Entries from January 2012

Message for the Commenters

January 6th, 2012 at 9:23 pm 16 Comments

Hello everyone. David and I have been in meetings all day but we made time to check in on the comment thread announcing the move to the Daily Beast and Newsweek. The support in the comments has been remarkable. However, there seems to be some misunderstanding going around so we wanted to clear up a few things:

1. Although David has been mandated with writing excellent magazine pieces for Newsweek, he will still be blogging regularly at The Daily Beast. In fact, we will be getting our own Andrew Sullivan-style blog. As of my most recent meeting, the url will be: http://www.thedailybeast.com/davidfrum. This blog will be updated as frequently as FrumForum always was.

2. This new blog will have comments! I strongly encourage all our regulars to sign up for the Daily Beast & Newsweek’s comment system. You are a dynamic and well informed commentating community, and I have no doubt you can raise the caliber of the debate at the Daily Beast (and if nothing else, you will continue the work of keeping us honest).

3. FrumForum.com will be retooled into an archive. The URL, frumforum.com, will redirect to the new site, but all the content and blog posts will be saved. The current homepage should be accessible via a new url: frumforum.com/homepage. All the content that has ever been written on FrumForum will be preserved.

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Watch: Noah Kristula-Green on MSNBC

January 2nd, 2012 at 1:03 am 3 Comments

Visit msnbc.com for breaking news, world news, and news about the economy

On the morning of January 1st, I was able to join the panel for Up With Chris Hayes on MSNBC. I’d of course recommend watching both part 1 and part 2 of the show, but if you are short on time, I’d watch part 2 since that is when Corey Robin came on to discuss his new book: The Reactionary Mind: Conservatism from Edmund Burke to Sarah Palin.

Robin’s book is interesting but it makes a bold thesis that both I and Michael Brenden Doughterty had to respond to.

Robin argues that:

Conservatism is the theoretical voice of this animus against the agency of the subordinate classes. It provides the most consistent and profound argument as to why the lower orders should not be allowed to exercise their independent will, why they should not be allowed to govern themselves or the polity. Submission is their first duty, agency, the prerogative of the elite.

You can watch my skeptical reaction to this idea in the video.

Here is also the video for part 1:

Visit msnbc.com for breaking news, world news, and news about the economy

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Ron Paul’s Useful Idiots

December 22nd, 2011 at 11:33 am 64 Comments

We’ve been spending a lot of time on this website critiquing conservatives and libertarians for supporting Ron Paul. However, the great thing about Ron Paul is that his appeal also extends to the most gullible members of the liberal left.

Today’s piece of useful idiocy in support of Ron Paul comes from The Nation where John Nichols argues that the real reason the conservative “establishment” doesn’t like Ron Paul is because he speaks truth to power:

Paul’s ideological clarity scares the wits out of the Republican mandarins who peddle the fantasy that the interventionism, the assaults on civil liberties and the partnerships that they have forged with multinational corporations and foreign dictators represent anything akin to true conservatism.

The problem that Limbaugh, Hannity and other GOP establishment types have with Paul is that the Texan really is a conservative, rather than a neoconservative or a crony capitalist who would use the state to maintain monopolies at home and via corrupt international trade deals.

Paul’s pure conservatism puts him at odds with a party establishment that has sold out to Wall Street and multinational corporations. But it has mad an increasingly iconic Republican with a good many of the grassroots activists who will attend the caucuss.

Let’s put aside that author of this piece seems to be arguing for some version of paleoconservatism. Why is The Nation publishing this? They are a magazine that ostensibly cares about the downtrodden, the lowest rungs of society, and for ethnic minorities. Ron Paul has nothing to offer the lowest rungs of society except for platitudes about the free market, and we all know about his racist newsletters.

Paul appeals to the left because of his simple stances on a few issues; he opposed Bush Administration foreign policy, he wants to end the Patriot Act, and he wants to decriminalize drugs.

What’s amazing is that his position on these issues doesn’t just give Paul some support,  on the left, it also seems to absolve him of his other positions and his past actions.

Here is an earlier essay by John Nichols where he dreams of seeing Paul Ryan lose his House seat. It’s clear from the essay he is no fan of the Paul Ryan budget. Yet Nichols consider Ron Paul a hero even though his preferred domestic policy budget would likely make Paul Ryan look like a big-government RINO.

Nichols’ must know that the real reason he like Ron Paul is because he sounds like a blogger from The Nation running for President. But that still doesn’t go far enough in explaining why he overlooks all the many other flaws in his candidacy.

It seems that for some people, opposition to the Iraq war and support for legal pot is more important than profiting off racist newsletters and calling for an end to all assistance for the downtrodden.

Don’t Forget Gary Johnson!

December 20th, 2011 at 1:08 am 26 Comments

While I was reading Conor Friedersdorf response to David Frum’s critique of Ron Paul, as well as Andrew Sullivan’s endorsement of Ron Paul, one question kept coming into my mind: “What about former Governor of New Mexico Gary Johnson?”

Friedersdorf makes the case for Ron Paul on the basis that he is different from all the other Republican candidates, but that is just not technically true. Gary Johnson is essentially Ron Paul but without the racist newsletters.

Has Johnson been treated unfairly in the current primary? Absolutely! I would agree with Friedersdorf that the debates would have benefited from giving him more exposure. While Johnson does not match my ideal profile of a candidate, I do think that his influence is more positive than negative, and that he is a less embarrassing standard bearer for the libertarian wing of the Republican Party than Ron Paul.

I have spoken with staff who migrated from the Ron Paul campaign to Gary Johnson’s camp. One thing I have been told is that they are frustrated that many libertarians in the Ron Paul camp equat being a libertarian with supporting the Paul clan. Many supporters of Ron Paul find that they can only support Ron Paul and Rand Paul, and that all the other candidates are not worthy of their attention. This past week, the FrumForum mailbox has been getting angry emails about how we’ve recently attacked Ron Paul. We’ve critiqued other libertarians before, but when you attack a person’s political savior, they take it a bit more personally.

When Kevin D. Williamson reported on the Ron Paul campaign in Iowa, he captured what this feeling was like:

[This] much they [Ron Paul fans] are certain of: The United States of America is an “empire,” the Federal Reserve is the capitol citadel of wickedness in the modern world, and Ron Paul — Doctor Paul — is “the one man in America who is willing to tell the truth,” “the one man who truly cannot be bought,” “the one man for the people,” and, in the Paul campaign’s own fevered imagination, “the one who will stop the spending, save the dollar, create jobs, bring peace — the one who will restore liberty. Ron Paul: The one who can beat Obama — and restore America now.”

Gary Johnson does not have followers like this and he shouldn’t. The entire Ron Paul campaign is a decidedly unlibertarian political movement. Here is a candidate who supposedly stands for absolute freedom, yet his followers believe that if they want to save America from the bankers who run the Federal Reserve that they have to support him and his family. The 2008 Obama campaign shows that liberals are equally capable of succumbing to the same misplaced delusions but at least when Obama fails to oversee an economic recovery his support among liberals languish. In contrast, it seems there is nothing that can reduce the enthusiasm of the Ron Paul fans.

One project that libertarians may want to consider is how to give the libertarians in the Republican party prominent voices that are not called Ron Paul. These voices would not have to make evasions on issues such as whether the Confederacy was a bad idea. Then the debate over whether we need a night-watchmen state can be done without Paul’s considerable baggage.

The Coming Liberal Argument

December 19th, 2011 at 12:00 am 51 Comments

Here is a real effect Occupy Wall Street is having on the liberal left. They will start to blame the current bad economy explicitly on income inequality.

Here is Heather Boushey writing at the Center for American Progress:

Take, for example, the housing bubble of the 2000s. It was facilitated in no small part by exotic mortgages that were sliced and diced and sold to investors who pushed home prices to hitherto unknown heights. And when it popped, millions of American families—through no fault of their own except the decision to buy a home—were left with mortgages greater than the value of their homes. High rates of foreclosure still plague our economy.

What is less-often discussed (until recently) is the role that inequality played in making the Great Recession and the subsequent slow recovery happen in the first place. Inequality has been rising for decades for most Americans in the form of stagnating incomes for the majority and sky-rocketing incomes for those at the very top. When income stopped growing, families responded by working more and borrowing more. As consumer activist Elizabeth Warren (with her daughter Amelia Warren Tyagi) documented, American’s debts are the direct result of a hollowed out middle class. Families borrowed to make ends meet, to cover health care costs, to put a child through college, and to purchase a home in a neighborhood with good schools.

The financial sector was only too happy to oblige. Increasingly unencumbered by regulation and flush with cash, Wall Street created a variety of new ways to extend credit. Basically, America didn’t get a raise and the financial sector said, “Don’t worry, buddy, we’ll loan you the money to pay the bills.” Of course, the whole thing was unsustainable. Thus came the Great Recession and the struggle ever since among everyday Americans to make ends meet, to cover health care costs, to put a child through college, and to purchase a home in a neighborhood with good schools.,

I would advise conservatives to start paying close attention to this argument. If President Obama runs on a platform of higher federal income taxes, this is how it will be justified. I wouldn’t be surprised if at some point in 2012, a Democratic congressman blames the financial crisis directly on the Bush tax cuts.

Boushey makes this argument in reference to a lot of other literature so a proper review of the evidence is needed, but one immediate question that comes to my mind is why middle class incomes were not rising.

If it was because healthcare costs were consuming all the productivity gains the American worker was making, then that suggests that better controls for healthcare costs could have saved everyone a lot of trouble. There can be a lot of arguments as to how best to do that, but that does not sound like a story about higher income taxes for the top 1% of society.

I suspect this argument will get more developed as the election season kicks off, especially if the Democrats develop a platform and message that is strongly against income inequality.

What Keeps the American Dream Alive?

December 16th, 2011 at 1:50 am 22 Comments

President Obama’s recent speech on income inequality and upward mobility has struck a chord with many Democrats. If the President keeps using this rhetoric, then it could become a central message of the 2012 campaign. If this happens, I would also bet that Elizabeth Warren will give the keynote speech at the Democratic Convention in 2012.

What’s interesting is that while there is growing awareness that America is a more unequal country, there is less awareness that America is also a less upwardly mobile society.

The Pew Economic Mobility Project has done a lot of polling on how Americans view economic mobility. In a poll conducted in May of 2011 (before Occupy Wall Street) one of the most important questions Pew asked tackled mobility directly:

Question 51:

Which of the following young people is more likely to get ahead economically?

Young person A grew up in a poor neighborhood. Young person A has the drive and ambition to get ahead.

OR

Young person B grew up in a wealthy neighborhood. Young person B lacks drive and ambition.

78% of respondents thought that a person born in a poor neighborhood but with “drive and ambition” is more likely to get ahead than a person born in a wealthy neighborhood.

This may be what people believe but simply having “drive and ambition” is not enough to actually pull yourself into a higher economic bracket. What we know is that there are certain choices that need to be made to make it more likely:

Brookings economists Ron Haskins and Isabel Sawhill studied the noneconomic components of poverty and came up with a rule. “If young people do three things — graduate from high school, get a job, and get married and wait until they’re 21 before having a baby — they have an almost 75% chance of making it into the middle class,” Haskins said.

What happens if you have “drive and ambition” but there are no jobs available in the economy? Or what if your parents can’t afford to send you to good schools, or the public schools in your area are terrible?

While we would like to believe that the person who is born wealthy will lose the chance to get ahead economically, I would still put money on the proposition that Person B is more likely to get ahead than Person A.

Americans also put more weight on values such as “Creativity” and “Talent” in determining where a person ends up as opposed to more mundane but important demographic facts such as whether a child grows up in a two parent family:

Question 52.

Which of the following young people is more likely to get ahead economically?

Young person C is talented and creative. Young person C grew up in a poor neighborhood.

OR

Young person D is an average student and lacks imagination. Young person D grew up in a wealthy neighborhood.

72% think the talented and creative poor student will do better than the average wealthy student who lacks imagination.

Question 53. Which of the following young people is more likely to get ahead economically?

Young person C is talented and creative. Young person C comes from a one-parent family.

OR

Young person D is an average student and lacks imagination. Young person D comes from a two parent family.

70% think the talented student from a one parent family is going to get ahead further than the average student from a two parent family.

While the American people can be admired for their optimism, it is an optimism that I think is strongly misplaced. Significant research has shown that families where both parents are working have a significant advantage over families where only one parent is working or where there is only one parent.

It’s this optimism that lets Marco Rubio declare that “[America is] the only place in the world where it doesn’t matter who your parents were or where you came from. You can be anything you are willing to work hard to be.” or for Paul Ryan to argue “Telling Americans they are stuck in their current station in life, that they are victims of circumstances beyond their control, and that government’s role is to help them cope with it – well, that’s not who we are. That’s not what we do.”

This isn’t just a Republican myth, its a fundamentally American myth, and one which does not hold up under close scrutiny.

One of the (many) great challenges for public policy over the next few years will be figuring how to make the American dream a true reality. The instinct that ambition and hard work should be properly rewarded is the right one for Americans to have. Surely if Denmark can figure it out, so can the country which invented the American dream in the first place.

Only One Can Rule the Galaxy

December 15th, 2011 at 12:00 am 41 Comments

While reading Maureen Dowd’s New York Times column about Newt Gingrich, we learn that the former Speaker of the House is a big fan of the science fiction novels of Isaac Asimov, and not in a good way:

Speaker Gingrich told me that he became a historian because he read Isaac Asimov’s seven-volume Foundation series about a mathematician and psychohistorian from Planet Trantor “who looked at long sweeps of history and tried to understand probable patterns of behavior.”

“I found it a very believable and understandable way of thinking about data,” he said. (Feel free to supply your own joke about Psycho Historians.)

Who else across the entire span of the space-time continuum also shares Gingrich’s fascination for technocratic experts who can save civilization? None other than Nobel Prize winning economist and conservative punching bag, Paul Krugman:

Krugman explained that he’d become an economist because of science fiction. When he was a boy, he’d read Isaac Asimov’s “Foundation” trilogy and become obsessed with the central character, Hari Seldon. Seldon was a “psychohistorian”—a scientist with such a precise understanding of the mechanics of society that he could predict the course of events thousands of years into the future and save mankind from centuries of barbarism. He couldn’t predict individual behavior—that was too hard—but it didn’t matter, because history was determined not by individuals but by laws and hidden forces. “If you read other genres of fiction, you can learn about the way people are and the way society is,” Krugman said to the audience, “but you don’t get very much thinking about why are things the way they are, or what might make them different. What would happen if?

With Hari Seldon in mind, Krugman went to Yale, in 1970, intending to study history, but he felt that history was too much about what and not enough about why, so he ended up in economics.

The Isaac Asimov-Krugman connection is even more remarkable given that one of the Gingrich criticisms of President Obama is that he is too much like Paul Krugman!

Newt Gingrich took to FOX News Monday night to compare President Obama to, of all people, Paul Krugman, one of the White House’s fiercest critics.

“This is a Paul Krugman presidency,” Gingrich told Bill O’Reilly. “[Obama] believes that stuff. He actually believes in left-wing economic ideas. The only problem with them is that they don’t work.”

It was an odd comparison, given that the New York Times columnist has staked out a position as Obama’s ultimate nemesis on the left since the very earliest days of his administration.

Ray Smock notes at the History News Network that Gingrich also referred to the Foundation series in a book published while he was still House speaker:

While Toynbee was impressing me with the history of civilizations, Isaac Asimov was shaping my view of the future in equally profound ways….For a high school student who loved history, Asimov’s most exhilarating invention was the ‘psychohistorian’ Hari Seldon.  The term does not refer to Freudian analysis but to a kind of probabilistic forecasting of the future of whole civilizations.  The premise was that, while you cannot predict individual behavior, you can develop a pretty accurate sense of mass behavior.  Pollsters and advertisers now make a good living off the same theory.

The question is, would Hari Seldon’s psychohistory predict the current deflation that Gingirch seems to be experiencing the polls?

I Love the 90′s

December 8th, 2011 at 3:23 pm 12 Comments

David Frum is concerned that a Newt Gingrich revival will bring back memories of the Clinton impeachment scandal, but what if the real danger is the return of one of the most popular children’s action-adventure shows? I of course refer to the Mighty Morphin’ Power Rangers.

I had heard stories about Gingrich’s fascination with the ‘teenagers with attitude’ but photographic evidence seemed to be lacking. Now, thanks to the efforts of Time Magazine and MSNBC the images can finally be seen.

Though twitter user Andy Kaczynski notes with great disappointment that, “The meeting of #Newt w/the Power Rangers was never put online in video form.”

Thankfully, FrumForum alumnus Tim Mak was able to find some first hand accounts of how Gingrich viewed the Rangers:

In another surprise move, the entire world watched as the new Speaker of the U.S. House of Representatives, Newt Gingrich, shook hands with the Mighty Morphin Power Rangers who were invited to Washington, D.C., to entertain at the Speaker’s opening day celebration. During the festivities, Gingrich remarked that he was like the Mighty Morphin Power Rangers. He said, “You ride the waves in America, and if something’s hot, it’s hot.”

How An Entrepreneur Sparked the Arab Spring

December 8th, 2011 at 12:00 am 9 Comments

I recently had the great pleasure of hearing economist Hernando de Soto speak to a group of think tank types and media members about his perspective on the Arab Spring. De Soto is most famous as an advocate for property rights for the world’s poor.

Henando de Soto’s big argument about the Arab Spring is that despite where it may end up, its origin began with a protest over the inability for Tunisia’s poor to accumulate capital.

The case study he used to make this argument is about Mohamed Bouazizi, a street vender in Tunisia. On December 17th of 2010, Bouazizi had his vending cart seized by the police, and he lacked the funds needed to pay off the police. This action destroyed Bouazizi’s livelihood and completely derailed plans he had made to save up money to buy a truck to help with his business.

After failing in making an appeal to the authorities, Bouazizi doused himself in gasoline and immolated himself. Bouazizi’s death turned him into a martyr and his name was frequently invoked by many of the revolutionaries who took part in the Arab Spring, including the political parties in Tunisia.

What most interests de Soto is why Bouazizi immolated himself. A series of interview with friends and families of Bouazizi conducted by de Soto’s Institute for Liberty and Democracy found that his primary motivation was likely economic, not political. According to his sister, Bouazizi wanted to accumulate Ras el Mel (capital). His brother noted that Bouazizi’s ambition was “that the poor also have the right to buy and sell.”

Like many developing countries, Tunisia has a tiny formal economy and a large “extralegal” economy. To be clear this is not an illegal or underground economy, this is an economy where transactions take place for many common items but there is not even the most basic regulation and no enforcement on property rights. Bouazizi would not have been able to get his right to sell goods upheld in a court, partly because he would have had to wait years just to have his case heard. The agreements that he had to make let him run his business were not part of a broader enforcement of property rights. As he found out, they were also dependent on the whims of the police.

De Soto argues that aggressive reforms which take the extralegal economy and bring it into formal law would very positive development. What frustrates him is that there is very little discussion about this economic and property rights component to the Arab Spring.

As de Soto put it, a problem is that currently: “Bouazizi is seen as a martyr, but he is not seen as an entrepreneur.”

Would You Trust a Randian Banker?

December 5th, 2011 at 12:00 pm 42 Comments

Conservatives give a lot of deference to the opinions of business leaders and other ‘job creators’. The operating assumption is that their criticisms of White House policies are accurate and well informed. What if this assumption is largely off-base?

Consider this roundtable hosted on CNBC between Austan Goolsbee, the former Chairman of the Council of Economic Advisers, and several business executives. Pay close attention to the arguments made by John Allison, former CEO of the bank BB&T:

(H/T Barry Ritholtz)

In this video, Allison argues that Fannie Mae and Freddie Mac were responsible for the majority of subprime mortgage loans. Goolsbee is aghast because this is not factually accurate at all.

Allison is the former CEO of one of the largest banks in America. It is a job demands incredible attention to detail and expertise. What could possible lead him to adopt a stance which is so at odds with what the facts say?

It turns out that Allison is actually a major philanthropists who has been making donations to business schools across the country on the condition that they teach Ayn Rand in the classroom. Allison doesn’t only give a lot of money to spread the Rand gospel, he believes it himself so he gives lectures on the topic.

If you have taken a business school class that teaches Atlas Shrugged as part of a course on the “morality of capitalism”, it is likely that the course is a product of BB&T’s money.

Allison is no David and Charles Koch, but I suspect he is expressing an opinion that is shared by many of the major donors to Heritage, Cato, and other think tanks.

The moral of the story: just because the person talking has a lot of money doesn’t mean they always know what they are talking about, especially if they never grew out of their Ayn Rand phase.