Saturday, October 08, 2011

Distrust of intellectuals is not stupid

Hostility toward the philosophes is not unique to Americans, of course. It was the ancient Greeks, after all, who executed Socrates because his philosophy conflicted with their piety. Likewise, there is an element of fear among religious conservatives that the intellectual project as such—not any particular brand of intellectualism—is inherently subversive of their settled wisdom.

But the bigger reason for this anti-intellectual animus is that every time really smart people run the country, things go spectacularly wrong.

The team of the “best and brightest” that Lyndon Johnson inherited from John F. Kennedy embroiled America in an ignominy like Vietnam—not to mention Medicare, a fiscal quagmire that, unlike Vietnam, the country can neither exit nor fix without courting bankruptcy or seriously screwing over millions of seniors.

Moreover, George W. Bush’s failures resulted not from his alleged stupidity, as his most vitriolic critics believe, but the brainiacs in his Cabinet. Bush himself might have reveled in his Forest Grump image. But he assembled a team of intellectual stars including Dick Cheney, who was so smart that Beltway Republicans and Democrats wished that he had run for president; Paul Wolfowitz, dean of the Johns Hopkins School of International Studies; Condi Rice, provost of Stanford University; and Donald Rumsfeld, who made his mark in academia, politics, and military service. But this Mensa-worthy team, backed by Ivy League neocon intellectuals, left a legacy of Afghanistan, Iraq, and deficits as far as the eye can see.

The prize for discrediting intelligence, however, goes to President Obama. Unlike Bush, he wore his intellect on his sleeve, raising hopes that he could fix the country with sheer brainpower. But he has presided over a deterioration on every front: Deficits are worse, unemployment is higher, a double dip is imminent, and we have added another foreign misadventure.

So why do intelligent people consistently make such a hash of things? Because they are smart enough to talk themselves into anything. Ordinary mortals don’t engage in fancy mental gymnastics to reach conclusions that defy common sense. But intellectuals are particularly prone to this. Hence Bush’s brilliant foreign policy team used the apparatus of the state to search for evidence connecting Saddam Hussein with the 9/11 attackers, which its superior ratiocination told them had to exist.

The great hope from Obama was that he would be different. That his thoughtful, professorial demeanor would prompt him to look for policies that worked—not push a preconceived agenda. In fact, when he took office, I hoped that he would be an “empirical president” who dispassionately considered the evidence from all sides before making decisions. One’s preferred position might not win every time under such a president, but it would at least have a shot, something that people outside Bush’s ideological kin never felt they had.

But Obama has been infinitely worse. He has glibly cited Congressional Budget Office scores and stats to argue that extending government-subsidized health coverage to 30 million Americans won’t exacerbate the federal deficit; that a debt-ridden country can borrow its way out of the recession; that pumping tax dollars into pie-in-the-sky green technologies would stimulate growth and produce energy security, and so on.

Ordinary folks might be unable to marshal facts and figures to counter such ludicrous claims, but they know bullshit when they see it. This has two effects on them: One, they feel profoundly disempowered watching their leaders deploy their smarts not on their behalf but against them. And two, since they can’t become experts and academics, they resist by retreating into their own simple certitudes drawn from folk wisdom, faith and founding principles. Indeed, Sarah Palin is as much Barack Obama’s gift to America as she is John McCain’s.

The great political divide right now is not between eggheads and blockheads, as Maureen Dowd puts it, or intellectualism and stupidity, as other self-serving liberal pundits sneer. It is between two types of activism: an irresponsible, pseudo-intellectual one and a retrograde, folksy one. This divide will disappear when some genuinely smart and wise leader earnestly addresses the nation’s problems, instead of pushing his or her loopy program.



Some history: Stimulus Has Been a Presidential Job Killer

The political graveyards are full of politicians who thought that temporary, targeted economic policies would get them re-elected.

Temporary, targeted tax reductions and increases in government spending are not good economics. They have repeatedly failed to increase economic growth on a sustainable basis. What may come as a surprise is that such policies are not good politics either. Their inability to deliver promised economic benefits has invariably led disappointed voters to turn against those politicians, Democratic and Republican, who have supported them.

Consider the evidence. When President Gerald Ford entered office, the economy was in the midst of the serious 1974-75 recession. Responding to the popular clamor to "do something," he proposed a short-term stimulus plan in early 1975. The centerpiece was a temporary income-tax rebate. Congress added a one-time, $50 increase in Social Security benefits and, to bolster the sagging housing market, a one-time tax credit for new home buyers.

The rebate caused only a temporary blip in consumer spending. Economic growth rose to 9% in the first quarter of 1976 but then dropped to only 2% in the third quarter, and unemployment started rising.

Congress enacted a second stimulus plan in July 1976 over Ford's veto. It authorized grants to state and local governments designed to prevent layoffs of public employees or tax increases. This plan also failed to produce the promised stimulus. The economic pause of 1976 was enough to swing the election to Jimmy Carter and cause more incumbent senators to lose their seats than in any election in nearly 20 years.

President Carter took office and by the end of his first month proposed another stimulus plan, which he said would "restore consumer confidence and consumer purchasing power." His plan called for another round of one-time tax rebates and Social Security bonus payments, federal public infrastructure grants and countercyclical aid to state and local governments.

He also added a tax credit for small and medium-size employers hiring new workers. The fine-tuned plan, according to the chairman of Mr. Carter's Council of Economic Advisers, Charles Shultze, was "designed to tread prudently between the twin risks of over and under-stimulation."

In May 1977, Congress enacted the president's proposals in modified form. Although the pace of economic activity quickened for a while, subsequent studies by senior Carter administration Treasury official Emil Sunley and noted economist Ned Gramlich showed that the government-provided stimulus had little effect. The recovery was not sustained and the economy fell into recession in January 1980. The failing economy combined with rapidly rising inflation doomed Mr. Carter's re-election chances, along with the Democratic Party's control of the Senate and 33 Democratic seats in the House.

President Reagan rejected temporary stimulus measures and instead proposed permanent income-tax rate reductions. His tax program, in conjunction with steady monetary policy begun by Paul Volcker, produced the promised results.

By late 1982 the recession was over and in early 1983 employment and investment began to rise rapidly. In 1984, it was "Morning in America" and Reagan was overwhelmingly re-elected. Nearly two decades of strong, steady, noninflationary economic growth ensued.

The success of Reagan's permanent tax-rate reductions, juxtaposed against the clear failure of his predecessors' temporary Keynesian stimulus measures, put the Keynesian approach on the back burner. The extent to which temporary stimulus measures fell into disfavor is evident from President Bill Clinton's first year in office. That year he proposed a minuscule $16 billion stimulus plan. Congress rejected it and turned its attention instead to reducing the federal budget deficit by cutting the growth in spending and raising taxes.

When President George W. Bush took office in 2001, his first priority was to put a broad-based, permanent reduction in tax rates into effect. But when the signs that the economy was weakening became apparent early that year, temporary stimulus measures were added to the president's plan. The final tax-reduction law included a temporary tax rebate and phased in the tax-rate reductions at a slower pace than he originally proposed. As with previous stimulus efforts, the rebates had little or no effect.

A combination of the economic impact of 9/11 and the failure of the 2001 Keynesian stimulus measure to have any lasting economic effect led Congress in 2003 to enact additional tax relief. In May of that year, at the urging of Mr. Bush, Congress sharply reduced tax rates on capital gains and dividends and put the 2001 income-tax rate reductions in place immediately.

Within four months, employment began to rise and the unemployment rate began to fall. By 2004, the economic recovery was in full swing. President Bush was re-elected, along with Republican majorities in both the House and Senate.

In response to the recession that began in late 2007, both Presidents Bush and Obama chose to rely on Keynesian stimulus policies. President Bush's temporary tax rebate in 2008 had no discernible effect on the economy. The declining economy partially contributed to John McCain's defeat and played a crucial role in the Republicans' loss of seats in both the House and Senate.

Mr. Obama's $800 billion temporary, targeted stimulus plan took the same approach as Mr. Carter's more than three decades earlier. The February 2009 bill included temporary tax rebates, additional spending on federal programs, and one-time grants to state and local governments.

It had the same negligible economic impact as Mr. Carter's and, thus far, eerily similar political consequences. The plan's failure preceded a historic Republican electoral sweep in the 2010 House elections and significant Republican gains in the Senate. The continuing economic discontent has placed Mr. Obama's re-election in serious jeopardy.

That temporary tax reductions and increases in government spending can jump-start the economy and sustainably boost employment and personal income may seem like a politician's dream policy. But the repeated failure of these short-term interventionist policies to deliver the promised economic benefits should make politicians think twice. Reliance on them has already cost dozens of members of Congress their jobs and two postwar presidents a second term.



Dangerous lies about Herbert Hoover live on

Attacking the idea of a Balanced Budget Amendment, “Congressman Jerrold Nadler (D-NY), the top Democrat on the House Judiciary Subcommittee on the Constitution,” issued a press release on October 4 promoting the falsehood that Herbert Hoover cut spending during the Great Depression, when in reality, Hoover more than doubled government spending as a percentage of GDP:
“Did Herbert Hoover win the last election?” asked Nadler. “If, in the middle of a recession, when tax revenues are down, and unemployment is up, we begin to slash the budget in ways my Republican colleagues are now suggesting, much less the far more draconian measures that this amendment would require, we will go from the Great Recession, right into another Great Depression. It’s been tried before, and if we want the Constitution to enshrine Hooverism for all time, we will get what we deserve.”

Nadler is wrong about the facts here, as he so often is. As I recently noted in the Edmonton Journal:
Former U.S. president Herbert Hoover did not practice austerity, so it is incorrect for politicians to claim that he “helped plunge his country into the Great Depression through austerity measures.”

Hoover’s administration increased federal government spending from three per cent of the U.S. economy in 1929, the year he took office, to eight per cent in 1933, the year he left office.

The U.S. budget deficit became so large as a result that by 1932, the country’s government was spending more than $2 for every dollar it took in.

It was not austerity that caused the Great Depression, but misguided government meddling in the economy, such as the Smoot-Hawley Tariff of 1930.

That increased tariff backed by Hoover ignited devastating trade wars between the U.S. and other countries that wiped out countless jobs.

Data from the White House’s own website shows that Hoover increased, rather than cut, spending in the Great Depression, and ran up deficits that were huge by historical standards.

That is illustrated in Table 1.1 on page 21 of a document on the White House’s website, a document entitled, “Historical Tables: Budget of the United States Government, Fiscal Year 2009.” It shows that Hoover increased the federal budget from $3.1 billion in 1929, the year he took office (and the Great Depression began), to $4.7 billion in 1932, his last full year in office, and $4.6 billion in 1933, the year he left office. The budget deficit went from a surplus in 1928 to a deficit of $2.7 billion in 1932. Table 1.2 on page 24 of that document shows that government spending and deficits rose considerably as a percentage of the economy under Hoover. (See Table 1.2, “Summary of Receipts, Outlays, and Surpluses or Deficits (–) As Percentages of GDP: 1930-2013)” and Table 1.1, “Summary of Receipts, Outlays, and Surpluses or Deficits (–): 1789–2013)”).

Newspapers like the Richmond Times-Dispatch and Washington Times also have noted that Hoover actually increased spending during the Depression. Financial writer Megan McArdle of The Atlantic noted that Hoover increased spending from 3.4 percent of GDP to 8 percent, increasing spending even as the economy shrank and deflation occurred. (Thus, government spending rose more rapidly as a percentage of the economy than in absolute terms.)

Recent massive spending by the Obama administration has similarly failed to stem rising unemployment, and some economists have argued that the $800 billion stimulus package actually wiped out hundreds of thousands of jobs.




Washington's Free Trade Adult: "President Obama is indulging Congress's protectionist elements as the price of moving three delayed free-trade agreements. Speaker John Boehner showed better judgment when he denounced such tactical domestic politics as "dangerous" on Monday night. Mr. Boehner's comments came after the Senate cleared with a 79-19 procedural vote a bill that would impose tariffs on China for supposed currency manipulation. Mr. Boehner was left to fill the Presidential vacuum, saying that "It's pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency." He added that "This is well beyond what Congress ought to be doing," and he hinted that he wouldn't bring the bill to the House floor."

What we don’t know about health insurance: "Despite the trillions of dollars we’ve spent on public health insurance programs, there’s very little strong evidence to suggest that subsidized health insurance actually improves health. Indeed, the push for universal coverage may be preventing other, more effective health measures. So here’s the question: Is the drive for universal health insurance actually making people worse off?"

Stifling medical device innovation: "The United States has long been the home to cutting-edge innovations in the medical device industry, a remarkable private enterprise success that has improved or extended the lives of millions of people. However, increasingly burdensome regulatory policy is driving pioneering research and development to Europe and to the rest of the world. Nevertheless, the U.S. Food and Drug Administration (FDA) and self-styled public health advocates are engaged in an assault on the primary regulatory pathway through which new products reach the market."


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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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