[y66]

Bill Kristol at The Bulwark said:

Your reminder that while Trump's lawyers are behaving ridiculously, Republican senators are poised to behave disgracefully.

[kenberg]

The first purpose of any trial is to convict or acquit the accused. But it also is a time when society says either "What you did is not acceptable" or "We are fine with what you did".

So we need the trial, we need the evidence laid out, and then we need the senators to cast their votes. On this it is not a matter of liking or not liking Trump, it is a matter of judging his actions. Like him or not, did he or did he not cross a line. So it will be decided. I believe that I both would be and should be in jail if I had done as he did. But we shall see how it goes.

[johnu]

kenberg, on 2021-February-10, 08:15, said:

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

Why is the Senate debating whether the impeachment trial is constitutional? That is a question for the Supreme Court.

In other news, Senate Democrats introduced a resolution stating that (2 + 2) = 4. The vote was 51-50 with all the Democrats voting for the resolution, and all the Repugs voting against the resolution.

[Winstonm]

Zelandakh, on 2021-February-10, 09:53, said:

"If it doesn't fit you must acquit". Trump's slogan: "Don't impeach, call the police."

Trump: I'm a liar and you're my choir.

[Zelandakh]

The Pence timeline emerging from the impeachment trial is quite remarkable:-

2:24:22 @realDonaldTrump tweets: "Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution, giving States a chance to certify a corrected set of facts, not the fraudulent or inaccurate ones which they were asked to previously certify. USA demands the truth!"

2:25:50 Secret Service hustle the VPOTUS down stairs in the Senate moments ahead of the Trump mob.

Hard to believe that 90% of GOP Senators could acquit and yet that seems all but inevitable. The only way would be an extremely unlikely backlash from Trump's base. Given the way Day 1 was covered in the RW Bubble, I won't hold my breath on that.

[pilowsky]

Zelandakh, on 2021-February-10, 17:10, said:

The Pence timeline emerging from the impeachment trial is quite remarkable:-

2:24:22 @realDonaldTrump tweets: "Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution, giving States a chance to certify a corrected set of facts, not the fraudulent or inaccurate ones which they were asked to previously certify. USA demands the truth!"

2:25:50 Secret Service hustle the VPOTUS down stairs in the Senate moments ahead of the Trump mob.

Hard to believe that 90% of GOP Senators could acquit and yet that seems all but inevitable. The only way would be an extremely unlikely backlash from Trump's base. Given the way Day 1 was covered in the RW Bubble, I won't hold my breath on that.

I wish they would hold their breath.

[Zelandakh]

Oh my, the timeline just gets worse. It seems that Trump was actually informed directly in a phone call around 2:15 from Capitol Hill of Pence being in immediate danger, then almost immediately sent out the tweet I previously posted. I hope everyone has been able to get all of this. I did not watch all 8 hours straight through and might be missing bits. I would imagine for conservative media viewers it might be quite difficult to be able to piece everything together.

[pilowsky]

Zelandakh, on 2021-February-11, 01:18, said:

Oh my, the timeline just gets worse. It seems that Trump was actually informed directly in a phone call around 2:15 from Capitol Hill of Pence being in immediate danger, then almost immediately sent out the tweet I previously posted. I hope everyone has been able to get all of this. I did not watch all 8 hours straight through and might be missing bits. I would imagine for conservative media viewers it might be quite difficult to be able to piece everything together.

I hope you aren't referring to those lovable friendly patriots that strolled quietly into the Capitol to have a quiet chat with their representatives.

Charming folks.

[pilowsky]

Elsewhere, I have commented that America is a failed state.
I have been castigated and taken to task by Americans with statements along the lines of "How would you know" or "But America is the greatest country in the world" or "If it were not for America there would not be Democracy in the world."
All of these statements are either red herrings or demonstrably wrong.
As a new publication in the Lancet shows, 40 years of incompetent economic polity in America has meant that while the America of the late 1970s America was a proud member of the so-called 1st world countries, it is now a pitiful example of what happens when you believe your own advertising.
Here is the reference: https://drive.google...iew?usp=sharing
Authors come from Harvard and UCSF amongst others.
Figure 1 (see below) alone tells the story of what happens when rank individualism is cherished at the expense of caring for the entire community.

Whenever someone in America suggests a timid policy that might benefit the population as a whole, they are derided as 'Socialist' or 'radical left-wing Democrats'.
If this poverty of understanding about how a first-world country manages its affairs persists for much longer, the damage may become irreversible.


Life expectancy in the USA is now ~ about 78 years in other countries around 82. This difference of 4 years means that the 'average' American is about 5% worse off than people in comparable countries.
But this is much worse than it appears because the years after 65 are years where an individual ought to expect to enjoy retirement after a long working life.
Instead of 17 years of retirement, an American gets only 13 years. Remove 3 years for end-of-life health problems, and the picture is even grimmer. 10 vs 14 years. Other countries get 40% more.

A key point that this study reveals is that while Trump came to personify all that is wrong with governance in the USA, he arrived on fertile ground.

Since this is a Bridge Forum, composed of an aging demographic, these data are even more devastating.

Yet, despite all this, I hear rusted on Democrats claiming that socialised medicine is awful and that Bernie Saunders is the devil incarnate.

In Australia, someone like Bernie would be considered relatively moderate in the Labor (correct spelling) party of Australia.

One of Australia's most brilliant politicians, Barry Jones, wrote in 1982 about the effect of technology on work and society in "Sleepers, Wake!" - his advice is even more cogent now.

[y66]

Matt Yglesias said:

https://www.slowbori...BQByWyGZls2HrZI

I want to revisit Tuesday’s article “The $1.9 trillion relief plan is not too large,” both because it quoted economist Ernie Tedeschi laying out some budget math that I don’t think is correct, and more broadly because after more conversations I think I can now describe a different — and somewhat stronger — argument against the size of the relief package than the inflation-centric one I rebutted on Tuesday.

Basically, I think the argument that the Biden relief plan will spark some huge amount of inflation is not credible, but the idea that it’s in some sense wasteful and delivers a fair amount of money that’s not strictly needed is pretty reasonable.

I don’t find this especially troubling, but others do, either for reasons of fastidiousness or based on concerns about the longer-term political consequences. But I do think it’s mathematically correct. If you shrugged off all the political constraints, you could develop legislation that’s better targeted than this.

...

How bad is it to be wasteful?

This is where the output gap math becomes relevant again.

If you believe the CBO’s relatively low output gap forecasts, then this really is just too big. If you’re like me and you think they’re missing the boat, the bad timing doesn’t seem so bad to me. State governments that don’t really need the extra money that they are getting will think of something to do with it over the next 2 to 3 years. Similarly, households that get checks that aren’t spent right away will spend them later. Money is money, and it will get spent. Meanwhile, the people and governments who are hard-up will get much-needed relief.

Of course, if you’re really anxious about debt, then this hand-waving “eh, it’ll work out” is not that convincing.

All I can really say to this is that with inflation-adjusted interest rates on government debt below zero, I just fundamentally think that’s wrong. It’s irresponsible not to be borrowing more money.

But then you get to opportunity costs. Granting that some kind of $1.9 trillion package was warranted, was this $1.9 trillion package warranted? I think that’s the strongest criticism Summers raised — maybe we could have cut out hundreds of billions of dollars worth of short-term low-multiplier federal spending and poured it into infrastructure projects that would get built over the next 2-3 years and have all kinds of huge long-term benefits. And I think as long as you leave it on that level of abstraction, it’s pretty compelling.

How would it work, though? After Democrats won the Senate on a promise to give a full $2,000 in direct payments, I think they basically have to deliver. And if you're going to do state and local aid, the simplest way to do it is to push money out through existing funding streams that ensure everyone gets some. Skimping on the actual virus stuff to go build broadband in northern Maine would be nuts. So then you start looking at the stuff that actually does have a strong multiplier — Unemployment Insurance, SNAP, an enhanced Child Tax Credit, etc. — which seems like a weird area to cut.

Probably the biggest opportunity cost here is in terms of not building automaticity and triggers into the package.

The federal government splits Medicaid costs with states using a formula called FMAP. Jason Furman, the top Obama administration economist, has this plan to make FMAP payments variable based on state-level unemployment rates. That’s a way of doing state and local aid that would target the funds to the states that actually need money, and would also be infrastructure to help prevent future recessions. We could make the bonus UI ramp up or down based on what’s actually happening with job openings. Lots of clever ideas about automatic stabilizers have been kicking around for years, and congressional Democrats keep refusing to pick them up for bad reasons. I wish they would pay more attention to the substantial importance of automaticity and worry less about CBO scores.

But the biggest thing I think is that on pure politics, you have to give credit where due.

Biden’s plan is very popular

The Summers criticism that makes the most sense economically is that the marginal parts of this plan are just not important enough on the merits to be worth burning down Biden’s political capital. It would be a shame for a president to make his political legacy a bunch of middle-class people getting a random, one-off $1,400 check.

But in the real world, does this critique make sense? The “political capital” metaphor always seems odd to me, because how do you know which things let you accumulate more of it versus which things let you spend it down?

I think the more straightforward thing to say is that in addition to evaluating a president’s decisions on the basis of how much good they do in the world, you want a president you like to make decisions that are popular rather than unpopular. I favor a carbon tax, for example, but there would be no point in Biden pushing through a carbon tax by a 51-50 vote on a reconciliation measure only to tempt a massive midterm backlash that leads to — among other things — its repeal.

But I don’t see any evidence in the polling that the president is costing himself anything by pushing this plan.

Polling isn’t the be-all and end-all of policymaking. But it’s hard to see exactly what the “political capital” concern here would be.

Biden’s team claims to be working on a second request to Congress for some kind of infrastructure-focused recovery plan in order to complement the rescue plan we’ve been talking about. I’ll be interested to see what that looks like. I’m a bit of an infrastructure skeptic compared to a lot of economics writers I know, since this country has a bad habit of blowing resources on dubious projects. But maybe that’s one reason I kind of like the structure of the rescue plan. By not using infrastructure spending as an emergency employment scheme, I hope we are laying the groundwork for an infrastructure plan that’s actually about infrastructure and not about “job creation.”

[Winstonm]

A big problem here in the U.S. is our methodology of belief formation. One can either form a belief due to evidence - to believe, In lieu of evidence, one must fall back on imagined reasons one has created - made belief. The faith-based belief systems inherent in religious populations indoctrinate populaces to accept non-evidentiary belief formation as equally valid.

[kenberg]

Thanks for putting up the Yglesias article https://www.slowbori...BQByWyGZls2HrZI

I am reading it, I will think more about it, I will follow some of his links, including one to Krugman. I find Krugman repulsive, but a repulsive person can still be worth listening to.

As an egocentric, I could say Yglesias must have read my post, or my mind, taken me seriously, and responded. I'm not that egocentric.

Analogies are dangerous but I will illustrate my thinking by bringing up student debt. Numbers that describe the problem vary, but I gather there is something like 1.5 trillion in student debt. Here is a question: What genius thought up this program? Someone said "Let's lend $20,000 a year to a student for four years" and no one noticed that after four years the student would be $80,000 in debt? Did the designers of the student loan program not notice that it would result in massive student debt or did they notice and just figure that dealing with that would be someone else's problem?

Let's look at one of the current issues, the stop on evictions. Suppose we have a husband and wife and three kids living in a rental unit. Surely we do not want them evicted. So we forbid it. But, as I understand it, the rent is not forgiven. For a family of five, at least in an urban area, the rent much be at least $2000 a month. So after a year, they owe $24,000. Really it looks like this will go on beyond a year and, for many, I bet that the rent is more than 2K a month. So there will be a debt of 30 or 40 K. Then what? I am not saying I know (although I have thoughts on it) but I am saying that it should not be left as a problem for later. Last spring we needed to act quickly, it made sense to skip over some long-range issues. Not now. We have had a year to think about how to handle this and we should expect some clarity.

On many things, it's as if planners say "Oh. Debt? Forget debt. Why would we worry about debt?". I am very much in favor of helping people both in general and at this awful time. I favor keeping small businesses alive. I favor helping the economy. But I react badly to those who just refuse to even think about how accumulated debt could pose a long-term problem.

[Winstonm]

Concerning long-term debt of a nation: if you work for "x" dollars per day, you certainly do not want to go too far into debt because your ability to repay is limited; on the other hand, if you can legally create money from nothing there is no limitation and the only real concern is putting so much extra money into the economy that it becomes less valuable.

[kenberg]

Winstonm, on 2021-February-11, 10:55, said:

Concerning long-term debt of a nation: if you work for "x" dollars per day, you certainly do not want to go too far into debt because your ability to repay is limited; on the other hand, if you can legally create money from nothing there is no limitation and the only real concern is putting so much extra money into the economy that it becomes less valuable.

Yes, of course. But let's take it to extremes.
States are in serious trouble financially. We could give every state 40 billion, that would help.
Small businesses are hurting. We could give every business employing fewer than 100 people a grant. Say $30,000 for each employee.
We could cancel all student debt.
Schools are having severe problems. Give each school district a grant of $25,000 per pupil.
I could easily think up a few, or maybe many, more.

Do you think that somewhere along the way we will have to prioritize spending? Is there a limit? Can the federal government pay off all student loans, pay all of the rentals on all families who are having financial difficulties, similarly make mortgage payments for those having trouble, buy every child an $800 computer and a dog to keep them company, and so on?


I am aware of the fact that the government can print money. That I accept. And I accept that having national debt is ok, perhaps even beneficial at some level. My issue is not that we need to balance the budget every year. I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

Here is a specific case that I mentioned above, student debt. What were the designers of this program thinking? Calling it a student loan program certainly suggests that they were anticipating that the money would be paid back. Were they lying when they presented it as a loan program? Were they thinking "Oh, we will just rum up a debt of 1.5 trillion or so and then we will use government funds to pay it all off?" Is that what they were thinking? I seriously would like to know what they were thinking. What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short but no big deal, we will just print some more money" then that person (or group of people) should never again be put in charge of anything.

[pilowsky]

kenberg, on 2021-February-11, 13:43, said:

Yes, of course. But let's take it to extremes.
States are in serious trouble financially. We could give every state 40 billion, that would help.
Small businesses are hurting. We could give every business employing fewer than 100 people a grant. Say $30,000 for each employee.
We could cancel all student debt.
Schools are having severe problems. Give each school district a grant of $25,000 per pupil.
I could easily think up a few, or maybe many, more.

Do you think that somewhere along the way we will have to prioritize spending? Is there a limit? Can the federal government pay off all student loans, pay all of the rentals on all families who are having financial difficulties, similarly make mortgage payments for those having trouble, buy every child an $800 computer and a dog to keep them company, and so on?


I am aware of the fact that the government can print money. That I accept. And I accept that having national debt is ok, perhaps even beneficial at some level. My issue is not that we need to balance the budget every year. I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

Here is a specific case that I mentioned above, student debt. What were the designers of this program thinking? Calling it a student loan program certainly suggests that they were anticipating that the money would be paid back. Were they lying when they presented it as a loan program? Were they thinking "Oh, we will just rum up a debt of 1.5 trillion or so and then we will use government funds to pay it all off?" Is that what they were thinking? I seriously would like to know what they were thinking. What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short but no big deal, we will just print some more money" then that person (or group of people) should never again be put in charge of anything.

What they were thinking was "Let's design a system that is so cruel and iniquitous that only rich people will be able to avail themselves of an education".
Any knowledge is dangerous they want to keep it away from the 'have nots'.

Pricing education out of the rich of people that have no money is an excellent way to achieve this goal.

For every heartwarming Hallmark story (a whole genre of American fiction) about some poor person that struggled and succeeded there are dozens of people that didn't.

[Winstonm]

kenberg, on 2021-February-11, 13:43, said:

Yes, of course. But let's take it to extremes.
States are in serious trouble financially. We could give every state 40 billion, that would help.
Small businesses are hurting. We could give every business employing fewer than 100 people a grant. Say $30,000 for each employee.
We could cancel all student debt.
Schools are having severe problems. Give each school district a grant of $25,000 per pupil.
I could easily think up a few, or maybe many, more.

Do you think that somewhere along the way we will have to prioritize spending? Is there a limit? Can the federal government pay off all student loans, pay all of the rentals on all families who are having financial difficulties, similarly make mortgage payments for those having trouble, buy every child an $800 computer and a dog to keep them company, and so on?


I am aware of the fact that the government can print money. That I accept. And I accept that having national debt is ok, perhaps even beneficial at some level. My issue is not that we need to balance the budget every year. I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

Here is a specific case that I mentioned above, student debt. What were the designers of this program thinking? Calling it a student loan program certainly suggests that they were anticipating that the money would be paid back. Were they lying when they presented it as a loan program? Were they thinking "Oh, we will just rum up a debt of 1.5 trillion or so and then we will use government funds to pay it all off?" Is that what they were thinking? I seriously would like to know what they were thinking. What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.
but no big deal, we will just print some more money" then that person (or group of people) should never again be put in charge of anything.

You make reasonable points which is to be expected as you are a reasonable man. A couple of things on which I'd like to comment. First, this:

Quote

I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

I'm not a great swimmer - I can probably manage a couple hundred yards of sidestroke. If the ship I am on sinks two-hundred yards offshore, it doesn't make a lot of sense to only swim 150 yards in order to exercise "restraint". At the same time, if I know my ship is sinking 200 yards offshore it would be folly to jump into the pool for 100 yard of laps just for kicks.

I think you are likely conflating two concerns: spending during normal times and spending during crisis. You are right that it is wise to show restraint when times are good or even normal. There is a price to pay for excess debt of that sort - it is paid with inflation. During crises, though, when spending has dried up, government stimulus does not come with that same cost - the cost comes from showing too much restraint and allowing people to suffer and businesses to fail.

Housing, food, healthcare. These need to be provided right now for those affected by the pandemic. Student debt has to wait to be solved - repayments should be delayed, though, as of now.

Second, this:

Quote

What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short

My answer to this may sound to you like it is from left field but bear me out. The problem with student debt is not the borrower nor lender but the costs of education. A huge amount of that borrowed money was funneled into for-pay colleges, some that have gone out of business or have been shuttered as criminal enterprises. My position is that the basic fault comes from the total faith-based reliance we have on free-market capitalism and its government assisted ability to raid the treasury.


So, yes, I agree that the people who created this situation should not be in power - but my reasons are different from yours, I am pretty sure.

[kenberg]

The reason (or one reason) I think the student debt problem is a useful model is that I really do not know just how it happened. I suspect inertia played a strong role. Also, there was some sort of effort, I forget the details, to take over a program and modify it. That often leads to trouble.
So I think it could be very useful to see just how it happened.
But first, there has to be agreement that it matters.
If we say debt doesn't matter, just print some money and pay it all off, then no one will think it worth the effort to see what went wrong.


It sounds as if we do agree that one problem is that there are some really crappy schools out there. There were some sort of rules about schools having to qualify but it was far too easy to get around them
Another problem, here we might not agree but to me it is clear, some students are not very good students and, far more importantly, they're not good at assessing their own abilities and interests.
This, like most things, goes on a spectrum. It's not just yes or no. To take a couple of extremes, when we did not finish the text in my high school algebra course I reported it as lost so I could finish it over the summer. Otoh, my father could never understand why a normal (??) kid would want to do such a thing. He installed weatherstripping, I became a mathematician, we both earned a living. (And I paid back my student loan.)

I understand that because of the special circumstances now, we need to spend money. Spend it on kids, schools, food, housing. Not on me.

On a related matter, there has been talk of sending out money and then getting it back from those of us who do not need it at tax time. I think it is a terrible idea.

[awm]

kenberg, on 2021-February-11, 15:07, said:

I understand that because of the special circumstances now, we need to spend money. Spend it on kids, schools, food, housing. Not on me.

On a related matter, there has been talk of sending out money and then getting it back from those of us who do not need it at tax time. I think it is a terrible idea.

How exactly are we to determine who needs help and who doesn’t? If we create some complicated process where you have to fill out a bunch of forms and show various documents to prove you need help, then a lot of people will not be able to negotiate the system and will miss out on getting help they really need. At the same time we will spend a great deal of money administering such a system and verifying the documents and rooting out fraud. It’s much easier to just send out checks to everyone who might need them (and might even be cheaper, and will surely get help to people in a more timely manner).

As far as costs, there is a reason Biden’s plan costs 1.9 trillion. This happens to be the same as the projected cost of Trump’s tax cut according to the CBO. The implication is that Congresspeople who voted for the tax cut but not the recovery funds are showing where their priorities lie. Further if we are worried about the cost we can always just repeal the tax cut!

It’s true that unlimited deficit spending will eventually create a problem — likely inflation as the government prints more money, or an increase in treasury bond interest rates as people lose faith that we will pay it off. But neither of these things is close to happening now and refusing to help people in need due to vague worries about inflation seems unreasonable.

In any case, tax rates on the wealthy and big corporations are historically low and the stock market is booming. If we need to pay for the rescue package it’s pretty clear how to get the money.

[kenberg]

I don't know how I could be more clear about the fact that I favor helping people in need and I recognize that the need right now is far greater, both in the number of people in need and the depth of their need, than it was before the pandemic.

As to how we get it to the right people, that has always been important and always been difficult. But we have had a year to think about it.

I will make some suggestions, I can't right now, but I do not believe I have all the answers. I do think we could do better.

[akwoo]

Winstonm, on 2021-February-11, 09:57, said:

A big problem here in the U.S. is our methodology of belief formation. One can either form a belief due to evidence - to believe, In lieu of evidence, one must fall back on imagined reasons one has created - made belief. The faith-based belief systems inherent in religious populations indoctrinate populaces to accept non-evidentiary belief formation as equally valid.

Evidentiary belief formation requires the ability to link evidence to conclusions. It requires the ability to think "A is sufficient evidence for B. A happened. Therefore, B must be true." That requires keeping three ideas in one's head at the same time. All my experience teaching mathematics tells me that a majority of adults do not have the ability to keep three ideas in their head at a time, at least when the ideas are not ideas they think about all the time.

I don't think Americans are that much stupider or poorly educated than anyone else. Sure there might be a few percent difference here or there, which is something, but I don't think you find someplace where 70 or 80% of adults can manage evidentiary belief formation across a wide variety of domains.

So it just becomes a matter of whether people are regarding as prophets people you agree with or people you don't agree with.

I don't know what to make of my conclusion here. Mostly I just think we're doomed.