Big happenings over the weekend. (You can take that as a joke if you like, but I’m quite serious.) Joseph Stiglitz wrote an extended OpEd over at the New York Times, Inequality Is Holding Back the Recovery. He presents four reasons for saying this. First, he notes the deleveraging problem: the middle class is feeling very poor because of the bursting of the housing bubble, but they haven’t seen their incomes increase since the crisis. Second, low income growth has caused the middle class to limit investment in things like education. Third, income inequality is keeping tax receipts low. And fourth, high income inequality is associated with economic instability.

Krugman responded in a blog post on Sunday. He noted that Stiglitz’s second and fourth points are important, but don’t really have anything to do with job growth since the bubble burst. But mainly, Krugman’s point is that the evidence isn’t that good for the theory that the rich don’t spend as much money as the poor. He notes that Milton Friedman showed that most of this correlation was actually due to people whose incomes had temporarily fallen. Understandably, they would spend more of their incomes on average. Similarly, people who get a suddenly windfall are likely to save more of it. So Krugman turns to data and shows that total spending was moving in the opposite direction than it would be given Stiglitz’s hypothesis.

Dean Baker then counters Krugman’s point by noting that much of the spending was driven by the stock and real estate bubbles where people thought they had more money than they actually did. He makes a number of other good points.

And then this morning, Krugman is back, yielding a little of the territory. But mostly, he is arguing again that economics is not a morality play. Just because you think something is right doesn’t mean it is good economics. It is entirely possible to have an unjust economy that works great. And this is where all three of these great economists agree: extreme income inequality is bad for us as a people. As we’ve seen over the last 35 years, the economy can grow without it improving the lives of the vast majority of its citizens. This counters the argument that Milton Friedman liked to make that even though the rich were getting far richer, the poor were also doing better than they would in a more egalitarian system. That simply is not true. (Of course, the moment you argued this with Friedman, he would switch to arguing some nonsense about rights and responsibilities—the typical libertarian bait and switch.)

See how fun economics is? If not, here’s your take home: income inequality is bad. It is turning us into a feudal system. Democracy requires some level of equality. If you don’t have it, then the rich can just buy whatever government they want. You know, just like in modern America.

Update (21 January 2013 11:55 am)

Matt Yglesias says that while he thinks Krugman may have the better argument, Stiglitz is probably still right:

My father showed me an article on the 1963 Buick Riviera. It was the first year that it had the new boxy design. And it sold for $4,333 at the time. That struck me. People tend to think of restored vehicles as being worth a lot of money, but given my intuition about inflation, it seemed like in inflation adjusted dollars, the car would sell for more or less what it now does as a “classic.” I decided to check.

Using yearly inflation data from InflationData.com, I created a spreadsheet and calculated the inflation adjusted price of the 1963 Buick Riviera at every year from then until now. So in 1970, it was worth $5,493. In 1980, it was worth $11,669. In 1990, it was worth $18,520. In 2000, it was worth $24,405. And last year, it was worth $32,565.

But I ought to point out one thing about inflation that I learned recently reading Social Security: the Phony Crisis. Inflation doesn’t just measure how fast prices rise. It adjusts for improvements in products. So a 1963 car really should be worth quite a lot less than the inflation rate would indicate because the car hasn’t improved over the last 50 years. But still, I think this exercise is a valuable one.

So now I knew that the 1963 Buick Riviera would cost $32,565 dollars in 2012 dollars. How much were fully restored models actually selling for? I went over to Hemmings Classifieds to look. Of course, it doesn’t list what the cars are selling for; it lists what people are asking. There where four in basically new condition: $19,900; $19,995; $22,900; and $24,495. In other words: a lot less than the car sold for originally.

I guess this doesn’t mean that much. I had noticed before that the value of cars tended to be right about the cost of restoring them. But with all the buzz about “classic” cars and all the celebrity collectors, I am still a little surprised that the cars don’t retain at least their sticker value.

Last night I introduced my father to Downton Abbey. (Listen up, JMF!) He seemed to like it well enough. But he was really bothered by how horrible all the upstairs people were. I didn’t think they were all that bad. And he very much liked the cook, who, on second view, is very amusing.

The whole time, I was thinking of one thing: Bates. As you may recall, Bates is the noble valet how was injured in the second Boer War. But also: Alan Bates played the honable, but troubled butler Jennings in Gosford Park. It was one of his last roles. And it made me wonder if Julian Fellowes didn’t provide Bates this name as an homage to the late great actor.

One thing I was reminded of that I had meant to note when I wrote about it before, is the rather over-done direction. I’m all for making such a film dynamic and unlike what have traditionally been the very boring Masterpiece Theatre film versions of novel classics. But I’m also not keen on the Steadicam, and it is way overused here. I had flashbacks of Goodfellas. (Scorsese’s worst excesses involve the Steadicam.)

So there you go: a few thoughts on watching Downton Abbey with my dad.

Strangely, this is not in the news. There is a coming crisis and there appears to be not a goddamned thing we can do about it. But first: some background.

It is often said that the Andromeda Galaxy is the nearest galaxy to the Milky Way. This is not actually true. It is just that it is the nearest big galaxy to us. Galaxies are like solar systems: they have satellites, and maybe those satellites have satellites. The Milky Way has at least 26 satellite galaxies. Andromeda has at least 36. It’s a wonder you can still find parking downtown!

With all of this celestial congestion, it’s no surprise that things are always running into each. And as it turns out, the Andromeda Galaxy is headed straight for us! And it is going to be really bad. But there’s good news: we have a lot of time to prepare. Roughly four billion years. But it’s not like we can just focus on this problem. Undoubtedly many life destroying asteroids and comets will hit the earth during that time. Also the luminosity of the sun is raising; in only one billion years, it will be so bright that the oceans will evaporate. And there is always the possibility of a supernova nearby that will kill all life on earth. There really is so much to prepare for, and that isn’t even including the upcoming Debt Ceiling crisis.

Actually, I fully expect that humans will go extinct within 10,000 years. But even assuming the very best of our species (And regular readers will know what I think of that!) we don’t have more than 100,000 years on this planet. That’s kind of a cheerful thought, when you consider that’s how long we’ve already been here. That is assuming we even exist, which I mostly doubt.

Regardless of all this, the smart and hard working people at NASA have put together the following video to show what’s going to happen to the Milky Way Galaxy when our sister Local Group galaxy rams into us. It is really cool. And it helps me keep things in perspective. But nonetheless, I still worry about that Debt Ceiling.

Liberal Viewer posted a great video, Aaron Swartz Tip of Iceberg in Justice System. The point is that what happened to Aaron Swartz happens to thousands of people every day. In Swartz’s case, the federal prosecutors were apparently going to offer him a six-month sentence plea deal. If that’s the case, why were they threatening him with 35 years? Because they can. They lose nothing by piling on ridiculous charges. But they gain lots and lots of leverage, which can lead to the defendant taking a lesser but still unreasonable sentence. Or it can lead to the defendant killing himself.

A young man caught with a quarter ounce of cannabis will likely find that he is charged with “intent to distribute.” That way, he is more likely to just accept the one charge that the prosecution has any chance of proving rather than fighting. The truth is that most plea deals come down to this, “We’re going to drop all the bullshit charges in exchange for the only one we have a case for.” This is not justice. This is just, as Aaron Swartz’s family said, “a criminal justice system rife with intimidation and prosecutorial overreach.” Or as I call it, the Injustice System.

Here’s the video if you can stand to hear any more of this travesty:

I think it is time again to discuss Chuck Hagel. I’ve been reasonably positive about Obama’s nomination of Hagel for Secretary of Defense. My main problem is just that I don’t like the optics of it: Republican presidents always have Republicans at this post, but this will be Obama’s second of three who are Republicans. As Michael J.W. Stickings has asked, “Is no Democrat good enough?”

Unfortunately, I’m afraid that is the wrong question. The Secretary of Defense is nominated by the president you have, not the president you wish you had. This is who Obama is: a man dedicated to seeming more reasonable than anyone else. It is actually, one of his least admirable qualities. It speaks of a man who cares more about appearances than accomplishments. But I don’t doubt that this is who he is. From the start I thought he was a man with very centrist beliefs. If it were 40 years ago, he would certainly be a Republican.

By far, the best argument that I’ve heard in favor of Hagel comes from committed discontent Eric Alterman, Hooray for Hagel. I am in agreement with him. There is nothing that makes me want Hagel confirmed as much as the neoconservative push against him. The idea that Hagel will not be a lackey of Israel and won’t push for war with Iran makes him perhaps more compelling than most Democrats.

Alterman’s case is summed up well at the end:

What he’s getting at here is that the United States is a very pro-Israel country. But the neocons take this to another level—a level that is actually bad for Israel. And it is certainly not what American Jews, much less Americans generally, want.

So I say let’s go. It would have been nice if Obama had picked someone else, but he didn’t. And it is likely that Hagel is more liberal than any Democrat that Obama would have nominated. As Secretary of Defense, Hagel could do much good. So “Hooray for Hagel,” indeed.

There was a flurry of writing on Friday about David Brooks’ column, The Next Four Years. Jonathan Chait sums up the column well, David Brooks Now Totally Pathological. And Ezra Klein asks, Is the Republican Party Obama’s fault? Answer: no, but a lot of Republicans want to think so.

They are both referring to the second half of Brooks’ column where he speculates about what Democrats are really thinking. You see, they are going to propose modest bills like Hurricane Sandy relief. The Republicans will respond as wackos—but not because they really are wackos. That’s what makes the Democratic plan so cunning: by proposing reasonable policies they are making the Republicans seem unreasonable just because the Republicans are devoted to unreasonable policies. I swear, I am not exaggerating; he gives no reason at all for why the Republicans must act crazy; I guess we are supposed to think it is a Pavlovian response: Republicans just can’t help it.

He continues on. The Democratic Party will push “wedge issues.” Wedge issues like—Wait for it!—President Bush’s comprehensive immigration reform. The other one that Brooks mentions is gun law reform like requiring universe background checks. Traditionally, a wedge issue is one that greatly divides people. You know, things like abortion. These two issues don’t even divide the Republicans. The only thing they divide is the Republican elite from the rest of the nation. Man oh man, are those Democrats cunning!

Of course, the New York Times has editorial standards. So Brooks can’t come out and say that Democrats are thinking or saying these things. Instead, he piles on the weasel words:

I’ve highlighted the weasel words. If you take them out, you’re left with: I’m making this up. But check out that first sentence. It contradicts his whole argument! He claims that the Democrats are not going to do anything big. They are going to do little things and this will make the Republicans look bad because they are even against the smallest reforms. Brooks can’t have it both ways, but he does try.

Look back at Obama’s first term. He did everything to get the Republicans to compromise and they would not yield one inch. Okay, Brooks claims that was because these were big proposals that the Republicans hated. Except that when McCain was running for president they didn’t hate the exact healthcare bill that Obama passed. But okay, politics is politics. What exactly makes Brooks think proposing little incremental bills will cause the Republicans to act any differently. Anyway, isn’t requiring universal background checks on gun purchases an incremental reform? I mean, 60% of all gun purchases get background checks now. All universal background checks requires is closing one loophole.

So Brooks is doing nothing more than following a long tradition of conservative writing that involves pretending that liberals say or think something and then complaining about it. But I actually find the first part of his column even more offensive. It is here that he talks around what he really believes. He claims, “I am an earnest, good-government type.” But he also says, “Polarization is too deep. Special interests are too strong.” What “special interests” could he be talking about? Certainly not the rich who managed to keep the Estate Tax hobbled. Certainly not military companies that get billions in government contracts. No, he’s thinking more along the lines of the labor unions and the Brady Campaign to Prevent Gun Violence and, you know, that evil AARP.

He also calls the Fiscal Cliff deal a “fiasco.” I’m none too happy with that deal, but I don’t see how it was a fiasco. Brooks thinks it was one because it didn’t end in gutting Social Security and Medicare. But I think Brooks should cheer up: Obama seems determined to do just that.

As with all “reasonable” Republicans, I don’t understand why Brooks is a Republican if he really holds the opinions he implies. And that’s why I think he is anything but reasonable. But if you dig down deep into his work, what you find is a guy that is mostly a social liberal. It is on economic issues that he is conservative. This is due to an embarrassing debate he had as a young man with Milton Friedman. According to Brooks, he was a liberal then. But Friedman managed to shoot down all of his arguments. This says much more about Brooks’ intellectual skills than it says about anything else. And so he’s left being a media lackey for conservative ideas that he understands no better than liberal ideas he long ago repudiated.

Afterword

It is possible that by providing these easy votes for Republicans, the Democratic Party is doing them a favor. It allows the more reasonable Republicans to vote sensibly. Hopefully, these politicians would be rewarded by the public with re-election while the unreasonable ones would lose. Brooks does not consider this.

I noticed something very troubling about the reporting on Aaron Swartz’s suicide. Among his friends and supporters, there was little understanding of depression. The great Lawrence Lessig was on Democracy Now! to talk about Swartz on Monday. He presented more or less a hagiography. But he also said, “Aaron was depressed. He was rationally depressed.” I don’t mean to attack Lessig who was clearly very close to Swartz and very upset about his death. But Lessig doesn’t understand depression. As Swartz wrote, “Depressed mood is like that, only it doesn’t come for any reason, and it doesn’t go for any either.”

On the other side are comments like those of Matt Yglesias, a big Swartz booster, who said, “People commit suicide because they suffer from depression, which he did, not because they’re being railroaded by the U.S. Attorney, which he was.” That’s not right either. It’s too convenient. Most people who suffer from depression never take their own lives.

I don’t pretend to know what Aaron Swartz was thinking and feeling. But I do have a lot of experience with depression. Indeed it does come and go for no apparent reason. But it is best to think of it like the weather: it is unpredictable, but there are both internal and external forces that affect it. I doubt those forces go so far as Lessig would have it. It seems unlikely that Swartz killed himself because he was disappointed in humanity. But a years long fight with an unyielding and impersonal government bureaucracy was certainly forcing Startz’s mood swings toward depression.

The main thing here is that there is a tipping point. Depression is characterized by the feeling of hopelessness: you could do this or that but what is the point? I know that even at my lowest, I retain at least the intellectual notion that things can be better. That is enough to continue on—slog through to a brighter time that might lie ahead. And I think that is what keeps us all going. But circumstances can push us too far down, and that is when depression becomes life threatening.

Yglesias’ claim that Swartz did not kill himself because he was being railroaded by the U.S. Attorney is partly right. I feel pretty sure when he killed himself, Swartz wasn’t doing it just because of the legal injustice he was enduring. But I have no doubt whatsoever that it colored how Swartz saw the universe. And that means the justice system is culpable in his death. (And it is the whole system and not just people like Carmen Ortiz.)

Of course, nothing will change. The same thing will happen again and again, just not very often to such a high profile victim.