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The Problem with Economists

[ 93 ] February 8, 2016 |

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As has bothered some of you, I think the field of Economics is largely intellectually bankrupt, a field specializing in mathematical formulas that tell us almost nothing about human behavior, a field serving as intellectual hacks for free-market global capitalism that provides justification for the exploitation of the world’s workers without actually caring about those workers, a field that intellectually uncurious and that is only comfortable with policymaking from 30,000 feet, yet a field that has an enormously inflated view of its own importance to the world, often looking down on other academic disciplines. This is not true of all economists of course, but it is true of far too many.

The historian Jefferson Cowie explores these these problems with economists in this Chronicle piece. A couple excerpts.

After reading through a policy speech prepared by John Kenneth Galbraith, President Lyndon Johnson addressed the economist. “You know, Ken,” he said, “the trouble with economics is it’s like peeing in your pants. It feels hot to you but leaves everyone else cold.” One only has to go to an economics seminar to know that Johnson was right.

Yet in an era in which markets have become the method of justifying and adjudicating all things, we cannot afford to have economics leaving us feeling cold and wet. Economics has become the benchmark for other intellectual endeavors; its practitioners rule policy debates; and, sadly, its mathematical modeling has become a closet form of anti-intellectualism — mathematically abstracted, as it tends to be, from real-world problems — that is creeping into other disciplines. While fewer people care that much of the lit-crit crowd stopped talking humanities to humans, economics is too central to political life for such shenanigans. It is time for the “queen of the social sciences” to get off her throne and start speaking to some of the lesser subjects in the kingdom of academe.

My “J’accuse” is this: The field of economics practices the very sin it preaches against ­— protectionism. That is to say, economists are protectionists of the intellectual sort at a time when the need for trade in the market of ideas has never been more pressing.

In a recent article, “The Superiority of Economists,” in the Journal of Economic Perspectives, we learn a number of things that are truly impressive about the field: Its graduates have higher standardized-test scores than political scientists and sociologists; they tend to find places higher up in policy and advisory circles; they are the best at math; and they earn more money and tend to have better career prospects than other graduates do. It’s no surprise that economists also seem to have more intellectual self-confidence than those in other fields. Economics, after all, is the only social science to have its own Nobel prize. Grounded in the present, they look toward the future and only rarely to the past.

On the other hand, smug in their security, economists are the least likely to cite other disciplines. Perhaps the most disturbing thing is the remarkable extent to which graduate training in the field is similar across institutions and departments — a stark contrast to other disciplines. And most of that graduate education is driven by textbooks and textbooks alone. To other social scientists and humanists, that is an astonishing proposition, and evidence of the field’s range of ideas.

As that survey of economic training shows, economics demonstrates more internal control over its own labor market, hiring only those who follow the prescribed formulas. The study of economics appears to be an exercise in the affirmation of orthodoxy.

First, that is classic LBJ. God bless him. Second, as Cowie points out, the Nobel in economics is a ridiculous joke that only exists because the Bank of Sweden wanted to promote itself.

The insularity of economics prompts an enormous irony: Rather than a market, economics borders on a command economy. From inside its fenced-in monocultural landscape, students are taught that they have arrived at the land of objectivity, that they have passed beyond the ideological and into the scientific. Not only is this protectionism, but it creates a rub with democratic theory and practice. It is, essentially, an invitation to opt out of the greater intellectual struggles in which the rest of us are engaged. By protecting itself from the contagion of outside ideas, economics offers up a more extreme version of the Balkanization and creeping anti-­intellectualism that are apparent elsewhere in the academy. Its hegemonic role, however, makes all the more important the need for the field to open up and transcend its preoccupation with the blackboard fictions of economic modeling.

As the Keynes scholar Robert Skidelsky has put it, the methodological presumption of economics is that “a good car [called economic modeling] has been built: Students must learn how to drive it.” But economics should not be a course in driver’s ed; it should empower students to think critically and creatively about the whole system of transportation. We should be inculcating curiosity, a sense of adventure, a greater range of ideas, not shutting them down. After all, it’s not as if economists are simply correct. When the queen asked the faculty members of the London School of Economics and Political Science why they did not foresee the 2008 financial crisis, they said they would get back to her. They later admitted in a letter that they had no answer and that their promise to provide one was an example of “wishful thinking combined with hubris.”

To put it bluntly, the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences. Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in.

The book is more important, of course, for its argument about how the economy works. Piketty’s basic premise is as heroic as it is succinct: The rate of return on capital outstrips economic growth, making capitalism an engine for inequality unless there are countervailing forces.

As powerful and persuasive as Piketty’s work is, truth be told, he is not much of a historian. As much as I admire his data — and use it myself — the American history in his book, where it exists, is often just wrong in both fact and interpretation. He wields history like a chef with a heavy hand on the salt — it’s there every time you taste the dish but it doesn’t really help things. Balzac keeps popping up in Piketty’s book, but there are no unions, the New Deal is not especially significant, and there is not much labor-market policy at all. Taxation and war seem to be the only levers of change and, by association, the only solution to problems. Social history — the history from below — seems like an unknown land.

Neither Cowie nor myself think the field of Economics is irredeemable. Obviously we need people studying the economic system. But as currently constructed, the field causes more problems than it solves and in doing so, directly contributes to the inequality of the modern world. Economists need to do better. Stopping the fetishization of mathematics is a good place to start. Study real people doing real things. Read the work of people in other disciplines. Come off the mountaintop and understand the people you theorize about. Talk to them. Speak to their concerns.

Cowie by the way is one our leading historians. Capital Moves was foundational in the study of capital mobility as a historical phenomenon and was the book that inspired Out of Sight. Stayin’ Alive may be the most important book written on the decline of working-class America in the 1970s. And his new book on the New Deal anomaly promises to be transformational in how we think about social change and inequality in American history.

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The Unnecessary Maureen Dowd

[ 94 ] February 8, 2016 |

The Democratic primaries have been admirably focused on substantive differences. This evidently leaves Maureen Dowd, a third-rate gossip columnist and twelfth-rate theater critic who for some reason is published on the New York Times op-ed page, largely at sea. What, do you expect her to talk about health care policy when she could talk about Bill Clinton’s facial expressions:

As one Hillary booster in Hollywood marveled: “There’s no chance her husband doesn’t understand the problem. The look on his face during her speeches evokes a retired major league All Star watching his son strike out in a Little League game. This is so fixable.”

One trademark of Dowd’s columns is her outsourcing of witless banalities to various unnamed Beltway and Hollywood insiders. It’s actually very logical, the perfect exemplification of the underachieving elite circle-jerk that has conferred inexplicable status on Dowd. If you think A Beautiful Mind and Chicago are towering achievements of American cinema, you may well think Maureen Dowd is a good political columnist!

Her allies think mentioning her shouting is sexist, and sexism does swirl around Hillary, but her campaign cries sexism too often. In 2008, Barack Obama used race sparingly.

These tautologies don’t tell us anything. If Clinton loses more narrowly than expected in New Hampshire and wins big in South Carolina, you could say that it proves her calling out sexism is working. Had she been more sparing in citing sexism, you could say that she was making a mistake in not being more aggressive. It’s all meaningless. And if you think this is what’s driving the 2016 Democratic primaries you’re lost.

Even after all this time watching Bill and Barry, she still has not learned the art of seduction on stage.

The “Barry” thing is as offensive as ever.

Hillary has ceded the inspirational lane to the slick Marco Rubio, who’s more like the new John Edwards than the new Obama.

1)Who finds Rubio “inspirational?” 2)The comparison of Rubio to Edwards is a classic example of the uselessness of substituting fashion analysis for political analysis.

And now, my favorite part:

But she is establishment. So is Nancy Pelosi. So was Eleanor Roosevelt. Hillary must learn to embrace that and make it work for her, not deny it. As a woman, as a former first lady, senator and secretary of state, she’s uniquely equipped to deliver a big, inspiring message with a showstopping speech that goes beyond income inequality, that sweeps up broader themes of intolerance, fusing the economic, cultural and international issues at stake.

Maureen Dowd has been talking to various friends about the Democratic primary. What she has “learned” is that Hillary Clinton has been focused too narrowly on economic inequality. I can’t even.

But anyway, sure, Hillary Clinton could deliver a big speech combining themes of economic inequality with other progressive priorities. It could perhaps start with FDR’s Four freedoms, and then link economic inequality to civil liberties and civil rights and environmentalism and international issues. Here’s a draft she could possibly work with.

As we saw back when Drew Westen was a thing, even people who are obsessed with political rhetoric and think it’s enormously important either don’t know or don’t remember what public officials actually say. It’s an almost perfect self-refutation.

Oil Tax

[ 15 ] February 8, 2016 |

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I know there is no way it will get past Congress, but President Obama is completely correct in calling for a $10 per barrel tax on oil to fund green infrastructure.

The proposal would go toward a $32.4 billion annual push to green the transportation sector by funding public transit, an urban planning initiative and clean vehicle research, the White House said in a fact sheet. Obama will include the plan in the budget request he releases next week.

The plan will likely die in the GOP-controlled Congress, which will vet Obama’s budget request before writing spending bills later this year.

But the proposal represents a new front in Obama’s climate change end-game: After finalizing carbon reduction regulations for the electricity sector last year, he is turning his attention back to the transportation sector, which accounts for 30 percent of American carbon emissions every year.

“The president’s plan does what we need to once again have a transportation system that is a source of American strength while at the same time taking steps to reduce carbon emissions and fight climate change,” Jeff Zients, the director of the National Economic Council, told reporters Thursday.

Charging the fee to oil companies, the White House said, is both a funding mechanism for the transportation initiative and an incentive for the private sector to move toward cleaner fuel.

Mostly, this is the correct policy. Now, it’s not without its downsides, in that were this to pass, it would be passed on to consumers, meaning that it would effectively be a regressive tax that made gas and heating bills a larger percentage of income for the poor than the rich. And I have a problem with that, not that there is an easy alternative solution. Otherwise, this is a correct policy in that it specifically targets climate-change inducing industries, incentivizing them, as well as drivers, to use less oil and move toward green energy, while using the money to build the infrastructure necessary to manage this transition. Of course, Republicans are opposed to hippie energy and infrastructure spending alike, so it will die. But this is along the lines of the policy Democrats need to constantly fight for.

Erik Visits an American Grave, Part 16

[ 11 ] February 8, 2016 |

This is the grave of Henry Ward Beecher.

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Beecher was the most prominent minister in mid-19th century America. The son of Lyman Beecher, one of the most important ministers of his generation, Beecher started his ministerial career in 1837 in Indiana. He rejected his father’s neo-Puritan teachings for a doctrine that emphasized joy, pleasure, and reform, fitting for the Second Great Awakening. He became a major social activist, an abolitionist, an temperance advocate, and a supporter of women’s suffrage. He attacked the Fugitive Slave Act and became a leading national voice against it. He also raised funds to send arms to anti-slavery forces in Kansas during the Bleeding Kansas period. During the Civil War, Abraham Lincoln sent Beecher to Europe to speak against the Confederates, helping turn the tide of European public opinion to supporting the United States.

After the Civil War, he was one of the abolitionists who quickly turned to attacking workers and their unions and to feeling that the government should stay out of the South. He supported Andrew Johnson’s Reconstruction plans, was close to the capitalists building their monopolies, and vociferously anti-union. During the Great Railroad Strike, Beecher stated, “Man cannot live by bread alone but the man who cannot live on bread and water is not fit to live.” He became hated by unionists around the country. To his credit, he did embrace Darwin’s theory of evolution and opposed the Chinese Exclusion Act.

He may have thinketh no evil, but he definitely thinketh lust, as Victoria Woodhull notoriously exposed. Beecher was a notorious womanizer, with rumors about his affairs extending to well before the Civil War. So when he spoke out against Woodhull’s ideas about free love, she decided to write an exposé of Beecher’s hypocrisy, detailing his latest affair in her newspaper. Beecher then had her tried for obscenity, launching a series of trials that dominated national headlines for two years, including Beecher himself going on trial for adultery. He was exonerated in 1875 and died in 1887.

Henry Ward Beecher is buried in Greenwood Cemetery, Brooklyn, New York.

The Coen Brothers Films, Ranked

[ 208 ] February 8, 2016 |

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I haven’t seen Hail, Caesar! yet, but I look forward to it. So naturally it is time to rethink the Coen Brothers work. Bilge Ebiri ranks their films. I love his writing, but I can’t agree with this ranking. So I’m trying my own.

1. The Big Lebowski–I know it’s not their most sophisticated film, but it might be the funniest movie of my lifetime. It’s basically a perfect film.

2. Fargo. Also a near perfect film.

3. No County for Old Men. Really the only decent adaptation of anything Cormac McCarthy has written. Partly that’s because it was a cinematic book to begin with, but partly it’s certainly the excellent scrip, casting, and direction.

4. Miller’s Crossing. I really love this film. I love the language, the ethnic politics, and Albert Finney blowing away his assassins to “Danny Boy.”

5. Raising Arizona. I never loved this as much as other people, but obviously it’s a good film.

6. Blood Simple. Not my very favorite, but obviously a very fine first film.

7. A Serious Man. This is a pretty underrated film. It feels minor at first, but it’s a pretty profound meditation. Great ending too.

8 True Grit. Just a very solid film. The original made a better choice in not including the ending of the book, but that’s a minor mistake by the Coens. Plus who can dislike Jeff Bridges as Rooster Cogburn?

9. O Brother Where Art Thou. It’s not truly great but I like almost everything about it, including of course the great soundtrack.

10. Intolerable Cruelty. This is also an underrated film. It’s slapstick and silly, but in a very good way.

11. Barton Fink. I know some people love this film. I do not. It is a completely decent work. But I do not love it.

12. Inside Llewyn Davis. A fairly disappointing film, outside of the cat.

13. The Hudsucker Proxy. Meh. I like the Coen Brothers silly side, but I just didn’t feel this worked that well.

14. Burn After Reading. God, this was disappointing. So much potential. Utterly forgettable.

15. The Man Who Wasn’t There. Sometimes people really defend this film, including Ebiri. I don’t get it. I thought it was just nothingness. I was bored throughout.

16. The Ladykillers. Ugh.

The Pull of Pollo

[ 7 ] February 8, 2016 |

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I don’t listen to a lot of podcasts, but one that I do like is Gravy, the podcast of the Southern Foodways Alliance. This podcast on how the chicken industry has utterly transformed Springdale, Arkansas, turning it from one of the state’s whitest towns into the state’s most diverse town. This is because the poultry industry is worked almost entirely by Latino immigrants, as well as some people from the Marshall Islands and south and southeast Asia. Lots of emphasis on the terrible working conditions in the plants, how this is a permanent transition since many of the immigrants really love northwest Arkansas and won’t leave, and the racism that pervades the community.

Well worth your time.

And if you like that, here’s one telling the story of Shirley Sherrod, who must be the most famous midlevel appointment in the Department of Agriculture in U.S. history, thanks of course to Republican mendacity and racism.

Frankfurt On Inequality

[ 13 ] February 8, 2016 |

Daniel Hirschman’s review of Harry Frankfurt’s exercise in lazy profit-taking book confirms my fears about it:

HE FIRST THING you should know about On Inequality is that its title is incredibly misleading. Harry Frankfurt’s newest book, another slim volume modeled after his best-selling 2005 On Bullshit, is not really about inequality. Rather, and this distinction is important to Frankfurt’s entire purpose, the book contains a strident argument against economic equality as an independent moral imperative. “Against Equality,” then, might have been a better title.
…..

Frankfurt provides several (highly stylized) counterexamples when economic equality actually produces clearly worse outcomes to some kind of inequality and thus correctly notes that diminishing marginal utility isn’t sufficient to guarantee that complete equality maximizes social welfare. My favorite hypothetical is a desert island–style example where 10 people have enough food for eight to survive if two people are given none, but all will starve if the food is divided evenly. Fair enough, and worth keeping in mind if one is trapped on a desert island with precise knowledge of one’s food supply and time to rescue. Frankfurt thus contributes to an old genre of debate about the problem of adding up individual utility functions to make claims about optimal policymaking — or, as is more often the case, to clarify what claims we can’t make.

Frankfurt’s book is a philosophical treatise on how complete economic equality fails as a moral compass. I can imagine a world in which such an argument would be an important intervention. I do not believe we live in that world. Who exactly is Frankfurt arguing against? As a sociologist who studies the history of debates over income inequality, I admit to significant confusion. Frankfurt never really cites examples of the argument he is criticizing; he seemingly takes for granted that proponents of radical equality are everywhere. Perhaps they are, in some corner of American philosophy. In the public debate over economic inequality, I have not seen any. Even communists argue “to each according to his need,” which is not exactly a call for complete equality: it is, instead, rooted in the concern for having “enough” that Frankfurt thinks should be paramount.

The last time Frankfurt took a decades-old academic journal article, enlarged the fonts and margins, added a nice cover and a marketing team, and sold it for $9.95 I was willing to offer at least a partial defense of the exercise. While I’d have preferred a bit more additional work to justify the book, in 2005 his philosophical account of bullshit turned out to be a much-needed and valuable addition to the lexicon of political discourse: it gave precise account of a particular category of pernicious discourse we were (and are) drowning in. Elevating that analysis from obscurity served a purpose beyond Frankfurt’s profile and Frankfurt/PUP’s bottom line.

At first glance, this might seem like a similar situation. Economic inequality is far more central to political discourse than it was when the papers were initially published, 1987 and 1997. But unlike “On Bullshit,” repackaging these papers as a contribution to the present discourse has the effect of making them seem rather more pointless than they actually are. Political philosophy that treats ‘economic inequality’ entirely as an abstraction, rather than an urgent practical and political problem, hasn’t aged well at all. Frankfurt’s articles work just fine as contributions to narrow academic philosophical project. But that project has moved on. The intervention of Elizabeth Anderson, in particular, reframed the debate in important ways–while she is often read as defending a version of sufficientarianism like Frankfurt, her framing of economic inequality as a problem of justice and democracy, rather than morality, moved the conversation in a far more productive direction. (Amazon’s search inside the book indicates that whatever light updating Frankfurt may have done, it did not include any engagement with Anderson’s work.)

I would love to see Frankfort tackle the question of economic inequality again, in light of subsequent philosophical debates about egalitarianism, political, economic, and sociological scholarship about the causes and consequences of economic inequality, and the trajectory of economic inequality generally in the last few decades: if he’d defend something like his 1987 version of sufficientarianism today, and what that defense would look like, and if he’d revise in light of where we are and what we know in 2016, that would be interesting too. I fear he’s going to make take some money from people purchasing this book on the assumption that he’s doing something like that.

With Notably Rare Exceptions, Marco Rubio Had An Excellent Debate Saturday

[ 84 ] February 8, 2016 |

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Hugh Hewitt, everybody!

Talk-show host and Rubio enthusiast Hugh Hewitt: “I’m a contrarian on Rubio. He won all of that debate, except those three minutes. That will push him back. But he had a terrific second half. And I think he’ll get the bronze come Tuesday night.” Other than that, how did you enjoy the play, Mrs. Lincoln?

This reminds me of a classic moment in the entertainingly pathetic saga of Howard Kurtz. Since he’s now actually cashing paychecks for Fox News, he had to pretend to be very outraged by the BIASED MSNBC debate panel:

Rachel Maddow did a pretty good job in questioning Hillary Clinton and Bernie Sanders at MSNBC’s Democratic debate last night.

But she shouldn’t have been on that stage as a moderator, sitting next to Chuck Todd, NBC’s political director and moderator of “Meet the Press.”

This is not a knock on Maddow as a commentator. She is smart and passionate, a Rhodes scholar with a deep knowledge of the issues. She did not roll over for Clinton during a recent interview on her prime-time show.

But she is an unabashedly liberal commentator who rips the Republicans every night on her program. She should not have been put in that position.

I actually don’t even agree withe first sentence. Especially after the first segment — which was good because the moderators kept their interventions to a minimum — way too many of Maddow’s questions in particular focused on inane horserace and procedural trivia. (Clinton and Sanders alike handed them beautifully, refusing to rise to the bait and getting them over with as quickly as possible.) Whatever problems there were, however, I don’t really see why Maddow being a liberal makes her unqualified to moderate a Democratic debate.

But, while the argument might be bad, it would be OK if Kurtz was consistent. As you may remember, uberhack Hugh Hewitt was featured in a at least two earlier Republican debates. At one point, he literally applauded when Donald Trump said he wouldn’t run as an independent candidate. I bet Kurtz was equally upset about that, right? As you can see, he didn’t think it was even worth mentioning, and nor did he think it was problematic for Hewitt to be a moderator.

How many years did CNN try to pass off Kurtz as a neutral media critic? If only the Daily Download was still around to cover the story!

Live-tweeting Superb Owl

[ 3 ] February 8, 2016 |

Folks, I’m pleased to announce that last night a bunch of wild horses got into a fight with a bunch of big cats and defeated them, despite the fact that the most famous wild horse is super old.

Nukes at Sea

[ 5 ] February 8, 2016 |
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“USS Belknap collision damage” by Official US Navy photo. –  Licensed under Public Domain via Commons.

My latest at the Diplomat looks at some of the good work on nukes coming out of FAS:

The Federation of American Scientists (FAS) has published declassified documents on the disposition of U.S. nuclear weapons at sea during the Cold War, detailing the extensive preparations that the U.S. Navy (USN) took to fight a nuclear war at sea.

The afloat nuclear arsenal included a wide array of weapons, including carrier-borne nuclear gravity bombs and nuclear depth bombs, nuclear-armed torpedoes, nuclear-armed anti-submarine missiles, nuclear land attack cruise missiles, and, of course, submarine launched ballistic missiles. Carriers, surface warships, and submarines each carried an array of weapons, designed for either tactical or strategic purposes.

Christie Crashes, Burns

[ 46 ] February 8, 2016 |

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Chris Christie just missed his last, best chance to win New Hampshire:

Gradualism and the fight over Single Payer

[ 60 ] February 8, 2016 |

Back when I was starting out in blogging back in 2009 (before Game of Thrones started on HBO and gave me something way more popular to write about), I was actually a public policy blogger. And with the ongoing fight over single-payer that came out of Hillary Clinton’s positioning of single-payer as an attack on the Affordable Care Act, interventions by Ezra Klein and Paul Krugman and others on the same, and even my esteemed colleague’s contribution to the debate, my policy blogging interests are starting to reawaken.

One of the topics I used to be really interested in was gradualism as it applied to health care. Indeed, one of my very first blog pieces ever was an essay that pointed out that single payer itself gradually emerged through a series of reforms that took place over decades and only gradually became systems like the NHS.

However, Hillary Clinton and her supporters are making a terrible argument for gradualism.

Read more…

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