Wednesday, May 31, 2017

Pronoun Madness

I have been assiduously following my institution’s recommendations regarding preferred student pronouns.  Students announce their pronouns on the first day of class.  We all commit to remembering not only their names and faces (always a burden for me) but also their pronouns.  In class discussion we have little signs on our desks with name and pronoun identifiers.

I find this extremely annoying, but not because I’m bothered by the freedom of my students to define their gender as they choose.  Far from it.  What irks me is that we have to go through so much bother because of the shortcomings in our language.  Rather than spend so much energy on pronouns, why not change the language?

Simply eliminated gendered pronouns from English—poof.  We could all get along just fine with a generic, formerly plural they-them.  Less to remember and stress about.  This reform would be even more welcome in languages like French, German and Spanish that are gendered through and through and throw up so many more barriers to well-meaning language learners like myself.

And for reciprocity, and to make it a package deal, the US could switch to a metric system at the same time.

Peter Dorman (he/him)

Monday, May 29, 2017

The Protests at Evergreen State College, Un-Foxed

Right wing media sources have been all ablaze in the past few days with stories about PC-inspired thuggery at Evergreen State College.  Unfortunately, there hasn’t been objective reporting on these events to set the record straight, and unless saner voices speak out there is a risk the Fox version will be the only one most people know.

I teach at Evergreen, and I have been present for most of the fireworks (and the slow burn that preceded it).  I’m no expert, but I also have no particular axe to grind.

Although racial issues have been a part of Evergreen’s history from the beginning, the last year has seen a significant increase in tensions.  A group of faculty and staff, initially calling themselves the Diversity and Equity (now the Equity and Inclusion) Council, formed to spearhead a drive for reforms.  They had difficulty agreeing on just what needed to be done, but they converged on a demand for annual mandatory diversity training for all faculty.  This proved to be divisive and did not get majority support at a faculty meeting, leading to a sense of frustration and polarization.  Social justice activists came away convinced that discussion and persuasion were fruitless, and only a top-down, administration-led approach would get results.  This in turn exacerbated tensions with faculty who were concerned about a more general drift away from faculty governance at the institution.

One consequence was an email battle, which quickly devolved into the Council and its supporters against a lone “anti” voice, Bret Weinstein, an evolutionary biologist.  Using a campus-wide list, Weinstein repeatedly argued that the Council was imposing an atmosphere of intimidation, a claim with an element of truth but which was delivered with what can charitably be described as insufficient awareness of his own assumptions and biases about race and racism.

The triggering event on the email front was a decision to alter the format of the college’s Day of Absence/Day of Presence observation in 2017.  DOA/DOP is a longstanding college tradition.  On DOA students, staff and faculty of color are invited to meet off campus to discuss the state of racial awareness and progress; on DOP everyone is invited to discuss these issues together.  For the current iteration it was decided to encourage those of color to meet on campus during DOP and invite others to a small, limited capacity off-campus event, a symbolic “flip”.  No one was required to do anything; it was all about invitation.  This seems to have pushed a button for Weinstein, who responded with an email (falsely) attacking the organizers for instructing whites to leave campus, a charge he embedded in a more sweeping claim of reverse racism.  The email wars heated up and then subsided; for several weeks it appeared the matter had been dropped.

But meanwhile a number of students of color and their supporters were organizing behind the scenes.  They were upset about several incidents involving the campus police, particularly one in which two black students were taken into custody following a heated verbal exchange over racial issues in the student cafeteria.  There was also buzz among students that a number of the faculty were displaying racial and gender bias in the classroom and anger about Weinstein’s email.  Last week they launched their protest by invading Weinstein’s class and shouting at him to either apologize or resign.  Someone (Weinstein says it was a student, the protesters say it was Weinstein) called the campus police, and further ugliness ensued.  (This has all been captured on video.)  Then the protesters moved on to the administrative offices of the college and engaged in an off-and-on sit-in.  No police were called in response to this.  Protesting students also disbanded a faculty meeting and herded the faculty to the site of their sit-ins, apparently worried about a police attack and hopeful that faculty presence would forestall it.

The immediate effect for Weinstein was banishment from the campus.  Students peppered the buildings with graffiti denouncing him as a racist, and campus police told him he should stay away for his own safety.  He held classes with his students off-campus.  There may also have been threats against some of his students, but protesters deny this charge, and the truth can’t be determined at this point.

The email war reignited, and one of the faculty most closely associated with the protests posted a message on Facebook that was at best ill-advised in its vituperation against Weinstein’s partner (also an Evergreen faculty member).  Meanwhile, Weinstein did himself no favors by agreeing to be interviewed for Fox News, during which he made exaggerated claims about the situation on campus.

George Bridges, the president of the college, has responded to the protests by supporting a number of initiatives (including the mandatory diversity trainings), but also demanding that personal attacks cease.

My purpose in relaying this information is to provide as objective a narrative as possible.  I have strong views of my own, but I’ve kept them out.  All I want to say at this point is that racial injustice is a pressing issue at Evergreen, I appreciate the attention students have brought to it, but I also think they have barely scratched the surface of the real problems, and a lot of the behavior on all sides has been unhelpful.

Wednesday, May 24, 2017

Fighting Zombies with Zombies

Larry Mishel and Josh Bivens enlist zombie government policy ponies in their battle against "the zombie robot argument":
Technological change and automation absolutely can, and have, displaced particular workers in particular economic sectors. But technology and automation also create dynamics (for example, falling relative prices of goods and services produced with fewer workers) that help create jobs in other sectors. And even when automation’s job-generating and job-displacing forces don’t balance out, government policy can largely ensure that automation does not lead to rising overall unemployment.
The catch here is that the displacement of workers by technology and the investment that re-absorbs workers displaced by technology are largely, but not entirely, independent factors. "Government policy" in the quoted paragraph is just another name for investment. Hans Neisser observed in his 1942 article on technological unemployment that "it is impossible to predict the outcome of the race between the two [investment and displacement] on purely theoretical grounds."
The conclusion is inevitable: there is no mechanism within the framework of rational economic analysis that, in any situation, would secure the full absorption of displaced workers and render "permanent" technological unemployment in any sense impossible.
The "robot apocalypse" is neither impossible nor inevitable. It is probably unlikely, but unlikely things do happen, especially when people become complacent about the impossibility of unlikely things happening.

Some Saudi-US History

Given Donald Trump's new commitment to support military adventurism by Saudi Arabia in Yemen and more generally against Iran, it might be worth reconsidering how this alliance developed.

The beginning for Saudi Arabia was in 1744 when a wandering radical cleric, Mohammed bin Abdel-Wahhab met up with a local chieftain, Mohammed bin Saud in the village of Diriyah, whose ruins are now located in the suburbs of the current Saudi Arabian capital, Riyadh.  Wahhab converted Saud to his cause of spreading the strictest of the four Sunni shari'as, the Hanbali code, throughout the world, and this remains to this day the ideology of the House of Saud, the ruling family of Saudi Arabia, with this ideology widely known as Wahhabism.  The territory ruled by the early Saudis expanded to cover a fair amount of the Nejd, the central portion of the Arabian peninsula, but when they threatened control of Mecca in 1818, ruled by Egyptians under the Ottomans who collected the moneys gained from pilgrims visiting there, the Egyptian leader, Muhammed Ali, invaded the Nejd and destroyed Diriyah.  The Saud family moved to the next village over, Riyadh, and reconstructed their small state, which expanded again in the mid-1800s, although near the end of the century they were defeated and exiled to Kuwait by the rival Rashid family from Hail to the north of Riyadh.

In 1902 the 27 year old family leader, Abdulaziz bin al-Rahman bin Faisal al Saud, reconquered Riyadh and would eventually establish the modern Kingdom of Saudi Arabia (KSA) through marital and martial conquests, with its modern boundaries established in 1932, and Abdulaziz (known in the West as "Ibn Saud") bearing the title of King and Protector of the Two Holy Places (Mecca and Medina), which he had conqurered in 1924.  He would have 43 sons, and today's king, 81-year old Salman, is one of the last of them, and Abdulaziz would die in 1953.  It should be noted that Saudi Arabia was independent of the Ottoman Empire, and was one of the few parts of the Muslim world that did not fall under the rule of a European power, along with Turkey, Persia/Iran, and Afghanistan.

In the early years, especially in the 1920s, he sought outside advice and support from the British, especially St-John Philby, the rival at Whitehall of T.E. Lawrence, and the first European to cross the Empty Quarter of the Arabian peninsula.  Philby was especially helpful during the revolt by the combined forces of the Rashidi and the Ikhwan (Muslim Brotherhood) whom Abdulaziz managed to defeat in 1929, with the rebels pushing an ultra-fundamentalist line against Abdulaziz (an replay of this revolt occurred 50 years later in 1979, with the Ikhwan seizing control of  the Grand Mosque in Mecca for a time).  Philby would convert to Islam and take several wives.  He was also the father of later Soviet spy, Kim Philby.

The first interest by anybody in the US came out of two agreements in 1928 and 1929, the Red Line Agreement that gave the territories of the former Ottoman Empire to a set of British and French companies, and then the As Is agreement of 1929 between Sir Henri Deterding of Royal Dutch Shell, Baron John Cadman of Anglo-Persian (now BP), and Walter Teagle of New Jersey Standard (now Exxon Mobil) at Deterding's Achnacarry Castle in Scotland.  These agreements amounted to an early effort to divide up the oil producing world in a cartel.  Out of this, Jersey Standard got Saudi Arabia, although at the time oil  had not been discovered there.  It would be in 1938 by geologists from Jersey Standard, and agreements for production with cash payments for Abdulaziz in gold bars were made.  In 1948, Abdulaziz would become the first leader of an oil-producing nation to succeed in getting a 50-50 profit sharing agreement, and as oil production surged there in the 1950s and after, the money would begin to flow into  Saudi Arabia providing the basis for its modernization, even as it retained its highly traditional and strict version of Wahhabist Islam and Hanbali shari'a law code.

While Saudi Arabia initially favored Nazi Germany at the beginning of World War II, much like Iran then, it gradually shifted to the Allied side, with FDR declaring the protection of Saudi oil reserves a US national interest in 1943, and the Saudis officially declaring war on Germany in early 1945.  It is widely viewed in  KSA that the alliance was sealed in 1945 when FDR was returning from Yalta shortly before his death and met briefly on a boat in the Suez Canal with King Abdulaziz, producing a famous photograph of the two of them smiling and shaking hands, shortly before FDR's death.  And indeed, despite some ups and downs, the alliance has held since, with oil at its center.

Given that, the nature of the relationship has changed substantially over time.  One major change, signaled initiallly by that 50-50 profit sharing agreement in 1948, was an increase in Saudi control over the oil aspect of it, with OPEC founded in 1960, which would impose a quadrupling of oil prices in 1973 in the wake of the Saudi oil export embargo against the US for the US supporting Israel in the Yom Kippur war of that year.  Prior to that embargo, KSA had managed to nationalize ARAMCO, the Arabian-American Oil Company, which produced the oil in Saudi Arabia, the original owners of ARAMCO being Jersey Standard, New York Standard (Mobil, now merged with Exxon), Texaco, and California Standard (now Chevron).  These companies, especially Exxon Mobil, continue to have an active relationship with ARAMCO, but the Saudis have been in control of their oil and their oil industry since the beginning of the 1970s.  This shifted the relationship to being one more of the US becoming the protetctor of KSA, providing it with arms as the petrodollars poured in, and this aspect of the relationship has reached a new height with this latest visit and arms deal, arranged by former Exxon Mobil CEO and now SecState, Tillerson.

It is worth noting also that for most of the postwar period probably the major  irritant in the Saudi-US relationship has been Israel, which even now KSA does not recognize, and Trump's flight from Riyadh to Tel Aviv was the first such direct flight on that route ever. Israel supporters for many years complained about "Arabists" in the US State Department who were  more oriented to worrying US oil interests in the Middle East and especially in Saudi Arabia.  But today there is now an alliance of convenience between KSA and Israel in their mutual dislike of Iran.

Which brings us to the current situation.  I personally think that the current Saudi leadership has gone off the rails in their anti-Iran attitudes.  The differences are both sectarian and ethnic, Sunni versus Shi'i Islam and Semitic Arabs versus Indo-European Iranians, with this manifesting itself in a regional power struggle.  But this is a relatively recent conflict, only getting going since the 1979 Islamic Revolution in Iran, and only getting really hot with the overthrow of Saddam Hussein by the US under George W. Bush.  It was the Saudis who convinced Bush's dad not to go to Baghdad to overthrow Saddam in the 1991 Gulf War, arguing that he kept a balance of power as a Sunni Arab leader against Iran.  And they argued with Bush, Jr. not to go in for the same reason, although they would support the US effort modestly once it happened, even though it aggravated Osama bin Laden and al Qaeda against the Saudi monarchy for supporting the US so openly (even  though the US had supported the decision by then Saudi intel chief, Turki bin Faisal, to send bin Laden to Pakistan to aid in the anti-Soviet campaign in Afghanistan).  But the replacement of a Sunni-led regime in Iraq by a Shi'i led one supported by Iran has upset the Saudis greatly.   They also do not like Iranian support of Assad in Syria, who appears to have won his war against largely Sunni rebels, many of them supported by KSA, and now the Saudis are bogged down in a war in Yemen against local Zaydi Shi'a, whom they claim (not with full credibility) are being supported by Iran.  So they, and the Israelis, want the US to join them in an anti-Iran crusade.

I think we are at a dangerous moment here.  The nuclear deal with Iran is the most importantdeal that Obama made, and even the Saudis and Israelis know it.  What they do not like about it is that it meant that the economic sanctions on Iran were relaxed.  But most of those sanctions were only put on to get Iran to  the nuclear negotiating table.  There is no way they can be reimposed without Iran returning to having a nuclear program.  The most influential person in KSA now appears to be the son of King Salman, 31-year old Mohammed bin Salman, Deputy Crown Prince and Defense Minister, who gets lots of good press in the US.  But for all the talk of reform, he has not moved to let women drive or to desegregate workplaces by gender.  He seems to be a warmongering hothead who has pushed this so far fruitless and destructive war in Yemen, which has led to incipient famine  in that nation as well as its likely falling apart into pieces.  He has even talked about "taking the war to Iran," which we can only hope that he will not be tempted to do with all those fancy arms that he is buying from the US.  Trump, or whoever is in charge of US foreign policy in the near term, will really have to both defend the nuclear deal with Iran and resist this warmongering push by our longtime erstwhile ally.  Let us hope that this is done.

Barkley Rosser

Monday, May 22, 2017

Output Optimum and the Roller Coaster of Immiseration

Following up on my post from two weeks ago, Immiseration Revisited, I built a spreadsheet replica of the marvelous Chapman diagram. In addition to lines on the page, the replica provides me with tables of numbers that I can add, subtract, multiply and divide in accordance with the conceptual logic of the diagram.

The chart below shows the results of some of these calculations. The red curve graphs cumulative gross "output" and green curve subtracts the value of foregone leisure and the pain cost of fatigue and wear and tear from output to calculate net "income" (green). The length of each vertical line measures the values of output and income, respectively for a work week of the length indicated by the scale on the x-axis.

"Big Dipper": the Roller Coaster of Immiseration

I have set the hypothetical "output optimum" work week at 48 hours in deference to the diagram's 1909 vintage. Assuming such an optimum and taking the conceptual diagram's proportions literally, the ideal length of a work week for a laborer would be 36 hours. That is the point at which the value of foregone leisure and the pain cost of additional work begin to outweigh the additional earnings from the longer week. A workweek of 40 hours marks the threshold beyond which the value of foregone leisure alone exceeds the additional wage earnings.

If the optimal output workweek was 40 hours, the corresponding ideal length of workweek for the worker would be 30 hours, again assuming the reasonableness of the diagram's proportions. There is, of course, only impressionistic evidence for the general shape of the curves and not for the accuracy of the proportions depicted. Nevertheless, the derived calculations indicate a steep acceleration of the discrepancy between output and worker welfare beginning well in advance of the output optimum.

Calculations based on the diagram suggest that by working 34 percent more hours per week, the employee can look forward to "enjoying" 29 percent LESS net benefit. If the actual cost to workers of working longer is even half or a third of those estimates, this still would represent a significant deviation not only from what Lionel Robbins dismissed as "the naïve assumption that the connection between hours and output is one of direct variation" but also from the equally indefensible premise of a consistently proportional relationship between work effort and reward.

(Most) Economists Balk

In a recent article, "Whose preferences are revealed in hours of work," John Pencavel noted the "radical change in economist's thinking about working hours" following the 1957 publication of H. Gregg Lewis's article, "Hours of Work and Hours of Leisure," Earlier textbooks attributed reductions in hours to pressure from trade unions, either directly through collective bargaining or by legislation promoted by organized labor. The earlier textbooks also addressed the effect that hours of work have on productivity, with reductions in hours usually leading to increases in hourly output and sometimes even to "no decline in total daily output."

In later textbooks, the orthodoxy followed Lewis's explanation that workers choose their own hours, based on their preferences for income or leisure. The connection between output and shorter hours vanished, as did the role of trade unions in achieving reductions of working time. But, Pencavel wondered, "If 'employers are completely indifferent with respect to the hours of work schedules of their employees,' [as Lewis had posited] why did employers oppose so resolutely workers' calls for shorter hours?"

In a footnote, Pencavel also mentioned that in Lewis's 1957 model, employers face no obstacle "to replacing shorter hours per worker with more workers." This is an interesting point because many economists' arguments against the employment potential of shorter working time rest on claims that workers and hours are not suitable substitutes. That conclusion is reached by smuggling back in the output/hours relationship concealed in a Cobb-Douglas production function with the Robbins/Hicks "simplifying assumption" that the current hours of work are optimal for output, so that any reduction of hours would result in a reduction of output. It is difficult to imagine how both of these things can be true at the same time.

Although the earlier textbooks and economists acknowledged the connection between hours of work and output, most were silent on the discrepancy -- or at least the magnitude of the discrepancy -- between an output optimum and worker welfare. Cecil Pigou, Philip Sargant Florence, Lionel Robbins, John Hicks and Edward Denison treated the output optimum as the economic ideal. Richard Lester and Lloyd Reynolds, authors of "institutionalist" labor economics textbooks, showed more sympathy to trade union arguments but did not emphasize the discrepancy between the output optimum and worker welfare.

Sydney Chapman clearly distinguished analytically between worker welfare and the output optimum but his presentation was obscured by digressions that dwelt on shift-work as a palliative and on the philosophical necessity of paying more attention to the non-tangible aspects of culture. Clyde Dankert clearly distinguished between the output optimum and worker welfare but had the rather eccentric view that although "maximization of worker satisfactions" rather than output should be the social objective, shorter hours would have to be postponed "in view of the current cold war situation." Only Maurice Dobb clearly and concisely stated what was at stake (although he left out the increasing value of leisure): unionists in the nineteenth century were severely castigated by economists for adhering, it was alleged, to a vicious 'Work Fund' fallacy, which held that there was a limited amount of work to go round and that workers could benefit themselves by restricting the amount of work they did. But the argument as it stands is incorrect. It is not aggregate earnings which are the measure of the benefit obtained by the worker, but his earnings in relation to the work he does — to his output of physical energy or his bodily wear and tear. Just as an employer is interested in his receipts compared with his outgoings, so the worker is presumably interested in what he gets compared with what he gives. A man who works longer hours or is put on piece-rates, and increases the intensity of his work as a result, may earn more money in the course of the week; but he is also suffering more fatigue, and probably requires to spend more on food and recreation and perhaps on doctor’s bills.
To compare "what s/he gets" with "what s/he gives" requires above all some way of estimating the value of what is given relative to what is being received. One may even suggest that constructing those estimates was the job economists should have been doing instead of castigating trade unionists and other advocates of shorter hours for adhering to a vicious "lump-of-labor" fallacy. Heck of a job, economists!

Saturday, May 20, 2017

"It's The Economy, Stupid!": The Iranian Presidential Election

"It's the economy, stupid!" quoth James Carville back in 1992, adviser to Bill Clinton during his successful presidential election campaign then.  And so quoth Stella Morgana in an informative piece written a few days ago prior to and about the Iranian presidential election as linked to by Juan Cole (Sorry, unable to link to this, and also unable to link to two  sites in my last post, not sure what problem is, but this can be found just by googling Juan Cole and looking for May 18 post there).  For those who have not seen it yet, incumbent President Hassan Rouhani has won decisively with 57% of the vote over his main rival, Ebrahim Raisi, who got 38.5%. Rouhani is viewed as a moderate in the traditon of former president Khatami, who is under house arrest, while Raisi was supported by hard line clerics and the supreme leader, Ali, Khamenei.  Many view Raisi as a potential successor to Khamenei.

In the Iranian system the Supreme Jurisprudent,  Khameinei, has control over the judiciary and security forces and ultimately over foreign policy, while the president has most control over economic policy and other domestic policies, although social policies are controlled partly by both, with a sharp difference over those, even though Rouhani himself is a Shi'i cleric.  The Supreme Jurisprudent also has a veto through his Council of  Guardians on all laws passed, which are  judged on whether or not they are sufficiently Islamic. Also, all candidates must be vetted by them on the same grounds, with Rouhani passing four years ago through their filter, while other more "liberal" candidates were banned.  So, Iran is a partial democracy at best, but still a partial democracy, with the same kinds of rules and restrictions applying to the elections for  its Majlis, the legislative body.

As Morgana notes, the economy was the leading issue, especially from Raisi's side, although Rouhani also emphasized his relative social liberalism, and it is thought that he got support on this from young, urban, and female voters.  In many ways the Iranian economy looks sort of like the US one did a few years ago, say at the time of Obama's reelection campaign.  It is not in all that good shape, with 12% unemployment, 30% for youth, stagnant wages, 7% inflation, and entrenched inequality with substantial amounts of corruption.  OTOH, there has been positive growth in the last two years since the partial lifting of international economic sanctions following the 2015 nuclear deal, with inflation down from 40%, and much of the corruption is perceived to be among the clerical  elites who supported Raisi, even as Raisi attempted to play the populist and push a program of monetary handouts for the very poor.  His line was essentially that things may be getting better, but they are still  bad.  He also pushed a harder line nationalism and religious extremism, and in this regard looked more like politicians such as Trump and Le Pen, and his defeat can be seen as another rejection of authoritarian nationalism that has been going on since Trump took office.

While many thought it was, one issue not in contention was the Iran nuclear deal itself, which was supported in any case by Supreme Jurisprudent, Khamenei, and thus also by Raisi as well, along with Rouhani, of course, who negotiated it and ran on doing so four years ago. Nevertheless, there was a difference in emphasis, with the economic critique by Raisi partly amounting to a critique that the deal had not gotten the economic benefits promised by Rouhani, and thus, perhaps, should be looked at again more closely. Of course this reflects the view one sees from Trump, not to mention the Saudis and Israelis whom Trump is currently visiting.  Trump ran hard against the agreement, calling it "the worse deal ever made." But while supposedly reviewing it, he has not yet  abrogated it, even as the US continues to maintain some economic sanctions on Iran that were on before for its violations of human rights and support of terrorism.  The Saudis and Israelis both opposed the nuclear deal, although when it gets down to it, neither are really pushing for undoing it.

OTOH, the Saudis do seem to be pushing an aggressive anti-Iranian stance, which they hope Trump will support. Deputy Crown Prince, Mohammed bin Salman, supposedly the power of the moment, just called for starting a "war in Iran" itself, claiming that Iran wants to start one in their nation.  The two have been fighting a proxy war in Yemen for  some time, with the Saudis not doing very well there against the Zaydi Shi'a Houthis, who control northern Yemen.  Trump has upped support for their efforts, although with little to  show for it.  But MBS, as he is known, is war whooping it  up and is the main person behind the wonderful welcome Trump is getting in Saudi Arabia, where they are also signing the big arms deal that  ProGrowthLiberal has just posted on here on Econospeak.  I note that this is really not a big deal  as the US has long sold large amounts of arms to Saudi Arabia, although this looks like a bigger deal than some other ones in the past.

Anyway, the Iran election seems to have had a positive outcome for world peace, although I doubt we are going to see either Trump or bin Salman or Netanyahu say so publicly in the midst of their denunciations of Iranian policy, some of which can be criticized.  But when Trump denounces Islamic terrorism in his about-to-happen speech in Saudi Arabia to an assembled group of Muslim leaders, which include no Shi'a ones, I doubt he is going to mention Saudi  support of radical madrassaa and many Wah'habist groups in Syria and Pakistan and elsewhere who have engaged in plenty of terrorism over a long period of time.  The Saudis are now opposing al Qaeda et al, but they seem to be relatively recent converts to this fights, and have supported radical Sunni groups in many countries when those were fighting Shi'a ones.  The US really does not need to get suckered into one side of an intra-Muslim sectarian war, but the Saudis seem to be hoping that they can do just that with Trump, especially given that some of his supposedly "adult" national security advisers such as DefSec "Mad Dog" Mattis, have long sided with the neocon hardline anti-Iran folks in Washington..

Barkley Rosser

Tillerson Economics and the Saudi Arm Deal

Secretary of State Rex Tillerson discussed the latest arm’s deal with the Saudi government today. Hanna Trudo covered the joint address with Saudi Arabian Foreign Minister Adel bin Ahmed Al-Jubeir in Riyadh today:
Tillerson said Saudi Arabia's direct investment in the U.S. would bring "hundreds of thousands" of jobs to American workers. Earlier, Trump said it had been a "tremendous day; tremendous investments for the United States. Hundreds of billions of investments into the United States, and jobs jobs jobs."
While this will be the headline story, note what else Tillerson said:
Tillerson also said the new defense deal — which includes upgrades to Saudi communications, missile defense, maritime, border and cyber security — lowers the demands on the U.S. military. “This huge arms sales package reduces the burden on the United States to provide the same equipment to our own military forces,” he said. “It will strengthen Saudi security forces for the future so Saudi Arabia is more capable of carrying a greater share of the burden.”
Deficit hawks may see this as good news but let’s step back for a moment. The $109 billion in arms sales is for the next decade amounting to an additional $11 billion in new exports on a per annum basis. So we are talking about only 0.06% of GDP in new exports but this only gets worse if we take Tillerson at his word that as the Saudis spend more on their own defense, we spend less. In other words, exports rise by $11 billion per year and Federal purchases fall by $11 billion per year. Good news from a deficit hawk perspective but no net increase in U.S. aggregate demand. So Trump’s “jobs, jobs, jobs” amounts to nothing but his usual political posturing.

Friday, May 19, 2017

On The Virtues Of Good Review Essays

There has been a debate going on now across several blogs starting with Noah Smith on Noahopinion posting about "Vast Literatures as Mud Moats."  He accurately complains that some people try to shut down debates by telling others that they should not speak until they have read "the vast literature" on whatever the topic is.  Noah proposes a "two paper rule," that when someone poses such an argument, they should be asked to present the two best papers in the vast literature, and if those are no good, then the literature can be dismissed. Paul Krugman has weighed in supporting this rule, and providing articles he thinks are good supporting his view that standard Keynesian macro is good, even though Noah's main example of a bad vast literature was the 1960s macro literature, supposedly all no good because of being subject to the Lucas Critique, even though that critique had been known since the 1950 paper by Jacob Marschak.  Then Tyler Cowen weighed in on Marginal Revolution, more or less supporting at least the general principle of the rule, but muddying the waters by dragging in the truly vast literature on climate change and not even limiting it to just one discipline, such as climatology, where the literature is vast enough as it is.

Anyway, I have popped into that debate here and there suggesting that in addition to reading the two (or maybe three) supposedly best papers, one should as well read a review essay of the literature, if one can find one.  There is often much more going on in these literatures, especially the larger ones, than just what one finds in the top two papers.  Noah responded on his blog with an addendum arguing that review essays do not deal with methodological issues, and that this is what he is really looking for by looking at the top two papers.  But, in fact, he is wrong.  The best review essays do deal with methodological debates, and often the debates in literatures involve methodological debates, with sometimes more than two methodologies involved.

Let me be clear that I am sympathetic to Noah's main point: that someone trying to shut down a debate by telling others to read a vast literature at a minimum should be prepared to summarize the main arguments of that vast literature, if not precisely provide two papers or a review essay.  This is not a legitimate way to argue, and any person making such an argument is certainly open to being challenged to put up or shut up with some literature or at least decent summaries of what is in it.

Just to note that review essays can be useful, I am going to list a few fairly recent ones from the Journal of Economic Literature that deal with controversial topics about which there have been substantive, policy, empirical, theoretical, and methodological controversies, without getting into the details of any of those.  But I would suggest that someone wanting to evaluate those literatures might well be helped by reading these essays in addition to whatever somebody might pull forth as the top two papers in those literatures (and the criteria for determining those has not been established at all).

This goes backward in time.

"State and Development: The Need for a Reappraisal of the Current Literature," Pranab Bardhan, JEL, Sept. 2016

"What can we learn from the Weather? The climate-economy literature," Melisse Dell, Benjamin F. Jones, Benjamin A. Olken, JEL, Sept. 2014

"Racial Discrimination in the Labor Market: Theory and Empirics," Kevin Lang and Jee-Yeon K. Latham, JEL, Dec. 2012

"Labor Supply and Taxes: A Survey," Michael P. Keane, JEL, Dec. 2011

"Relative Income, Happiness, and Utility: An Explanaton for the Easterlin Paradox and other Puzzles," Andrew E. Clark, Paul Frijters, and Michael A. Shield, JEL, March 2008

"Neuroeconomics: How Neuroscience can Inform Economics," Colin Camerer, George Loewenstein, and Drazen Prelec, JEL, March 2005

"Trade Liberalization and Poverty: The Evidence so far," L. Alan Winters, Neil McCulloch, and Andrew McKay, JEL, March 2004

"Time Discounting and Time Preferences: A Critical Review," Shane Frederick, George Loewenstein, and Ted O'Donoghue, JEL, June 2002

"The New Institutional Economics: Taking Stock, and Looking Ahead," Oliver E. Williamson, JEL, Sept. 2000

and for a real oldie but goody that may have been more influential than any of the original papers:

"Some Cambridge Controversies in the Theory of Capital," Geoffrey C. Harcourt, JEL, 1972

Barkley Rosser

Jonah Goldberg’s Smear of Comey

Let me be upfront – I have zero respect for Jonah “momma’s boy” Goldberg and little respect for fellow rightwing toady Hugh Hewitt. So I did not watch their interview but I did watch Hewitt brag about this part of it:
HH: Now I want all of the Comey memos, Jonah, and I don’t think it’s a trap. I want to establish who did he keep memos about and when did he keep them? Did he keep any about Hillary Clinton? Did he keep any about Loretta Lynch? I’ve already seen one of his associates said oh, he didn’t, he never kept any on President Obama, because he trusted him. So it’s not a pattern and practice. And sometimes, FBI directors like Mueller keep handwritten notes of an important engagement, but I get the feeling that Comey was laying in wait for this guy, and that he just, he was very suspicious of him, maybe legitimately, maybe not, but that I do think it’s a trap to call Comey. I don’t think it’s going to happen now because of Mueller’s appointment, but what do you make of the Comey notetaking and this whole kind of, as Brian Williams calls it, Eliot Ness complex that James Comey has?
JG: Yeah, well, I don’t know. I’ve seen contradictory stuff about how he’s taken, he takes notes about all sorts of stuff. I’m dubious. Let me put it this way. I think it is pretty damning if he never took serious notes relating to conversations with Obama. I mean, I think that would be pretty indicative that he did have some sort of agenda.
HH: Exactly.
JG: Yeah.
Exactly? Yeah? This sounds like a couple of drunken frat boys. Actually we do not know whether Comey took notes of meetings when Obama was President. Maybe he did. We do know Trump cannot be trusted. But leave it to Momma’s Boy to smear Comey as having an “agenda”. No – the only thing damning here is how these two rightwing toadies will shill for a Republican regardless of what he did.

Wednesday, May 17, 2017

Is V.V. Putin An Idiot?

We do not usually think so, even though he has overseen a major decline of the Russian economy as well  as a major isolation of  his nation internationally, with many other nations putting his under economic sanctions and generally shunning his in response to aggressive actions that he has taken in recent years.  But, as we know, he has been able generally to sell all this to his own population as being part of a neo-Great Patriotic  War against fascism in Ukraine and elsewhere, with people buying this and accepting the need for economic sacrifice as a result, by and large, although there have been some demos and some slippage recently.  But mostly his poll ratings remain high.  So, maybe he is a terrible leader for the economic health of his people, but they do not  care and support him and his cronies and their multiple billions of dollars of corruption and thievery.  Looks pretty smart from the strictly personal standpoint.

So now he goes and makes himself look like Sean Spicer or Mike Pence, making a public statement about Donald J. Trump that Trump has already denied and shown to be false.  Putin is joining this crowd of humiliated losers, at least on the surface.  Here Trump has already bragged that he leaked super classified information to the visiting Russian foreign minister, Sergei Lavrov, as well as the ambasador, as well as it turns out quite a few other Russian flunkies, with photos of the bunch all grinning taken by Tass and splattered all over the world, even as the US press was kept out.  Trump has gone out of his way to assert his right to do this, and he does have the right to do this, however stupid or careless or destructive it is (and I do not know how destructive it is, the Israelis are claiming it is no big deal, and apparently it is their agent who may be dead as a result of this leak).  NSC chief, McMaster has defended Trump's actions as being "most appropriate," after initially denying he had leaked something so secret it had not been told to high level allies.  But hey, "Russia is our friend," as Richard Spencer and the alt-right white supremacists chanted in Charlottesville the other night, so it is OK.

But now we have Putin coming along, who requested this meeting in the first place, to declare that no classified material was leaked by Trump.  And if there was any, Lavrov and crew did not tell him or anybody else about it or what it was, even though by now we all know pretty much what it was (all about a Daesh/ISIS plot to blow up planes using laptops that had led to US restricting laptops on planes going through certain airports) and that the info came from the Israelis, although I have not as yet seen which city this info came from, which supposedly Trump also blabbed, which was probably the crucial thing that should not have been blabbed, although probably Mossad has gotten their guy the heck out of there before he could get killed.  So, hey, no problem.  But, in any case, here we have the supposedly brilliant and well-informed V.V. Putin putting out something that the whole world already knows is nonsense, based on the public statements of Donald J. Trump himself.  He leaked deep secrets, and he is proud of it.

So why is this pretty crafty guy making himself look like some pathetic sucker?  My guess is that he is trying to prop up Trump and keep him happy with V.V. Putin.  We increasingly know that all Trump cares about is hearing people say praising things about him, even if what they are saying is a flagrant lie and inconsistent with things already publicly known.  This ridiculous claim by Putin would fit in with that, and indeed, he is hoping to have Trump be cooperative and get along with him and Lavrov and Kislyak, even if Trump is not about to remove economic sanctions or other such things that maybe Putin and his minions were hoping might happen as a result of Trump's assuming the presidency.  Pat him on the back and publicly lie for him in the flagrant face of facts. Trump just loves that sort of thing, and in the current situation where many are seriously down on his case, it probably is pleasing him plenty. VV is still his pal.

Let me be clear that I am not  at all against the US and Russia being friendly, at least to some extent.  No, I am not for just rolling over and saying, "Great about invading and annexing parts of Ukraine in violation of the 1994 Budapest Memorandum; those darned Ukies are just a bunch of fascists, blah blah blah!"  And there have been other areas where Putin has been very badly behaved in response to the economic sanctions, particularly in relation to nuclear weapons agreements between Russia and the US, especially the fairly recent START that Obama worked so hard to negotiate with Medvedev, which Putin has reportedly been massively violating recently.  But maybe a positive of all this Putin having a patsy in the White House is that Putin will behave better on that front (I have seen no reports about that, and maybe he has been harassing the Estonians and others in Northern Europe less as he was messing with them during the Obama presidency, which I have also seen no reports on).  So, maybe there have been some improvements, if not all that visible.

In fact this meeting should have taken place.  The supposed topics of the meeting were Syria and Ukraine, and it was not widely reported but the Ukrainian foreign minister met with Trump shortly after Trump met with Lavrov et al.   With the signing of the Astana accord between Russia, Turkey, and Iran, with Erdogan of Turkey visiting Trump yesterday, it was indeed important that some sort of agreements be made about who is doing what and where in Syria.  And coming to agreements about Ukraine as well were also important.  It should also be kept in mind that even when they were not getting along, Obama and Putin did cooperate on quite a few things, including getting Assad to get rid of (most of) his chemical weapons as well as Lavrov playing an absolutely crucial, if not widely publicized, role in finalizing the difficult negotiations with Iran over the nuclear deal, which seems to be being maintained by all sides so far, despite Trump's having declared it during the campaign to be "the worst deal ever made."  I suspect Putin and Lavrov have played a not unimportant role in convincing Trump not to keep that campaign promise to end that very important deal.  So there are many areas for cooperation, despite ongoing disagreements.

Of course, Trump has managed to totally botch this.  I actually feel sorry for Lavrov, coming in for this important meeting in the difficult context of many in the US (accurately) accusing Trump's people of working for the Russians and lying about it (OK to communicate with them, but not to lie about it), and then Trump completely blows it all apart by firing FBI director Comey the day before Lavrov arrives, and then keeping the US press out of the meeting, just making it all look even more sinister and ridiculous.  No wonder Lavrov said "You're kidding" when he was told after his meeting with Tillerson and just before his meeting with Trump that Trump had just fired Comey.  Trump may be a pathetic and hopeless moron, but Lavrov is not.

Barkley Rosser

Monday, May 15, 2017

Esther George’s Excuse for Raising Interest Rates Has It All Backwards

Dean Baker is rightfully not happy with a recent speech from Esther George. George pushes this concern:
Keeping monetary policy easy to achieve higher inflation has the potential to push rents still higher, negatively affecting a large percentage of households. Consequently, I am not as enthusiastic or encouraged as some when I see inflation moving higher, especially when it has been driven by a sector like housing. Inflation is a tax and those least able to afford it generally suffer the most.
Dean notes:
First, the people who are denied work as a result of higher interest rates will be disproportionately those at the bottom of the ladder: African Americans, Hispanics, and workers with less education. Furthermore, higher unemployment rates mean that the workers who have jobs will have less bargaining power and be less able to push up their wages. It's hard to see how people who lose jobs and get lower pay increases will benefit from a slightly lower inflation rate. The other reason why the argument doesn't quite work is that even the modest inflation we have seen in recent years is driven almost entirely by rising rents. Higher interest rates could actually make rental inflation worse. An immediate effect of higher interest rates is lower construction. This will reduce the supply of housing in cities with rapidly rising rents, making the shortage of housing units worse. This will compound the negative effect of reduced labor market opportunities. That hardly seems like a winning policy option for the poor.
Let me just add that the same Bloomberg report that Dean cites has a link to a recent paper by Olivier Coibion, Yuriy Gorodnichenko, Lorenz Kueng, and John Silvia:
We study the effects of monetary policy shocks on—and their historical contribution to—consumption and income inequality in the United States since 1980 as measured by the Consumer Expenditure Survey. Contractionary monetary policy systematically increases inequality in labor earnings, total income, consumption and total expenditures. Furthermore, monetary policy shocks account for a non-trivial component of the historical cyclical variation in income and consumption inequality. Using detailed micro-level data on income and consumption, we document some of the different channels via which monetary policy shocks affect inequality, as well as how these channels depend on the nature of the change in monetary policy.
The Bloomberg report notes:
Many economists remember a 1998 study by Christina and David Romer. It concluded that while expansionary monetary policy can reduce poverty in the short run by juicing economic growth, in the longer run everyone will benefit more from policies that aim for low and stable inflation because those measures improve the economy’s overall efficiency. Although it is true that high inflation in itself can sometimes disadvantage the poor -- the idea is that wealthier people are able to more-easily diversify their savings into assets less susceptible to inflation -- it’s only a small part of the story when it comes to the implications for monetary policy, according to Olivier Coibion, an economics professor at the University of Texas in Austin. In a recent study, Coibion and his co-authors found that over the period from 1980 to 2008, the inflation-as-regressive-tax argument was swamped by other benefits of accommodative monetary policy that pushed in the opposite direction, leading to a conclusion somewhat at odds with the Romers’ findings.
Their findings amplify what Dean Baker has been saying. I hope that he gets to read their new paper. We all should – especially members of the Federal Reserve.

Sunday, May 14, 2017

"Russia Is Our Friend"

So chanted a group of torch-bearing demonstraters last night in Charlottesville, VA who were protesting a city plan to remove statues of Robert E. Lee and Stonewall Jackson from downtown city parks currently named for them.  These demonstraters were also carrying Confederate flags.  So it  seems that the racist neo-Confederate alt-right is fine with Trump being closest buddies with Vladimir Putin and the Russian leadership.  It is just fine that all his aides were talking to the Russian ambassador and lying about it and that he had the Russian foreign minister and ambassador in the Oval  Office with no US media allowed and the fact that the ambassador was there only learned publicly after the only media allowed, Russia's Tass, published photos of the meeting.

Of course, these folks are probably upset with Trump because he upset Putin by firing Tomahawk missiles at a Syrian air base after it was learned that the Assad government was engaging in chemical weapons attacks out of that base.  But, hey, not to worry.  Our people warned both the Syrians and the Russians ahead of time that the missile attack  was coming so  that they could get anything serious, including personnel, out of there before it happened.  So,  still pretty friendly.

As for Ukraine, Estonia, Poland, Sweden, Germany, France, the UK, and other countries not so happy about Russian behavior towards its neighbors, well, obviously these nations are not our friends.  To heck with them, and keep on waving those Confederate battle flags!

Barkley Rosser

Saturday, May 13, 2017

Remembering The Open Arts Be-In A Half Century Later

A half century ago today, Saturday (yes, same day of week) May 13, 1967 was the first (and I think only) Human Be-In in Madison, Wisconsin, which was on Picnic Point, a wooded spit of land sticking out into Lake Mendota.  It was organized by a group called Open Arts, which was led by Zack Berk, who had long black  hair and was indubitably a Very Groovy Guy.  It was a beautiful sunny day.  The star of the event was Beat poet Allen Ginsberg, who chanted for some time near the entrance.  He had read poetry the previous evening in the famously odiferous Stock Pavilion, in conjunction with a performance by The Fugs, who sang their  most famous song, "Kill for Peace,"among others.  I knew a lot of people at the Be-In. One good friend was Rod Clark who sat near Ginsberg while he chanted, nodding and grinning broadly.  Rod is now the editor of the literary magazine, Rosebud, and independently coined the term "econophysics," in his science fiction novel, Redshift: Greenstream from 2000, in which he used the term not too differently from academics, although I am unaware of him attempting to estimate power law distributions from financial time-series ever.  Another person there I did not know then but do now was Econospeak's own Peter Dorman.

It was a day of full-blown idealistic enthusiasm, with the assembled hippies wandering and grinning among the trees while looking at the lake.  Anything seemed possible.  In particular, there was a lot of mumbling about how Flower Power was going to Sweep The World and bring us all Peace, Love, and Happiness.  Would that it had turned out to be so. But it was not to be.

Indeed, just over five months later on October 19, 1967, students demonstrating against the Dow Chemical Company at the University of Wisconsin there ended up clashing with police in what most Google links label a  "riot."  The billy clubs and the tear gas came out and people ended up in the hospital.  My friend Rod Clark got his skull pretty badly bashed in.  In this case he was dealing with real power laws.  It changed a lot of attitudes, and the flowers were nowhere to be seen.

This change would culminate nearly three years later on August 24, 1970 when the so-called New Year's Gang would bomb Sterling Hall in an attempt to  get at the Army Mathematics Research Center, then directed by my late father.  A physics grad student, Robert Fassnacht, would die in the blast.  The dream of a half century ago was fully dead, and there has  been no going back since.

Barkley Rosser

Addendum:  One can read a very detailed account of the runup, the events, and the aftermath of the Dow demonstration/riot at UW in the 2003 best selling book by David Maraniss, They Marched into Sunlight: War and Peace America and Vietnam 1967.  It also deals with a simultaneous not-widely-publized battle that US troops lost in Vietnam that apparently convinced LBJ that the US could not win that war.  Maraniss, author of widely praised bios of Bill Clinton and Barack Obama, is the son of a longtime former editor of the progressive Capital Times newspaper in Madison and was at the Dow demo/riot.  I do not know if he was on Picnic Point for the earlier  Open Arts Human Be-In.

Coming Home To America

This is a personal observation at an odd point in time.  I just spent nearly four months out of the US, mostly in Florence, Italy, but also in China, Israel, Malta, Spain, Croatia, Ireland, UK, Poland, and France.  I gave talks at various universities; I saw and talked with many people, and I read newspapers in local languages in several of these nations as well as experiencing their media.  I lived abroad long enough to get a strong feel for how people in many nations abroad think, even if arguably my sample was skewed to some extent.  However, I have now been back long enough to see what is going on here in the USA, to experience it, especially after this past week, while still not fully back into the groove here, still having as a short term memory of these perspectives from abroad. So I want to share how that is.

It is not pretty, as most reading this will not be surprised to learn.  Even among conservative foreigners who do not know one, if you are an American and you are speaking with them at all seriously for more than a few seconds, one of the first things they will want to know if if you are "one of  them," you know, supporters of Donald J. Trump.  They were all relieved when I informed them that, no, I was not.  Now I know that there are many people in other countries who are sympathetic to  him, and he has been sympathetic back, those who support authoritarian nationalism, and some countries contain many such types. But since Trump won in the US, these people have been losing elections pretty much all over, with the exception of Erdogan's referendum in Turkey, which Trump congratulated him on, even though it was close with allegations of fraud, and, of course Erdogan celebrated his victory and Trump's congratulations by arresting and torturing several more thousands of people.

There are some contradictory polls out there. So one poll from last year claimed that 77% of the world's people supported Trump over Clinton. Maybe, but probably not.  Specific polls in some nations supported that, especially in Russia, where Trump was definitely popular, maybe more so than anywhere else in the world, big surprise.  He also appears to have been quite popular in Poland according to one poll. Certainly various authoritarian leaders supported him, with Hungary's Oban and Egypt's al-Sissi and Turkey's Erdogan on the list along with Putin, of course.  The Saudi leaders have and continue to support him, although polls suggest their enthusiasm is not shared by their populace.  Likewise in Israel, Netanyahu has been all for him, even though prior to the election more people supported Clinton than him. In most other nations he has had terrible poll ratings, with one poll from last year showing only 9% of Europeans as a whole supporting him.  And it looks like he has gone down hill in support in most places, just as the polls show as well in the US.  Thus to go to his once most supportive nation, Russia,  a poll at the end of April had only 13% supporting him against 39% against.  No wonder their foreign minister appears to view him with contempt as exhibited by his reaction when SecState Tillerson told him before he met with Trump that Trump had just fired the FBI director: "You're kidding."  This is a man who played the ultimate role in helping the Iran nuclear deal negotiations come to a successful conclusion, not a fool.

And of course in our neighbor and major trading partner, Mexico, only 3% support him, with even that level surprising given his behavior toward that nation, long a US friend and ally, if not always.

I also checked polls for the Most Admired Person In The World, finding the most recent one from slightly over a year ago on May 7, 2016 from yougov.  The top three men were Bill Gates, Barack Obama, and Xi Jinping.  Putin was 6th, with the Dalai Lama at 8th, Pope Francis at 13th, and Bernie Sanders at 20th, the farthest down they went. Trump was not on the list.  The top three women were Angelina Jolie, Queen Elizabeth, and Hillary Clinton, with Angela Merkel at 8th and Marine Le Pen at 20th.  A Gallup poll of Americans in December had Obama as the most respected, far ahead of Trump.  In any case, all of  this just reinforces that Trump is viewed very negatively around the world, even in countries where the leaders are making friendly noises to him, such as in Japan.

 So how do  I feel about all this?  I must say that I am glad to have been out of the country for the last few months, to have some distance from the grind of partisan media and social media that is here, which I am now experiencing full blast, and seeing how it just sucks one in.  I pay attention to Fox and some other rightist outlets, but I see how the bubbles are really strong, how one just gets caught up in the scandal  of the moment and so on.  Heck, just to note, so many think this is it for Trump, but so many thought that a year ago after his "grab 'em by their pussies" remark came out, and here he is president.  Those of you seeing him about to be impeached, sorry, no, his support is hanging in there at well over 30% and the GOP in Congress remains more afraid of Trumpist primary challengers than of Dem opponents doing them in, although the health care issue may yet change all that.  But that is not an impeachment issue, that is a midterm election issue, and it is normal for an incumbent president to lose badly in midterms.  Reagan did so in 1982, and he took 49 states two years later, not that I am predicting that for Trump in 2020.  But a lot of you need to step outside of your bubble, and I am addressing those I agree with.

What really concerns me is the bubble of the hanging-in-there Trump supporters.  I must confess that my long absence where everyone I have met has viewed them as people beyond belief and utterly beneath contempt has affected me, and that is how they are viewed, like they are no better than Nazis, really.  Yes, I recognize that Trump has not done many bad things he promised he would do (and is not a Nazi), but from what the rest of the world thinks, he looks like a total disaster of an incompetent and unpredictable president, profoundly frightening because he has his finger on the nuclear trigger and can end the world in a flash of fitful anger.  I know that support for him has been drifting downward in the US, and the opposition/Resistance to him has been ferocious here.  But his core supporters in their Fox News/alt-right media bubble continue to hang on, although it seems that they may be becoming somewhat desperate.  I have been watching Fox and I am astounded at how much time they are spending conjuring up how the new FBI director will restart the investigations of Hillary Clinton, and how Trump goes to  rallies where these people continue to chant "Lock her up,"when he is clearly the most criminal and corrupt president in the history of the nation. They are getting further and further disconnected from reality in their desperation to believe in their man.

If anything has shocked me it has been how ferocious and bitter these people have become, viciously and wildly attacking others they disagree with on social media in a frenzy unlike what I saw before I left, before Trump became president.  It is clear that many of them are seriously disillusioned and upset, but those hanging in there are lashing out irrationally at those criticizing their hero.   I am deeply worried about this and where it could lead.  I sort of intellectually realized this might be the case before I returned, but seeing it after I got here is really upsetting.  I do not see how this is going to end, and I fear it will be very hard for these people ultimately.

Objectively I have to say that anybody still supporting Trump is one of at least the following three, or three and a half things: stupid, crazy, or a fascist racist.  I might have said that before I left, but no, I would not as I knew many loyal and reasonable Republicans who supported him out of party loyalty, if without enthusiasm.  But after what has gone down over the last few months, which my absence has made me see very clearly, this sort of view is no longer acceptable.  The only possible excuse now is that one has simply gotten totally ensconced in the media bubble supporting him and pays no attention to anything else.  So, yes, I recognize that there are still at least semi-intelligent and not insane or totally socially awful people who continue to support  him sitting in these bubbles.  But the bubble is getting really stretched out and thin, and pretty much the rest of the world can see it, even in places like Russia where they once liked Trump.  They now view him as seriously dangerous for the whole world, and chanting "America First" will not change that reality.

Barkley Rosser

Friday, May 12, 2017

The "Tapes" Threat

This may be so obvious it needs no explanation -- but allow me to explain. This tweet puts on notice anyone who has a conversation with the POTUS that whatever they say MAY be recorded and selectively "leaked" for the purpose of blackmail, extortion and/or intimidation.

That should be an effective strategy for ensuring candid, confidential communication and advice. Mitch McConnell and Paul Ryan may be too stupid to realize the implications or too corrupt to care but there is no putting this genie back in the bottle.

Monday, May 8, 2017

Immiseration Revisited: The four phases of working time

Is there a neo-classical theory of immiseration?

Below is the marvelous Chapman hours of labor diagram (follow the link for a more detailed explanation). It looks complicated but it really only contains four curves representing, roughly, long-term and short-term productivity, income [correction: actually income minus the value of leisure foregone] and fatigue. But there is more to it than Chapman realized or that I have previously noticed.
The context for this diagram is William Stanley Jevons's discussion of work effort in his Theory of Political Economy:
A few hours' work per day may be considered agreeable rather than otherwise; but so soon as the overflowing energy of the body is drained off, it becomes irksome to remain at work. As exhaustion approaches, continued effort becomes more and more intolerable.
The "L" curve in Chapman's diagram echoes the lower curve in Jevons's figure VIII, presented to illustrate the "painfulness of labour in proportion to produce":
In this diagram the height of points above the line ox denotes pleasure, and depth below it pain. At the moment of commencing labour it is usually more irksome than when the mind and body are well bent to the work. Thus, at first, the pain is measured by oa. At b there is neither pain nor pleasure. Between b and c an excess of pleasure is represented as due to the exertion itself. But after c the energy begins to be rapidly exhausted, and the resulting pain is shown by the downward tendency of the line cd.
Chapman was primarily concerned with the length of the day optimal for output, which would be measured on the X axis of his diagram by the distance Ob. The optimal working day from the workers' perspective, however, would be On and would terminate at the point where the marginal income from another time unit of work would just equal the marginal pain of working.

But the intervals from n to i and from i to b add another dimension to the diagram that has been overlooked. From n to i the worker gives up proportionally more in work effort than he or she receives in extra income [minus the value of leisure foregone]. Finally, during the interval from i to b, workers endure additional pain in exchange for a decrease in total income minus leisure. Beyond b, the incomes of both workers and employers are reduced.

The four phases of working time can be labeled cooperation, exploitation, immiseration and ruin. The incentive for employers is to progress inexorably toward the last phase unless regulated by legislation or collective bargaining. The following animation illustrates the contrast between the workers' gains (green) and losses from lengthening of the working day and the employers' gains (blue) and loses.

The conflict between labor and capital over the length of the working day can also be illustrated less kinetically by the following close-up of the X axis from Chapman's diagram. The green arrows indicate income gains, the red arrows income losses or pain cost:
The bottom line, showing the social aggregate, indicates that the income gain for capital at the optimal point b for output is essentially a transfer of income from labor, which also has to invest additional work effort to accomplish that transfer. Up to the output optimum point there is a small net surplus of income that is, however, dwarfed by the quantity of work effort pain cost required to generate it. This does not even qualify for the Kaldor-Hicks compensation criteria. From capital's perspective, however, the small net return and larger transfer appears to be all simply gain from expanded output -- growth is good! (Just don't look under the hood).

Chapman gave no indication of being aware of the immiseration implications of his analysis. John Hicks gave even clearer indication that he was not aware of the immiseration implications of Chapman's analysis. Hicks observed that "it had never entered the heads of most employers that it was at all conceivable that hours could be shortened and output maintained" but asserted that trade unions "will not usually need to exert any considerable pressure in order to bring about a reduction" in circumstances where the working day exceeded the output optimum. As if workers should be content to be ground down into wretched poverty provided they didn't drag their employer down with them! The output optimum is not a good place on the X axis for workers to be.

Only the Marxist economist, Maurice Dobb, appears to have noticed the importance of the relationship between wages and "the worker's expenditure of energy and his 'wear and tear.'"
What was implied in the economists' retort to the advocates of the so-called Work-Fund leads to the apparent paradox that the more the workers allow themselves to be exploited, the more their aggregate earnings will increase (at least in the long run), even if the result is for the earnings of the propertied class to increase still faster. And on this base is erected a doctrine of social harmony between the classes. But it does not follow that the workers will prefer to be exploited to a maximum degree, or that attempts to limit this exploitation are based on fallacious reasoning.
There is no scale on the Chapman diagram and this turns out to be a useful feature. Different occupations, technologies, individuals and wage levels generate a variety of scales. One could conceive of aggregating these scales either in an overall average or clustered in quintile or decile groups. The latter procedure would be valuable in exploring whether a substantial number of workers were being pushed into conditions of immiseration even though the overall average was still safely in the exploitation range.

It is worth remarking that based on the relative length of the segments in Chapman's diagram, the optimal length of the day for workers would be less that 72 percent of the optimal output day. For example, if the optimal length of the workweek for output was 48 hours, the optimal week for workers would be 34.4 hours. Of course Chapman's diagram is not based on empirical measurement but Chapman had investigated in depth the extensive statistical and experimental data available at the time he was formulating his theory, so, while his proportions cannot be assumed to be precise they probably represent an informed impression -- a ballpark estimate -- of general relationships.

In conclusion, yes, there is a neo-classical immiseration theory. The economists who propounded it apparently were unaware that it was such a theory. By extension, that immiseration theory is a crisis theory. There is no built-in mechanism of negative feedback from prices that militates against the passage from the immiseration phase to the ruin phase. Hicks assumed that a "very moderate degree of rationality on the part of employers will thus lead them to reduce hours to the output optimum as soon as Trade Unionism has to be reckoned with at all seriously [emphasis added]." But by the time exploitation has progressed to the immiseration phase, trade unionism doesn't have to be "reckoned with at all seriously" by employers. The trade unions would already have been defeated somewhere between point n and point b on the Chapman diagram's X axis.

Saturday, May 6, 2017

Messing Up Badly In Korea

In many areas where many were worried that President Trump would do this that or the other crazy thing he has held back for one reason or another.  But one very serious location where he has recently made a total botch of things has been in Korea, a series of unforced errors.  Of course before he got into it in Korea it looked like he might get in a shooting war with China, but then he decided that Xi Jinping is a great guy after the Chinese paid his family gobs of money and Trump realized that he needed to make nicey nice with Xi in order to deal with unquestionably serious problem of the North Korean nuclear weapons program, possibly the most dangerous situation in the world right now.

So then he proceeded to talk tough on North Korea, making noises about starting a war with them if they tested a nuclear weapon (which they did not, making a failed rocket test instead) with this supposedly being backed up by him supposedly sending the USS Carl Vinson to back up his threats, only to have it come out a few days later that the Vinson was sailing off into the Indian Ocean.  I gather it has finally shown up in the neighborhood, but now Trump has messed up with longtime US  ally South Korea, the only party involved in this arguably more important than China even.

South Korea is in the middle of a snap election happening May 9 brought about by the impeachment of now former President Park Geun-ye, daughter of former dictator Park Chung-he, who was assassinated by his top intel guy.  Park is from the more conservative of South Korea's political parties and had agreed under pressure from Trump to install the THAAD anti-missile defense system.  Doing this has upset China, which has put in place a strong economic boycott against South Korea.  Nevertheless Trump pushed on and has had the THAAD system installed and up and running, even though the politician most likely to win the upcoming election, Moon Jae-in of the more left-liberal party, has said that he would like to think about this and that it should not be fully installed yet.  But to add insult to injury, Trump demanded that the South Koreans pay for the THAAD system, completely outraging pretty much everybody there.  He has backed off that, but has now added a threat to unilaterally end the South Korea-US trade agreement. Maybe that is a bad agreement, but given everything else that is going on, this seems like an abysmally stuipid moment to bring up such an issue.  The South Koreans are enraged and likely to elect Moon on an anti-US platform.  Surely Trump should have been trying to make nicey nice with the South Koreans as he has with the Chinese, but maybe they have not paid Ivanka enough money yet.  This is just messing up very badly in a very important and serious part of the world.

Curiously this resembles in some ways a former messup there made by then President George W. Bush in March, 2001, which I have posted about here.  
In 1994 North Korea stopped pursuing a plutonium weapons program by shutting down its Yongbyan plant in exchange for various economic and security promises.  This was followed by the "sunshine" policy from South Korea, still going on when Bush became president in January, 2001.  Kim Dae-jung was South Korean president at the time and very much wanted support from the new administration of this policy.  Some supported him, notably SecState Colin Powell, and Kim thought he had full support.  He  came to Washington on March 7, 2001 to meet with Bush, but at the last minute Cheney and Rumsfeld convinced Bush not to support the policy for a variety of in retrospect stupid reasons.  Kim went home humiliated and angry.  At the end of 2002 it was found that North Korea was starting to enrich uranium, which was not part of the agreement, but the US said that this violated the agreement and stopped shipping materials to North Korea under the agreement.  This led to North Korea fully pulling out.  It restarted the Yongbyan plant and made its earliest nuclear weapons out of plutonum from that plant.  Of course soon thereafter most attention was taken up by Bush's even more disastrous invasion of Iraq, but his early blundering in Korea paved the way for  North Korea to get the nuclear  weapons that are now such a problem.

Barkley Rosser

Thursday, May 4, 2017

A Climate of Capitalist Dominance

We’ve now had a chance to see Stephens #2, the second column on climate change by the new NY Times voice on the right, Bret Stephens, and unlike the first (which reasoned—sort of—back from its conclusions in true hackish fashion), this one isn’t so bad.  He argues that government action on climate change has done as much harm as good, pointing to the biofuels fiasco and shortcomings in the European (Carbon) Trading System (ETS) and Germany’s Energiewende as cases in point.  I agree.  What he says about these programs deserves to be said, especially since too many self-styled progressives won’t.  There’s a lot of really sketchy climate policy out there.

So what does he miss?  The first omission, and it’s an important one, is that he considers only the failures of government, not those of business and the market.  Above all, the continued operation of, and even investment in, a fossil fuel-based economy in the face of what we know about climate risk, is a massive fail, greater than every error committed by governments.  That doesn’t justify bad policy, but it puts government malfeasance in perspective.

To see the second omission we need to drill down a bit.  Consider the three examples Stephens brings up; what do they have in common?

Biofuels: Rather than taking action to remove fossil fuels from our energy base, government policy boosted a supposed “green” energy source derived from commercially grown crops.  This generated substantial profits for agribusiness, but, as Stephens rightly argues, it did little if anything to forestall greenhouse gas accumulation while producing a number of serious economic and social costs.

The ETS: Despite howls of protest from the scientific community, European politicians made decision after decision that eviscerated their carbon pricing system, handing out carbon permits for free, setting meaningless targets and removing large sectors of the economy from regulation.  The system has essentially broken down, but not before, as Stephens mentions, bilking European households of billions in energy costs, which went directly into corporate coffers.

Energiewende: While the achievements of solar and wind energy promotion in Germany are remarkable, the overall strategy prioritizes expansion of renewables and avoids taking any action to simultaneously restrict carbon fuels.  The result is that Germany has both record-setting increases in renewable capacity and hardly any reduction in carbon emissions.

All of these examples have a common theme: governments seem unable to frame climate policy in any terms other than subsidies for corporate investment and profit.  A biofuels initiative is easy to advance, since it funnels public money to agribusiness.  The only ETS element that had any effect is the one that temporarily increased electricity prices and allowed privately-owned utilities to reap all the profits.  Energiewende supports firms that invest in the renewable sector but overlooks firms that continue to profit from burning carbon.

The common denominator is overweening capitalist power.  Climate policy is constrained by the determination of wealth-holders to protect and expand their wealth.  An effective response to the threat of a climate catastrophe, on the other hand, would unavoidably deplete their wealth—not only the stranded assets of the fossil energy sector but a range of other investments that would be devalued by a rapid shutdown of oil, gas and coal.  (I’ve done a back of the envelope estimate that the wealth hit to non-energy assets would be approximately as great as that to carbon energy.)

So I’m on board with what Stephens is against but not what he’s for.  Rather than dismiss all action on the climate front as misguided, I would like to see the non-wealth-obsessed interests in society mobilize to overcome capitalist power.

Tuesday, May 2, 2017

Against the Subjective Theory of Knowledge

The story begins in France, post-1968 and post-decline-and-fall-of-the-French-Communist-Party.  The legitimacy of power in France, the country of the Grandes Écoles, historically depended on claims to expertise, and the Communists had offered a pole of opposition based on “scientific” Marxism.  When Communism collapsed, how could the French left oppose power?  The response was to refound the movement on a posture of radical subjectivism: the experts’ claims to truth, derived from their so-called master narrative, would be refuted by a deeper truth derived from the subjective experience of the oppressed.  Their subjectivity would no longer be reduced to a chunk of data to be processed by the ruling experts; no, being the very substance of truth, it would be available only to those who had actually lived this experience and would have precedence over all external claims.  Take that, technocrat!

This radical subjectivism was smuggled into the United States, wrapped in innocent-looking volumes of cultural criticism, where the context was different.  Elite claims to power in the US are not generally based on expertise in the French manner, and in any case there had been a deep debate between Left and Right over the question of democracy versus technocracy in the 1920s, Dewey against Lippmann.  The US Left, in the decades following this debate largely adopted the optimistic view that radical democracy could embrace expertise, and the belief that science and political radicalism are compatible can still be seen in current activism over climate change, among other topics.  (True, a minority current on the left appeared in the 1970s which challenged scientific claims to knowledge, and it still exists, but it has little political influence.)

Initially the subjective theory of knowledge presented itself in the American context as a more radical assertion of freedom and personal difference.  It fed a pre-existing expressive conception of what it means to engage in political action, which has always had an appeal in the US, but before long it attached itself to identity politics.  According to the new subjectivism, racism came to be understood as the result of a discourse grounded in white non-experience of racial oppression, and so also sexism, a product of male discourse.  Such oppression, it was believed, could be challenged only by counterposing to these discourses of exclusion the truth inhering in the experience of people of color, women and other marginalized groups.  In this process the critique of expertise became a critique of rationalism applied to issues involving identity.  Rationalism was regarded as a rigged contest, a fig leaf for the dominant discourse, against which resistance could be grounded only in direct personal experience.  If you didn’t have the experience of oppression, no matter how cleverly you argued, you couldn’t know, and if you had it no one could tell you otherwise.  Voice was not a means for putting forward evidence; voice removed the need for evidence.

To be very clear, I am not arguing against subjective experience as a basis for knowledge.  Experience is real, and so is the meaning we attach to it.  An examination of racism or any other social problem would be seriously incomplete and probably misguided if it didn’t take account of how this condition is experienced subjectively.  I am not making a case for a supposed “objective” approach to understanding (a false ideal), nor for categorically putting externally observable data above subjective self-report.  That would be extreme.

Nevertheless, two types of problems have arisen from adhering to the opposite extreme that privileges subjective experience beyond all other forms of knowing, one at the individual level and the other collective.

The individual problem is that our experience, and the inferences we draw from it, is often a poor guide not only to the external world but also ourselves—who we are, what motivates us, and how we interact with others.  Cognitive psychology is nothing if not a litany of human foibles.  Autobiography is valuable, but not necessarily more truthful than biography written by others.  Your friends can tell you things about yourself you scarcely imagined.  A foreigner can often observe aspects of a culture that are invisible to those immersed in it.  Knowledge from within is valuable, but so is knowledge from without, which means radical subjectivism is lousy epistemology.

This problem has practical consequences.  In the 1980s America went through a period in which the subjective reports of children concerning possible child abuse were privileged over virtually any external evidence, and the result was the persecution of many innocent daycare workers and a wave of dubious “repressed memory” denunciations of parents.  Of course, many children were and are abused, and many adults are culpable, but the categorical privileging of child testimony or memory over all other forms of evidence clearly resulted in gross injustices.  The same critique can be applied to recent formal and informal determinations of violation and oppression on the basis of gender and race that privilege the self-reports of the (presumably) violated and oppressed.  When Rolling Stone messed up in its false exposé of “A Rape on Campus” two years ago, for instance, it had clearly been led off the rails by its assumption that the rape testimony of a woman possesses an existential truth that normal journalistic evidence-gathering cannot evaluate—but testimony can be wrong, even if it is offered in all sincerity.  Again, this is not to devalue what people say they have experienced; personal testimony is always crucial evidence.  But it can’t be the only evidence, or even the evidence that overrules all other.  Us humans are simply too fallible.

The collective problem exists because individual experiences vary.  It’s one thing to hear the testimony of a single voice describing what it means to be oppressed, but when issues like racism and sexism are discussed at a social level, how can the subjective experiences of thousands or even millions of individuals be combined into a composite voice to settle issues in dispute?  After all, if each experience is its own truth, without some further processing you would have a very large number of different truths, many of them contradictory.  There’s no escaping the need for an organization that offers its own voice on behalf of the many, so the rest of us can learn this composite truth.  But who gets to do this, and what experiences do they incorporate or set aside?

The politics of this representation is always fraught.  Sometimes open competition breaks out between different groups that each wish to express the general subjectivity but selected and combined according to different criteria.  Even when groups giving voice to identity are united there is often tension between individuals whose subjectivity is downplayed or ignored and the groups that claim to speak for them.  Given the underlying philosophy of radical subjectivism, there is no basis for individuals to contest the selection process that may have excluded them, since there are no criteria for selecting subjectivities, which in any case is not supposed to happen.  (No group openly states it performs this role; their rhetoric is always universal.)  Thus identity dissidents are effectively expelled from the entire framework.  Conservatives actively seek to locate these individuals, offering them support so they can draw them into their network.  The biographies of many black conservatives, for instance, fit this pattern.

As much as I respect the role that subjective knowledge needs to play in everyday life and social science, I think the extreme version, which holds that subjective experience is immune from challenge by any other mode of knowing, is causing great damage to the left.  The first step in freeing ourselves from it is to recognize it for what it is.

Climate of Complete Incomprehension

I finally got around to reading the NY Times new “responsible conservative”, Bret Stephens’, call for skepticism and moderation on climate change.  He adopts an attitude that exudes reasonableness and rejection of hubris.  Complicated modeling is an uncertain business and often fails; just look at Hilary Clinton’s Big Data campaign gurus.  Climate change is such a difficult, uncertain business, so why don’t liberals just back off and stop invoking a “scientific consensus” to bludgeon common people who don’t think decarbonization is the be-all and end-all?

If this is the outer limit of right-wing sanity, we’ve really got our work cut out for us.

First off, the guy seems to live in a binary, pre-probability universe.  At least, that’s the only sense I can make of a paragraph like
Anyone who has read the 2014 report of the Intergovernmental Panel on Climate Change knows that, while the modest (0.85 degrees Celsius, or about 1.5 degrees Fahrenheit) warming of the earth since 1880 is indisputable, as is the human influence on that warming, much else that passes as accepted fact is really a matter of probabilities. That’s especially true of the sophisticated but fallible models and simulations by which scientists attempt to peer into the climate future. To say this isn’t to deny science. It’s to acknowledge it honestly.
Well, yes.  I’ve read the latest assessment reports and the ones that preceded them, and it’s true that each claim is assigned a rough probability.  But to counterpose “fact” and “probability” is to really not understand how modern science works.  Science is always a matter of probability.  When I do a statistical test, I don’t sum it up by saying that it proves that my result is a “fact”, but that I can assign a provisional probability to it, or a confidence interval or (best yet) a plausible probability distribution around my best guess of what’s going on.  This is the basis for all modern work in the empirical sciences, and singling out the use of probabilities by IPCC as somehow demanding less credence or urgency is to demonstrate his own ignorance.

And there’s more.  Implicit in the entire piece is that the uncertainty is one-sided, that climate change might be as bad as the models predict, or it might be a more minor problem.  It never dawns on him that probability distributions have two tails, and the consequences of foregoing climate action might be much more severe, catastrophic even, than the mean prediction suggests.  This makes it clear that Stephens’ use of “probabilistic” to denigrate concern on climate change is pure ideology: he’s using the word to blow smoke over the issue rather than to illuminate it.

This is just op-ed #1 from their new guy, but it already looks like the Times has hired a hack.