Category: Equitablog

Should Read: Bonnie Kristian: We’re All Public Intellectuals Now: “Public Intellectuals in the Global Arena: Professors or Pundits? http://amzn.to/2kx3M6U…

… The single theme… is a word of caution for those who would guide the public mind…. Global Arena’s call to a certain humility and ethical skepticism in public pronouncement is extended beyond any of its milieus…. There is “no doubt that scholarly engagement with policy poses some moral quandaries,” Desch says, but “this tension can be a creative one,” if intellectuals can engage with prudence….

Taylor’s description of our loss of common “cultural capital”… shapes Global Arena beyond its mild secularist tendencies…. Public intellectuals can no longer communicate to a small, homogenous audience steeped in the same classic texts and cultural imaginary. For the public, they mean it is increasingly difficult to independently identify intellectuals of value—and thus the institutional endorsement a faculty role provides has become a convenient stand-in…. Public Intellectuals in the Global Arena offers a useful and provoking read.

Must-Read: Donald Trump leads America’s heel turn: the American Century as we have known it since 1940 is over:

Ed Luce: President Trump’s Speech Puts the World on Notice: “Combative address will go down as a turning point in America’s postwar role…

In case there were any lingering doubts about the sincerity of Donald Trump’s “America First” campaign, he laid those to rest the moment he swore the oath of office. His brief inaugural address was perhaps the most xenophobic in US history. The 45th president’s one specific foreign policy promise was to eradicate Islamist terrorism “from the face of the earth”. His only other message to the rest of the world was to put it on notice that America would take precedence again after an age in which the US had “defended other nations’ borders” and subsidised their armies. That age was over, he said… a turning point in America’s postwar role — and quite possibly its death knell.

The contrast with Barack Obama’s inaugural address in 2009, in which he promised Iran he would “extend a hand if you are willing to unclench your fist”, was Manichean. Mr Obama spoke to a snow-filled scene of up to 2m people — something that Steven Spielberg said would have been impossible to set up for a movie. Mr Trump spoke to crowds a fraction of that size on a dreary Washington day. That should perhaps be no surprise. He comes into office with the lowest approval ratings of any US president in modern history — twenty or so points below what is typical, and considerably below Mr Obama’s outgoing ratings. Unlike Mr Obama, he will inherit an economy in reasonable shape and no large scale US military wars. But the biggest contrast was in their tones. Mr Obama radiated hope. Mr Trump channelled rage…

Should-Read: David Beckworth: It’s Policy Divergence, Not China, Driving the Dollar: “President Trump is worried about the strong dollar… said… China holds down its currency…

…The real issue is… the diverging of the current and expected paths of monetary policy…. The Fed has been tightening and is expected to continue do so with further rate hikes in 2017. The ECB, on the other hand, is still running its QE program and is keeping it short-term policy rates pegged close to zero…. The surging dollar… is something to worry about…. But… [it] is a very different problem than the one President Trump sees with the strong dollar. 

Should-Read: Ann Marie Marciarille: Email, The Gift That Keeps on Giving: “U.S. District Judge John D. Bates spilled a considerable amount of ink in yesterday’s Memorandum Opinion enjoining the Aetna-Humana health insurance merger…

… Even though antitrust opinions are not known for their brevity, the roughly thirteen pages devoted to discussing whether Aetna’s announced  withdrawal from the complaint counties about three weeks after the date of the filing of the government complaint was  motivated by a desire to  improve its litigation position or as part of ordinary business decision making is pretty detailed…. Yes, it was the  internal documents of Aetna management discussing motivation for withdrawal from the profitable Florida exchange market or, even, in refusing to discuss the Florida decision while laying out the business case analysis behind withdrawal from the exchange markets in other locales that animated Judge Bates’ opinion…. Internal Aetna management correspondence…. My favorite part involved hints at what was sometimes unsaid in emails. When Aetna’s Florida Market President, Christopher Ciano, received word of the decision to exit the Florida exchange market (he was not part of the decision making group), his serial emails lamenting the decision, pointing out that Florida’s exchange market was profitable for Aetna, and stating that he just couldn’t make sense of the decision are powerful because of his apparent ignorance or because of what wasn’t said. Christopher Ciano was, eventually,  directed to stop discussing this matter in emails and to take the conversation to the telephone.

That’s the thing about email correspondents — they often know, on some level, that the messages may be brought to light in some way but they can’t always seem to stop.  I wonder if, because email can be so conversational in tone, they forget that they are creating a written record.

Must-Read: This is a different degree of idiocy than we saw under Bush-Cheney or Cameron-Osborne. It could have been the case that Saddam Hussein had an active nuclear-weapons program. It could have been the case that the confidence benefits from fiscal austerity would have made it a good policy choice after 2010. It was unlikely in both cases. But there were possible worlds in which those things were true.

There is no possible world in which a VAT rebated at the border is an export subsidy:

Martin Wolf: Donald Trump and Xi Jinping’s Battle Over Globalisation: “[The Trumpists] believe, for example, that a value added tax not levied on exports is a subsidy to exports…

…It is not: US goods sold in the EU pay VAT, just as European goods do; and European goods sold in the US pay sales taxes (where levied), just as US goods do. In both cases, no distortion between domestic and imported goods is created. Tariffs are levied only on imported goods. So they do distort relative prices…. These people believe trade policy determines the trade deficit. To a first approximation, this is not so, because the trade (and current account) balances reflect differences between income and spending. Assume imposition of an across-the-board-tariff. Purchases of foreign exchange will fall and the exchange rate will appreciate, until exports fall and imports rise enough to return the deficit to where it started. Protection then just helps some businesses at the expense of others. The Trump proposals seem to aim at resurrection of the economically dead.

True, protection might lower the [trade] deficit by making the US a less attractive destination for foreign investment. But that hardly seems a sane strategy….

Unwise policies might do huge damage. The US president possesses the legal authority to do virtually whatever he wants…. Reneging on past deals is sure to make the US seem an unreliable partner. Its victims, particularly China, are also likely to retaliate…. In a full trade war, US employment might fall by 4.8m private sector jobs. The disruption of supply chains is likely to be especially serious. Beyond this are huge geopolitical consequences….

The rhetoric of “America First” reads like a declaration of economic warfare. The US is immensely powerful. But it cannot even be confident it will get its own way. Instead, it may merely declare itself to be a rogue state. Once the hegemon attacks a system it created, only two outcomes seem at all likely—its collapse or recreation of the system around a new hegemon…. Mr Xi’s vision is the right one. But, without Mr Trump’s support, it may now be unworkable. That would benefit nobody, including the US…

Should-Read: Remember–I was a soft TPP skeptic: I thought the IP protections and dispute resolution provisions were more likely than not to be unwise for the world (although probably profitable for the United States, and very profitable for the U.S. overclass.

Kevin Drum has a “shorter Brad DeLong”:

Kevin Drum: Who’s Afraid of the Trans-Pacific Partnership?: “The responsibility of trade deals for the decline of manufacturing in the US has become practically holy writ over the past year…

…Is this legit? Over at Vox, Brad DeLong says no. Period. However, his post is 8,000 words long, and ominously, over at his own site he says that it does “only a third of what I wanted to do.” Clearly, then, we need a shorter Brad DeLong. Here it is:

Very roughly speaking, DeLong’s argument is this: everyone agrees that Germany is the poster child for an advanced economy with a great manufacturing policy. And yet, their manufacturing employment has steadily declined for the past half century too, just like ours. So if this has happened to Germany, there’s not much of a case for suggesting that the US has done anything especially wrong over the past 50 years. We’ve simply evolved from a (relatively) poor manufacturing nation into a (relatively) rich services and technology nation. This has nothing much to do with trade policy, either. It’s just what rich countries do. What’s more, it’s a decidedly good thing overall, even if it does affect a smallish number of people badly.

Now, you should click the link and read all 8,000 words if you want to understand the details…

Should-Read: Paul Krugman: Donald the Unready: “Betsy DeVos… doesn’t know basic education terms, doesn’t know about federal statutes governing special education…

…but thinks school officials should carry guns to defend against grizzly bears. Monica Crowley… withdrew after it was revealed that much of her past writing was plagiarized. Many other national security positions remain unfilled…. Rex Tillerson… [was] apparently unaware that he was in effect threatening to go to war if China called his bluff. Do you see a pattern here? It was obvious to anyone paying attention that the incoming administration would be blatantly corrupt. But would it at least be efficient in its corruption?…

The typical Trump nominee, in everything from economics to diplomacy to national security, is ethically challenged, ignorant about the area of policy he or she is supposed to manage and deeply incurious. Some… are even as addicted as their boss to internet conspiracy theories. This isn’t a team that will compensate for the commander in chief’s weaknesses; on the contrary, it’s a team that will amplify them. Why does this matter? If you want a model for how the Trump-Putin administration is likely to function (or malfunction), it’s helpful to recall what happened during… Bush-Cheney….

The last Republican administration was also characterized by cronyism, the appointment of unqualified but well-connected people to key positions…. Consider the botched occupation of Iraq…. And what will happen when we face a crisis? Remember, Katrina was the event that finally revealed the costs of Bush-era cronyism to all…. Real crises need real solutions. They can’t be resolved with a killer tweet, or by having your friends in the F.B.I. or the Kremlin feed the media stories that take your problems off the front page…. An administration unprecedented in its corruption, but also completely unprepared to govern. It’s going to be terrific, let me tell you.

Should-Read: Charles Stross (2010): Insufficient Data: “So. I ask: how many people does it take, as a minimum, to maintain our current level of technological civilization?…

…I’d put a lower bound of 100 million on the range…. The specialities required for a civil aviation sector alone may well run to half a million people; let’s not underestimate the needs of raw material extraction and processing (from crude oil to yttrium and lanthanum), of a higher education/research sector to keep training the people we need in order to replenish small pools of working expertise, and so on. Hypothetically, we may only need 500 people in one particular niche, but that means training 20 of them a year to keep the pool going, plus future trainers….

You can’t simplify a complex society that runs on just-in-time delivery and a host of specialities. You need a huge training back-end to provide for the thousands of skilled graduate-entry niche occupations. You need an efficient just-in-time delivery system to keep everyone supplied with food, water, power, shelter and whatever else they need — it’s that, or accept huge inefficiencies in your supply chain that wipe out the gains produced elsewhere…. Seemingly similar artefacts (cars, phones, airliners) have invisibly accreted complexity… [that] makes them better (safer, more economical, more luxurious)… but vastly more difficult to engineer; stuff that used to be fixable by shade-tree mechanics and jobbing electricians has receded over the horizon. Back in the early 19th century, the complement of a sailing ship could expect to maintain the ship in every significant way using tools and expertise that they could carry aboard the ship. Today in the early 21st century, that’s not an option with airliners or probably even automobiles….

Space colonization? Get back to me when you’ve tracked down how many people it takes to design and build a space suit. (The number is in the hundreds, if not the thousands.) More realistically, we won’t have autonomous off-world colonies unless and until they can cover all the numerous specialities of the complex civilization that spawned the non-autonomous, dependent-on-resupply space program. Or, to put it another way: colonizing Mars might well be practical, but only if we can start out by plonking a hundred million people down there.