Saturday, August 7, 2010

World War 2, Fiscal Austerity, and Economic Growth

I was wrong last night. I was attempting to argue a point about stimulus spending and whether or not government spending actually helped an economic recovery. To offer some support for my position, I tried to relay from memory a point that David Henderson made over at EconLog. To wit, Keynesian economists predicted that the end of government spending after World War 2 would precipitate a massive rise in unemployment and a return of recession.

David Henderson quoted Paul Samuelson’s prediction, from before the war ended.

When this war comes to an end, more than one out of every two workers will depend directly or indirectly upon military orders. We shall have some 10 million service men to throw on the labor market. [DRH comment: he nailed that number.] We shall have to face a difficult reconversion period during which current goods cannot be produced and layoffs may be great. Nor will the technical necessity for reconversion necessarily generate much investment outlay in the critical period under discussion whatever its later potentialities. The final conclusion to be drawn from our experience at the end of the last war is inescapable–were the war to end suddenly within the next 6 months, were we again planning to wind up our war effort in the greatest haste, to demobilize our armed forces, to liquidate price controls, to shift from astronomical deficits to even the large deficits of the thirties–then there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced. [italics in original]

Samuelson predicted that the government would act to avoid this catastrophe by slowly ramping down spending and acting to increase public employment.

For there is every reason to believe that we shall not be lulled into a feeling of false security by the last war’s experience or by the half-truth that the end of the war will witness a boom. No doubt, we shall retain direct controls for a period after the conflict ends. We shall taper off war production gradually. We shall undertake income maintenance in the form of dismissal pay for soldiers, unemployment compensation, direct and work relief expenditure. It is probable, although less certain, that, in addition, the Federal government will initiate employment maintenance measures such as large scale public works, etc. But even these will not be adequate to maintain full employment or any approach to it.

Here’s what Henderson said actually happened:

This reinforces the lesson from the far more extreme U.S. experience after World War II: Between FY 1945 and FY 1947, federal government spending was cut by 61 percent. This was a 27-percentage-point drop from 41.9 percent of GDP to 14.7 percent of GDP. Yet the unemployment rate over that same time rose from 1.9 percent to only 3.6 percent. The postwar bust that so many Keynesians expected to happen never did.

History shows that it’s possible for government to sharply slash spending without sending the economy into a tailspin. So far, so good. This I remembered last night. Then I tried to remember what David Henderson said about the GI Bill. What I remembered reading was that comparatively few people took advantage of the GI Bill and that it didn’t have a huge effect on the company. What Henderson actually said was that comparatively few people took advantage of it in any one year.

Of course, direct controls were removed relatively quickly, certainly within a year and a half of the end of the war. War production did not taper off gradually but plunged. I don’t think there was any dismissal pay for soldiers. You could see the GI Bill as a form of relief expenditure, but if I recall correctly, at any given time only about 500,000 people were taking advantage of the GI Bill to get education. [italics mine]

Oops. As I learned last night, 7.8 million veterans eventually took advantage of the G.I. Bill.

Thanks to the GI Bill, millions who would have flooded the job market instead opted for education. In the peak year of 1947, veterans accounted for 49 percent of college admissions. By the time the original GI Bill ended on July 25, 1956, 7.8 million of 16 million World War II veterans had participated in an education or training program.

Now I’m intrigued by the qualification “education or training program”. If we’re going to count the G.I. Bill as stimulus, I think it makes a difference whether someone went to an actual 2-4 degree program or whether they just went to a training program and then entered the workforce.

Is David Henderson right? Were only about 500,000 people at a time taking advantage of the G.I. Bill? I don’t know. I’ve been having a hard time tracking down the number of students enrolled in college during the 1940′s. According to a 1947 Census report, 62.2% of the 6-24 year old population was enrolled in school. Of the 18-29 year old cohort actually enrolled in school, 75.1% of them were veterans. But I’m having a hard time tracking down the actual absolute number of people enrolled in school.

Answers.com has an estimate, but I’m not sure where it’s sourced.

Initial expectations for the number of veterans who would utilize the educational benefits offered by the G.I. Bill were quite inaccurate. Projections of a total of several hundred thousand veterans were revised, as more than 1 million veterans were enrolled in higher education during each of 1946 and 1947, and well over 900,000 during 1948. Veterans represented between 40 and 50 percent of all higher education students during this period.

While the G.I. Bill also had an impact on home sales following the war, its unemployment provisions were little used.

Millions also took advantage of the GI Bill’s home loan guaranty. From 1944 to 1952, VA backed nearly 2.4 million home loans for World War II veterans.

While veterans embraced the education and home loan benefits, few collected on one of the bill’s most controversial provisions—the unemployment pay. Less than 20 percent of funds set aside for this were used.

Job training and higher education certainly took off after World War II, much of it aided by the jobs bill. But overall government stimulus was negative as government spending was cut sharply and as millions of service men and women returned to the civilian workforce. In contrast to Keynesian predictions, the economy responded with a surge of growth and not another slump into recession.


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Thursday, July 8, 2010

President Obama’s Moral Cowardice and Dr. Berwick

I’m no fan of President Obama. But I believe I have good reason for disliking him.

For instance, take the appointment of Dr. Don Berwick to head the Centers for Medicare and Medicaid Services (CMS). Dr. Berwick was nominated for the post just a few months ago, back in April. Yesterday, the President decided to bypass the Senate entirely and just give him the job through a recess appointment. Why? Well, the White House Communications Director made the President’s position quite clear:

Many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points.

Yes, it was all the fault of those evil and nasty Senate Republicans, the source of all evil in this country. Now, that may very well be true. Most Senate Republicans are rather spineless, greedy, and craven. But, as the Senate Republican Policy Committee pointed out, they never even got a chance to stall, prevaricate, or vacillate.

In this context, it’s worth pointing out that Democrats never called a hearing on Dr. Berwick’s nomination. Republicans have no ability to “stall the nomination” in committee – and nothing prevented the majority from calling a hearing, or voting to report the nomination out of committee. They chose to do neither.

In fact, they were quite eager to have a conversation about the importance of the post and the merits of the nominee.

Second, CMS is one of the largest agencies in the federal government. This fiscal year, it will disburse $803 billion in benefits – making CMS larger than all but 15 of the world’s economies. And of course, its responsibilities will only grow under the health care law, as the CMS Administrator will be responsible for implementing more than $500 billion in savings from the Medicare program, and an unprecedented expansion of Medicaid as well. Yet both Republicans and Democrats will be denied any opportunity to question Dr. Berwick about how he plans to implement the law, and manage CMS, because the President decided to make a recess appointment before the confirmation process began in earnest.

This recess appointment is more about our President’s moral cowardice than it is about the Republican’s moral cowardice. Dr. Berwick, together with the President, is a proponent of some ideas that a majority of Americans don’t like.

Dr. Donald Berwick has been awaiting a nomination hearing in Congress since Mr. Obama tapped him for the post in April. Since then, Republicans have attacked the Harvard professor and health policy expert for making favorable statements about Britain’s government-run health system and for endorsing certain health spending cuts.

Democrats have been concerned that Dr. Berwick’s confirmation hearing would be a bruising battle. Republicans indicated they would use the hearing to revive their arguments that the health-overhaul law will lead to a government takeover of the health system.

ABC reported that Republicans were rather looking forward to this nominating hearing.

But Republicans were not delaying or stalling Berwick’s nomination.

Indeed, they were eager for his hearing, hoping to assail Berwick’s past statements about health care rationing and his praise for the British health care system.

“The nomination hasn’t been held up by Republicans in Congress and to say otherwise is misleading,” said Sen. Chuck Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee, which would have held Berwick’s hearing.

Grassley said that he “requested that a hearing take place two weeks ago, before this recess.”

Berwick’s nomination was sent to the Senate in April, and his hearing had not been scheduled because he was participating in the “standard vetting process,” a Democratic aide on the Senate Finance Committee told ABC News.

But speaking not for attribution, Democratic officials say that neither Senate Majority Leader Harry Reid, D-Nev., nor Sen. Max Baucus, D-Mont., the chair of the Senate Finance Committee, were eager for an ugly confirmation fight four months before the midterm elections.

Even the New York Times managed to notice that something wasn’t quite right.

The recess appointment was somewhat unusual because the Senate is in recess for less than two weeks and senators were still waiting for Dr. Berwick to submit responses to some of their requests for information. No confirmation hearing has been held or scheduled.

The holding and scheduling of confirmation hearings is at the discreation of the Senate majority. Democrats have a 59-41 advantage in the Senate. If they truly wanted to, they would have no problem scheduling a hearing, voting the nominee out of committee and then approving the nominee with a full Senate vote. Senate Republicans would have had little real opportunity to stop the process.

Instead, the President and Senate leadership ignored their Constitutional duties out of fear of the American public. They were afraid of political fallout from letting the American public watch the hearings and see what their nominee really believed — what the President really believes. This isn’t a mark of a great leader. It’s the mark of a political coward. And it’s just one of the many reasons why I don’t like President Obama.


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Tuesday, June 29, 2010

New Stalin statue up… in America [by Adam Volle]

No, seriously.

I’m suddenly inspired to take up vandalism. How much trouble does one get in for destroying a $50,000 statue?


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Thursday, June 17, 2010

The secret of eternal life [by Adam Volle]

…apparently belongs to a certain species of Caribbean jellyfish.


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Thursday, June 10, 2010

Greek Rioters Kill 3

I just heard about this today, courtesy of PJTV (the May 26, 2010 episode, “Euro-Style Liberalism Leads to Euro-Style Violence”).

Three die in bank during Greek riots – USATODAY.com

Riots over harsh new austerity measures left three bank workers dead and engulfed the streets of Athens on Wednesday [May 5, 2010], as angry protesters tried to storm parliament, hurled Molotov cocktails at police and torched buildings. Police responded with barrages of tear gas.

The three bank workers a man and two women died after demonstrators set their bank on fire along the main demonstration route in central Athens. As their colleagues sobbed in the street, five other bank workers were rescued from the balcony of the burning building.

A senior fire department official said demonstrators prevented firefighters from reaching the burning building, costing them vital time.

“Several crucial minutes were lost,” the official said, visibly upset. “If we had intervened earlier, the loss of life could have been prevented.”

Demonstrators set a bank on fire, trapping 3 people inside, and then prevented fire fighters from getting to the people to either release them or put out the fire before they burned to death.

This is absolutely unaccceptable. It’s mob rule. Mobs cannot be allowed to firebomb buildings and then prevent the fire department from reaching the building. The solution: the next time it happens, give the police the authority to fire into the crowd to disperse it. With real bullets, not rubber bullets.


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Tuesday, June 8, 2010

This Is Not About Teachers

I almost wish I lived in New Jersey. (Almost.) I’d like to vote for this guy.


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The Land of Milk and Jam? [by Adam Volle]

After referring to the Levant for thousands of years as “a land of milk and honey” simply on faith, archaeologists have finally unearthed evidence that people did farm bees there.

According to New Scientist‘s pretty interesting article on the matter, “Because no evidence for beekeeping had been found until now, ‘honey’ was deemed to mean jam.”

Deemed by scholars, the writer surely means. This is one of those revelations concerning a matter about which your average person – myself included – has never known there was any doubt.

UPDATE: And here’s another article from New Scientist concerning the largest study of Jewish genetics to date:


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Thursday, June 3, 2010

How was I supposed to know I should take a magazine with this cover seriously? [by Adam Volle]

It’s been a pretty big surprise to me that one of the few magazines out there still interested in shedding some real light on how things work today in Washington D.C. is RollingStone. I mean, yeah, they were cool enough to print stuff from P.J. O’Rourke, but those were basically humor columns. Yet take a look to the right of Taylor Lautner’s drenched abs on the above cover, for instance, and you’ll note a small yellow caption reading “Obama’s Wall Street Sellout, by Matt Taibbi”. It’s an understated advertisement for the latest gold from the rag’s very skilled and utterly furious staff writer on politics.

His latest (June issue) story is entitled “Wall Street War”. I’m ordering you to read it for free here on RollingStone‘s website, because it’s as well-researched and well-written an article as I can imagine on the issue of financial reform and how our so-called representatives have turned betraying their constituents into an outright art form. This is really the sort of hard-hitting, truth-to-power stuff all major journalists should at least try to write.

The only criticism I have of the piece is its lackluster concluding paragraph. What Taibbi wrote to summarize “Wall Street War” doesn’t hold a candle to the flourished finish he wrote for “The Great American Bubble Machine”, his stellar article on the history of Goldman-Sachs.

It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.

But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.

I won’t lie to you: to read words like these in a major magazine with a high circulation among my generation does my soul a world of good. In retrospect, maybe I should have realized that any magazine for adults willing to make the Jonas Bros. their monthly feature has be fearless, and now I’m wondering what I’ve been missing. Crazy as it seems, I’m also looking forward to what RollingStone‘s got next.

FURTHER READING: Matt Taibbi’s smashing discussion of health care reform and American government, “Sick and Wrong: How Washington is screwing up health care reform — and why it may take a revolt to fix it.”


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Monday, May 31, 2010

Recommended podcasts [by Adam Volle]

After three months, Anna and I have finally grown confident enough about the stability of our lives here in Korea that we’ve entered into a contract for internet service in our apartment. This means I’m listening to podcasts on my iPod again after about six months’ abstinence from them. Here are my favorites:

Common Sense with Dan Carlin – It may surprise those who know me (or who have read any post about politics on this blog) that my favorite podcast about politics – indeed, the only one I still bother to regularly check – is by an independent centrist who supports socialized health care. But that’s just proof of how great a communicator and honest a thinker Dan Carlin is: you don’t have to agree with him to find his show consistently fascinating. Give it a listen.

Dan Carlin’s Hardcore History – Dan Carlin also has a second, far more popular podcast on the less contentious subject of History. Listen to the show once and you’ll soon find that you’ve consumed the entirety of its program backlog and are now waiting in agony along with the rest of us for the next, traditionally late installment of the best monologue on the web. My favorite podcast.

Reasonable Doubts – I’ve sifted through a lot that’s on offer in the world of podcasts concerning the world’s theologies and (later on, after I stopped believing) arguments against it. The three liberal, atheist professors from Michigan who run this show are the only (anti-)religious partisans with whom I still keep up. They are unabashed in their contempt for stupidity and ignorance among theists, but even while I myself was a theist I found them very willing to hear out other views and award them credit where it was due.

Free Talk Live – I don’t listen to Ian, Mark, or their revolving guest hosts very often anymore, but that’s mainly because I agree with it too often and it’s way too effective at pushing my buttons. The program’s nightly reports on how much injustice is really going on in my native country often enrages me to a degree I am certain is unhealthy. That said, it’s still a great show, mainly because Ian and Mark are not only utterly authentic but also inhumanly patient, never failing to live up to their promise to discuss whatever their callers want to talk about. Sometimes this results in utter hilarity, since the policy inevitably draws the craziest people our society has to offer. For instance, one regular is a believer in every antisemitic conspiracy theory out there.

All of them are available for free on iTunes.


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Thursday, May 20, 2010

My 2010 Reading List, Update III [by Adam Volle]

Above: “Summer reading list” by Kimberly Applegate.

Counting up how many books I’ve read in the last 3+ months, I find that I’ve just passed my reading list’s halfway point; I’m on my nineteenth entry out of thirty-six.

A commute to work by bus has its advantages.

Let’s throw some ratings into the mix here. We’ll use a five-star system:

1 – being God-awfully inept and offensive. 2 – being so flawed that it lacks entertainment value. 3 – being entertainment, but a clearly flawed work. Inoffensive and forgettable.
4 – being a perfectly respectable example of How It’s Done, but falling short of Art. 5 – being something special, a superior achievement.

FICTION

The Pillars of the Earth, by Ken Follett – I paid a visit to the former chair of the Shorter College Humanities Department recently and we naturally flung books at each other before parting. This was his selection. Finished. 4 stars.

Percy Jackson & The Olympians: The Lightning Thief, by Rick Riordan – The movie looks like a great deal of fun, but in general I’m a firm believer of reading the book first. So I will. Finished. 2 stars..

Up in the Air, by Walter Kim – Another book purchased simply because the previews for the movie greatly intrigue me. Finished. 3 stars. Loses points on the dismount with a tacked-on “shocking revelation”.

Native Son, by Richard Wright – Because I like my reading lists to have some diversity and realized I didn’t have any great African-American novels on it. I love Ralph Ellison’s Invisible Man and Ellison was connected with Wright, so I selected this to fill the gap.

War & Peace, by Leo Tolstoy – I’m probably being absurdly optimistic in purchasing this book and putting it on my reading list for this year; as anyone can tell you, it’s huge, and God knows the block of time it’ll require has plenty of other claims on it, the rest of this list included. Still, I’ve really wanted to read it ever since finishing The Death of Ivan Ilyich, and having it readily available is the first step, so just maybe…

Crime and Punishment, by Fyodor Dostoevsky – And buying Tolstoy made me think of Dostoevsky, whose The Brothers Karamazov I finally finished when I last visited Korea.

The Grapes of Wrath and East of Eden, by John Steinbeck – I’ve already read Grapes, but I did it back in high school, which really is more or less equivalent to having not read something at all (children are all Philistines; their souls have not yet developed). One of Steinbeck’s other novels ranks as an absolute favorite of mine, The Winter of Our Discontent, and one of the particularly proud moments of my time in college was when I had the honor of introducing my Creative Writing professor to it, who afterward declared it one of her all-time favorites as well.

The Angel’s Game, by Carlos Ruis Zafon – Zafon’s other novel, The Shadow of the Wind, is one of the most enjoyable books I read in ’09. My wife’s already read this one and told me it’s darker, which disappointed her and somewhat disappoints me – Shadow was one of those books where you bounced in your bed at the ending, which is a rarity for me – but so it goes; no doubt it will still be, as Stephen King called Shadow, one gorgeous read.

The Baroque Trilogy (Quicksilver, The Confusion, The System of the World) and Snow Crash, by Neal Stephenson – Apparently a force with which to be reckoned in science fiction, which accounts for why I haven’t heard of him. I’ve received a lot of recommendations from friends who are into the genre, though, and Snow Crash made TIME’s “100 Greatest Novels of the 20th Century”, so I feel pretty confident these’ll be enjoyable. Finished with Snow Crash. 5 stars.

The Golden Compass, by Philip Pullman – I’ve always been curious about the His Dark Materials trilogy, a fantasy series that’s often referred to as the anti-Chronicles of Narnia. I’m not willing to blindly plump for all three, but I’m pretty sure the first installment is a self-contained story, like The Lion, The Witch, & The Wardrobe. So it turns out that the first book was not self-contained, but it was so good Anna and I immediately purchased the next two. I’m on the third volume now. Grade So Far: 5 stars.

The Magicians, by Lev Grossman – What if a bunch of today’s adults found out Hogwarts and Narnia were real? Sounds fun. Finished. 4 stars.

Supreme Courtship, by Christopher Buckley – On the strength of his Thank You For Smoking. Finished. 4 stars.

A Farewell to Arms and The Son Also Rises, by Ernest Hemingway – I’d never actually read Hemingway until I picked up For Whom The Bell Tolls at the airport on my way to my honeymoon destination. I am now of course very much looking forward to reading the rest of his body of work. In March I accidentally found and finished The Old Man and the Sea.

This Side of Paradise, by F. Scott Fitzgerald – Obviously I’m taking the opportunity to fill in a few shameful gaps in my reading experience.

Riding Lessons, by Sara Gruen – Because her Water For Elephants is utterly charming.

Twilight, by Stephenie Meyer – I consider it sort of a duty to read anything that gets as popular as this book. Plus my wife’s read them all and wants to be able to discuss them with me. Hey, who knows? I didn’t want to read the Harry Potter books, either. Finished. 2 stars.

Her Fearful Symmetry, by Audrey Niffenegger – On the strength of her first book, The Time Traveler’s Wife, which reminded its readers of how great science fiction can be when it’s not just left for geeks to write. Finished. 3 stars, but not for any observable deficiency; the narrative simply doesn’t compel.

The House of Mirth, by Edith Wharton – Since all of her novels are in the public domain now, Amazon asks only ninety-nine cents in return for all thirty-one of them. I actually finished this particular book back in January (we’re over a month into ’10, after all). Verdict: enjoyable, but The Age of Innocence is far more rewarding to the modern reader. 3 stars.

Between, Georgia, by Joshilyn Jakson – My mother’s recommendation. I honestly have no idea.

Being Written, by William Conescu – One of several impulse buys. A minor character in a book realizes his nature and struggles with the author to achieve greater prominence. Finished – and boy, this book wasn’t what I thought it would be at all. 4 stars, but I’m disturbed..

Persona Non Grata, by Ruth Downie – My trial installment for a light-hearted series in which an ancient Roman doctor and his slave girl solve mysteries.

Tipperary, by Frank Delaney – In preparation for my Kindle spree I walked about a Barnes & Noble, just letting covers leap out at me. My wife tells me this one did. I naturally no longer remember.

The Plot Against America, by Philip Roth – A tale set in an alternative history in which the Fascists gained political power in America prior to World War II. Why not? Finished. 2.5 stars. Undeniably the work of someone who knows what he’s doing, but its message is extraordinarily deceitful and the pace of the plot sometimes unforgivably slow.

NONFICTION

The Art of Biblical Narrative, by Robert Alter – Assigned by my Old Testament professor at college, this is one of the books that spearheaded the (re-?)introduction of literary analysis of the Bible to universities in the last century. Obviously I’ve read it (got a “B” – Dr. Wallace wasn’t easy), but I’d like to read it again at a more leisurely pace. And maybe take notes this time. An assured 5 stars.

Foreskin’s Lament, by Shalom Auslander – A memoir from an author who has written only one other book to my knowledge, an anthology of short stories collectively entitled Beware of God, which was so side-splittingly hilarious and poignant I’ll probably be buying anything with his name on it for the foreseeable future. Finished. 4 stars.

The Bible Unearthed: Archaeology’s New Vision of Ancient Israel…, by Israel Finkelstein – A survey of what modern archaeology has to say about the ancient kingdoms of Israel and Judah and their Biblical records. Finished. 3 stars. Fully half the book is dull summarizing of the Bible stories themselves. The rest is very interesting.

Nothing to Envy, by Barbara Demick – Six North Korean refugees describe life beyond the DMZ, and how they escaped it. Being in such close proximity to what may be the most evil regime on this planet almost demands an interest in it, so I’ve always known that when I returned to Seoul I’d be bringing along more reading material about the DPRK. Finished. 5 stars and very moving.

The Incredible Shrinking Son of Man, by Dr. Robert “The Bible Geek” Price – A biblical scholar’s assessment of the four gospels’ authenticity. Finished. 4 stars.

On Writing, by Stephen King – The best book on writing fiction I’ve ever read, written by the writer’s writer. I owned a physical copy but gave it away.

Brotherhood of Warriors, by Douglas Century – A look into Israel’s special forces. Already read this one too, but I need to comb through it again for research purposes. Finished. 4 stars for what it is – but what it is doesn’t happen to be that audacious, so don’t take that as a strong recommendation.


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