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January 19, 2015

Latest Posts from Economist's View

Latest Posts from Economist's View

Paul Krugman: Hating Good Government

Posted: 19 Jan 2015 12:24 AM PST

Why do conservatives hate government?:

Hating Good Government, by Paul Krugman, Commentary, NY Times: It's now official: 2014 was the warmest year on record. You might expect this to be a politically important milestone. ... So will the deniers now concede that climate change is real?
Of course not. Evidence doesn't matter for the "debate" over climate policy... And this situation is by no means unique. Indeed,... it's hard to think of a major policy dispute where facts actually do matter; it's unshakable dogma, across the board. And the real question is why.
Before I get into that, let me remind you of some other news that won't matter.
First, consider the Kansas experiment. Back in 2012 Sam Brownback, the state's right-wing governor, went all in on supply-side economics: He drastically cut taxes, assuring everyone that the resulting boom would make up for the initial loss in revenues. Unfortunately..., his experiment has been a resounding failure. ... So will we see conservatives scaling back their claims about the magical efficacy of tax cuts...? Of course not. ...
Meanwhile, the news on health reform keeps ... being more favorable than even the supporters expected. ...
All this is utterly at odds with dire predictions that reform would lead to declining coverage and soaring costs. So will we see any of the people claiming that Obamacare is doomed ... revising their position? You know the answer.
And the list goes on..., a big chunk of America's body politic holds views that are completely at odds with, and completely unmovable by, actual experience. ...
The question, as I said at the beginning, is why. Why the dogmatism? Why the rage...,why this hatred of government in the public interest? Well, the political scientist Corey Robin argues that most self-proclaimed conservatives are actually reactionaries. That is, they're defenders of traditional hierarchy — the kind of hierarchy that is threatened by any expansion of government, even (or perhaps especially) when that expansion makes the lives of ordinary citizens better and more secure. I'm partial to that story, partly because it helps explain why climate science and health economics inspire so much rage.
Whether this is the right explanation or not, the fact is that we're living in a political era in which facts don't matter. This doesn't mean that those of us who care about evidence should stop seeking it out. But we should be realistic in our expectations, and not expect even the most decisive evidence to make much difference.

Links for 01-19-15

Posted: 19 Jan 2015 12:06 AM PST

'It Can be Morning Again for the World’s Middle Class'

Posted: 18 Jan 2015 11:05 AM PST


It can be morning again for the world's middle class, by Lawrence Summers, FT [open link]:The most challenging economic issue ahead of us involves a group that will barely be represented at this week's annual Davos summit — the middle classes of the world's industrial countries..., no one should lose sight of the fact that without substantial changes in policy the prospects for the middle class globally are at best highly problematic.
First, the economic growth that is a necessary condition for rising incomes is threatened by the spectre of secular stagnation and deflation. ... Second, the capacity of our economies to sustain increasing growth and provide for rising living standards is not assured on the current policy path. ... Third, if it is to benefit the middle class, prosperity must be inclusive and in the current environment this is far from assured. ...
The experience of many countries and many eras shows that sustained growth in middle class living standards is attainable. But it requires elites to recognise its importance and commit themselves to its achievement. That must be the focus of this year's Davos.

'Driving the Obama Tax Plan: The Great Wage Slowdown'

Posted: 18 Jan 2015 09:50 AM PST

David Leonhardt:

Driving the Obama Tax Plan: The Great Wage Slowdown: The key to understanding President Obama's new plan to cut taxes for the middle class is the great wage slowdown of the 21st century. ... There is little modern precedent for a period of income stagnation lasting as long as this one. ...
The wage slowdown is the dominant force in American politics and will continue to be as long as it exists. ...
No politician, of either party, can quickly alter the basic forces behind the great wage slowdown. That's why Mr. Obama has begun talking about a tax cut for the middle class, to be financed by a tax increase on the affluent — who have continued to do quite well in recent years. It's also why several conservatives are talking about a cut in the payroll tax, the largest federal tax for most Americans.
And you can expect the 2016 presidential candidates to talk about middle-class tax cuts, too. ...

Links for 01-18-15

Posted: 18 Jan 2015 12:06 AM PST

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