Paul Krugman - New York Times Blog
January 10, 2012, 10:37 am
Businessmen and Economics

A brief thought on something I’ll try to expand on later. Leaving aside all the questions about what Mitt Romney did or didn’t do at Bain — and about his self-aggrandizing double standard — there’s an even broader question: why does anyone believe that success in business qualified someone to make economic policy?

For the fact is that running a business is nothing at all like making macro policy. The key point about macroeconomics is the pervasiveness of feedback loops due to the fact that workers are also consumers. No business sells a large fraction of its output to its own workers; even very small countries sell around two-thirds of their output to themselves, because that much is non-tradable services.

This makes a huge difference. A businessman can slash his workforce in half, produce about the same as before, and be considered a big success; an economy that does the same plunges into depression, and ends up not being able to sell its goods. Nothing in business experience prepares one for the paradox of thrift, or even the inflationary impact of increases in the money supply (which is real when the economy isn’t in a liquidity trap.)

And I haven’t even mentioned the fact that presidents need to work with Congress, and face far more limits on their authority than CEOs.

The idea that what America needs now is an executive type is just foolish.

TINA DUPUY: Paul Ryan is loud, bold and wrong

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We must love boisterous blowhards. As Americans, we are fixated on people who make loud, definitive declarations so we can stand behind them waving our oversized number-one foam-fingers chanting: “Go team! Win!” If you take away all the nebbishy number-crunching and bureaucracy — which is most of government — politics is all posturing and platitude landing.

There’s an entire industry (cable “news”) solely devoted to bold assertions as entertainment. This means we’re subjected to a colossal amount of failed predictions and prognostications. Yes, if both sides say they’re absolutely correct — at least one has to be wrong.

But as Americans we like the courage it takes to stand up and be inaccurate. We hate handwringing and pandering - it’s just not fun to watch. We still like that swagger of a sure-of-himself cowboy. We love to love them, and we love to hate them — which is why Republicans tout Congressman Paul Ryan’s budget plan as “brave” despite being unable to bring themselves to call it “pragmatic.”

Ryan, a widely admitted Ayn Rand fanboy who seems unaware that she wrote libertarian-fantasy fiction while collecting social security and Medicare, is the new GOP “it” guy. After the State of the Union, Ryan gave the rebuttal (dubbed a Debbie Downer), and his name is what the GOP wants you to think of since they’ve been re-branded as the fiscally fretful Tea Party.

And, in homage to Republican titles meaning the opposite of what they’ll actually do (e.g., The Clean Skies Act), Ryan’s plan is titled, “The Path to Prosperity.”

In early April, Ryan wrote in a Wall Street Journal op-ed: “A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4 percent by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage’s analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.”

Read more: TINA DUPUY: Paul Ryan is loud, bold and wrong - Westport, MA - Herald News

http://www.wickedlocal.com/westport/archiv...

By NICHOLAS D. KRISTOF
Published: November 17, 2010


http://www.nytimes.com/2010/11/18/opinion/...

Earlier this month, I offended a number of readers with a column suggesting that if you want to see rapacious income inequality, you no longer need to visit a banana republic. You can just look around.My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana. But readers protested that this was glib and unfair, and after reviewing the evidence I regretfully confess that they have a point.

That’s right: I may have wronged the banana republics.

You see, some Latin Americans were indignant at what they saw as an invidious and hurtful comparison. The truth is that Latin America has matured and become more equal in recent decades, even as the distribution in the United States has become steadily more unequal.

I just wrote out this essay on how to create jobs, after hearing a political advertisement saying we do not need more spending to create jobs. I tried to make it as concise as possible, in order that someone of average intelligence would be able to understand it. I would like to see it sent out to local newspapers in Letters to the editor. Any comments on this essay? Thanks.





To increase the number of jobs, and reduce unemployment, you have to increase the Gross Domestic Product, or, GDP. The equation for GDP is: C + I + G + X - M, where: C = Consumer Spending, I = Private Investment, G = Government purchase of goods and services. X = the value of exports, M = value of Imports. Increasing C, I,G, or X will increase the GDP, and the number of jobs created. When private investment declines, there will be increased unemployment. To increase I, you have to increase demand, but if there is more unemployment, C will also decline, and the GDP will shrink, and with it, taxes paid to the Government. The most practical way to increase total demand, and with it, private investment, is to increase Government spending, or G. As private investment increases. there will be more jobs created, more profit, and more people will be paying taxes, and the deficit will decline. This takes time. Government spending should be directed to investments in the infrastructure, education, and supporting basic research, and in this way we will restore the prosperity of our country. This is borne out by our history, and in the experience of other countries.

GROWTH AND JOBS
IN THE NAME OF
DEFICIT REDUCTION



On September 16, 2010, the following statement, signed by more than 300 economists and civic leaders, was publicly released. It warns of “a grave danger” that today’s still-fragile economic recovery will be undercut by austerity economics of the kind being pushed by conservative politicians and by the White House Commission on Fiscal Responsibility and Reform.
The statement urges the president and Congress to “redouble efforts to create jobs” through investment in infrastructure, sending aid to the states and creating public service jobs.
In addition to warning that premature deficit reduction will cripple growth, the statement also warns that some conservative def­icit reduction proposals would undermine such important programs as Social Security, even as they fail to reduce deficits. Finally, the statement outlines a plan for reviving growth and jobs, for effective deficit reduction after the recovery, and for investment in infrastructure, green technology, and long-term economic productivity and job creation.


http://ourfuture.org/files/documents/don%2...

Extremely interesting--all you need to know from an expert

Radiometric Dating

A Christian Perspective

Dr. Roger C. Wiens

http://www.asa3.org/ASA/RESOURCES/WIENS.ht...



Dr. Wiens has a PhD in Physics, with a minor in Geology. His PhD thesis was on isotope ratios in meteorites, including surface exposure dating. He was employed at Caltech's Division of Geological & Planetary Sciences at the time of writing the first edition. He is presently employed in the Space & Atmospheric Sciences Group at the Los Alamos National Laboratory.

Radiometric dating--the process of determining the age of rocks from the decay of their radioactive elements--has been in widespread use for over half a century. There are over forty such techniques, each using a different radioactive element or a different way of measuring them. It has become increasingly clear that these radiometric dating techniques agree with each other and as a whole, present a coherent picture in which the Earth was created a very long time ago. Further evidence comes from the complete agreement between radiometric dates and other dating methods such as counting tree rings or glacier ice core layers. Many Christians have been led to distrust radiometric dating and are completely unaware of the great number of laboratory measurements that have shown these methods to be consistent. Many are also unaware that Bible-believing Christians are among those actively involved in radiometric dating.

This paper describes in relatively simple terms how a number of the dating techniques work, how accurately the half-lives of the radioactive elements and the rock dates themselves are known, and how dates are checked with one another. In the process the paper refutes a number of misconceptions prevalent among Christians today. This paper is available on the web via the American Scientific Affiliation and related sites to promote greater understanding and wisdom on this issue, particularly within the Christian community.

More about the author: Dr. Wiens received a bachelor's degree in Physics from Wheaton College and a PhD from the University of Minnesota, doing research on meteorites and moon rocks. He spent two years at Scripps Institution of Oceanography (La Jolla, CA) where he studied isotopes of helium, neon, argon, and nitrogen in terrestrial rocks. He worked seven years in the Geological and Planetary Sciences Division at Caltech, where he continued the study of meteorites and worked for NASA on the feasibility of a space mission to return solar wind samples to Earth for study. Dr. Wiens wrote the first edition of this paper while in Pasadena. In 1997 he joined the Space and Atmospheric Sciences group at Los Alamos National Laboratory, where he has been in charge of building and flying the payload for the solar-wind mission, as well as developing new instruments for other space missions. He has published over twenty scientific research papers and has also published articles in Christian magazines. Dr. Wiens became a Christian at a young age, and has been a member of Mennonite Brethren, General Conference Baptist, and Conservative Congregational, and Vineyard denominations. He does not see a conflict between science in its ideal form (the study of God's handiwork) and the Bible, or between miracles on the one hand, and an old Earth on the other.

Lots more at the link (Something like 28 pages)

The Very Angry Tea Party
By J.M. BERNSTEIN


http://opinionator.blogs.nytimes.com/2010/...



Sometimes it is hard to know where politics ends and metaphysics begins: when, that is, the stakes of a political dispute concern not simply a clash of competing ideas and values but a clash about what is real and what is not, what can be said to exist on its own and what owes its existence to an other.

The seething anger that seems to be an indigenous aspect of the Tea Party movement arises, I think, at the very place where politics and metaphysics meet, where metaphysical sentiment becomes political belief. More than their political ideas, it is the anger of Tea Party members that is already reshaping our political landscape. As Jeff Zeleny reported last Monday in The Times, the vast majority of House Democrats are now avoiding holding town-hall-style forums — just as you might sidestep an enraged, jilted lover on a subway platform — out of fear of confronting the incubus of Tea Party rage that routed last summer’s meetings. This fear-driven avoidance is, Zeleny stated, bringing the time-honored tradition of the political meeting to the brink of extinction.



\

It would be comforting if a clear political diagnosis of the Tea Party movement were available — if we knew precisely what political events had inspired the fierce anger that pervades its meetings and rallies, what policy proposals its backers advocate, and, most obviously, what political ideals and values are orienting its members.

Of course, some things can be said, and have been said by commentators, under each of these headings. The bailout of Wall Street, the provision of government assistance to homeowners who cannot afford to pay their mortgages, the pursuit of health care reform and, as a cumulative sign of untoward government expansion, the mounting budget deficit are all routinely cited as precipitating events. I leave aside the election of a — “foreign-born” — African-American to the presidency.

When it comes to the Tea Party’s concrete policy proposals, things get fuzzier and more contradictory:

keep the government out of health care, but leave Medicare alone;

balance the budget, but don’t raise taxes;

let individuals take care of themselves, but leave Social Security alone;

and, of course, the paradoxical demand not to support Wall Street, to let the hard-working producers of wealth get on with it without regulation and government stimulus, but also to make sure the banks can lend to small businesses and responsible homeowners in a stable but growing economy.


more at link

< I. Why We Need Regulation >



A public good is something that the free market tends not to provide on its own, to the detriment of society. Pollution laws and police departments are classic examples. In the case of finance — and of the crisis of the past two years — this missing good has been strong regulation. A weak system of regulation allowed Wall Street firms to take on enormous debt. Those debts let the firms make more and riskier investments than they otherwise could have, lifting their profits. But when the value of the investments began falling, the firms had little margin for error. They were like home buyers who made a tiny down payment and soon found themselves underwater.

It was tempting to let the banks fail. They certainly deserved it. But big bank failures often cause terrible damage. Credit dries up, and the economy can enter a vicious cycle of falling asset prices and job losses. That is what began to happen in 2008. To get credit flowing again, the federal government came to the rescue with billions of taxpayer dollars. It was a maddening story line: the government helped the banks get rich by looking the other way during good times and saved them from collapse during bad times. Just as an oil company can profit from pollution, Wall Street profited from weak regulation, at the expense of society.

If there has been a theme to the Obama administration’s disparate domestic policies, it has been to invest more in public goods. The administration has increased spending on schools, highways and scientific research and tried to play a more active role in energy policy and health care. “They’re all a necessary part of the network of what makes market economies work,” Timothy F. Geithner, the Treasury secretary, told me recently, “and we have not been good enough about doing them in recent years.” A big part of that network, Geithner added, is financial re-regulation.

To reduce the odds of a future crisis, the Obama plan would take three basic steps. First, regulators would receive more authority to monitor everything from mortgages to complex securities. This is meant to keep future financial time bombs, like the no-documentation loans and collateralized debt obligations of the past decade, from becoming rife. Second — and most important — financial firms would be forced to reduce the debt they take on and to hold more capital in reserve. This is the equivalent of requiring home buyers to make larger down payments: more capital will give firms a bigger cushion when investments start to go bad. Finally, if that cushion proves insufficient, the government would be allowed to seize a collapsing financial firm, much as it can already do with a traditional bank. Regulators would then keep the firm operating long enough to prevent a panic and slowly sell off its pieces.

more: (4 pages)
http://www.nytimes.com/2010/03/28/magazine...

PAUL KRUGMAN
America Is Not Yet Lost

The way the Senate works is no longer consistent with a functioning government, and senators should change the rules to end obstructionism.

We’ve always known that America’s reign as the world’s greatest nation would eventually end. But most of us imagined that our downfall, when it came, would be something grand and tragic



What we’re getting instead is less a tragedy than a deadly farce. Instead of fraying under the strain of imperial overstretch, we’re paralyzed by procedure. Instead of re-enacting the decline and fall of Rome, we’re re-enacting the dissolution of 18th-century Poland



A brief history lesson: In the 17th and 18th centuries, the Polish legislature, the Sejm, operated on the unanimity principle: any member could nullify legislation by shouting “I do not allow!” This made the nation largely ungovernable, and neighboring regimes began hacking off pieces of its territory. By 1795 Poland had disappeared, not to re-emerge for more than a century.
Today, the U.S. Senate seems determined to make the Sejm look good by comparison.

more;

http://www.nytimes.com/2010/02/08/opinion/...

If a society wants to progress, and increase the quality of life for its citizens, it must invest in the following areas:

1. Education and job training.

2. Infrastructure, including roads, transportation systems, power, communications,etc.

3. Research and development, to keep abreast of other countries

4. Public health, anything to have a healthy populace

To make these investments, taxes are required, and we should support taxes to pay for them.


It should also have a neutral (or positive) balance-of-payments with other countries. When a country has a negative B.O.P.,its wealth is being transferred to foreigners, and the country becomes poorer as a result. The last time we had a neutral B.O.P. was during the Carter Administration.

By January, he will have accomplished more than any first-year president since Franklin Roosevelt.
By Jacob Weisberg

Posted Saturday, Nov. 28, 2009, at 8:13 AM ET


About one thing, left and right seem to agree these days: Obama hasn't done anything yet. Maureen Dowd and Dick Cheney have found common ground in scoffing at the president's "dithering." Newsweek recently ran a sympathetic cover story titled, "Yes He Can (But He Sure Hasn't Yet)." The sarcasm brigade thinks it's finally found an Achilles' heel in his lack of accomplishments. "When you look at my record, it's very clear what I've done so far and that is nothing. Nada. Almost one year and nothing to show for it," Obama stand-in Fred Armisen recently riffed on Saturday Night Live. "It's chow time," Jon Stewart asserts, for a president who hasn't followed through on his promises.

This conventional wisdom about Obama's first year isn't just premature—it's sure to be flipped on its head by the anniversary of his inauguration on Jan. 20. If, as seems increasingly likely, Obama wins passage of a health care reform a bill by that date, he will deliver his first State of the Union address having accomplished more than any other postwar American president at a comparable point in his presidency. This isn't an ideological point or one that depends on agreement with his policies. It's a neutral assessment of his emerging record—how many big, transformational things Obama is likely to have made happen in his first 12 months in office.

The case for Obama's successful freshman year rests above all on the health care legislation now awaiting action in the Senate. Democrats have been trying to pass national health insurance for 60 years. Past presidents who tried to make it happen and failed include Harry Truman, Lyndon Johnson, Jimmy Carter, and Bill Clinton. Through the summer, Obama caught flak for letting Congress lead the process, as opposed to setting out his own proposal. Now his political strategy is being vindicated. The bill he signs may be flawed in any number of ways—weak on cost control, too tied to the employer-based system, and inadequate in terms of consumer choice. But given the vastness of the enterprise and the political obstacles, passing an imperfect behemoth and improving it later is probably the only way to succeed where his predecessors failed.


more:
http://www.slate.com/id/2236708/?from=rss


comment: I hope he's right--I was getting discouraged

If the health insurance bill does not pass due to a few legislators obstructing it, we should consider modifying the Constitution to ensure a more efficient method of passing legislation. I would propose the following steps:

1.For major legislation, the president would appoint a body of experts to draft the bill. All members of this body would be required to be approved by Congress. This bill would then be submitted to Congress for a reading. They would then propose amendments and return the bill to the experts, who would consider them and return the bill to Congress for a vote.

2.If Congress fails to pass the legislation, the President would then submit the bill to the country for a national referendum.

3.To become law, the bill would have to have the approval of a majority of voters in at least half of the states, plus an absolute majority in the entire country.

4. Congress would still be able to enact minor legislation. This needs to be defined further, as to what is major and what is minor. Minor appropriation bills could be enacted, also bills naming .post offices and other government building.


Canada has something similar, but if the legislation is defeated, they call for new elections. A referendum would be simpler, and less costly. A disadvantage is that if a reactionary President was elected, he would try proposing reactionary laws. This is what happened when Thatcher was elected in England. However, she was replaced with a Labor Government afterwards. What do you think would happen if a reactionary President tried to eliminate Social Security or Medicaid? I believe if we adopted the system I suggest, after a few presidential terms, we would have a efficiently functioning government, with universal health insurance, a more progressive income tax, etc.

The paradox of US healthcare
By Andrew Kennis

http://english.aljazeera.net/focus/2009/10...

snip>
In the meantime, the US continues to be the country with the highest proportion of uninsured people in the developed world. It also has the distinction of spending a greater portion of its total economic output on healthcare than any other developed country - just over 17 per cent of its gross domestic product (GDP) last year.

On average, the US spends twice as much as other developed countries on healthcare.

But even though US citizens pay more for healthcare, they get less of it, resulting in a lowly 37th place ranking among healthcare systems in the world, according to a study by the World Health Organization based on quality and fairness.

In terms of the infant mortality rate, a common marker for the overall state of healthcare systems, the US was outranked by all of the following countries according to the CIA's World Factbook: Sweden (3rd), Japan (4th), France (7th), Norway (10th), Germany (14th), Israel (17th), Denmark (21st), United Kingdom (31st), Canada (35th), Taiwan (39th), Italy (41st) and even a few underdeveloped countries, including Cuba (43rd).

How can this paradox of the US spending the most and getting the least for its healthcare occur in the country with the world's largest economic output?

Claudia Schaufan, an Argentine physician and professor of comparative health policies at the University of California in Santa Cruz, explains that the common characteristics of healthcare systems in the developed world have to do with the universality of coverage and the lack of for-profit entities.

The key behind each of these systems is that they all outperform the US in terms of their infant mortality rates, administrative costs, the extent of population with coverage and the proportion of GDP spent on healthcare.

Furthermore, there are no documented instances of citizens going bankrupt because of medical care in these systems while, conversely, some studies have shown as many as 700,000 Americans suffer that fate annually.

'Making a buck


One grouping of healthcare systems can be described as socially insured and multi-payer (Germany, Switzerland, Japan, Israel, Belgium and Austria), another as socially insured and single-payer (Taiwan and Canada), and a third as nationally insured and delivered (United Kingdom, Spain, all of Scandinavia, Italy and Iceland).

Socially insured and multi-payer systems feature health insurance delivered by non-profit insurers. Those who are unemployed or cannot afford to pay for the insurance, receive governmental assistance so that universal coverage is achieved.

Certain multi-payer countries have a wide choice of insurance programmes, as is the case in Germany. When you choose a private, non-profit insurer - Germany has 240 of them - the government pays a portion of the costs based on your income.

Developed countries with one national insurer that is funded publicly - often described as single-payer - have a healthcare system that is delivered by either private (as is the case in Canada) or publicly-run institutions (as is the case in all of Scandinavia).

While these systems differ in their specific characteristics, the similarities are more important, according to Schaufan.

"Everyone has health insurance and there is no significant for-profit aspect in any part of the medical sector ... nobody in these systems 'makes a buck' at the expense of the health of patients," she says.

Learning from others

Taiwan, which spends three times less than the US on healthcare, developed its current healthcare system in the mid-1990s, when the majority of citizens were uninsured and policymakers collectively decided the health system needed to be radically overhauled. However, the Taiwanese looked to other countries to forge their own system.
Asked what the proposed US reforms show in terms of learning from other examples, Naoki Ikegami, a leading Japanese healthcare economics professor, says simply: "Not much, because there has to be a willingness to learn and if anything, US leaders have isolated themselves from learning about other healthcare systems."

Professor Ikegami's co-author on numerous scholarly publications, John Campbell, an American-born political science professor, says: "The reforms being proposed in the US simply do not fix or get at the heart of the problem, which is price containment and unsustainable healthcare costs.

"The US would stand to gain a lot from going to a single-payer system, where costs could easily be contained and controlled."


more:
http://english.aljazeera.net/focus/2009/10...

How Poland and Hungary Led the Way in 1989

By Walter Mayr, Christian Neef and Jan Puhl

Everyone remembers the iconic images from the dramatic breaching of the Berlin Wall on Nov. 9, 1989. But the groundwork was laid elsewhere. The fate of Germany and the rest of Europe was decided in Warsaw, Budapest and Moscow.

By that evening of Nov. 10, 1989, Anatoly Sergeyevich Chernyayev had been meticulously keeping a diary for 20 years. Every day, after coming home to his apartment on Deneshny Pereulok from the party headquarters on the Old Square or from the Kremlin, he had sat down at his desk to write in his diary.

After gazing out the window at the Foreign Ministry building, a Socialist Classicist monstrosity built shortly before Stalin's death in the neighborhood where Moscow's coin makers traditionally had their shops, he would write a detailed account of his daily experiences. He focused, in particular, on the thoughts that he could not express at work, where he was surrounded by fellow party comrades: his futile hopes, frustrations and disappointments.



Chernyayev, a close associate of then Soviet President Mikhail Gorbachev, made a short and laconic entry into his diary on Nov. 10: "The Berlin Wall has collapsed. An epoch in the history of the 'socialist system' is coming to an end," the advisor to the president and party chairman wrote on that Friday evening. "Following the Polish and the Hungarian workers' parties, Honecker has now fallen, and today there was news of Shivkov's departure. All we have left now are our 'closest friends': Castro, Ceausescu and Kim Il Sung. All people who hate us."

His tone was not one of bitterness but of deep sarcasm. Chernyayev had seen this day coming for a long time. "It's the end of Yalta and the Stalinist legacy," he concluded.

Let History Pass it By

The motto "Workers of the world, unite!" was still emblazoned on the front page of Pravda, the party-controlled newspaper, lying on the table next to him. A top headline, on that Nov. 10, read "Today is the day of the Soviet police." Pravda had let history pass it by.

t was a completely different story elsewhere in Europe, where people were celebrating with abandon, almost overwhelmed by the images from Berlin showing East and West Germans in each others' arms. "Germany weeps with joy. Berlin is Berlin once again!" wrote the tabloid BZ. The news that Berlin, divided for 28 years, was united had even traveled as far as the remote reaches of the Australian West Coast. German film director Wim Wenders, was on a visit to the region at the time ("I couldn't have been farther away from Berlin than I was at that moment," he said), encountered a hermit living in a cave. "It was early in the morning, and he was dead drunk. He was a Lithuanian and he spoke a little German. He kept drinking toasts to Berlin, speaking in a loud voice in an attempt to drown out the Wagner music blaring from his ghetto blaster. 'No more walls! No more walls! No more walls anyplace in the world!'"

1989 went down in the history books as the year of the fall of the Berlin Wall and of peaceful revolution in East Germany. That, at least, is the way the Germans like to see it. It was also the way then-Chancellor Helmut Kohl saw it from the beginning. "We are writing a chapter in world history, once again, it must be said," the chancellor said on Nov. 9, in an emotional speech during a state visit to neighboring Poland.But why did it take so long for the Wall to come down? And who actually destroyed it?


Lots more:

http://www.spiegel.de/international/spiege...