Wednesday, September 28, 2011

Won't You Be My President?

My wife has had to put up with my enthusiasm for Chris Christie for a while now: she strongly suspects that he was the reason we bought a house here in New Jersey. I think he is the rare politician who makes his position crystal clear in almost all circumstances, and I think he understands the severity of the financial problems that plague our nation and is prepared to do something about them, even if it is difficult.

I was a bit disappointed when he dismissed the idea of running for President earlier this year, but I respected that he thought he wasn't ready for the job. And at that time, I thought Mitch Daniels would be the best possible Republican candidate. And hey, I'm selfish: I wanted to keep him as my governor, if only to protect me from additional property tax hikes.

Now, of course, there are rumors swirling that Christie is reconsidering his earlier decision. (And it would be a reversal of some very clear statements that he was not running.) On the one hand, this would cut against one of the most appealing aspects of his personality: that you can really believe what he says. On the other hand, I am reminded of a scene in the movie Gladiator:
Emperor Marcus Aurelius (to General Maximus): I want you to become the protector of Rome after I die. I will empower you to one end alone: to give power back to the people of Rome...and end the corruption that has crippled it. Will you accept this great honor that I have offered you?
Maximus: With all my heart, no.
Emperor: Maximus...that is why it must be you.
Now, Chris Christie isn't an action hero. (He doesn't have the physique for it...) But I believe this moment calls for a man who has a sense of duty, a man who doesn't necessarily want the Presidency for reasons of vanity or to wield power, but because he sees a job that must be done and is willing to do it.

I think the financial foundation of this country is crumbling, and I am willing to do what I can to support someone who understands that and will give it his all to fix the problem, especially if that person has a track record of making progress on these types of issues. I'm also looking for a person who can articulate the problem and its solution in a way that might inspire people to support the difficult choices that must be made. Which is why I am so heartened by a speech Christie gave tonight at the Reagan Library, and especially by this quote:
I believe in what this country and its citizens can accomplish if they understand what is being asked of them and how we all will benefit if they meet the challenge.

There is no doubt in my mind that we, as a country and as a people, are up for the challenge. Our democracy is strong; our economy is the world’s largest. Innovation and risk-taking is in our collective DNA. There is no better place for investment. Above all, we have a demonstrated record as a people and a nation of rising up to meet challenges.

Today, the biggest challenge we must meet is the one we present to ourselves. To not become a nation that places entitlement ahead of accomplishment. To not become a country that places comfortable lies ahead of difficult truths. To not become a people that thinks so little of ourselves that we demand no sacrifice from each other. We are a better people than that; and we must demand a better nation than that.
I don't know if a politician like Chris Christie can become our President. But I hope he takes the daunting step of running, so we can find out. Because the candidates we have now, including our current President, are far more likely to perpetuate our problems than to solve them.

Monday, September 26, 2011

My Son is Making Me a Girlie Man

The latest scientific study to get big press is one from Northwestern University that demonstrates men undergo a large drop in their testosterone levels when they become fathers. Previous studies did not show if testosterone dropped when children arrived, or if men with lower testosterone were likely to have children. But now there is proof that becoming a father sucks the manliness right out of you. And the effect is even more pronounced if the father takes a significant role in child rearing, meaning that my cute little son is actually a diaper-soiling male hormone remover. (See! I publicly used the word 'cute'.)

Maybe I wouldn't be so distraught, but the researchers make testosterone sound pretty damned awesome:
While scientists still argue over testosterone's exact function, it's fairly clear it provides a boost to confidence, increases competitiveness, and orients men to achieve more in the social world, said Christopher W. Kuzawa, co-author of the study and a faculty fellow at the Institute for Policy Research at Northwestern.
Don't worry, though, because I can't imagine any downsides from being less confident, competitive and outgoing. Nope, everything should be just fine.

All joking aside, the article, and apparently the underlying research, do a terrible job of thinking through what this drop in testosterone might mean, instead going with the pat answer that having less of the quintessentially male hormone will make men more 'nurturing' and 'caring'. First, hormones (like most of the other inputs into our biological functioning) aren't simple dials. You don't turn the testosterone way down to make men take on traditional feminine roles. Second, it seems unlikely evolution would be geared to radically lower a 'confidence' hormone when a man is going to have to take on a big new challenge and provide for a growing family. So let me offer some more nuanced takes on why testosterone levels might drop in new fathers:

1) Fewer stupid risks: It seems apparent that young men are often primed to be daredevils, taking crazy chances with little thought to consequences. Maybe this originally evolved to give males the courage to charge into battle when provoked. At any rate, dialing down the big T might help a new father pause before he charges someone with a club, or goes out racing on his dirt bike.

2) Open a bonding window: Children are likely to get more paternal affection and protection through life if they form a connection early on, and a lowering level of testosterone level could bring down the desire to socialize enough to keep dad around more. Less time at the pub means more time with the new baby.

3) Aid to fidelity: Let's be honest: new baby time isn't sexy time. Maybe evolution or a merciful God brings down testosterone levels in new fathers so they don't go crazy during the time when their wives can't imagine using the bed for anything other than sleeping.

Whatever the full explanation, I've decided to forgive my son for any decline in testosterone he might be inflicting on me. And I've realized another benefit of this study: if we can make sure the male cast members of Jersey Shore hear about it, we can be pretty confident they'll never procreate.

Thursday, September 15, 2011

Why Stimulus isn't Stimulating

Obama's jobs bill (so named, presumably, on the theory that no one could be against jobs) (and yes, I know the Republicans do the same sleazy thing, for example with the Patriot Act) has renewed the debate over stimulus: whether we need it, how much good it does, and how big it should be. Conservative writers I respect, like Ross Douthat have offered measured voices of approval, but generally reaction to the plan breaks along partisan lines. The Wall Street Journal offers the conventional conservative perspective:

With $4 trillion in debt in three years, it is hard to see how another $400 billion in debt will lead to more economic growth and job creation. We've already had the biggest Keynesian stimulus in 60 years, and the result has been more than a million job losses since January 2009.
That $4 trillion number really jumps out, but in this case the conservative desire to bash Obama is hiding the true scope of the problem. While borrowing has accelerated since Obama was elected, G.W. Bush was borrowing on a scale almost as extreme. By looking at Obama's decisions in isolation, we lack the context to ask a fundamental question: are these stimulus measures doomed to failure because our economy was already highly stimulated before the recession even started?

The chart above shows the annual level of borrowing from 1990 through 2010. During the early 1990's, we see the level of borrowing peak at the end of Bush the First's presidency, and decline until we actually had a small surplus at the end of Clinton's second term. And then things reverse, the line trending up almost as steeply as it does during Obama's time in office. Why? Because Bush the Second decided to 'give back' the surplus in the form of tax cuts, and then the 9/11 attacks both hurt the economy and led to unpaid-for wars.

If the essence of stimulus is that the government borrows to increase overall demand in the economy, than the 2002-2004 saw a massive, if unnamed, stimulus effort. And perhaps it worked. The economy didn't go into a severe recession after 9/11, so perhaps it had some sort of effect. Add to that the historically low interest rates and loose borrowing standards that led to a massive injection of private credit spending into the economy, and we had a truly massive "stealth stimulus."

Now, before those borrowing levels even had a chance to go down much, the crash of 2008 hit and government borrowing quickly spiked to the trillion-plus levels to which we've now sadly become accustomed. But why hasn't deficit spending, this time specifically structured to be 'stimulative', had the desired effect?

I think there are three potential explanations:

1) The fundamentals of the economy are so bad that much more deficit spending is needed to have an effect. (The Krugman thesis)
2) Stimulus doesn't really work, especially if the numbers we're borrowing are so high that lenders and investors doubt we can pay it back (The Republican thesis)
3) Stimulus has to be temporary to work, and we already had one last decade that we haven't even started to pay off. (My lonely theory)

Whether the first explanation is true or not is really academic: to borrow a significantly higher amount was never going to be politically feasible. (And could any recovery be strong enough to pay off the incurred debt in a reasonable period?)

But I think the second explanation, much loved by conservatives, risks positioning the Republican party as do-nothings who aren't trying to help the jobless. As Jacob Weisberg wrote recently on, "Pick up any standard economics textbook, and it will explain how governments respond to cyclical downturns with temporary deficit spending." You can fight this argument, or you can concede it and point out that we have had a decade of unprecedented stimulus, and there is no longer anything temporary about our deficit spending. A simple question to ask your pro-stimulus friends (or for the eventual Republican nominee to ask Barack Obama), "In what year do you foresee the government taking in more money than it spends, and how will you get us there?"

Since 2002 (or maybe even since Reagan began large-scale peacetime borrowing in the 1980's) that we have been using government borrowing to mask weaknesses in our economy. The sad truth is that doing so made those weaknesses more severe, and now our problems are worse and the tools we have previously used to juice the economy have lost their effectiveness. Which should tell us that, just maybe, we should not act as if we know how to control something as complex and unpredictable as the nation's economy in the first place.

Thursday, September 1, 2011

One Economy or Two?

Good writing can expose you to something new, or it can organize thoughts and facts you already have into a more coherent picture. That happened to me the other day when I read David Goldman (who often writes as "Spengler) explain that we have a 'winner' economy and a 'loser' economy.

The main thrust of his argument is that for a significant portion of the country, things are actually going quite well. But instead of success at the top pulling everyone along into economic revival, the successful are pulling away and leaving a significant group of Americans behind. So far this sounds like the standard liberal critique of the economy since the days of Reagan. But Goldman is no liberal, and he is making a more important and unusual point:
Perhaps we should think about America the way we think of an emerging market, except that America is submerging instead. The Chinese have warned for years that they are two countries, a First World country on the seacoast and a Fourth World country in the interior. We know that India has two economies, a small modern one and a vast backward one, and we are not particularly concerned with the GDP of impoverished rural people (if indeed we could measure it). We want to know what Tata Industries or Reliance Industries are up to.

China and India have become a dual economy because a portion of their population has clambered up into prosperity; America has become a dual economy because a portion of their population has tumbled into destitution. But the fact that larger American corporations have had a strong recovery should reassure us that America is capable of a broader recovery.
The suggestion here, I think, is that none of the typical efforts to get the economy as a whole moving again are likely to work as king as some people (and maybe some entire regions) lack the skills and resources to compete in the modern global economy.

We have enjoyed almost seven decades since the end of World War II where our country was the center of the economic universe, which allowed us to find something to do for nearly everyone who wanted to work. In the past few decades, though, as stiffer economic competition has emerged, our advantages have lessened. The acceleration of our borrowing in recent years can be seen in part as an effort to delay dealing with that fact by handing out benefits that the country hadn't earned. But now that game is up.

As a thought experiment, let's imagine 70% of people can partake of the modern 'winner' economy, while the other 30% bump along in the uncompetitive 'loser' economy. Will the 70% subsidize the others when doing so means higher taxes instead of just more borrowing? Or will the 30% be left to fend for themselves, making the divide that much more apparent?

The myth Democrats tell themselves is that they can find ways to subsidize the poor without bankrupting the country and disincentivizing work further. The myth Republicans tell themselves is that removing the support will encourage effort and individual initiative among the 'losers' and ultimately help them more than the subsidies. But the reality is that a large and growing number of Americans probably don't have the skills and talent to compete, and without some sort of assistance will live more miserable, unfulfilling and unhealthy lives. As will their children.

Our divided economy doesn't look to be going away any time soon. But what do we do about it?