Tuesday, July 26, 2005

Karl Rove's America:How the Dream Ends

It ends not with a bang but with a prolonged sigh ...

"John Gibson of Fox News says that Karl Rove should be given a medal. I agree: Mr. Rove should receive a medal from the American Political Science Association for his pioneering discoveries about modern American politics. The medal can, if necessary, be delivered to his prison cell.

What Mr. Rove understood, long before the rest of us, is that we're not living in the America of the past, where even partisans sometimes changed their views when faced with the facts. Instead, we're living in a country in which there is no longer such a thing as nonpolitical truth. In particular, there are now few, if any, limits to what conservative politicians can get away with: the faithful will follow the twists and turns of the party line with a loyalty that would have pleased the Comintern.

I first realized that we were living in Karl Rove's America during the 2000 presidential campaign, when George W. Bush began saying things about Social Security privatization and tax cuts that were simply false. At first, I thought the Bush campaign was making a big mistake - that these blatant falsehoods would be condemned by prominent Republican politicians and Republican economists, especially those who had spent years building reputations as advocates of fiscal responsibility. In fact, with hardly any exceptions they lined up to praise Mr. Bush's proposals.

But the real demonstration that Mr. Rove understands American politics better than any pundit came after 9/11.

Every time I read a lament for the post-9/11 era of national unity, I wonder what people are talking about. On the issues I was watching, the Republicans' exploitation of the atrocity began while ground zero was still smoldering.

Mr. Rove has been much criticized for saying that liberals responded to the attack by wanting to offer the terrorists therapy - but what he said about conservatives, that they "saw the savagery of 9/11 and the attacks and prepared for war," is equally false. What many of them actually saw was a domestic political opportunity - and none more so than Mr. Rove.

A less insightful political strategist might have hesitated right after 9/11 before using it to cast the Democrats as weak on national security. After all, there were no facts to support that accusation.

But Mr. Rove understood that the facts were irrelevant. For one thing, he knew he could count on the administration's supporters to obediently accept a changing story line. Read the before-and-after columns by pro-administration pundits about Iraq: before the war they castigated the C.I.A. for understating the threat posed by Saddam's W.M.D.; after the war they castigated the C.I.A. for exaggerating the very same threat.

Mr. Rove also understands, better than anyone else in American politics, the power of smear tactics. Attacks on someone who contradicts the official line don't have to be true, or even plausible, to undermine that person's effectiveness. All they have to do is get a lot of media play, and they'll create the sense that there must be something wrong with the guy.

And now we know just how far he was willing to go with these smear tactics: as part of the effort to discredit Joseph Wilson IV, Mr. Rove leaked the fact that Mr. Wilson's wife worked for the C.I.A. I don't know whether Mr. Rove can be convicted of a crime, but there's no question that he damaged national security for partisan advantage. If a Democrat had done that, Republicans would call it treason.

But what we're getting, instead, is yet another impressive demonstration that these days, truth is political. One after another, prominent Republicans and conservative pundits have declared their allegiance to the party line. They haven't just gone along with the diversionary tactics, like the irrelevant questions about whether Mr. Rove used Valerie Wilson's name in identifying her (Robert Novak later identified her by her maiden name, Valerie Plame), or the false, easily refuted claim that Mr. Wilson lied about who sent him to Niger. They're now a chorus, praising Mr. Rove as a patriotic whistle-blower.

Ultimately, this isn't just about Mr. Rove. It's also about Mr. Bush, who has always known that his trusted political adviser - a disciple of the late Lee Atwater, whose smear tactics helped President Bush's father win the 1988 election - is a thug, and obviously made no attempt to find out if he was the leaker.

Most of all, it's about what has happened to America. How did our political system get to this point?"

--P Krugman, The New York Times, 7.15.05

Friday, July 22, 2005

Krugman: real unemployment rate is 1-3 pts higher

The Unofficial Paul Krugman Web Page: "Economists who argue that there's something wrong with the unemployment numbers are buzzing about a new study by Katharine Bradbury, an economist at the Federal Reserve Bank of Boston, which suggests that millions of Americans who should be in the labor force aren't. 'The addition of these hypothetical participants,' she writes, 'would raise the unemployment rate by one to three-plus percentage points.'
Some background: the unemployment rate is only one of several numbers economists use to assess the jobs picture. When the economy is generating an abundance of jobs, economists expect to see strong growth in the payrolls reported by employers and in the number of people who say they have jobs, together with a rise in the length of the average workweek. They also expect to see wage gains well in excess of inflation, as employers compete to attract workers.
In fact, we see none of these things. As Berkeley's J. Bradford DeLong writes on his influential economics blog, 'We have four of five indicators telling us that the state of the job market is not that good and only one - the unemployment rate - reading green.'
In particular, even the most favorable measures show that employment growth has lagged well behind population growth over the past four years. Yet the measured unemployment rate isn't much higher than it was in early 2001. How is that possible?
The answer, according to the survey used to estimate the unemployment rate, is a decline in labor force participation. Nonworking Americans aren't considered unemployed unless they are actively looking for work, and hence counted as part of the labor force. And a large number of people have, for some reason, dropped out of the official labor force.
Those with a downbeat view of the jobs picture argue that the low reported unemployment rate is a statistical illusion, tha"

Krugman: Chinese will stop buying T-bills, then kiss that bubble buh-bye

The Unofficial Paul Krugman Web Page: "By keeping the yuan down, China is feeding a trade surplus that is creating a growing political backlash in America and Europe. And China, which is still a poor country, is devoting a lot of resources to the accumulation of a basically useless pile of dollars instead of to higher living standards.
The question is what happens to us if the Chinese finally decide to stop acting so strangely.
An end to China's dollar-buying spree would lead to a sharp rise in the value of the yuan. It would probably also lead to a sharp fall in the value of the dollar relative to other major currencies, like the yen and the euro, which the Chinese haven't been buying on the same scale. This would help U.S. manufacturers by raising their competitors' costs.
But if the Chinese stopped buying all those U.S. bonds, interest rates would rise. This would be bad news for housing - maybe very bad news, if the interest rate rise burst the bubble.
In the long run, the economic effects of an end to China's dollar buying would even out. America would have more industrial workers and fewer real estate agents, more jobs in Michigan and fewer in Florida, leaving the overall level of employment pretty much unaffected. But as John Maynard Keynes pointed out, in the long run we are all dead.
In the short run, some people would win, but others would lose. And I suspect that the losers would greatly outnumber the winners.
And what about the strategic effects? Right now America is a superpower living on credit - something I don't think has happened since Philip II ruled Spain. What will happen to our stature if and when China takes away our credit card?
This story is still in its early days. On the first day of the new policy, the yuan rose only 2 percent, not enough to make any noticeable difference. But one of these days Chinese dollar purchases will trail of"

Wednesday, July 06, 2005

Batting .500 isnt bad if death isn't on the line

The likelihood that the innocent are being executed was enough to compel Illinois Governor George Ryan, a onetime supporter of the death penalty to suspend executions two years ago. Simple arithmetic convinced him the system was broken: of 25 people put on death row in Illinois since 1987, 12 were executed, 13 were falsely accused and eventually freed, including Anthony Porter, a retarded man who came within a few days of execution for a murder he didn't commit.

... What is your state's average?