# blueollie

## The Republican Anti-Poverty Program, in one photo!

Why can’t people like Paul Krugman think of this?

May 23, 2013

## Getting it right and getting called out

Public mistrust of science: it is often in the public articles themselves. Here is an example: someone will notice that factor A is correlated with effect X. Journalist writes: “scientist show that A causes X” which, of course, isn’t the same thing. In fact, many (most?) correlations have nothing to do with causation, but they give a place to look.

Many who write articles often don’t understand things like:
1. False positives. Lots of times, especially in the biological sciences, a statistically significant effect has up to a 5 percent chance of being a false positive.
2. Sometimes scientists themselves overplay the significance of their results.
3. Sometimes, the result is a very narrow one. Example: a training technique might have been tested on, say, university level runners and show a 1 percent improvement on their time for, say, a 5K run. But that effect might only apply to university runners (e. g. runners of that age, ability and experience).

Or it might be something like this: a test might show that those who drink 2-3 cups of coffee today enjoy a 5 percent reduction on a risk factor for a given disease…and this result gets a “coffee is good for you” headline. Another study might show that 3 or more cups of coffee a day might increase a risk for another unrelated disease and lead to a headline: “study shows that coffee is bad for you.”
4. Innumeracy. Yes, drug X which treats a condition might double the chances of getting a certain fatal disease! That is terrible, right? Well, maybe not if the risk of that fatal disease goes from 1 in 10,000,000 to 2 in 10,000,000. But maybe so if the risk goes from 1 in 10 to 2 in 10. Context and data matter!

Jon Stewart: here is his segment on the NRA convention. The best part, IMHO:

1. the conservatives accuse us of “using fear”. So what do you think that they do?
2. Senator Ted Cruz: brags about filibustering. He then accuses Democrats of “tyranny” when they filibuster.

Paul Krugman
He points out that Niall Ferguson has really been whiny (he is the one that tried to discredit Keynes by pointing out that he was gay). He then directs us to a William Black article that just takes Ferguson apart:

We now have Niall Ferguson, a history professor at Harvard and Hoover fellow whose theoclassical views have proven so influential with Prime Minister Cameron’s government’s adoption of austerity policies that have killed the UK recovery.

Ferguson has had a terrible last 10 years. He was a strong proponent of invading Iraq and pines for us to stay indefinitely in Afghanistan. He was a Romney supporter who wrote an anti-Obama screed in Newsweek that demonstrated his contempt for facts. He was an advisor to Senator McCain’s campaign for the presidency. Because of his record of getting every important policy issue wrong he was paid a great deal of money to speak to an “alternative investment” conference that began, with no small irony, on May Day. Ferguson was presenting his thesis that the West has become “degenerate.” He certainly proved that point about himself.

Krugman v. Ferguson (2009) (TKO for Krugman in the First Round)

Ferguson has been spinning out of control in recent weeks. In 2009, he made the mistake of trying to debate a Nobel Laureate in Economics (Paul Krugman) about Krugman’s specialty. If it had been a fight the ref would have stopped it in the first round and awarded a TKO. Ferguson did his ode to austerity as a response to the Great Recession and claimed that the stimulus program was causing, and would continue to cause, interest rates to soar and prevent a recovery.

Austerity created the gratuitous über-Depression in the Eurozone’s periphery. U.S. interest rates have fallen to record lows. Ferguson admitted recently that stimulus had not produced his predicted surge in interest rates and that austerity in response to the Great Recession proved self-destructive. That was fine, but Ferguson could not leave it there. He added three points got him trouble – and those three points prompted Ferguson’s latest and greatest of own goals. First, Ferguson tried to reinvent the history of the position he took during the 2009 debates with Krugman.

Second, having agreed that Keynes had proven correct and Ferguson had again been proven incorrect in his predictions, Ferguson proceeded to continue to demonize Keynes as the cause of much of the West’s supposed degeneration. This is more than passing strange because it is Ferguson’s policies that have proved disastrous and Keynes’ policies that have proven correct.

Third, Ferguson responded furiously on March 6, 2013 to Krugman’s article pointing out Ferguson’s effort to air brush out of history Ferguson’s history of predictive failure. Ferguson’s cri de cœur is so delectable because it sends a frisson through one’s body to see such naked hypocrisy and whining in print from the self-proclaimed champion of American military adventure designed to create and expand a new American empire and a writer whose works are now redolent of innuendo.

“In my view Paul Krugman has done fundamental damage to the quality of public discourse on economics. He can be forgiven for being wrong, as he frequently is–though he never admits it. He can be forgiven for relentlessly and monotonously politicizing every issue. What is unforgivable is the total absence of civility that characterizes his writing. His inability to debate a question without insulting his opponent suggests some kind of deep insecurity perhaps the result of a childhood trauma. It is a pity that a once talented scholar should demean himself in this way.”

Ferguson, trained as a historian, uses innuendo to make up a (self) “suggest[ed]” history to smear a critic who (1) proved correct, (2) proved Ferguson incorrect, and (3) correctly called out Ferguson’s effort to change history to mislead readers about point #2. But what sends the frisson through your body when you read Ferguson’s effort to smear Krugman is Ferguson’s naked hypocrisy – and his blindness to it. As with his repeated efforts to smear Keynes, Ferguson’s attempt to smear Krugman reveals everything important and true about Ferguson and nothing important or true about Keynes or Krugman. The nice thing about Ferguson is that despite the adage that “practice makes perfect” he is getting ever cruder and more self-destructive in his efforts to smear those with whom he disagrees.

Black goes on to gut Ferguson….read the rest.

But back to what Krugman was writing about: he gives 5 other instances in which a conservative critique of Keynesian economics failed miserably. He finishes with an open mocking of Ferguson:

So, if I were Ferguson I guess I’d have to seek some kind of psychosexual explanation here. I would note that none of these guys has a beard. Masculinity issues?

May 8, 2013

## Couda-Wouda-Shouda

Workout notes 51:04 for my hilly 5.1 mile Cornstalk course; perfect weather; this is the best time of the year to be outside. But I was heavy legged from the start.

Posts
Monday Morning Quaterbacking
Some events are all but impossible to foresee, no matter how much data you gather: (via Bruce Schneier)

The FBI and the CIA are being criticized for not keeping better track of Tamerlan Tsarnaev in the months before the Boston Marathon bombings. How could they have ignored such a dangerous person? How do we reform the intelligence community to ensure this kind of failure doesn’t happen again?
It’s an old song by now, one we heard after the 9/11 attacks in 2001 and after the Underwear Bomber’s failed attack in 2009. The problem is that connecting the dots is a bad metaphor, and focusing on it makes us more likely to implement useless reforms.
Connecting the dots in a coloring book is easy and fun. They’re right there on the page, and they’re all numbered. All you have to do is move your pencil from one dot to the next, and when you’re done, you’ve drawn a sailboat. Or a tiger. It’s so simple that 5-year-olds can do it.
But in real life, the dots can only be numbered after the fact. With the benefit of hindsight, it’s easy to draw lines from a Russian request for information to a foreign visit to some other piece of information that might have been collected.
In hindsight, we know who the bad guys are. Before the fact, there are an enormous number of potential bad guys. [...]

Piling more data onto the mix makes it harder, not easier. The best way to think of it is a needle-in-a-haystack problem; the last thing you want to do is increase the amount of hay you have to search through. The television show Person of Interest is fiction, not fact.
There’s a name for this sort of logical fallacy: hindsight bias. First explained by psychologists Daniel Kahneman and Amos Tversky, it’s surprisingly common. Since what actually happened is so obvious once it happens, we overestimate how obvious it was before it happened.
We actually misremember what we once thought, believing that we knew all along that what happened would happen. It’s a surprisingly strong tendency, one that has been observed in countless laboratory experiments and real-world examples of behavior. And it’s what all the post-Boston-Marathon bombing dot-connectors are doing.
Before we start blaming agencies for failing to stop the Boston bombers, and before we push “intelligence reforms” that will shred civil liberties without making us any safer, we need to stop seeing the past as a bunch of obvious dots that need connecting.

Schneier concludes: there will always be incidents; it is impossible to stop them all.

In statistics, one can often back fit key factors AFTER the fact and come up with a model that…well…might “make sense” but utterly fail the next time.

Politics and Economics
Paul Krugman reminds the Very Serious People that, yes, there was political bickering over the last stimulus fight, but the politics was mostly from the right wing. All too often Republicans turn economic policy debates into a morality play of sorts.

So, why hasn’t President Obama been as effective as, say, President Franklin Roosevelt? Hint: look at how Congress was made up during President Roosevelt’s time. Look at it during President Johnson’s time. The caveat is that during those eras, the president did have to compromise with southern Democrats (who are now Republicans)

Science
Yes, some scientists behave badly and fake data.

But most don’t. Here are two good articles:
1. This is one about human brain cells which were grown in the laboratory and then put into mice...where they functioned…AS MOUSE brain cells.

A key type of human brain cell developed in the laboratory grows seamlessly when transplanted into the brains of mice, UC San Francisco researchers have discovered, raising hope that these cells might one day be used to treat people with Parkinson’s disease, epilepsy, and possibly even Alzheimer’s disease, as well as and complications of spinal cord injury such as chronic pain and spasticity.
“We think this one type of cell may be useful in treating several types of neurodevelopmental and neurodegenerative disorders in a targeted way,” said Arnold Kriegstein, MD, PhD, director of the Eli and Edythe Broad Center of Regeneration Medicine and Stem Cell Research at UCSF and co-lead author on the paper.
The researchers generated and transplanted a type of human nerve-cell progenitor called the medial ganglionic eminence (MGE) cell, in experiments described in the May 2 edition of Cell Stem Cell. Development of these human MGE cells within the mouse brain mimics what occurs in human development, they said.
Kriegstein sees MGE cells as a potential treatment to better control nerve circuits that become overactive in certain neurological disorders. Unlike other neural stem cells that can form many cell types — and that may potentially be less controllable as a consequence — most MGE cells are restricted to producing a type of cell called an interneuron. Interneurons integrate into the brain and provide controlled inhibition to balance the activity of nerve circuits.

Honey Bees and Pesticides
Yes, there is a bee die off and some have wondered if pesticides are to blame. Well, lots of things are to blame:

This week’s federally sponsored report about the mysterious disappearance of honeybees, known as colony collapse disorder, pointed to a complex combination of factors, ranging from parasitic mites to pesticides. But what are experts going to do about it? And what about the pesticides known as neonicotinoids, which are facing a ban in European countries?

In an email to NBC News, the Environmental Protection Agency says it’s speeding up its schedule for reviewing research on neonicotinoids and their potential effects on honeybees. It’s also fine-tuning existing regulatory practices and setting up new educational efforts to deal with colony collapse disorder. Here’s how the EPA responded to NBC News’ questions about the next steps to counter the honeybee die-off:
Are there any specific policy questions under consideration? Anything relating to the next steps in the wake of the report?

“EPA is working collaboratively with beekeepers, growers, pesticide manufacturers, seed manufacturers, equipment manufacturers, USDA and states to apply technologies to reduce pesticide dust drift, to advance best management practices, to improve enforcement guidance and to explore enhancing pesticide labeling in order to protect bees.
Specifically, EPA is:

Moving to change pesticide labels which will limit applications to protect bees and be more clear and precise.

Moving to add warning statements to each bag of pesticide-treated seed.

Issuing new enforcement guidance to federal, state and tribal enforcement officials to help them investigate bee kills.

Working with the equipment manufacturer and pesticide and seed industry and USDA to develop and apply technologies to reduce pesticide dust drift during planting seasons.

Working with USDA and other partners to promote Best Management Practices for growers and beekeeping via a new website, education and training modules for professional applicators, video, and other mechanisms

Finally, EPA is working on a range of national and international efforts to develop appropriate tests for evaluating both exposure to and effects of pesticides on insect pollinators. EPA is also requiring new lab and field studies to inform the risk assessment process to better understand pollinator risks.”

May 7, 2013

## Some corrections to common misconceptions

Economics:
Some conservatives say “ok, I understand why you might want to TRY government economic stimulus during a recession and practice austerity during boom times. But do these stimulus plans ever really go away?”

Start with stimulus programs. As it turns out, there have only been two significant spending stimulus programs in US history — by which I mean programs deliberately introduced to fight an economic downturn. One was FDR’s program, the WPA/CCC and all that; the other was the spending part of the Obama ARRA. So what happened to each of these programs? Why, not only did both go away; both went away too soon, with premature austerity hitting in 1937 and again in 2010. So much for stimulus that never ends.

OK, someone will reply, but what about aid programs like unemployment benefits and food stamps? Don’t they just ratchet up after each slump?

Um, no. Unemployment benefits as a percentage of GDP:

And yes, there is a chart showing debt (as percentage of GDP) going down during boom times.

Biology
You may have heard that a journeyman NBA player has “come out” as gay. It turns out that this player has a straight brother. So, some conservative thinks that this slams the door on there being a genetic factor in gayness:

There are some things that can be learned from Jason Collin’s stunt. For example, Mr. Collins’ announcement was a surprise to his former fiancé, Carolyn Moos, who played in the Women’s NBA. It was also a surprise to Jason’s twin brother, Jarron.
The media may mention Ms. Moos, but they may not want to mention Jason’s identical twin too often. Doing so may remind people that, unlike race, there is no genetic cause or “gay gene” driving homosexual behavior. If there were, Jason’s happily married, father of three, twin brother would also be involved in homosexuality, and he’s not.

1. “Identical twins” aren’t completely identical: there are a few differences and there are epigenetic factors as well. Proof: they don’t have identical fingerprints. And someone noted that his twin brother isn’t an NBA caliber athlete and there are genetic factors in athletic ability.

2. From the article:

It’s not, of course. The studies that have been done on identical twins are far from conclusive and the few that have been done have found that if one twin is gay, the probability that the other twin is gay ranges from a high end of just over 50% to a low end of around 20% or even lower (to be fair, all of those studies have shortcomings worth discussing). The point is that, while genes appear to play a role in one’s homosexuality, the exact nature of how and how much is still something scientists are trying to figure out.

Many people have trouble with probabilistic reasoning. Example: how many times have you heard someone dismissing the link of smoking to cancer saying “X smoked for 80 years and it didn’t harm him!”.

Social
Uh, people calling your ideas “dumb, “bigoted” or “hateful” does NOT mean that your group (religious or otherwise) is a “persecuted minority.” I just find it comical when Christians in the United States try to play the “victim card”. (now, it IS true that Christians are persecuted in other countries, but not in the US).

I think that many, including some Christians, think that they are entitled to be immune from scrutiny or criticism….while they provide plenty of it to others. I would shake my head and say “unbelievable”, but…well….I’ll just say it: I’ve NEVER, NEVER been a part of ANY group that didn’t take at least a bit of pleasure or comfort in saying “the rest of society doesn’t like us…doesn’t understand us…etc.”, though some groups do this more than others. It is probably a human thing to find excuses to “rally to the side”.

And to their credit, I haven’t seen Christians rioting because they didn’t like a book, cartoon or the way that Jesus was portrayed.

May 5, 2013

## P, NP and jobs…

Economy: job growth continues to be weak:

We remain in the gravitational pull of the Great Recession. The Labor Department reports that 165,000 new jobs were created in April – below the average gains of 183,000 in the previous three months.

We can’t achieve escape velocity. Since mid-2010, the three-month rolling average of job gains hasn’t dipped below 100,000 but has exceeded 250,000 jobs just twice.

This isn’t enough to ease the backlog of at least 3 million (estimates range up to 8 million) job losses since 2007, just before the Great Recession began. (And as I’ll point out in a moment, 2007 wasn’t exactly jobs nirvana.)

Moreover, most of the new jobs now being created pay less than the ones that were lost.

What’s wrong?

First, government is doing exactly the opposite of what it should be doing. It raised payroll taxes in January (ending the temporary tax holiday), thereby reducing the incomes of the typical family by about \$1,000 this year.

More damaging, government cut spending through the damnable sequester – thereby reducing overall demand for goods and services. (Direct government employment dropped another 11,000 in April.)

There’s also a deepening structural problem. All the economic gains from the recovery have gone to the very top, leaving the middle class (and everyone aspiring to join it) with a shrinking portion of the pie.

Consumers are still spending, but tentatively at best. And much of the spending is coming from the rich, whose stock portfolios have grown nicely. (The wealthiest 10 percent of Americans own 90 percent of all shares of stock.)

But the rich don’t spend as much of their earnings as everyone else. They save and speculate around the world wherever they can get the highest return.

We have a demand problem; businesses won’t hire unless there is demand to warrant it.

And no: we don’t always call for more spending; spending is for bust times; austerity is for boom times.

Mathematics
Every so often, someone announces that they have solved a big problem. What happens: mathematicians check the solution…and the vast majority of the time: it isn’t a correct solution. This recently happened with the $P \ne NP$ claim:

On August 6, 2010, a computer scientist named Vinay Deolalikar published a paper with a name as concise as it was audacious: “P ≠ NP.” If Deolalikar was right, he had cut one of mathematics’ most tightly tied Gordian knots. In 2000, the P = NP problem was designated by the Clay Mathematics Institute as one of seven Millennium Problems—“important classic questions that have resisted solution for many years”—only one of which has been solved since. (The Poincaré Conjecture was vanquished in 2003 by the reclusive Russian mathematician Grigory Perelman, who refused the attached million-dollar prize.)

A few of the Clay problems are long-standing head-scratchers. The Riemann hypothesis, for example, made its debut in 1859. By contrast, P versus NP is relatively young, having been introduced by the University of Toronto mathematical theorist Stephen Cook in 1971, in a paper titled “The complexity of theorem-proving procedures,” though it had been touched upon two decades earlier in a letter by Kurt Gödel, whom David Foster Wallace branded “modern math’s absolute Prince of Darkness.” The question inherent in those three letters is a devilish one: Does P (problems that we can easily solve) equal NP (problems that we can easily check)? [...]

If Deolalikar’s audacious proof were to hold, he could not only quit his day job as a researcher for Hewlett-Packard but rightly expect to enter the pantheon as one of the day’s great mathematicians. But such glory was not forthcoming. Computer scientists and mathematicians went at Deolalikar’s proof—which runs to dozens of pages of fixed-point logistics and k-SAT structures and other such goodies—with the ferocity of sharks in the presence of blood. The M.I.T. computational theorist Scott Aaronson (with whom I consulted on this essay’s factual assertions) wrote on his blog, “If Vinay Deolalikar is awarded the \$1,000,000 Clay Millennium Prize for his proof of P ≠ NP, then I, Scott Aaronson, will personally supplement his prize by the amount of \$200,000.” It wasn’t long before Deolalikar’s paper was thoroughly discredited, with Dr. Moshe Vardi, a computer-science professor at Rice University, telling the Times, “I think Deolalikar got his 15 minutes of fame.”

As Lance Fortnow describes in his new book, “The Golden Ticket: P, NP and the Search for the Impossible,” P versus NP is “one of the great open problems in all of mathematics” not only because it is extremely difficult to solve but because it has such obvious practical applications. It is the dream of total ease, of the confidence that there is an efficient way to calculate nearly everything, “from cures to deadly diseases to the nature of the universe,” even “an algorithmic process to recognize greatness.” So while a solution for the Birch and Swinnerton-Dyer conjecture, another of the Clay Millennium Prize problems, would be an impressive feat, it would have less practical application than definitive proof that anything we are able to quickly check (NP), we can also quickly solve (P).

For a “quick and dirty” of P versus NP, read this. Basically, the “P” stands for “polynomial time” and things that can either be checked or solved in polynomial time are more tractable. A problem is “P” if it can be solved in polynomial time and a problem is “NP” if a solution can be verified in polynomial time. Now it is “common sense” that it should be easier to check if a solution is correct than to come up with the correct solution to begin with, but as of right now, we don’t have a proof of this assertion.

To see what I am talking about: suppose you have a graph with nodes (think of this as a collection of cities in, say, a state with the roads between the cities being the segments of the graphs. If you want to find the shortest path in a graph from one vertex to another (say, find the shortest distance to get from Peoria to Chicago via roads), that is an example of a P problem; it can be readily solved in a reasonable amount of time.

On the other hand, if you wanted to solve the “travelling salesman problem” (find the shortest path to travel to ALL cities, hit each city only once and then return); that problem is “NP complete”: it might not be solvable in a reasonable amount of time in all cases.

May 3, 2013

## Republican Relativism and Something Good about Peoria

We do have first rank science being done here:

PEORIA —
It began in South Korea with a baby girl born without a windpipe. Unable to eat, drink or swallow on her own, she breathed through a tube inserted into her esophagus. She was a prisoner of the neo-natal intensive care unit, her father said.

The next chapter moved to Peoria, where about three weeks ago doctors performed the experimental surgery that could change her life and upend traditional organ transplantation.

Her name is Hannah, she’s almost 3 and she tasted her first lollipop Friday.

With an artificial windpipe made of plastic fibers bathed in Hannah’s own living cells, surgeons at Children’s Hospital of Illinois at OSF Saint Francis Medical Center successfully performed the first bio-engineered transplant on a child in the United States and the first bio-engineered trachea transplant on a child in the world. It also was the first stem cell therapy at the Catholic hospital.

“I cannot express what it means to me as a scientist, a man, a father,” said Dr. Paolo Macchiarini, the expert in regenerative medicine and tracheal transplantation from Sweden’s Karolinska Institute, who led the intricate 11-hour surgery on April 9.

Officials at Children’s Hospital and St. Francis announced the ground-breaking surgery Tuesday in a St. Francis conference room packed with media, either live or online, from throughout the world, plus the surgical team, researchers and businesses involved in building the expensive devices needed to regenerate human tissue into organs.

It doesn’t get more big-time than this folks!

Now in another “man-bites-dog” story, Paul Krugman points out something:

Brad DeLong directs me to a screed by Clive Crook, who sort of admits that I’ve been right about a lot of things but accuses me of being, well, shrill. Where have I heard that before?

But the Crook piece is actually useful, in an unintended way.

Brad points out, correctly, that Crook demands that I engage respectfully with reasonable people on the other side, but somehow fails to offer even one example of such a person. Not long ago Crook was offering Paul Ryan as an exemplar of serious, honest conservatism, while I was shrilly declaring Ryan a con man. But I suspect that even Crook now admits, at least to himself, that Ryan is indeed a con man.

But in a way the most revealing point here is Crook’s demand that I engage with

thoughtful, public-spirited Americans whose views on the proper scale and scope of government are different from his, yet worthy of respect.
Wait — is that what it’s about? If you read my original post, and Noah Smith’s KrugTron the Invincible post that inspired it, you’ll see that it’s all about macroeconomics — about questions like whether budget deficits in a depressed economy drive up interest rates and crowd out private investment, about whether printing money in a depressed economy is inflationary, about whether rising government debt has severe negative impacts on growth.

What do these questions have in common? They’re factual questions, with factual answers — and they have absolutely no necessary relationship to the “proper scale and scope of government”. You could, in principle, believe that we need a drastically downsized government, and at the same time believe that cutting government spending right now will increase unemployment. You could believe that discretionary policy of any kind is a mistake, and at the same time admit that the expansion of the Fed’s balance sheet isn’t at all inflationary under current circumstances.

So where’s this stuff about the scale of government coming from? Well, in practice it turns out that many conservatives are unwilling to concede that Keynesian macro has any validity to it, or that you can sometimes run the printing presses without unleashing runaway inflation, because they fear that any such admission would open the doors to much wider government intervention. But that’s exactly my point! They’re letting their views about how the world works be dictated by their vision of the kind of society they want; they’re politicizing their economic analysis. And that’s why they keep getting everything wrong.

They do the same in science; after all creationists and intelligent design advocates say that standard science “is only a theory; only one point of view”.

Conservatives might bash liberals for “moral relativism” but they are happy to use “relativism” themselves when the facts don’t fit their world view.

Oh yes, liberals do that to, but liberals don’t accuse conservatives of being “relativists”. But in fact, we should, because they are!

May 1, 2013

## Are Republican PACS and Super PACS fleecing their donors?

PRIOR to the 2012 general election, Paul Krugman wondered if people like Karl Rove were in it merely to make money for themselves:

The estimable Rick Perlstein has a fascinating essay about the seamless continuum from direct-mail marketing scams to direct-mail right-wing fundraising, and from there to the whole character of modern movement conservatism. Go read. I didn’t know, for example, that heroes of direct-mail fundraising like Richard Viguerie ended up delivering hardly any of the money to political causes; somehow it ended up swallowed by overhead, otherwise known as the fundraisers themselves.

And although Perlstein doesn’t make this point, I suspect that his analysis explains one of the great mysteries of 2012: the failure of the great Rove/Citizens United juggernaut to materialize.

Remember how Rove and others were supposed to raise vast sums from billionaires and corporations, then totally saturate the country with GOP messaging, drowning out Obama’s message? Well, they certainly raised a lot of money, and ran a lot of ads. But in terms of actual number of ads the battle has been, if anything, an Obama advantage. And while we don’t know what will happen on Tuesday, state-level polls suggest both that Obama is a strong favorite and, much more surprising, that Democrats are overwhelmingly favored to hold the Senate in a year when the number of seats at risk was supposed to spell doom.

Some of this reflects the simple fact that money can’t help all that much when you have a lousy message. But it also looks as if the money was surprisingly badly spent. What happened?

Well, what if we’ve been misunderstanding Rove? We’ve been seeing him as a man dedicated to helping angry right-wing billionaires take over America. But maybe he’s best thought of instead as an entrepreneur in the business of selling his services to angry right-wing billionaires, who believe that he can help them take over America. It’s not the same thing.

And while Rove the crusader is looking — provisionally, of course, until the votes are in — like a failure, Rove the businessman has just had an amazing, banner year.

Well, this blast from the past had Dick Morris POSSIBLY doing the same thing to small donors (who, frankly, have no business donating to PACs; it is better to give directly to the candidates instead)

Frankly, I wonder if the conservative punditry is really part of the scam.

Side note
This is a bit of economics. Paul Krugman explains the difference between the inflation rate that is announced on television (and used for cost of living calculations) and “core inflation” which is used by the Fed to help set monetary policy:

As I explained long ago, the idea behind core inflation is that not all prices behave the same. (In that post, I worried about deflation, which hasn’t happened; I’ve written a lot since about why). There are many “sticky” prices that are revised only occasionally; these prices cause inflation to have a lot of inertia, and are why disinflation can be so costly. But there are other prices that fluctuate a lot in the short run, and can cause overall inflation to jump around.

The idea of core inflation is to strip out the volatile prices to get a better measure of underlying trends. Core inflation is NOT used for things like cost of living adjustments, and it’s not the headline number in the news; so anyone who claims, with a knowing sneer, that the inflation number you hear is ignoring food and energy is just ignorant. Core is, however, what the Fed uses to assess monetary policy, because it believes that the headline number is too volatile, and it doesn’t want to overreact either to short-run inflation or short-run deflation.

You can see the two measures used side by side:

And here is a nice article that explains demand side economics:

Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family.

Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too.

And that’s what happened after the financial crisis of 2008. Many people suddenly cut spending, either because they chose to or because their creditors forced them to; meanwhile, not many people were able or willing to spend more. The result was a plunge in incomes that also caused a plunge in employment, creating the depression that persists to this day.

Why did spending plunge? Mainly because of a burst housing bubble and an overhang of private-sector debt — but if you ask me, people talk too much about what went wrong during the boom years and not enough about what we should be doing now. For no matter how lurid the excesses of the past, there’s no good reason that we should pay for them with year after year of mass unemployment.

So what could we do to reduce unemployment? The answer is, this is a time for above-normal government spending, to sustain the economy until the private sector is willing to spend again. The crucial point is that under current conditions, the government is not, repeat not, in competition with the private sector. Government spending doesn’t divert resources away from private uses; it puts unemployed resources to work. Government borrowing doesn’t crowd out private investment; it mobilizes funds that would otherwise go unused.

Now, just to be clear, this is not a case for more government spending and larger budget deficits under all circumstances — and the claim that people like me always want bigger deficits is just false. For the economy isn’t always like this — in fact, situations like the one we’re in are fairly rare. By all means let’s try to reduce deficits and bring down government indebtedness once normal conditions return and the economy is no longer depressed. But right now we’re still dealing with the aftermath of a once-in-three-generations financial crisis. This is no time for austerity.

He then goes on to say: “ok, why should you believe me?” and show how those who prescribe austerity have been spectacularly wrong.

April 30, 2013

## Floods, internet taxes and other topics

Taxes: we are seeing some cracks in the Republican caucus. Some businesses are putting pressure on Republicans in Congress to back the internet sales tax laws. I agree with the business types who say that this will level the playing field.

Infrastructure
Michael Reuter wrote an interesting op-ed in the Peoria Journal Star about preparing for flooding. The gist: these big floods ARE more common and by making some changes (e. g. giving the river some wetlands where it can spread out a bit in places and therefore take up some of the water volume) we will be better off in the future and, perhaps, even same money in the long run:

[...]2. It’s time for a different, coordinated, system-wide approach that reduces losses while improving the health of great rivers like the Illinois. In the future we must be proactive and innovative. There is a payoff: A study by the National Institute of Building Sciences estimated that for every dollar we spend on hazard mitigation efforts, we save \$4 in future damages.

3. Work with nature, not against it. We need dams and levees but nature is an essential part of the solution, too. Large cities are demonstrating how to use nature to slow stormwater runoff with less money than required for hard infrastructure. On the Lower Mississippi, the U.S. Army Corps of Engineers has opened floodplains and floodways to create room for the river during catastrophic events – an approach that avoided devastating losses to farmlands and urban areas in 2011.

4. Demonstrate potential solutions. While The Nature Conservancy is focused on developing and maintaining critical fish and wildlife habitat at Emiquon, part of our plan is to provide room for the river to help curtail damages during major floods. Every flood is different, but in general, by allowing floodwaters to spread out onto this vast area, Emiquon can help lower flood levels in nearby communities, including Peoria some 40 miles upstream. Even a few inches can prevent millions in damages, but ultimately additional floodplain areas along the Illinois and other rivers are needed. Farsighted public policies would provide fair economic incentives to those farmers and landowners who want to be part of the solution, potentially saving taxpayers substantial money.

Note: the economic calculations aren’t that easy, given that flooding is a stochastic event and we have to take the time value of money into effect: spending X now to prevent damage in the future (thereby saving repair and recovery costs) might save us money in the long run, but how much (if at all) depends on how long it is before the next major flood.

Speaking of disasters: Matthew Yglesias caught a lot of heat by suggesting that not every foreign country have their businesses and factories held up to the same safety standards of the United States. Yes, extra safety can be thought of as a luxury and one can overdo it. But his piece was related to the collapse of a Bangladesh factory which killed 100′s. Here he explains himself and what he was thinking. And yes, the factory in question didn’t follow local codes.

On the other end
A Texas member of the House of Representatives wonders if windmills will lead to more warming of the earth? His reasoning: windmills take energy out of the wind, which cools the planet. Or something.

My beef: why didn’t he run his idea past an engineer or scientist first? Yes, windmills take energy from the wind (and energy to the wind is being supplied by the sun) and it is nice to see what the potential “upstream” and “downstream” energy effects are. But people will look a lot smarter if they consult an expert prior to opening their mouths. Instead, they don’t feel the need to consult.

President Obama: 2013 Correspondence Dinner:

The White House Correspondents’ Association dinner on Saturday night gave President Barack Obama a chance to take humor-laced shots at those things in Washington that rub him the wrong way — Republicans in Congress, the media, his critics — and he also directed plenty of friendly fire at himself.
“I look in the mirror and say, ‘I’m not the strapping young Muslim socialist that I used to be,’” Obama quipped at one point, reflecting on how he’s aged into a second term. [...]

“Some folks still don’t think I spend enough time with Congress. ‘Why don’t you get a drink with Mitch McConnell?’ they ask,” Obama said. “Really? Why don’t you get a drink with Mitch McConnell?” The line earned Obama one of his loudest applauses of the evening from the 2,700 in attendance at the Washington Hilton.
Along the same lines, Obama vowed to take his “charm offensive” on the road to “a Texas barbecue with Ted Cruz, a Kentucky bluegrass concert with Rand Paul and a book burning with Michele Bachmann.”

Senator McConnell had a sense of humor and posted this photo:

Some Paul Krugman
There is a difference between cherry picking facts that support your cause and ignoring ones that don’t and picking what you write about:

One criticism I face fairly often is the assertion that I must be dishonest — I must be cherry-picking my evidence, or something — because the way I describe it, I’m always right while the people who disagree with me are always wrong. And not just wrong, they’re often knaves or fools. How likely is that?

But may I suggest, respectfully, that there’s another possibility? Maybe I actually am right, and maybe the other side actually does contain a remarkable number of knaves and fools.

The first point to notice is that I do, in fact, perform a kind of cherry-picking — not of facts, but of issues to write about. There are many issues on which I see legitimate debate, from the long-run trend of housing prices to the effects of immigration on wages. And in happier times I would probably write more about such issues than I do, and the tone of my column and blog would be a lot more genteel. But right now I believe that we’re failing miserably in responding to economic disaster, so I focus my writing on attacking the doctrines and, to some extent, the people responsible for this wrong-headed response.

But can the debate really be as one-sided as I portray it? Well, look at the results: again and again, people on the opposite side prove to have used bad logic, bad data, the wrong historical analogies, or all of the above. I’m Krugtron the Invincible!

Am I (and others on my side of the issue) that much smarter than everyone else? No. The key to understanding this is that the anti-Keynesian position is, in essence, political. It’s driven by hostility to active government policy and, in many cases, hostility to any intellectual approach that might make room for government policy. Too many influential people just don’t want to believe that we’re facing the kind of economic crisis we are actually facing.

And Krugman really doesn’t think highly of President Bush:

I’ve been focused on economic policy lately, so I sort of missed the big push to rehabilitate Bush’s image; also, as a premature anti-Bushist who pointed out how terrible a president he was back when everyone else was praising him as a Great Leader, I’m kind of worn out on the subject.

But it does need to be said: he was a terrible president, arguably the worst ever, and not just for the reasons many others are pointing out.

From what I’ve read, most of the pushback against revisionism focuses on just how bad Bush’s policies were, from the disaster in Iraq to the way he destroyed FEMA, from the way he squandered a budget surplus to the way he drove up Medicare’s costs. And all of that is fair.

But I think there was something even bigger, in some ways, than his policy failures: Bush brought an unprecedented level of systematic dishonesty to American political life, and we may never recover.

Think about his two main “achievements”, if you want to call them that: the tax cuts and the Iraq war, both of which continue to cast long shadows over our nation’s destiny. The key thing to remember is that both were sold with lies.

I suppose one could make an argument for the kind of tax cuts Bush rammed through — tax cuts that strongly favored the wealthy and significantly increased inequality. But we shouldn’t forget that Bush never admitted that his tax cuts did, in fact, favor the wealthy. Instead, his administration canceled the practice of making assessments of the distributional effects of tax changes, and in their selling of the cuts offered what amounted to an expert class in how to lie with statistics. Basically, every time the Bushies came out with a report, you knew that it was going to involve some kind of fraud, and the only question was which kind and where.

I do object to the phrase: “rammed through”: this is what people say when they are on the losing side of a vote. On these issues, President Bush was a good enough politician to sell this deal (the economic one).

http://krugman.blogs.nytimes.com/2013/04/27/the-ignoramus-strategy/

April 29, 2013

## Consequences

GET THAT-THERE GOVERNMENT OFF OF OUR BACKS!

What happens: if the government doesn’t enforce safety guidelines, then businesses and factories get in a race to the bottom; after all, it is tough to compete with someone who has no safety criteria to meet.

So this is a good reminder of one of the consequences of such policies.

April 29, 2013

## Some politics

The George W. Bush library opened.

Brutal, but fair.

Background Checks
This issue isn’t dead in the Senate…yet. The House will be more problematic, unless we can get some GOP votes in the Senate.

Austerity
Paul Krugman lays out the data on “debt as a percentage of GDP versus growth”. There is a weak correlation between debt and slow growth but:

So there’s a clear negative correlation between debt and growth, although no cliff at 90 percent or actually anywhere. The absence of a cliff is crucial: whereas R-R like to say that debt going above 90 percent cuts your growth rate by 1 percentage point, what we actually find is that raising the debt ratio by 45 points cuts growth by 1 point, which is a very different implication.

As Brad DeLong has been pointing out, numbers like that, even if you take them as causal, are a very weak argument for austerity in a liquidity trap.

But we probably don’t have causation though:

So, the alleged relationship is driven by (a) fast growth in the former Axis powers, which had very little debt and were recovering from war damage, after World War II; and slow growth in Japan and Italy since 1990. The latter cases were clearly a matter of growth slowdowns leading to higher debt, not the other way around; the former a case of spurious correlation.

This is not stuff that should be having any influence on policy.

April 26, 2013