Thursday, July 7, 2016

Where is the USA Chilcot Report?

Tony Blair was a henchman.

Wednesday, July 6, 2016

Bernie Flips California!: 52% to 48%

This is what was reported on June 8 as the "final result" of the California primary, with "100.0%" of precincts reporting:


With no outstanding uncounted ballots, the vote totals are 2,745,293 for Clinton (53.1%) and 2,381,714 for Sanders (46%). Bernie Sanders received a little over 52% of the 1,684,384
ballots that were either for Sanders or Clinton that remained uncounted on June 8 when the "final result" was reported. The percentage spread between the two stands at 7.1% -- down from a reported "final" margin of 12.6% on June 8.

In other election news-- just to be clear -- the Federal Bureau of Investigation will not be recommending criminal charges against Secretary Clinton, announced FBI Director James B. Comey today in Washington, following an impromptu meeting last week between Attorney General Loretta Lynch and former President William Clinton. Director Comey stressed that the exoneration of Secretary Clinton should not be viewed as a precedent of leniency that might apply to anyone else:
To be clear, this is not to suggest that in similar circumstances, a person who engaged in this activity would face no consequences. To the contrary, those individuals are often subject to security or administrative sanctions. But that is not what we are deciding now.

Monday, July 4, 2016

Trade and Jobs and Fallacies of Composition

Paul Krugman (partly) takes on David Autor and his coauthors (co-Autors?), who found large impacts of net imports from China on manufacturing jobs in the US during the period leading up to the 2008 financial crisis.  Krugman takes the position that, in theory, any loss of employment through the trade channel can be offset by more expansionary monetary and fiscal policy, so that trade deficits per se are not consequential (in this respect).  He notes that policy was not expansive enough during the heyday of the China deficit, so there was an employment impact, but smaller than the one estimated by Autor et al., who don’t take into account policy spillovers.

Dean Baker takes Krugman to task for relying on unemployment rather than employment data.  If you look at the number of jobs in the economy rather than the number of jobless workers looking for work, he says, the China effect is much larger.  He also points in passing to the potential impact of trade on wages, an argument made powerfully by Dani Rodrik almost twenty years ago and not, as far as I know, rebutted.

Here I want to make a different point, that Krugman’s analysis suffers from a serious fallacy of composition of its own.  The key point has to do with the national income accounting framework used to measure trade and capital flows, the one that’s in the back of every economist’s mind (or should be) when thinking about issues like this.

Trade is the main component of the current account and measured as net exports or imports.  It’s a component of GDP, which is linked to employment through an Okun’s Law mechanism, but, as Krugman points out, policy makers have the ability, at least in part, to offset fluctuations in NX with policies to alter government spending, taxes (and therefore consumption) and investment (via interest rates).  So far, so good.  But here’s the thing: assuming no changes in the holdings of currency, the balances on the current and capital account are identically the same.  (The capital account measures net inflow or outflow of capital—financial assets.)  All else being equal, the US trade deficit with China corresponds to an equal and opposite capital inflow, i.e. borrowing.

Economists are used to thinking of the national accounts as separate boxes.  You can analyze trade with China today, sleep on it, and then tomorrow you can analyze capital flows.  Much economic writing treats these items as things that require some process out there in Marketland to make them equal.  Not so, however: the accounting boxes are for mental and measurement convenience, but the two items are identical: they’re the same thing, the way a purchase and a sale are the same thing, not two different things.

When the US runs a trade deficit with China it is borrowing in some fashion to finance its net purchases.  (I realize, of course, that the trade-and-finance system works multilaterally, and that China could exchange a portion of its dollar-denominated assets for assets in other countries, with subsequent rounds of displacement effects, but I’m keeping things simple here.)  This is the same logic that we are familiar with at the individual level.  If you spend more than your income, to buy a house or car for example, you are simultaneously borrowing money to cover the difference.  You may be using an auto dealer’s trade credit, a bank’s mortgage facility, credit cards or some other device, but the financing in some form is identically what the purchase-in-excess-of-income means.  It would make no sense to analyze the purchase and treat the financing as a separate, unrelated  topic.

So back to China.  How did the US finance its humongous trade deficit with that country during the glory years of the early to mid 00's?  To a large extent, this was achieved by selling mortgage-backed securities to the Chinese.  At the peak, a quarter of Fannie Mae and Freddie Mac loans were Chinese-held, and there is no reason to believe their share of non-GSE mortgages was much different.  In other words, to purchase Chinese imports in excess of their international income (earned through exports), US consumers were building up debt, especially through mortgage finance, as a vehicle for borrowing from China.

Bottom line: the immense trade deficit during this period took the form of a housing credit bubble.  If you want to analyze the impact of unbalanced trade with China you have to look at the whole thing.  It’s reasonable to ask, what would have been the economic effect of these deficits if they had been financed differently—through larger fiscal deficits, for instance, or more corporate debt or some other channel?  It’s not clear how policy choices could have made this happen, but hypothetical counterfactuals, as Krugman noted in his blog post, are the right way to go.

The big picture, from my point of view, is that the US is a chronic deficit country and has been since the 1970s.  It has not developed an export capacity capable of generating income at a level comparable to its somewhat-full-employment import demand, but it has been very successful at generating financial assets that foreign wealth holders wish to accumulate.  (During the final phase of the housing credit bubble this foreign demand was nearly all official.)  To repeat, these are not separate events; it’s one event seen from two perspectives.  China is an important part of this story, but we can’t understand how it connects to US economic development, including employment effects, by looking only at the spending side and not the financing.

Sunday, July 3, 2016

Why Are Experts Ignoring Voters?

There. I've fixed the question to make it more pertinent.

The irony is that the expert/voter division of responsibility is supposed to occur along the lines of the distinction between facts and values. According to this mystical fact/value scenario, the voters determine the ends and the experts then advise the government on the means to achieve those ends.

No, seriously. Stop laughing! Assuming that experts were correct in their assessments of the economic consequences of Brexit, who is to say that instead of ignoring the experts, the voters simply gave a lower priority to those facts than to other values?

I'm not suggesting that is what happened. No, the experts have disgraced themselves with self-serving "absolute" distinctions between fact and value that they transgress with impunity but that insulate them from ethical critique. The experts make a habit not only of ignoring non-experts but of ridiculing them -- and bragging about their condescension:
As the derisive name suggests, it's an idea economists view with contempt... -- Paul Krugman
And even plagiarizing each other bragging about their condescension:
(Pekka Ilinakunnas, Jan van Ours, Vegard Skirbekk, and Matthias Weiss)
Do you hear that, voters? The experts view your ideas with contempt. They brag about viewing your ideas with contempt. They plagiarize each other bragging about how much contempt they have for your ideas. Now what are going to do about it? Just ignore them?

On the other hand, there are also some experts' ideas that other experts have critiqued and refuted. Rather than view those refutations with contempt, the former set of experts simply ignore the latter's critique. Here are my candidates for experts' ideas -- old and new -- that voters ought not only to ignore but to positively view with contempt because their promulgators have demonstrated contempt for basic standards of scholarship:
  1. Non-accelerating inflation rate of unemployment
  2. IS-LM "Keynesianism"
  3. System of natural liberty
  4. Growth imperative
  5. Net present value discounting
  6. Kaldor-Hicks compensation
  7. Efficiency/equity trade-off
  8. Labor/leisure trade-off
  9. Ceteris paribus
  10. Equilibrium
  11. Say's Law of Markets
  12. Wages-fund doctrine
  13. Sticky wages
  14. Self-adjusting economic systems
  15. Built-in mechanisms
  16. Supply and demand
  17. Pareto improvement
  18. Microfoundations
  19. Rational choice
  20. Coase theorem
  21. Efficient market hypothesis
  22. Spontaneous generation
  23. Phlogiston
  24. Phrenology

Saturday, July 2, 2016

Which Way Is Up? How Much Schmexit After The Brexit

Well, all those experts forecasting general global economic collapse after a Brexit vote look kind of silly.  Ha ha ha!  So stocks around the world crashed hard the days right after the vote (Italy's market down more than 15% on the day after), but this past week they have pretty much gone up everywhere quite vigorously, in many countries now higher than before the vote.  Even in Britain, the most closely watched index, the FTSE-100, has seen its largest five day rise since 2011 and is now more than 3% higher than it was the day before the vote.  Yeah, the pound has gone back down to around $1.32 from $1,50 on the day of the vote, after bouncing back up to nearly $1.40 from an initial low after the vote of $1.31.  But, hey, that lower pound should help prevent recession by expanding exports and keeping out imports. And with Mark Carney, the Bank of England governor, promising looser monetary policy on Thursday, and Chancellor of the Exchequer, George Osborne, abandoning his heightened austerity to  stave off deficts, we can expect more stimulus from a still lower pound, not to mention no fiscal austerity.  Why things are just peachy keen!  Brexit-Schmexit it is!

Ah, but then we have things going every which way to the point that it is hard to see which way is up. The positives seem to be driven by the negatives.  So, the British pound falls in anticipation of a decline in exports in the future to the EU, with this supposedly leading also to a decline in foreign direct investment by companies wanting access to those EU markets. But then this decline looks to increase exports and maybe even foreign direct investment to take advantage of this export-led growth.  Which is it or will be?  Indeed, the picture is pretty muddied.  While the FTSE-100 has increased, it is noted that it consists mostly of large firms involved in exporting.  In contrast, according to the Financial Times Weekend, the much less watched FTSE-250, with more firms focused on the domestic market, while rising in recent days from a low around 15,000 is only at about 16,000 compared with about 17,400 on the day of the Brexit vote. Furthermore, the FTSE bank stock index is going nowhere around 350 after rising from a low of 340, compared with about 420 on the day of the vote.  But, hey, the more it looks like the British economy is going down, the more it looks like it is going up!

More of this confusion is the optimism arising from Carney's negative assessment on Thursday as well as Osborne's fiscal policy cave on Friday.  Wow! There will be monetary stimulus and an even lower  pound!  But in fact Carney is forecasting if not outright recession then much slower growth, with some of that already happening.  So, according again to the FT Weekend, Carney cites among items declining right now to be auto sales, property deals, and business investment.  Hmm. And all the FT commentators are calling for UK not to start the actual exit process by holding off invoking Article 50 of the Lisbon Treaty, even as all their European counterparts are requesting that they get on with it to reduce general uncertainty.  But this view in UK involves those who think the Brexit should be completely undone by a new  referendum, such as Gideon Rachman, those who think that probably won't happen but wish it would and are fearful of all the negative consequences they see, such as Martin Wolf, and even those who support the Brexit, such as Chris Grayling, who is all keen on "the City" getting out from EU regulations, but thinks that "the divorce" must be approached "calmly and methodically," presumably with lots of preliminary negotiations prior to any invocation of Article 50, again with all these commentators simply choosing to ignore  that the other EU nations are not at all in a mood for this shilly-shallying.

Then we have the problem that in fact that nobody in the pro-Leave group has put forward any sort of plan, much less one that other EU nations would agree with.  With David Cameron resigning and his successor yet to be selected (although that will probably happen soon), and Labour Party leader, Jeremy Corbyn facing strong demands that he resign, one FT writer  notes that Britain "has no Plan, no Leader, and no Opposition," a fine howdy-doo indeed.  Which way is up is even less clear.

Let me finally note that almost nobody in Britain is talking about the coming loss of EU regional  development aid to Britain.  While Britain almost assuredly pays more to the EU than the EU pays back (the amounts involved a matter of debate, although it is clear that the net difference claimed by the pro-Brexit group has been much exaggerated), what Britain receives has been heavily directed at its poorer regions, with in some of them very little capital investment occurring that has not been supported in recent years by such aid.  It is hard to get exact numbers on this, although regional development aid has been about a third of the EU budget, about the same as its support for CAP. However, for Wales alone, an area that voted for Brexit with 52%, it is slated to receive about 1.5 billion pounds in aid from the EU during 2016.  What is striking to me is how little this fact has been publicized.  I think that those in these poorer areas of the UK who have voted for Brexit have no idea what they are about to lose.  But,hey, Brexit-Schmexit!  What goes down must go up!

Barkley Rosser


Utter Breakdown of Editorial Standards at the New York Times

How else to describe the publication of this bit of drivel on the political self-identification of college professors?  The author, a political scientist at Sarah Lawrence (and Hoover fellow) who used data from the Higher Education Research Institute, claims that the biggest driver of the leftward shift of the professorate is the cataclysmic transformation of New England, where the ratio of liberals to conservatives exploded from 5:1 in 1989 to 28:1 in 2014.  Twenty-eight to one!  This is across all disciplines and all types of institutions.  Pretty astonishing, huh?  And nothing like it shows up in any other region of the country.

Now, if I found myself getting numbers like that, the first thing I’d do would be to check under the hood.  What’s the overall sample size, and how much of it is from New England?  And then I’d get more detailed: what’s the sample frame—how exactly did the surveyors identify the individual professors who got surveyed?  Response rates?  And are there any indicators that might point to data errors?  (Data errors are not unheard of.  I worked a couple of years ago with data from one of the most internationally respected survey outfits, and after some email back-and-forths it became clear that there were significant errors for one of the countries in one of its samples.)

But there was no checking the Times story.  The author provided no link to a longer technical paper or to the original data set.  And the text itself supplied exactly zero information on sampling, not even the N.  You’re supposed to take it all on faith.

To return to the heading of this post, the real fault lies with the editors at the Times.  Careless or disingenuous authors, some with academic credentials, are a dime a dozen.  Work at perhaps the world’s most influential newspapers and you’ll get a flood of these half-baked manuscripts.  It all comes down to editorial judgment, and there was a big-time failure in that department.

Friday, July 1, 2016

Why Are Voters Ignoring Experts?

...asks Jean Pisani-Ferry at Project Syndicate. "Why this angry attitude toward the bearers of knowledge and expertise?" he implores. He then speculates on a number of reasons. I would like to suggest a reason that Professor Pisani-Ferry overlooks.

The "experts" systematically ignore the experts. For example, Pisani-Ferry recommends that economists take a more granular approach and:
...economists should move beyond the (generally correct) observation that such distributional effects can be addressed through taxation and transfers, and work out how exactly that should happen. Yes, if a policy decision leads to aggregate gains, losers can in principle be compensated. But this is easier said than done.
Except that this observation is not "generally correct" -- it is unacceptable nonsense. The so-called compensation principle has been studied to death and found to be utterly invalid. Never mind, though, it would be convenient for the experts if it was "generally correct" and if the losers could "in principle be compensated" and that's all that really matters.

A Rorschach Test on Antisemitism

Give it a try.  According to today’s New York Times, here’s Jeremy Corbyn on the respect the British Labour Party owes to its Jewish members and supporters:
Mr. Corbyn said at the event that assuming that “a Jewish friend or fellow member is wealthy, part of some kind of financial or media conspiracy or takes a particular position on politics in general or on Israel and on Palestine in particular, is wrong.” 
He added, “Our Jewish friends are no more responsible for the actions of Israel or the Netanyahu government than our Muslim friends are for those of various self-styled Islamic states or organizations.”
Does this sound antisemitic to you?  According to the Times, the comments “provoked outrage”.  Angry denunciations in Britain and Israel take up several paragraphs, countered only by a cautious clarification from Corbyn’s staff.  That’s one point of view; let me offer another.

I’m Jewish by background and highly sensitive to antisemitic remarks and innuendos.  I’ve quit organizations in the past because I found their atmosphere demeaning.  If antisemitism was the “socialism of fools” a century ago, it is sometimes the anti-imperialism of fools today.  But for the life of me, if this remark is correctly quoted, I can’t see why anyone should complain about it.

The Times inserted what it saw as a correction about the “self-styled” reference to states or organizations that claim to act in the name of Islam, but I think I understand where Corbyn is coming from, and where his comment leads.

Various governments, government wannabees and armed sects tell us that they represent Islam, and that any attack on them is an attack on all believers.  Well, they can say that: this is what self-styled means.  But saying something doesn’t make it true.

And the same holds for Israel.  Its government claims to represent and speak for all Jews everywhere; it’s a self-styled Jewish state.  But Jews in Britain, the US or anywhere else are not bound by this.  They are not Israelis, and they are no more represented by Netanyahu than by  Putin, Xi Jinping, or King Salman for that matter.  Is disputing Israel’s claim to represent all of the world’s Jews antisemitism?  I think Corbyn was indirectly laying down that challenge, and he’s being punished for it.

UPDATE: I changed the title to get the right kind of test.

Britain's Bloodiest Day

On July 1, 1916 about 60,000 British soldiers died in the opening day of the Battle of the Somme in northern France in World War I.  It was the bloodiest day in the entire history of Britain. While there  is no reason to expect a full return to such bloodiness as a result of it, I see a bit of irony that the Brexit vote happened eight days prior to this centennial.  Let us hope indeed that the voted does not presage an unraveling back into serious warfare in Europe, with or without Great Britain.

Barkley Rosser

Wednesday, June 29, 2016

Details-Schmetails!: Brexit And Uncertainty

An FB friend of mine skeptical that Brexit will have much of a negative economic impact has put up a post entitled "Brexit-Schmexit!"  To this I say, "Details-Schmetails!" because the widely varying possible impacts of details of that exit have induced a massive increase in uncertainty over the future around much of the world that itself can cause considerable economic harm.  Just for the US alone, Jim Hamilton at Econbrowser documents the sharpest increase in measured policy uncertainty since the debt ceiling crisis of 2013 (also linked to by Mark Thoma at Economists View), and this is the leading complaint by most EU leaders against the plan by David Cameron (and Boris Johnson too apparently, as well as many in the UK hoping for an eventual Remain outcome)  to delay invoking Article 50 of the Lisbon Treaty that would trigger the two year divorce negotiations, even as I sympathize with those in the UK hoping such a delay might lead to no Brexit at all in the end.  The Europeans want the negotiations to start sooner so as to  end the uncertainty sooner, which they see as hanging over the heads of their economies and damaging them, which seems a fair point.

Circumstantially, yesterday Marina and I led some students to visit the European Commission and the European parliament in Brussels.  At the Commission last night, the Council of Europe heard David Cameron say good-bye and how much he loved Europe, even as he declared that he would not invoke Article 50 and would not leave office until at least October.  Other EU leaders rejected this and called for immediate invocation of Article 50 to minimize uncertainty, including Germany's Angela Merkel, France's Francois Hollande, and Italy's Matteo Renzi.   We visited the plenary hall of the parliament a few hours after a contentious debate in which one member denounced pro-Brexit Nicholas Farage as engaging in "Nazi propaganda," while Farange declared that his critics had "never held a real job in their lives."  We heard speakers defending these institutions, but it became clear that details matter.

Something that struck me that EU critics would note is the massive ponderousness of the complex of buildings in this "Europe City" zone.  Although Tyler Cowen recently compared them, they put to shame the structures in the  zone in Washington that houses the headquarters of the Fed, World Bank, and IMF.  A full 50,000 Eurocrats work in them, with it not at all clear that many or most of those are doing all that much useful.  But then again, details matter. Much of what these folks do is related to the much hated regulations that the EU promulgates in its single market, with pro-Brexit campaigners declaring drag Britain down.  How awful are these regulations?  This is not clear.

Some are for environmental quality; some are for safety; ome are posed as unifying standards.  Some of  this may be useful, but some may not.  Our speaker at the commission spoke about how the EC is cleaning up its act and doing better with standards.  An example had to  do with safety in relation to cosmetics.  At one point there were sixteen different sets of standards relating to different cosmetics, running to 25,000 pages.  More recently there has been an effort to simplify this and the sixteen have been reduced to one, with the number of pages involved down to 500. Is all this worth it?  I do not know, although I do know that there have been safety issues regarding cosmetics and that this is s pretty big industry in the EU.

An especially controversial one involving the UK has involved fisheries policy.  One of the more dramatic moments in the Brexit campaign in Britain in the last weeks involved a flotilla of fishers floating up the Thames in London calling for Brexit, with a competing flotilla led by Bob Geldof contesting them, with near violence breaking out between the two.  Some of the fishers spokesmen were especially vehement about their alleged suffering at the hands of the EU regulaters, but this is far from obvious.  That it is taken seriously shows up in that a major fishing area, Cornwall, voted strongly to leave, even as it is one of the parts of UK receiving the most amount of regional development aid due to its great poverty.  They are getting lots of aid from the EU, but there has been no love there for it, given their attitude towards the fisheries policy.

So mostly they do not like quotas and other limits put on when and where and how much they can fish.  But the hard fact is that open access renewable resource markets are subject to over-harvesting and collapse, with fisheries around the word most subject to this. Iceland has fought "cod wars" with British fishers invading their  territorial waters.  The British contest mostly with the Spanish fishers in the EU and feel that others are getting into waters they should control.  There is no simple answer to  this, but in fact there is strong evidence based on rising incomes for fishers, albeit smaller numbers of them, that the quotas and limits imposed by the EU have helped to preserve and even revive damaged fisheries that the British fishers use.  Brexit may well lead to them being worse off, much worse off, even as they believe otherwise.  This may well be how it will turn out for quite a few in UK.

In  any case, whether declining foreign direct investment tanking the UK economy has a greater impact than some gain in reduced import competition and rising exports due to  a devaluing pound, it looks from most in the EU that the greatest damage to their economies and the British one, as well as others around the world, will arise from the uncertainty associated with how all this will work itself out and how long it will  take.  In this regard I agree with the Europeans: whether or not the Brexit vote by the British was wise or not, they must minimize the damage of it to the rest of the world and get out ASAP to reduce all this world-economy-wrecking uncertainty.

Barkley Rosser

Tuesday, June 28, 2016

Brexit and the Incorrigibility of the EU

A standard argument from the left runs like this: in principle there are three positions a country like Britain could take toward the EU, opposition/exit, support/remain, and transform.  But transforming the EU is not on the table, so the choice comes down to whether a country should remain part of the existing EU with all its faults or leave it.  This is a lousy pair of options, and the debate between them can’t help but be muddled and unproductive.

The interesting question for me is why the EU is such a determined enforcer of neoliberalism and so resistant to fundamental reform.  I asked this on Crooked Timber yesterday, and one of the commenters (thanks!) sent me to Gerassimos Moschonas, the Greek political scientist.  I haven’t read his book In the Name of Social Democracy: The Great Transformation, 1945 to the Present yet (what’s taking me so long?), but I did take a look at this article, which was published in 2009 after the first edition of In the Name and seems to summarize his position.

Moschonas is very insightful about the structural constraints on anti-neoliberal (or genuinely social democratic) politics in Europe.  The EU obstructs transformative political projects at the national level; meanwhile it prevents party formation and radical political action at the supranational level.  This structure, which institutionalizes the deregulation of national economies in the name of the single market and imposes anti-Keynesian policies through the Stability and Growth Pact, is intrinsically resistant to change.  Moreover, it coincides with a grand coalition at the EU level whose political ideology is resolutely neoliberal.  Some of this is obvious to anyone who follows events, but Moschonas’ analysis of the structural aspect of “embedded neoliberalism” (my term) is enlightening.

But there is a hole in his narrative.  Somehow, during the crucial period from the mid-80s to the early 90s, this neoliberal consensus in Europe was forged, and its project was the creation of exactly those structures that Moschonas studies.  How could it be that, in a Europe that lacked explicit political organization at the confederal level, such a coalition, powerful enough to create entirely new institutions, could be assembled?  Here structural political analysis of the sort represented by Moschonas is useful for posing the problem but doesn’t give us the resources to begin to answer it.

I think the missing dimension is political economy.  Politics does not occur in a vacuum, with ideas competing on the basis of pure logic or emotional resonance.  Political economy proposes a larger terrain, in which wealth and material interests generally condition politics and make particular ideas or projects more “realistic” or attainable.  I’ll be the first to admit, however, that political economists have relied primarily on indirect evidence—historical or geographical correspondences between economic motives and political outcomes—and have been mostly unsuccessful in tracing the actual processes through which they occur.  Understanding them is important not only in a general intellectual sense, but also, especially, for coming up with counter-hegemonic political projects.

I see this difficulty, for instance, in Varoufakis’ DiEM25 project to democratize the EU.  He has in mind a two-step process: first the political structures are changed to enable a Europe-wide political space, and then that space can used to combat neoliberal hegemony.  I’m not against this, but it seems to me that the first step presupposes the second: the existing structures exist precisely because of that hegemony, and it will have to be challenged in order to create new ones.  It would be interesting to get Moschonas’ reaction to DiEM25.

In any case, DiEM25 was not on the ballot in Britain.  You could vote to be part of the actually existing EU or vote to leave it.  Like I say, lousy choice.

Chat Shit Get Sacked

Dear Bernie Sanders supporters,

I hope you are paying close attention to what is happening in the British Labour Party. 

If Bernie Sanders had somehow managed to win the Democratic Party nomination for President, the anti-Corbyn coup is exactly the kind of behavior you would have seen from the Democratic Party establishment. 

Sabotage. During the election campaign.

The same pundits who now demand that Sanders immediately endorse Hillary Clinton in the name of party unity would walk away in disgust from a Sanders nomination, declining to get involved with a campaign so "out of touch" with the American electorate, a foregone conclusion that would be rerun incessantly in the liberal media.

Pillorying Hilary Benn: "Chat Shit Get Sacked"
Meanwhile, in a Sanders-nominated universe, Donald Trump would be profiled on TV as the kind of guy you'd like to have a beer with -- a straight-talking tycoon who says outlandish things but whose frenzy will be tamed once he is anaesthetized by the trappings of office.

The establishment does not find losing amusing. But when they do have to lose, they would much prefer losing to a megalomaniac than to a movement. Megalomaniacs can be flattered and manipulated more predictably. Or so the professional courtiers believe. Whether this is true or not is doubtful. But then a lot of what courtiers believe is based on abject conformism, not observation and reflection.


I remember waking up in a sweat one night in late June or early July of 1972 with the realization that "they" would not let "it" happen. Exactly who they was wasn't clear -- the military? the Republicans? the Democratic Party establishment? Or what -- the nomination? an election?

And they didn't let it happen. But of course it was all the fault of McGovern and his supporters, just as the Leave vote in European Union referendum was all the fault of Jeremy Corbyn and Trump's election will be all the fault of Bernie Sanders and the Bros.

The establishment is never responsible for anything.

Monday, June 27, 2016

National Income Accounting in Iceland

One account notes:
gross national income per capita is still down by a quarter since 2007
But Dean Baker checks with the IMF and notes:
per capital GDP in Iceland is around 2.0 percent higher now than its pre-recession peak. That is a very different story. In fairness, the NYT piece refers to gross national income (GNI), not gross domestic product.
Dean argues that GDP is preferred over GNI but why if the citizens of a nation enjoy significant net income from abroad. Dean adds:
GDP is usually the preferred measure, but it can be inflated by things like foreign companies claiming profits in the country for tax purposes, as happens in Ireland. If the NYT's GNI numbers are correct, it is most likely due to foreign profits of Iceland's major banks in the bubble years before the crisis. It's not clear that the loss of these profits, which were based on speculation and fraud, is a negative for Iceland's economy.
Actually this represents two stories. Is it the bank speculation tale only? Or how much of this difference is due to transfer pricing manipulation? Ireland is known for its tax haven status with lots of multinationals shifting income there, which is why its reported GDP in 2013 on a PPP basis was almost 30% greater than its reported GNP in 2013 on the same basis. Iceland’s reported GDP in 2013 on a PPP basis was 15% higher than its reported GNP in 2013 on the same basis. While there is not much discussion of Iceland being a tax haven or transfer pricing with respect to this nation, it is interesting that its corporate tax rate is only 20%.

Sunday, June 26, 2016

Who Really Are The "British"?

At one level this is a trivial question with an easy answer.  A British person is a citizen of Great Britain, whose more formal and official name is the United Kingdom, or UK for short. That should be the end of that, and the recent vote vote by citizens of Great Britain (I think permanent residents may also have been allowed to vote) to leave the European Union, the "e," arguably reinforced the meaningfulness of this identity, especially in regard to the broader alternative of being a "European."

But then we have this problem that this vote appears to be stirring up divisions within these British people, with the Scottish in particular having voted strongly against the majority outcome, resulting in renewed pressure to have another referendum on Scottish independence, for them to cease to be citizens of Great Britain, arguably to cease to be "British."  Is this identity then much more fragile than we might think  it  is?  This gets pushed further in that people in Northern Ireland also voted to Remain, although not by as large a margin as did the Scots, 56% rather than 62%.  The Welsh went with the national majority, indeed mirroring it closely at 52%, with the English making that the national average by more strongly supporting Leave and offsetting the Remain majorities in Scotland and Northern Ireland, with this even more  strongly the case in more rural parts of England as London went strongly for Remain, almost as strongly as did Edinburgh and Glasgow in Scotland.  There seem to be some pretty sharp divisions on this among the main identifiable sub-groups among the British.

This then suggests that we should take this internal division and apparent lack of agreed upon identity a bit more seriously.  The word "British" comes from the word "Britain," which while often used as a short hand name for the entire nation, the United Kingdom, more specifically means the island of Britain, large island to the east of the island of  Ireland. That the UK is "Great" Britain is partly because it involves more than just the people on that island, most notably the Northern Irish, as well  as those on other much smaller islands such as Lewis (birthplace of Donald Trump's mother) where Scottish Gaelic is still spoken, and the Isle of Man, where the now-extinct language of Manx was spoken, related to Irish and Scottish Gaelic (and where the cats without tails come from),among some others.  Thus being a British citizen includes people not living on the island of Britain.

The name "Britain" itself is quite old, going back to at least the Roman period, when those living on the island, or at least in the part of it ruled by the Romans, were known as the "Brythons."  However,  that proves to have involved a narrower group than those who live there now,  not including the people now in Scotland who were called the "Picts" by the Romans, although they never viewed themselves as a group and identified themselves by tribal group names constituting sub-groups of themselves.  That Scotland itself is sub-divided is clear in the division between the Highlands, where one is more likely to find people who can speak Gaelic, the language of people who invaded from Ireland several centuries after  the Romans stopped ruling in the southern part of the island of Britain, the Romans having built Hadrian's Wall to protect the zone they ruled and full of Brythons largely to keep out the troublesome Picts, who reportedly painted themselves blue.  Modern Scots are descended from ancient Pictish tribes, but also with this Irish Gaelic ancestry in the Highlands, as well  as Viking ancestry, and Anglian ancestry in the Lowlands (Lowland Scottish fishermen reportedly can communicate easily with Frisian ones from the Netherlands, the Frisian language supposedly close to Old English).   Yes, the Lowland Scots have serious English ancestry.

As for those original British, the "Brythons" who were ruled by the Romans, they lived in what is now England.  But the language that the spoke was an ancestor to the modern Welsh language.  Perhaps this is why the vote totals in Wales on Brexit so closely corresponded to the overall totals in Great Britain as a whole.  However, clearly the modern Welsh are distinct from the Scottish, the Northern Irish (or "Scotch-Irish" as they are called in the US), not to mention the modern English.  After all, Welsh is a Celtic language, if one more closely related to Breton spoken in northwestern France, as well as the now dead Cornish language, once spoken in Cornwall in the very southwestern most part of modern England, than to the Gaelic languages that came out of the island of Ireland.  These modern Welsh are not all that closely related to the modern English, who now  occupy the territory once occupied by the Roman-ruled Brythons, ancestors of the modern Welsh.

As it is, English not a Celtic language, although having many Celtic loan words in it,but mostly a Germanic  one, related to modern Frisian as noted above, although also now with many loan words from Latin languages as a result of the Norman Conquest in 1066 and all  that.  The Germanic Anglo-Saxons (who also included the Jutes from Denmark who mostly ended up in Kent in the southeastern most part of England) invaded the island of Britain around and especially after the removal of Roman rule of  what is now  England and Wales, pushing the Celtic-speaking Welsh westwards into modern Wales, although also certainly killing many of them and intermarrying with some of their women to create the modern English.  We indeed have some complicated migrations and wars that lie behind the identities of  the main modern groups that inhabit both the island of Britain as well as the nation of Great Britain, not getting into all the groups that have arrived more recently ranging from Jews from Central Europe through Hindus from India and Muslims from Pakistan to Polish plumbers especially recently under the auspices of the European Union, from which the English in particular seem so keen on leaving, much more so than their fellow "British" in the Celtic fringe.

So we have it that the modern British are a bunch of sub-groups, ones that do not intermarry or mingle all that much, except maybe in London and a few other large cities.  At some deeper level there really are not many "British" in Great Britain in the sense of people who are the descendants of fully intermarried members of these older constituent sub-groups who are very much aware of their identities, with this awareness if anything being heightened by their different attitudes towards this Brexit vote.  This vote has if anything undermined what it means to be "British," even as it supposedly reinforces it.  Indeed, quite a few observers are noting that this vote was really about the English asserting themselves, with those rural parts especially in the north and east often called "Little England" being the most strongly pro-Brexit parts of Great Britain of all.

While I have not  seen anybody doing so, I am going to  raise the question then about if there is a place where this intermingling of these different sub-groups has happened, where indeed we might find people who might represent this type that does not, or only barely does so  in Great Britain itself. I think there is.  It  is the United States of Ameica, although also probably to a lesser degree in some of the other former English-speaking colonies of Great Britain, such as Canada, Australia, New Zealand, and parts of South Africa.  However, in the US, this is not immediately obvious, and this is partly because most of these people are certainly not called "British" or even "British-Americans," but something else.  They are called WASPs, or "White Anglo_Saxon Protestants," and I am one of them by ancestry, or so a sociologist who would use this term would argue.

There is a problem, however, with this label, which misleads most people to the real background of these so-called "WASPs," a term that was invented in the 1950s by sociologists and poltiical scientists, although sometimes the "W" in it is argued to stand for "wealthy," with the real WASPs being only the wealthier and more elite branch of this group, who arguably were long the dominant ruling elite of  the US.  The problem lies in the use of the term "Anglo-Saxon," which has the more specific meaning and association with the English of Great Britain.  The term's specifically literal meaning is White English Protestants.  But in fact only in certain parts of the US are the so-called WASPs largely of only English ancestry, especially in rural parts of New England (hence that name) as well as in the more Tidewater areas of the southeastern states, especially in Virginia.  These people are more likely to be Episcopalian or Congregationalist or Quaker  (or curiously Morman, with Utah probably the US state whose population is more strongly descended from the English than any other).

Most people in the US identified as being WASPs are of  mixed ethnic descent.  English is certainly a major part of it, but especially in the US South this descent usually includes people from Celtic fringe of Great Britain, the Scots, the Ulster or Northern Irish called the Scotch-Irish, especially in the Appalachian mountains, as well as the Welsh.  My last name is Welsh, but I am descended from all these groups.  And these WASPs often have other groups as well, mostly other Protestant northwestern Europeans, with the Dutch prominent in New York, the Germans in Pennsylvania, the French Huguenots in South Carolina, and the Scandinavians in the upper Midwest, as well as often some unacknowledged amounts of Native American, African-American, or others (I have both German as well as some Gypsy ancestry). And these people often adhered to religious groups not so strictly tied to the English as are the Episcopalians, Congregationalists, Quakers, and Mormons,such as Presbyterians (Scottish), Methodists (Welsh), Baptists (German), and Lutherans (German and Scandinavian).

So, the bottom line is that the real "British" are the British Americans now labelled as "WASPs." It was in America where this mixing of these groups that have not mixed so much back in Great Britain have mixed, creating that type that might have constituted a unified ethnic identity in the home country, but have not done so there.  It has been in America where this mixing happened, even as the label applied to this group in the US suggests that it is mostly or only of English descent.  In any case, whatever  one thinks about it, the power of this group has been fading since the end of World War II.

I shall close this by simply noting that I because aware of this personally only about two decades ago, although I was intellectually aware of the fact that American WASPs, especially those in the US South (who include the lower class "rednecks"), were of this mixed English-Celtic ancestry.  It was on a visit indeed to Great Britain when we went driving around, although I had done this more than once at earlier times.  I kept realizing that I found myself sympathetic to and feeling a kindred with all of the people who were local to each area, even as I realized that I was not so fully sympathetic for the reason that I was not just English or Scottish or Welsh, but all of these in my ancestry.  I realized that I was one of the "real" British, a British-American, somebody not found very often in Britain itself.  Curiously this difference was long recognized between the British British and the British Americans, but in the earlier era, prior to World War II, this odd group that dominated in the US was simply called "Americans," although that term has now lost that meaning as it now means something like what "British" means in Great Britain, that is, somebody who is a citizen of the US whatever is their ethnic ancestry.  Thus we have since identified that group with this oddly misleading term, White Anglo-Saxon Protestant, which is not precisely correct in general.

Barkley Rosser

Addendum:

Another unfortunate fallout from the Brexit vote may involve the Good Friday Accords and the broader peace agreements between Ireland and UK over the status of  Northern Ireland, which agreements were ultimately carried out within the framework of EU rules and regulations.  This is now threatened, with the possibility of either a hard border between the two parts of Ireland reappearing or Northern Ireland leaving the UK to join  the now  more prosperous Republic of  Ireland.  Hopefully whatever happens there will not see a return to outright violence as we have seen in the not so distant past.

This shows up in the US with there recently being more attention paid to those people desended from Northern, or Ulster, Irish, known here as Scotch-Irish (or more recently Scots-Irish), alhough the westernmost county of traditional Ulster is in the Republic of Ireland rather than the UK.  Anyway, among others former senator and presidential candidate, Jim Webb, has written books about them and their  heritage in the US, which indeed has been heavily concentrated in the Appalachian mountains, with them having a history of  being martially oriented, with such figures as the now unpopular Andrew Jackson, being a prominent president of this background.  This group has been culturally important as the main source of folk and country music forms in the US, which when combined with blues and jazz with their African and German marching band music influences led to rock and roll.  However, from an early period these musics had been intermixing, with hardest core instrument of country/folk music, the banjo, having been imported straight from western Africa, with almost no changes (and ironically with that instrument never used by any modern African-American musicians).

Prior to the arrival of the Catholic Irish in large numbers after the potato famine of the late 1840s, the Scotch-Irish simply called themselves "Irish," but started with this Scotch-Irish stuff so as to distinguished themselves from their Catholic co-islanders, thus making them able to join that odd mass of WASPs or "Americans." and join in with discriminating against the Catholic Irish.  I note that I also  have Scotch-Irish ancestry, with in fact my middle name that I go by, Barkley, being a Scotch-Irish last name, the English spellings of that name being Barclay and Berkeley.

A correction: The proper name of the UK is the United Kingdom of Great Britain and Northern Ireland, so "Great Britain" is just the island of Britain. Also, the Isle of  Man and the Channel islands are not part of the UK, but bailiwicks of it.

Who Really Are The "British"?

At one level this is a trivial question with an easy answer.  A British person is a citizen of Great Britain, whose more formal and official name is the United Kingdom, or UK for short. That should be the end of that, and the recent vote vote by citizens of Great Britain (I think permanent residents may also have been allowed to vote) to leave the European Union, the "e," arguably reinforced the meaningfulness of this identity, especially in regard to the broader alternative of being a "European."

But then we have this problem that this vote appears to be stirring up divisions within these British people, with the Scottish in particular having voted strongly against the majority outcome, resulting in renewed pressure to have another referendum on Scottish independence, for them to cease to be citizens of Great Britain, arguably to cease to be "British."  Is this identity then much more fragile than we might think  it  is?  This gets pushed further in that people in Northern Ireland also voted to Remain, although not by as large a margin as did the Scots, 56% rather than 62%.  The Welsh went with the national majority, indeed mirroring it closely at 52%, with the English making that the national average by more strongly supporting Leave and offsetting the Remain majorities in Scotland and Northern Ireland, with this even more  strongly the case in more rural parts of England as London went strongly for Remain, almost as strongly as did Edinburgh and Glasgow in Scotland.  There seem to be some pretty sharp divisions on this among the main identifiable sub-groups among the British.

This then suggests that we should take this internal division and apparent lack of agreed upon identity a bit more seriously.  The word "British" comes from the word "Britain," which while often used as a short hand name for the entire nation, the United Kingdom, more specifically means the island of Britain, large island to the east of the island of  Ireland. That the UK is "Great" Britain is partly because it involves more than just the people on that island, most notably the Northern Irish, as well  as those on other much smaller islands such as Lewis (birthplace of Donald Trump's mother) where Scottish Gaelic is still spoken, and the Isle of Man, where the now-extinct language of Manx was spoken, related to Irish and Scottish Gaelic (and where the cats without tails come from),among some others.  Thus being a British citizen includes people not living on the island of Britain.

The name "Britain" itself is quite old, going back to at least the Roman period, when those living on the island, or at least in the part of it ruled by the Romans, were known as the "Brythons."  However,  that proves to have involved a narrower group than those who live there now,  not including the people now in Scotland who were called the "Picts" by the Romans, although they never viewed themselves as a group and identified themselves by tribal group names constituting sub-groups of themselves.  That Scotland itself is sub-divided is clear in the division between the Highlands, where one is more likely to find people who can speak Gaelic, the language of people who invaded from Ireland several centuries after  the Romans stopped ruling in the southern part of the island of Britain, the Romans having built Hadrian's Wall to protect the zone they ruled and full of Brythons largely to keep out the troublesome Picts, who reportedly painted themselves blue.  Modern Scots are descended from ancient Pictish tribes, but also with this Irish Gaelic ancestry in the Highlands, as well  as Viking ancestry, and Anglian ancestry in the Lowlands (Lowland Scottish fishermen reportedly can communicate easily with Frisian ones from the Netherlands, the Frisian language supposedly close to Old English).   Yes, the Lowland Scots have serious English ancestry.

As for those original British, the "Brythons" who were ruled by the Romans, they lived in what is now England.  But the language that the spoke was an ancestor to the modern Welsh language.  Perhaps this is why the vote totals in Wales on Brexit so closely corresponded to the overall totals in Great Britain as a whole.  However, clearly the modern Welsh are distinct from the Scottish, the Northern Irish (or "Scotch-Irish" as they are called in the US), not to mention the modern English.  After all, Welsh is a Celtic language, if one more closely related to Breton spoken in northwestern France, as well as the now dead Cornish language, once spoken in Cornwall in the very southwestern most part of modern England, than to the Gaelic languages that came out of the island of Ireland.  These modern Welsh are not all that closely related to the modern English, who now  occupy the territory once occupied by the Roman-ruled Brythons, ancestors of the modern Welsh.

As it is, English not a Celtic language, although having many Celtic loan words in it,but mostly a Germanic  one, related to modern Frisian as noted above, although also now with many loan words from Latin languages as a result of the Norman Conquest in 1066 and all  that.  The Germanic Anglo-Saxons (who also included the Jutes from Denmark who mostly ended up in Kent in the southeastern most part of England) invaded the island of Britain around and especially after the removal of Roman rule of  what is now  England and Wales, pushing the Celtic-speaking Welsh westwards into modern Wales, although also certainly killing many of them and intermarrying with some of their women to create the modern English.  We indeed have some complicated migrations and wars that lie behind the identities of  the main modern groups that inhabit both the island of Britain as well as the nation of Great Britain, not getting into all the groups that have arrived more recently ranging from Jews from Central Europe through Hindus from India and Muslims from Pakistan to Polish plumbers especially recently under the auspices of the European Union, from which the English in particular seem so keen on leaving, much more so than their fellow "British" in the Celtic fringe.

So we have it that the modern British are a bunch of sub-groups, ones that do not intermarry or mingle all that much, except maybe in London and a few other large cities.  At some deeper level there really are not many "British" in Great Britain in the sense of people who are the descendants of fully intermarried members of these older constituent sub-groups who are very much aware of their identities, with this awareness if anything being heightened by their different attitudes towards this Brexit vote.  This vote has if anything undermined what it means to be "British," even as it supposedly reinforces it.  Indeed, quite a few observers are noting that this vote was really about the English asserting themselves, with those rural parts especially in the north and east often called "Little England" being the most strongly pro-Brexit parts of Great Britain of all.

While I have not  seen anybody doing so, I am going to  raise the question then about if there is a place where this intermingling of these different sub-groups has happened, where indeed we might find people who might represent this type that does not, or only barely does so  in Great Britain itself. I think there is.  It  is the United States of Ameica, although also probably to a lesser degree in some of the other former English-speaking colonies of Great Britain, such as Canada, Australia, New Zealand, and parts of South Africa.  However, in the US, this is not immediately obvious, and this is partly because most of these people are certainly not called "British" or even "British-Americans," but something else.  They are called WASPs, or "White Anglo_Saxon Protestants," and I am one of them by ancestry, or so a sociologist who would use this term would argue.

There is a problem, however, with this label, which misleads most people to the real background of these so-called "WASPs," a term that was invented in the 1950s by sociologists and poltiical scientists, although sometimes the "W" in it is argued to stand for "wealthy," with the real WASPs being only the wealthier and more elite branch of this group, who arguably were long the dominant ruling elite of  the US.  The problem lies in the use of the term "Anglo-Saxon," which has the more specific meaning and association with the English of Great Britain.  The term's specifically literal meaning is White English Protestants.  But in fact only in certain parts of the US are the so-called WASPs largely of only English ancestry, especially in rural parts of New England (hence that name) as well as in the more Tidewater areas of the southeastern states, especially in Virginia.  These people are more likely to be Episcopalian or Congregationalist or Quaker  (or curiously Morman, with Utah probably the US state whose population is more strongly descended from the English than any other).

Most people in the US identified as being WASPs are of  mixed ethnic descent.  English is certainly a major part of it, but especially in the US South this descent usually includes people from Celtic fringe of Great Britain, the Scots, the Ulster or Northern Irish called the Scotch-Irish, especially in the Appalachian mountains, as well as the Welsh.  My last name is Welsh, but I am descended from all these groups.  And these WASPs often have other groups as well, mostly other Protestant northwestern Europeans, with the Dutch prominent in New York, the Germans in Pennsylvania, the French Huguenots in South Carolina, and the Scandinavians in the upper Midwest, as well as often some unacknowledged amounts of Native American, African-American, or others (I have both German as well as some Gypsy ancestry). And these people often adhered to religious groups not so strictly tied to the English as are the Episcopalians, Congregationalists, Quakers, and Mormons,such as Presbyterians (Scottish), Methodists (Welsh), Baptists (German), and Lutherans (German and Scandinavian).

So, the bottom line is that the real "British" are the British Americans now labelled as "WASPs." It was in America where this mixing of these groups that have not mixed so much back in Great Britain have mixed, creating that type that might have constituted a unified ethnic identity in the home country, but have not done so there.  It has been in America where this mixing happened, even as the label applied to this group in the US suggests that it is mostly or only of English descent.  In any case, whatever  one thinks about it, the power of this group has been fading since the end of World War II.

I shall close this by simply noting that I because aware of this personally only about two decades ago, although I was intellectually aware of the fact that American WASPs, especially those in the US South (who include the lower class "rednecks"), were of this mixed English-Celtic ancestry.  It was on a visit indeed to Great Britain when we went driving around, although I had done this more than once at earlier times.  I kept realizing that I found myself sympathetic to and feeling a kindred with all of the people who were local to each area, even as I realized that I was not so fully sympathetic for the reason that I was not just English or Scottish or Welsh, but all of these in my ancestry.  I realized that I was one of the "real" British, a British-American, somebody not found very often in Britain itself.  Curiously this difference was long recognized between the British British and the British Americans, but in the earlier era, prior to World War II, this odd group that dominated in the US was simply called "Americans," although that term has now lost that meaning as it now means something like what "British" means in Great Britain, that is, somebody who is a citizen of the US whatever is their ethnic ancestry.  Thus we have since identified that group with this oddly misleading term, White Anglo-Saxon Protestant, which is not precisely correct in general.

Barkley Rosser