My Amazon Review of Craufurd Goodwin's, "Walter Lippmann:Public Economist

The Columnist as Economist

Duke University economic historian Craufurd Goodwin has written, but probably too lengthy, biography of the preeminent columnist Walter Lippmann’s writings.  However, it is not a biography of Lippmann. Although he focuses on Lippmann’s “Today and Tomorrow” columns from the early 1930s through the 1960s, he takes up his earlier writings and books along the way.

What the book brings out is Lippmann’s grappling with the economic crisis of the Great Depression. In column after column Lippmann is concerned about the economic collapse and the tragedy of mass unemployment that comes with it. For the most part Lippmann gets it right. Early on he is against the gold standard, for a flexible monetary policy and for free trade. Lippmann is an anti-monopolist to the core and it explains his opposition to the National Recovery Act. Lippmann, a friend of Keynes since the Versailles Conference of 1919, brings his ideas to the American public.

In column after column Lippmann is a true believer in both Keynesian Economics and the competitive market system. In the case of the latter, that makes him an anti-New Dealer and for that conservatives flock to him. One of the lessons for today is that in the 1930s both Lippmann and Keynes urged that economic recovery should take precedent over economic reforms. Would that President Obama follow that important advice in 2009-10.

Walter Lippmann stopped writing in 1967 and died in 1974 just as the Keynesian consensus was collapsing. One wonders what how he would have responded to the stagflation of the 1970s. Unfortunately Goodwin is silent on this question.

For Amazon URL see:

http://www.amazon.com/review/R35G2TITDK11A5   

   

My One Sentence Letter to The New York Times, Published Nov 22

Well-intentioned liberals impatient with the normal workings of the democratic process will rue the day they supported President Obama’s expansion of executive power when a different administration wields it in a far more malevolent manner.

Note: See my prior post for more details.

The Lawless Law Professor

The online edition of The Wall Street Journal reported this morning that President Obama will announce his recently promised defacto legalization program for approximately four million undocumented/illegal residents on Friday at an event in Las Vegas. This is a far cry from his 2011 statement noting that going it alone (i,e, without Congress) is "not how our democracy functions." What the president is doing, under the guise of prosecutorial  discretion, is that he is refusing to enforce the existing body of immigration law.

The issue here is not immigration reform which is something I support, but rather an unprecedented reach of executive power. Instead of being the cautious law professor he once was, I guess President Obama is channeling his inner Richard Nixon or his inner Dick Cheney. As others have noted the day will come when a future Republican president refuses to enforce environmental protection and income tax laws using the same lame excuse. Simply put if he wants to change the immigration law he needs the Congress. That is how the system works.

I close by noting that when/if fascism comes to the United States it won't come from jack-booted thugs marching in the streets , but rather it will come in on the cat feet of well intentioned liberals who have grown impatient with the more orderly processes of democracy.  

My Amazon Review of Francis Fukuyama's "Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy"

Good Governance is Hard to Do

Francis Fukuyama of “The End of History and the Last Man” has written a lengthy history of comparative government from 1800 to the modern era. In Political Order he discusses why certain governments succeed while others fail.  His sweep covers the globe from Europe to the Americas, to Asia and to Africa. Though too long the narrative is breathtaking.

His thesis is that successful governance requires a coherent state, laws that are equally enforced and system of accountability, usually, but necessarily through elections. Weak governance gets one or all three of these factors wrong, Fukuyama although in many ways quite conservative, is political progressive in the early 20^th Century sense in that a successful state needs a highly trained impartial bureaucracy. Examples of such are the U.S. between 1900- 1950, Germany and England in the 19^th century. To be sure bureaucracies that become too independent can go out of control. His example of this is the German military on the eve of World War 1.

On the other hand there can be too much accountability. In this instance he highlights the role of interest groups in the U.S. who in total possess veto power over what the state can do, a “vetocracy” if you will.

Fukuyama’s book should be read in conjunction with Daron Acemoglu and James Robinson’s “Why Nations Fail.” Simply put both argue that the success of rent seeking clienteles have the power corrupt government for their own ends.

Although “Political Order…” is a great text, it is a tough read for the lay reader, hence four stars.

For the Amazon URL see:

 http://www.amazon.com/review/RBH6T3L6A0CJN  

A Bad Night for the Democrats; A Good Night for Shulmaven

As we predicted on Sunday the Republicans did very well last night as Democratic hopes of forestalling a Republican turnover in the Senate crashed and burned. As of this morning the Republicans have picked up seven seats and are likely to win Alaska later today. Along with a likely win in the Louisiana runoff in December the Republican majority will expand to 54. Its better to be lucky than smart, but it looks like we were on the money. Moreover we noted, contrary to conventional wisdom, that the races in Virginia and New Mexico would be close. with a recount coming in Virginia we were dead right there, but not so right in New Mexico where Udall won by 10 points.

In the governor races the Republican did far better than what we thought. We had an above consensus pick-up a net gain of one governorship. As of this morning the Republicans are up 3. We were right on Scott Walker and were pleasantly surprised to see Republican wins in Democratic Massachusetts and Maryland. With Democrat Gina Raimondo winning in Rhode Island and Republican Bruce Rauner winning in Illinois, the public employee "Blue State" model suffered major defeats. Unfortunately education reformer Marshall Tuck lost to teachers union backed Tom Torlakson in the Superintendent of Public Instruction race in  California. It is clear that the Republican Party in California is still not ready for prime time.

In the House it looks like the Republicans will pick up between 15-20 seats. We had them up by 10-15 seats. A big loss for the Democrats and look for Nancy Pelosi to step down as Democratic Leader. The other big Democratic loser was Harry Reed whose $100 million PAC outspent everybody. Look for Schumer to challenge him in January.

On the Republican side the big winner was John Kasich who reelected Ohio governor by 30 points. He will be much talked about in the coming weeks as presidential candidate. Just to note he expanded Medicaid in his state. Also a big winner was Chris Christie whose leadership of the Republican Governors Association brought in a $100 million and provided the sinews of victory.

The Republican was victory opens the way for real legislative progress in 2015. Why? The Republicans have to govern and President Obama needs a legacy. If cooler heads prevail, admittedly an heroic assumption, there is the potential to do corporate tax reform, trade promotion, Keystone Pipeline, partial immigration reform, a minimum wage increase and some relief on student debt. Remember Mitch McConnell is a deal maker and he has worked very well with Vice President Joe Biden. Of course if the Republicans go after Obamacare on day one or if President Obama does a major executive order on immigration the well will be poisoned. As of today the ball is in the President's court. Watch his news conference this afternoon.

A Long Night for the Democrats

Despite the almost innate ability of the Republicans to snatch defeat from the jaws of victory, I think
Tuesday will be a long night for the Democrats. Why? A real trend seems to be in the making with late deciding voters breaking for the Republicans. Specifically my best guess is that by the time we wake up Wednesday morning the Republicans will have picked up 7 Senate seats and be favored to win the run-offs in Georgia and Louisiana making for a total gain of 9 seats. Moreover although the
Democrats will likely win in Virginia and New Mexico those two races will be surprisingly close. In terms of the House, the Republicans appear to be on track to picking up between 10-15 seats thereby surpassing their 2010 majority and possibly passing their postwar record majority in 1946. In terms of governor races, contrary to all earlier expectations the Republicans might net one governorship, with their only major loss in Pennsylvania. Until a week ago I thought Scott Walker would lose in Wisconsin, but I now think he will eek it out.

In my mind three very important races in the country involve the fight against one of the most reactionary elements in the Democratic Party, the public employees unions. In Rhode Island Democrat Gina Raimondo had the audacity as State Treasurer to push through fundamental pension reform against stiff union opposition. No surprise the unions are backing Republican Allan Fung. In the failed state of Illinois incumbent  Democrat Pat Quinn is hanging on by his finger nails against Republican Bruce Rauner. A Rauner win would signal that there is still hope for Illinois to deal with the biggest unfunded public employee pension liability in the country. Lastly in California in the race for Superintendent of Public Instruction education reformer and Democrat Marshall Tuck is squaring off against the incumbent Democrat fully backed by the teachers unions, Tom Torlakson. A Tuck win would send a message that Sacramento's most powerful lobby can be beaten and ignite the long smoldering civil war within the Democratic Party.

As they say in poker, "read em and weep." I'll comment on Wednesday morning on how far off base this is and the implications for next year's governing.