Feeble intellect struggles to connect subjects to objects

On the one hand, Mitt Romney is quite dreamy. That’s nice in a president, as the late Warren G. Harding demonstrated. I also suspect from Mitt’s track record, and the fact that he has the annoying but not-insane Greg Mankiw as his economic advisor, that he would do a passable-to-good job as president, at least on domestic matters. It seems like the responsible thing to do is to vote for the guy who I think will actually do the best job.

On the other hand, I want the GOP to lose the election, and I’d prefer a disastrous presidential candidate who drags down other GOP reps — preferably someone with a history of egregious narcissism, habitual philandering, and outrageous and provocative statements. This makes me think that I ought to cast my vote for Newt Gingrich. Whether he wins or loses, it is likely to be funny. The value of humor should not be discounted.

And then there’s Ron Paul, who’s a total crank on economic policy (and I really mean a total crank) and whose interpretation of the Constitution is silly and ahistorical, but who is better on civil liberties and foreign policy than any Democrat I know of. Whenever I watch the Republican debates, it is hard not to sympathize with him. And I would vastly, vastly prefer to be arguing with a libertarian Republican party whose skepticism toward government action extended to interventions overseas and the surveillance of private activities, instead of the xenophobic, pro-torture, pro-wiretapping GOP we have. But to hope for so much is to slip into fantasy.

So. Who gets my vote?

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I apply for a tutoring gig on craigslist, and this is what shows up in my inbox:

 How you doing? I m Sorry getting in-touch late. I hereby inform you that qualified and efficient tutor is needed to
lecture my son because i dont want him by any chance be too playful and by so doing might not be doing well with his studies and that is why i am getting a tutor for him Asap that will devote quality time with him for the time been

He is apparently on holidays, I am willing to pay the sum of $400 plus every other charges involved. I hope to read back from you soon

Regards,
Smith

I’m sorry, but is it unreasonable for me to want a higher caliber of confidence man than this? This guy is specifically aiming at “marks” who have enough education to apply to tutoring jobs… and this is the copy he sends to fool us into trusting him? “I hope to read back from you soon?” “i don’t want him by any chance be too playful”? I don’t even really understand what too-good-to-be-true fantasy job the guy thinks he’s dangling in front of us simple rubes. And we’re supposed to believe that his name is Smith?! AND that’s apparently his entire name?!

Woe, woe, woe unto any person simple enough to be taken in by this e-mail and move on to the next stage of the con! One worries for this con man’s family and anyone else he’s providing for.

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This Thanksgiving, I am supremely grateful not to be in a monetary union dominated by Germany. For other things, too, but that’s a big one.

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And which ones? I’m curious about the extent to which normal people have heard about figures in the field, past and present. My guess is that most people can name three, and could name four if they really thought about it.

Readers?

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I have been perennially skeptical of Newt Gingrich ever since the great government shut-down of the the mid-90s, and specifically, his decision to attribute it to a perceived snub by Bill Clinton. In his previous runs for the Republican nomination, it seemed he was allergic to getting above the 5 percent threshold. But in this election, all of the viable hard-right candidates  have discredited themselves in one way or another, and suddenly Gingrich is the great white hope of the talk-radio set. He currently has the support of 22 percent of the Republican electorate. I suspect that he, too, will blow out and spin off to the side of the road, leaving Romney as the nominee, but, But, BUT, I eagerly welcome the prospect of being proven wrong about this.

Go, Newt, go! If you go into the general election, this thing has 1964 written all over it.

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Crappy pro-EU propaganda!

I will not let an aside be an aside. Paul Krugman writes:

As an aside, the interesting thing about the euro from a political point of view is the way it cut across the ideological spectrum. It was hailed by the Wall Street Journal crowd, who saw it as a sort of milestone on the way back to gold, and by many on the British left, who saw it as a way to create an alliance of social democracies. It was criticized by Thatcherites, who wanted to be free to move Britain in an American direction, and by American liberals, who believed in the importance of discretionary monetary and fiscal policy.

Krugman is right that thought on the euro did not follow ideological alignment. But I think his own position as an American liberal who was critical of the idea shades his vision. The view that he attributes to “many on the British left,” that the eurozone would be an alliance of social democracies, was widespread internationally among leftish types. So was the sympathetic view of the euro as an implicit challenge to the political and military dominance of the United States. That is how I saw it at the time, at least, and when I lived in France it seemed to be a common view among French people. Because the most visible opponents of the euro were nationalist xenophobes on the right, tribal instincts made many of us feel we must belong in the other camp. Krugman’s view was that a eurozone with a continent-wide monetary policy would not be able to deal with downturns that affected some countries but not others, given that Europe’s economy was not integrated enough that workers could move in large numbers from recessionary countries to prosperous one. Krugman was studying Japan’s economic woes at the time, and so was acutely aware that serious recessions could still occur in modern, developed countries. Krugman’s critique has proven to be prescient, to say the least. But most of us back then thought Japan’s problems were due to unusual features of the Japanese economy (declining population, unwillingness to allow immigration, &c) and that central bankers in the west had figured everything out. There would never be a serious recession, we thought, so it didn’t matter. That was the crazy idea that prevailed in the late 90s, just as it prevailed in the 20s. Whoops.

The fundamental idea behind the European Common Market, which expanded to become the European Union, was to create common interests between the European powers that would prevent further conflict between them. It is paradoxical that now, half a century later, the institution that resulted is causing more turmoil in Europe than it has seen in decades. The proud workings of rationality stand once again humbled.

UPDATE: I’ve edited the post to make it more precise. The first draft needlessly brought Krugman’s writings on the liquidity trap into the mix. In fact his case against the euro was stronger than I originally implied, since it doesn’t rely on that special case. (I think that if Krugman were to restate his argument now, he would probably emphasize the lack of continent-wide fiscal policy capable of making transfer payments to workers in recession-affected countries, since it’s unrealistic to assume that increased labor mobility would actually fix unemployment problems).

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Daniel Kuehn, in commemoration of this historical day, quotes a passage from John Maynard Keynes’s harsh condemnation of the Versailles treaty and the statesmen who forged it:

This was the atmosphere in which the Prime Minister left for Paris, and these the entanglements he had made for himself. He had pledged himself and his Government to make demands of a helpless enemy inconsistent with solemn engagements on our part, on the faith of which this enemy has laid down his arms. There are few episodes in history which posterity will have less reason to condone – a war ostensibly waged in defence of the sanctity of international engagements ending in a definite breach of one of the most sacred possible of such engagements on the part of the victorious champions of these ideals.

Now, Germany in 1918 was going to lose the war: it just didn’t have a prayer of turning it around. It also had the unhappy fortune of being governed by two generals who were stupid and greedy (both of whom would later throw their support to Adolph Hitler), and who vacilated irresponsibly about whether they were surrendering and whether they could accept the Allies’ terms. So the war would have ended without the heroic resistance of the naval officers, soldiers, and workers all over Germany who stopped cooperating, which brought the German war machine to a halt and rendered the generals impotent — though these people’s recognition of their leaders’ idiocy, and their refusal to keep going along with the war, reflect well on them. The war would have ended regardless of the terms offered by the allies or agreed to by the Germans.

Nonetheless, it was both shabby and stupid for the Allies to double-cross the Germans. It poisoned the peace that Armistice Day was originally supposed to honor.

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Today marks the 100th anniversary of the day when California voters approved a measure granting its female residents the right to vote. Here as in other places, the issue divided the cosmopolitan, forward-looking city folk — who worried that since women were more religious than men, they would quickly vote in Temperance and Bible-thumping dullards — and the more traditional, rural folk who thought exactly the same thing. The big hurdle that suffrage had to overcome was the overwhelming No sentiment in populous San Francisco. Incidentally, it is likely that the impetus for the Federal suffrage amendment in 1919 was the impending 1920 Census: everybody knew that it was going to count more people in the cities than the counties, reapportioning representation to favor these vile centers of corruption and vice.

Anyway, cheers to one milestone in the advance of equal rights.

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This Occupy _____ movement came as a complete surprise to me. It has had a noticeable impact on discussions: people are now speaking their minds about economic inequality, which, it turns out, a lot of them have really disliked for awhile. This is welcome, but from this valid starting point people sometimes seem to wander into what I regard as error. I don’t want to be pedantic in the least, but I also don’t want to see positive energy wasted on unfruitful pursuits.

There are several tendencies among Occupy people that seem to me misguided:

-Protectionism. There seems to be something very deep-rooted about the notion that trade with foreign countries is harmful. It used to be the avowed policy of the Republican Party that high tariffs were advantageous to American business. I have come across a number of compelling readings in the last year to the effect that trade barriers can in some cases be productive, but I still tend to agree with Paul Krugman that most of the time foreign trade enriches us

-Opposition to corporations. There is an argument that the corporate ownership structure creates anti-social outcomes. However, I see no evidence that businesses structured as corporations are worse malefactors than other business arrangements. What people mean, I think, when they say “corporations” is actually “big companies”. To some extent, certain big companies do have monopoly power that tips the scale in their favor (especially ones like Microsoft and Apple that rely heavily on intellectual property laws). However, there are also returns to scale that make large operations more efficient. Such businesses are frequently also the ones with unionized workers who can bargain for decent compensation. I’m going to bring in Paul Krugman again here to defend my lefty cred.

-Anti-capitalism. If central planning worked and guaranteed full employment, good wages, efficient production, and technological innovations comparable to the ones we get from the market system, then it would indeed be desirable. But most experiments with it have gone terribly. Central planning only seems to be workable in three special cases:

-during wartime, when people are willing to sacrifice for a common cause

-when motivated by religious zealotry

-when there is a policy of political terror in place to make the planning credible (e.g., France in 1794, Russia in the 1930s, &c.)

None of these is desirable and the latter two are not compatible with secular democracy. (Note that I am making a huge understatement here, because I’m operating on the Principle of Charity). Even with the political terror in place, a centrally planned economy can deliver truly awful results if the planners are stupid and dishonest (see China’s “Great Leap Forward“) The only places that have made central planning systems somewhat workable in the absence of these factors are those that have integrated market features into the system. So it’s probably unproductive to oppose capitalism as such. What is important to note is that we know from experience that it’s completely possible to have a mixed economy where markets distribute 50 percent or so of income and the state distributes the rest through social insurance and public services. Such systems actually seem to be more stable than laissez-faire ones, unless they are involved in ill-planned currency unions. (Incidentally, it also annoys me considerably that most communist types  I meet, who supposedly take inspiration from the work of Marx, seem to be almost entirely unfamiliar with his economic writings).

I will allow, however, that strategically, anti-capitalist arguments may be useful: Franklin Roosevelt saw himself as saving the capitalist system from people like this. So did Germany’s Otto von Bismarck, the conservative who instituted the welfare state there. You can be wrong and still be part of a push in the right direction.

-Opposition to the Federal Reserve and fractional reserve banking. Yes, the Federal Reserve operates in relative secrecy (which actually hampers its ability to act), but on balance we are lucky that we have it. Workers and businesses alike were in a worse position before the country had a central bank, and bank failures frequently wiped people out. The fact that banks can lend out more money than they have in deposits may seem unfair, but it also allows businesses to find credit on much better terms. Putting an end to fractional reserve banking would cause a serious recession and probably force the US into a debt crisis.

That’s my 2 cents. The big issue I haven’t heard addressed much is legal protections for unions, which are necessary if you want “the 99 percent” to have real power in dealing with the privileged, and which the mainstream Democrats rarely talk about.

UPDATE: Upon further reflection, it seems to me that earlier I missed the forest for the trees in this post. The important point is really what I conceded with a passing thought:

“I will allow, however, that strategically, anti-capitalist arguments may be useful: Franklin Roosevelt saw himself as saving the capitalist system from people like this.”

Up to now, the Krugman-DeLong-Thoma-Romer-Summers axis of moderate Keynesians have defined the “far left” extreme of policy discussions. The people who actually run the country have thus seen the arguments coming from the axis as hostile and dangerous, even though these arguments are quite moderate and reasonable. The Occupy people, if they keep it up, can change this dynamic. When the people who run the country are hearing loud demands for protective tarriffs and the end of capitalism, the Krugman-DeLong-Thoma axis suddenly looks quite reasonable and pro-business. When push comes to shove, big business will take Keynes every time if it thinks the alternatives it faces are more radical (Keynes famously described his work as “moderately conservative in its implications”). The loud demands needn’t be economically sound: indeed, it is preferable that they be loony and unfeasible. The “Tea Party” has no sensible ideas yet this doesn’t stop them from being influential.

I also now regret my response to a reader who some time ago recommended this video by David Harvey. I responded, basically, by denigrating the theories of money and value implicit in the video, seeing it as something of a distraction. I should have said it was interesting and I’d like to hear more. If David Harvey is in the discussion, Paul Krugman looks like big business’s best friend.

In short, I take back what I wrote earlier. The Occupy movement is more useful as an army of cranks and heretics than as purveyors of Gospel truth. So people should carry on and call for whatever their worldview advises. And while you’re at it, ask for a pony.

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