration is at fault for a whole host of problems in America, from crime to income inequality. ProEnglish, a lobbying organization that advocates for "official English,” has released a video attacking Senator Lindsey Graham (R-SC) for his work on the immigration bill. The Center for Immigration Studies has testified in Congress against reform, claiming “virtually all illegal aliens are guilty of multiple felonies.” All of these organizations are connected to John Tanton, a nativist who has formed a network of radical anti-immigration groups, all of which receive a significant portion of their funding from foundations tied to the Scaife family.  

John Tanton’s Anti-Immigration Network, Bankrolled by the Scaifes

Tanton was initially a population control advocate connected with the environmental movement – which now largely supports immigration reform – but has since dabbled in eugenics, openly professed his preference for white people, and been tied to white supremacists. Tanton has constructed a powerful array of anti-immigrant groups that for the past three decades has had significant influence over the immigration debate, with the help of millions of dollars from the Scaife family foundations.  

Tanton was a close friend of the late Cordelia Scaife May, an heir to the Mellon family's banking and oil fortune, and who until her death in 2005 was one of the richest women in America. Like Tanton, May was an environmentalist committed to population control -- and believed limiting immigration was the best way to do it -- and founded the Colcom Foundation to advance this goal, providing tens of millions to anti-immigrant groups as well as funding legitimate environmental organizations. Colcom's Vice President of Philanthropy, John Rohe, worked for Tanton for many years and wrote a fawning biography. Since 2001, Colcom has been the primary funder for many groups in the Tanton network, giving over $17 million to NumbersUSA and almost $15 million to the Federation for American Immigration Reform, and more than $6 million to the Center for Immigration Studies.  

Scaife May's billionaire brother, Richard Mellon Scaife, is a major supporter of right-wing causes perhaps best known for bankrolling the effort to try ousting President Bill Clinton after "troopergate" and more recently for funding the climate change deniers at the American Enterprise Institute. Scaife manages the Carthage Foundation and the Sarah Scaife Foundation, which together with the Scaife Family Foundation (controlled by Richard Scaife’s children since 2001) have donated more than $4 million to FAIR and more than $3 million to CIS since the early 1990s; additionally, since 2001, the foundations have given ProEnglish $285,000 and NumbersUSA $987,500. The Scaife Family Foundation is also the sole funder of ProEnglish.  

Richard Mellon Scaife is also a major funder and Vice-Chairman of the Heritage Foundation, which recently generated controversy for issuing an anti-immigration report written by an author who previously argued that immigrants have lower IQs than the “white native population.”

Read the rest.

These aren't people who lived a hundred years ago; they are financing a complaint media and propagandizing right now.

The personal is the political; people who hate and fear other races and ethnicities, or communists, or women or whatever use their resources to create political pressure. But naked hatred and fear and greed are not acceptable political programs, so the powerful make up other reasons such as safety and freedom. The Sarah Scaife Foundation funded a lot of right-wing organizations.

Sarah Scaife Foundation past relationships:  

Accuracy in Media - funder  

Acton Institute for the Study of Religion and Liberty - funder  

Allegheny Institute for Public Policy - funder  

American Academy for Liberal Education - funder  

American Civil Rights Institute - funder  

American Enterprise Institute - funder  

American Foreign Policy Council - funder  

America's Future Foundation - funder  

America's Survival - funder  

Atlantic Legal Foundation - funder  

Atlas Economic Research Foundation - funder  

Capital Research Center - funder  

Cato Institute - funder Center for Equal Opportunity - funder 

Center for Immigration Studies - funder  

Center for Individual Rights - funder  

Center for Security Policy - funder  

Center for Strategic and International Studies - funder  

Center for the Study of the Presidency - funder 

Claremont Institute - funder  

Collegiate Network - funder  

Commentary - funder  

Committee for a Constructive Tomorrow - funder  

Commonwealth Foundation - funder  

Competitive Enterprise Institute - funder  

Counterterrorism and Security Education and Research Foundation - funder  

David Horowitz Freedom Center - funder 

Ethics and Public Policy Center - funder  

Federalist Society - funder  

Fletcher School - funder  

Foreign Policy Research Institute - funder  

Foundation for Cultural Review - funder  

Foundation for Individual Rights in Education - funder  

Foundation for the Defense of Democracies - funder  

Freedom House - funder  

FreedomWorks Foundation - funder  

Galen Institute - funder  

George C. Marshall Institute - funder  

George Mason University Foundation - funder  

Heritage Foundation - funder  

Hoover Institution - funder  

Hudson Institute - funder  

Independent Women's Forum - funder  

Institute for Foreign Policy Analysis - funder  

Institute for Justice - funder  

Intercollegiate Studies Institute - funder  

Jamestown Foundation - funder  

Judicial Watch - funder  

Maldon Institute - funder  

Manhattan Institute for Policy Research - funder  

Media Research Center - funder  

Mercatus Center - funder  

Mountain States Legal Foundation - funder  

National Center for Policy Analysis - funder  

National Institute for Public Policy - funder  

National Legal and Policy Center - funder  

National Taxpayers Union - funder  

Pacific Legal Foundation - funder Pacific Research Institute - funder  

Reason Foundation - funder  

James C. Roddey - trustee  

Social Philosophy and Policy Foundation - funder  

Tax Foundation - funder  

University of Virginia School of Law - funder

Where would our libertarian elite pundits be today without Scaife May's racism and oodles of money? Or the Koches' largess, by way of the John Birch Society? True, everyone must be paid by someone, but it says a lot about their peers that they must stoop so low to find someone willing to publish their work.

But this is what happens when billionaires get millionaires to write campaign financing laws in their favor. The billionaires smear their hysteria all over everyone else's attempts to make money. Scaife  May already has tons of money and doesn't need to worry if the institutional racism she funded costs other people money and elections. The politicians they fund can't afford to be as cavalier.

Reinhart, Rogoff, and McArdle

While I was on my mental vacation hiatus, Megan McArdle was all over la affaire of Reinhart and Rogoff. As we all know, data is McArdle's bête noir. It didn't have to be that way. McArdle was always willing to hold up her side of the data bargain. She was perfectly happy to look for numbers that seemed to support her point, or perhaps a bar graph or one of those colorful little pie charts. True, the graph didn't always say what she seemed to think it said, but the spirit was willing even if the mind was weak. But those numbers betrayed her by being different from the numbers she envisioned in her head. Something was very wrong in McArdleland but never fear, McArdle was more than eager to Cuisinart the lemons of defeat into the lemonade of victory.

Bit of a bombshell in the econoblogosphere yesterday. Several economists from the University of Massachusetts are contesting one of the key findings by the authors of This Time is Different, a landmark study of financial crises and debt dynamics from Carmen Reinhart and Ken Rogoff. At issue is their observation that once the debt-to-GDP ratio passes 90%, growth slows down dramatically. We should be careful about what we're actually refuting. Since this critique broke, there's been a bit of strengthening up Rogoff and Reinhart's claims in order to beat them down--claiming, for example, that Rogoff and Reinhart asserted that high debt mechanically causes low growth. I've interviewed both of them about their work, and they've always been most modest in their claims, emphasizing that they've isolated an empirical regularity, not causality. While the paper under question does speculate about possible vehicles for causality, its claims are more modest than both its critics, and those who have bandied about the 90% statistic, would have you believe.

I would love to take McArdle's word for it that since she has met Reinhart and Rogoff she knows they would not claim a relationship between high debt and low growth. However the last time she personally vouched for a man that gentleman was David Koch. It would be wiser to go to the source, the Reinhart and Rogoff (R and R) paper Growth In A Time Of Debt.

Our main finding is that across both advanced countries and emerging markets, high debt/GDP levels (90 percent and above) are associated with notably lower growth outcomes. In addition, for emerging markets, there appears to be a more stringent threshold for total external debt/GDP (60 percent), that is also associated with adverse outcomes for growth. Seldom do countries simply “grow” their way out of deep debt burdens. Why are there thresholds in debt, and why 90 percent? This is an important question that merits further research, but we would speculate that the phenomenon is closely linked to logic underlying our earlier analysis of “debt intolerance” in Reinhart, Rogoff, and Savastano (2003). As we argued in that paper, debt thresholds are importantly country-specific and as such the four broad debt groupings presented here merit further sensitivity analysis. A general result of our “debt intolerance” analysis, however, highlights that as debt levels rise towards historical limits, risk premia begin to rise sharply, facing highly indebted governments with difficult tradeoffs. Even countries that are committed to fully repaying their debts are forced to dramatically tighten fiscal policy in order to appear credible to investors and thereby reduce risk premia. The link between indebtedness and the level and volatility of sovereign risk premia is an obvious topic ripe for revisiting in light of the more comprehensive cross-country data on government debt.

According to Wikipedia, critical realist economists say:

The world that mainstream economists study is the empirical world. But this world is "out of phase" (Lawson) with the underlying ontology of economic regularities. The mainstream view is thus a limited reality because empirical realists presume that the objects of inquiry are solely "empirical regularities"—that is, objects and events at the level of the experienced.

McArdle is saying that R and R are just noting two things that happen and do not say one was a cause of the other. Clearly this is wrong and it's typical that McArdle thinks denial based on an appeal to authority is an effective means of argumentation. Especially when she has written about Reinhart's work before. In this post McArdle argues that Reinhart is right that our debt will drag down the economy.

One way or another, all the debt we've taken on has to be dealt with. And the least painful way, at least in the short term, is for central bankers to keep their hands on the interest rate levers--and their eyes on the government debt.

And if the R and R paper was not pointed enough, Reinhart emphasized the relationship in an interview with Der Spiegel.

You have to deal with the debt overhang one way or the other because the high debt levels are an impediment to growth, they paralyze the financial system and the credit process.

Perhaps Reinhart played McArdle or McArdle didn't understand a word the woman said. Or McArdle is attempting to re-write reality to agree with her personal opinions.

I've seen more than one suggestion today that Rogoff and Reinhart must have deliberately or subconsciously biased their work because they're such mad advocates of fiscal austerity. But I interviewed Rogoff about the fiscal cliff last fall, and he was emphatic that we should not simply slam on the brakes and cut spending drastically, immediately. In fact, he was moderately dovish on stimulus. For example, he said "Back in 2008-9, there was a reasonable chance, maybe 20% that we’d end up in another Great Depression. Spending a trillion dollars is nothing to knock that off the table." Rogoff is basically an austerity moderate: he thinks we should be spending a little more now, while making plans to cut back in the future. And note that the main vehicle by which they suggest high debt causes slow growth is . . . that it forces sudden fiscal contraction.

Apparently Rogoff does advocate austerity, just a slower, gentler type. And Reinhart believes austerity is absolutely necessary.

SPIEGEL: Do you think it is wrong for Europe to focus on austerity measures with inflation at such a low level? Reinhart: No. Restructuring, inflation und financial repression are not substitutes for austerity. All these measures reduce your existing stock of debt. Unless you do austerity you keep adding to the debt. There is no either-or. You need a combination of both to bring down debt to a sustainable level.

McArdle (incorrectly) throws austerity into the mix to distract her readers from the main issue, the data. Then she attempts to downplay the effect of the Reinhart and Rogoff paper by declaring it had only a trivial effect on some radicals. It is utterly impossible to believe that McArdle does not know of the impact of the R and R paper; at the very least she saw a description of it in the paper written by Herndon et al. As the important critique relates, the impact of R and R's paper was enormous.

Publication, Citations, Public Impact, and Policy Relevance  

According to Reinhart's and Rogoff's website, the findings reported in the two 2010 papers formed the basis for testimony before the Senate Budget Committee (Reinhart, February 9, 2010) and a Financial Times opinion piece "Why We Should Expect Low Growth amid Debt (Reinhart and Rogoff, January 28, 2010). The key tables and figures have been reprinted in additional Reinhart and Rogoff publications and presentations of Centre for Economic Policy Research and the Peter G. Peterson Institute for International Economics. A Google Scholar search for the publication excluding pieces by the authors themselves finds more than 500 results. The key findings have also been widely cited in popular media. Reinhart's and Rogoff's website lists 76 high-profile features, including The Economist, Wall Street Journal, New York Times, Washington Post, Fox News, National Public Radio, and MSNBC, as well as many international publications and broadcasts. Furthermore, RR 2010a is the only evidence cited in the "Paul Ryan Budget" on the consequences of high public debt for economic growth. Representative Ryan's "Path to Prosperity" reports

A well-known study completed by economists Ken Rogoff and Carmen Reinhart confirms this common-sense conclusion. The study found conclusive empirical evidence that gross debt (meaning all debt that a government owes, including debt held in government trust funds) exceeding 90 percent of the economy has a significant negative effect on economic growth. (Ryan 2013 p. 78)

RR have clearly exerted a major influence in recent years on public policy debates over the management of government debt and fiscal policy more broadly. Their findings have provided significant support for the austerity agenda that has been ascendant in Europe and the United States since 2010.

But McArdle is not one to let reality rear its ugly head.

That said, many more radical austerity hawks have naturally been drawn to that 90% figure. Such a lovely, round, precise number is bonza for stump speeches and TV sound bytes, and unsurprisingly, it's been found in a lot of them. So it matters whether it's in error. And it does seem to be at least somewhat in error.

Tie me kangaroo down, sport! After mitigating and shading as hard as her little heart could, McArdle is forced to admit that mistakes were made. Little, inconsequential mistakes that would in no way destroy R and R's arguments. And that mistake never influenced policy at all.

The UMass authors (heretofore to be known as Herndon et al) argue that there are three major problems with Rogoff and Reinhart's work, or at least with the claim that very high debt causes negative average growth rates: 1. They excluded the immediate postwar-growth years for Australia, Canada, and New Zealand. 2. There is a coding error in the spreadsheet which caused them to exclude the first five countries in their analysis: Austria, Australia, Canada, Belgium, and Denmark. 3. They weighted each country's growth rate during high-debt episodes equally, rather than by the number of years for which the debt persisted.

Number one is arguably the most troubling, but funnily enough, it is mostly taken care of by the coding error. We're actually arguing mostly about New Zealand. Herndon et al. argue that New Zealand, plus the decision to weight by country, instead of the number of years that each country was in debt, lowers the growth rate during high-debt episodes from a somewhat robust 2.2% average to a terrible -0.1% average. Basically, they're arguing that because New Zealand had one year of very high debt and very bad growth, when you weight all the countries equally, you multiply that one bad year into a spurious "tipping point" where high debt destroys your GDP growth rate. Obviously this is a problem. I'm unable to tell exactly how much of a problem, because the country-year method is also arguably problematic. The years that a country spends in debt are serially correlated--which is to say that if you had a debt load above 90% of GDP last year, you're much more likely to have a similar debt load this year than a country which had a debt load in the 30% of GDP range. So weighting by country year is also likely to produce problems with your data. You could argue about how to calculate this for years--and I hope that these guys, and Rogoff/Reinhart, will do just that.

Because McArdle would much rather you argue methodology than discuss the effect of the methodology problems on the data and therefore conclusion. But what of McArdle's claim that serial correlation invalidates the country-year method? Let's had over this question to Josh Bivens at the Economic Policy Institute:

Some have argued that “serial correlation” in country/year high debt episodes—particularly when the years are consecutive—might mean that each country/year observation is actually not providing another fully independent data point in their sample and that weighting each as such might be inappropriate. Maybe, but it’s a long way from this insight to thinking that a proper fix is that the “year” part of the country/year observation should be completely ignored and each high debt year for a given country should just be collapsed into one single data point. Further, R&R have never been hugely clear about the economic transmission mechanism that allows high debt ratios to slow growth (indeed, they note that the most logical prime suspect—rising interest rates, do not seem to be up to the job of explaining this association). What they have strongly implied is that it is the problem of debt exceeding 90 percent is greatest when it comes in long-lived episodes rather than in one or two-year bursts (their latest paper on “debt overhangs,” in fact, focuses exclusively on episodes of debt exceeding 90 percent of GDP for five years or more). Given this, one might think that serial correlation would make their results stronger when one switches to country/year observations. That is, long-lived episodes of high debt (the 19 years in the UK) should be much more damaging to growth than one-off years that see debt barely move over the 90 percent threshold and then retreat (the one year of New Zealand data in their sample). But as HAP show, weighting each country/year observation equally (which should allow serial correlation to influence the results) actually makes most the R&R findings on debt exceeding 90 percent melt away.

After blowing smoke, McArdle helpfully hands her audience a convenient excuse to ignore the flaws in R and R's data:

Frustratingly, though the authors of the paper break out the results in various ways, the labelling is not very clear, and as far as I can tell they do not show you what the data looks like if you put all the New Zealand miscoded years back, but use the Rogoff/Reinhart weighting method. I'd really like to see this to get a sense of how much of their dispute hinges on omissions, and how much over disagreements about weighting methods.

Hernden et al tell us:

The exclusion of the missing years is alone responsible for a reduction of 0.3 percentage points of estimated real GDP growth in the highest public debt/GDP category. Further, RR's unconventional weighting method that we describe below amplifies the effect of the exclusion of years for New Zealand so that it has a very large effect on the RR results.

Not that the actual numbers matter to McArdle. She's already decided that there are two versions of R and R's conclusion, the actual "strong" one and an imaginary "softer" version that would be easier to defend.

Nonetheless, I think it's fair to say that a result should not hinge on a single bad year from New Zealand. And Herndon et al are arguing that the "strong" version of Reinhart-Rogoff, where debt levels of above 90 of GDP are actually correlated with negative growth rates, is almost entirely driven by that one bad year, plus the choice of weighting method. This is not, to put it mildly, a very robust result. The question remains: how much does it matter? As a policy matter, in my humble opinion is: not at all.

McArdle goes on to explain in great length why R and R's paper didn't really count because everybody else said debt was associated with slowdowns and Clinton reduced debt so liberal critics are just hypocrites and Europe's austerity had nothing to do with the paper and the US didn't count.

I think there is a roughly 0% chance that US economic policy would be detectably different if Reinhart and Rogoff had never been published. This is obviously going to be embarassing for Reinhart and Rogoff, because coding errors always are, and especially when your coding error produced a widely cited figure. To point out the obvious, conservative wonks and politicians should stop citing that result.

Most of all, McArdle wants us to learn a very valuable lesson from this unfortunate situation: Nobody can know anything ever.

And to point out the somewhat-less-obvious, people on all sides should be cautious about lovely, round numbers. Even if there had been no coding error, no disagreements about the country weights, this still would have been one number from one study. People were relying on this figure because it gave the illusion of precision. For some stupid reason, things sound more like a fact if there's a number attached.

Especially liberals.

On the flipside, no one should be acting as if discrediting this single number somehow defeats the hawkish arguments over government borrowing. Even if this one number is wrong, there is still ample reason to worry about debt dynamics and crowding out--some of that evidence from Reinhart and Rogoff, but also from many other sources. Indeed, Herndon et al show a relationship. They say that this relationship is not statistically significant. But "not statistically significant" is not the same as "unlikely to be true". There is other empirical work, and some good theoretical reasons, to think that too much debt is dangerous. The reasons for debt hawkery can certainly be argued with. But they neither stand nor fall on a single paper, much less a single number from it.

I predict within a week or two, McArdle will be reminding us that it has been proven statistically that high debt slows growth, and will link to this article as proof. I also predict that if a liberal made these sorts of mistakes (or if McArdle could convince people that a liberal made these sorts of mistakes), McArdle would be the first to call them dishonest and ideological, as she attempted to do with Elizabeth Warren.