Appreciation: Cohen and DeLong on The Future

[It's 10:09 PM, and I like to go to bed early. I invoke the blogger's privilege of publishing a first draft.--Buce]
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Readers who want the core argument from The End of Influence by Stephen Cohen and Brad DeLong might consider this roadmap: read the first chapter; then skip to Chapter 6 (State-led Development) and read the first half; then Chapter 7. (Conclusion). That will give you the takeway points (or keep reading this review and pick up another version of the takeaway points below) (or see this helpful excerpt in FP).

Am I saying you shouldn't read the rest of the book? Hm. Well, if you do skip the rest, you'll miss out on a lot of cool factoids about the current macro environment--the kind of thing that makes you such a damn nuisance so loveable at parties. But if you follow DeLong's hugely successful weblog, you know a good deal of this stuff already. On the other hand, if you don't read the intervening chapters, you'll miss out on the frustration of trying to cope with an absorbing and instructive--but maddeningly ill-organized--presentation. The book, to be blunt, shows all the earmarks haste, as if the authors felt they just had to get an oar in at this juncture of the debate, rather than think through a more complete project.

Item: there's a lot of discussion here of "the neoliberal order" (aka neoliberal dream, neoliberal utopia, neoliberal program, neoliberal game, neoliberal age, neoliberal worldview)--all without any effort at precise definition, nor (this is more important) any effort to specify just why it is so central. Item: there's a useful introduction to "sovereign wealth funds" with little to connect the dots as to how they fit into the larger argument. Item, there's a discussion of dirigiste economic growth, provocative but entirely inconclusive (Can anybody do it? Can we do it? Have we done it? Will others do it? Should we try it? etc.).Item: there's an elegant menu of competing paths to development which seems on the face of things almost entirely irrelevant to the business at hand. Item: there's a swell tour d'horizon of foreign-exchange issues, instructive if you ignore the fact that it seems almost to contradict the main line of argument.

So, of course you'll read it. But you'd better be prepared to structure a lot of the argument yourself. Let me see if I can give a summary:

1. In the future, we won't be as powerful as we have been in the past; because
2. We won't be as rich;
3. Relatively [and also absolutely?], such that
4. In fact, nobody, will be able to dominate the way we have dominated since world war II. This will lead to
5. Wasteful, beggar-thy-neighbor strategic infighting.

This is a perfectly intelligible set of propositions, debatable of course (not least because we are predicting the future here), but still worth reflection. As to the first couple (not as powerful, not as rich), it happens that I believe them to be true. They are also at this point pretty familiar stuff ("that's all?" said Mrs. Buce with a dismissive snarl; she outsources macro policy to me and expects a higher-value-added return).

The last couple of pointts (infighting, beggar-they-neighbor--dare I call it mercantilism?)--are interesting and might be right, although I'd need a lot more by explicit argument to be persuaded. But this is where I could use lot more careful analysis.

Example: consider "the neoliberal (whatever)"--by which I take it they mean "the way we have lived for the last 40 years:" increasingly unfettered free markets. CD seem to be assuming that this "neoliberalism" has been discredited by the late uproar and will therefore vanish into the sunset. I'd need a lot more persuading. There is a lot of money and power that rides on the legitimacy of the market model, and these guys have no instinct to go away--hell, they don't even know they've been discredited.

Example: I am really not at all clear why they are telling me what they tell me about foreign exchange. They observe that lots of people, for a long time, have been forecasting s calamitous decline in the exchange value of the dollar. And yet it hasn't happened. There may be good reasons why it hasn't happened: we offer political stability; world lending is still dollar denominated; the lenders are locked in. Sure, fine, but what exactly does this have to do with their more general argument? Stated baldly (but this cannot be their point) it seems to suggest that we might not be losing our wealth and power and influence anywhere near as fast as might at first glance appear.

A final example: CD seem to be trying to tell us that sovereign wealth funds necessarily exercise "political" or perhaps "strategic" power instead of mere "economic" power, as we might expect from a neoliberal enterprise. The more I look at that one, the more skeptical I become. My present inclination is to surmise that the critical factor is "bigness," and that huge "private" corporations" might well start acting like (or in concert with) states; while "sovereign" funds might perfectly well find that money is more fun than politics.

Which brings me to a final, more general, point. That is: if there is an important flaw in their general argument, it may lie in their (implicit) assumption about the nature of states. They seem to presuppose a static model of statehood--the kind of thing we've come to take for granted since the Treaty of Westphalia. That would mean: a state that makes at least a pretense of commitment to "a common good," to the maintenance of public order, to the administration of justice. It would mean a state professing (however hypocritically or ineffectually) to the welfare of its people.

I think they may failing to consider just how transitory, perhaps accidental, this model might be--a lucky accident, like the very existence of life in the universe. We've lived so long (and in the US, so well) on that state model, that we forget how quickly and easily and completely it might pass away. There are already signs of states weakening everywhere--not just the basket cases like Somalia or Afghanistan, but in so many places where the ligaments of the (if you'll permit me) Enlightenment model may seem to be coming unglued.

This is a nightmarish scenario and I certainly hope I am just grotesquely wrong. If it does come to pass, what then? I don't even pretend to have a very clear idea, but whatever idea seems to boil down to two overlapping concepts: tribes, and cartels. As CD observe, we also have a half a dozen or so sovereign wealth funds that we find we must treat as players in their own right. CD seem to assume (although they don't quite say) that we should treat them as arms or allies of the stat. But what if they simply are the state? Or simply self-sustaining states-within-a-state, nesting in some vestigal state womb, but answering to no one but themselves (and each other)? What then, huh? I have no idea;it's an incomplete picture and thank heavens for that, because it isn't very pretty and I'm not in the mood for a nightmare. But I think I'd have to cope with it before I went public with any grand propositions about the future.

I don't think CD have considered this possibility (or perhaps they simply think it is too ridiculous even to consider). Yet I'd say it is one testimony to the power of this absorbing and provocative book that it generates the thought of such a bleak alternative.

DeLong Gets It Mostly Right

Brad DeLong moves the ball a long way downfield with the following post, which I reprint in full before improving upon it:

Three Possible Financial Narratives for the Obama Administration

"So we are settled," said the convenor of the meeting. "Our story is: the truth!"

"At least it is easy to remember," someone muttered under their breath as we gathered up our papers.

It seems to me that the Obama administration can go with any of three different truths as it tries to explain its banking programs to the world:

• The banks have us by the plums: Keeping the economy near full employment requires pushing asset prices back up to values at which businesses selling stocks and bonds can obtain financing that makes it profitable for them to expand. But pushing asset prices back up enriches the bankers whose overleverage got us into this mess, and prevents them from suffering their just punishment. There is no way out of this dilemma, but the Obama administration is trying as hard as it can given the limited authority congress has granted it to maximize the gain to employment and minimize the support provided to financial princes.

• The government has a chance to make a fortune: Just as in 1999 and 2005 financial markets were ruled by irrational exuberance, now they are ruled by irrational pessimism. Because of this irrational pessimism, businesses selling stocks and bonds cannot obtain financing that makes it profitable for them to expand--and so unemployment is high. But the government is not irrationally pessimistic, and is "patient capital": the government can buy up financial assets and so raise their price, boost employment, and then hold the assets until maturity and very likely make a fortune. It can do good for the economy and the country and do well by its own finances at the same time. It is true that financiers who ride-alongside, front-run, and manage the government's portfolio are very likely to make fortunes too, but much smaller fortunes than the government.

• We have to play out the hand before we ask for a New Deal: Perhaps the situation can be cured with relatively minor support for the banks. Perhaps the situation will require full-fledged bank nationalization. Bank nationalization could not pass the Senate now. Come this fall, it may be needed--but it will only be clear that it is needed if the Obama administration has done its best to rescue the banking situation with the powers it has at its current disposal. You cannot ask for a New Deal until you have played out your hand.

If the Obama administration were selling any of these three lines of narrative--or were selling all of them--it seems likely to me that it would be having more success is building support for its strategy. But I do not think that it is selling any of these narrative lines to make sense of its policies. Indeed, I do not know what the narrative story it wants to tell about the current situation is.

Three good, provocative, thought-provoking choices, but it may be the reason he can't tell which is the right one is that ther is a fourth choice: we think that throwing taxpayer money at investors. Granted that the administration has done a shockingly perfunctory job of trying to explain itself to voters, still I think we'd have to accept this fourth alternative as the "official story" and even perhaps accept (although this is a different point) that they believe it.

Still, a solid B-plus for Brad, who is definitely holding his own in the league tables. And wouldn't it be nice if Brad's second reason were actually true?

Brad's Comments

Josh Wright and Steve Horowitz (and commentators) are bent out of shape with Brad DeLong for deleting (or editing) comments. I suspect they've got a point; I've been deleted a few times over the years. Couple of times I figured it was a judgment call, and Brad was probably right. Couple of times, it seemed to me more like outright thought control but I figured it was his blog and not a big deal.

But Josh and Steve and I are not the only ones I've heard make this point. And just in general--well, put it this way: DeLong's is a great blog. it almost always in the top ten in my aggregator Trendline (right now it is third place in number, first in content). Unfailingly interesting, challenging and thought-provoking.

But let's face it, Brad is a rigid guy. His ferocious attacks on those with whom he disagrees are legend. But also self-defeating. I mean, discretion, baby! It is one thing to expose the bankrupt pretentions of the Washington Post Ombudsperson. And beating up on George Will is always the Lord's work. But to come out with guns blazing against every ink-stained mediocrity who has a bad day--after a while, it takes on the unmistakable aroma of the Boy Who Cried Wolf.

So, Brad, baby! This is an intervention! This is a friend speaking! Lighten up! You've got a perfect right (perhaps an obligation) to delete the vicious, the vulgar and the hollow. But interesting people who disagree with you: look, just stop it! You'll enhance your street cred and make an already-riveting weblog even more indispensable than it already is.

DeLong's Nightmarish Dream

Brad DeLong offers one of the oddest and most unsettling possible salutations to the new Obama Adminstration. All will be well, says Brad, because these guys are perfect in almost every way:

1. The bench is very deep right now. Practically everyone competent and qualified for high executive office has come over to the Democratic Party over the fourteen years since the coming of Gingrich. Thus there are a huge number of superb choices available for every position.

2. Everyone being considered for high federal office is intellectually honest: they understand not just the advantages of their own views, but their flaws and disadvantages as well; they understand the pluses of views opposed to theirs. Policy will be reality-based: it will depend upon our collective best guesses as to the way the world works, and not the idiosyncratic intellectual hobbyhorses of ex-AEI staffers.

3. Everyone knows that the American people have elected Barack Hussein Obama and Joe Biden--not their staffs. Everyone knows that the jobs of staffers will be to present Obama and Biden with the options, their pluses and minuses, and then strive to implement their choices as best they can. The policies of the Obama-Biden administration will be Obama-Biden policies.

4. Everyone thinks it would be a great honor to work for the Obama-Biden administration.

5. Everyone knows that the bench is deep, and that their chances--however qualified they are--are low.

6. Everyone's knows that this is bigger than any of us, and that the right attitude is to ask for an oar, find a place on a bench, and start rowing. There is an awful lot to do.

What do you think of when you hear this kind of talk? You know the answer to that one; you think of Shakespeare's Hamlet--or more precisely, Hamlet's Hamlet: the model of Renaissance manhood: intelligent, cultivated, energetic, warm-hearted and full of good intentions. All he wants is a well-ordered nation and a loving family.

And yet by the end of act five, the stage is littered with corpses, including his own. Brad, baby! Where's your sense of tragedy? Where's the touch of ingratiating humility? Where is your distrust of know-it-all arrogance, of moral complacency--of all the sub-vices of pride that can drive even The Best and the Brightest (remember them?) to disaster? Where's that little voice on the shoulder telling you that you may be full of , um, you know.

Don't get me wrong, baby: this is a great day for King and Country, and we have more reasons for hope than at any time in the last eight years. But along with the shock of the new, let's have just a smattering of awe.

Footnote:

hubris

hyoobriss

• noun excessive pride or self-confidence.

— DERIVATIVES hubristic adjective.

— ORIGIN Greek, originally denoting presumption towards or defiance of the gods, leading to nemesis.

Go ahead, look it up (link).

More on: "If Things Are So Bad, Why Are They So Good?"

DeLong has been puzzling over the bad/good issue. Now Tim Duy weighs in with a thoughtful response (hint: think "outsourcing").

Afterthought: Tim Duy? Oh, of course, Tim Duy.

Update: DeLong responds. Yves Smith weighs in.

Kumbaya

I have to confess I really don't have a clue how exactly the Hillary supporters are going to react to the great disappointment--I'm certainly not plugged in and my instincts are not that great to begin with. But if I were looking for clues, I might want to start with "Anne" who, if I understand things right, is a regular, intelligent and instructive commentator over at DeLong. Brad posted the notorious "How Can We Beat that Bitch?" squib; no particular problem with that, but Anne responded with, I think, eleven separate comments ranging from mildly acerb to downright angry. If this is the future, it ain't pretty (link).

What Is it with DeLong and Greider?

What is it with Brad DeLong and Bill Greider? A couple of years so ago, DeLong let loose with a screed against Greider and David Stockman—recall it was Greider the journalist who outed Stockman the political hack good man in a bad trade who tried to save us from the evils of the Reagan administration. I thought then that the bile against Greider was at least unwarranted and more generally, downright bewildering (link).

Today for no very convincing reason, DeLong hauled out the same fiery hairball and hurled it again (link). I remain unpersuaded, and said so in the DeLong comments, with a link to my earlier piece. A short time later, “Brad” (sic?) popped up with a comment on the two-year-old thread:

Be assured that my dislike for Greider is small potatoes relative to what the people who worked for him when he was Assistant Managing Editor of the *Post* say when they let their hair down...

Hah? What is this all about? And what does Brad (sic) think he is telling us? Reporters didn’t like their editor? Given DeLong’s ceaseless harping about the evils of journalism in general and the Post in particular, how could anyone possibly take seriously the opinion of any Post journalist about his (her) editor? Or must we recognize that this is, in the last analysis, a matter of personal animus—the kind of personal feud which, practically speaking, shouldn’t be of any interest to the rest of us anyway?

And tedious fn: I don’t know who DeLong knew/knows at the Post, but I knew/know a scattering of these guys, and from what I hear, the tweendecks folks had a high opinion of Greider and were sorry to see him go.

Another tedious fn.: In my original post, I snidely cracked that the book was being remaindered at $1.96. As of this morning, at Amazon it was down to a penny.

One more: Aa the risk of extending this interminably, I have to say I have never been that crazy about Greider’s economic analysis—on the whole, I like DeLong’s better. But as an observer/psychologist, I think Greider has no peer. His profile of George McGovern, reprinted (I think) in the Library of America collection of Vietnam-era journalism (to take just one example) is a masterpiece of shrewd observation. So also the Stockman piece. I think it retains whatever value it has (a penny?) more for its description of Stockman than for whatever, in particular, it says about tax-and-spend.

Milton-Friedmanism RIP

Brad DeLong is on a roll this week. He’s declared the Democratic primaries over. And now he has declared Milton Friedman dead.

He’s got a better chances for selling the second claim than the first, but actually, his full claim is stronger: not just that Friedman is dead but that the Age of Milton Friedman is now kaput at the age of 30, the victim of increasing irrelevance and general exhaustion.

Okay, I exaggerate. DeLong didn’t quite declare Friedmanism over, but he did write it obituary. Friedman, says DeLong:

adhered throughout his life to five basic principles: strongly anti-inflationary monetary policy; a government that understood that it was the people's agent and not a dispenser of favors and benefits; a government that kept its nose out of people's economic business; a government that kept its nose out of people's private lives; and an enthusiastic and optimistic belief in what free discussion and political democracy could do to convince people to adopt principles one through four.

The fifth, I’d say, is not really a “principle” as it is a description of Friedman in action. Anyway—DeLong tips his hat to Friedmanism, particularly insofar as it got us out of the doldrums of the 70s. But:

Nevertheless, the distribution of economic welfare produced by the market economy does not fit anyone's conception of the just or the best. Rightly or wrongly, we have more confidence in the correctness and appropriateness of political decisions made by democratically elected representatives than of decisions implicitly made as the unanticipated consequences of market processes.

We also believe that government should play a powerful role in managing the market to avoid large depressions, redistributing income to produce higher social welfare, and preventing pointless industrial structuring produced by the fads and fashions that sweep the minds of financiers.

DeLong says he builds on the idea “that market economies and free and democratic societies are built on a very old foundation of human sociability, communication and interdependence.” This declaration is not, I think, merely an empty vacuity. This capacity for cooperation, contingent and limited though it may be, is one of the extraordinary facts of the human condition. It is a feature which, as the Victorians would have said, distinguishes us from the lower animals. It’s the kind of characteristic which economic modeling, at least through the Age of Friedman, has kept pretty much at bay.

DeLong builds his riff on a remark from Dani Rodrik, the development economist. The choice is worth noting, I think, because the development economists have gone further than virtually anyone else in trying to figure out what actually works in society. They know better than almost anybody that a “market” is a cultural artifact the creation of human actors, one that that exhibit a thousand different faces, only some of which let the human spirit soar.

Fn.: I’ve always been a little pushed by the idea that “Friedman” is somehow central to the age of Friedman. Granted that he’s an important economist, but there are a fair number of those. His real mastery is publicity. Others (von Mises, Hayek, I’d say particularly Frank Knight) deserve a lot of credit for what is Friedmanesque about Friedmanism. Friedman may be just one more illustration of the insight credited to his friend and colleague, George Stigler—that the guy who credits for an idea is not the first man to think of it, but the last.

Update: Well, can't please 'em a (link):

Oh my! Is this confused mix of platitudes, generalizations, half-truths, old wives’ tales and gool ol’ collectivism supposed to replace Friedman’s vision for a society of free associating (legal) peers, on the basis of the impersonal justice of property rights? Dream on.

Whoo-wee

Source: DeLong, who says he gets it from A Tiny Revolution, but I couldn't find it there. DeLong also says "The last five of these are, I think, the worst from the point of view of their long-run implications," but why? I can think of several other candidates. And gasoline only at $3.07 a gallon? I was hoping for $12.

Plutarch, Rawls, Lord Mansfield and Buster the Dog, etc.

Brad DeLong linked my snippet from Plutarch on Cato the Elder, setting off an instructive thread about slavery (link). It brought to my mind the story of the Slave ship Zong, notorious from the JMW Turner painting, where Master Luke Collingwood ordered that slaves be thrown overboard so the owners could collect on the insurance (link). No one was ever prosecuted for murder in the case, although there was litigation over the insurance claim, prompting Lord Mansfield to say that there was "no doubt that (though it shocks one very much) the case was the same as if horses had been thrown overboard"—and if you think this is gauche, take a look at the argument of the Solicitor General.

A DeLong commentator remarked that John Rawls characterized non-human animals as lying "outside the scope of the theory of justice" – echoing Plutarch. The commentator continues:

Of course, Plutarch himself seems to have regarded treatment of slaves *and* animals as issues of "kindness and charity," while "justice," I suppose, applies to free people. Rawls would undoubtedly say that "justice" applies to human slaves, but still keeps non-human animals in the sphere of "compassion and humanity." [Martha?] Nussbaum … attacks Rawls with the critique that "justice" also applies to non-human animals.

Over lunch yesterday, Mrs. B tried to explain to me that “mercy” is best understood as some sort of subset of the “justice;” she didn’t persuade but she is the philosopher in the family, so perhaps I should defer to her judgment. It does make me remember, however, the story of the guy who asked the rabbi deliver a eulogy for Buster his dog. The rabbi said he didn’t do memorial speeches for animals, but the petitioner persisted, saying that he was a prosperous man with no family, and would make it worth the rabbi’s while. The rabbi, being a reasonable fellow, reconsidered the issue, and set him down for 2 p.m. on a Thursday afternoon when, he figured, there wouldn’t be much of a crowd.

Thursday came and sure enough, the synagogue was almost empty, but the rabbi gave it his best shot. After the service, his petitioner approached him and passed over a $50,000 check. “You know,” he told the rabbi, “until you spoke I just didn’t realize what a great friend Buster was to Israel.”

Is DeLong Being Coy?

Brad DeLong does something odd. (link). Weighing Clinton v. Obama, he says:

[T]he Hillary Rodham Clinton who made such an administrative mess of health reform in 1993-1994 could not have run the campaign she has run over the past two years. Thus I am now confident that either has a reasonable shot of being in the top 20% of American presidents.

Why is this odd? Let’s go to the tape:

My two cents' worth--and I think it is the two cents' worth of everybody who worked for the Clinton Administration health care reform effort of 1993-1994—is that Hillary Rodham Clinton needs to be kept very far away from the White House for the rest of her life. Heading up health-care reform was the only major administrative job she has ever tried to do. And she was a complete flop at it. She had neither the grasp of policy substance, the managerial skills, nor the political smarts to do the job she was then given. And she wasn't smart enough to realize that she was in over her head and had to get out of the Health Care Czar role quickly.

You anticipate me: that is Brad DeLong, writing in 2003 (link). Now, I have a high regard for DeLong, even if he does get off the reservation every once in a while (link). But I think he deserves to be taken seriously—and indeed, I have long regarded him as a principal component of a mosaic that helps to shape my own view of Clinton. In particular: it has always impressed me how much she is disliked by those in a position to know—those who were close to her in the Bill years (if you doubt me, check the list of Obama supporters from a year ago, back when he was still the outsider). In this picture, DeLong counts as a vital component.

Now, I don’t pretend to be a master of the entire DeLong oeuvre, but I’m not aware of any place where he squarely and explicitly addresses his change of heart. In a cursory Google search, I do find one occasion when a commentator threw these words back in DeLong’s face. DeLong’s response? Actually, I am not clear there is a response. DeLong enters a comment—the single word “touché,” but it isn’t clear whether he is responding to this post or another (link).

A Google search for the critical phrase turns up 1,000 hits—a great many, it seems, from Clinton enemies delighted to find such sharp language from someone you might expect to be a friend.

I don’t suppose you would say "friend" just yet (are the Clintons ready to forgive?), but you’d certainly have to say "friendly." I really think the situation calls for a bit of clarity—more explanation on how he got from “there is no reason to think that she would be anything but an abysmal president,” to now, where she is looking at the top 20 percent.

Postcript: I see that Kevin Miller picks up on the point in the DeLong comments (link).

Improved Jesse Tree Blogging

Brad deLong selects "the Jesse tree" for Christmas eve blogging, though I cannot imagine why he did not affix the King James Version, annexed infra. I once succeeded in wheedling a child into memorizing it as a showpiece for her grandmother, though what any one of must might have been thinking at the time is quite beyong me now. Anyway:

1	And there shall come forth a rod out of the stem of Jesse, and a Branch shall grow out of his roots:
2	and the Spirit of the LORD shall rest upon him, the spirit of wisdom and understanding, the spirit of counsel and might, the spirit of knowledge and of the fear of the LORD;
3	and shall make him of quick understanding in the fear of the LORD. ¶ And he shall not judge after the sight of his eyes, neither reprove after the hearing of his ears:
4	but with righteousness shall he judge the poor, and reprove with equity for the meek of the earth: and he shall smite the earth with the rod of his mouth, and with the breath of his lips shall he slay the wicked.
5	And righteousness shall be the girdle of his loins, and faithfulness the girdle of his reins.
6	¶ The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them.
7	And the cow and the bear shall feed; their young ones shall lie down together: and the lion shall eat straw like the ox.
8	And the sucking child shall play on the hole of the asp, and the weaned child shall put his hand on the cockatrice' den.
9	They shall not hurt nor destroy in all my holy mountain: for the earth shall be full of the knowledge of the LORD, as the waters cover the sea.

The next part gets into some heavy duty doctrine, on which I will cheerfully defer to DeLong.

Pete Seeger: Worse than a Crime

Brad DeLong confesses to a guilty pleasure: Pete Seeger (link). But Brad seems discomfited: He learns that Dave Boaz recalls Seeger’s Stalinist past (link).

Boaz is right, but it’s worse than he realizes. I will play the old guy card here: I don’t remember the Hitler-Stalin pact, but I remember the Seeger with the Weavers from the 40s and Seeger solo from the 50s. I attended Seeger performances in little tiny halls where his long-necked banjo seemed to extend half way over the audience. I was enchanted by his banjo playing, thrilled by his energy and drive.. His “Wimaway” (back before Disney kidnapped it) was enough to knock me flat..

And as much as I loved the music, I always felt a creepy uneasiness at the Seeger schtick: it was sheer manipulation—no, worse, it was tacky down-market manipulation, vulgar Stalinism, proletarian art.

I grant there’s a complicated relationship between an artist and his art. At the same time that I was enchanted by Seeger’s “Tzena, Tzena,” I was dazzled by what Walter Gieseking could do with a Beethoven Sonata. It bothered me that Gieseking seemed to be a bit of a Nazi; but at least he didn’t get in my face about it. I could listen to the music and pretend that the politics wasn’t there. No such option with Seeger. He played his banjo with dazzling panache, but he played his audience with a lot of simplistic sermonizing about “the people” and “together” that was enough to make you gag. It was, among other things, a show of contempt—contempt for an audience that should have known better, but, sadly, perhaps deserved his contempt because they let him get away with it.

I grant in general that the 50s were a treacherous time in American politics, a time when it was almost impossible to get everything right. Who would have guessed that I would live long enough to think that accused wife-killer Dr. Sam Sheppard was probably innocent and Alger Hiss, almost certainly guilty? Seeger is no more than a bit player in that story and the sensible path might be just to remember the good stuff, and forget about the vulgar Stalinism. But I really wish he had stuck to what he was good at; Id’ rather not have to remember him as part of a mean, dishonest, thuggish lot. Paraphrasing a great man, it was worse than a crime, it was kitsch.

Fn.: Yglesias doesn’t even like the music (link).

Supply Side as Fantasy

I’m no economist, but I have long suspected that supply-side had a lot more to do with political marketing hype than it did with true economics. Comes now Paul Krugman (and Brad DeLong) weighing in with a more explicit articulation of the point (link). Part of what seems to be a burgeoning on-line discussion of the nature of supply-side, kicked off by the estimable Mark Thoma (link).

I’ve always been particularly irritated by the legendary Laffer Curve. I mean—of course it is true that “too much” taxing reduces revenue; the question is “how much.” And to draw a curve and find a limit, applying the methods of first-semester calculus—why, from 1870 to 1950, economists did almost nothing else. Laffer has about as much to do with the invention of supply-side as Abner Doubleday has to do with the invention of baseball (remarkably, one person who seems to agree with me on this is Laffer himself—see the Wiki article supra; he attributes it to, inter alia, John Maynard Keynes).

A somewhat more charitable view of supply-side comes from Greg Mankiw (link), who dredges up what may be the money quote (from Herb Stein): “"There is nothing wrong with supply-side economics that division by ten wouldn't fix."

The Miseducation of Brad DeLong

I’m a great admirer of Brad DeLong’s blog, but I have a tough time makinge sense of the great glob of bile and spittle that he just landed on Bill Greider (link). Geezers will remember Greider as the author (or at any rate, the amanuensis) of The Education of David Stockman (get yours for $1.96), in which Stockman details to Greider how he discovers that the Reagan fiscal/economic policy was all smoke and mirrors. Among reporters in his generation, Greider (whose politics often strike me as near-looney) is one of the shrewdest observers of humankind. He’s sympathetic, funny—and often devastating, as he was here in this which was for him (as I recall) pretty much of a career-making item.

Apparently (I learn via DeLong) the SEC now believes that Stockman “may have lied” in fronting for a rust-belt auto parts company that later collapsed into bankruptcy (link). I learn also that Greider, now at The Nation, has mounted a sort-of defense (link). It’s actually pretty anodyne stuff. Greider says of Stockman (who has not been formally accused of anything):

I don't know the facts of Stockman's present travail, but I have a hunch he is guilty mainly of excessive optimism, not fraud. When asked, I express sincere sympathy for his plight.

Recalling Stockman’s Washington days, Greider recalls:

His greatest sin … was telling the truth, albeit belatedly. That is one transgression Washington does not forgive.

This strikes me as entirely correct. So far as I can tell, Stockman went into the Reagan administration a true believer. At some point, the scales fell from his eyes. At some later point, he bared his breast to Greider, who rode it into one of the decade’s most amusing bits of political inside baseball.

For this latest apologia, DeLong adds Greider to the post-office wall display headed “Why Oh Why Can't We Have a Better Press Corps?” He says:

But there was no truth-telling exercise to collaborate in. Republican Vice President George H.W. Bush knew that Reagan's fiscal policies didn't add up; he and his people coined the phrase "voodoo economics." Republican Senate Majority Leader Howard Baker knew that Reagan's plan made no sense: he called it a "riverboat gamble," meaning an imprudent and unwise throw of the dice.

DeLong thereupon anatomizes four different categories of Reagan partisans. He puts Stockman in group four:

Those who knew that the tax cuts and defense spending increases would unbalance the budget, and thought that the deficits created would put irresistible pressure on congress to do what it would never do otherwise--shrink a social insurance state.

There’s a grain of truth in this categorization, but it utterly fails to capture the essence of Stockman's experience, and Greider's narrative. The point is that Stockman came into the administration with a vision, however misguided, of how to Make Things Work. What spun him –and what he told Greider about—was the discovery that almost nobody in the entourage gave a rat’s patootie about whether it worked or not: they were there for short-term profit and let everything else go hang.

Oddly enough, DeLong doesn’t even identify a category for these: the self-serving liars and hypocrites who made the whole system go. Instead he speaks of

The innumerate and gullible--most of them willfully so--who did not look into assurances that the Reagan administration's plan would balance the budget.

I suppose there were some innumerate and gullible (though “willfully…gullible” skirts dangerously close to incoherence). Yet the truly innumerate and gullible were, for the most part, those in the audience—the voters or the bystanders, who deluded themselves into believing they had a role in it all (I suppose I would include the President himself, floating out there like a plaster Madonna at the front of a Corpus Christi parade). Nobody can rightly call Stockman “innumerate.” He was “gullible”—but not about “the plan.” He was gullible not to anticipate the tsunami of venality (okay, grand theft) that came to roll over him.

Greider says he disclosed “bracing realities”—DeLong says there were no “bracing realities” to disclose. But there were: not about the voodoo-ness of voodoo economics, but about the wholesale knavery that lay behind it. DeLong calls it “he said-she said” journalism. But it is not: it is “he-said” journalism, in that he is describing how one well-intentioned country boy lost his cherry.

If there was an Emmy for missing the point, then for this one, DeLong would be a contender. No wonder I can never understand macro.

Hereditary Succession

DeLong has an interesting thread on hereditary succession in politics, but I think the issue is more pervasive than has been noticed so far. Aside from Clintons and Bushes (and Adamses and Harrisons and Roosevelts), a moment's reflection should remind us of Kennedys and Sununus, Romneys, Murkowskis, etc. etc.. Less well known, perhaps (except I assume on home turf), combing through the Barone Almanac of American Politics, I find, e.g., that Kansas governor Kathleen Sebelius is the daughter of former Ohio governor John Gilligan (and that her father-in-law is a former Congressman).

I don't mean to kick around a governor here. My point is that there must be something going on here besides crude dynasticism. I assume that the Gilligan name does not have any of the national celebrity of even, e.g., a Romney. Surely the Gilligan political network cannot have offered a lot of clout in Kansas (maybe it hurt?)? Is just that she learned this stuff at the kitchen table? What about money? My friend Ann asks: did daddy have a war chest to transfer? Or a phone list? Or--?

And it's certainly not just her. I suspect a careful read of Barone would turn up a hundred such examples. Is this hereditarty succession? A "political class?" Or something vaguer on the lines of "politics is in my blood?"