Over at Jezebel, Katie J. M. Baker is angry that the New York Times profiled the female-founded New Inquiry in the Style section and the male-founded Jacobin in the Books section. I don't blame her. But then we get this rote bit of defensiveness:

This is not to say that fashion is less important than literature.

Fine. I'll say it. Fashion is less important than literature. That's why the Times shouldn't natter on about fashion and flirting when they profile cultural magazines founded by women but focus on ideas and hard work when they profile similar magazines founded by men. There's no need to pretend otherwise, and it's no insult to fashion to place it somewhere behind Shakespeare and H.L. Mencken.

I'd say that this was a more explicitly political inauguration speech than usual, with lots of shoutouts to specific political goals and partisan disagreements. I expect the Fox News set to hate it. Here are a few key excerpts:

Our country cannot succeed when a shrinking few do very well and a growing many barely make it.

The commitments we make to each other — through Medicare, and Medicaid, and Social Security — these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.

Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law — for if we are truly created equal, then surely the love we commit to one another must be equal as well. Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote. Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity.

Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it.

Our journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia to the quiet lanes of Newtown, know that they are cared for, and cherished, and always safe from harm.

Also: that was a helluva performance of America from Kelly Clarkson, wasn't it?

UPDATE: Sure enough, the Fox News commenters seem distinctly unhappy with this speech. Brit Hume is complaining that the economy is still terrible. Chris Wallace says Obama didn't reach out to conservatives at all. Bret Baer thinks it was basically a challenge to Republicans not to try and mess with the welfare state. Megyn Kelly says that even the Washington Post thinks Obama is too liberal. And so far, we've only heard from the relatively moderate wing of Fox pundits. I can hardly wait to see what Karl Rove and Sean Hannity have to say about it.

UPDATE 2: Now they're chattering about whether it's OK to say that Beyonce is an attractive woman.

UPDATE 3: Now they're back to arguing that Obama is the real obstructionist, not Republicans. I think I'll tune out now. I imagine they can keep up this schtick pretty much forever.

Does rising income inequality place a drag on economic growth? Joe Stiglitz says yes, and the basic argument is pretty simple: the poor and middle class tend to spend nearly 100% of their income while the rich spend much less of theirs. To see what effect this has, suppose you have two people in an economy with total income of $100. Now take a look at two different scenarios:

  1. Rich guy has $60 and poor guy has $40. Rich guy spends half his income and poor guy spends all of it, for total consumption of $70.
  2. Rich guy has $80 and poor guy has $20. Rich guy spends half his income and poor guy spends all of it, for total consumption of $60.

This sounds pretty plausible, doesn't it? Higher inequality should generate less consumption, which in turn produces a weaker economy. Unfortunately, the data says something else. "I wish I could sign on to this thesis," says Paul Krugman, "and I’d be politically very comfortable if I could. But I can’t see how this works."

Me neither. I spent a couple of months trying to write a magazine piece based on this thesis, and I finally gave up. By the time I was done, I just didn't believe it. So I gave up and spiked the idea.

Still, there are other ways that income inequality can hurt the economy. Krugman, for example, buys the idea that high inequality fosters financial crises, and when I was done with my research I found that an intriguing hypothesis too. There's a pretty compelling argument to be made that rising inequality simultaneously puts pressure on the middle class to borrow more (in order to maintain steadily improving lifestyles even with stagnant incomes) and on the rich to lend more (they have to do something with all that extra money they're hauling in, after all). So the rich lend money to the non-rich, but as the debt loads of the non-rich grow they become less and less able to afford more borrowing. That produces (a) government policies that help to sustain the credit bubble and (b) ever more baroque financial instruments to convince the rich that their lending is still safe. Eventually, however, it all collapses.

Matt Yglesias proposes another way in which inequality hurts economic growth:

My conjecture would be that high levels of inequality greatly complicate the political economy of expansionary policy....To the extent that you have a lot of inequality, your politics is naturally going to be more focused on questions of distribution than expansion. I think you saw that in liberal hostility to even temporary expansion of the Bush tax cuts and even more clearly in things like the GOP turn against Making Work Pay and the payroll tax cut.

Maybe! The poor want to stick it to the rich even if that hurts economic recovery, and the rich want to stick it to the poor because....something. The motivation there is less clear, actually. Empirically, though, it sure seems to be the case. There's not much question that in America, anyway, the party of the rich is distinctly non-thrilled with tax cuts that primarily benefit the poor and the middle class.

In the end, I find all of this compelling but still pretty speculative. In the meantime, there are plenty of reasons to oppose growing income inequality even if it doesn't directly hurt economic growth. I might change my mind later, but for now I think those reasons will have to do.

House Republicans have apparently agreed to raise the debt ceiling for three months, and liberals are widely declaring victory. I'd advise caution on two grounds. First, we haven't yet seen the actual proposal, so we don't know if they're offering a clean bill or one with obnoxious conditions. Second, is three months really that big a victory? Jaime Fuller Paul Waldman, echoing many others, writes:

There's a lesson for the White House: Hardball works. Unlike in previous crises, President Obama didn't try to make a bunch of pre-concessions in the hope that Republicans would moderate their position. He simply told them that the debt ceiling wasn't up for negotiation. It just had to be raised, and that was all there was to it. And what do you know, he won. For three months at least. Then we get to do it all over again.

I don't entirely disagree with this, and I'm certainly in favor of Obama adopting a more tough-minded negotiating posture. Still I'm not sure that "hardball works" is really the lesson to be learned here. I think the lesson is that hardball works if your opponents have a weak hand. In the case of the fiscal cliff, taxes were going to go up automatically if Republicans refused to make a deal. Their hand was disastrously weak. In the case of the debt ceiling, the business community told them in no uncertain terms that playing games with the full faith and credit of the United States government would be catastrophic. Republicans knew this was true, and they knew they'd be blamed for it. They had no way out.

In both cases, Obama could have blown it. He could have failed to recognize the strength of his own position and made preemptive compromises. It's to his credit that he didn't. Still, to say that hardball won these arguments misses a big piece of the story. Whether it works in the future will depend a lot on how weak the Republican position is. It's not a cure-all.

This week's set decoration idea comes from my sister (aka Inkblot's Aunt, in comments). Get a box, she said, put a quilt in the box, and then put the cat in the box. Or, better yet, just wait for the cat to hop into the box on her own. After all, a cat in a box is a timeless theme of catblogging, no?

We did this outdoors because our recent cold snap turned into a warm spell this week, so Domino was already outside sunning herself when I hauled out my camera. Besides, the light is better. This week features a second iteration of the Yellow Brick Road quilt design, which you can compare to last week's version here. It's machine pieced and machine quilted.

Matt Yglesias argues that since the federal government can borrow money at negative interest rates, it should borrow instead of taxing:

You're the mayor of a city. A storm strikes and ruins a whole bunch of your police cars. Now you need to buy new ones. You have two options for paying for the cars—you can borrow the money and pay the bill ten years from now, or you can raise taxes and pay right now. The case for paying later is pretty clear. In ten years' time your city's overall economic output will be higher so the burden of paying off the loan then will be lessened. On the other hand, the case for paying now is also pretty clear—lenders generally expect interest payments in exchange for their loans so the total cost of the debt option is higher. But wait! The city's accountants show up and point out that it's currently possible for the city to borrow at a negative real rate. Suddenly the interest costs are off the table as a reason to prefer paying sooner.

So what's left? Nothing. The city will be richer in ten years, so pay then. The logic becomes especially compelling when you recognize that the city's income will grow more rapidly under the lower-tax regime that encourages more investment in residential and commercial property and more business activity.

This is true. We should be borrowing more now, when interest rates are negative, and taxing less, since that slows down an already fragile economy.

However, this was written in the context of replying to a critic who thought it was crazy to suggest that we simply not tax at all. But the critic is right. The financial case for borrowing 100% of our budget might be sound, but the political economy case isn't.

One of the fundamental reasons for taxation is that it provides a constraint on democratic governments. If you want to appropriate a certain amount of the productive capacity of the country, you need to get permission from the citizens of the country, and you need to make that permission painful in some way. Otherwise the government will seize an ever bigger portion of the economy essentially by stealth. This is bad juju.

Borrowing is simply too easy. Politicians will always be attracted to it, because the money doesn't have to paid back until they're long out of office. This is one reason that so many states have burgeoning pension problems: politicians would rather hand out pension increases than pay increases, because the pension increases don't come due until they're long gone. Pay hikes, by contrast, require them to either raise taxes or else cut back on other spending.

But that kind of pain is useful. Societies do have to make tradeoffs, and human nature being what it is, those tradeoffs will only be made if the costs are fairly clear and fairly sharp. That's why maintaining the discipline of taxation is important even when borrowing costs are low.

David Brooks is worried that Democrats, sensing weakness, will spend the next four years trying to divide and destroy the Republican Party:

He’s already started with a perfectly designed gun control package, inviting a long battle with the N.R.A. over background checks and magazine clips. That will divide the gun lobby from suburbanites. Then he can re-introduce Bush’s comprehensive immigration reform. That will divide the anti-immigration groups from the business groups (conventional wisdom underestimates how hard it is going to be for Republicans to back comprehensive reforms). 

Then he could invite a series of confrontations with Republicans over things like the debt ceiling — make them look like wackos willing to endanger the entire global economy. Along the way, he could highlight women’s issues, social mobility issues (student loans, community college funding) and pick fights on compassion issues, (hurricane relief) — promoting any small, popular spending programs that Republicans will oppose.

Politics is everywhere, and I don't doubt that Democrats would like to take advantage of Republican divisions. What party wouldn't? But look: if one party is dominated by a bunch of loons who make every political skirmish into a sign of the apocalypse, you really can't blame the other side for exposing this. What choice do they have?

Take cabinet appointments, for example. President Obama obviously wanted Susan Rice to be his secretary of state, and spent several weeks in an effort to win over Republicans. But it was impossible. She was a perfectly mainstream choice, but for obviously crackpot reasons Republicans insisted that if she were nominated they'd turn the confirmation process into a scorched-earth battle. And in the end they got their scalp: Obama backed down and nominated John Kerry instead.

And what did that get him? Nada. The fight immediately turned to Chuck Hagel and then Jack Lew. These are both pretty standard mainstream candidates too, but we were nonetheless told repeatedly that Obama knew they were plainly unacceptable and was just trying to pick a fight.

So what's he supposed to do? After winning reelection handily, is he supposed to agree that he won't nominate anyone to serve in his cabinet who isn't pre-approved by the most hardcore members of the opposition party? Of course not. That's crazy. Hagel and Lew are perfectly ordinary nominees, and Obama wasn't picking a fight with anyone by selecting them. He was just nominating people who agree with his policy positions. It was Republicans who insisted on turning this into a mortal insult.

The same is true for Brooks's examples. It's Republicans who picked a fight over the debt ceiling that makes them look like wackos. It's Republicans who picked a fight over hurricane relief, earning the ire of Chris Christie and other members of their own party. (What was Obama supposed to do? Not propose any hurricane relief?) Ditto for gun regulations, where it's the NRA taking an absolutist position, not the president. Obama is plainly willing to compromise here, just as he's plainly willing to compromise over the budget. It's Republicans who aren't.

Brooks thinks Democrats should skip this stuff entirely. Not propose any significant legislation at all. Hell, the GOP is apparently so fragile that he's not even supposed to propose small stuff that might be popular (!) because it would do damage to a Republican party held hostage by—what was Michael Gerson's phrase? Oh yes: the "momentum of their ideology," which, like the law of gravity, literally forces Republicans to oppose even small, sensible spending programs.

This is crazy. You can't expect a president to back down on everything simply because the opposition party is in thrall to a bunch of fanatics who will interpret any action at all as a step on the road to tyranny or financial ruin. You have to try to get things done anyway. And along the way, if that exposes the fanatic faction as a millstone that needs to be dealt with, isn't that all to the good? After all, Brooks plainly has no sympathy for the tea party wing of the GOP. How else does he expect their influence to wane except by exposing their crackpottery to public view?

UPDATE: Jon Chait writes pretty much the same thing here, but better than me.

National Journal reports:

Republicans appear to be willing to avoid a showdown over the debt limit and instead use the sequester as their main negotiating lever in upcoming fiscal fights with the White House and Senate Democrats.

House Budget Committee Chairman Paul Ryan, R-Wis., said Republicans at a closed-door retreat in Williamsburg were weighing a short-term increase in the country’s borrowing limit, giving all sides time to work on a broader fiscal plan in March that would include substantial spending cuts.

I'm not a conservative, so I can't pretend to have their best interests at heart. But it sure seems to me that their best bet right now is to unpaint themselves from their corner and make sure they never go back. The last thing they should do is approve a short-term increase in the debt ceiling and then have this same, self-defeating argument all over again in March.

Here's my suggestion: pass a law that gives the president the ability to raise the debt ceiling on his own, but put some limits on it. Every month the Treasury has to release a statement showing how much we've spent, how much tax revenue we took in, projected bond sales over the next month, and the amount the debt ceiling needs to be increased. The statement has to be signed by the president of the United States.

This gets Republicans off the hook from ever having to play a hostage game they can't win, but it forces the president to put his name to a monthly statement showing just how rapidly he's building up debt and turning America into the next Greece. It would be harmless campaign fodder for 2014 (good for Republicans), and would also prevent any further market-panicking showdowns (also good for Republicans). As a bonus, it would also be good for the country. What's not to like?

The sports world is all atwitter over the revelation that Manti Te'o's girlfriend, Lennay Kekua, has turned out to be a hoax. The two didn't meet after Notre Dame lost to Stanford in 2009, they didn't get together occasionally when Kekua visited Hawaii, and Kekua didn't die of leukemia the same week as Te'o's grandmother. She never even existed.

There are, needless to say, questions galore about this, and I look forward to the media frenzy over it. But this I don't really get:

The revelation that Kekua had never actually lived, let alone died, has stunned a nation and a sporting press that had blithely reported details of their relationship for months on end. Many are now angry at the media. "Nobody asked: who is she? Where did she live? Not one reporter dug deep. The lack of legwork is a total surprise to me," said Frank Shorr, a sports and journalism expert at Boston University.

Well....OK. But come on. Reporters don't go into cynical investigative mode when a football player tells sappy stories about his girlfriend. Why would they? Not only would it be kind of creepy, but there's simply no reason to suspect any kind of foul play. I mean, who lies about stuff like this? Nobody. So why would anyone ever be skeptical enough to start digging into it? This is a football player's girlfriend, not the president of the United States saying he had nothing to do with that botched burglary over at the Watergate.

I think the press gets a pass on this. You'd have to be a little deranged to think about investigating something like this. It's not even slightly surprising to me that no one ever did.

UPDATE: Hmmm. More here from SI's Pete Thamel, who wrote a cover story about Te'o on short deadline a few months ago. I'm not sure whether this changes my mind or confirms it. Either way, this is one damn peculiar story.

There's only one reason to fight the very idea of doing research in a particular field: because you're afraid of what the truth might turn out to be. Brad Plumer has more.