Sunday, September 29, 2013

What Republicans should do…

Of course I have no standing whatever to advise anyone about how they should conduct their politics, or how they should pursue their political goals.  But the current course on which Ted Cruz and his acolytes---or maybe his victims---in the house are set seems to me, and to almost everyone, as dangerous to the country, to the economy of course, and drastically dangerous to themselves.  They disagree.  We’ll see, I guess.

But I really don’t want to write about the House Republicans or Obamacare; they will do what they will do, and no amount of warning will slow them down.  The Washington Post this morning quoted Michelle Bachmann saying that this threat to the Government of the United States (the budget issue), and later in the month to the economy of the world (the debt ceiling issue), is exactly what the Tea Party conservatives wanted to do, and that they have arrived exactly where they wanted to be. 

Ok.  Maybe.  And there is nothing I can do or say that will change the next month.  But in a longer sense, beyond the present turmoil, there is a nit I need to pick. 

I live in a blue state, and in a very blue district in that state.  We aren’t frozen in a fixed party devotion; our representative in Congress for many years---8 terms---was a Republican named Connie Morella, but she was a moderate, and in fact a charming moderate.   People here voted for her at the same time that they were voting for Democrats for every Senate seat, for Governor, for President.   She was a brand of Republican that is currently extinct.  That is not just my opinion.  That is Connie Morella’s opinion. 

So of course, at the last Labor Day parade through Kensington, the town where I live, dozens of Democratic politicians who hold office or want to hold office drove by, walked by, waved themselves by, threw candy to the children, and generally behaved like politicians in a safe town.  And there was also one Republican running for office who carried a sign that read, if I’m remembering it right:

“Fiscal Responsibility, Low Taxes”. 

Yes.  That seems to be the Republican stand on the issues.  But in this blue district in this cobalt blue state, where the majority of the people vote for Democrats most of the time, I doubt if I could find a single person who disagrees with that slogan.  I wanted to do a quick poll, asking each person I met whether they favored fiscal irresponsibility, or taxes that are high just for the sake of having high taxes. 

So my nit is this: the slogan above has no bearing on the distinction between Republican stands on issues and Democratic stands on issues.  No matter which side you ask, they will tell you that they are being as fiscally responsible as it is possible to be while still meeting the proper responsibilities of government.  And they will tell you that they are trying to keep taxes as low as they can keep them while still being fiscally responsible. 

Republicans need a much more substantive slogan if they want to get votes from people with even moderate views: they need a slogan that distinguishes them from Democrats.  They have to tell us what they mean by “fiscal responsibility”, and why the policies that Democrats are proposing don’t meet that test.   And they have to tell us how they plan to lower taxes and still maintain enough revenue to run the government, and meet all of the government’s responsibilities, without huge deficits.   

But much more is riding on this than the votes of moderates.  Because right now we are butting heads over issues on which I think we may all substantially, or at least partially, agree in principle.  For example, you don’t want people taking welfare, or food stamps, or unemployment insurance, from the government---meaning from those of us who still have jobs---if they are healthy, able, and simply choose not to work.  Guess what?  Neither do I.  If people are able to contribute and have that opportunity, they should contribute.  On that the difference between us is our belief about the facts, not our underlying principle:  my facts are that the great majority of people on foodstamps come from households in which at least one person is working (for a very low wage), and most recipients are off the program within a year.  You may have different facts you want to bring to bear: but if we can recognize an underlying agreement about framework, and make this a discussion about the facts, we may get somewhere. 

So, House Republicans: I get that this confrontation and its consequences are the product of the elections that took you into office, and that the wreckage of a government shutdown and a default on debt is something that right now it’s hard for you to avoid.  But let’s start talking about real ideas, real facts, and real underlying principles, starting right now.  Default is truly a catastrophic result: the dollar is the currency on which the world depends, and Treasury notes are the safe refuge to which international money turns when the world is uncertain.  If those two lose the world’s trust, the 2007-2008 financial panic will seem mild by comparison.

So let’s talk, not in silly slogans and fake distinctions, but in real fact and real principle.  Maybe, if we’re all still standing after we clear the rubble from this fall’s unavoidable confrontation, we can maintain a discussion that avoids the next nation-threatening, global-economy-threatening showdown, or the one after that, or after that.  We can’t keep doing this, we can’t keep governing by showdowns at high noon, even if we always find last-minute escapes, without courting true disaster.  Eventually this drama will wear the world’s credulity too thin to bear the weight of the vast structure of international finance.   

And when that snaps we come to a very painful place.  

Sunday, September 22, 2013

What, again? Debt ceiling again?? Really?? Come on. I don't have the patience to stress out about this right now.

For a thousand reasons, it’s been far too long since I sat down here to write.  It’s true that my day job has interfered, which will happen from time to time---too many deadlines and not enough time to meet them---and it’s also true that a variety of health issues, mine and others, have distracted me.  But the big reason is just that the last time I wrote I had huge math formatting problems, and I got hung up trying to resolve them, and the truth is that when you are in the habit of writing you write, and when you aren’t you don’t. 

Example random health problem:  a number of weeks ago, while cleaning out a garage, I dropped myself on my head from a significant height.  I was standing on a table putting something on a high shelf when the table more or less disintegrated under me.  I know that because I found it scattered in pieces all around me; I don’t remember the fall at all.

This event had a number of immediate effects.  It caused a substantial delay in the task I was doing, for one thing.   And it provided a good opportunity to exercise an opulence of verbal expression that is usually beyond my means.  And it enabled me to examine the inside of the Sibley Hospital emergency room, and to experience a CAT scan, and to enjoy the benefit of numerous stitches in my scalp.  For a while I thought it had caused a loss of about 30 IQ points too, but I’m pretty sure those were all still in there, they were just temporarily resistant to vigorous use.  (Even so I hadn’t disabled enough IQ points to believe in Ricardian equivalence.  I know, I checked.  I thought about it in the emergency room just to be sure, and it still seemed the height of absurdity even after a whack on the head.  Although IQ doesn’t really seem to have anything to do with it; some very smart people do believe in it, God knows how or why.)

But I think I did discover what happened to the IQ points in question, about two days later.  They were jarred loose and tossed randomly about, and soon started skittering around inside my head like marbles in a sailboat cockpit, say, in the cockpit of Sea Frog exiting the mouth of the Choptank into the bay on a long, bright, windy, wavy day.  Every time I tilted my head they all rolled over to the low side, whacking into everything in the way and making me dizzy.  It was disturbing.   And it kept me from writing for a while.

So I want to get back to this blog to begin to recreate the habit, but current events in economics seem a little heavy for the moment.  There’s plenty to say.  The House Republicans are once again threatening to shut down the government and render the Treasury insolvent by refusing to raise the debt ceiling, which would mean that the Treasury would no longer be able to pay for the government functions that Congress has already legislated.  Sequester is still in effect, a circumstance that caused most government employees to be furloughed for a number of days earlier this summer.  At the start of the furloughs I said (here) that federal employees seemed to be taking it all with good grace, but wondered what would happen if it continued “next year”.  Well, October is the start of a new federal budget year.  I think the federal workforce is getting more than a little tired of job chaos, of pay freezes, furloughs, and constant budget brinksmanship that puts their bill payments at risk.  Still, we’ll put that topic off for another day.

Instead of delving into economics, I’ll talk about making boats.  Or daydream about it.  It’s a topic, for once, that many of my friends can comment on, some with real knowledge far beyond my own.   With any luck they can talk me out of trying it.  But I have a reason for thinking about it.  I have a few odd ideas about sailboat gadgets that I’d like to try out, and some of them would require serious surgery on any existing hull, so it seems more efficient (and possibly cheaper) to just build my own.   I’ll stick to something I can do in my backyard, some easy variety of stitch and glue.  Or maybe staple and glue.  Nothing fancy.

I need something that will float and sail, but for economy (there’s that damned word again!!) it can’t be too much bigger than a dinghy---but to make it all worthwhile I want something more than just a simple dinghy.  I’m actually thinking of building a kind of adventure.  I want a sailing dinghy that I can put in the water at the Washington Sailing Marina and sail to Galesville or Annapolis. It would be a two-day trip down the Potomac, and then it’s nearly 70 miles from the mouth of the Potomac up the bay to Annapolis, which, in a boat that size, will probably be another two to three days.  That means I’ll need a dinghy that I can sleep in comfortably, probably using a tent over the boom for shelter.  I also need to have a small stove of some kind to cook with.  And a head.  In other words, I’ll need to build a cruising dinghy, if that’s not too weird a concept. 

I’ll get back to economics in another post or two.  Maybe I actually will talk about Ricardian equivalence again.  The last time I posted about it Nick Rowe chastised me in the comments for claiming that the concept depended on full employment, so I might try to explain why I think that’s true.  Why Ricardian equivalence, which seems to me to be a minor and fairly silly idea in the vast universe of economic models?  Because it seems to me to be a perfect embodiment of what has gone wrong and sour in macroeconomics since I went through the graduate program at Georgetown.  It’s hard for me to believe that anyone can take it seriously for ten minutes at a time.  But people do.  People write long, difficult papers on it dense with mathematics.  I think there’s an affliction that I guess I’ll call TANSTAAFL-blindness that produces models like that.  Maybe.  The truth is that I don’t really understand how those who build and believe models like that think.  But maybe TANSTAAFL-blindness is part of it.

Maybe I’ll talk in another post about what I mean by that phrase…but not today.