Exit Strategy

by the Sandwichman

Wolfgang Münchau in the Financial Times writes:

Our present situation can give rise to two scenarios – or some combination of the two. The first is that central banks start exiting at some point in 2010, triggering another fall in the prices of risky assets. In the UK, for example, any return to a normal monetary policy will almost inevitably imply another fall in the housing market, which is currently propped up by ultra-cheap mortgages.

Alternatively, central banks might prioritise financial stability over price stability and keep the monetary floodgates open for as long as possible. This, I believe, would cause the mother of all financial market crises – a bond market crash – to be followed by depression and deflation.

In other words, there is danger no matter how the central banks react. Successful monetary policy could be like walking along a perilous ridge, on either side of which lies a precipice of instability.

For all we know, there may not be a safe way down.

"For all we know," as long as the solution is forbidden.

Where the Climate Critics Of Superfreakonomics Are Wrong

I have not yet read the now-heavily criticized chapter 5 of Superfreakonomics, due for release tomorrow, and, no, I am not going to defend them. That some of their critics are wrong about something does not make them right, although this particular matter is one that depends on their exact wording, which I have not yet seen. It looks from all the comments that they are probably way off the deep end on many things, way overstating the benefits of geoengineering for resolving global warming (yes, we should have research on it as a possible emergency backstop down the road; no we should not dump other approaches to go with it), focus too much on questionable sources they do not even quote accurately, and say a lot of other dumb things, such as their claim that solar power worsens global warming because the panels are black (no, they are mostly blue and they do combat global warming, although because of their high cost, they will not likely do so much in the near future). Where their critics are wrong is when they characterize the views of climatologists in the 1970s as not at all supporting the hypothesis of global cooling, that this was just a view of a couple of oddballs and some media stories.

The strongest expression of this argument can be found on the blog by climatologist William Connolley at http://scienceblogs.com/stoat/2009/10/superfreakonomics_global_cooli.php. His argument is also picked at Real Climate and is based on a paper he did with Peterson and Fleck in the very respectable Bulletin of the American Meteorological Society about a year ago. available at http://ams.allenpress.com/archive/1520-0477/89/9/pdf/i1520-0477-89-9-1325.pdf (if I have gotten that right). It looked at the articles published in top climatology journals during 1965-1979, characterizing them as "pro-global warming," or "pro-global cooling" or "neutral," and concluded that only 12% of them (7) were "pro-cooling," leading to the dismissive commentary. However, this is misleading on various counts. The main one is that there was a period in the early 1970s when the count was not all that far apart. The facts were that there had been global cooling from the late 1930s that lasted well into the 1970s. Researchers were aware of this and aware of a competition between warming CO2 emissions and cooling aerosol/particulates emissions, although not sure about the relative strength of the effects. As time passed, things became clearer, and as of 1975, there were more pro-warming articles cumulatively than cooling-plus-neutral ones, with this balance then shifting more strongly that way afterwards, indeed with no "pro-cooling articles" after 1977. Of course, if Levitt and Dubner characterize the 1970s as a period dominated by a pro-cooling "consensus," then they are clearly wrong. But their critics on this point need to be more careful about how they state things, with many seriously mischaracterizing the situation then.

Fossil Fuels Get Down and Dirty

The New York Times reports today that the united front of gas, oil, coal and electricity generating companies has splintered as climate legislation slowly advances in Congress. Where they once merged their voices, and dollars, in denial of climate change and against any curtailment of carbon emissions, they are now scrambling to secure advantages for their own industry in the fine print of Waxman-Markey-Boxer-Kerry. Gas wants special privileges for its product, since it has a lower carbon content than its fossil siblings. Oil is focused on removing subsidies for biofuels. Electrical utilities are split between those with a higher hydropower component (good for renewable portfolio standards) and those without, but both benefit from free allocation of permits. Only coal sits on the sidelines, denouncing the “hoax” perpetrated by several thousand communist-inspired climate scientists. (Although they will no doubt throw their weight behind carbon capture and storage provisions as the end draws near.)

Is this a good thing or a bad thing?

Mainstream environmentalists are tickled. When the well-heeled hydrocarbon lobbies were solid against climate change legislation, it was difficult to make progress. Now that they are pursuing competing agendas, they can be played off against each other, and some sort of a bill can go through. In fact, you could argue that the particular flavor of cap-and-trade that anchors WMBK is designed to achieve exactly that.

The downside, of course, is that the climate policy regime we end up with will be a product of this dogfight. Each fuel sector will have its own budget of free vs auctioned permits. Moneys collected by the government from whatever permits are auctioned will subsidize the industries with the greatest lobbying heft. Some energy products will see minimal price increases, others a lot. Ostensible carbon caps will have giant loopholes for offsets to benefit still other industries, largely determined by their own lobbying efforts.

The alternative strategy would have been to keep the system simple and without favoritism. Require a permit for extracting or importing hydrocarbon fuels, with a fixed formula for the amount of fuel per permit based on carbon content. Cap the permits to achieve carbon emission targets. Auction all the permits without exception, and return the bulk of the money to households to buffer them against the inevitable price jolt. Make no provision for offset loopholes.

The problem with this approach is that the fossil fuel interests, and the fuel-intensive industries most closely aligned with them, would resist monolithically to the end. The advantage is that such a bill, if passed, would be far more efficient economically, more equitable in its effects on income distribution, and, above all, would actually have a reasonable chance to meet its targets. Instead, we have a much greater chance of passing legislation that is filled with pork, regressive, and is almost guaranteed to fall well short of its headline emission reduction promises.

Capitalism as an Infectious Disease

Joseph Schumpeter once wrote, "the budget is the skeleton of the state stripped of all misleading ideologies."

Schumpeter, Joseph A. 1954. "The Economic Crisis of the Tax State." International Economic Papers, 4; reprinted in Schumpeter, Joseph A. 1991. The Economics and Sociology of Capitalism, ed. Richard Swedberg (Princeton: Princeton University Press): pp. 99-140.

Yesterday's post dealt with the way that budget choices create pressures that shape pension funds' choices, something like the way that people in desperate states make decisions that they would not make under ordinary circumstances. However, the skeleton ranges across the body of society. For example, ordinary people often must depend their pensions fall victim to a similar logic. In fact, one of the many objectives of the privatization of Social Security was to make workers identify with the objectives of capitalism. Andy Stern of SEIU suggests how that kind of thinking even infects the supposedly progressive union movement. Here is the exchange from Business Week:

Q: Has the recession led you to rethink the way you operate your union? What is the SEIU doing to prepare for a recovery?"

A: "Well, it's made us appreciate that we have to be better partners with our state governments and employers in terms of efficiency. It makes us appreciate that our pension funds are tied to the success of the economy. And it makes us very much want to come together with other Americans and employers and people in the nongovernmental part of our country and say we need to create a 21st-century American economic plan so Team USA can compete and win."

Bartiromo, Maria. 2009. "Union Leader Andy Stern on the Future of Big Labor." Business Week (28 September).

A Big Surprise: Bhagwati Defends Free Market Economics

Jagdish Bhagwati is a poster child for multiple intelligences. He is famous for having manipulated the equations of neoclassical trade theory with consummate skill, but whenever he jumps into a verbal argument he makes embarrassing errors of reasoning and commits the greatest sin of the disputant, failing to understand the views of the other side. When you read his screeds, you wonder why anyone pays attention.

So the first response I had to his latest outburst, Feeble Critiques: Capitalism's Petty Detractors, was to delete it. But then I thought, maybe there is something to learn from a critique of this guy—he can’t be that vacuous, can he? So I read it again. No, he is that vacuous, but now that I’ve invested the time I feel I have to say something about the experience.

Bhagwati is defending “capitalism”, by which he means a primary reliance on free, unconstrained markets in national and international affairs. He seems to be reacting especially against Joe Stiglitz, who has written widely on the inadequacies of neoliberalism, especially in the wake of the ongoing economic crunch. In typical Bhagwati fashion, he introduces his nemesis by mentioning that he shared a Nobel prize with George Akerlof, and then spending several sentences praising the latter to the skies, with nary a mention of the former. (I’m a big fan of Akerlof, but Stiglitz’ innovations in economics are of the highest order.) In other words, pure pettiness.

Then Bhagwati gets down to argument, sort of. He says that the current crisis is just a temporary speedbump on the path to universal riches—but, of course, to simply assert this is to assume what needs to be proved. He should read up on “begging the question”. (Perhaps his background in trade theory, a giant piece of question-begging in its entirety, has preconditioned him in this respect.) He invokes China and India as examples of countries that have adopted liberalism and prospered, without being aware that his critics dispute this. (To regard China as “liberal” is bizarre, and Dani Rodrik has written persuasively on why liberalization should not be seen as the basis for India’s accelerating growth rate.)

There are many pixels spilled over the effort to tar all critics of neoliberalism with the experience of the Soviet Union: you are either with us or with the Stalinists, for free markets or for central planning. What this has to do with someone like Stiglitz I can’t imagine. Add to Bhagwati’s reading list Whither Socialism?, Stiglitz’ post mortem on the formerly-existing mode of production.

What about the claim that trade competition from the poor countries, and especially China, have depressed wages in the US? Bhagwati cites his own work and that of two other authors, but does not given even a brief explanation for why his results should be regarded as a refutation of those who come up with something else. (He does make an ad hominem swipe at Paul Krugman: K’s paper on trade and wages was commissioned by Larry Summers, and, well, you know about him.) Homework assignment: look up “cherry-picking”.

We learn that the Washington Consensus was not imposed, but was taken up “with gusto” by India, China and Russia. This gusto business is a strange descriptor for the ex-USSR, as is “liberalism”, but the main problem is that critics of the Washington Consensus never claimed that China or India were bullied—rather, that most of Latin America, sub-Saharan Africa and southeast Asia were. To put it simply, debt was the lever, and China and India were the only two developing countries not laboring under massive debts to western banks (thanks to the policies Bhagwati deplores).

A few paragraphs later, Bhagwati launches into an attack on financial deregulation. It was an intellectual error, he says, and reflected not only cognitive capture by what he calls the “Wall Street–Treasury Complex”, but also “old-fashioned lobbying”. I was starting to warm to him, but then he attributes regulatory failure to leftists and protectionists. Hank Paulson, you see, is an “ardent environmentalist and graduate of liberal-leaning Dartmouth College” (guilt by matriculation) and Charles Schumer (the only politician identified by name) is a serial Japan-, then India-, then China-basher. If you’re Bhagwati, this proves financial deregulation was a conspiracy by the forces opposed to free markets.

In case you were wondering, it was not the private sector that gave us subprime mortgages either. This was a conspiracy hatched by populists within the government, who wanted to maximize home ownership. Granted, there have been many public programs that unwisely pushed people into mortgages who should have put their scarce savings somewhere else, but surely the folks at Countrywide had something to do with it too, not to mention the securitization bandwagon that was entirely of Wall Street’s doing. And is Bhagwati aware that housing bubbles have had a tendency to appear in the buildup to financial crises throughout modern history, or that there have been recent housing meltdowns in other countries (Spain, Ireland, England) with different sets of laws and policies? Add Reinhart and Rogoff to the man’s bookshelf, and maybe also Chapter 3 of the IMF’s latest World Economic Report.

Bhagwati concludes with a call for charity on the part of the rich and a safety net for the poor. This will keep the population pacified, he hopes, so that economists of a critical bent cannot “enjoy a success that they do not deserve.” Do I hear a rumbling among the ranks? Increase their rations and they won’t cause us any trouble....

On third thought, deletion would have been the best choice.

Reporters Don’t Need to Know Arithmetic....

to get a job at the New York Times. In an article about broadband adoption, after a reference to Finland’s promise to extend 100 Mbps service to its entire population, we read:

Finland occupies a compact 130,558 square miles, versus more than 3.5 million for the United States. The economics of broadband deployment are greatly affected by physical distances.

Right away something smelled fishy. As anyone who has been there will know, Finland can hardly be described as “compact”; it’s a land of wide open spaces, many of them inhabited by a fierce, warlike breed of mosquitoes. This may be why sitting indoors in front of a computer screen is the national pastime. But I digress.

Finland is smaller than the US but has fewer people. In fact, while the land area of the US is 30 times that of Finland, the population ratio is about 60:1. In other words, average population density is about twice as high in the US as Finland. Perhaps there are regional variations in density that offset the overall average for cost calculations, but that would need to be demonstrated, and in any case it doesn’t follow from the data given in the article.

OK, comparisons between the price of broadband in the US and Finland are a bit esoteric for the purposes of this blog. But the same standards are applied to economics stories with depressing consistency: as Dean Baker has shown, a large portion of the reportorial staff at our leading newspapers have problems with the concept of a denominator. (“Congress voted an extra $3 billion for program X, an exorbitant sum that will surely bankrupt our great-great-grandchildren....”)

Pension Fund Fraud: The Wall Street Journal vs. Unions

The Wall Street Journal posted a story about Orange County's pension fund, gloating that it outperformed the supposedly union dominated California state pension fund: CALPERS.

Jim Carlton and Tamara Audi. 2009. "Orange County Dodged Bullet by a Avoiding Calpers: Southern California Locale Decided to Stick with Its Small Pension Fund in 2006." (16 October): p. A 4.

Orange County had a chance three years ago to join the California Public Employees' Retirement System. Instead, county leaders stayed with a small Orange County pension fund, and now they feel vindicated for their stay-local strategy. While Calpers's investments went on to lose almost 30% of their value during the crash of financial markets last year, the Orange County Employees Retirement System, or Ocers, lost only 21%.

Now that Calpers has revealed that a former board member allegedly reaped $50 million in fees for arranging investments that could saddle state taxpayers with hundreds of millions of dollars in losses, those in Orange County who once lobbied to ditch Ocers are even happier their side lost the debate.

Calpers, whose board is dominated by union ties, has invested much more aggressively in equities.

In fact CALPERS lost big by investing in real estate and hedge funds. Also, Orange County had a curious investment history, when in 1994, its treasurer, Robert Citron, lost heavily investing in derivatives, which he did not understand. The county went bankrupt.

Of course, treasurers were expected to make big bucks as a way to keep taxes down. This sort of pressure still continues.

CALPERS's losses are also worth another look. Why did CALPERS get involved in so many risky ventures? I once confronted a member of the board, asking why they were taking on so much risk. I thought that they were just being foolish, but I had not thought everything through.

Here is a snippet from the Financial Times regarding CALPERS's investment strategy:

Calpers, for example, has invested $21bn in private equity and committed another $22bn. While last year its private equity investments had fallen by nearly a third, Joe Dear, its chief investment officer, expects to allocate more of its assets to private equity. Calpers, like other state pension schemes, needs the higher returns available from private equity if they are to meet the 7 to 8 per cent returns required to fulfill promises to scheme members. But a lot rides on cutting the charges that eat into returns.

Burgess, Kate and Martin Arnold. 2009. "Transparency Vital to Investors' Lobby." Financial Times (29 September).

Part of the problem is that the state does not adequately fund CALPERS -- another self-defeating policy. But the Wall Street Journal suggests that the problem is unions.

Ideologically Loaded Rhetoric of Mainstream Economics

A half-century ago, John Kenneth Galbraith had a marvelous description of the shaping of language regarding crises.

Galbraith, John Kenneth. 1958. The Affluent Society (Boston: Houghton Mifflin, 1998).

38: Marx's reference to the "capitalist crisis" gave the word an ominous sound. The word panic, which was a partial synonym a half century ago, was no more reassuring. As a result, the word depression was gradually brought into use. This had a softer tone; it implied a yielding of the fabric of business activity and not a crashing fall. During the great depression, the word depression acquired from the event described an even more unsatisfactory connotation. Therefore, the word recession was substituted to connote an unfearsome fall in business activity. But this term eventually acquired a foreboding quality and a recession in 1953-1954 was widely characterized as a rolling readjustment. By the time of the Nixon administration, the innovative phrase "growth recession" was brought into use.

I am presently reading Reinhart and Rogoff's new book.

Reinhart, Carmen M. and Kenneth S. Rogoff. 2009. This Time Is Different: Eight Centuries of Financial Folly (Princeton: Princeton University Press).

The book is an encyclopedic study of crises through the lens of monetarism and public finance. The authors also casually bandy about the expression, "financial repression," for any policy that inconveniences the financial system.

I wonder what the academic economics community would think of a book that routinely described economic policies in terms of labor repression. I suspect that no matter what the quality of the book might be such language would automatically convict the author of unacceptable bias.

Did Lawrence Kudlow Say That President Obama is Doing a Great Job?

No - this quote:

I have long believed that stock markets are the best barometer of the health, wealth and security of a nation. And today's stock market message is an unmistakable vote of confidence for the president.

was written back on June 20, 2007 when George W. Bush was the President. Then again - Paul Krugman has had fun with it on a couple of occasions.

Of course, most well informed people would argue that the stock market is not the same thing as the labor market. I guess Mr. Kudlow could distance himself from his quote back then by acknowledging the error in his old thinking.

Senator Snowe on the Public Option

Eric Zimmerman watches MSNBC's Morning Joe so we don’t have to:

"The public option would be problematic," Snowe told MSNBC's Morning Joe when asked what changes to the bill could cost Democrats her vote. "As I've said I'm against a public option because I think the government would be another vast new bureaucracy, and also create a disproportionate advantage in the marketplace. And inevitably government's not going to do it better."

Does this make any sense at all? I know conservatives love to think government run organizations are horribly inefficient. But if a government run insurance company is not going to provide lower cost health insurance – how does the Senator think that it will have an advantage in the marketplace? And even if the government run insurance company does provide lower cost health insurance – isn’t this what we’d hope from competition?

God turns 100

Today is 100th anniversary of the birth of Art Tatum, who was certainly the best jazz pianist to ever walk the earth. I lifted the title from the name of the thread on a jazz e-mail list group I subscribe to. It comes from a story told about Bud Powell - another hall-of fame jazz pianist. He was playing in a club on 52nd street when Tatum walked in the door. Powell stopped cold, right in the middle of his solo, and said, "Ladies and Gentlemen, God is in the House."

Happy Birthday, Art!

Books vs Articles: The Flaying of Elinor Ostrom

I am not going to link to the obnoxious economicsjobmarketrumor blog, where lots of grad students supposedly seeking jobs have been savagely trashing Elinor Ostrom on all kinds of grounds, most of them involving that they have not heard of her and that she has not published articles in top four journals. Her important book that was key to her prize, Governing the Commons, 1990, has been riduculed because presumably unlike an article in the AER, it did not go through a "peer review" process. Wow. Somehow the fact that it has been cited over 7000 times, more than all the citations of some economics Nobelists, including Stiglitz and Prescott, does not register with these dingbats (some of whom were pushing Nancy Stokey, "if you need to give it to a woman," whose citations barely exceed 1,000, but by gosh, she has published with Lucas in the JPE!).

I see this as a broader problem in the economics profession. In particular it calls to mind the tragic situation at Notre Dame University, where the original economics department is now being closed down. The original shot against it came some years ago when a dean wanted a grad program that was "highly ranked," with these rankings based on the publication rates in "top journals" being the key. A characteristic of that department all along has been a tendency for several of its most prominent members to publish more in books than in journal articles. The leading example of this is Phil Mirowski, and I have already argued here that I predict that, say, 30 years from now there will be more citations to his books, More Heat than Light, and Machine Dreams, than to the entire corpus of publications up to this point of the members of the new, self-labeled "neoclassical" department, even though some of them are publishing articles in the AER and so on. In any case, these silly criticisms of Ostrom seem to be of the same piece as the sort of arguments that have been brought to bring down the very fine Notre Dame department.

Child Labor Through the Strange Filter of Orthodox Economics

There is much to endorse in the innards of the argument made by Matthias Doepke and Fabrizio Zilibotti in their recent post on Vox EU. Yes, consumer boycotts and trade sanctions are a poor way to address the blight of child labor, and double yes, income transfer programs that pull poor families out of poverty and keep their kids in school are a proven remedy. But why is it that, whatever the question, the economically correct answer is always “Don’t mess with trade”?

Actually, the fundamental problem with consumer activism around child labor is that very few of the world’s child laborers work in the export sector, and even fewer are part of the value chain for branded products. The sad truth is that first world consumers who obsess about what to buy are mainly assuaging their own conscience and not doing a whole lot for the downtrodden. Whether such activism has more costs than benefits is dubious, however, despite the authors’ assumption-laden modeling exercise.

But let’s take as our starting point the observation that child labor is much more widespread and more harmful in poor countries than rich ones. Surely anyone concerned about the problem would be thinking about ways to reduce the burden of poverty. Unfortunately, global poverty is exploding in the wake of the current economic crisis, and this will make the problem of child labor—and child hunger, and child disease, and child death—far more severe.

This crisis has many causes, but none has been more fundamental than the unsustainable imbalances engendered by the very trading system we are instructed not to mess with. It turned out that flooding western markets with goods produced by extremely cheap labor depended on western consumers piling up a mountain of debt. These imbalances have now collapsed, and they will not be rebuilt. If we are to put globalization on a sustainable footing, we will most definitely have to mess with trade, so that it can grow on the basis of a more equitable pattern of demand.

One other item jumped out at me. The core argument of Doepke/Zilibotti turns out to be this:

In our analysis, we find that international interventions weaken domestic support for child-labour restrictions because they reduce competition between children and unskilled adult workers in the labour market. Unskilled workers then have less incentive to push for child-labour regulation.

When effective, trade sanctions or consumer boycotts move child workers from formal employment in the export sector to informal production, often in family-based agriculture. In the export sector, particularly in factories, children and adults perform similar tasks and therefore compete directly for jobs. In the informal sector, children and adults usually have different work responsibilities.

As it happens, I have actually conducted research into the potential competitive effects of child labor on adult markets. As far as I know, no one else has investigated this empirically. It turns out that children do not always offer higher profits to employers, but they often do, and this situation is not confined to production for export. Let’s not let a little evidence get in the way of their nice, neat theorems, however.

Prediction Markets Again Utterly Fail To Predict Econ Nobel

I made a lot of predictions about the Econ Nobel (noticed Williamson and said environmental, which Ostrom is, at least partly). However, one I made was that once again the prediction markets for the Econ Nobel would fail, and they have, spectacularly.

Ladbroke's had Fama as top at 2 to 1, followed by Paul Romer at 4 to 1, and Fehr, French, and Barro at 6 to 1. Williamson and Ostrom were both far down the list at 50 to 1.

The Harvard betting pool had as their tops in order: Jean Tirole, John Taylor, Paul Milgrom, and Martin Weitzman (who I said was likely, and was also in the top ten at Ladbroke's, as was Tirole).

Thomson Reuters had their tops as Ernst Fehr, Matthew Rabin (also in top ten of Ladbroke's) and William Nordhaus, also sort of on my list.

others mentioned in a Real Time Economics post included Christopher Sims, Richard Thaler, Oliver Hart, Halbert White, Thomas Sargent, Lars Hansen, and Peter Diamond. Neither of the actual winners anywhere in sight.

Neoconservative Idiocy: How An Unconstrained Lust for Profit and Power Implodes

I can understand the attraction of an unconstrained lust for profit and power, but I am puzzled by the stupidity of its practitioners. I'm presently researching the life and work of William Petty, more than three centuries ago. Petty was an avaricious land pirate, who is willing to move entire populations from one country to another and promoted wars in order to win favor with the government, but Petty was not stupid.

For example, Petty, who is trained in medicine, realized the economic benefits of a healthy population. He even called for clinics to care for orphans and poor children.

I was struck by a recent Wall Street Journal article that reminded me of Petty's intelligence. David Wessel reported on a paper from the Chicago branch of the Federal Reserve Board, showing how children's health care boosted test scores. The study itself pointed to a relatively obvious outcome, I wondered why so little attention has been paid to the economic payoffs from better health care -- especially in the mainstream media.

Here is a snippet from the articlet:

Wessel, David. 2009. "Wider Health-Care Access Pays Off." Wall Street Journal (8 October): p. A2.
http://online.wsj.com/article/SB125493500031971173.html#mod=todays_us_page_one

Federal Reserve Bank of Chicago Working Paper 2008-20

"Kenneth Chay of Brown University, Jonathan Guryan of the University of Chicago's Booth School of Business and Bhashkar Mazumder of the Federal Reserve Bank of Chicago ... (link) improvements in test scores of black teenagers from the South in the 1980s to improved health care they received as children after Southern hospitals were integrated in the 1960s. The bottom line, in a working paper circulated by the Chicago Fed, is this: "Improved post-neonatal health among blacks born between the early 1960s and early 1970s ... led to long-term improvements in the academic and cognitive skills of these cohorts as teenagers."

Then on Sunday Gov. Schwarzenegger vetoed two bills regarding higher education. One limited excessive administrative salaries during hard times and the other would have brought more accountability to the State University System and the University of California. Supposedly, limiting executive salaries in higher education would do a disservice to students. Presumably, if salaries were limited, students would like the opportunity to pay as much tuition.

Here again, William Petty emphasized the importance of tapping the potential of ordinary people.

Finally, I read an AP story, which describes how soldiers are dying because of weapons they carry to not function properly.

So what we have is government that demands we have excellent education to compete in the world. To do so, we can cut funding, as long as we are willing to smash teachers unions and force students to take endless multiple-choice tests. We praise our brave soldiers are carrying out our imperial ventures, but let war profiteers supply them with inferior materials.

William Petty, once accurately described as a great land pirate, would have immediately recognized the stupidity of our neoconservative leadership.