150 Years Ago: July 4 At Vicksburg And Gettysburg

Many momentous events in American history have occurred on July 4. The first announcement of the Declaration of Independence was just one of many.

July 4, 1826: former Presidents Thomas Jefferson and John Adams both died on that day;
July 4, 1831: former President James Madison died;
July 4, 1863: Confederate forces surrendered at Vicksburg, ending a long siege and putting the Union in command of the entire length of the Mississippi River, cutting the Confederacy in half and isolating the West;
July 4, 1863: Confederate forces at Gettysburg under command of Robert E. Lee begin a long retreat that was to end nearly two years later at Appomattox.

July 4, 1943: Task Group 36.1 moves into position for assault on New Georgia, Solomons Islands the following day, beginning in earnest the long retreat of Japanese forces that was to end two years later in Tokyo Bay.

Today's New York Times prints a thoughtful essay by Paul Krugman, entitled e pluribus unum. I recommend the essay, though I have a slightly different take on some of Krugman's thoughts.

"Is America in 2013," Krugman asks, "in any meaningful sense, the same country that declared independence in 1776?" Krugman's answer is "yes."

My answer is "maybe."

Krugman emphasizes on the one hand how different the country is now from 1776:
"America in 1776," he points out,  "was a rural land, mainly composed of small farmers and, in the South, somewhat bigger farmers with slaves. And the free population consisted of, well, WASPs: almost all came from northwestern Europe, 65 percent came from Britain, and 98 percent were Protestants."

Ethnically, he emphasizes, "we are...very different from the founders. Only a minority of today’s Americans are descended from the WASPs and slaves of 1776. The rest are the descendants of successive waves of immigration: first from Ireland and Germany, then from Southern and Eastern Europe, now from Latin America and Asia. We’re no longer an Anglo-Saxon nation; we’re only around half-Protestant; and we’re increasingly nonwhite."

I am one of that diminishing minority of Americans descended from the WASPS of 1776. All of my ancestors were here by then.

Before I buy into Krugman's assurances that "we are still the same country that declared independence all those years ago," I feel compelled to point out that from the beginning of our history, Americans have had vastly different visions of what the country is and should be.

From 1789 until 1865, there was a clear conflict between the vision of 1776 ("all men are created equal") and the vision of the Constitutional Convention, which facilitated slavery and other serious constraints on liberty. Even so, the Constitution gave lip service to "form a more perfect union" and "secure the blessings of liberty for ourselves and our posterity."

Abraham Lincoln's Gettysburg Address rescued the vision of 1776 from obscurity. The thirteenth, fourteenth and fifteenth amendments went far toward incorporating that vision as an integral element of the Constitution.

A good thing to remember in this Sesquicentennial year of America's Civil War.

We remain a Democracy. Securing the blessings of liberty is still up to us.  



 

The Sequester - Destructive And Dumb

Have I mentioned before how destructive and stupid the sequester is?

We are seeing the total failure of government. People are being hurt. The economy is being hurt.

I say again: We don't have a deficit problem - we have a jobs problem! The federal government should spend more money, not less, until employment returns.

Do you want to know just exactly what and who is being harmed by the sequester? Check out Jared Bernstein's blog here.

Have We Been Derped?

Actually, I'm still a bit unsure as to whether Derp is just a noun, or whether it can be a verb as well.

What is a derp? Economist Noah Smith in his blog Noahpinion gives a complete and somewhat humorous explanation here.

It turns out it is connected with epistemology and also with Bayesian analysis. And posteriors.

It explains why some people aren't interested in evidence.

Paul Krugman has a discussion of derpiness here. Even conservative economists use the term.

As for epistemology, epistemic closure (meaning closed minds) can have real world consequences. Here, for example.

This problem has been around for a long time in human affairs. Ecclesiastes had something to say about it:

"...wisdom is better than folly, just as light is better than darkness. The wise have eyes in their heads, while the fool walks in the darkness...." Ecclesiastes 2:13-14.

Quis custodiet ipsos custodes?

Who watches the watchers?

Juvenal: Satires, Book VI

Sequester: A Destructive Solution To A Non-Problem

Two years ago, the newspapers and TV pundits were warning about a vast "debt crisis."

There never was a debt crisis. There were substantial deficits resulting from the economic collapse from our real estate bubble. Economic collapse and resulting loss of jobs triggered increased expenditures on the social safety net and reduced revenue.

This was not a problem - it is a feature of our economy. It is called "counter-cyclical" expenditure, and is designed to moderate the business cycle and prevent the economy from going into a tailspin. This time, the economic collapse was so severe, it took additional measures to avoid a collapse.

It could have been worse. Much worse.

By now, it could be much better, had we acted on a scale required by the situation. But especially after the 2010 election, the House of Representatives, under Republican leadership, did everything they could to sabotage recovery.

In early 2011, the newly sworn-in Republican House threatened to shut down the government if they didn't get their way.

The result was the sequester bill.

Just as recovery was beginning to happen (though more vigorous recovery efforts would have speeded things up), the sequester is now kicking in. As a nation, we are pressing on the brake while trying to accelerate up the on-ramp of recovery.

Bad idea.

Here's what I had to say about it two years ago.

The underlying problem isn't getting better.

Wall Street Journal: New York City Is Totalitarian

According to the Wall Street Journal, New York City has become totalitarian because it is making rental bicycles readily available to visitors.

There may be logic to the WSJ attack, but it escapes me. Here is an article explaining the WSJ complaint and providing a link to the relevant video.

Vacation Comparison

The Organization for Economic Cooperation and Development (OECD) has put together a graph showing how advanced economies compare on paid vacation days.

Here's the graph:



On this Sunday morning, having listened to what Calvin Trillin calls the "Sabbath gasbags," I am reminded of Jesus' words when he was admonished for healing someone on the Sabbath: "The Sabbath is made for man, not man for the Sabbath."

Bob Fletcher, American Hero

We've probably all seen Spencer Tracy in "Bad Day at Black Rock." If not, we should have.

The internment of Americans of Japanese descent is one of the more disgraceful events of World War II. Many loyal Americans lost their property during their internment.

But Bob Fletcher, an American who knew injustice when he saw it, saved the farms of three hard working Japanese families. His obituary in the Sacramento Bee tells the story. He kept the families from suffering the fate of the Japanese in the Spencer Tracy movie.

Bob Fletcher was just one man. He couldn't right all the injustice of all the interned families. But he did what he could where he was with the tools at hand.

No more can be asked of anyone.

Why Did The Soviet Union Fall Apart?

Over the past two decades, several inaccurate narratives have dominated public discourse about the former Soviet Union's demise.

The first narrative is that President Reagan ordered Mikhail Gorbachov to "tear down this wall" and the Berlin Wall came down. Kind of like Joshua's trumpet.

The second narrative is that the Soviet Union fell apart because of the failure of Central Planning, also known as the "Command Economy."

Both narratives appeal to widespread prejudices rather than objective evaluation of both the accomplishments and the failures of the Soviet system. Contributing to both successes and failures was the complexity of the "nationality question" during both the Soviet period and during the preexisting Russian Empire.

Following the Russian Civil War and the Polish invasion of Russia, Lenin introduced his "New Economic Policy" (NEP). NEP allowed a considerable amount of free enterprise, including farming. It apparently worked pretty well. But the leadership became rightfully concerned about increasing turmoil in Europe and began the collectivization campaign at least in part to support the Soviet Union's ability to mobilize its natural resources for war. Any examination of Soviet economic policy during that period has to address such questions as whether NEP could plausibly have prepared for war with Germany.

As for the larger issue of the Command Economy, economic historian Brad DeLong recently posted an essay of his from seventeen years ago, examining the corporation as a command economy. This is a good corrective to analyses that draw large distinctions between Western industry and Soviet Central Planning.

Many years ago, I attended a lecture by Alexander Kerensky, the second Prime Minister of the Russian Provisional Government of 1917, which was overthrown by the Bolshevik Revolution of October. Kerensky contended that the Soviet Union's economy was not a Socialist one, but an example of what he called "State Capitalism." He autographed a copy of his book, which is still in my library. It may be worth rereading.

It is time to take another look at the issues presented by seventy-five years of Soviet history.

Soak The Poor - Enrich The Rich

Who benefits - who pays?

North Carolina's Republican legislature thinks the poor aren't poor enough and the rich aren't rich enough.

If you aren't in the top 10%, Republicans don't know anyone like you and certainly don't care about anyone like you. And it isn't just taxes.

But their tax plan is bad enough.

Economist Jared Bernstein spent today in North Carolina trying to talk sense about taxes and expenditures.

Lowering taxes on the rich and raising taxes on the poor - which is what a shift from income taxes to sales taxes will do, is just a very bad idea. As bad an idea as the sequester.

But it helps the rich, to whom Republicans pander.

Here is a graph of the share of income spent on taxes by income group:



Remember the old song about the rich getting richer and the poor getting poorer?

Here's Bernstein's summary of the problem. Increasing sales taxes will take a proportionately bigger bite out of the lowest three quintiles than of the top 20%. Decreasing income tax will have almost no benefit for the bottom 20% but the top 1% will rake in the dough.

Krugman Is Right - But It May Not Make A Difference

Business Insider has a well-written article summarizing the intellectual triumph of those economists like Paul Krugman and Brad DeLong who advocated more economic stimulus instead of more austerity.

Readers of my blog know I have agreed with that assessment all along. But I have to take issue with part of the BI article. "Over the course of this debate," the article emphasized, "evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong." 

I don't buy into the "well-intentioned" argument. Many of the "Austerians" were simply pandering to the preferences of the wealthy and powerful. Yesterday economist Jared Bernstein posted an article about "The Preferences Of The Wealthy And Their Role In American Politics." None of what he says will come as a surprise to anyone who has paid attention. Nor is it new in our history. But from around 1935 until around 1975, it was under control. 

Things began to change while working Americans were paying attention to something (or somethings) else.

Now it will take a sustained effort to undo the work of the wealthy and powerful over the past four decades.

It is not accidental that wages of working Americans have stagnated for the past four decades while income and wealth of the wealthy has soared. And it was not due to efforts I would call "well-intentioned."

Krugman himself doubts that the thorough discrediting of studies by Reinhart/Rogoff and Alesina will make a difference. Our Congress continues applying discredited medicine. Currently the sequester. What destructive economic leeches will they apply next?

More On The Sequester Disaster

Here's an analysis of the sequester published by the Center for Economic and Policy Research.

The Sequester Is A Really, Really Bad Idea

I don't care who thought it up. The sequester was a bad idea. The obsession with debt instead of joblessness that led to the sequester was foolishness of a high order.

Unless the Congress comes to its senses, the damage that is being done will persist.

The only good thing we can say is that the US isn't acting as foolishly as Europe.

Paul Krugman explains. He shouldn't have to.

For at least four years, the U.S. political class has failed in economic leadership. In steering the ship of state, they persist in putting the rudder over in the wrong direction.

The problem is jobs, not debt.

At least the United States hasn't entered another dip in the recession.

Yet.

Who Benefits - Who Pays?

As I have said before, this is the central question of politics. It is also a central question of economics. The issue is not "is the system fair?" it is "does the system work for the prosperity of everyone?"

The answer right now is "no."

In fact, that has been the answer for about four decades.

Economist Joe Stiglitz has some ideas about how to make it better.

The central purpose of our national economy should not be to make the already wealthy wealthier or to replicate Downton Abbey.

Speaking Of Elections: Hayes - Tilden 1876

Economic historian Brad DeLong has raised another interesting question: "why did the Republicans in 1876 abandon their most reliable supporters in the South (African Americans) for small gains that put Benjamin Hayes in the White House?" The negotiated outcome of this, one of the most contentious elections in US history, ended any effective Federal oversight of the South for nearly a century.

Another historian provides a plausible answer.

It remained for Lyndon Johnson to undo the Republican capitulation of 1876. The Republican Party then promptly recruited Southern racists to their own cause.

Who Are The Tyrants?

Churchill saw Tyranny as the foe.

So who were the tyrants?

Economic historian Brad DeLong has a very interesting blog post today on the history of Tyrants, especially twentieth century tyrants.

His essay is worth reading. Just as worthy of attention are the many well-argued comments others have posted taking exception to or modifying many of the points DeLong makes.

Churchill: "Tyranny Is Our Foe"

In 1943, Winston Churchill was awarded an honorary degree by Harvard University. Churchill spoke at the ceremony, emphasizing the importance of a common effort by English-speaking peoples because of their shared traditions of freedom.

"We do not war," he said, "with races....Tyranny is our foe, whatever trappings or disguise it wears, whatever language it speaks, be it external or internal, we must forever be on our guard, ever mobilized, ever vigilant, always ready to spring at its throat. Not only do we march and strive shoulder to shoulder at this moment under the fire of the enemy on the fields of war or in the air, but also in those realms of thought which are consecrated to the rights and dignity of man."

Let us not forget.

Seventy Years Ago: Wartime Rationing

I have written before about rationing. It pervaded our lives during World War II and it involved an enormous organization to plan and control the economy to insure a successful war effort. The "magic of the marketplace" wasn't up to the task.

Economist Brad DeLong provides a link to a detailed explanation of how it worked. World War II truly mobilized all of our national assets.

Was this trip necessary? Yes it was.

On a personal note, I was ten years old before I learned to ride a bicycle. They weren't available during the war. When bicycles came back on the market in 1947, my grandfather bought one and drove 125 miles from Tulsa to Oklahoma City to deliver it on my tenth birthday.

What's Happening In The States?

A good article in today's New York Times by columnist Bill Keller examines how it comes about that there is such a wide variation in laws passed recently by state legislatures. Equally puzzling is the national gridlock in the Congress.

Keller describes a number of alternate explanations offered by political scientists. I find one explanation is probably the most accurate: political outcomes are determined by an activist elite of about 15 percent of the populace, combined with a largely indifferent public. Or maybe it isn't that the public is indifferent. Maybe it is that they are confused and ill-informed.

How to address that may be the greatest challenge to democracy in today's world.

Affordable Care Act: How Is It Doing So Far?

Good summary in today's New York Times of the accomplishments to date of the Affordable Care Act. Even though the complete law doesn't go into effect until January 1, 2014, many elements have already taken effect.

What has ACA (aka Obamacare) accomplished to date:

1.  Nearly 7 million children have stayed on their parents' insurance, more than 3 million previously uninsured;
2.  71 million Americans already received free preventive care (no co-pay or deductibles);
3.  34 million additional Americans on Medicare received free preventive care;
4.  17 million children with pre-existing conditions now insured;
5.  107,000 adults with pre-existing conditions now in federal plan;
6.  Community health centers serving 3 million additional Americans;
7.  19 million Americans with reduced premiums or cost sharing;
8.  In 2012 insurers paid $ 1.1 billion in rebates because they didn't spend enough revenue on claims or quality improvements;
9.  Lower rate increases by insurers;
10. $ 6.1 billion saved on prescription drugs;
11. Sharp declines in annual growth in health care spending;
12. Medicare Advantage premiums down 10% and enrollment up by 28%.

That's just the beginning. Readmissions are down and followup care improved. More improvements are in the offing.