Europe’s Impossible Dream

by Paul Krugman

July 20, 2015

http://www.nytimes.com/2015/07/20/opinion/paul-krugman-europes-impossible-dream.html?ref=international&_r=0


Most academic economists continue to make the wrong-headed and arrogant assumption that there is a "science of economics", separate and apart from politics and other social sciences, with immutable scientific "laws", which unfailingly govern how a society and its economic activity will develop.

If you want to talk about "fantasy economics", today's mainstream academic economics is a prime example. Based as it is on largely false assumptions of "rational, fully informed decision making", it pretends to derive nicely behaving demand curves, and from that derives the myth of "self-correcting, self-optimizing" economics. This myth could be excused in the times of Adam Smith and the "Age of Reason" movements around the same time. Today there is overwhelming evidence that only a relatively small subset of human decision making is based on rational thought and full information.

The "fantasy" is even worse for macroeconomics, which assumes that individual demand curves can be aggregated to form a "market demand curve". Efforts to prove this resulted in the Sonnenschein-Mantel-Debreu (SMD) theorem, which actually disproves that adding up demand curves results in a well behaved Market Demand Curve.

What academic economists refuse to accept is that "economics" does not exist in a vacuum outside politics and other social sciences. The EU and Euro are primarily political projects; they will persist. Even today most Greeks want to stay in the Euro because they see its benefits.

An Unsustainable Position

by Paul Krugman

July 15, 2015

http://krugman.blogs.nytimes.com/2015/07/15/an-unsustainable-position/?comments#permid=15496855

So Prof. Krugman's "expert" advice on how to get Greece back to economic and fiscal health is to give it access to unlimited additional funds, with no attached requirements to, for example, correct the comparatively excessive pension costs and poor tax collection effectiveness - see Steven Rattner's collumn in today's NYT.

That would be a similar position as if the US and allies had gone into the Iran nuclear negotiations with the promise to remove all sanctions - to relieve the Iranian people of the economic hardship they have caused - without any requirements on Iran to curtail its nuclear program.

Brilliant!

Germany’s Destructive Anger

by Jacob Soll

July 15, 2015

http://www.nytimes.com/2015/07/15/opinion/germanys-destructive-anger.html?comments#permid=15496663

There indeed is a strong current of resentment and anger against Greece in some circles in Germany - the AfD political party, which btw is in the process of self-destructing, is an expression of this anger. However, the majority of Germans, according to recent polling, and certainly the coalition government are in favor of helping Greece to stay in the Euro. 

As a counterpoint to the nonesense about "austerity for austerity's sake", read Steven Rattner's collumn in today's NYT.

And if Mr. Soll wants to use the sight of people going through garbage cans as a sign of economic mismanagement (I agree), I invite him to accompany me on my morning walks in downtown Seattle (which currently is quite well off, compared to other American cities), where that sight is so commonplace that one tends to ignore it, as one tends to ignore the people standing at virtually every major intersection with cardboard signs detailing their desparate straights.

Overregulating Life in Greece

by Steven Rattner

July 15, 2015

http://www.nytimes.com/2015/07/15/opinion/overregulating-life-in-greece.html?comments#permid=15496288

Finally someone in the American economics community has the insight to call out this nonsence of "austerity for austerities sake", and the evil Germans using their economic power to dominate Europe.

I first saw these statistics on relative pension costs and uncollected taxes among Euro countries in a German paper and wondered why people like Paul Krugman choose to ignore these data. Actually the divergence in tax receipts, if you include all taxes, not just value-added, showed that 86% of taxes in Greece go uncollected.

Now the "bad, mean Europeans" are opffering Greece Euro 83 Billion more to help them out - the Greeks actually requested Euro 52 Billion, so the story among the Krugmans of this world is going to be, that Europe "forced" Greece into even more debt to control them even more - with the demand to simply get their pension costs and tax collection in line with other Euro countries.

As a side note, the ranking in the graphic on pension cost and tax collection effectiveness closely correlates to the current fical health of Euro countries. In the future the Euro will require better coordination/controls of fiscal policies among its members, and these statistics seem to show a good place to start.

Can the Islamic State Survive?

by Ross Douthat

May 23, 2015

http://www.nytimes.com/2015/05/24/opinion/sunday/ross-douthat-can-the-islamic-state-survive.html?comments#permid=15040240:15040488

Ross, what you seem to forget is that US blundering military action in Iraq and Afghanistan, and the hapless "support" to in Lybia and Syria has set this monster loose in the first place.

After more than 12 years of abject military and political failure in Afghanistan and Iraq, what evidence do you have to suggest that the US can stop this madness? More troops? We've tried several surges, and their effect was at most very localized and temporary. Sending more weapons? We see that US supplied weapons in Afghanistan, during the Soviet invasion, and now from retreating Afghan and Iraqi troops, are being used against us.

And you, of all people, who loves to natter on about religion, should know that the major difference between the Soviet experience and that in the Middle East, is the power of religious fanaticism.

It seems to me that there is a different ray of light, which may show that over the (very) long haul, barbarism caused my religious fanaticism, brain-washing and ignorance, the hall mark of the long running Sunni/Shia conflict in the Middle East, will one day burn itself out: the pro-gay-marriage vote in Ireland.

The dogmatic, ignorant and fanatic wing of Catholicism has long held sway in Ireland, longer than in most other European countries. But INTERNAL changes in that society (perhaps with a little help from the outside, the EU) have caused the Irish to discard the shakes of religious dogma and prejudice and join the modern world.

It is only through INTERNAL changes in a society that lasting changes from centuries of prejudice and ignorance can gain a foothold. Trying to force such changes from the outside, especially through military force, is completely self-defeating, as the US's disastrous interventions in Iraq and Afghanistan have shown. 

When Cultures Shift

by David Brooks

April 17, 2015

http://www.nytimes.com/2015/04/17/opinion/david-brooks-when-cultures-shift.html?ref=opinion

I agree with Mr. Brooks' assessment - a rare occurrence in and of itself; actually much more frequent when he writes his "philosophical" pieces than with his political commentary.

However, I believe this genie is going to be difficult to get back into the bottle. Kennedy's "ask not what your country can do for you, but what you can do for your country" was probably the last gasp of the "old" rules.

Conservatives like to blame the liberals for this turn of priorities, and in some social areas, like sexual mores, feminism, acceptance of other "lifestyles", that is probably correct. But in the areas of business ("greed is good", economic libertarianism) and government (Reaganism - government is the problem), conservatives have taken the lead.

Not sure which side to "blame" for the Kardashian or Paris Hilton media phenomenon, where huge careers are made with literally nothing but a "look at MEEE" attitude.

And not unexpectedly, Conservative are trying to roll back this trend on the social front with their continued (self-serving) emphasis on "church" and "family values" - as if hating gays and outlawing abortion had anything to do with either.

Liberals, on the other hand, are trying to contain the runaway belief in "me", "the rugged individual" on the economic and political front be reasserting the value of communal, social action at the government level through legislation like the ACA.

Given our current political disfunction, the twain shall never meet.

Making Religion the Problem

by Russ Douthat

APRIL 2, 2015 11:11 AM

http://douthat.blogs.nytimes.com/2015/04/02/making-religion-the-problem/?comments&_r=0


So the essence of Douthat's answer to "the question of what, if anything, conservatives actually think we should do about the problem if it is primarily a cultural one" is:
"One possibility, the one I favor ..., is basically to allow a fairly wide latitude for these religious subcultures, with legal protections and a general tolerance that makes it relatively easy for the observant and traditionalist not only to worship and find fellowship but also to run businesses, schools, colleges, hospitals, etc. in accordance with their beliefs."

The rub is in the last part - the fact that social conservatives want the ability not only to freely "freely worship and find fellowship" (which is guaranteed as a cornerstone of the Constitution), but also to IMPOSE their beliefs on others by, for example, not serving a gay couple in their business or other activities. With other words, Douthat is arguing FOR the current law in Indiana, which implicitly (and in the interpretation of some of that bills sponsors, explicitly) would allow businesses to discriminate for the sake of their "religious beliefs". That is unacceptable. Remember, not so long ago discrimination against a blacks was justifies by many churches (in South Africa of old, by the Dutch Reformed Church - we called it the Much Deformed Church) because supposedly their "faith" demanded it.