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November 28, 2012

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Posted: 04 Nov 2012 12:06 AM PDT

Shiller: Businessmen as Presidents

Posted: 03 Nov 2012 04:43 PM PDT

Robert Shiller:

Businessmen as Presidents: A Historical Circle, by Robert Shiller, Commentary, NY Times: With so much attention on the income divide between the top 1 percent and the other 99 percent..., it might seem that having enormous business wealth wouldn't be a great qualification for election as president. And if such a candidate pledged to keep taxes low for the wealthy, he would appear to have no chance at all in a troubled economy.
Mitt Romney's campaign has been showing that these factors may not be insurmountable. ... Still, Americans haven't elected many businessmen as presidents. The principal examples come from the Roaring '20s... You might think that the current economic slump would drain support for businessmen, as it did in the Great Depression. But there are differences. ...
For many voters this year, a central question is how to maintain what they consider as America's greatness, its exceptionalism. They are concerned with both lowering the unemployment rate and creating good jobs — jobs that are exciting and can create substantial wealth. This attitude may be improving the odds for businesspeople seeking office.
If elected, Mr. Romney wants to enforce a general pro-business mandate and to bolster business confidence. That is quite possible. Still, any such confidence boost will most likely be offset by his promise to drastically cut government spending. The weight of evidence from studies of fiscal austerity indicates that, at least in times like these, it is very costly to economic activity. Big cuts now could easily plunge the country back into a recession.
Yes, many Americans admire business success and believe that business experience is a plus in a president. But Americans have usually also understood that other factors — like wise policies and strong leadership ability — are much more important.

He gives more credit to the "bolster business confidence" claim than I would.

The Long-Run Harm of 'Putting Ideology Ahead of Reality'

Posted: 03 Nov 2012 11:45 AM PDT

Republicans attack anyone or anything that disagrees with them. The attempt to politicize the Congressional Research Service is the latest example:

Ideology Over Reality, by Andrew Rosenthal, Editorial, NY Times: In a brazen example of putting ideology ahead of reality, Senate Republicans seem to have pressured the Congressional Research Service to withdraw a report debunking conservative economic orthodoxy. Cutting tax rates at the top appears "to have little or no relation to the size of the economic pie," the report said. "However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution." So charging the rich lower tax rates doesn't promote economic growth; it merely increases economic inequality.
The CRS is a highly respected, independent agency that prepares reports for members of Congress and routinely issues findings that disappoint or even irritate their clients, who usually just grin and bear it, or at least bear it. But Congressional Republicans seem to think that the CRS should function like Pravda. In recent months, Republicans have been on a paranoid tear. They attacked the private and equally authoritative Tax Policy Center because it bothered to analyze Mitt Romney's tax plan and found that it's pretty much impossible to cut taxes by 20 percent without increasing the deficit. And they claimed there was a conspiracy at the Bureau of Labor Statistics when it reported last month that the unemployment rate had dipped below 8 percent. ...

The attacks on the Fed have also been harmful, and, of course, it doesn't end there. Republicans attack academic research whenever it doesn't agree with them, e.g. the attempt to portray global warming research as manufactured to support ideological beliefs rather than the science that it is. This behavior undermines our ability to provide fact-based, independent assessments and research on important issues. All that matters to Republicans is their short-run political interests, there's little thought or concern about the longer-run harm their actions cause (their approach to global warming is a good example of this behavior, both in terms of the climate risks and the attempt to undermine academic research/researchers). There's little sense of obligation to the social good, little worry about harming important institutions, only their narrow, short-run, self-interest matters. Even when they proclaim long-run interests -- "what about the future of our children?!" -- it is really about the narrow, powerful interests in control of the party (in this case, it's an attempt to use fear about the future to get support for cuts to social programs now, which in turn support tax cuts for the wealthy, but see here on "the myth of the exploding safety net"). And of course, there are also attacks on individuals if they say the wrong thing (even children can come under attack).

Paul Krugman adds:

The Ultimate Zombie Idea: Zombie ideas — a phrase I originally saw in the context of myths about Canadian health care — are policy ideas that keep being killed by evidence, but nonetheless shamble relentlessly forward, essentially because they suit a political agenda.
The controversy over the withdrawal by the Congressional Research Service of a report showing no connection between tax cuts for the rich and economic growth is a reminder that in U.S. politics, at least, the tax cuts/growth notion is the ultimate zombie idea.
I mean, when the CRS report first came out I didn't write about it because it was basically old news... Nobody has ever been able to find clear evidence of a link between high-end tax cuts and growth. ...
And the tax-cut faithful have delivered one forecasting debacle after another. I'm old enough to remember not just the predictions that the Bush tax cuts would unleash a huge economic boom, but the claims that Clinton's 1993 tax hike would cause a deep depression.
Yet the tax-cut dogma remains politically intact, and it is at the core of Romney's alleged plan for recovery.
There is, of course, no mystery here: just ask who benefits from the dogma that ever-lower taxes on the wealthy are just what we need, and you understand why there is always plenty of money for both economists and politicians who promote the dogma.
But it's kind of sad to realize that our public discourse is so obviously, nakedly corrupt.

It's also kind of sad that political polarization and the quest for power is doing so much harm to our ability to provide fact-based, reliable, politically unbiased information to the public. People don't know who they can trust anymore, and the deliberate harm that Republicans have caused is a big part of the reason why.

'The Scapegoats of Racism and Immigration'

Posted: 03 Nov 2012 10:30 AM PDT

Is Robert Reich correct?

... The biggest challenge ahead isn't just to get jobs back. They're coming back. It's to raise the wages of most Americans.
This isn't a new challenge. The median wage has been flat for three decades, when you adjust for inflation. Since 2000 it's been dropping.
What does all of this have to do with the upcoming election? Plenty. Some of the biggest wage losses over the last several decades have been among white men who haven't attended college. And, not coincidentally, they're the ones who have been abandoning the Democrats in droves.
Three decades ago, non-college white men were solidly Democratic. Many of them were unionized. They had jobs that delivered good middle-class incomes.
But over the last three decades they stopped believing the Democratic Party could deliver good jobs at decent wages.
Republicans have done no better for them on the wages — in fact many policies touted by the GOP, such as its attack on unions, have accelerated the downward wage trend.
But Republicans have offered white non-college males the scapegoats of racism and immigration — blaming, directly or indirectly, blacks and Latinos — and the solace of right-wing evangelical Christianity. Absent any bold leadership from Democrats, these have been enough.

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