Party of 1

New York University economics professor Nouriel Roubini has come to be known as “Dr. Doom” because of his prescience in forecasting the ongoing financial crisis.  He has offered his thoughts on the outlook for the world economy in an interview with Germany’s Der Spiegel. “I’m not a perma-bear. I am not always negative about the future. Rather, I want to assess the situation correctly. But if I look at the economic picture of the world now, I still see plenty of dark clouds.”

I’d like to focus on one aspect of Dr. Roubini’s remarks. He asserts that “crises are part of capitalism’s DNA. They are not the exception but rather the rule. Many elements vital to capitalism, like innovation and risk taking, also trigger frequent collapse. And what we just went through could get much worse in the future.… They are not inevitable. But if you look at history, you will see patterns repeated — such as excessively loose monetary policy, leveraged vulnerabilities and weak regulation. And we will see them again. Probably we will have even more crises in the future.”

In the aftermath of 1989 we were browbeaten with triumphalist rhetoric that proclaimed the superiority of capitalist economics, which had won such a comprehensive victory that it amounted to an “end of history.” Skeptics noted that the the system nevertheless harbored a tendency to lurch from crisis to crisis. Looking at the last two decades alone, we have seen currency crises in Mexico and throughout Asia, not to mention the difficulties dating back to September 2008 or before.

We tend to associate capitalism with the Industrial Revolution, so that its lifespan may be considered to have run about two hundred years now, give or take a few decades.  Depending on one’s perspective, that length of time may be regarded as no more than the blink of an eye. The system has indeed suffered periodic crises, in the aftermath of which it had to be reformed, with measures introduced to get through the emergencies and prevent, or at least delay, their recurrence. Every time, the ideologues resisted the emergency measures, denouncing them as violations of the system’s highest principles. Revisionist histories of the crises were pumped out ex post facto, proclaiming that everything would have been fine if only the principles of laizzez-faire had been adhered to strictly.

It may be conjectured that people will continue to accept the system if, and only if, the recurring crises are not so severe as to be unbearable. If the system is indeed susceptible to crisis, and if the ideologues continue to object in principle to measures aimed at ameliorating the crises, can this be a stable situation in the long run?

Newt Gingrich is on the warpath.  The Washington Post on Friday offered space to the former Speaker to respond to criticism from the American Enterprise Institute’s Norman Ornstein, who regards President Obama as a “mainstream, pragmatic moderate,” taking exception to Gingrich’s assessment of Obama as the “most radical president in American history.” Gingrich described the Obama administration as a “secular, socialist machine.”

Gingrich has any number of points to make in response to Ornstein.  For present purposes, I’ll focus on his argument that Obama is an aggressive secularist.  He cites Obama’s April statement describing America as a “secular country that is respectful of religious freedom,” which the ex-Speaker finds to be “an act of willful historical revisionism. The United States was founded as an intensely religious country that believes our rights come from God…. This understanding of America’s promise is far more tolerant of religion in the public square than the secular purge that we have seen since the Supreme Court outlawed school prayer in 1963.”

The Obama statement in question came from a press availability with President Gul of Turkey. Reporters were questioning the two leaders, not about Supreme Court decisions of the 1960s but rather about Turkish-American relations. Here is a more extensive excerpt from Obama’s remarks:

“Turkey and the United States can build a model partnership in which a predominantly Christian nation and a predominantly Muslim nation, a Western nation and a nation that straddles two continents — that we can create a modern international community that is respectful, that is secure, that is prosperous…. And I’ve said before that one of the great strengths of the United States is — although as I mentioned, we have a very large Christian population, we do not consider ourselves a Christian nation or a Jewish nation or a Muslim nation…. I think Turkey was — modern Turkey was founded with a similar set of principles, and yet what we’re seeing is in both countries that promise of a secular country that is respectful of religious freedom, respectful of rule of law, respectful of freedom, upholding these values and being willing to stand up for them in the international stage.”

I question whether there’s anything here about which to be outraged here. “Secular state” might have been a better choice of words than “secular country,” especially if we are concerned primarily with humoring Gingrich’s sensibilities — which Obama was not, at least not in these extemporaneous remarks.  All he was trying to say is that Turkey and the United States are not like Iran, even though America is “a predominantly Christian nation.”

There’s a legitimate debate to be had about the place of religion in the public square. However, methinks that in this case the former Speaker is a bit overeager to find something about which to be outraged….

Here’s a follow-up on my post from last week in which I argued that CEO John Mackey of Whole Foods Market ought to think twice about whether the worthies at the Wall Street Journal editorial board really are his friends, their solicitude for his opinions about health-care reform notwithstanding. When Mackey is not looking, his erstwhile friends are belittling his entire business model.

This week’s Earth Day observations provided the occasion for a screed on “Environmentalism as Religion,” by Paul H. Rubin, an economist at Emory University. “As the world becomes less religious, people can define themselves as being Green…. Consider some of the ways in which environmental behaviors echo religious behaviors and thus provide meaningful rituals for Greens…. There are food taboos. Instead of eating fish on Friday, or avoiding pork, Greens now eat organic foods and many are moving towards eating only locally grown foods.”

I hope John Mackey will take notice.  These people will resort to any rhetorical device whatsoever to belittle his customer base….

Some months ago I blogged on a Wall Street Journal op-ed by Whole Foods Market CEO John Mackey, whose libertarian views on the health-care reform issue provoked some efforts at a consumer boycott. At the time, I mentioned that the WSJ editorial board was happy to embrace Mackey — for the moment.  From a “macro” perspective, however, I observed that the very existence of Mackey’s company was problematical from a libertarian perspective. Setting aside the health-care issue, the attitude of the free-market crowd toward the natural-foods phenomenon generally is one of at least mild belittlement, I argued.

Sure enough, Tuesday’s WSJ brings a review of a new offering by Canadian journalist Andrew Potter, entitled The Authenticity Hoax. We learn that “the ever-narrowing search for just the right kind of food has less to do with saving the environment or pursuing a healthy lifestyle than with achieving a certain self-image…. the search for authenticity often ends up as a status-seeking game…. By competing against one another to see who is more authentic, he says, we just become bigger phonies than we were before.” Affluent consumers have fallen prey to a new form of status-seeking in the form of “conspicuous authenticity.” Reviewer Paul Beston of the Manhattan Institute concludes that “Mr. Potter is here to tell us what should be obvious: that there is no paradise back there, that we moderns have never had it so good and that authenticity in the way we’ve defined it is a sham,” although he does allow as that “while much of the authenticity search is absurd, not all of it is so easily separable from the self-criticism that has been foundational to Western success.”

In my opinion, the article reflects not so much on the author or the reviewer as on the editorial board that solicited the review.  The rhetorical pressure exerted by the review is anything but “traditionalist” — no matter that it serves the purposes of this editorial board to pose at times as defenders of “traditional values.” Indeed, the pressure is all in the direction of “hyper-modernism” — you’ve never had it so good, so don’t give a second thought to what might be going on behind the scenes.  As I mentioned some months ago, you might think this would prompt John Mackey to have a second thought or two about his libertarianism. The very existence of his company suggests that there is something wrong with the superabundance of foodstuffs to be found in the supermarkets and supercenters that the market economy has supplied so lavishly. Generally, free-market enthusiasts are unwilling to take the organic-food movement sitting down.

Only the most affluent are able to take much of their time seeking out organic or locally-produced food – and their enthusiasms leave them open to caricature.  Still, our economic system, with its chain stores and mass production, while it confers considerable benefits, also prompts unease.  Some people may alter their purchasing habits out of a consumerist search for “authenticity,” but others may be concerned that, while human biology hasn’t changed radically in the past century or so, what we eat and the way it is produced has changed radically.

In some senses, a more localized agricultural economy with organic methods of production might be better. However, I don’t see how it can come about until and unless the economy as a whole moves in the same direction — which probably will require much higher energy prices. That might be better on the whole, although the transition to it might be wrenching in the extreme….

Momentum appears to be building on behalf of the idea of anti-obesity taxes on sugary sodas. Last week’s New York Times featured a piece on New York State health commissioner Dr. Richard F. Daines, who is outraged by highway billboards promoting “Any Size Soda, One Dollar.” (“Who would go in and order the petite size?… It’s just a signal to consume.”)

Years ago, late-night talk-show hosts and comedians used to joke about it.  Taxes on beer, taxes on cigarettes — what’s next, a tax on Big Macs? I can’t think of a better idea — if what you want to do is incite anti-government “tea party” sentiment and drive away voters of low to moderate incomes. It’s a good illustration of the chasm between suburban professionals and the working-class, blue-collar grassroots. Christopher Lasch, an irascible and eclectic thinker, wrote in his 1991 book, The True and Only Heaven, of suburbanite progressives who “proposed to reduce the deficit not only by cuts in the defense budget but by heavy taxes on tobacco, beer, and hard liquor — the traditional consolations of the working class.”

This situation evokes the image of the boxer who let his guard down, and left himself open to a roundhouse right.  Is obesity a serious problem? Absolutely.  Are the soda companies lobbying aggressively against the proposed taxes? Without a doubt. My suggestion would be that we find another way to address the matter….

Bruce Bartlett, an economist who served briefly in Ronald Reagan’s White House, became disaffected from the policies of George W. Bush, which has caused him to be regarded as something of an apostate on the right.  Writing last week on the website of Forbes magazine, he reminds us that, whatever we might make of the current administration’s economic policies, freedom is more than a matter of government spending as a share of GNP. “Perhaps we are moving toward European levels of taxation and spending. While I would prefer not to live that way, I certainly don’t view those in Scandinavia, where the level of government is twice what it is here, as twice as close to slavery as we are.”

The entire article by Bartlett is well worth reading. I would add that there is good reason to insist that our freedom is, in the first instance, political rather than economic. That may not be easy for many of us to swallow, considering that economics is a preoccupation for almost everyone, whereas many of us are politically passive. Furthermore, the view is widespread that political freedom is nothing but the “freedom” to rob Peter to pay Paul. According to that view, political freedom as it might be exercised by the “have-nots” is something like a criminal conspiracy. Why not then impose an authoritarian regime, for the sake of enforcing fair rules of the economic game as understood by the laissez-faire school of economics? Would we then be more free?

Under an arrangement like that, perhaps the “captains of industry” would be able to go about their business unfettered by government — a prospect that would warm the hearts of the admirers of Miss Rand. The problem would be that the same regime that grants unlimited prerogative to economic actors could also take it away. Without political freedom, no one would be in a position to speak up or do anything about it.

As much seemed to be the view of Hannah Arendt, whom I have discussed on the “About” page of this site. She wrote of the individual who “would be flattered at being called a power-thirsty animal, although actually society would force him to surrender all his natural forces, his virtues and vices, and would make him the poor meek little fellow who has not even the right to rise against tyranny, and who, far from striving for power, submits to any existing government and does not stir even when his best friend falls an innocent victim to an incomprehensible raison d’etat….”

The “tea party” activists think they are getting a raw deal from the media these days.  Fair enough: one, two or a dozen instances of incendiary rhetoric do not necessarily make for a trend.

A more serious vein of criticism is suggested by remarks contained in a Washington Post article from this past Thursday. The piece focused upon Tennessee farmer and Republican Congressional hopeful Stephen Fincher, who “could be a perfect ‘tea party’ candidate: a gospel-singing cotton farmer … seeking to right the listing ship of Washington with a commitment to lower taxes and smaller government.”

There’s just one problem: “Fincher accepts roughly $200,000 in farm subsidies each year.”

One supporter of Fincher sees no problem. “He is for getting the budget balanced. He does not want this health care. He is right in line with the views we are holding true to.” Another says: “I don’t see the agricultural subsidy thing as an issue at all … If it were an issue, then we would never elect a farmer to Congress at all. Because basically, most farmers get agriculture subsidies. If they didn’t, they’d be broke, and we’d be buying our food from China.” In his own defense, the candidate says: “People are quick to say with their mouth full, ‘Well, the American farmer is on the dole.’… But a loaf of bread is two bucks when it could be 10 bucks. I know what it is with the government in my business. We would be all for not having government in our business, but we need a fair system.”

These people represent themselves as tribunes of the oppressed masses, but what they really are, are affulent voters who haven’t thought through the implications of their own libertarianism. They’re not being oppressed. Their opposition to the health-care reform legislation borders on the hysterical. In their own detached and disinterested opinion, they’re overtaxed.

Somewhere in a trailer park, there’s a family with a kid on a respirator, and no health insurance. They’d like a “fair system” in health care, just as Mr. Fincher wants a “fair system” in agriculture.  I wonder whether he is aware that libertarians will belittle the invocation of “fairness” in either case.  What’s good for the goose is good for the gander….

Someone with the Wall Street Journal’s editorial board seems to have been asleep at the switch. In Friday’s paper, in the weekly “Taste” section, there appeared a commentary that was unflattering in the extreme to the board’s positions, especially the contentious matter of climate change — a matter about which the board is only too happy to trumpet its views.

The article in question didn’t have much to do with climate change, except in passing.  The author was Robert Crease, chair of the philosophy department at SUNY-Stony Brook.  In the main, his intent was to pay homage to Martin Gardner, longtime author of the “Mathematical Games” feature that appeared in the Scientific American from 1956 to 1981.

Crease spoke to cognitive neuroscientist Al Seckel, an admirer of Gardner, who studies “why people regularly and seemingly inexorably fall victim to optical illusions, faulty logic and pseudoscience.” Seckel notes that people may discount dissonant information that fails to conform to their preconceived notions. “As an example, Mr. Seckel noted that global-warming skeptics who lack training in science yet appear to argue on a ‘technical level’ tend to be libertarians. If global warming is correct, that suggests large-scale governmental regulation is needed, contrary to the core beliefs of a libertarian. ‘It is easier for a libertarian to attack the science of global warming,’ Mr. Seckel said, ‘than to alter one’s core libertarian beliefs.’”

That’s a concise summary of the reasons for declining to take the representations of climate-change skeptics at face value. The most loudmouthed skeptics are not climatologists. They’re not meteorologists.  They’re not physicists.  They presume that they are competent to critique the work of natural scientists — because they’re ideologues….

On the whole, I tend to look at the representations of climate-change skeptics with a skeptical eye, as regular visitors to this site will have noted. For me, the skepticism smacks too much of a corporate public-relations campaign, going back two or three decades.  On the other hand, it was no less of a thinker than John Stuart Mill who reminded us of the benefits of freewheeling debate, involving even the views of those we might regard as absolutely repugnant.  In that spirit, a lengthy feature posted last week on the English-language website of German newsmagazine Der Spiegel merits close attention.  Highlights:

– The reputation of the Nobel-prizewinning Intergovernmental Panel on Climate Change (IPCC) has been compromised. “In mid-March, UN Secretary General Ban Ki Moon slammed on the brakes and appointed a watchdog for the IPCC…. There is already a consensus today that deep-seated reforms are needed at the IPCC. The selection of its authors and reviewers was not sufficiently nonpartisan, there was not enough communication among the working groups, and there were no mechanisms on how to handle errors.” In Germany, the prestigious Leibniz Association has called for the resignation of IPCC chair Rajendra Pachauri.

– Reconstruction of global temperatures from historical records is extremely complicated. “At a number of weather stations, temperatures rose because houses and factories had been built around them. Elsewhere, stations were moved and, as a result, suddenly produced different readings.” Due to these and other complicating factors, the data had to be “homogenized” by means of statistical methods.  Unfortunately, British climatologist Phil Jones, one of the principals in the “Climategate” affair, admitted under pressure from climate-change skeptics that he “had deleted his notes on how he performed the homogenization. This means that it is not possible to reconstruct how the raw data turned into his temperature curve.” Pressure is building to “start from scratch” on the calculation of the global temperature curve — a process that could take years.

– The latest estimates indicate that, even in the face of ongoing warming, an increase in the incidence of “monster storms” such as Hurricane Katrina is not to be expected. “According to the models, the high latitudes will heat up more substantially than the equatorial zones (which also explains why climate change is already so visible in the Arctic regions). On balance, temperature differences on the Earth’s surface will decrease, which in turn will even reduce wind speeds — meaning the much-feared monster storms are unlikely to materialize.”

– Climate change may produce winners as well as losers. Canada, Russia, and Germany may benefit from a more temperate climate.  On the other hand, subtropical regions, including the southern United States, Australia, South Africa, and such Mediterranean countries as Spain, Italy and Greece may suffer from more frequent drought conditions.

The feature concludes with the thoughts of German climatologist Hans von Storch: “Climate change isn’t going to happen overnight. We still have enough time to react.” That’s not inconsistent with the position staked out elsewhere on this site….

David Frum believes that Republicans overplayed their hand on health care. “We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat.”

This is too good to pass up: “When Rush Limbaugh said that he wanted President Obama to fail, he was intelligently explaining his own interests. What he omitted to say – but what is equally true – is that he also wants Republicans to fail. If Republicans succeed – if they govern successfully in office and negotiate attractive compromises out of office – Rush’s listeners get less angry. And if they are less angry, they listen to the radio less, and hear fewer ads for Sleepnumber beds.”

The takeaway: “So today’s defeat for free-market economics and Republican values is a huge win for the conservative entertainment industry….”