Sunday, June 26, 2011

The record of RepubliCON false predictions on raising taxes.

Paul Krugman points to this revealing history of RepubliCON dire predictions about raising taxes: first with Reagan's own tax increases, and then with Clinton's tax increases. In both cases expansions followed. Since both tax increases in the last 30 years were followed by greater economic growth, treating it as a sacred truth that tax increases tank the economy is either a lie or stupid. It is particularly interesting that these observations come from Bruce Bartlett, one of the builders of supply side economics, who repudiates it in its current form. He worked for Ron Paul and Jack Kemp, and wrote the Kemp-Roth tax bill, the foundation of Reagan tax cuts.

Wednesday, June 22, 2011

Soros' brilliant analysis of what's gone wrong in American politics and economics

Soros' Introduction to a book on his philanthropy appeared in the New York Review of Books. It includes an incisive critique of The Open Society and its Enemies, by Karl Popper, under whom I, like Soros, studied. More importantly, it reveals why the collapse of political debate is a key problem for US democracy. Here is the last part of it, which I quote at length:

How can open society protect itself against dangerously deceptive arguments? Only by recognizing their existence and their power to influence reality by influencing people’s perceptions. People’s thinking is part of the reality they need to understand, and that makes the understanding of reality much harder than the philosophers of the Enlightenment imagined. They envisioned reason as something apart from reality, acting as a searchlight illuminating it. That is true for natural science but not human affairs. In political discourse we must learn to give precedence to the understanding of reality; otherwise the results will fail to conform to our expectations. Karl Popper took it for granted that the primary purpose of political discourse is the pursuit of truth. That is not the case now; therefore we must make it so. What was a hidden assumption in Popper’s argument must be turned into an explicit requirement for open society to prevail.

I thought I had a convincing argument in favor of the truth. Look at the results of the Bush policies: they were designed to demonstrate America’s supremacy, and they achieved the exact opposite; American power and influence suffered a precipitous decline. This goes to show, I argued, that it is not enough to manipulate perceptions; it is important to understand how the world really works. In other words, the cognitive function must take precedence over the manipulative function. That is the additional requirement I put into my definition of open society, but obviously it did not have an effect on the public that reelected Bush in 2004.

The election of President Obama in 2008 sent a powerful message to the world that the US is capable of radically changing course when it recognizes that it is on the wrong track. But the change was temporary: his election and inauguration were the high points of his presidency. Already the reelection of President Bush had convinced me that the malaise in American society went deeper than incompetent leadership. The American public was unwilling to face harsh reality and was positively asking to be deceived by demanding easy answers to difficult problems.

The fate of the Obama presidency reinforced that conviction. Obama assumed the presidency in the midst of a financial crisis whose magnitude few people appreciated, and he was not among those few. But he did recognize that the American public was averse to facing harsh realities and he had great belief in his own charismatic powers. He also wanted to rise above party politics and become—as he put it in his campaign speeches—the president of the United States of America. Consequently, he was reluctant to forthrightly blame the outgoing administration and went out of his way to avoid criticism and conflict. He resorted to what George Akerlof and Robert Shiller called the “confidence multiplier” in their influential book Animal Spirits. Accordingly, in the hope of moderating the recession, he painted a rosier picture of the economic situation than was justified.

The tactic worked in making the recession shorter and shallower than would have been the case otherwise, but it had disastrous political consequences. The confidence multiplier is, in effect, one half of a reflexive feedback loop: a positive influence on people’s perceptions can have a positive feedback in its effects on the underlying economic reality. But if reality, for example the unemployment rate, fails to live up to expectations, confidence turns to disappointment and anger; that is the other half of the reflexive feedback loop, and that is what came to pass.

The electorate showed little appreciation of Obama for moderating the recession because it was hardly aware of what he had done. By avoiding conflict Obama handed the initiative to the opposition, and the opposition had no incentive to cooperate. The Republican propaganda machine was able to convince people that the financial crisis was due to government failure, not market failure. According to the Republican narrative, the government cannot be trusted and its role in the economy—both regulation and taxation—should be reduced to a minimum.

he Republicans had good reason to take this line: it is a half-truth that advanced their political agenda. What is surprising is the extent of their success. The explanation lies partly in the power of Orwell’s Newspeak and partly in the aversion of the public to facing harsh realities.

On the one hand, Newspeak is extremely difficult to contradict because it incorporates and thereby preempts its own contradiction, as when Fox News calls itself fair and balanced. Another trick is to accuse your opponent of the behavior of which you are guilty, like Fox News accusing me of being the puppet master of a media empire. Skillful practitioners always attack the strongest point of their opponent, like the Swiftboat ads attacking John Kerry’s Vietnam War record. Facts do not provide any protection, and rejecting an accusation may serve to have it repeated; but ignoring it can be very costly, as John Kerry discovered in the 2004 election.

On the other hand, the pursuit of truth has lost much of its appeal. When reality is unpleasant, illusions offer an attractive escape route. In difficult times unscrupulous manipulators enjoy a competitive advantage over those who seek to confront reality. Nazi propaganda prevailed in the Weimar Republic because the public had been humiliated by military defeat and disoriented by runaway inflation. In its own quite different way, the American public has been subjected to somewhat comparable experiences, first by the terrorist attacks of September 11, and then by the financial crisis, which not only caused material hardship but also seemed to seal the decline of the United States as the dominant power in the world. With the rise of China occurring concurrently, the shift in power and influence has been dramatic.

The two trends taken together—the reluctance to face harsh reality coupled with the refinement in the techniques of deception—explain why America is failing to meet the requirements of an open society. Apparently, a society needs to be successful in order to remain open.

What can we do to preserve and reinvigorate open society in America? First, I should like to see efforts to help the public develop an immunity to Newspeak. Those who have been exposed to it from Nazi or Communist times have an allergic reaction to it; but the broad public is highly susceptible.

Second, I should like to convince the American public of the merits of facing harsh reality. As I earlier wrote, I have from my childhood been drawn to contending with what may seem insurmountable challenges. Those in charge of Fox News, Rupert Murdoch and Roger Ailes, have done well in identifying me as their adversary. They have done less well in the methods they have used to attack me: their lies shall not stand and their techniques shall not endure.

But improving the quality of political discourse is not enough. We must also find the right policies to deal with the very real problems confronting the country: high unemployment and chronic budget and trade deficits. The financing of state and local governments is heading for a breakdown. The Republicans have gained control of the agenda, and they are promoting a misleading narrative: everything is the government’s fault. The Democrats are forced into fighting a rearguard battle, defending the opposite position.

We need to undertake a profound rethinking of the workings of our political system and recognize that half-truths are misleading. The fact that your opponent is wrong does not make you right. We must come to terms with the fact that we live in an inherently imperfect society in which both markets and government regulations are bound to fall short of perfection. The task is to reduce the imperfections and make both private enterprise and government work better. That is the message I should like to find some way to deliver.

The lie of the great Reagan economic growth

Krugman exposes the lie of a great spurt of economic growth under Reagan. It was under Clinton.

Monday, June 13, 2011

Republicons didn't get memo on death of supply side economics

Ezra Klein, in the Washington Post, links to interesting article on supply side economics. Not surprising in being new, but in who says it: Bruce Bartlett, one of the key people advising Jack Kemp and Reagan. Here he says that supply side economics has turned into a completely nutty theory, and that Keynes was one of the best economists.

It looks like none of the current Republicons, including the candidates for president got the memo.

Wednesday, June 8, 2011

Believing is Seeing

The problems with the journalistic enterprise are legend..esp. as a broadcast medium. The accent is upon 24 hour turnaround, and upon hyperbole and sensationalism. The old paradigm, "seeing is believing" seemed to imply some type of objective, "evidence-based" standard.....but the reality increasingly appears to suggest that the chain of causation works in the other direction, i.e. "believing is seeing"esp. in the political realm. Thus - to cite one compelling current example - in the face of unambiguous evidence (based on BLS "establishment" data) that the Bush administration's job creation record was beyond anemic (total non-farm job losses of 597,000, 681,000,and 741,000 respectively in the last three months of his administration) vs net job growth of 194,000, 232,000, and 54,000 for the three months of March, April, and May have two competing interpretations of these facts:

Republicons become studiously ahistorical and see Obama's "recovery" as an unmitigated disaster. They refuse to acknowledge ANY of the contextual lead-up to it (namely the twin Bush decisions to both enter into a prohibitively expensive elective war, and to cut taxes in both 2001 and 2003 - a phenomenon without historic precedent in this nation's history EVER). The relevance of these decisions to the current fiscal deficit should be obvious to all (especially since all major "spikes" in fiscal deficits in the country's history follow: a) the Civil War; b) World War I; and c) World War II )...

Add to this the journalistic propensity now - ESPECIALLY in the absence of any strong data-oriented, fact-gathering norms - (exacerbated by quick turn-around requirements of contemporary journalism) and you have a recipe for disaster. Given few facts, the enterprise boils down to "he said"-"she said" in which journalists seek to "balance" their reportage - not to provide a strong objective basis for them. Thus, creationist "science" is accorded a false intellectual equivalence with evolutionary theory - in the interest of balance !!! Thus, comparative analyses of health care systems (virtually all of which demonstrate the cost effectiveness of universal health care systems in leading European nations) must share the stage with Heritage Foundation and Cato Institute analyses who persist in portraying fee-for-service capitalist approaches as fine and dandy...even if $40 million go uninsured. Regrettably, this is the type of balance which will rapidly turn this country into a third rate power.

Monday, June 6, 2011

Balanced and Untrue

In writing about some recent craziness of Haley Barbour, Krugman laments "If you say that one of our two major parties has gone completely off the deep end, you’re considered shrill and extreme. But if you don’t say that, if you pretend that someone like Barbour is a reasonable guy with somewhat different views, then you’re fundamentally lying about reality."

I linked earlier to the article on the press treatment of the "death panels" lie. Its authors made a related point: print journalists sometimes pointed out the lie, but often did not in an effort to appear "balanced." And had that article looked at television, I think they would find a far lower percentage that have pointed out the lie.

This shows that something is broken in journalism. The first duty of journalists should be to the truth, not to balance. When journalists avoid looking for and stating the truth in order to be balanced they are doing the public a grave disservice. Something is broken in much of the TV news.

Friday, June 3, 2011

No shame—open duplicity.

Steven Colbert satirizes the open duplicity of the Republi-con. What is remarkable is that they introduce a bill saying it must be defeated, and then assure Wall Street that they are not serious about sending the country into default. This shows nakedly that they think government is all about sloganeering, and it doesn't matter if they are lying.