2009 - %3, January

CARONA WALKS (SORT OF)...."America's Sheriff" Michael Carona says it's "an absolute miracle" that he was acquitted of five out of six corruption charges on Friday. But it turns out that the criminal code has more to do with it than the redemptive power of God:

In interviews after the trial, jurors said that they believed Carona had illegally accepted cash and gifts but that they were stymied by a statute of limitations that allowed them to consider only acts committed after late October 2002. The government had failed to prove that the conspiracy it alleged among Carona and his associates had involved any overt act after that, the jurors said.

"His hand was in the cookie jar. He was just quick enough to wipe the crumbs off his hands," said juror Jerome Bell, 42, a truck driver from Anaheim.

Sometimes good timing is better than good luck. Anyway, here in The OC we prefer to look forward, not back.

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CIVIL LIBERTIES WATCH....Glenn Greenwald summarizes the initial 48 hours of the new administration:Barack Obama will have spent his first several days in office issuing a series of executive orders which, some quibbling and important caveats aside, meet or actually exceed even the most optimistic expectations of civil libertarians — everything from ordering the closing of Guantanamo to suspending military commissions to compelling CIA interrogators to adhere to the Army Field Manual to banning CIA "black sites" and, perhaps most encouragingly (in my view): severely restricting his own power and the power of former Presidents to withhold documents on the basis of secrecy, which has been the prime corrosive agent of the Bush era. As a result, establishment and right-wing figures who have been assuring everyone that Obama would scorn "the Left" (meaning: those who believe in Constitutional safeguards) and would continue most of Bush's "counter-Terrorism" policies are growing increasingly nervous about this flurry of unexpected activity.Well, look: if Glenn is happy, then I'm happy. He's a tough customer on this stuff. I hope Obama's followup is as good as his initial flurry of executive orders.

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SPENDING DURING A RECESSION....Does government spending during a recession produce more than one dollar of growth for every dollar spent? Conventional Keynesian economics says yes: in a virtuous circle, that dollar will flow through to workers, who will spend it on other things, which will in turn stimulate further growth and further spending. Most of the liberal economists who write about Barack Obama's stimulus plan think that the spending portion will have a short-term multiplier of about 1.4 or so.

But apparently Robert Barro disagrees:

I have estimated that World War II raised U.S. defense expenditures by $540 billion (1996 dollars) per year at the peak in 1943-44, amounting to 44% of real GDP. I also estimated that the war raised real GDP by $430 billion per year in 1943-44. Thus, the multiplier was 0.8....Wartime production siphoned off resources from other economic uses — there was a dampener, rather than a multiplier.

I'm no economist, but this sounds mighty suspicious. The whole point of stimulus spending is to temporarily raise employment during a recession. But once unemployment has been reduced below 5% or thereabouts — I think it eventually got to around 2% during World War II — then that's all she wrote. All additional government spending can do is suck resources away from private consumption, which might very well produce a net multiplier less than one. The same is true, though in less extreme form, for other wartime spending that happens when unemployment is already low.

But during a recession, when monetary policy is wrung out and there are millions of workers who aren't being utilized in the private sector? That's a different story, no? And it's pretty fundamental to the whole theory. The fact that Barro doesn't even mention this, let alone address it, gives me little confidence in the rest of his op-ed.

Via Tyler Cowen.

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A POVERTY PROGRAM THAT WORKS....Have you heard of the Harlem Children's Zone? I first read about it only a year or two ago, and it's a pretty fascinating anti-poverty project headed by a guy named Geoffrey Canada — one that might well be the template for Barack Obama's approach to inner-city poverty. In the current issue of MoJo, Paul Tough describes how it works:

Canada believes that many poor parents aren't doing enough to prepare their kids for school — not because they don't care, but because they simply don't know the importance of early childhood stimulation. So the Zone starts with Baby College, nine weeks of parenting classes that focus on discipline and brain development. It continues with language-intensive prekindergarten, which feeds into a rigorous K-12 charter school with an extended day and an extended year. That academic "conveyor belt," as Canada calls it, is supplemented by social programs: family counseling, a free health clinic, after-school tutoring, and a drop-in arts center for teenagers.

Canada's early childhood programs are in many ways a response to research showing that the vocabularies of poor children usually lag significantly behind those of middle-class children. At the Harlem Gems prekindergarten, I watched as the four-year-olds were bombarded with books, stories, and flash cards—including some in French. The parents were enlisted, too; one morning, I went with a few families on a field trip to a local supermarket organized by the Harlem Children's Zone. The point wasn't to learn about nutrition, but rather about language—how to fill an everyday shopping trip with the kind of nonstop chatter that has become second nature to most upper-middle-class parents, full of questions about numbers and colors and letters and names. That chatter, social scientists have shown, has a huge effect on vocabulary and reading ability. And as we walked through the aisles, those conversations were going on everywhere: Is the carrot bumpy or smooth? What color is that apple? How many should we buy?

So far, Canada's vision has yielded impressive results. Last year, the first conveyor-belt students reached the third grade and took their first statewide standardized tests. In reading, they scored above the New York City average, and in math they scored well above the state average.

Canada has gotten plenty of press already from the likes of Oprah and 60 Minutes, but our new president might be the biggest name convert of them all: Obama has proposed replicating the Harlem Children's Zone in 20 cities across the country, an investment that he thinks will cost a "few billion" dollars. For comparison, this is less than 1% of what it will take to bail out the gazillionaires of Wall Street. Read the whole piece for more.

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