Nick Baumann

Nick Baumann

Senior Editor

Nick is based in our DC bureau, where he covers national politics and civil liberties issues. Nick has also written for The Economist, The Atlantic, the Washington Monthly, and Commonweal. Email tips and insights to nbaumann [at] motherjones [dot] com. You can also follow him on Facebook.

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The Market for Economics

| Thu Feb. 4, 2010 4:31 PM EST

Ian Crosby offers up some interesting questions:

Paul Krugman maintains that Austrian business cycle theory is "as worthy of serious study as the phlogiston theory of fire." Milton Friedman claimed, less colorfully but no less categorically: "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false."

Am I right to interpret this concurrence of opinion by two Nobelists from opposite ends of the political spectrum as a strong evidence that the Austrian critique is misguided?  Are latter-day Austrians the economic equivalent of creation scientists and climate-change deniers?  Or are there mainstream economists who take them seriously?  And if they do, what does it say about macro as science that there should be basic disagreements about a fundamental object of study in the discipline?

After talking to a few working economists, he concludes:

The real lack of consensus in macro, it seems, is not how to respond to a downturn in the business cycle, but what causes the business cycle in the first place.  And if mainstream macroeconomists agree that the Austrian explanation of this phenomenon is demonstrably lacking, it is not because they have a well-supported alternative or viable research program of their own.

Today’s Austrians may be a small and dubious minority.  But they have hardly opposed themselves to the edifice of a successful science.

Does that conclusion seem right to you guys?

And why is Austrianism appealing, anyway? Krugman argues that Austrianism appeals to people because it offers easy, clear-cut rules about cause and effect, and because it appeals to individuals' moral sense.*

But I think part of the reason people are attracted to the Austrian school is that more mainstream economists don't seem as interested in gaining public (i.e., nonacademic) acceptance of their ideas as the Austrians are. Whether or not they're "serious," the Austrians are definitely serious about promoting their theories. The Austrians have the Mises Institute, dedicated to spreading their ideas. They have the legions of Ron Paul supporters, most of whom lean towards Austrianism and are eager to tell you about it. And various Austrians and Austrian-leaning folks are responsible for clever things like the Keynes vs. Hayek rap video and Peter Schiff's series of YouTube videos. Russ Roberts, a professor at George Mason University who is behind the rap video, has written about the peculiarity of GMU's "Austrian-flavored" economics department:

We don’t just speak to the academy. We blog. We write novels. We write letters to the editor. Op-ed columns. We write books for a general audience. This isn’t an aberration. It isn’t just tolerated. It’s honored.

The point is that while it's easy to find someone ready to convert you to Austrianism, you just don't see "mainstream" economists out there trying to explain the basics of their theories to the masses. The closest you get to a public evangelist for Keynesian economics, for example, is Krugman, who generally focuses his New York Times column on the political and policy implications of economics—not the underlying theory. And yet when he has tried to explain the counterintuitive parts of Keynesianism, Krugman's actually been fairly effective. Witness this Slate article from 1998, in which Krugman talks about a microeconomy in order to explain his theories about the larger economy. More of that, please! 

Kevin is traveling today.

*I edited several sentences in the middle of this post for clarity.

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Do Elections Have Consequences?

| Thu Feb. 4, 2010 3:19 PM EST

John Cole uses this video of Sen. Al Franken (D-Minn.) to highlight some unfortunate behavior on the part of Sen. John McCain (R-Ariz.):

You see, McCain put a hold on Craig Becker, a nominee for the National Labor Relations Board, back in October, but never submitted any questions for Becker in all that time. The point of Franken's questions, which get at the fact that Becker is a former labor lawyer, is to point out that nominees for something like the NLRB are very likely to be from one side or the other—in this case, either management or labor.

Republicans, who generally take management's side, are going to oppose the labor-type nominees. And Democrats are going to oppose the management-type nominees. And because the minority's opposition to someone is often enough to block that person's confirmation (because of holds and the filibuster), you have a real problem. Elections are supposed to determine who runs the country. But the way the system works currently is that winning a presidential election gives you the right to determine foreign policy and assassinate Americans but gives you very little power over domestic governance. Winning a presidential election should at least give you the power to hire people to help you run the country. It should also probably give you a better shot at actually implementing your agenda. Right now, both those things are impossible.

Kevin is traveling today.

The Power to Assassinate American Citizens

| Thu Feb. 4, 2010 3:01 PM EST

Today, via the Washington Post's Ellen Nakashima, we get more confirmation that the Obama administration believes it has the power to unilaterally order the assassination of Americans who it suspects are terrorists:

Director of National Intelligence Dennis C. Blair acknowledged Wednesday that government agencies may kill U.S. citizens abroad who are involved in terrorist activities if they are "taking action that threatens Americans."

There don't seem to be any non-executive branch checks on this power. But Barack Obama is a good and wise man. What could possibly go wrong?

As usual, Glenn Greenwald is the person to go to on this:

Although Blair emphasized that it requires "special permission" before an American citizen can be placed on the assassination list, consider from whom that "permission" is obtained:  the President, or someone else under his authority within the Executive Branch.  There are no outside checks or limits at all on how these "factors" are weighed.  In last week's post, I wrote about all the reasons why it's so dangerous—as well as both legally and Consitutionally dubious—to allow the President to kill American citizens not on an active battlefield during combat, but while they are sleeping, sitting with their families in their home, walking on the street, etc.  That's basically giving the President the power to impose death sentences on his own citizens without any charges or trial.  Who could possibly support that?

[...]

It would be perverse in the extreme, but wouldn't it be preferable to at least require the President to demonstrate to a court that probable cause exists to warrant the assassination of an American citizen before the President should be allowed to order it?  That would basically mean that courts would issue "assassination warrants" or "murder warrants"—a repugnant idea given that they're tantamount to imposing the death sentence without a trial—but isn't that minimal safeguard preferable to allowing the President unchecked authority to do it on his own, the very power he has now claimed for himself?  And if the Fifth Amendment's explicit guarantee—that one shall not be deprived of life without due process—does not prohibit the U.S. Government from assassinating you without any process, what exactly does it prohibit?

That, at least, I have a bit of an answer for: the government can take your life, but it can never take your steel plants.

Kevin is traveling today.

Did Bush Almost Bomb Georgia?

| Thu Feb. 4, 2010 2:31 PM EST

Politico reports breathlessly that George W. Bush's administration "considered—and rejected—a military response to Russia’s 2008 invasion of Georgia." Andrew Sullivan draws the conclusion that the Bush team "came close" to bombing Georgia to stop Russian troops from pouring into the tiny country through a critical tunnel. But that's not really what the article says.

The key quote, in the sixth paragraph of the story, explains that "No principal advocated the use of force." It's both appropriate and unsurprising that Bush and Cheney's national security aides—or the national security aides to any president—would lay out all the potential responses to a crisis like the invasion of Georgia. And it's only responsible for the pricipals—actual decisionmakers like Bush, Cheney, and National Security Adviser Stephen Hadley—to discuss all the options. But if none of the actual decisionmakers ever pushed to use military force, it's hard to argue that it was seriously considered. This really seems like a non-story.

Kevin is traveling today.

The Democrats' Jobs "Plan"

| Thu Feb. 4, 2010 1:44 PM EST

Scott Brown is set to be sworn in as the newest member of the United States Senate later today. That means Democrats will need at least one Republican to switch sides if they hope to beat a Republican filibuster of their jobs bill. An initial vote on the package is set for Monday. Brian Beutler has the latest on how the Dems' plan to do that:

"You need two to tango. And you need Republicans for bipartisanship," said Senate Majority Whip Dick Durbin (I-IL). "Hope is prospective...we don't have bipartisanship at this moment. I hope we'll have it in a matter of minutes, hours, days."

Hope may be prospective. But it's not a plan.

Maybe the Dems really do have a GOPer on board, and they just don't want to say yet. But more likely, they're expecting the bill to fail and plan on blaming the Republicans for it. That might be good politics, but it doesn't actually help anyone get a job.

Kevin is traveling today.

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