Ken Rogoff Doesn’t Tweet His Junk

Reinhart and RogoffKenneth Rogoff, last year:

In a series of academic papers with Carmen Reinhart… we find that very high debt levels of 90% of GDP are a long-term secular drag on economic growth that often lasts for two decades or more.

Carmen Reinhart and Kenneth Rogoff, today:

Nowhere did we assert that 90 percent was a magic threshold that transforms outcomes, as conservative politicians have suggested.

I will admit, Carmen Reinhart did not run around the country claiming that we had to have austerity or we’d have slow or even negative economic growth. No, it’s always been Kenneth Rogoff. Just the same, we didn’t hear a peep from Reinhart that he was mischaracterizing their work. But let’s lay that aside for the moment. If Reinhart & Rogoff didn’t show that a 90% debt to GDP ratio was some bad tipping point, what was the big deal of their paper? Matt Yglesias answers this question, “The raw fact that there’s a statistical correlation between debt:GDP being high and GDP growth being low is trivial and offers no policy guidance.”

What we have here is a case of scientists riding a popular wave based upon an obscene overstatement (that they helped create) of their work. And then when their work is shown in no uncertain terms to not show what was claimed, they retreat back to the safety of scientific objectivity and caveats. This is totally unacceptable. Rogoff especially should be thrown out of the field. But of course he won’t be. He’s “elite.” And you know what that means: unless he’s caught tweeting pictures of his junk, he can’t be touched.

Of the 1%, By the 1%, For the 1%

1%Have you heard? Senate Votes to End Furloughs of Air Traffic Controllers. The House is working on it as I write this and the President is likely to sign it. Are you surprised? Only if you’ve been living in a cave your entire life.

I think we should call this the “Rich People Can’t Be Inconvenienced in the Least” act. Because that is what this is all about. It is totally okay if the poor and weak are harmed by the Sequester. Shared sacrifice, am I right?! We’ve all got to pull together and if that means that malnourished children have to march for days without shoes, that’s just the way it has to be. On the other hand, if a rich man has a pebble in his show, why, we’d better do something about it. Perhaps a few barefoot children could carry him.

The Senate cares about these flight delays because because it affects them and their wealthy friends. This is not a partisan issue! They are all in it against the rest of us. When the Sequester hit the Head Start program hard, that was just the way it had to be. And I understand this: the Sequester was a terrible piece of legislation. But now Congress has decided to make it even worse. The rich, whose lives are already, shall we understate it and say “good,” have Congress (and the President!) jumping to attention to make sure that the Sequester only hurts people whose lives already suck.

Paul Krugman’s column this morning was called, The 1 Percent’s Solution. In it he talks about how the people of the United States do not want austerity. They do not want to cut programs for the poor. They do not want to cut programs for the old. But can you guess who does want all these things? The rich, of course. And Krugman points out what we have become: a country “of the 1 percent, by the 1 percent, for the 1 percent.”

And so it goes on. Our supposedly democratic government will continue to inflict pain on the poor and weak. Why? Because they are poor and weak. At the same time they will do anything the wealthy and powerful want. Why? Because they are wealthy and powerful.

And the la-hand of the Freeeeee!
And the hoooome, of thhhhhe, braaaave!

Afterword

In case anyone is wondering, I know a lot of non-rich people travel by air. I am one of them. But that is not why Congress has sprung into action.

On Not Understanding Wittgenstein

Ludwig WittgensteinArt theorist and painter Gian Paolo Lomazzo was born on this day in 1538. French master Eugene Delacroix was born in 1798. American impressionist Edmund C. Tarbell was born in 1862. And everyone’s favorite Nazi Rudolf Hess was born in 1894.

Carol Burnett is 80 today!

But the day does not belong to painters, comedians, or even Nazis. No, today belongs to the great philosopher Ludwig Wittgenstein. It’s hard to know what to say about him. His work was largely analytical—more math than philosophy. What I find most interesting is his discussions of how language maps to reality and how we can transcend the limits of language. Umberto Eco in his essay “Absolute and Relative” puts it well:

[I]t would be quite enough for an Eskimo to meet us to understand perfectly well that when we say “snow” for the four things that he supposedly describes in different ways, we are behaving in the same way as a Frenchman who used the word glace for ice, glacier, ice cream, mirror, and window glass—and the Frenchman isn’t such a prisoner of his own language that he shaves in the morning looking at himself in an ice cream.

It’s that kind of stuff. But harder.

Happy birthday Ludwig Wittgenstein!

In the Loop

In the LoopLast night, I tried to watch two films. I’ve been putting off watching Three Kings for some time, so I finally sat down to watch it. It seems partly based upon Kelly’s Heroes, which I don’t much like. But I have to say, Three Kings made me appreciate it more. This isn’t because of the film. It is about how the characters act. Regardless of how actual soldiers acted in World War II versus how they acted in the Persian Gulf War, the representations indicate that we are devolving. Put simply: we apparently don’t have to bomb a people back to the stone age to show them that we are assholes. After about a half hour I stopped watching the film. It isn’t that the film is not well made, I just wasn’t in the mood for it.

So I put on In the Loop. It is a comedy about the lead up to the Iraq War. It isn’t in any way accurate in the details, although I tend to think it is exactly right broadly speaking. Basically: there were a bunch of powerful people who really wanted to go to war so we did. The first two acts are very funny. Actually, the third act is very funny, I just didn’t laugh. It got too real and I got increasingly angry that these assholes pushed us into war and then managed to screw over everyone who showed the least sign of a soul or backbone. It does not have a happy ending because the Bush-Blair days were not happy. (I still have a great deal of anger toward Blair because I tend to think without his help, Bush could not have gone to war in Iraq; but I might be overestimating Bush.)

The highlights of the film are two actors. First, Peter Capaldi is Malcolm Tucker, the foul-mouthed alpha male Director of Communications. I first saw him in Local Hero where he played such a nice young man. Since then, he seems to have been type cast as a profane Scot. He is hilarious here, although you might want to put on the subtitles so you don’t miss any of the great writing. The second actor is the always wonderful Tom Hollander, who plays Simon Foster, the Secretary of State for International Development. He is a man who really believes in things. Except when he doesn’t. And he goes back and forth on this quite a lot. Here is perhaps the high point of the film where Simon is (quite rightly) chewing out his assistant for showing up at a meeting in his slept-in clothes after a hard night of drinking:

If you like British comedy, you can’t help but enjoy In the Loop. But if you are sometimes offended by the language I use on this site, you should avoid it. The film relishes in its obscenities.

Afterword

On a related note, the much maligned film War Inc. is very good. My guess is that it will become popular over the next 20 years as people realize that if they don’t approach it as “the sequel to Grosse Pointe Blank” that it is brilliant social and political satire.

No High Tech Worker Shortage

VisaBack in February, I wrote about the situation with H1-B visas. These are visas that allow highly educated workers in science and technology (STEM) to come to the United States to work. High tech companies are always pushing for more of these visas. But as I pointed out then, this is not a form of immigration; it is more like indentured servitude. But most important from a policy standpoint, it is yet another example of how companies who are well connected can get unfair advantages from the government.

I also noted that company requests for H1-B workers did not represent the fact that there were not qualified workers in America; they represent the fact that companies don’t want to pay the going rate for workers with these skills. Well, on Wednesday, the Economic Policy Institute released a report by Salzman, Kuehn, and Lowell (SKL), Guestworkers in the High-Skill U.S. Labor Market. Their conclusion, “Our examination of the IT labor market, guestworker flows, and the STEM education pipeline finds consistent and clear trends suggesting that the United States has more than a sufficient supply of workers available to work in STEM occupations” (italics in original).

There is one fundamental economic fact about the supposed lack of STEM workers: there is no unusual growth in wages. If there really were a high demand for workers and a low supply, wages should increase to push more people into the field. This is not happening so there really isn’t any reason to think there is a huge unfulfilled demand. As SKL noted, “Employment and wage levels in IT jobs have been weak, trends that are not consistent with strong demand.” What’s more, they showed that there is more than enough supply of STEM workers coming out of college. The United States graduates 50% more college educated workers than go into the field. Most of these graduates go into other fields because they can make more money, but roughly a third just can’t find jobs in their fields.

Meanwhile, guestworkers make up a large and increasing part of the workforce. In IT, as many as one-half of the new hires are guestworkers. In addition, a good one-third of the workforce doesn’t have college degrees at all. This isn’t to say that college degrees are necessary to do this kind of work. Rather, there are a lot of people who can fill the positions that these firms claim they need guestworkers for.

So we are left with a very bad situation. SKL conclude, “The supply of IT guestworkers appears to be growing dramatically, despite stagnant or even declining wages.” This is at a time when corporate profits are sky high. And even this explosion of guestworkers is not enough; the industry wants more. But let’s be clear: they want more because they want to keep wages as low as possible, not because they can’t find the workers.