I hope you will forgive me for talking about monetary policy. But really, you should pay attention, because it is good for you, in a far more important way than Cymbeline. Tim Duy has a sub-blog over at Mark Thoma’s place, Fed Watch. In general, I skip what he writes, because it makes my brain hurt. Monetary policy really is difficult. It drives home just what a slippery concept money is.

But there is another aspect of it, that is really important but also keeps me away from it: the Federal Reserve is irrational. It has been obsessing for the last two years about when exactly it will raise interest rates. I saw an interview recently where Dean Baker explained in clear terms what that means: the Fed raising interest rates is deciding to put millions of people out of work to head off inflation. Now, maybe that’s a good thing when inflation is a problem. But when there is just concern that maybe the economy is kind of, sort of at the place where maybe inflation will tick up to the Fed’s own 2% target, talking about raising interest rates is not just mad — it is evil.

I’ve been in this very uncomfortable position of thinking that the Fed is making no sense. But everywhere you look, people are saying that they are right to do this. I realize that most of this is nonsense. It’s an unstated kind of moralism that cheap money just can’t be good. But this belief is so common that it makes me uncomfortable. If I didn’t have Dean Baker, who I trust completely, I’d wonder if I weren’t just really ignorant. So any indication that the conventional wisdom is actually wrong is welcome.

Thus we get to Duy’s recent article, Brainard Drops A Policy Bomb. That’s a reference to Lael Brainard, a Fed governor, but formally Undersecretary of Treasury. She’s something we don’t see all that much in economists: an independent thinker. She recently gave a speech at the National Association of Business Economists. And she said that she was not willing to make “calendar-based statements” about raising interest rates. This is a shot across the bow at Janet Yellen and others at the Fed who seem to do nothing but.

The issue, to me at least, is that most of the people are not letting the facts guide them. They want to raise interests rates. (That is: they want to put people out of jobs and make wages continue to stagnate.) And they are looking for any reason to do so. And now, it’s December. If the economy can just hold on and look good for a couple of months, then Yellen and company can raise the interest rates and get the bankers off their backs!

Paul Krugman offered an interesting take on why it is that Brainard has such a different idea from the other folks at the Fed, “I would say that Brainard’s experience is dominated not so much by the Great Moderation as by the Asian financial crisis and Japan’s stagnation.” In other words, Brainard isn’t hyper-focused on the possibility of inflation — she knows that there is at least as big a threat of low and even negative inflation.

What I find fascinating is that the inflation rate in the 1970s was high — but not that high. In 1980, it reached almost 15%. But before the Federal Reserved decided to tame inflation, the unemployment rate was less than 6% — so workers weren’t suffering that much. I can see being totally freaked out if the inflation rate had been 200%. But it was manageable. And that was it at its worst. And they are only concerned about that, and not the great threat of low inflation.

On Wednesday, Walmart stock went down by over 10%. And over the following two days, it has slowly gone down another 3%. Walmart did announce that earnings for the next year will be 6% to 12% less. But as Michael Hiltzik pointed out, this is primarily due to investments that the company is making. In particular, Walmart is raising wages and improving its ecommerce capabilities. To offset this, the company is going to do a $20 billion stock buyback, which should increase shareholder value. But that was apparently not good enough. And clearly, this wasn’t an impetuous reaction from Wall Street — the slide continues.

What the whole thing shows is how American finance is razor focused on short term profits. The things that Walmart is doing are undoubtedly good for its long term profitability. In fact, this has traditionally been the point of having stocks. It is a way for businesses to raise money so that they can invest in their infrastructure. But today, it seems the only point of stocks is to have a quarterly return. The stock traders figure that they can always buy back into Walmart after it is done with its worker and capital improvements. They don’t need to be part of the process, because actual business investment is scary.

As I write this, the total value of Walmart stock is down over 12%. Supposedly, this means that the company is worth that much less than it was Wednesday morning. You know: the perfection of markets and all. But this just shows that Wall Street doesn’t actually reflect the value of companies. It is some kind of sick and twisted notion of wealth where companies are worth only what they can bring in immediately. It is this kind of thinking that never would have gotten us to the Moon or even to civilization.

Although I think this is a particular dysfunction of modern Wall Street, this has actually always been the problem with capitalism. It really is great at doing the minutia of production and distribution. If you need to produce and distribute disposable diapers, capitalism is absolutely the best way there is for getting them to new parents. When it comes providing prenatal care for mothers, capitalism is a particularly bad system. So that ought to be settled. But as a society, we seem incapable of looking objectively at capitalism, and see it rather as a law of the universe that can’t be questioned.

But it is very disturbing that as proven a moneymaker as Walmart can’t look out for its long term interests without being savaged. Investors would rather use their money to get certain immediate profits than do the work of actual investment. There are only two possibilities in the Walmart case. It’s either that the investors are panicking over nothing — they care only about profits in the next year and not at all about Walmart’s long term profitability. Or it is that investors greatly overvalued it before based only on short term considerations, not calculating its need to continue to invest in order to grow.

This is a great example of the failure of capitalism. And part of it is that the rich understand that they don’t need to worry about the long term. If things go wrong, the government — which they spend so much time complaining about — will be there to bail them out. So they base everything on a three month time frame. Squirrels plan further ahead.

I heard from Jonathan Chait that, The New Conservative Argument to Ignore Climate Change Is Even Dumber Than the Old One. It seems that National Review came up with a “clever” question they wanted the Democrats asked at Tuesday’s debate, “Do you support President Obama’s EPA restrictions on emissions even though science reporters at The New York Times admitted in a recent story that restrictions will do nothing to combat climate change by themselves?” Chait noted what should come as no surprise to readers here: that’s not actually what the Times article said.

But what I thought was interesting was the idea that we should do nothing about climate change if that thing all by itself doesn’t fix the problem. It’s kind of like they took Zeno’s Paradox as a proof: if you add up a bunch of small thing the end result is nothing! I know, I know: because National Review started in large part to push back against the stupidity of the conservative base, you think it still ought to do that. But those days are gone and the most you can expect of conservative elites is a resigned acceptance of the way things are. After all: how else are they going to get their regressive tax cuts?

So I present you with a few of my own examples of things that are not worth doing because they alone will not fix a problem. Chait offered this own: calling 911 when you have a heart attack and buying groceries to feed your children. In addition, I offer the following, which I’m sure National Review (actually, Stephen L Miller) obviously thinks (because consistency is the cornerstone of conservative thinking):

• Why work out in the gym when that one work out isn’t going to make you stronger?
• There’s no point of driving on the right side of the street, because that alone is not going to keep you safe.
• Why practice a musical instrument when that one session isn’t going to make you a good musician?
• There’s no point of starting a diet, because that first day of eating less isn’t going to make you thin.
• Why put on the brakes when it is clear you are going to hit the car in front of you? In fact, why not hit the accelerator?

There are obvious political cases too: we shouldn’t enact any healthcare reform because nothing will fix all of the problems. Basically National Review would make that case since they want the government to do nothing other than those things it does now that funnel wealth from the bottom of the economy to the top. Of course, with global warming, it’s clear that addressing the problem would be a good thing even if it didn’t fix the problem. The National Review position reminds me very much this cartoon:

As Chait noted, “The new talking point rests on grade-school-level sophistry.” You would think that conservative thinking would have nowhere to go but up. Instead, they always find a way to go down.

Last year, I wrote an article that got quite a lot of attention thanks to a tweet by Max Blumenthal, News Bias Is a Choice to Lack Diversity. The article was about the implicit bias in the press because the reporters are all of the upper-middle and upper classes — cut off from the worlds of middle and lower class workers. I wrote, “This is why business reporters seem to only find news about the management side of business interesting. They don’t have any friends who are in labor unions.” The article got enough attention that Matt Yglesias read it and responded that reporters do known people in unions because most newspapers are unionized. Note the change from “are friends with” to “know.”

It’s a telling comment. I like Yglesias’ work very much. But he is blind to the interests of lower class workers who were so very well represented by unions in the decades before he was born. And he’s very much typical of a particular group of “data journalists” most symbolized by Vox. Again, I read Vox every day — they put out great work. But despite the publication’s claim that it is all about data, it is constrained as much by ideology as every other news outlet. It is just that their brand of soft neoliberalism is easily mistaken for the truth.

Erik Loomis over at Lawyers, Guns & Money has been on this beat for a while. I first noticed it with an article earlier this month, What Does Dylan Matthews Think The Worst New York Times Article Published in the Last Decade Is? It turned out that it was article by Paul Theroux, The Hypocrisy of “Helping” the Poor. Basically, the Vox senior correspondent thought that it was wrong — Really wrong! — to complain about globalization hurting poor people in America when it was helping poor people in Bangladesh.

Matthews original complaint was just a tweet. Now, two articles have been published attacking the original article. Loomis has all the details, More on Paul Theroux, the Greatest Monster in Known History for Caring About American Workers. And he dives pretty deeply into the subject of the Washington data journalists’ ideological dysfunction. It is a mindless acceptance of globalization as a Good Thing™. We all know that, all things equal, more trade is a good thing. Thus, any given worker complaining about their troubles should just shut up.

This is almost literally true of Annie Lowery. A woman in Theroux’s article was complaining about how the Clinton Foundation did all this work in Africa, “Don’t they realize our people need help?” To which Lowery responded, “Not in the way that people in Zimbabwe do, lady. Not even close.” It’s a shocking display of class based disdain. As if a paraplegic can’t complain so long as there are quadriplegics in the world. And as Loomis points out, it shows that they approach the problem of poverty “from 30,000 feet.” They have no connections to these people, just as their analyse of Uber is all about them getting more convenience in their urbane lives and not about struggling low-middle class drivers.

Jeff Spross at The Week provided a far more expansive view of the issue, Us against them? Why Globalization Doesn’t Have to Pit American Workers Against the World’s Poor. Basically, he’s making a Dean Baker kind of argument: globalization hurts the poor in America because our government has made it that way; we can have globalization that works for everyone. But what I want to focus on is Spross’ criticism of the “American preference for ‘absolute’ poverty measures.”

The reason I bring it up is because of this great lecture by Richard Wilkinson, where he looks at economic inequality. Between countries, inequality doesn’t seem to have much effect on broadly defined health measures. But it has a clear and large effect within countries. Clearly, this is a study only of advanced economies, and Zimbabwe is seriously messed up. But the idea that poor people in Mississippi should just shut up because other people are doing worse outside the country 10,000 miles away misses the whole point.

My takeaway from this is just how callous we all are. I don’t believe that the Vox crowd really cares any more about the people in Zimbabwe than they do the people in Mississippi. They certainly don’t have any experience with the people who are suffering there. But it is really the fact that having a callous disregard for the suffering in Mississippi and a deep concern for the suffering in Zimbabwe pushes their existing belief that globalization is a Good Thing™. All of the neoliberal data journalists should listen to Lowery’s own inadvertent wisdom, “The reality, you’ll be surprised to hear, is more complicated.”

Afterword

After I wrote this, I noticed that the brilliant Matt Bruenig wrote, The Muddled Globalization Debate. He looks at the issue in an economic way and notes, “The fact that goods cost 10% less than they would in the alternative doesn’t help someone whose income is 30% less than the alternative.” It gets to the same issue, which is just that Lowery and company are clueless about the effects of globalization on actual people. They can wave a hand and say that there are things we could do to minimize the harm, but the fact remains that we don’t. It’s like I wrote earlier this year, No Trade Deals Until Our Economy Is Fixed. I’m not interested in trade deals even if they do increase GDP as long as the vast majority of the gains all go to the top.

The big news over the past few of years has been the rise of voter ID laws and many other efforts designed to make voting harder than it already is. This is being done almost exclusively by conservatives. I don’t doubt the sincerity of conservative voters; they’ve been manipulated for years into thinking that if only voting were fair then Ted Cruz would be President for Life. It’s the conservative elites who have pushed this disingenuous narrative that voter fraud is a problem that must be fixed.

Think about it in the opposite way. If there is a legal voter who is stopped from voting, this is what I will call institutional voter fraud. Voting, as it is construed by most people, is a right. It isn’t something that one should have to earn. On the right, people are concerned about votes being “canceled out” by fraudulent votes, but there is no concern about votes being canceled out by them simply not being allowed. This is where the pathetic number of actual fraudulent votes is important: to stop a handful of cases of voter fraud, we create a hundred or thousand times as many cases of institutional voter fraud. That is what the voter ID campaigns are: a form of (currently legal) voter fraud.

Even as conservatives have been working to stop democracy, there are places where work is being done to expand voting rights. The Brennan Center for Justice puts out a Voting Laws Roundup each year with the good and bad news. And it isn’t all blue states either. For example, Louisiana recently passed a law that would allow 16- and 17-year-olds to pre-register to vote when they apply for driver’s licenses. And Oklahoma expanded access to absentee ballots to people living on tribal lands. But as usual, the only red state doing anything big was Utah, which established a “pilot program for election day registration.”

I’m very pleased that my home state of California has been on the leading edge of this, and we made a massive step forward over the weekend. The Los Angeles Times reported, Governor Brown Approves Automatic Voter Registration for Californians. It isn’t perfect. It is tied to the state DMV. When people get or renew a driver’s license, they will automatically be registered to vote. But given this is California, that is the vast majority of people. The system doesn’t require people to register, of course. They may opt-out if they wish. But the default will be to register them. This will result in up to 7 million more people registered to vote. The system will not be fully operational until June 2016.

I wonder about my own commitment to democracy. If I were a conservative, would I say what I hear so many conservatives say, “I don’t want people to vote unless they are well informed like me!”? I’d like to think that I would be in favor of democracy regardless. But I recall when I was a libertarian being fairly disinterested in voter turnout. Regardless, I think that most people in America do believe in democracy. And like so many things in US politics, the distinction between the left and the right is clear: the left believes in people voting and the right does not.

Brian Beutler was definitely right, The Adults Take the Stage in the Democratic Debate. I’m a Sanders supporter, but not enough to want to see any of the candidates attacking each other. So I didn’t like seeing that. But in an absolute sense, there was very little of it. And it was all substantive. Overall, I thought it was a great debate.

I agreed with Lincoln Chafee when he said that he hadn’t changed — it was the Republican Party that had changed. He’s right. I’m constantly amazed at the people who stay in the Republican Party, even though it has clearly gone on tilt. I welcome former Republicans into the Democratic Party — often they are more liberal than long time Democrats.

Speaking of long time Democrats, what’s up with Jim Webb? After Chafee made his statement about the Republican Party, Webb implied the same thing about the Democratic Party: that somehow he was the guy who represented the tradition of the Democratic Party. How can anyone seriously think that?! But if the purpose of the debate was to mention Vietnam and veteran the most times, Webb won!

Martin O’Malley had a strong debate. I don’t think he answered the question about his “lock ’em up” policies, but otherwise, he was good. And his final statement was the best of any of them. Was it enough to move him in the polls? I doubt it. And it certainly wasn’t enough to move me. If he becomes the nominee, I’ll support him. But he doesn’t shine when it comes to my issues — economics.

Clinton and Sanders did about as well I expected them to. Clinton came off as serious and competent. But she also lacked a great deal of passion for the most part. Sanders was full of passion — especially on economic issues. And he’s absolutely right. At the same time, he came off a bit scattered and, frankly, old. Still, I will be donating some money to his campaign tomorrow.

Overall, I think the Democratic Party did itself proud. We don’t have to be embarrassed by our candidates. Even the worst of them is better than the best that the Republicans have to offer: Marco Rubio. It was a good night. But will the American people notice? I doubt it.

As I was looking for something to write about for today’s anniversary post, I came upon a mention of a massive one day murder of Gypsies at Auschwitz. I didn’t write about it, because it turned out that the date was wrong. It turned out that on 1 August 1944, the entire population of the “gypsy camp” was murdered — some 4,000 adults and children. It’s staggering to think about, although looking at some of the pictures of the victims, it was probably the most humane thing the camp personnel ever did to them.

I don’t bring this up to point out yet again just how awful the Nazis were. But after all these years, I find myself still trying to understand the Nazis. I don’t think the Germans are different than any other people. Certainly there are problems with its culture, but it isn’t any different in this way than any other culture. And I largely think that the vast majority of the German people were also victims of Nazism — even while they were culpable. So what makes people respond to a call for genocide with a shrug as they pick up a pitchfork?

Several years ago, I had a really uncomfortable experience. I was head of software development at this startup. And we had hired five Romanian programmers. They worked in Romanian, and I set up our system in such a way that they could work with the hardware remotely. I was totally against hiring them, but it was forced on me. Still, I found that it worked remarkably well. For one thing, the programmers were fantastic. But a couple of times we flew the Romanian team leader here to work directly with me.

He was a brilliant young man — and very nice. You absolutely couldn’t ask for a better person to work with. But one day, he asked me the most peculiar question, “Do you think Americans wouldn’t think so lowly of Romania if it weren’t for the Gypsies?” I was shocked by this blatantly racist question. But despite how I appear online, in real life, I’m very much a placater. I might be different today, but then, I was not interested in finding out why this young man thought so lowly of this particular ethnic group. So I gently told him that the only thing any Americans were likely to know about Romania were Nadia Comăneci and Dracula. And that was the end of that conversation.

I assume that my Romanian colleague had about as much direct direct experience with the Gypsies as I did. Even at the time, I immediately thought of African Americans: an underclass deprived of opportunities and then shamed for their lack of success compared to the “white” class that is given every advantage. In fact, not long before that, I had had a conversation with some young immigrants to America who were asking me the same kinds of questions with regard to blacks. They are valid questions that deserved answers, and I think I did a decent job with them.

The problem we have is not with the questions, but with the assumptions that many if not most people have: those who are struggling in our society are simply worse people. The specifics of who “those people” are don’t matter. I’m sure that few Americans could tell the difference between Gypsies and the non-Gypsies in Romania. We humans create more or less random groups that we put great significance into. It is the source of our greatest strength in that it is what binds us together. But the dark side is that we become exclusive, and it really isn’t necessary; there are more than enough non-human things that might kill us.

In the end, I suppose I’m not that surprised that the Nazis happened. It’s more surprising that we don’t see more of it. But I do think that we are getting better; we are more inclusive than we have ever been. But looking around at America, it is clear that we have a very long way to go.

Photo by Adam Jones adamjones.freeservers.com