Kevin Drum

It Looks Like We're Stuck With Low Inflation

| Mon Oct. 12, 2015 8:16 PM EDT

Back in August I agreed with Brad DeLong that 4 percent inflation would be a good thing right now, but I was skeptical that the Fed could engineer this given current conditions. So I asked him what it would take. Today, I apparently made it to the top of the question pile:

I think the answer is: We don't know whether it is in fact possible for a central bank today to hit a 4%/year average inflation target via conventional ordinary quantitative easing. It might well require other tools. For example:

  1. Miles Kimball's negative interest rates.
  2. Helicopter drops--that is, allowing everyone with a Social Security number to incorporate as a bank, join the Federal Reserve system, and borrow at the discount window, with the loan discharged by the individual's death.
  3. The Federal Reserve as infrastructure bank--an extra $500 billion/year of quantitative easing buying not government or mortgage bonds but directly-financing public investments.
  4. Extraordinary quantitative easing--buying not the close substitutes for money that are government bonds but rather the not-so-close substitutes that are equities.

I say: If we could win the argument about what the goal is, we could then begin the discussion about what policies would be needed to get us there.

That's pretty discouraging. Of these, #2 and #3 are almost certainly illegal, and undesirable in any case. I may not like what Congress is doing, but disbursing money is certainly under their purview—and should be. I don't want the Fed mailing out checks or contracting for new roads and bridges.

I don't know if #4 is illegal. Probably not. But I'm not crazy about this either. The Fed shouldn't be in the business of directly propping up the stock market, and certainly shouldn't be in the business of directly propping up specific stocks.

So that leaves only #1. This one is perfectly OK, and a few European countries have adopted negative rates recently. But there's probably a limit to how negative these rates can be. Individuals could avoid negative rates by deciding to hold physical cash, which pays zero percent, but banks and corporations almost certainly couldn't. I'm not sure how long it's sustainable to essentially have two different interest rates like that.

This is why DeLong mentions "Miles Kimball's" negative interest rates. Kimball's version depends on making the e-dollar into the unit of account, and this would allow negative rates of any level for any period of time. However, it would also require many years to make this transition. It's not an option in the short term.

So if I'm reading DeLong right, it's not clear that the Fed could engineer 4 percent inflation at all right now. Maybe Scott Sumner has a bright idea about how we could do this.

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I'd Give Obama's Syria Policy a B+

| Mon Oct. 12, 2015 1:48 PM EDT

"I don’t have a lot of good things to say about the Obama administration’s Syria policy," says Dan Drezner. He links to Adam Elkus, who calls Obama's Syria strategy "semi-competent." At the BBC, Tara McKelvey writes about Robert Ford, former US ambassador to Syria, who was close to the Syrian opposition and wanted to arm them when the Assad regime started to crumble. "People in the intelligence community said the time to arm the rebels was 2012," she writes. The problem is that officials in Washington were unsure that Ford really knew the opposition well enough. "Most of the rebels, he said, weren't 'ideologically pure', not in the way US officials wanted. 'In wars like that, there is no black and white,' he said."

I'll agree on a few counts of the indictment against Obama. Now that the mission to arm the rebels has failed, he says he was never really for it in the first place. That's cringeworthy. The buck stops with him, and once he approved the plan, hesitantly or not, it was his plan. He should take responsibility for its failure. You can also probably make a case that we should have done more to arm the Kurds, who have shown considerable competence fighting both ISIS and Assad.

But those are relative nits, and I'd be curious to hear more from Drezner about this. He basically agrees that arming rebels hasn't worked well in the Middle East, and there's little chance it would have worked well in Syria. "There is a strong and bipartisan 21st-century record of U.S. administrations applying military force in the Middle East with the most noble of intentions," he says, "and then making the extant situation much, much worse." He also agrees that Obama's big-picture view of Syria is correct. "The president has determined that Syria is not a core American interest and therefore does not warrant greater investments of American resources. It’s a cold, calculating, semi-competent strategy. But it has the virtue of being better than the suggested hawkish alternatives." He agrees that those "hawkish alternatives" are basically nuts.

So why exactly is Obama's record in Syria "semi-competent"? Why does Drezner not have much good to say about it? My only serious criticism is that Obama did too much: he never should have talked about red lines and he never should have agreed to arm and train the opposition at all. But given the real-world pressures on him, it's impressive that he's managed to restrict American intervention as much as he has. I doubt anyone else could have done better.

There is something genuinely baffling about American hawks who have presided over failure after failure but are always certain that next time will be different. But why? If anything, Syria is more tangled and chaotic than Iraq, Yemen, Libya, Afghanistan, or any of the other Middle Eastern countries we've gotten involved in since 2001. What kind of dreamy naivete—or willful blindness—does it take to think that we could intervene successfully there?

Anyway, that's my question. Given the real world constraints, and grading on a real-world curve, what has Obama done wrong in Syria?

Another Long, Hot Summer of Catcalling Is Coming to a Close

| Mon Oct. 12, 2015 10:03 AM EDT

Hannah Giorgis writes about the endless struggle with catcalling in New York City:

After another summer spent shrugging off men’s loud assessments of my body any time I left my apartment, I am exhausted. And as the streets thin out and the weather cools to a temperature less accommodating of men who consider catcalling a leisure sport, I am increasingly able to pause and feel the depth of my own fatigue.

....Every outing involves dozens of split-second decisions. The short, loose dress or the long, form-fitting one? The almost-empty subway car or the crowded one? The shorter route or the more well-lit one?....My mind can only make so many daily calculations before it slips into what social psychologist Roy F. Baumeister calls “decision fatigue.” Processing each of these useless equations takes a biological toll on my brain, leaving it more inclined, as the day wears on, to look for shortcuts.

Read the whole thing. Or, if you'd prefer a video dramatization of what it's like, check out the YouTube below.

Report: John Boehner Is the Guy Who's Kept the Hillary Email Scandal Alive

| Mon Oct. 12, 2015 1:04 AM EDT

Back when the Benghazi committee started up, Rep. Trey Gowdy swore that it was nothing more than an impartial search for the truth about a raid that cost four American lives. So how is that coming along? The New York Times reports:

Now, 17 months later — longer than the Watergate investigation lasted — interviews with current and former committee staff members as well as internal committee documents reviewed by The New York Times show the extent to which the focus of the committee’s work has shifted from the circumstances surrounding the Benghazi attack to the politically charged issue of Mrs. Clinton’s use of a private email server while she was secretary of state.

....The committee has conducted only one of a dozen interviews that Mr. Gowdy said in February that he planned to hold with prominent intelligence, Defense Department and White House officials, and it has held none of the nine public hearings — with titles such as “Why Were We in Libya?” — that internal documents show have been proposed.

At the same time, the committee has added at least 18 current and former State Department officials to its roster of witnesses, including three speechwriters and an information technology specialist who maintained Mrs. Clinton’s private email server.

From the standpoint of a genuine Benghazi investigation, Hillary Clinton's email issues wouldn't matter. All the committee would care about is getting a look at the emails from her private server—which is now happening. For some reason, though, they care deeply about investigating that email server to death, even though it has nothing to do with the Benghazi attacks. Why is that?

A friend of mine has tried to persuade me that Gowdy is probably playing things straight. I've argued that I don't believe it. He's a true believer, and he cares a lot more about taking down Democrats than he does about Benghazi itself, which he probably knows perfectly well has already been investigated to death. So which of us is right? This tidbit sheds a bit of light on things:

[Gowdy] said that at one point this spring he told John A. Boehner, the House speaker, that he feared the task of investigating the email issue would distract from his committee’s work....[and] pressed Mr. Boehner to have another House committee examine the matter of Mrs. Clinton’s emails, but that Mr. Boehner had rejected the request.

....Senior Republican officials, who spoke on the condition of anonymity because they were discussing confidential conversations, said that Mr. Boehner had long been suspicious of the administration’s handling of the attacks and that Mrs. Clinton’s emails gave him a way to keep the issue alive and to cause political problems for her campaign. But he thought that the task was too delicate to entrust to others and that it should remain with Mr. Gowdy, the former prosecutor.

If this is true, my friend is halfway right: Gowdy never really wanted to get distracted with politically motivated attacks on Hillary Clinton. But John Boehner did, and he figured Gowdy was the best man for the job.

I'm not quite sure what this says about Gowdy, but it's certainly clear that Boehner thought that manipulating the media into nonstop reporting on Hillary's email server was a great idea. He also figured the media would take the bait. And they did.

So Gowdy gets, oh, let's say a C+. He tried to do the right thing, but caved in pretty quickly. Boehner gets a D. He was all about taking down Hillary Clinton from the get-go. The media gets an F. Boehner at least has the excuse of being a senior Republican leader, and attacking Democrats comes with the territory. But the media is not supposed to be so gullible that they believe everything Republicans say about Democratic leaders. In the case of Hillary Clinton, though, that rule seems to have been suspended. Again.

Benghazi Staffers Spent Their Days Designing Personalized "Tiffany Glocks"

| Sun Oct. 11, 2015 1:31 AM EDT

Who said this?

He described to CNN an office environment in which employees spent their days Web surfing and sometimes drinking at work. He said staffers joined a “gun buying club” for “chrome-plated, monogrammed, Tiffany-style Glock 9-millimeters,” and some would spend hours at a time at work designing the personalized weapons.

Answer: Maj. Bradley Podliska, a former member of the House Benghazi committee, who claims he was fired for refusing to spend his time focused solely on Hillary Clinton instead of actually investigating Benghazi. I don't know yet if I believe him, but the whole Tiffany Glock thing sounds way too weird to have been made up.

Was the "California Stop" Really Invented in California?

| Sat Oct. 10, 2015 8:15 PM EDT

On my way home from lunch today I saw the billboard on the right. Seems like it should be "California Alto" or something, shouldn't it? I guess "California Stop" is one of those things that's famous enough that it's always rendered in its native language.

But I'm curious: where did "California Stop" come from, anyway? I won't claim that I have a ton of experience driving all over the country, but I've driven in plenty of places both east and west, and it seems to me that people are pretty casual about stop signs everywhere. Sure enough, on a message board that posted a question about this, various folks said that in their neck of the woods it was called a:

  • St. Louis Stop
  • New York Stop
  • Hollywood Stop
  • New Orleans Stop

This suggests that it really is common everywhere, but it's equally common to think it's unique to your own city/state/region. But if that's the case, why is it so common to call it a California Stop? Did we do it first? Is it related to California pioneering the right-on-red rule? Anybody know what the deal is?

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Have You Ever Thought About the Republican Party? I Mean, Really Thought About It?

| Sat Oct. 10, 2015 1:08 PM EDT

As much as we've talked about it, I wonder if we've really gotten our heads around the fact that Paul Ryan is literally being begged to be the leader of the Republican Party. He is Literally. Being. Begged. To be the leader of one of America's two major parties! And he doesn't want it, no how, no way. Because he knows there's a substantial faction of his party that's insane. And who would know better?

I feel like this is one of those things that maybe you can only truly comprehend after a couple of blunts:

Boehner: Dude, have you ever thought about the Republican Party? I mean, really thought about it?

Ryan: I know. I know. It's, like, insane, man. (Giggles, coughs.) This is good stuff. Medical, right?

Boehner: That's it! Totally insane. I mean, completely batshit fucked up.

Ryan: But awesome. Insane but still awesome. I mean, seriously, it's our only defense against, like, total socialism.

Boehner: Oh man, you been reading Atlas Shrugged again? You're bumming me out, dude.

And while we're on the subject, I have another idea. As thousands of people have pointed out, nothing in the Constitution says the Speaker has to be a member of Congress. This has spawned a whole cottage industry of jokes. Donald Trump! Bibi Netanyahu! Rush Limbaugh! But I have another idea: does it have to be one person? Here's the relevant text:

The House of Representatives shall chuse their Speaker and other Officers....

Sure, "Speaker" is singular in that sentence, but "Speaker and other Officers" suggests that maybe leadership of the House could be shared. How about a triumvirate, like Rome in its glory days? Ryan could be one, some tea party nutcase could be another, and the third could be, um, Mia Love, who's a black woman and the daughter of immigrants. I'm not sure how they'd make decisions, but I guess they'd figure out something. Maybe rock paper scissors.

Donald Trump Has Big Plans to Reform the NIH

| Sat Oct. 10, 2015 11:30 AM EDT

A few days ago Donald Trump called into Michael Savage's radio show. Savage suggested that if Trump wins, he would like to be appointed head of the National Institutes of Health. Trump responded:

Well, you know you'd get common sense if that were the case, that I can tell you, because I hear so much about the NIH, and it's terrible.

This is appalling on several levels, but the part that made me laugh is in bold. It's such vintage Trump. Can you just picture this? People practically mobbing Trump in the streets to complain about the NIH? Hell, I'd be willing to bet a week's salary that Trump had never even heard of the NIH until Savage mentioned it.

Then again, maybe I'm just easily amused these days.

Friday Cat Blogging - 9 October 2015

| Fri Oct. 9, 2015 2:55 PM EDT

Hmmm. What happened here? There is no documentary record, so perhaps if Hopper hides no one will connect her with it. Worth a try! Meanwhile, Hilbert hangs around absentmindedly, not realizing that his sister is doing her best to pin the rap entirely on him. That's family values, folks.

The "Gig Economy" Is Mostly Just Silicon Valley Hype

| Fri Oct. 9, 2015 2:22 PM EDT

How big is the "gig economy"? An Uber driver is the archetypal gig worker, but more generally it refers to anyone who works independently on a contingent basis. This means, for example, that an old school freelance writer qualifies.

Still, it's tech that's driving the gig hype, and if the hype is true then the number of gig workers should be going up. Lydia DePillis takes a look at this today and recommends two sources:

The Freelancers Union, which advocates for self-employed people of all kinds, recently came up with the 53 million number Warner mentioned. MBO Partners, which provides tools for businesses that use contractors, put it at 30.2 million. But for lawmaking purposes, it's probably a good idea to get your information from a source that doesn't have a commercial interest in the numbers it's putting out.

True enough, but let's start with these folks. The Freelancers Union reports that in 2015 the gig economy "held steady" at 34 percent of the workforce. MBO Partners reports that it "held firm" at 30 million. They additionally report that it's increased 12 percent in the past five years, which is not especially impressive considering that total employment has increased 9 percent over the same period.

The government does not track this directly, and I assume that these two sources are generally motivated to be cheerleaders for the gig economy, which means their numbers are about as optimistic as possible. If that's true, it looks as though the gig economy is almost entirely smoke and mirrors. After all, if it were a big phenomenon it would be getting bigger every year as technology became an ever more important part of our lives. And yet, both sources agree that 2015, when the economy was doing fairly well, showed no growth at all in the gig economy. What's more, as Jordan Weissmann and others have pointed out, what little government data we have isn't really consistent with the idea that the gig economy is growing.

So be wary of the hype. Maybe the gig economy will be a big thing in the future. Maybe the tech portion is growing, but the growth is hidden by a decline in traditional freelancing. Maybe. For now, though, it appears to be mostly just another example of the reality distortion hype that Silicon Valley is so good at.