Month: August 2012

My old and good friend Niall Ferguson has written an essay arguing against re-electing Obama. So for the second time in four years, we will be backing separate candidates. One reason is that I believe that the Bush-Cheney wars turned out to be disastrous and a second war against Iran could be catastrophic. Niall has had no such change of heart and remains an advocate of American imperial power. Another is that I do not share Niall's view of the Obama administration's record, which I think he massively – and rather self-evidently – distorts.

Lets start with one sleight of hand noted many many times on this blog. Niall uses a February 2009 rough draft from the Obamaites in transition on the outlook for the next four years as a way to prove that their "promises" fell short. It does nothing of the sort:

Back then, the consensus was that the economy had shrunk some 3 percent in the last quarter of 2008. That was the data on which Romer at el based their predictions. We now know the recession was far worse – with a decline in the fourth quarter of close to 9 percent – three times the contemporaneous assumption.

Niall concedes this at one point:

It was pretty hard to foresee what was going to happen to the economy in the years after 2008.

But that doesn't prevent him from writing something as clearly propagandistic as this:

Unemployment was supposed to be 6 percent by now. It has averaged 8.2 percent this year so far.

By Niall's own admission, that proves nothing except the vagaries of prediction. But he still wants to use it to indict Obama. I cry intellectual foul. Even more amazing, this is his assessment of Obama's record on jobs:

The total number of private-sector jobs is still 4.3 million below the January 2008 peak.

Er … but Obama didn't become president in January 2009? Or did that fact also elude the fact-checkers? Most fair assessments of Obama's employment record give the guy some slack for his first twelve months because of the enormity of the crisis he inherited. But Niall insists not only on judging him by job growth after February 2009 but after January 2008! Almost the entire recession is on Obama's watch, including Bush's last year! And that, alas, is roughly the quality of the entire piece.

To judge Obama's record on jobs, you need a better benchmark. Lets try two. The first is the last administration's first term. Here's a graph comparing the two presidents on private and public sector job growth – and remember Bush had nothing remotely like the recession that Obama had to cope with:

If you removed the blue and red labels, you'd assume that Obama was the conservative and Bush the leftist, wouldn't you? And that Obama was therefore far more successful. Yet Niall manages to argue exactly the opposite. Under Obama, there has been a serious reduction in public sector jobs – largely by state governments. But I'd say Obama's record in private job creation easily defeats his predecessor, even when dealing with the worst recession since the 1930s.

Or look at other countries, including Britain, where the Coalition government has followed Niall's advice that our main problem right now is the threat of soaring inflation. Here's the unemployment record globally for the past four years:

Under Obama, the US has recovered more strongly than Europe or Japan. It's not dispositive proof of the superiority of Obama's policies but when compared with his predecessor and his global advanced economy competitors, he's doing pretty well. Good enough? Nope. But the task of drawing down such massive debt was bound to lead to a slow recovery. In America, it's been a lot faster than Europe or Japan. In 2008, unemployment was at 10 percent in Europe and the US. In Europe it's now over 11 and rising. In Britain, after following Niall's directives, half a million more people are unemployed than in February 2009, and all the predictions are for more unemployment ahead. Here, it's close to 8 and declining slowly.

Then there are the glaring omissions. Niall simply pretends the cost-control pilot schemes in the ACA do not exist at all. This is Simply. Not. True:

The Patient Protection and Affordable Care Act (ACA) of 2010 did nothing to address the core defects of the system: the long-run explosion of Medicare costs as the baby boomers retire, the “fee for service” model that drives health-care inflation, the link from employment to insurance that explains why so many Americans lack coverage, and the excessive costs of the liability insurance that our doctors need to protect them from our lawyers.

Agreed on the last two – but the idea that there is no attempt to unravel fee for service or try to get cost control in the ACA is something even the lowliest fact-checker should have caught. This is absurd propaganda, not journalism. It may be that the cost-controls fail. Fine. Make that case. But don't pretend there wasn't the most ambitious effort to control healthcare costs in decades.

More to come. The piece is sadly so ridden with errors and elisions and non-sequiturs it will require a few more posts.

I don't share some Obama-supporters' contempt for Paul Ryan. That's in part because he comes across as a sincere, decent, fine fellow – whose Randian worldview has produced a reformist zeal known most intimately to an adolescent male. Indeed, he reminds me most of all of myself in my teens – dreaming of how to cut government in half, relishing schemes to slash taxes and slash spending and unleash revolutionary growth which, in itself, would render all other problems more manageable. There is no libertarian quite as convinced as a teenage libertarian. And it's the adolescent conviction of Ryan that shines so brightly.

One can call it courage or arrested development. But he is, in some ways, a pellucidly bright plant bred in the conservative movement's hydroponic greenhouse. Barely exposed to natural light, these young fertile saplings are fed with a constant drip of Koch money, sprayed with anti-liberal pesticides and brought eventually into the political marketplace with joyful children, a lovely wife and a set of abs Aaron Schock would die for (and probably has). He has no life or experience outside the greenhouse – which is why he glows with its certainties. Most important, he has that quintessential characteristic of the modern conservative – total denial of the recent past. Ryan was instrumental and supportive of the most fiscally reckless administration in modern times. He gave us a massive new unfunded entitlement, two off-budget wars and was key to ensuring that the Bowles-Simpson plan was dead-on-arrival. This alleged fire-fighter – whose credentials are perceived as impeccable in Washington – just quit being an arsonist.

But on one key subject, the ineluctably rising costs of healthcare for the elderly, Ryan has in the past proffered a real solution. At some point, seniors would be cut off from the funds they would require for the kind of comprehensive treatment many now expect. This is a rather blunt way of putting it – and Ryan may hope somehow to bring costs down with some kind of competition among private plans for Medicare recipients to ease the pain. But that hope is no more credible at this point than Obama's ACA hope for lower costs – except Obama has initiated several specific cost-control pilot projects, while Ryan is relying on the increasingly tenuous hope that competition within Medicare really will lower costs – i.e. that the sick elderly will act like twenty-somethings seeking a bargain on a smartphone. I doubt it – probably more than I do the ACA experiments. In the latest iteration of his plan, however, Ryan has made the premium support option voluntary – thereby effectively tabling its fiscal potential, and shunted off all the pain onto the post-boomers. Ryan doesn't reverse this generational warfare; he intensifies it by siding with today's seniors over tomorrow's.

I'll be frank, though, and say that some kind of premium support in Medicare seems to me the only solid way I can see right now to save us from fiscal catastrophe. If I had my druthers, I'd give the ACA a decade to make real progress on cost-cutting and then, if it failed, I'd move to premium support. Ryan's right on the unsustainability of the current program and has made cutting it a campaign promise. We owe him thanks for that.

But, no, he is not a serious fiscal conservative. Not even close. In 2012, decades after supply-side economics was proven not to add more revenues than it gave back, Ryan is still a true-believer. His view is that if you cut taxes massively, you will decrease the debt. But this is the primary reason we currently have the massive debt that began its ascent under Reagan, was arrested by Bush and Clinton and then exploded under Bush and Ryan. Worse, Ryan believes that you can cut taxes drastically, increase defense spending massively and still cut the debt. This, to put it mildly, is Zombie-Reaganomics. Tax rates are already far lower than they were in 1980 – and can't be cut still further and have the same impact. Besides, our problem right now is obviously lack of demand, rather than enervated supply. Companies are sitting on piles of cash. Interest rates are very very low. And yet we struggle under a debt burden Ryan would immediately drastically increase, with a promise to get to a balanced budget somewhere near the middle of the century. It makes zero sense to me.

But in many ways, it helps frame this election constructively. We all know we have a debt and a growth problem. Obama favors raising taxes on the wealthy, cutting defense and controlling costs in the ACA. He's also open to serious Medicare reforms if the GOP would join in. Bowles-Simpson was much more of a reach for a Democrat than for a Republican on entitlement reform. And I firmly believe that Obama would sign a Bowles-Simpson type deal in his second term if the GOP were to cooperate. I think he'd sign one this December if he could. Ryan never ever would. Obama's reason for ducking Bowles-Simpson was that the GOP wouldn't bite. Ryan's reason for ducking Bowles-Simson is that he is still a supply side fanatic.

On the Republican side, we now have a debt-reduction plan that actually cuts tax rates for the very rich along with everyone else, vastly increases defense spending, and "balances" the entire thing on gutting care for the old, the poor and the sick (the Medicaid proposal is truly Darwinian) and ending loopholes (which Ryan refuses to specify). I'm all for ending loopholes but even then, we wouldn't get a balanced budget for three decades because of all the defense spending and tax cutting.

This isn't conservatism. It's rightist theology. In a fiscal emergency, the Republicans are proposing not clear remedies but ideological fantasies that were already disproven in 1990. They have learned nothing. And the immense damage they inflicted on this country's fiscal health in the last decade would be nothing compared to what would come under a Ryan-Romney administration.

Because it compounds the errors that came before it.