I have made most of these comments as comments on Econbrowser and Angry Bear (an excellent post by Robert Waldman), as well as on Econbrowser in response to a serious post by Jeffrey Frankel. I note that pgl has added useful comments on this matter in the other blogs.
So it was 1990 that the New Zealand central bank became the first in the world to impose an inflation target of 0-0.002. It worked out pretty well for NZ, and in general it has not done too badly in general where applied, well beyond the US. Of course, global inflation has declined, with a handful of exceptions.
In the mid-90s the US grew better than it had previously, and in the middle of the decade there was an important moment regarding policy. There was no inflation directive but Fed Chair Greenspan was facing a de facto such directive based on central Fed estimates that there was a known "natural rate of unemployment (=NAIRU) that must not be passed.
As it was then Fed Gov Janet Yellen in the mid 90s convinced Greenspan not to raise interest rates partly because of a paper by her husband, Noblelist George Akerlof. This famous paper from 1996 out of Brookings where George was due to Janet being at the Fed,
His now famous paper with Dickens and Perry redefined this whole debate. So the hard empirical fact is that that nominal wages do not decline. The Akerlof et al paper shows that there is no downard movement in nominal wages. His group said that given no wage downs, those gaining will push wages up.
George (yes, an old very close friend), has coauthored with his wife, Janet Yellen, on why workers do not accept nominal wage decreases. It is a matter of social relations within workers, with A and Y publishing numerous papers on why that no wages going down.
So, in 1990 the New Zealand central bank worked out OK In the mid-90s Yellen convinced Greenspan to lay back because there is no NAIRU or natural rate of unemployment, although there has never been a credible argument that the"natural rate of employment equals the NAIRU."
Barkley Rosser
Monday, July 29, 2019
Friday, July 26, 2019
Why is John Cochrane Nodding to a Gold Bug?
John Cochrane gave a preview of a WSJ oped he wrote in response to something from James Grant. Permit me to be brief about the utter nonsense from Grant before noting the more worthwhile discussion from Cochrane:
Jim Grant: The Big Flaw in Ph.D-conomics: The Ph.D. standard of monetary management was the topic on the agenda at the July 15 panel at the American Enterprise Institute in Washington. Discretionary central-bank policy conducted by former tenured economics faculty, or by people imbued with the doctrines of those learned people, is the system in place today. We discussants pulled at our chins: Is the system any good at all? It’s a timely, down-to-earth question. Federal Reserve Chairman Jerome Powell, though a lawyer by trade, does business in a building infused withSorry but I refuse to go on with this rant as to how people trained in economics do not have perfect forecasting record especially since it is written by someone who co-authored a 1999 prediction that the DOW would soon hit 36000. The entire purpose of Grant’s rant was to advocate a gold standard. Cochrane was kind enough to provide a link to something from Grep IP entitled:
Judy Shelton, a Goldbug Who Bends to Fit TrumpThis WSJ oped is worth the read. Now to what Cochrane contributed:
Pegging the dollar to gold won't stop inflation or deflation. Inflation was already quite volatile in the 19th century, and it would be worse today...In particular, if the value of gold goes up, you have deflation, which many people are worried about today. The gold standard did nothing to stop the sharp deflation of the 1930s.Quite right and he notes that broader commodity standards face similar problems – which is something Stephen Moore apparently does not get. Cochrane instead advocates that we adopt a CPI target, which means that the Federal Reserve should target a zero percent inflation rate and not the current 2 percent target. Of course, those of us who lived through the Great Recession and also worry that the Wicksellian real interest rate might drop below negative 2 percent are advocating a higher inflation target – not a lower inflation target. Correction:It seems James Glassman is a popular name. James Kenneth Glassman is the co-authored of DOW 36000 not be confused the chief economist at JPMorgan. Now James Grant - this particular gold bug is a journalist who has his own Grant’s Interest Rate Observer and once suggest Ron Paul should head the Federal Reserve. James Grant also wrote The Forgotten Depression, which I believe has been criticized on this very blog. Glassman - Grant - we need to program to keep these monetary nutcases straight! Sorry for the confusion.
Wednesday, July 24, 2019
Pledging Zero Carbon Emissions by 2030 or 2050: Does it Matter?
We now have two responses to the climate emergency battling it out among House Democrats, the “aggressive” 2030 target for net zero emissions folded into the Green New Deal and a more “moderate” 2050 target for the same, just announced by a group of mainstream legislators. How significant is this difference? Does where you stand on climate policy depend on whether your policy has a 2030 or 2050 checkpoint?
I say no. Neither target has any more than symbolic value, and what the government does or doesn’t do to prevent a klimapocalypse (can we use this interlingual word?) won’t depend on which one gets chosen.
Endpoint targets have no constraining power at all. A 2030 target won’t be met or unmet until 2030, and by then it will be too late. Same, and worse, for a 2050 target. Moreover, the whole target idea is based on a misconception of how carbon emissions work. The CO2 we pump into the atmosphere will remain for several human generations; it accumulates, and the sum of the carbon we emit this year plus next plus the one after and so on is what will determine how much climate change we and our descendants will have to endure. (The relationship between our emissions and the earth system’s response is complex and may embody tipping points due to feedback effects.) Every additional ton of carbon counts the same, whether it occurs today or just before some arbitrary target date.
What we need instead is a carbon budget, an announced total quantity of emissions we intend to hold ourselves to, starting right now and continuing through the end of the century. That way, whether we’re living up to our pledge or scrapping it is put to us each year based on how quickly we’re using up our quota. It sets the meter running now.
As a secondary point, caveat emptor about the “net” emissions thing. Net of what? Purchased offsets like in California? (My emissions don’t count because I’ve given you money so you won’t increase yours by as much as you said you might, and I’m hoping no one else will step up and do your emissions instead.) Or investments in forests, that may or may not continue to store carbon in the decades ahead, and which may or may not cause more harvesting of other forests? A proper carbon budget isn’t net of anything; it’s an amount of fossil carbon we set aside for ourselves to burn, and that’s it. Anything else, like bulking up our forests or pursuing other forms of carbon sequestration, should be additional, because at this point no feasible budget alone can be tight enough.
I say no. Neither target has any more than symbolic value, and what the government does or doesn’t do to prevent a klimapocalypse (can we use this interlingual word?) won’t depend on which one gets chosen.
Endpoint targets have no constraining power at all. A 2030 target won’t be met or unmet until 2030, and by then it will be too late. Same, and worse, for a 2050 target. Moreover, the whole target idea is based on a misconception of how carbon emissions work. The CO2 we pump into the atmosphere will remain for several human generations; it accumulates, and the sum of the carbon we emit this year plus next plus the one after and so on is what will determine how much climate change we and our descendants will have to endure. (The relationship between our emissions and the earth system’s response is complex and may embody tipping points due to feedback effects.) Every additional ton of carbon counts the same, whether it occurs today or just before some arbitrary target date.
What we need instead is a carbon budget, an announced total quantity of emissions we intend to hold ourselves to, starting right now and continuing through the end of the century. That way, whether we’re living up to our pledge or scrapping it is put to us each year based on how quickly we’re using up our quota. It sets the meter running now.
As a secondary point, caveat emptor about the “net” emissions thing. Net of what? Purchased offsets like in California? (My emissions don’t count because I’ve given you money so you won’t increase yours by as much as you said you might, and I’m hoping no one else will step up and do your emissions instead.) Or investments in forests, that may or may not continue to store carbon in the decades ahead, and which may or may not cause more harvesting of other forests? A proper carbon budget isn’t net of anything; it’s an amount of fossil carbon we set aside for ourselves to burn, and that’s it. Anything else, like bulking up our forests or pursuing other forms of carbon sequestration, should be additional, because at this point no feasible budget alone can be tight enough.
Repeat Message to the Mainstream Media: Stop Serving as Trump’s Propaganda Machine
I don’t usually like to repeat myself in these posts, but when it comes to the media getting suckered by Trump and serving as bots in his reelection campaign, I have to get shrill: no more headlines reporting on Trump’s tweets, taunts and tantrums! Just stop! Now!
The New York Times is one of the worst, and they would do well to read their own reportage on the matter. Today’s edition carries an article entitled Trump Aims Words at Working Class, but Policies at Its Bosses, and the body says exactly that—which should come as no surprise to anyone who has been remotely paying attention the past two and a half years. There is virtually no correspondence between what Trump says and what he does. (And the exceptions, like border repression and the Muslim travel ban, are in policy realms in which he [unfortunately] enjoys majority support.)
Trumpian blather and obscenity are not an accident. He has been doing this stuff for decades. He gets to make his background and true agenda invisible while he slums as a dude with 1950s white working class politics, at the same time reaping the benefit of being perceived as unscripted, honest-for-better-or-worse and the opposite of every politician who has ever tried to put one past you. But every word he utters is the opposite of what it claims to be: Trump’s themes are carefully scripted, cavalierly dishonest and political to the core. It is all about misdirection, and like a devious martial arts move, it turns his opposition’s disdain to his own use.
The solution is simple. The media should just stop megaphoning Trump’s mouth unless he is announcing a policy or personnel action he has actually taken. Make Trump’s true agenda visible by stuffing everything else into the asides or back pages or just deleting it altogether.
The New York Times is one of the worst, and they would do well to read their own reportage on the matter. Today’s edition carries an article entitled Trump Aims Words at Working Class, but Policies at Its Bosses, and the body says exactly that—which should come as no surprise to anyone who has been remotely paying attention the past two and a half years. There is virtually no correspondence between what Trump says and what he does. (And the exceptions, like border repression and the Muslim travel ban, are in policy realms in which he [unfortunately] enjoys majority support.)
Trumpian blather and obscenity are not an accident. He has been doing this stuff for decades. He gets to make his background and true agenda invisible while he slums as a dude with 1950s white working class politics, at the same time reaping the benefit of being perceived as unscripted, honest-for-better-or-worse and the opposite of every politician who has ever tried to put one past you. But every word he utters is the opposite of what it claims to be: Trump’s themes are carefully scripted, cavalierly dishonest and political to the core. It is all about misdirection, and like a devious martial arts move, it turns his opposition’s disdain to his own use.
The solution is simple. The media should just stop megaphoning Trump’s mouth unless he is announcing a policy or personnel action he has actually taken. Make Trump’s true agenda visible by stuffing everything else into the asides or back pages or just deleting it altogether.
Degeneration of Bipartisan Blog Sites: Econbrowser
This is probably just a whiny complaint of well-known and long running issues. Indeed for a long time most blog sites (not to mention most twitterspheres and Instogram Idiotspheres) have been mono-partisan in those who participate in their discussions/debates. This has been true for a long time for most sites in the Econoblogosphere, including this site, which clearly tilts "left," even though we have always been open to comments from a wide variety of views.
I have in mind here a particular blog site that I respect and have been spending a lot of time and attention at for some time. It is Econobrowser, initially set up by Jim Hamilton, now at UCSD, and a leading time-series econometrician, long viewed as a nonpartisan technocrat. Some years ago he brought in Menizie Chinn of UW-Madison as a co-blogger, with Menzie becoming the main poster recently, with Jim H only rarely now posting or commenting on anything.
This site has been for some time now one of the few among higher level economics sites where people from different partisan positions have been regularly posting, reasonably intelligently. It has been for some time tilting "left," as Mr. Apolitical Jim H rarely posts, with Menzie Chinn dominating the site. He served for both both Clinton and G.W. Bush as staffer on the CEA, giving him a cred cover of bipartisanship, although since Trump came in he has clearly been negative on Trump.
However, various pro-Trump commenters remain there, of varying degrees of intelligence and credibility. But as even as some of them have disappeared (oh, where are you, Peak Trader?), some still hang on, even as the site has become dominated by leftist liberals, with me and this site's pgl among the most active there.
But a bottom line here is that I do not wish to see the various misinformed and trollish right wingers completely disappear from the site. For its all its flaws, Econbrowser remains one of the few sites where one can encounter people making arguments from a variety of paradigmatic perspectives, and I am glad that they have achieved this, and I encourage them to continue with this useful public good.
Barkley RoSser
I have in mind here a particular blog site that I respect and have been spending a lot of time and attention at for some time. It is Econobrowser, initially set up by Jim Hamilton, now at UCSD, and a leading time-series econometrician, long viewed as a nonpartisan technocrat. Some years ago he brought in Menizie Chinn of UW-Madison as a co-blogger, with Menzie becoming the main poster recently, with Jim H only rarely now posting or commenting on anything.
This site has been for some time now one of the few among higher level economics sites where people from different partisan positions have been regularly posting, reasonably intelligently. It has been for some time tilting "left," as Mr. Apolitical Jim H rarely posts, with Menzie Chinn dominating the site. He served for both both Clinton and G.W. Bush as staffer on the CEA, giving him a cred cover of bipartisanship, although since Trump came in he has clearly been negative on Trump.
However, various pro-Trump commenters remain there, of varying degrees of intelligence and credibility. But as even as some of them have disappeared (oh, where are you, Peak Trader?), some still hang on, even as the site has become dominated by leftist liberals, with me and this site's pgl among the most active there.
But a bottom line here is that I do not wish to see the various misinformed and trollish right wingers completely disappear from the site. For its all its flaws, Econbrowser remains one of the few sites where one can encounter people making arguments from a variety of paradigmatic perspectives, and I am glad that they have achieved this, and I encourage them to continue with this useful public good.
Barkley RoSser
Monday, July 22, 2019
Mankiw Misrepresents a Story on Senator Sanders Campaign Worker Negotiations
Greg Mankiw reads this story and writes:
Staffers in the Sanders campaign, who are working on salary, complain that they are paid less than the $15 per hour that Senator Sanders advocates for the minimum wage. So Sanders raises their hourly wage. Does that increase their income? No, because he raised the hourly wage by cutting the number of hours they work! Of course, if a President Sanders raised the federal minimum wage, I am sure he would be confident that the change would not have any adverse employment effects. Downward-sloping demand curves may describe socialist political campaigns, but back in the actual capitalist economy, the laws of supply and demand work completely differently.OK – he started his post by saying it is a wonderful story, which is true. But as I read the story, I saw a very different tale than the one Mankiw suggested:
Field organizers say they make a salary of $36,000 annually but work 60 hours per week, which is an average of $13 per hour ... Sanders' 2020 campaign was the first to unionize in March 2019. The union then made an agreement with the campaign that field workers were to be paid $36,000 annually. The contract, which began on May 2, also provides platinum level health care, paid vacation, sick leave and other benefits. Shakir also told Newsweek that leadership at the campaign previously offered a pay increase for field organizers, but that the offer was rejected in a formal vote. According to the Post, Shakir offered organizer pay to be raised to $42,000 annually and extend the workweek to six days. The offer was reportedly rejected because it would have elevated staff to a pay level in which they'd be responsible to pay more of their own health care costs.Let’s note what Mankiw did not. The negotiations also involved what appears to be a decent level of fringe benefits in addition to a $36,000 per year salary. These workers are apparently working 60 hours a week, which if they did so for 50 weeks would indeed translate into 3000 hours per year at $12 per hour. Does Harvard require its faculty to put in such an incredibly demanding schedule? I hope not as we know Mankiw loves to spend time with his children. Now if one worked 6 days a week and 8 hours a day for 50 weeks, then $36,000 per year translates into $15 an hour. How Mankiw interprets this story into evidence that we are seeing a competitive labor market moving along a downward sloping demand curve is beyond me. I’m sure he can explain this all to his students at Harvard.
Sunday, July 21, 2019
Frank Ackerman, 1946-2019
The world of economics suffered a sad loss a few days ago (July 15) with the death of Frank Ackerman. Frank was a mainstay of the activist left within the profession; he was one of the founders of the magazine Dollars and Sense and could always be found at activities of the Union for Radical Political Economics. He was notable for being one of the most exacting of critical economists, never substituting political passion for careful analysis and documentation of his evidence. His “cool” personal style may have made him less prominent in the public eye, but those who knew him realized what an important role he served.
I crossed paths with him many times because of our mutual interest in, and horror at, benefit-cost analysis. Frank coauthored his influential book Priceless: On Knowing The Price Of Everything And The Value Of Nothing to demonstrate that economic methodologies that promised to replace ideology with pragmatism were in fact riddled with ideology themselves. His final book was Worst Case Economics, which argued sensibly for a prudential approach in finance and climate change.
I hope readers who have had a closer personal connection to Frank will use the comment thread or posts of their own to tell their stories. This is an important transitional moment for dissident economics.
Friday, July 19, 2019
Hannity Calls For/Predicts War With Iran
OK, sorry if this is just over the top, but this evening Trump's close pal, Sean Hannity, has gone over the top both predicting and clearly supporting a full blown attack on Iran, "take out all their nuclear facilities." Curiously a sign of how over the top this is was given by one of his guests, a colonel, warned that it would take nuclear weapons by the US to fully take out the most deeply buried Iranian capabilities.
I am reasonably certain that part of why Hannity was sounding the war trumpet rather than his usual "investigate Hillary and the Steele dossier" baloney is that today Trump put himself into a difficult contradictory situation, having gone doubtful last night on his followers in NC chanting "Send her back" to supporting those chanters today. So, much easier to distract everybody with a possible war in the Persian Gulf (sorry, not "Arabian Gulf," not yet), especially given that there has been an ongoing escalation of incidents in the Gulf over oil tankers, with Iran pushing back against the US withdrawing from the JCPOA nuclear deal.
But the bottom line is that what Hannity spouts often ends up being what his close pal Trump ends up doing. I take this spout from Hannity all too seriously. We may well be in more serious war with Iran soon, with such an effort accompanied by far more massive lies than the Bush admin gave us when he stupidly invaded Iraq on false pretenses, although Hannity is assuring us that "It will be all over very soon, with no boots on the ground." Yeah, we have heard that one before.
Barkley Rosser
I am reasonably certain that part of why Hannity was sounding the war trumpet rather than his usual "investigate Hillary and the Steele dossier" baloney is that today Trump put himself into a difficult contradictory situation, having gone doubtful last night on his followers in NC chanting "Send her back" to supporting those chanters today. So, much easier to distract everybody with a possible war in the Persian Gulf (sorry, not "Arabian Gulf," not yet), especially given that there has been an ongoing escalation of incidents in the Gulf over oil tankers, with Iran pushing back against the US withdrawing from the JCPOA nuclear deal.
But the bottom line is that what Hannity spouts often ends up being what his close pal Trump ends up doing. I take this spout from Hannity all too seriously. We may well be in more serious war with Iran soon, with such an effort accompanied by far more massive lies than the Bush admin gave us when he stupidly invaded Iraq on false pretenses, although Hannity is assuring us that "It will be all over very soon, with no boots on the ground." Yeah, we have heard that one before.
Barkley Rosser
Thursday, July 18, 2019
Fox News Is Calling The Persian Gulf "The Arabian Gulf"
Yes. For centuries throughout the entire world that crucial body of water has been called "the Persian Gulf," even though in 1935 the nation of Persia changed its named to "Iran." I became aware several decades ago when I was in Saudi Arabia that they have a really big fuss that it should be called "the Arabian Gulf." I think maybe their fellow Arab GCC members have been supporting this nonsense as well, but nobody else did, certainly not the US.
But now here it is, and I had noticed in some other US media outlets recently. Is this yet another payoff to the murderous Saudi Crown Prince Mohammed bin Salman (MbS) for funneling piles of money to Jared Kushner and the Trump Organization? I mean, Fox News does what Trump and his flunkies want. So, not only are we not punishing MbS for his awful war in Yemen, which even the UAE is now getting out of, not only are we not punishing him for ordering the assassination of a US-based journalist, Jamal Khashoggi, but, heck, Trump through Fox News and I am not sure who is trying to change the name of this body of water from its historical origin to kiss the ass of this disgusting murderer.
Oh, there is also the matter that Trump has gotten himself off into a totally anti-Iran schtick, with his withdrawal from the JCPOA and his imposition of massive sanctions on Iran. But this looks like an attempted permanent punishment. Frankly, I hope the rest of the world does not go along with this bs, but in the US, I fear he may have succeeded, so many people are so ignorant.
Barkley Rosser
But now here it is, and I had noticed in some other US media outlets recently. Is this yet another payoff to the murderous Saudi Crown Prince Mohammed bin Salman (MbS) for funneling piles of money to Jared Kushner and the Trump Organization? I mean, Fox News does what Trump and his flunkies want. So, not only are we not punishing MbS for his awful war in Yemen, which even the UAE is now getting out of, not only are we not punishing him for ordering the assassination of a US-based journalist, Jamal Khashoggi, but, heck, Trump through Fox News and I am not sure who is trying to change the name of this body of water from its historical origin to kiss the ass of this disgusting murderer.
Oh, there is also the matter that Trump has gotten himself off into a totally anti-Iran schtick, with his withdrawal from the JCPOA and his imposition of massive sanctions on Iran. But this looks like an attempted permanent punishment. Frankly, I hope the rest of the world does not go along with this bs, but in the US, I fear he may have succeeded, so many people are so ignorant.
Barkley Rosser
Eliminate The Debt Ceiling
Two days ago in WaPo, Catherine Rampell published a highly reasonable column calling for eliminating the century-old US debt ceiling, something no other nation has ever had, a position supported by a wide array of economists including such a conservative GOP stalwart as the recently deceased Martin Feldstein, a former CEA Chair for Reagan. I have made numerous posts here on this in the past, but the issue is hot again as once again the debt ceiling is being rapidly approached.
The latest story is that the "adults in the room," Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi, may be very near an agreement to raise the debt ceiling, Reportedly Pelosi has been open to eliminating the ceiling, but in the current circumstances I certainly understand why she might be wanting to secure a two year agreement to preserve funding for social safety programs crazy right wingers want to use the debt ceiling issue to trash as well as holding off any shutdowns this fall. This is what used to be known as "good government," but in the current environment, even this apparently reasonable deal, which also has no non-economic sideshows involving abortion or whatever, may yet not pass. Pelosi says it must be agreed to by tomorrow evening if it will get passed properly by Congress before they all go on leave and the government might run out of money in early September (corporate tax payments have been way down due to Trump tax law). Eliminating the ceiling would avoid all this bs, but this is not the moment for that.
This is definitely a weird and unprecedented situation. For over a century we have had this completely indefensible debt ceiling, which has been raised so many times it is not worth counting, and when the WH and Congress have been controlled by the same party, it has been no big deal, although obviously that is what we need to get rid of the damned thing. However, historically, when there has been split partisan control the game has been the WH pushing raising the ceiling while the opposition party in Congress has made lots of complaining noises and often made demands for raising it. The problem this time is that the major power broker of the administration, Acting Chief of Staff Mulvaney, was part of the tea party fanatics in the House who when Obama was prez tried to block raising the ceiling. Apparently at times he and Trump have indulged in fantasies that if there is a default he could personally control which agencies get funded and which do not. This is not true, and maybe they are figuring it out, but Mulvaney has said nothing, and Trump must pass on this.
If he messes up the deal, it will be all his fault, as his own Treasury Secretary has cut it with the Congressional leader of the opposition party in the House, with reportedly the toadish GOP-controlled Senate ready to go along. He may or may not have figured out that triggering a shutdown did not help him, but if he thinks triggering a default will not be worse, this will be a big mistake, to put it mildly.
Barkley Rosser
The latest story is that the "adults in the room," Treasury Secretary Steven Mnuchin and Speaker of the House Nancy Pelosi, may be very near an agreement to raise the debt ceiling, Reportedly Pelosi has been open to eliminating the ceiling, but in the current circumstances I certainly understand why she might be wanting to secure a two year agreement to preserve funding for social safety programs crazy right wingers want to use the debt ceiling issue to trash as well as holding off any shutdowns this fall. This is what used to be known as "good government," but in the current environment, even this apparently reasonable deal, which also has no non-economic sideshows involving abortion or whatever, may yet not pass. Pelosi says it must be agreed to by tomorrow evening if it will get passed properly by Congress before they all go on leave and the government might run out of money in early September (corporate tax payments have been way down due to Trump tax law). Eliminating the ceiling would avoid all this bs, but this is not the moment for that.
This is definitely a weird and unprecedented situation. For over a century we have had this completely indefensible debt ceiling, which has been raised so many times it is not worth counting, and when the WH and Congress have been controlled by the same party, it has been no big deal, although obviously that is what we need to get rid of the damned thing. However, historically, when there has been split partisan control the game has been the WH pushing raising the ceiling while the opposition party in Congress has made lots of complaining noises and often made demands for raising it. The problem this time is that the major power broker of the administration, Acting Chief of Staff Mulvaney, was part of the tea party fanatics in the House who when Obama was prez tried to block raising the ceiling. Apparently at times he and Trump have indulged in fantasies that if there is a default he could personally control which agencies get funded and which do not. This is not true, and maybe they are figuring it out, but Mulvaney has said nothing, and Trump must pass on this.
If he messes up the deal, it will be all his fault, as his own Treasury Secretary has cut it with the Congressional leader of the opposition party in the House, with reportedly the toadish GOP-controlled Senate ready to go along. He may or may not have figured out that triggering a shutdown did not help him, but if he thinks triggering a default will not be worse, this will be a big mistake, to put it mildly.
Barkley Rosser
Wednesday, July 17, 2019
Will Kim Jong Un As Head Of State Move More Towards Markets?
This may be. In April DPRK leader Kim Jong Un was finally named "Head of State," more specifically Chair of the Commission for State Affairs. Implicitly until now that position had been held by his late father, although he has long held certain crucial ruling positions such as head of the ruling party and commander-in-chief. Nkeconwatch now reports on a July 12 announcment that at the same time in April there was also a rewrite of the North Korean constitution. Nkeconwatch sees certain changes that indicate economic systemic changes.
The crucial wording change relates to how state-owned corporations should operate to determine the production and distribution decisions. The former wording was that this should be based on "work team system," which is interpreted as following directives of the ruling party. This has been replaced by focusing on "responsible management system for socialist corporations," which is seen as granting more autonomy to the managers in the firms.
The main question impossible to know the answer to at this time is whether this change points to a new direction of policy or simply ratifies and legalizes marketizing changes that have already taken place, especially in agriculture. The coincidence of this constitutional change with Kim Jong Un finally assuming the one remaining top position he had not yet held is consistent with either view or even a combination of both.
Barkley Rosser
The crucial wording change relates to how state-owned corporations should operate to determine the production and distribution decisions. The former wording was that this should be based on "work team system," which is interpreted as following directives of the ruling party. This has been replaced by focusing on "responsible management system for socialist corporations," which is seen as granting more autonomy to the managers in the firms.
The main question impossible to know the answer to at this time is whether this change points to a new direction of policy or simply ratifies and legalizes marketizing changes that have already taken place, especially in agriculture. The coincidence of this constitutional change with Kim Jong Un finally assuming the one remaining top position he had not yet held is consistent with either view or even a combination of both.
Barkley Rosser
Tuesday, July 16, 2019
A Half Century Since Apollo 11 Launched To The Moon
On July 16, 1969, a half century ago today, a Saturn 5 rocket launched from Cape Kennedy on its way to the moon, where Neil Armstrong and Buzz Aldrin would land on the moon on July 20 before returning successfully to earth. Recent books have made clear just how close a call it was with many things nearly going wrong that would have doomed them, including such oddities as Aldrin using a felt tipped pen to adjust a minor switch that was needed for them to return. My late father played an important role in that event, which I have posted about here before. At that time he and I had many disagreements, but on this matter we were in agreement, and I was pleased to watch the famous landing with him.
The recent book, _One Giant Leap_ by Charles Fishman, argues that JFK was motivated to push the project out of Cold War competition with the USSR. My late father agreed that this was a motive that provided the support for it. This does raise the question whether it was really worth it. I mean, nobody has gone back since 1972, although there is much noise now about maybe going back.
A curious way of looking at this in perspective is to think about what we thought the future would look like from that time period as compared with what has happened. One way of looking at that is to think about how the moon and human presence there was depicted in the movie "2001: A Space Odyssey," which came out in 1968, the year before Apollo 11. I well remember taking very seriously the forecast in that movie, which depicted fairly substantial and established US and Soviet moon bases for 20001, now 18 years in the past. That certainly did not remotely happen, although some other things shown in that movie have come to pass, such as people being able to see each other while communicating with each other over distances (thank you, Skype!).
It may be that we did not do that because the Cold War point got made and later the US and USSR cooperated on the Soyuz orbiting lab, which has become somewhere boring and embarrassing, especially the US lack of a space vehicle to get there and back now. I think there are reasons for eventually getting at least one base on the moon. I do not know when that time will really come, however.
I close this by noting how heroic those initial explorers were. Sunday's WaPo Outlook section printed a speech written by William Safire for Pres. Nixon to deliver if the mission went badly. The accompanying verbiage noted this would probably have been the most eloquent speech he would have given ever, but fortunately he did not have to deliver it. Here are the concluding two paragraphs of this never-delivered address:
"Others will follow, and surely find their way home. Man's search will not be doomed. But these men were the first, and they will remain foremost in our hearts.
For every human being who looks up at the moon in the nights to come will know that there is some corner of another world that is forever mankind."
Again, fortunately that speech never needed to be given, and the man who made the small step and giant leap made it back alive.
Barkley Rosser
The recent book, _One Giant Leap_ by Charles Fishman, argues that JFK was motivated to push the project out of Cold War competition with the USSR. My late father agreed that this was a motive that provided the support for it. This does raise the question whether it was really worth it. I mean, nobody has gone back since 1972, although there is much noise now about maybe going back.
A curious way of looking at this in perspective is to think about what we thought the future would look like from that time period as compared with what has happened. One way of looking at that is to think about how the moon and human presence there was depicted in the movie "2001: A Space Odyssey," which came out in 1968, the year before Apollo 11. I well remember taking very seriously the forecast in that movie, which depicted fairly substantial and established US and Soviet moon bases for 20001, now 18 years in the past. That certainly did not remotely happen, although some other things shown in that movie have come to pass, such as people being able to see each other while communicating with each other over distances (thank you, Skype!).
It may be that we did not do that because the Cold War point got made and later the US and USSR cooperated on the Soyuz orbiting lab, which has become somewhere boring and embarrassing, especially the US lack of a space vehicle to get there and back now. I think there are reasons for eventually getting at least one base on the moon. I do not know when that time will really come, however.
I close this by noting how heroic those initial explorers were. Sunday's WaPo Outlook section printed a speech written by William Safire for Pres. Nixon to deliver if the mission went badly. The accompanying verbiage noted this would probably have been the most eloquent speech he would have given ever, but fortunately he did not have to deliver it. Here are the concluding two paragraphs of this never-delivered address:
"Others will follow, and surely find their way home. Man's search will not be doomed. But these men were the first, and they will remain foremost in our hearts.
For every human being who looks up at the moon in the nights to come will know that there is some corner of another world that is forever mankind."
Again, fortunately that speech never needed to be given, and the man who made the small step and giant leap made it back alive.
Barkley Rosser
Saturday, July 13, 2019
Pence’s Potemkin Village on the Mexican Border
Merriam Webster defines a Potemkin Village as:
an impressive facade or show designed to hide an undesirable fact or conditionMike Pence visited a Potemkin Village in Donna, Texas:
Pence also visited a tent-like temporary detention facility in Donna, Texas, that holds unaccompanied children and immigrant families. The new and mostly clean facility stood in stark contrast to the McAllen station Pence later visited.While the Buzzfeed story focused on the McAllen station, which depicted horrific conditions, I’m sure Trump’s favorite “news” outlets will highlight the facility in Donna, Texas. In other words, part of Pence’s visit to the border was designed to con the American people that immigrants are being treated well. Leon Panetta is right:
Trump treats Americans like we’re chumpsSince Pence is a Christian, we have to wonder how he can still support Trump’s racist immigration policies after seeing how God’s children are being horribly abused. Here’s a little challenge for Mr. Pence – how many of the Ten Commandments are you violating? Certainly the first two with your idol worship of Donald Trump:
1. You shall have no other gods before Me. 2.You shall make no idols.This abuse of God’s has led to many deaths, which of course violates the Commandment not to murder. OK – Mike Pence has not committed adultery even if his idol has many times. But cheating on one’s wife is sort of routine for powerful politicians. The serial abuse of innocent people solely based on their race and mainly for partisan purchases is not only unAmerican but also against everything Pence’s religion stands for.
Friday, July 12, 2019
Does Turkish Lira Decline Mean Turkey Leaves NATO?
Probably not, but Turkey is about to receive Russian S-400 missiles against US demands. More signifigantly the US will kill high level US F-35 agreements, and will not fly US planes over Turkey if it uses the Russian systems. This threatens Turkish membership in NATO.
The immediate result of this in financial markets has been a substantial decline of the Turkish lira over the last several weeks. While pushing off the US has costs, there will be gains from favoring Russia, from Russian tourist business to other economic deals, as well as cooperation with Russia not only in Syria, but also with respect to Iran, where both Turkey and Russia disagree with US policy to pull out of the JCPOA nuclear agreement with Iran, which has led to a very bad state.
More deeply we see the limits of the weltenschaaung that Trump put forward last September at the UN GA to massive laughter by many other national leaders, a moment not known to most Americans while unprecedented, the idea of super nationalism. Now he is facing the outcome of his folly on these matters: both Putin and Turkish leader Erdogan agree with him on this nationalist baloney, but now they are allying against him and the US. This shows that the end of this approach is not international cooperation through international organizations like the UN. It is nationalist competition and rivalries leading to warfare.
Oh, and Erdogan seems to be imitating Trump also on economic policy, although he is playing a weaker hand, with the Turkish economy's problems one of the reasons the US Fed is looking at lowering interest rates, not only a supposed ally, but one of the G20 nations whose economic problems are serious enough to draw the attention of the US Fed.
Barkley Rosser
The immediate result of this in financial markets has been a substantial decline of the Turkish lira over the last several weeks. While pushing off the US has costs, there will be gains from favoring Russia, from Russian tourist business to other economic deals, as well as cooperation with Russia not only in Syria, but also with respect to Iran, where both Turkey and Russia disagree with US policy to pull out of the JCPOA nuclear agreement with Iran, which has led to a very bad state.
More deeply we see the limits of the weltenschaaung that Trump put forward last September at the UN GA to massive laughter by many other national leaders, a moment not known to most Americans while unprecedented, the idea of super nationalism. Now he is facing the outcome of his folly on these matters: both Putin and Turkish leader Erdogan agree with him on this nationalist baloney, but now they are allying against him and the US. This shows that the end of this approach is not international cooperation through international organizations like the UN. It is nationalist competition and rivalries leading to warfare.
Oh, and Erdogan seems to be imitating Trump also on economic policy, although he is playing a weaker hand, with the Turkish economy's problems one of the reasons the US Fed is looking at lowering interest rates, not only a supposed ally, but one of the G20 nations whose economic problems are serious enough to draw the attention of the US Fed.
Barkley Rosser
Wednesday, July 10, 2019
The Condition Of North Korean Conventional Weapons
This is based on essentially gossip, or if you prefer, a rumor. I have dining in Washington again and someone there who is in fact both well known and very well informed, but whom I shall not name made a comment about the state of conventional weapons in DPRK and also said that this has not been publicly known. According to this person their condition is much worse than publicly believed. So out of date and out of condition are they supposedly that North Korea no longer can seriously threaten Seoul with a conventional attack as has long been taken for granted as being possible and looming over the situation there.
The supposed implication of this, if indeed it is true (which it may not be, and this is simply not easily checked on), would be that the DPRK needs its nuclear weapons more than we have thought and will be even less willing to give them up than has been thought, not that many of us have taken too seriously the idea that they would be willing to give them up. Indeed, there have been recent rumblings out of Washington, denied by the administration, that Trump may be willing to return to the position of earlier administrations and cease trying to get DPRK to give up those weapons while trying to put some limits on the program instead. Needless to say, Trump has had nothing but ridicule for this position when it seemed to be that of Obama, but if he does it, well, this will sort of be like calling NAFTA the worst trade deal ever and then negotiation a new NAFTA that is only slightly different from it and proclaiming it to be the best trade deal ever.
Barkley Rosser
The supposed implication of this, if indeed it is true (which it may not be, and this is simply not easily checked on), would be that the DPRK needs its nuclear weapons more than we have thought and will be even less willing to give them up than has been thought, not that many of us have taken too seriously the idea that they would be willing to give them up. Indeed, there have been recent rumblings out of Washington, denied by the administration, that Trump may be willing to return to the position of earlier administrations and cease trying to get DPRK to give up those weapons while trying to put some limits on the program instead. Needless to say, Trump has had nothing but ridicule for this position when it seemed to be that of Obama, but if he does it, well, this will sort of be like calling NAFTA the worst trade deal ever and then negotiation a new NAFTA that is only slightly different from it and proclaiming it to be the best trade deal ever.
Barkley Rosser
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