More Critiques of Piketty

Ryan Decker points out that Piketty’s “criticisms of mathematical economics (32, 574) are not surprising given that he relies so heavily on assumptions and mechanisms that would be highly vulnerable to criticism if they were forced into the transparency of a formal model.” And the following from Garrett Jones is certainly worth reading:

Market-oriented economies that learn to live with inequality will reap the rewards: More domestic capital for workers to use on their jobs, more foreign capital flowing in to a country perceived as a safe investment, and a political and cultural system that can spend its time on topics other than the 1 percent. Market-oriented economies that instead follow Piketty’s preferred path—taxing capital heavily, preferably through international consortiums so the taxes are harder to evade—will end up with less domestic and foreign capital, fewer lenders willing to fund new housing projects, fewer new office buildings, and a cultural system focused on who has more and who has less.

We can count on Paul Krugman to ignore these critiques, as they do not conform to his world view.

Credibility Gap

Why, oh why do we make threats that we cannot and will not back up?

VLADIMIR PUTIN’S assault on Ukraine has been relentless and increasingly reckless: Forces working with Russian personnel in eastern Ukraine are torturing and murdering opponents and holding international observers hostage. In contrast, President Obama’s response has been slow and excruciatingly measured. New U.S. sanctions announced Monday fall well short of the steps that senior officials threatened when the Russian offensive in eastern Ukraine began three weeks ago.

No wonder that, even as he announced them, Mr. Obama expressed skepticism that they would work. “We don’t expect there to be an immediate change in Russia’s policy,” a top aide told reporters. This official acknowledged that the United States could take steps that would impose “severe damage on the Russian economy” but was holding them back. The obvious question is: Why would the United States not aim to bring about an immediate change in Russian behavior that includes sponsorship of murder, torture and hostage-taking?

Well, the answer to that last question is that such measures would harm us, our allies and the global economy in the process. The Russians are convinced that behaving as they do vis-à-vis Ukraine and Crimea is in their national interests, and as realist theory instructs us, nation-states are willing to sustain a great deal of punishment in order to carry out measures that they believe further their national interests. By contrast, there are few strategic interests of any seriousness involved for the United States and its allies, and as a consequence, the United States and its allies are unwilling to sustain the costs of carrying out a successful sanctions campaign against Russia.

But none of this changes the fact that the United States should not be issuing threats against Russia that it cannot and will not back up. Doing so diminishes our credibility, and at this rate, we will soon have precious little credibility left.

So, Shall We Call Him “John the Enhanced Interrogator” Now?

Apparently, Sarah Palin was concerned that she was losing her touch when it came to grabbing headlines by making comments that . . . oh, how shall I put this nicely? . . . ought to be held in minimal high regard.1 In order to remedy this doubtless serious problem, John McCain’s choice for “heartbeat away from the presidency” decided to inform us that “waterboarding is how we baptize terrorists.”

Baptism is, of course, the way in which people are admitted into particular Christian churches. It is a meaningful and beautiful ceremony for Christians, one that represents a major life moment for the baptized person and for his/ her loved ones. To compare this holy rite with a method by which information is extracted from terrorists–a method that might even constitute torture!–may very well strike Christians (and others who believe that joyful ceremonies ought not to be analogized with practices that are forbidden by the Geneva Conventions) as being rather incredibly offensive and ignorant. I imagine that Sarah Palin does not lose much sleep over this fact, but perhaps on the 12th of Never, the thought that she should take into account the religious and ethical sensibilities of Christians (a community of which she counts herself as a part) and others will enter her remarkably barren mindscape.

Yes, I am aware that Palin’s remarks stand her in good stead with certain folks on the starboard side, which is why she makes such remarks in the first place. Words–even poorly chosen words–are a substitute for accomplishments when it comes to Palin, who as we know, decided to unburden herself of the responsibility of serving her fellow Alaskans as their governor halfway into her first term. Being liberated from the demands of leadership, the lady needed a hobby, and found one. In general, that hobby may be described as “making John McCain’s first presidential choice look as disastrously bad as possible,” and Heaven knows that Palin pursues this particular activity with zest and gusto. But perhaps Palin might want to throw both her adoring and not-so-adoring fans a curveball or several and actually make some public statements that serve as evidence that there lies a working mass of gray matter in between her ears. That way, she may confuse critics into believing–if only for a few moments–that she is in fact intelligent. Writing for myself, I can safely state that after nearly six years of watching Sarah Palin at work, I would welcome the befuddlement.

1. Tip O’Neill reported that the unkindest comment John McCormack ever made of a colleague was “I hold him in minimal high regard.” What a lovely statement. I plan on using it often, and I am sure that fate and circumstance will give me plenty of occasions to do so.

Torture in Iranian Prisons

Needless to say, this is both entirely obscene, and entirely unsurprising, given the nature of the current regime in Tehran:

Political prisoners in Tehran’s Evin prison have allegedly been subjected to humiliating physical abuse, including being forced to run a gauntlet of guards armed with batons, it has emerged.

Iran‘s president, Hassan Rouhani, has been silent despite chilling details being revealed by prisoners and their families about how Thursday’s disturbances marked a dark episode in one of the country’s most notorious prisons.

Dozens of inmates held in Evin’s ward 350, including journalists, lawyers and opposition members, were injured, with some suffering skull fractures, broken ribs, wounds and swelling on their bodies after guards and intelligence officials created a tunnel and made prisoners run through it as they beat them with batons, according to opposition sources.

Emad Bahavar, who is serving a 10-year sentence because of his political activities, recounted some of the horrific moments in a letter sent out of jail and published on an opposition website, Kaleme, on Tuesday.

In separate interviews, a group of relatives who met a number of prisoners beaten up in Evin’s violence last week echoed Bahavar, saying some could hardly speak and others had bruises on their bodies. The incident has been described by activists as Iran’s “black Thursday”.

“‘Beat them up,’ they shouted. Forty guards armed with batons then rushed down the stairs … they sent more guards as it went on,” Bahavar wrote in his letter. “They made us stand in a row facing the wall in ward 350’s corridors while being handcuffed and blindfolded. They started to beat us up from behind. You could hear a whining noise. Outside the ward’s gate, the guards stood liked a tunnel and forced us to go through it before taking us on to a minibus. You could see blood on the way and inside the minibus.”

Recall that the election of a supposedly “moderate” president was supposed to alleviate at least some of the totalitarian burdens that Iranians are forced by their government to bear. This has not happened because (a) the president is not all that powerful in the Iranian system of government, and (b) because the Iranian president may not be the moderate people think he is.

Paul Krugman Remains as Arrogant and Epistemically Closed as Ever

Don’t believe me? Read this, in which he reviews Thomas Piketty’s new book and says the following:

So what’s a conservative, fearing that this diagnosis might be used to justify higher taxes on the wealthy, to do? He could try to refute Mr. Piketty in a substantive way, but, so far, I’ve seen no sign of that happening. Instead, as I said, it has been all about name-calling.

(Emphasis mine.) Krugman really thinks that there have been no substantive refutations of Piketty? Has he read none of the refutations linked here or here? I recognize that Krugman has not heard of my wee little blog, but perhaps he has heard of some of the people whom I linked and who did a lot of refuting, and the web sites where those people write. I mean look, I recognize that Paul Krugman has epistemic closure issues, but apparently, they are worse than I ever thought they were. And I thought they were pretty bad indeed.

But leave it to Krugman to think that no ideas in the world matter except for the ones he agrees with:

. . . if you think you’ve found an obvious hole, empirical or logical, in Piketty, you’re very probably wrong. He’s done his homework!

Maybe you too can get a gig at the New York Times, provided that you are willing to live the rest of your life in an intellectual cocoon.

Quote of the Day

Recently, Barack Obama — a Demosthenes determined to elevate our politics from coarseness to elegance; a Pericles sent to ameliorate our rhetorical impoverishment — spoke at the University of Michigan. He came to that very friendly venue — in 2012, he received 67 percent of the vote in Ann Arbor’s county — after visiting a local sandwich shop, where a muse must have whispered in the presidential ear. Rep. Paul Ryan (R-Wis.) had recently released his budget, so Obama expressed his disapproval by calling it, for the benefit of his academic audience, a “meanwich” and a “stinkburger.”

Try to imagine Franklin Roosevelt or Dwight Eisenhower or John Kennedy or Ronald Reagan talking like that. It is unimaginable that those grown-ups would resort to japes that fourth-graders would not consider sufficiently clever for use on a playground.

George Will.

The Koch Brothers Have a Lot to Learn if They Want to Be Genuine Villains

Maybe Tom Steyer can teach them a thing or two:

The psychiatric world defines “projection” as the act of denying unpleasant qualities in yourself, while attributing them to others. Consider liberal billionaire Tom Steyer’s riff this week about the libertarian billionaire Koch brothers.

Mr. Steyer took exception in a C-SPAN interview to comparisons between his big-dollar funding of Democrats with the Koch brothers’ big-dollar funding of Republicans. The Kochs’ priorities “line up perfectly with their pocketbooks—and that’s not true for us,” said Mr. Steyer, who is fighting against the Keystone XL pipeline. Moreover, he insisted, his politicking is “completely open,” whereas the Kochs have “not been huge embracers of transparency.”

Why is Mr. Steyer so touchy about motives and transparency? The media tend to give liberal spending a pass, since they assume its motives and aims are pure. Mr. Steyer’s problem—and he knows it—is that his own purity remains hugely suspect, even among his allies.

It’s old news that the billionaire reaped his fortune at hedge fund Farallon Capital, via investments in “dirty” oil and coal projects. Mr. Steyer, who retired from the firm in late 2012, has since publicly repented for his prior investment ways. But what many greens remember is that he didn’t do so until he was caught.

Mr. Steyer had spent months fighting Keystone, attending anti-coal rallies and urging colleges to divest from “fossil fuels,” before the press noted that his money was still parked at Farallon, still profiting from Kinder Morgan pipelines and coal projects. It was only then, last July, that Mr. Steyer issued a press release saying he’d directed his money be moved to a fund that didn’t invest in “tar sands” or “coal” and pledged this process would be complete by the end of 2013.

And don’t think that environmentalists failed to notice Mr. Steyer’s specific divestment instructions. He did not say in that July press release that he was pulling his money from “fossil fuels”—only tar sands and coal. That may be because Mr. Steyer as recently as 2012 wrote an op-ed in this newspaper supporting more natural-gas extraction, and last year (as the Keystone debate raged) he helped fund a University of Texas study that supported fracking. Farallon over the years has held positions in natural-gas companies.

Surprising precisely no one, Koch-addicts like Harry Reid, who have made attacking the Kochs into something of a cottage industry, have nothing whatsoever to say about Steyer’s many conflicts of interests, and the ethical problems that come with them.

Quote of the Day

In 1943, Jan Karski, a Polish diplomat and courier for the Polish resistance, met with U.S. Supreme Court Justice Felix Frankfurter and relayed to him in detail the horrors of the Holocaust. Karski had personally witnessed Nazi atrocities in the Warsaw ghetto and a Nazi transit camp in Poland. He told Frankfurter of his experience, but his appeal fell on deaf ears. “I do not believe you,” the judge responded.

“Felix! What are you talking about?” interrupted Jan Ciechanowski, Poland’s ambassador to the United States, who was present at the meeting. “He is not lying!”

Frankfurter, a Jew himself, said: “I did not say that he is lying; I said that I don’t believe him,” as if refusing to face the horrible reality.

Karski’s mission was difficult, if not impossible. In 1942, the Polish resistance and Jewish leaders in the besieged country tasked Karski with telling the West about Poland’s plight and the tragedy of its people, hoping for help from the allies. Though reports of Nazi war crimes had reached Western leaders prior to Karski’s mission, he was the first eyewitness to the atrocities to give an account in person. Karski, the man who tried to tell the world about the Holocaust, would have turned 100 years old today. He died in 2000 in Washington D.C. after a decades-long career teaching history at Georgetown University.

Everywhere he went, Karski, a devout Roman Catholic, was met with disbelief or inaction. British Prime Minister Winston Churchill claimed he had no time to meet with the Polish emissary. President Franklin Delano Roosevelt met with the Pole in 1943, assured his support for Karski’s people, but made no mention of the destruction of the Jews.

“When I left, the President was still smiling and fresh. I felt fatigued,” Karski later wrote of his meeting with the U.S. president.

Hanna Kozlowska.

Let’s All Please Stop Allying with Crazy People

I am going to give the microphone to Jonathan Tobin so that he can preach some righteous truth at all of us:

You may have noticed that among the many and varied topics touched upon by COMMENTARY writers in recent weeks, none of us chose to weigh in on the Bundy Ranch controversy that attracted so much notice on cable news, talk radio, and the blogosphere. The reason was that none of us considered the standoff between a Nevada tax scofflaw and the federal government over grazing rights fees to rise to the level of an issue of national interest. The government may own too much land in the West and may have acted in a heavy-handed manner in this case but anyone with sense realized that stiffing the feds is likely to end badly for those who play that game, something that even a bomb-thrower like Glenn Beck appeared to be able to understand. Moreover, there was something slightly absurd about the same people who froth at the mouth when “amnesty” for illegal immigrants is mentioned demanding that Cliven Bundy be let off the hook for what he owed Uncle Sam.

Unfortunately some other conservatives liked the imagery of a rancher and his supporters opposing the arrogant power of the federal government and Bundy became, albeit briefly, the flavor of the month in some libertarian circles. So when he was caught uttering some utterly repulsive racist sentiments by the New York Times earlier this week some of the same pundits that had embraced him were sent running for cover. As they have fled, they have found themselves being pursued by jubilant liberals who have attempted to use Bundy’s lunatic rants to brand all of conservatives and Tea Partiers as racists. This was a popular theme today taken up by left-wingers at the New York Times, Salon, and New York magazine who all claimed that Bundy exposed the dark underside of libertarianism in general and conservative media in particular. While Jonathan Chait may consider to be an Onion-like coincidence that libertarian sympathizers are all crackpot racists, that is about as cogent an observation as an attempt to argue that most liberals are unwashed socialist/anti-Semitic lawbreakers just because many of the Occupy Wall Street protesters they embraced fell into those categories.

But there is another moral to this story that should give some on the right pause. In their enthusiasm to embrace anyone who sings from the same “agin the government” hymnal, some libertarians have proved themselves willing to lionize people that were liable to besmirch the causes they cherish. As our Pete Wehner pointed out recently, that some figures identified with conservatism have embraced sympathizers with the Confederacy as well as open racists and anti-Semites is a matter of record.

That the liberal attempt to tar all Tea Partiers as racists is unfair is beside the point. It is one thing to believe in small government, federalism, and to fear the willingness of liberals to undermine the rule of law. It is quite another to treat the government as not just a problem but as the enemy. The U.S. government is not the enemy. When run by responsible patriots it is, as it was designed to be, the best defense of our liberty, not its foe. . . .

It is frankly amazing and ridiculous that pundits and politicians on the starboard side of the political divide gravitated to supporting Bundy merely because he opposed the federal government regarding a particular matter. I recognize that “the enemy of my enemy is my friend” is something of a powerful motivator in the political sphere, but that doesn’t always mean that those who allow themselves to be motivated by such a sentiment make good decisions as a consequence. There was absolutely no attempt on the part of a host of right-of-center pundits and politicians to hang back, to check out and learn about the facts that led to the standoff, to see what developed in the standoff, and to determine whether Cliven Bundy was a figure worth supporting. He was not vetted in the slightest. Instead, his cause was embraced with reckless abandon by people who ought to have known better, and now, those same people are reaping the whirlwind. I’m sorry to say that this represents the just desserts of Bundy supporters, but I’m afraid it does. Maybe these folks will be more careful about choosing their heroes next time.

While we are discussing this matter, why should Cliven Bundy have been a figure worth supporting in the first place? Bundy is involved in a tax dispute with the federal government. Maybe he is in the right. Maybe not. To determine these and other related questions we have these wonderful things in the United States of America called “courts.” These “courts” hold events called “trials” in which a combination of law and fact is used to determine whether a particular party is in the right or in the wrong in some legal dispute or other. In the event that a trial court makes a mistake of law, we even have these things called “appellate courts” which can correct the trial court’s errors, thus protecting and making whole aggrieved parties who were harmed by a legal screwup on the part of the trial court. A brilliant set-up, no?

Bundy could have availed himself of these courts in order to make his case that the federal government was demanding too much of him in taxes. But if the courts find against him, Bundy then has to abide by the courts’ rulings and work to make the federal government whole. He cannot engage the federal government in a standoff, and as Tobin states, his supporters–who claim to be “law and order” types in other contexts–cannot expect that demands for leniency or (yes, I will type it) amnesty should or will be taken seriously by the federal government. That’s not the way that things work, and Bundy and his supporters should have recognized as much from the outset.

As for Bundy’s disgusting comments on race, neither I nor anyone else can compel him to hold more enlightened sentiments in his mind and heart, but perhaps someone with more patience than that which is possessed by your humble servant will try to explain to Bundy (slowly, and using simple words) that his comments on race made all of his supporters look bad, including those who never for one moment harbored the kind of racial animus that Bundy appears to harbor. And perhaps that same person can explain to Bundy supporters that the next time they go in search of a folk hero to publicly idolize, they had better make sure that folk hero in question does not embarrass them down the line.

I recognize that right-of-center folks are deeply suspicious of government power and want to make sure that such power is curbed and limited. I share in that sentiment, as anyone who reads my blog is aware. But not every opponent of government power is, or should be our friend. Let’s stop wasting our time and our prestige in lending support to those who manifestly do not deserve it. Doing so only serves to set back the honorable cause of responsibly and legally limiting the power of government.

Chaos Has Come to American Foreign Policy

We were assured in 2008 and 2012 that if we were wise enough to vote for Barack Obama as our president, we would see vast and significant benefits in the conduct and management of American foreign policy. We the voting populace fulfilled our end of the bargain–well, at least enough of us did to make Barack Obama the 44th president of the United States–and while no one surely expected the conduct and management of American foreign policy to be all sunshine and unicorns, one certainly expected (and should have expected) better than this:

AFTER AN agreement to “de-escalate tensions and restore security” in Ukraine was announced Thursday, Secretary of State John F. Kerry was very explicit about U.S. expectations. “We fully expect the Russians . . . to demonstrate their seriousness by insisting that the pro-Russian separatists who they’ve been supporting lay down their arms [and] leave the buildings” in eastern Ukraine, he said. “I made clear to Foreign Minister [Sergei] Lavrov today that if we are not able to see progress . . . this weekend, then we will have no choice but to impose further costs on Russia.”

The weekend has come and gone, and far from standing down in eastern Ukraine, Russia has continued to escalate. Its operatives and those they control have not withdrawn from the government buildings they occupy. In Slovyansk, the crossroads where Russian military operatives appear to be headquartered, a shooting incident early Sunday morning has been seized on by Moscow’s crude propaganda apparatus, which is claiming — based on what looks like fabricated evidence — that a Kiev-based right-wing group was involved.

On Monday, Mr. Lavrov was back to threatening an invasion by the tens of thousands of Russian troops on Ukraine’s border, claiming that, in the words of his ministry, “Russia is increasingly called upon to save southeastern Ukraine from chaos.”

Again Vladi­mir Putin is flagrantly disregarding the warnings and “red lines” of the Obama administration. He has reason to do so: President Obama also doesn’t observe them. Despite Mr. Kerry’s clear words, sanctions that have been prepared against cronies of Mr. Putin and companies involved in his Ukraine ad­ven­ture remain on ice at the White House, where they have languished for more than a week. When asked Monday how much longer they would be held back, White House spokesman Jay Carney said, “I don’t have an end date for you.”

I have said before and will say again that from the outset, the Obama administration’s options were limited when it came to Russian aggression vis-à-vis Ukraine. But that doesn’t justify writing foreign policy checks that the American body politic can’t cash. Thanks to the administration’s predilections for issuing threats and demands that are backed up with nothing whatsoever, it has ensured that throughout this crisis, Russia will not take the United States seriously. And of course, it ought to go without saying that other adversaries will be similarly disinclined to take American foreign policy statements to the bank.

In the event that you think I am out of bad foreign policy news to share in this blog post, think again. To be sure, bringing about peace in the Middle East is an exceedingly tricky task (this sentence has now become a strong contender for Greatest Understatement in the History of Ever), but the failure to secure a trade deal that makes trade freer throughout the globe is a significant, lamentable, and entirely avoidable one. Recall that Bill Clinton was able to bring both his party and the world kicking and screaming from the dark corners of protectionism into the blessed land of free trade. We would be better off if Barack Obama had Clinton’s skill and talent on this front. Alas, he does not.

They Say You Learn Something New Every Day

Today, I learned that some Marxists think that private property isn’t theft after all. And here I thought that the lot of them may not be educable in the least.

(Thanks to Charles Glasser for the link.)

UPDATE: Well played, Liberty Fund and Mises Institute. Exceedingly well played, indeed.

Quote of the Day

. . . he told me, very tenderly, that it can be dangerous to believe things just because you want them to be true. You can get tricked if you don’t question yourself and others, especially people in a position of authority. He told me that anything that’s truly real can stand up to scrutiny.

As far as I can remember, this is the first time I began to understand the permanence of death. As I veered into a kind of mini existential crisis, my parents comforted me without deviating from their scientific worldview.

“You are alive right this second. That is an amazing thing,” they told me. When you consider the nearly infinite number of forks in the road that lead to any single person being born, they said, you must be grateful that you’re you at this very second. Think of the enormous number of potential alternate universes where, for example, your great-great-grandparents never meet and you never come to be. Moreover, you have the pleasure of living on a planet where you have evolved to breathe the air, drink the water, and love the warmth of the closest star. You’re connected to the generations through DNA — and, even farther back, to the universe, because every cell in your body was cooked in the hearts of stars. We are star stuff, my dad famously said, and he made me feel that way.

Sasha Sagan, on her parents Ann Druyan and Carl Sagan.

Picking Some More at Piketty

One of the interesting aspects of Thomas Piketty’s Capital in the Twenty-First Century is the way in which the tome makes use of literary allusions from Jane Austen and Honoré de Balzac to make Piketty’s points about income and social mobility. I am fine with using literary allusions when they fit, but while Piketty may have used Austenesque references appropriately, he may not have done the same with Balzac:

However, Piketty makes no differences between the worlds of Jane Austen and Balzac. Balzac’s world is primarily urban rather than rural and it is much more diverse than Austen’s. Contrary to Austen’s landed gentry with its inherited wealth, the novels of Balzac are full of successful entrepreneurs, journalists, attorneys, medical doctors, and artists who lead pleasant and interesting lives. While not as rich as the banker Nucingen — a self-made man, but not always the most scrupulous — they lead comfortable lives due primarily to their hard work and talent.

It is true, however, that Balzac’s successful professional characters are all males. The women who manage to change classes in Balzac’s world tend to come in two varieties: those who marry successful entrepreneurs and those free-spirited courtesans who invest their money carefully — at times benefit from insider trading — and accumulate a significant patrimony that guarantees an elegant life in old age. Balzac’s courtesans also play a redistributive role that Piketty might have praised. They zero in on the richest one percent, ruthlessly obtain a large part of their fortune, and redistribute it lavishly among a large crowd of witty but otherwise poor friends (Rastignac among them) and artisans of all sorts — milliners, seamstresses, cooks, coachmen, and decorators.

In spite of the contrast between the stagnant rural world of Jane Austen and the world of mobile nouveau riche found in Balzac, Piketty seems to perceive no differences between the two. He summarizes the inequality and lack of mobility in Balzac’s literary world in chapter 11 of Capital, in a section called “the Rastignac’s dilemma”. Rastignac, a student of law, has only two choices in life: marry a rich but dull heiress and lead an elegant life, or pursue a professional career that will likely lead to poverty and mediocrity. Though Vautrin, the escaped convict in Balzac’s novels, does indeed present this dilemma to Rastignac, it is unfair to pretend that it is representative of the diverse world described by Balzac. This interpretation is so skewed that it seems that Piketty has been reading Balzac through inequality glasses.

I guess I have a problem with both the accidental and the purposeful misuse and misreading of literature in order to prove political and economic points.

Going back to economic analysis for a moment, be sure to check out Scott Winship, who casts doubt on the notion that wealth has become as concentrated as Piketty claims that it has been. The data that Winship cites is

. . . likely to lead us to conclude that, at least in the U.S. since 1989, the Piketty-Saez and CBO income concentration estimates have overstated the increase in inequality substantially. Interestingly, a wide array of research has found that inequality between the middle class and poor has not risen meaningfully since the 1980s.

What Is the Difference Between Harry Reid and Most Other Public Servants?

Well, for starters, most other public servants are not nearly as rich as Harry Reid is. Of course, there is nothing wrong with being wealthy, but the way in which Reid has acquired his wealth ought to raise more than a few eyebrows, as I have written before:

Last month, as the Senate was busy negotiating the final details of its Ukraine aid package, Majority Leader Harry Reid became temporarily distracted with a campaign finance issue. Since winning re-election in 2010, Reid’s campaign had purchased gifts for supporters and donors from vendors like Bed Bath & Beyond, Amazon, Nordstrom, and the Senate gift shop, among others. But one round of spending was directed to a less recognizable firm: Ryan Elisabeth, a jewelry line.

In 2012 and 2013, the campaign spent $31,267 purchasing gifts from the company, which is owned by Reid’s granddaughter, Ryan Elisabeth Reid. All told, she took in nearly seven times more cash than all vendors of donor gifts combined during that period of time.

Veteran Nevada political journalist Jon Ralston first reported the news after receiving a tip about the expenditures. (Ryan Elisabeth’s last name did not appear on the FEC reports, and the senator’s office initially failed to confirm her identity.) While Sen. Reid does not appear to have broken the law, he understood that the purchases created a perception of favoritism. Lamenting the unwanted attention heaped on his granddaughter, he decided after the news broke that “it would be best to pay for her work out of my own pocket.”

This was not the first time that Reid had mixed family and politics — or potentially run afoul of ethics rules.

Read the whole thing, which is chock-full of instances in which Reid seriously skirted–or completely broke–ethical rules. Again, why did anyone obsess over Reid’s McCarthyite charges regarding Mitt Romney’s tax returns, which was an utter non-story in comparison to Reid’s complete disregard for higher standards and propriety? I recognize that some will respond with “because Mitt Romney is a Republican and there is a double standard at work here.” But while that is an explanation, it is not an excuse.

Picking at Piketty

Thomas Piketty’s Capital in the Twenty-First Century has basically been declared the Greatest Book in the History of Ever by those on the port side of the political divide. The book declares income inequality to be a serious problem, and it prescribes massive confiscatory taxes in order to solve that problem. (I believe income immobility to be a greater problem than income inequality, but as one might imagine, Piketty ain’t buying that argument; he is too busy throwing flirting glances at Marxists and neo-Marxists to ditch the income inequality angle.) I don’t want to judge a book by its title any more than I want to judge it by its cover, but, ahem, check out the title and see if it might remind you of another famous book by another famous economist who claimed to take the side of the poor and the dispossessed.

So, just about everyone who ever had a nice thing to say about Occupy Wall Street has something nice to say about Capital in the Twenty-First Century. But there are those who believe that Piketty might–just might–be talking out of his hat.

Megan McArdle, for example, believes that Piketty offers little to nothing to help the middle class:

I am not disputing that something unhappy is going on in the global economy. Nor am I disputing that this unhappiness is unequally distributed. But the proportion of this unhappiness due to income inequality is actually relatively small — and moreover, concentrated not among the poor, but among the upper middle class, which competes with the very rich for status goods and elite opportunities.

If we look at the middle three quintiles, very few of their worst problems come from the gap between their income and the incomes of some random Facebook squillionaire. Here, in a nutshell, are their biggest problems:

  1. Finding a job that allows them to work at least 40 hours a week on a relatively consistent schedule and will not abruptly terminate them.
  2. Finding a partner who is also able to work at least 40 hours a week on a relatively consistent schedule and will not be abruptly terminated.
  3. Maintaining a satisfying relationship with that partner over a period of years.
  4. Having children who are able to enjoy more stuff and economic security than they have.
  5. Finding a community of friends, family and activities that will provide enjoyment and support over the decades.

This is where things are breaking down — where things have actually, and fairly indisputably, gotten worse since the 1970s. Crime is better, lifespans are longer, our material conditions have greatly improved — yes, even among the lower middle class. What hasn’t improved is the sense that you can plan for a decent life filled with love and joy and friendship, then send your children on to a life at least as secure and well-provisioned as your own.

How much of that could be fixed by Piketty’s proposal to tax away some huge fraction of national income from rich people? Some, to be sure. But writing checks to the bottom 70 percent would not fix the social breakdown among those without a college diploma — the pattern of marital breakdown showed up early, and strong, among welfare mothers.

Noting the economic models with which Piketty makes his arguments, Arnold Kling points out that “[t]he real world is so far removed from those models that I simply cannot buy into the undertaking.” Tyler Cowen both critiques Piketty, and points out that there are other policy proposals that might help solve the problems Piketty identifies in his book. James Pethokoukis outlines alternative policy proposals as well; naturally, those proposals are not covered in Piketty’s book.

Clive Crook is properly scathing:

. . . There’s a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws. At times this borders on schizophrenia. In introducing each set of data, he’s all caution and modesty, as he should be, because measurement problems arise at every stage. Almost in the next paragraph, he states a conclusion that goes beyond what the data would support even if it were unimpeachable.

This tendency is apparent all through the book, but most marked at the end, when he sums up his findings about “the central contradiction of capitalism”:

The inequality r>g [the rate of return on capital is greater than the rate of economic growth] implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future. The consequences for the long-term dynamics of the wealth distribution are potentially terrifying …

Every claim in that dramatic summing up is either unsupported or contradicted by Piketty’s own data and analysis. (I’m not counting the unintelligible. The past devours the future?)

Relatedly, be sure to read Bas van der Vossen, who defends Crook from critiques by Ryan Avent, and who quite properly states that “[w]hether or not markets are fair depends in part on whether they help rise living standards. And if they do so unequally, well, maybe that is par for the course.”

Daniel Schuchman writes that Piketty’s policy prescriptions are utterly punitive in nature, and will achieve nothing for the non-wealthy:

So what is to be done? Mr. Piketty urges an 80% tax rate on incomes starting at “$500,000 or $1 million.” This is not to raise money for education or to increase unemployment benefits. Quite the contrary, he does not expect such a tax to bring in much revenue, because its purpose is simply “to put an end to such incomes.” It will also be necessary to impose a 50%-60% tax rate on incomes as low as $200,000 to develop “the meager US social state.” There must be an annual wealth tax as high as 10% on the largest fortunes and a one-time assessment as high as 20% on much lower levels of existing wealth. He breezily assures us that none of this would reduce economic growth, productivity, entrepreneurship or innovation.

I am sure that there are plenty of people who would love some of what Piketty is smoking, but cogent economic policy this ain’t. And while I can readily understand why left-of-center economists, pundits and policymakers are in love with Piketty’s book, I cannot understand why anyone who might be interested in designing and implementing smart economic policies would take Piketty’s arguments even slightly seriously.

Quote of the Day

The notion that conservatives not only oppose liberal health care reforms but are vigorously working to deny Americans access is a popular one on the left. If you don’t support Obamacare, you are basically endorsing murder. A recent contemptible piece in The New Republic, which argues that Democrats should—without any evidence, if necessary—blame the unfortunate deaths of Americans on the rival political party, is perhaps the pinnacle of this brand of absurd demagoguery. Alan Grayson mainstreamed.

Although, it’s also the unspoken starting point for many pundits, including The Washington Post’s Greg Sargent, who believes he’s detected a seismic shift within Republican ranks:

“Republicans remain gung-ho for repeal, and continue to insist Obamacare is destroying the lives of millions, if not American freedom itself. And yet, Republican Senate candidates are increasingly sounding like Obamacare’s most ardent supporters in one key way: they are rhetorically embracing the imperative of expanding affordable health coverage to those who need it.”

Two small problems with that contention: 1) It is possible to deem Obamacare destructive policy and still support “expanding affordable health coverage,” and 2) the GOP has been using the exact same rhetoric Sargent points to from the beginning of the debate. And I mean exactly the same.

The majority of Americans believe that Obamacare is detrimental to the health care system yet, one assumes, many of them believe extending “health coverage” to everyone is a worthy cause. There are— and I realize this might be inconceivable to some—other systems that deliver affordable, high-quality services and products to lots and lots of people. Presumably, most of you have bought food or clothing without an individual mandate in a highly regulated government exchange? This kind of delivery system may seem excessively chaotic, antiquated or even unfair to you, but it’s worth mentioning that the moral objective of those who support competitive markets over contrived technocratic schemes is probably just as good as yours.

David Harsanyi, with the “it’s amazing someone actually has to point this out to be people” piece of the day.


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