Quote of the Day

Valerie Plame doesn’t deny that blowing the cover of the CIA station chief in Afghanistan is a serious matter. It’s just that, discussing the issue at a Wednesday evening forum sponsored by The Atlantic, Plame seemed to view the outing of the CIA’s top spy on the front lines in the Afghan war as more of an embarrassment than an outrage.

“My understanding is … it was a military aide who compiled this list of those that were greeting the president when he came,” Plame said. “Colossally stupid, but I think it was inadvertent. It was an error … really stupid. The White House apparently has said that they’re going to do an investigation, and they’ll find someone who’s really embarrassed at the end of it.”

The leak, if that’s what it can be called, happened over the weekend as President Obama made a surprise visit to Afghanistan. In a routine email to the press, the administration included a name with the description “Chief of Station” after it — a clear reference to the ranking CIA official in Kabul. It’s hard to imagine a more sensitive assignment in a more dangerous place, and blowing the station chief’s cover — in an email to 6,000 reporters, no less — will surely have repercussions.

The White House quickly explained that a mistake had been made, but did not offer any details. Top officials announced that White House counsel Neil Eggleston, a veteran of many Washington investigations, will “look into” the matter. “It shouldn’t have happened,” deputy national security adviser Tony Blinken told CNN on Tuesday. “We’re trying to understand why it happened. In fact, the chief of staff, Denis McDonough, asked the White House counsel to look into it, to figure out what happened and to make sure it won’t happen again.”

Many observers seem satisfied with the White House’s explanation that the incident was just a regrettable error. And that is indeed what it appears to be. But such assessments represent a remarkable change in tone from the discussion several years ago, when the George W. Bush administration leaked Valerie Plame’s identity as part of a bitter fight over the origin and direction of the Iraq war. Back then, it was quite common to hear the words “traitor” and “treason” used to describe top Bush officials involved in the controversy.

Byron York, pointing out that hypocrisy is alive and well. Relatedly, why hasn’t Richard Armitage been forced to face charges? And why is it that neither Joe Wilson nor Valerie Plame even pretend to be angry with Armitage for having been the actual leaker of Plame’s identity?

Exeunt Shinseki

I don’t have much to say in response to the resignation of Eric Shinseki, except (a) the resignation was long overdue; (b) the resignation is not nearly enough to make up for the disgraceful treatment of veterans at VA hospitals (hospitals which were once praised as models for healthcare reform before the current scandal forced those who praised VA hospitals as models for healthcare reform to change their story and say that all of the problems at VA hospitals are the fault of the Bush administration); and (c) the resignation does nothing to allay concerns over the Obama administration’s–and the president’s–lackadaisical response to the entire scandal. If the party of the president of the United States loses lots and lots (and lots) of seats in midterm elections because of the scandal, well, that’s just tough I guess; perhaps it would have done the party of the president of the United States a whole lot more good if the president of the United States actually took decisive action in response to the scandal, instead of acting as though he resented having to respond in the first place.

Actions have consequences. So does inaction.

“Moderate” Governments Don’t Jail People Over Facebook Postings

Just thought I’d throw that opinion out there:

An Iranian court has sentenced eight people to jail terms ranging from seven to 20 years for crimes including anti-regime propaganda posted on Facebook, an opposition website has said.

Kaleme, which did not cite a source for its report, said the sentences were delivered last week giving the eight Facebook users a combined 123 years in jail.

They were charged with “insulting the supreme leader (Ayatollah Ali Khamenei) and the authorities, anti-regime activities, sacrilege and spreading lies,” Kaleme said.

There was no official confirmation of the court ruling and AFP could not independently verify the report.

Incidentally, are we still under the impression that the current Iranian president–weak though he is in comparison to the supreme leader–is a moderate?

The Piketty Wars Continue

Piketty has now come out with a substantive response to the criticisms in the Financial Times found by Giles and Giugliano. I am glad that he has done so, and I suspect that there is much to chew over in the response, so I will look forward to reading the response of others to Piketty’s defense. For the time being, let me offer the following somewhat random observations (I am not going to comment on every paragraph or sentence in the letter, though I have read it all. I certainly encourage readers to read it all as well):

  • Piketty tells us that he “certainly agree[s] that available data sources on wealth inequality are much less systematic than what we have for income inequality.” I am glad he states so; it is nice to establish as a premise for this debate the fact that the data sources for wealth inequality are sketchy and incomplete. But while Piketty tells us that he is sure the data set can be improved, he also claims that he “would be very surprised if any of the substantive conclusions about the long run evolution of wealth distributions was much affected by these improvements.” For my part, I am surprised that Piketty can admit both (a) that the data set is incomplete and can be improved upon; and (b) it really doesn’t matter that the data set is incomplete and can be improved upon, because supposedly, even after it is improved upon, Piketty’s conclusions will somehow hold. Admitting the data set is incomplete and can be improved upon should also mean admitting that the “substantive conclusions” in Piketty’s book might be improved by an improvement in data sets, but Piketty is unwilling to concede this (obvious) point.
  • Piketty once again tries to defend his findings by pointing out that others have found even greater degrees of wealth inequality than he has, and that “if anything, my book underestimates the rise in wealth inequality.” I am going to quote myself in response: “[J]ust because other studies find widening inequality ‘by using different sources’ does not mean that they are right, or that even if they are, Piketty is justified in finding widening inequality through a flawed data set.”
  • Piketty argues that “our ability to measure the most recent trends in wealth inequality is limited, partly due to the huge rise in cross border financial assets and offshore wealth.” Somehow, I don’t think that having access to some accounts in the Caymans and/or Switzerland in order to augment our data set is going to do much to advance Piketty’s thesis concerning wealth inequality, but I am anxious to hear and read what others have to say on this topic.
  • Concerning one particular argument on data sets, Piketty informs us that he prefers using decennial averages “because wealth series often display a lot of short-run volatility (in particular due to sharp movements in asset prices).” Well, okay, but some of the decennial averages only partially cover a particular decade (“1873-1877,” for example), so I am left wondering whether or not a better method can be used.
  • Concerning the data set from the United States, Piketty concedes that “there are very large uncertainties regarding US historical sources on wealth inequality, and I certainly agree that the series that are provided in the book can be improved.” With all of these concessions, we may safely conclude that if they have done nothing else, Giles and Giugliano have shown us that the data sets for wealth inequality are incomplete and in need of substantial buttressing. Dayenu, as me and mine are wont to say from time to time. But again, Piketty falls back on the argument that (a) if anything, he understated the degree of wealth inequality he found and that others have found greater amounts of wealth inequality; and (b) improvement in the data sets “has little impact on the overall long-run pattern.” To be entirely fair to Piketty, it should be noted that he cites this paper by Saez and Zucman, which he says was done after Piketty’s book was written, and which Piketty believes “should be used as reference series for wealth inequality in the United States.” According to Piketty, Saez and Zucman “actually find a larger rise of top 10% wealth shares and especially top 1% and top 0.1% wealth shares than what I report in my book.”
  • Regarding the data set from Britain, Piketty concedes–are you ready for this?–that there are “major uncertainties and limitations in our collective ability to measure recent evolution of wealth inequality in developed countries, particularly in Britain.” Additionally, Piketty accuses the FT of cherry-picking wealth inequality estimates based on what particular decade of British data they want to study. He claims that “such a methodological choice is bound to bias the results in the direction of declining inequality” because “in every country wealth surveys [which the FT uses for later decades in Britain–ed.] tend to underestimate top wealth shares as compared to estimates based upon administrative fiscal data.”

There is certainly more to the Piketty response, so again, I urge readers to read it all and make up their own minds. But there still seem to be some unexplained contradictions in Piketty’s arguments, as I have noted above. I will be especially curious to see what kind of response Giles and Giugliano come up with.

Speaking of Giles, he has compiled an impressive list of “follow up problems” with Piketty’s data (this appears to be a response to Piketty’s response, though Giles does not link to the Piketty reply). Read it all, but let me note that Giles has taken the Saez-Zucman paper (referenced in the bullet points above) into account and has the following to say about it:

. . . Like any data, it has its shortcomings: in particular, a lot of imputation is required for pension and owner-occupied housing wealth (two of the largest sources of wealth), for which income streams are not taxed. As Prof Martin Feldstein has also noted, income tax data can be deeply problematic because the tax system itself affects the data supplied.

Again, to be entirely fair to Piketty–not to mention Saez and Zucman!–Giles does say that the Saez-Zucman paper “appears reasonable and further work on the reasons why its results differ from those published in Capital in the 21st Century is worthwhile.” But:

. . . in a separate slide of their presentation, the two authors make the identical point I have made, that evidence from estate taxes and the Survey of Consumer Finances (the sources used by Prof Piketty in his book) do not show the rise in wealth concentration for the top 1 per cent that Prof Piketty shows in his work.

This suggests that my comment that Prof Piketty’s own sources do not obviously show rising wealth inequality for the top 1 per cent is a point we should all be able to agree upon.

Concerning Piketty’s preference for estate tax data over wealth and asset surveys (which was referenced in the discussion over British data), Giles states the following:

. . .I believe this is the wrong choice, since the ONS data was specifically designed to measure wealth, correcting for potential biases. The survey oversamples the top decile to address known non-response biases, samples between 21,000 and 30,000 households in each wave and bases its sample on stratified techniques, not just bumping into people in the street and asking them questions.

I was therefore surprised for two reasons by Prof Piketty’s response to Bloomberg that the ONS wealth and assets survey is “very low quality”.

First, the UK research community does not share that view in general. Comparing different data on British wealth, Prof Sir John Hills, director of the Centre for the Analysis of Social Exclusion at the London School of Economics, writes about the difficulties of inconsistent data in his book Wealth in the UK: Distribution, accumulation and policy. There, he writes that the Wealth and Assets Survey is “the most comprehensive survey” and lists its drawback as its relatively short life. Just to avoid some confusion, the Wealth and Assets survey has the National Statistics kitemark and is not experimental.

Second, in Capital in the 21st Century Prof Piketty favours the US Survey of Consumer Finances, conducted by the Federal Reserve, which is a very similar voluntary cross-section survey with effort made to ensure known non-response biases among the rich are addressed. One big difference between the ONS survey and the SCF is that the US version is much smaller, even though the US is much larger, sampling 6,500 families in the latest wave.

It is inconsistent to accept a cross-section survey for the US when it gives high numbers, but reject one for the UK which gives low numbers. Prof Piketty needs to explain why he has made this choice and rejected the specific advice of HM Revenue and Customs not to use its latest survey of personal wealth survey in estimating the wealth of the UK as a whole.

What Prof Piketty also does not explain is how he derives an estimate for the top 1 per cent for Britain in 2010 on the basis of these published estimates shown below. Sir John Hills in his table on the question did not attempt such a calculation.

Finally, regarding the issue of whether the corrections in data undermine Piketty’s point, Giles offers this (to my mind) entirely reasonable explanation of why it does:

My point is that if someone is claiming to have found a fundamental contradiction of capitalism, predicts the result is a rising share of wealth inequality, and uses apparent recent rises in recent wealth inequality as evidence that his theory is correct, those data lie at the core of the book’s argument.

Without the rising wealth inequality data across all advanced economies, I would submit that Prof Piketty has a theory without all the necessary evidence.

This post has gone on for quite a while, so let me close it by citing James Galbraith, who is no one’s idea of a right-wing economist, but who takes issue with Piketty’s claim that capitalism is responsible for wealth inequality:

In his feted book Capital in the Twenty-First Century , Thomas Piketty contends that wealth inequality rises inexorably under capitalism. The Financial Times has reported that, once various apparent errors are corrected, the European numbers show no tendency to rising wealth inequality after 1970. A judgment on this issue must, of course, await Prof Piketty’s response. Whatever the outcome, we are reminded that economic knowledge, especially in this area, is forged in long hours of work with sketchy and ambiguous statistical sources.

For the past two decades, the University of Texas Inequality Project has been contributing to this work. We did not set out to make, prove or disprove any grand theoretical claim.

Our main goal was to provide information, to clarify a factual record that was sparse, inconsistent and noisy. Our data on pay inequality, with estimates of income inequality, now cover most of the world from the early 1960s until (in some cases) as recently as 2012. We also find that inequality, measured within countries, rose in recent decades. But we do not find anything inexorable about this. We think that global circumstances and national policies were largely at fault. When policies and circumstances change, the rise of inequality can be stopped. Our data show that rich countries are more equal than poor countries. No surprise: to be rich is to have a large middle class. Communism defied this rule for a while, but not any more.

In rich countries “market income”, which reflects the income people receive from paid work, is very unequal, but this is because strong welfare states permit many households to exist without market income. Once taxes and transfer payments are factored in, disposable incomes are much more level. In poor countries the distinction is less clear. In some countries with weak welfare states and light taxation, measures of market and disposable income inequality do not appear to differ very much.

My bottom line from writing this post and going through the arguments is that Piketty is doing a better and more substantive job of responding to his critics. I am glad of that. But his critics have hardly run out of ammunition and in particular, Giles’s responses to Piketty’s responses still pack quite a wallop, one that may well be fatal to Piketty’s argument.

When Even the New York Times Editorial Board Pans an Obama Speech . . .

Boy, I guess that foreign policy address given yesterday really didn’t go over well:

President Obama and his aides heralded his commencement speech at the United States Military Academy at West Point on Wednesday as a big moment, when he would lay out his foreign policy vision for the remainder of his term and refute his critics. The address did not match the hype, was largely uninspiring, lacked strategic sweep and is unlikely to quiet his detractors, on the right or the left.

[. . .]

In his speech, Mr. Obama tried to push back against critics who say he has ceded America’s post-World War II dominance. The question, as he correctly put it, is “not whether America will lead but how we will lead” and he reasserted that “isolationism is not an option.” Mr. Obama was right when he suggested there would be no serious negotiations over Iran’s nuclear program without his approach to American leadership.

But he provided little new insight into how he plans to lead in the next two years, and many still doubt that he fully appreciates the leverage the United States has even in a changing world. Falling back on hackneyed phrases like America is the “indispensable nation” told us little.

[. . .]

Mr. Obama’s talk of the need for more transparency about drone strikes and intelligence gathering, including abusive surveillance practices, was ludicrous. His administration had to be dragged into even minimal disclosures on both topics. Just Tuesday, the administration said it wanted to make further deletions from a legal memo on drone strikes that a court ordered it to make public.

Mr. Obama’s comments on China and Russia barely touched on how he plans to manage two major countries that have turned increasingly aggressive. Pledging anew to close the jail at Guantánamo Bay, Cuba, which Congress has blocked, was, at this point, little more than a reassuring gesture.

What a tired, lame, lacking second term this has turned out to be.

Quote of the Day

In 1982, horrified by the meanness, tedium and depravity of my existence as I toured the American South playing rock and roll music and going crazy in public, I purchased an abridged copy of The Decline and Fall of the Roman Empire (Dero Saunders, Penguin). The grandeur of the subject appealed to me, as did the cameo illustration of Edward Gibbon, the author, on the front cover. He looked like a heavy dude. Being in a political business, I had long made a habit of reading biographies of wilful characters – Hitler, Churchill, MacArthur, Brando – with large profiles, and I also enjoyed books on war and political intrigue, as I could relate the action to my own situation in the music business, which is not about music at all, but is a kind of religion-rental.

I would read with pleasure around 4 am, with my drugs and whisky in cheap motels, savouring the clash of beliefs, personalities and values, played out on antiquity’s stage by crowds of the vulgar, led by huge archetypal characters. And that was the end of that. Or so I thought.

Eleven years later I stood in a dilapidated but elegant room in a rotting mansion in New Orleans, and listened as a piece of music strange to my ears pulled me back to ancient Rome and called forth those ghosts to merge in hilarious, bilious pretence with the Schwartzkopfs, Schwartzeneggers and Sheratons of modern American money and muscle-myth. Out of me poured information I had no idea I ever knew, let alone retained, in an extemporaneous soliloquy I called ‘Caesar’. When I listened back, it made me laugh my ass off because it was so true. America is Rome. Of course, why shouldn’t it be? All of Western life and institutions today are traceable to the Romans and their world. We are all Roman children for better or worse.

Iggy Pop. Yes, I really think that he might have written this. Read the whole thing. Bonus Quote of the Day: “I am inspired by the will and erudition which enabled Gibbon to complete a work of twenty-odd years. The guy stuck with things.” (Emphasis in the original.)

Let Me Repeat what I Have Said Before about the Anti-GMO Crowd

They are out to kill people. Or, at the very least, they do a very good impression of people out to kill other people:

It’s easy to scare people about what’s in their food, but the danger is almost never real. And the fear itself kills.

Take the panic over genetically modified organisms, or GMOs. Ninety percent of all corn grown in America is genetically modified now. That means it grew from a seed that scientists altered by playing with its genes. The new genes may make corn grow faster, or they may make it less appetizing to bugs so farmers can use fewer pesticides.

This upsets some people. GMOs are “unnatural,” they say. A scene from the movie Seeds of Death warns that eating GMOs “causes holes in the GI tract” and “causes multiple organ system failure.”

The restaurant chain Chipotle, which prides itself on using organic ingredients, produces videos suggesting that industrial agriculture is evil, including a comedic Web series called “Farmed and Dangerous” about an evil agricultural feed company that threatens to kill its opponents and whose products cause cows to explode.

Michael Hansen of Consumer Reports sounds almost as frightening when he talks about GMOs. On my show, he says, “It’s called insertional mutagenesis … you can’t control where you’re inserting that genetic information; it can have different effects depending on the location.”

Jon Entine of the Genetic Literacy Project responds: “We’ve eaten about 7 trillion meals in the 18 years since GMOs first came on the market. There’s not one documented instance of someone getting so much as a sniffle.”

Given all the fear from media and activists, you might be surprised to learn that most serious scientists agree with him. “There have been about 2,000 studies,” says Entine, and “there is no evidence of human harm in a major peer-reviewed journal.”

I stand by every condemnation I have ever written or uttered regarding this lot. They are truly dangerous.

The Economy Takes Yet Another Hit


A contraction in the nation’s economic output in the first quarter again deferred hopes for a sustained pickup in growth, another stumble for a lackluster recovery approaching the end of its fifth year.

Gross domestic product, the broadest measure of goods and services produced across the economy, shrank at a seasonally adjusted annual rate of 1% in the first three months of the year, the Commerce Department said Thursday. The agency last month initially estimated GDP grew at a 0.1% rate in the first quarter.

The drop marked the economy’s first contraction in three years, though economists say the downturn should be short-lived and likely doesn’t herald a new recession. “Nobody likes to see a negative for growth,” said Beth Ann Bovino, U.S. chief economist at Standard & Poor’s Ratings Services. “But it doesn’t change my expectation that the economy is recovering at a nice pace. I call it a recovery delayed.”

I would like to think that it is just “a recovery delayed,” and I would also like to think that “it’s not a big deal” that the American economy shrank a whole percentage point, but given the uncertainty and unevenness associated with the current “recovery,” I have to believe that this latest news bulletin regarding the state of the economy is a cause for at least some concern. Maybe the numbers will be revised upward in the future, but of course, it is entirely possible that the numbers will be revised downward as well. And maybe now that the weather is warming up, we will see more sustained economic growth, but are we really supposed to fear for our pocketbooks every time it gets a little brisk out there?

Let’s face facts at long last: The current “recovery” is anything but. We have barely made up the ground we lost since the advent of the Great Recession. And we’d better do something to accelerate recovery lest we remain stuck in the doldrums, and lest the lives of those impacted by the economic downturn become irretrievably ruined.

Thanks, Anti-Vaccine Lunatics

Thanks an awful lot, with an emphasis on the word “awful”:

The number of measles cases in the United States this year has risen to 288, the highest number for one year since the disease was eliminated from the country in 2000, the Centers for Disease Control and Prevention said Thursday.

This also is the largest number of measles cases that the country reported in the first five months of a year since 1994, according to the CDC. Health officials say there were 764 cases of measles at this time in May 20 years ago, and 963 by the end of that year.

“We don’t want to break the record of 1994,” says Anne Schuchat, assistant surgeon general with the U.S. Public Health Service and director for the National Center for Immunization and Respiratory Diseases.

This is why she’s describing the latest numbers as a “wake-up call,” urging people who are unsure about their vaccine status to get inoculated.

The story doesn’t expressly blame the increase in measles cases on the anti-vaccine lunatics, but I have no problem doing so, and I think that I am on firm ground in how and where I cast blame.

The Obama Doctrine and How It Is Lacking

President Obama offered his foreign policy vision at West Point today. David Rothkopf finds a great deal to dislike about it (the critique is long and thorough, so I wouldn’t do justice to it by excerpting; you should just read the whole thing). Additionally Admiral James Stavridis points out that for all of the talk about cooperation and partnership in the crafting and implementation of foreign policy, the president’s speech

left out two vital components of how we can best create security: the power of interagency cooperation, and — above all — private-public partnerships. As we approach deeply challenging situations in Afghanistan, Syria, Ukraine, Iran, East Asia, and Yemen, among others, we need not only the international approach laid out by the president, but the immense power that coordinated interagency and private-public efforts can provide, as well.

Let me just add that the lack of intellectual rigor and thoughtfulness in the president’s speech–and in the formulation and implementation of the president’s foreign policy vision–stems at least in part from the fact that this administration has not tried to field an A-team in foreign policy and national security. Hillary Clinton was a celebrity secretary of state who accomplished nothing of note (quick, name a Clinton achievement while she presided over Foggy Bottom, and do it without Googling. Bet you can’t, can you?). Chuck Hagel has been all but invisible as secretary of defense, and he certainly cannot be counted on to bring intellectual candlepower to bear in transforming the armed forces to prepare America’s defense structure to respond to the threats of the twenty-first century. John Kerry got played by the Russians regarding Syria, and has nothing to show for his efforts to bring about peace in the Middle East. To be sure, the latter task in an extraordinarily difficult one to accomplish; I am not sure that I will see the implementation of a just and lasting peace in my lifetime, though I hope to be proven wrong. But despite the fact that Kerry has been preparing for all of his life to serve as secretary of state (that is, when he wasn’t preparing all of his life to serve as president of the United States), he has little to show for his tenure. It’s early yet, but there is no indication whatsoever that this State Department, or this national security team as a whole has any sense of a comprehensive, rigorous, imaginative and bold grand strategy that will serve American interests.

I don’t want to make too much of personnel issues, as I am a realist and as I believe that the formulation and implementation of foreign policy and national security choices depend mostly on third-image interest perception on the part of nation-states. But even realists will tell you that at some level, personnel matters, and the foreign policy/national security personnel of the Obama administration have hardly been up to their respective jobs. The result is a listless, formless, shapeless, substance-free foreign and national security policy. You heard all about it today in President Obama’s speech.

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