Glenn Greenwald Shout Out to Dean Baker

"So the last point I want to make is that one of the things I set out to do and I think that Mr. Snowden set out to do and that I know the people at The Guardian set out to do was not simply to publish some stories about the NSA. It was to really shake up the foundations of the corrupted and rotted roots of America’s political and media culture. And the reason I say that is that there is an economist Dean Baker, who yesterday on Twitter wrote that he thinks the stories that we’re doing are shining as much light on the corruption of American journalism as they are on the corruption of the National Security Agency. 

"I think that is true for several different reasons. Number one is if you look at the 'debate' over—the charming, very endearing debate over whether or not I should be arrested, prosecuted and then imprisoned under Espionage Act statutes for doing journalism—What you find is that debate is being led by other people who are TV actors who play the role of journalists on TV. They’re ones who are actually leading the debate and the reason they are doing that is they purport to be adversaries of political power or watchdogs of political power but what they really are servants to political power. They’re appendages to political power."

Increases in Certain Price Over the Past Ten Years

Paul Krugman provided us certain information on the price of bread and milk as a reaction to a rant from Erick Erickson:

The rest of America is nervous about where their next meal and paycheck are coming from, how they are going to afford to bail their kids out of crumbling schools, and the price of a gallon of milk and loaf of bread that keep going up though Ben Bernanke tells them there is no inflation.

I’m a little surprised that this rant failed to mention the price of gasoline so permit me to provide a similar chart for that. Paul’s graphs (plus ours) show that these prices are volatile but haven’t had much of an upward trend over the past 5 years. But I guess one could say they have risen a bit over the past 10 years. Mik prices as of May 2013 were 28% higher than they were as of May 2003, while bread prices rose by 40% over the same period. And gasoline prices have risen by 135% over this 10-year period. But let’s break this into the period from May 2003 to May 2008 (a period where Federal Reserve policy wasn’t that expansionary) versus the period from May 2008 to May 2013 (where the Federal Reserve has increased the monetary base substantially). Milk prices rose by 40% over the earlier period and have moderated since. Bread prices rose by 37% over the earlier period with the increase over the past 5 years being just over 2%. Gasoline prices are even more fun given how Republicans tried to argue that Obama has doubled gasoline prices as they focus on the change since December 2008 ignoring the fact that this followed a major dip from its height in May 2008. If we use our 5-year period (May to May), gasoline prices soared by 144% during the earlier period and have basically moderated since. Correct me if I’m wrong but I don’t recall Mr. Erickson complaining about hyperinflation when George W. Bush was President.

The Minions of Marginal Revolution

Pour yourself a cup of coffee (or tea if you're like me), pull up a chair and have a look at the comments to a question posed by Tyler Cowen, "Who is the most influential public intellectual of the last twenty-five years?"  Hint: "intellectual" is interpreted rather broadly.

"Ned" Snowden: Hedge-Levellers, Frame-Breakers and Whistleblowers

In a comment a couple of weeks ago at Juan Cole's Informed Comment blog, Warren Lunsford called Edward Snowden a "Luddite":

In this Snowden disclosures it appears we are finding standard Marketing Science applied to National Security and Federal Criminal Investigations of Enemies of our County. I would think Snowden is a Luddite. Just as a group of early 19th century English workmen destroyed laborsaving machinery as a protest, we find Snowden attempting the same activity against the application of Modern Technology for National Security.

Lunsford was right but for the wrong reasons. There is indeed an important parallel between Snowden's actions and the frame-breaking of the Luddites (as well as the hedge-levelling of the commoners resisting enclosure). But Lunsford got his chronology backward.

The enclosures of the commons and the mechanization of industry were usurpations that disrupted long-established regimes of property and legality. The real innovation here was the criminalization of protest against actions that previously would themselves have been regarded as violations of acknowledged rights.

The law doth punish man or woman
That steals the goose from off the common,
But lets the greater felon loose
That steals the common from the goose.

Nicholas Blomley (2007) wrote about "the consequential and often contradictory role of material objects in producing enclosure" emphasizing "the important work that hedges did, physically, symbolically and legally, in the dispossession of the commoner." I would argue, as did Marx, of course, that machinery performs a similar function of physical, symbolic and legal dispossession of labor power from the worker as does information technology dispossess citizens of their privacy.

This is not to say that machines or IT, any more than hedges, are culpable for the dispossession. That would be to reduce them to their physical aspect alone. Rather it is the interaction of this physical aspect with its symbolic and legal interpretations that resulted and results in dispossession.

The Infernal Errors of Dan Brown

Just finished reading Dan Brown's Inferno while in Italy.  I know I should not bother correcting stuff, but for this book he declares at the beginning, "All artwork, literature, science, and historical references in this novel are real."  So, he is inviting closer scrutiny than in earlier books, where he definitely stretched and invented and distorted lots of books, but avoided such claims.  Here are some errors of fact in this book (which is a fun read anyway, although formulaic).

p. 95: "To this day, modern banks use the accounting method invented by the Medici - the dual-entry system of credits and debits."  Wrong.  It was first used in Pisa where I sit at this moment a good two centuries prior to the Medicis getting into banking. BTW, the oldest continuously existing bank in the world is also here in Tuscany, the now-troubled Monte dei Peschi di Siena, where its HQ still is since it was founded in 1472, which is the period of the Medicis.  [Correction:  Double entry accounting was not invented in Pisa, but in Florence.  However, it was initially done by merchants in the late 1200s prior to the Medici, although they may have been the first to use it in banking.  Brown is not as far off on this matter as I initially suggested.]

p. 96:  "You can't get into the [Boboli] gardens from here.  The entrance is way over by the Pitti Palace.  You'd have to drive through Porta Romana and go around."  False.  From where they were standing just outside of the Porta Romana, southern entrance to Old Florence, there is an entry to the gardens just to their right, a few meters away, not requiring going through the Porta Romana.

p. 103 (and related pages):  A graph of world population is shown starting 2 million years ago, which, with this scale highly magnifies recent growth while not really showing that the growth rate of world population has been decelerating since the mid-1970s.  It is repeatedly declared, including by a character with an IQ of 208, and never questioned, that it is a "mathematical certainty" that exponential population growth is simply continuing at a constant rate with no mention of the slowdown.  It is mentioned that world population might reach 9 billion by 2050.  The latest estimates are that this level might be reached later and might be the maximum world population will ever reach.  Population growth is almost certainly going to go negative before the century is over due to the spread of falling birth rates across more and more countries, which is happening.

p. 106: "If we head northeast, we'll reach the palace."  From where the characters were at that point (having entered Boboli Gardens by jumping over a wall near the southern entrance), the palace is northwest, not northeast.  The error of the location of the palace is repeated throughout the coming pages.  It is on the northwest end of the gardens, not the northeast.

p. 136: an even more ridiculous figure with rates of growth of various variables stuck on top of each other so that they all appear to converge at a point at the right end of the figure.  Some of these are extremely misleading.   Thus, one is the rate of growth of the demand for fresh water.  Yes, that is growing, but the rate of growth of the supply of clean fresh water has been growing more rapidly as a rising percentage world population  obtains clean water.  I will note that some of the variables do reflect real problems, such as species extinction and overexploited fisheries.

pp. 141-142:  He has the Vasari corridor starting at the northeast end of the Boboli Gardens and going east across the Arno River.  It is at the northwest corner (near the palace) and goes basically north and a bit west across the Arno.

pp. 144-145: "A quick Internet search led him to  information about a prominent nineteenth-century mathematician and demographer named Thomas Robert Malthus, who predicted a global collapse dut to overpopulation."  I do not think anybody has ever described Malthus as a mathematician, although arguably he was a demographer.  In any case, besides being a minister, he was the first Professor of Political Economy in Britain, and he did not predict "global collapse."  He did predict ongoing poverty and stagnation due to overpopulation, but not this more dramatic outcome.  That would come with some of his followers, particularly in the 1970s, when this book would have been more timely.

There are numerous repetitions later of the inevitably of  global collapse due to overpopulation, accompanied by such statements as "The mathematics is indisuputable" (p. 214).  Nowhere does Brown ever let any character remotely bring up the numerous well known issues questioning this that are mentioned above.

p. 294: "In the 1940s, Nazi scientists had dabbled in a technology they'd dubbed eugenics..."  The term was invented decades before the Nazis and was highly respected and supported by many progressives in the US and elsewhere.  It was the Nazi embrace of this already dubbed and established eugenics that made it become a disrespected movement.

p. 324: "Architectrually speaking, the word basilica defined any eastern, Byzantine-style church erected in Europe or the West."  The first buildings to which the term was applied were built in Rome during the Roman Empire period, prior to the Byzantine period.  The term moved east initially, and more generally is a church term tied to having a saint buried or strongly associated with the building
[Addition: The first basilica was built in 184 BCE in Rome by Cato the Elder.  They were originally public building located in the forum of a major  Roman city.  Their crucial architectural  detail was the presence of colonnades in the interior to create separate spaces, not a dome, although some do have domes.]

Border Security as Militarized Keynesianism – Outsourced

I think we have found a proposal to increase government purchases that Republicans like:

Leahy said a proposal drafted by Sens. Bob Corker (R-Tenn.) and John Hoeven (R-N.D.) “reads like a Christmas wish list for Halliburton.” The amendment requires implementation and activation of $4.5 billion in technology and equipment to achieve full surveillance of the U.S.-Mexico border. “I am sure there are federal contracting firms high-fiving at the prospect of all of the spending demanded by some of our friends on the other side in this amendment,” Leahy said on the Senate floor. Leahy criticized the GOP-sponsored language for waiving standard federal contracting rules. “That is a potential we must watch out for — for waste and fraud,” he said.

Normally – this kind of largesse for military contractors should be roundly condemned by those who care about fiscal responsibility and/or efficient allocation of resources. But we are far below full employment and this seems to be the only form of stimulus we can expect from the modern Republican Party.

Robert Reich and Life of "Pie"

AFL-CIO: "The rich keep getting a bigger share of the economic pie while everyone else’s share keeps shrinking. What should be done to reverse this trend?"

Sandwichman: "Stop growing "the pie." Restore the commons instead."

Bob Reich: "They go together. Economic growth doesn't have to result in more consumption of material goods. It can also result in a better environment, better public health, better education. All growth does is create the economic capacity to do these things. How we use growth -- either for more consumer goods of for more public goods (the commons) is a political choice."

Sandwichman: "There is a very large literature that disagrees with that assumption, Bob. A good place to start would be with Jonathan Rowe's "Our Common Wealth" or the 1995 Atlantic Magazine article on the GDP Jonathan co-authored. Also the commons is not just another term for public goods. See Elinor Ostrom's Nobel Prize winning work on the commons."

Megan McArdle: As the Lump Crumbles...

At the Daily Beast, Megan McArdle tries to defend herself from charges that she has committed the dread Lump of Labor Fallacy (Why Aren't We Creating Enough New Jobs?) -- but wants to have it both ways.

Last Friday, I wrote a piece about When Work Disappears. On twitter, by email, and in the comments, I got pushback. Wasn't I committing the Lump of Labor Fallacy, assuming that the jobs that were disappearing meant permanent unemployment? 

No, but I can see why people were worried. Let me explain.  

For starters, let me define the Lump of Labor Fallacy for those who don't fill their spare hours by reading classical economics texts. Or rather, let me let The Economist define it for you.

After citing the "one of the best known fallacies" BS from The Economist's Economics A to Z, Ms. McArdle asks: "Is that what I am worrying about? Am I under the delusion that when we lose 10,000 steelworker jobs, that necessarily means 10,000 fewer people working?"

McArdle then answers her own question: "No, not at all. Nonetheless, I am worried about unemployment at the bottom of the economy..."

It doesn't dawn on McArdle that she is no exception. If she is not guilty of the alleged Lump of Labor Fallacy (and I agree with her that she isn't), then on what basis does she assume that the fallacy claim is valid for other people? Maybe if instead of relying on The Economist's Lump of Labour hackery, Ms. McArdle would consult a peer-reviewed economic journal article...

"Why Economists Dislike a Lump of Labor"

"The lump-of-labor fallacy has been called one of the “best known fallacies in economics.” It is widely cited in disparagement of policies for reducing the standard hours of work, yet the authenticity of the fallacy claim is questionable, and explanations of it are inconsistent and contradictory. This article discusses recent occurrences of the fallacy claim and investigates anomalies in the claim and its history. S.J. Chapman's coherent and formerly highly regarded theory of the hours of labor is reviewed, and it is shown how that theory could lend credence to the job-creating potentiality of shorter working time policies. It concludes that substituting a dubious fallacy claim for an authentic economic theory may have obstructed fruitful dialogue about working time and the appropriate policies for regulating it."

Theodore Kaczynski's TED Talk

There is, of course, no such thing.

Fred Hiatt Outs Self As Total Social Safety Net Hysterian

In (now yesterday's) Washington Post, editorial page editor Fred Hiatt makes it clear that he is one of the most out there of Washington "liberal" social safety net hysterians, totally obsessed with cutting benefits for Social Security and Medicare, no matter what.   Dean Baker duly takes him to task on various fronts, including that taxes could be raised (and even Republicans are willing to do so to avoid cuts in those programs), defense could be cut more, and there is no guarantee that if liberals go along with cutting those benefits, the money will go to discretionary non-defense spending as Hiatt wants rather than yet another round of tax cuts for the rich See http://www.cepr.net/index.php/blogs/beat-the-press/fred-hiatt-is-holding-head-start-hostage-until-liberals-support-cuts-to-social-security-and-medicare .  I have a few additions to Dean's worthy screed on this.

One is the matter that Hiatt seems particularly incensed that Congressional liberals have not jumped on Obama's proposal for a chained CPI for COLA adjustments to Social Security.  Hiatt completely ignores that there is an alternative CPI for the elderly that shows substantially higher rates of price increases for goods purchased by the elderly than the non-elderly, with the still rapidly rising medical care costs a main reason for this, even if that rate of increase is decelerating.  A chained version of that is probably conceptually the best one to use.  As it is, Hiatt simply does not care what is fair or reasonable.  He just wants to have those future benefits cut now, blankety blank, no matter what the rationale.  After all, if we do not cut the future benefits now, we might have to cut them in the future!!!

Like many other VSPs who regularly pat each other on the back, such as Bowles and Simpson, he is clearly upset that the recent declines in the budget deficit have taken the pressure off for a grand bargain of tax increases and spending cuts, with social safety net cuts the centerpiece of this.  What is funny is that he fails to notice that this recent decline in the deficit is in fact partly the result of what is effectively a grand bargain that has now been struck, although admittedly a pathetic and stupid one and not done so in any coordinated way: the ending of the Bush tax cut for the rich and the ending of the Obama fica tax cut for the middle class and poor along with the spending cuts mandated by the inane sequestration.  Sure, this is not what these good government goo goo VSPs think should be done, but they are living in la la land if they think this totally dysfunctional Congress is at all remotely able to have any sort of sensible negotiation on this matter, if indeed such were really needed, which is highly questionable in the current situation.  They would rather blame Obama anyway, even though he caved to the VSPs and offered the chained CPI for SS, only to have everybody in both parties in Congress shoot it down, well aware that the public does not like it at all.

Something that is important is that Fred Hiatt is an especially influential VSP, much more so than most, who only rarely surfaces in such a public way as he does here and whose role is probably not that well known by the broader public.  His influence on the editorial WaPo page is certainly why few columnists there go against his arguments, with Harold Meyerson being about the only one I can think of who does so on any regular basis.  While some simply ignore the topic, several other supposedly nominally liberal columnists there parrot the line of Hiatt, including Robert J. Samuelson and Ruth Marcus.  And, of course, all their conservative columnists also agree that Social Security and Medicare should be cut, period, the sooner and greater, the better.

What remains to me a bit mystifying is how he and some of these others managed to get themselves so obsessed and in such conniption fits over this.  I suspect that it dates back to the 90s when Clinton was pushing the issue, with much talk of setting up private accounts then and of course under Bush as well.  I attribute much of the original push to pressure coming from Wall Streeters like Robert Rubin who saw lots of money for their companies if such accounts were set up.  That has largely fallen out of the discussion, but this consensus among Washington insiders that formed then, has simply remained ("Everybody knows Social Security is in crisis," said Robert Schieffer to John Kerry and George W. Bush during their third presidential debate back in 2004), even though it is clear that this view is highly unpopular with the public, and many of the arguments that these people make have been repeatedly discredited over a long period of time.  This is clearly the general phenomenon, but why somebody like Hiatt is so particularly obsessed himself to the point of writing such a silly column as this one, which is simply crawling with false or distorted "facts," more documented by Dean Baker and his commenters, is something of a mystery to me in the end.

John Taylor’s Flip-Flop on Federal Revenue Sharing

Paul Krugman compared John Taylor’s testimony in 2009 that Federal revenue sharing was only committed to reducing state government debt versus Taylor’s latest:

Janet Yellen blamed the slow recovery in part on the fact that “State and local governments were cutting spending…” As a matter of national income and product accounting, it is true that cuts in state and local government purchases subtract from GDP, but these cuts are mainly an endogenous consequence not an exogenous cause of the weak recovery.

His latest is the claim that state governments with balanced budget constraints are forced to adopt austerity during recessions. But isn’t this the reason we adopted Federal revenue sharing in the first place. OK, Taylor has resigned from the community of honest economists to join Team Republican but can we point out one consistency in his 2009 testimony and his latest:

Consider the following two charts. The first shows how state and local government purchases have been essentially flat in nominal terms in the past few years.

He also graph nominal purchases back in his 2009 testimony. Odd – don’t macroeconomists normally talk about real purchases, which is how our graph is drawn? In real terms, state and local government purchases have fallen after 2009. They were also showing stagnation in 2008 as the recession got started but they showed a bump in 2009 when ARRA implemented its temporary Federal revenue sharing. Oops – doing this in real terms sort of undermines what Taylor was trying to claim.

Thomas Schelling Gives The Bottom Line On Why We Did Not Blow Ourselves Up So Far In A Nuclear War

For as good account as will probably ever be given on how we are still alive and not having had a nuclear war since 1945, from the man as responsible for this good outcome as any on the planet, see

http://www.youtube.com/watch?v=BFE7gw7bEdQ .

I have no further comment on this, which speaks for itself totally.

Paul Krugman's Sympathy for the Luddites

Paul Krugman finally catches up with the Sandwichman:

Mechanization eventually — that is, after a couple of generations — led to a broad rise in British living standards.

But it’s far from clear whether typical workers reaped any benefits during the early stages of the Industrial Revolution; many workers were clearly hurt. And often the workers hurt most were those who had, with effort, acquired valuable skills — only to find those skills suddenly devalued.

As the Sandwichman wrote a little over two years ago (May 7, 2011) in an Open Letter to Paul Krugman:

One of the favorite unintended-consequences stories in economics is the idea that 'technology creates more jobs than it destroys.' This was a standard rebuke to Luddites in the early 19th century, who were portrayed as fearing that machines would create chronic unemployment. It closely resembles the case argued against the mercantilism of the early 18th century by Henri Martyn in Considerations on the East India Trade. The lump-of-labor fallacy appears as the negative version of this story. In fact, the fallacy is sometimes called the Mercantalist or Luddite fallacy.

There is a crucial difference between the two sides of the story, though. The technology creates jobs story is openly embraced by economists and triumphantly played as the trump card in debates over employment policy. The fixed-amount-of-work story, though, is only attributed by economists to Luddites, shorter work time advocates and other 'naive populists' they wish to discredit. In both cases it is the economist (not infrequently, The Economist) speaking, telling the uninitiated to sit down and shut up.

From The Big Ear To The Universal Ear

In 1958 a radio silence zone was created in eastern West Virginia around the Green Bank radio telescope.  During the next few years it was thought there might be a way of monitoring of Soviet military/intel communications by catching them bouncing off the moon.  A project was initiated to do just that, the "Big  Ear," with a site selected at Sugar Grove, West VA, about 30 miles from Green Bank and within its radio silence zone, which would make it easier to pick up the signals.  For a variety of reasons this project was discontinued in 1962, but the materials and equipment were in place at Sugar Grove, just over the Shenandoah Mountain range from the central Shenandoah Valley, and became attractive to other customers for other communications purposes.

So it was that the Sugar Grove Naval Station opened in 1969, although with minimal publicity, under the oversight of the Naval Informations Operations Command (NAVIOCOM).  To the few who became aware of this station in the area it was let out that it was involved in long wave communications with submarines, which apparently was a function that it did.  Over time, a variety of obvious pieces of equipment appeared there that could carry out such activities, eventually three large dishes (each much smaller than the originally planned Big Ear), as well as some large circular arrays, all of this readily visible from nearby mountaintops, particularly Reddish Knob on the Shenandoah range, a high point where a James Madison University, Norlyn Bodkin, would find a previously unknown species of plant left over from the ice age, along with a parking lot, where students and many locals would regularly repair for picnics and wild parties, with all those very visible communications devices down below providing fodder for all kinds of amusing speculations.

And then in 1982 James Bamford published a book about an agency whose existence had previously been officially classified, although its existence had surfaced briefly during the 1975 Church committee on abuses by US intelligence agencies.  One upshot of those hearings related to this agency whose existence was still classified was a 1978 act establishing a secret court to determine when this agency (and any others) could listen to telephone calls by US citizens.  The agency was the National Security Agency (NSA), whose initials had long been claimed jokingly to stand for "Never Say Anything," 

Among the more important secrets revealed about the NSA in Bamford's book was about the Sugar Grove Naval Station.  Not only did it communicate with submarines, it also was the top listening post for the NSA on the US East Coast, able to listen to all long distance telephone calls, the technology of that time being that such calls were transmitted by shortwaves, with local calls sticking to cables.  While all such calls could be listened to, at that time only ones using key words and with foreigners were supposedly listened to, but the potential was clear for what could be done, particularly in connection with the NSA being the regular first customer for whatever was the latest Cray supercomputer to roll out of the barns in Chippewa Falls, Wisconsin, which could be programmed to direct such mass targeting of long distance telephone calls.

Well, time and technology have moved on.  The importance of Sugar Grove began to decline in the 1990s as long distance calls increasingly were transmitted via fiber optic cables rather than shortwave transmissions, hence not readily picked up by the ears at Sugar Grove (not to mention that some attention got focused on the even more secret spy satellite operater NRO, whose existence had continued to be classified until then: how widely are they watching people?), although reportedly there was quite a bit of construction there during 2000-04.  I do not know how NSA sweeps up those calls now, but obviously they have the tech, and the computer tech has only massively increased. 

Last year in Wired magazine, Bamford reported that NSA was building a massive new data center in Utah, able to "intercept, decipher, analyze, and store vast swaths of the world's communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks," as quoted in an article by the superknowledgeable Walter Pincus in today's Washington Post.  Not many paid much attention, any more than many had paid attention in 2006 when USA Today, of all sources, according to Pincus, had reported that NSA "has been secretly collecting the phone records of tens of millions of Americans, using data provided by AT&T, Verizon, and BellSouth."  However, this did trigger some reaction with President Bush defending the program in terms reminiscent of those now defending PRISM, with NSA's ability to do this expanded with the 2008 FISA.

As for Sugar Grove, ironically the announcement of the end came just before Edward Snowden publicly revealed PRISM and related activities by the NSA, amounting to a Universal Ear picking up all telephone calls, not to mention a whole lot emails and other communications.  On April 23 of this year, NAVIOCOM sent an order moving the naval command at Sugar Grove to NSA headquarters at Fort Meade, Maryland.  I have no idea what, if anything, will still happen at Sugar Grove, but I suspect that those dishes and circular arrays will still be around for some time for the picnickers and partiers from around where I live in the central Shenandoah Valley to look at and speculate about while they do their things on top of Reddish Knob.

Barkley Rosser

NSA Leak – Privatization Run Amok

Is Edward Snowden a hero for protecting our liberties or a traitor for undermining our national security? This is indeed a difficult issue for most Americans but as I watched Snowden describe his actions, it struck me that the privatization of our national security may have undermined both noble goals. Some excellent reporting from the Washington Post shocked me as to how far this privatization has gone:

Never before have so many U.S. intelligence workers been hired so quickly, or been given access to secret government information through networked computers. In recent years, about one in four intelligence workers has been a contractor, and 70 percent or more of the intelligence community’s secret budget has gone to private firms ... But in the rush to fill jobs, the government has relied on faulty procedures to vet intelligence workers, documents and interviews show. At the same time, intelligence agencies have not hired enough in-house government workers to manage and oversee the contractors, contracting specialists said.

If the national security buffs in our Federal government were serious about keeping such programs classified, why allow private contractors to be so heavily involved? And when private companies have such access to our private information, where are the protections to our liberties? And with the secrecy involved with these programs, private fraud is made that much easier. The situation created by this privatization run amok is something only Dick Cheney could love.