Economic Principals

Back In Business

David Warsh — Sat, 26 Apr 2025 15:46:34 +0000

After six months offline, Economic Principals’ site has returned to life. Betweentimes, EP has been appearing on Substack since March 2002 — a publisher very satisfactory to free subscribers, followers, supporters, and the writer alike.

Frequency has become monthly instead of weekly while EP finishes a book.

Eventually, EP’s archive will return to this page. Meanwhile, supporters can find its 1200+ edition archive on its Substack page. Others will find the most recent editions available there. A couple hundred back numbers can be found here.

Settling UP : End of an Era

David Warsh — Thu, 09 May 2024 08:21:00 +0000

This is the final weekly edition of Economic Principals. A new monthly version will commence Sunday June 2, and thereafter arrive on the first Sunday of each month. The new letter will feel its way to a different form, longer and more expansive. Content? More of the same.
This change creates a quandary for paid subscribers. My hope is that many subscribers will choose to let their current subscriptions continue until they end. (To those who have already expressed a willingness to do just that, many thanks.) Substack will notify you a week before the auto-renew feature is scheduled to kick in. Decide then whether you want to continue or not.
Others will want to cancel their subscription now. Follow these simple instructions and drop me a note at warsh.economicprincipals.com if you want a prorated refund. I will arrange it through Substack. It may take 7-10 days to appear on your credit card. Monthly subscribers can quit at any time.
The thousand or so free subscribers may stay on the list and receive via email the top of the monthly you’re missing. Some will choose to become paid subscribers, but most will not. I am sorry to lose you.
EP is making this change in order to finish a book about some recent developments in economics. I think of it as a sequel to Knowledge and the Wealth of Nations: A story of economic discovery (Norton, 2006). The new book is at least as interesting as the old one, or so I believe, and probably more so. If all goes well, it will appear in 2026.

In Time of War, Prepare for Peace: A wise assessment by a veteran Mideast correspondent.

David Warsh — Sat, 28 Oct 2023 09:21:00 +0000

The public message that Biden delivered to Israeli Prime Minister Binyamin Netanyahu, the part the world heard, was crystal clear. Don’t act in haste. Remember the mistakes America made by reacting in rage after 9/11, specifically the occupation of Afghanistan and the invasion of Iraq.

Equally powerful was the message that wasn’t briefed to the press. It has been widely recognized that unprecedented blunders of Israeli military intelligence had occurred, exposing villages in southern Israel to Hamas’s savagery. If it turns out that those mistakes were Netanyahu’s to own, neither the wider world nor Israel itself will forgive a decision to launch a reckless tunnel war in Gaza at the expense of two million trapped Palestinians.

Central figures in the tragedy are Netanyahu and the Hamas leader his people call “the Guest.” If you haven’t read Who is ‘The Guest’: the Palestinian mastermind behind deadly Israel incursion?, by Mehul Srivastava, of the Financial Times, do it now. The Hamas military commander who devised the murderous raid of October 7 into Israeli territory is named Mohammed Deif.

Born Mohammed Diab Ibraham al-Masri in 1965 in a Palestinian refugee camp established in the Gaza Strip after the Arab-Israeli War of 1948, Deif came of age during the first Intifada, or Palestinian uprising against Israel. He joined the newly-formed Hamas to become an expert bomb-maker.

Deif is said to have been nearly killed in an Israeli airstrike twenty years ago. It cost him an arm and a leg and left him in a wheelchair. His nom de guerre, “guest,’ derives from his custom moving from house to house each night to evade Israeli agents.

How was Deif able pull it off? Two weeks ago, Seymour Hersh ventured one possibility. a veteran investigative reporter employed in the past by The New York Times (to report on Watergate) and The New Yorker (the war in Iraq), betweentimes, Hersh wrote The Samson Option, an account of how the US turned a blind eye to Israel’s development of nuclear weapons, while condemning Iranian attempts to do the same. (Iran is, you’ll remember, governed by religious fanatics.) Hersh is now operating on his own at Substack.

Soon after October 7, Hersh asserted that that two of the three Israeli Defense Force battalions ordinarily providing security around the northern portions of he Gaza Strip had been ordered to “shift their focus” to protecting a controversial festival among Israeli settlers in the West Bank for the last day of Succoth. His source: “a veteran of Israel’s national security apparatus with inside knowledge of recent happenings:

‘“That left only eight hundred soldiers,” the insider told me, “to be responsible for guarding the 51-kilometer border between the Gaza Strip and southern Israel. That meant the Israeli citizens in the south were left without an Israeli military presence for ten to twelve hours. They were left to fend for themselves.”’

You can read Hersh’s dispatch for yourself here. Israel’s unity government has vociferously discouraged all such inquiries until “after the war.” The Israeli press has been clear enough about the government “four-fold blunder” of October 7, but the public mood there is not yet ready for detailed self-examination. Hersh’s account hasn’t been confirmed by the mainstream Western press, though specialists are no doubt working on the story.

Two further considerations emerged yesterday. The Wall Street Journal highlighted the horrors the Israeli army would face in an invasion of Hamas’s tunnel system; The New York Times examined the alarming threats of a wider war that a second-front battle with Hezbollah in southern Lebanon would pose.

It is all pretty dire. So for a tough-minded assessment of the overall situation, see “The Case for Hope is Israel and Gaza. Really,” by Storer Rowley, who spent the Nineties as Mideast correspondent of The Chicago Tribune, and who remains America’s foremost reporter on the beat. Writing in the Washington Monthly last week, Rowley skirted no hard truths. “Hamas is a fanatical, religious terrorist group that is no more interested in a peaceful, two-state solution than Al Qaeda, ISIS, or other Jihadist cults,” he wrote. Netanyahu’s government career was finished, too, he continued:

“Netanyahu is only surviving for now because he’s in a unity government. His far-right cabinet allies are despised as dangerous, racist incompetents. (When one visiting minister was shouted out of an Israeli hospital—a scene captured on video—it showed how Bibi and his allies have fallen.) Netanyahu’s divisive effort to upend Israel’s independent judiciary and save his own neck from corruption charges is dead, too.”

The shocking Hamas raid took place against the backdrop of looming Saudi diplomatic recognition of Israel. The Israeli Defense Forces were distracted by Netanyahu’s attempt to keep himself out of jail. The shock to Israel’s equanimity was profound.

But previous Arab-Israeli wars created openings for peace. The Yom Kippur War of 1973 led to the 1978 Camp David and a peace with Egypt that has lasted nearly fifty years. The first Palestinian intifada, or uprising, in 1987 produced the Oslo Agreement in 1993. They didn’t last, but once the horror of October 7 and the subsequent recriminations recede, it will time to begin again, with a new awareness of how desperate the situation has become. Rowley concludes:

“[T]he prospect of a post-Hamas era in Gaza and the Arab world and the fallout in Israel offer some glimmers of hope—not this year, maybe not next, but sometime in the near future. The Saudis and other Sunni governments are no less fearful of Iran than a month ago and maybe more. Palestinian statehood remains illusory, but U.S. policy still rightly supports it, or is at least preparing the ground so that the parties can return to consider it one day.… Can there be a Gazan Sadat or a new Israeli Rabin? It’s hard to imagine now, but it may prove possible when the alternative is unthinkable.”

You don’t have read Steven Pinker to recognize that the world is outraged by the slaughter of innocents; indeed, that it is losing its willingness to go to war, all the more so with the climate warming. Violence and threats of violence continue – in Palestine Ukraine, Iran, Mexico, Sub-Saharan and East Africa, China and Taiwan. Yet time – and popular opinion around the world –are on the side of peace.

What Americans Don’t Get about Putin: Continuity in Russia is obvious, but there have been important changes there as well.

David Warsh — Fri, 22 Sep 2023 13:17:00 +0000

To remind myself of the hatred I felt for the Soviet Union while it existed, I re-read last month Smiley’s People, the third and final novel of “Karla Trilogy,” John le Carré’s saga of the monumental struggle of British spy chief George Smiley with his KGB counterpart Karla, director of Moscow Centre’s Ninth Directorate. The hollow-point bullet in the back of the head of a former Soviet general taking a late-night London stroll brought back all the brutality and duplicity of le Carre’s portrayal of high-level espionage competition during the Cold War.

Vivid as the story is, it seemed too narrow an indictment of the many loathsome aspects of the Soviet empire. So for a broader reminder, I picked up again The Soviet Century: Archaeology of a Lost World, by Karl Schlögel, translated from the German by Rodney Livingstone (Princeton, 2023). The Soviet Century is by far the single best chronicle I have ever encountered of what happened in Russia over the course of the hundred years after those Ten Days that Shook the World reporter John Reed’s contemporary account of the Bolshevik Revolution of 1917,

I haven’t read all of Schlögel’s tome, which presents as a generously illustrated guidebook to a museum of the vanished Soviet world. Mostly I have leafed through its generously illustrated pages again and again, reluctant to give the book away, but unwilling to commit to systematically reading its 906 pages. A series of deeply thoughtful essays organized around particular eras, places, and things, “an arrangement of exhibits to provide a form framework,” but not the linear history of progress of a typical museum, but instead a searing look behind the scenes.

Tolstoy could organize a ball to introduce his cast of characters when he wanted to explain a war; Schlögel relies on words and photographs to tell his stories: of dams, steelworks, and canals; city parks and gulag camps; couples dancing and being married; everyday kitchens and homey toilets; apartment buildings, parades, and queues; public cemeteries and private killing fields. The last chapter comes close to capturing the heart of the matter: the enormous Lubyanka Building in central Moscow, headquarters of an nineteenth-century insurance company, twentieth century home to Soviet secret services, reimagined as a physical museum, a celebration of a newly open society, containing innumerable installations in the manner of Schlögel’s book.

Born in Bavaria in 1948, Schlögel started working on the history of Eastern Europe and Russia forty years ago as a young professor at the University of Konstanz. The Soviet Century appeared in Germany in 2017. By then the war in Ukraine had begun. Schlögel became an outspoken critic of Russia, especially after 2022. It is easy to understand his disappointment with the way post-Soviet Russia has turned out.

Economic Principals is not so sure of the way this story is being told in the West. “What Brits don’t understand about life in Russia,” by Robin Ashenden, is an account of four years, the young editor and novelist, recently spent in Russia before the most recent phase of the war in Ukraine began. No subscription to The Spectator is required; the short piece is a link especially worth clicking on for the picture it paints of the mood and feel of daily life in Russia before the all-out invasion of Ukraine began in 2022, and how the mood and feel of daily life in London has changed since. Recollections of my own short tour of Soviet Russia in 1974 lead me to believe there had been trending in the direction he describes for at least fifty years, more rapidly after 1999.

Standard versions of Russia history in the twenty-first century usually stipulate that, since having been as a KGB officer stationed in Leipzig when the Berlin Wall came down, Vladimir Putin has learned nothing, and that he began yearning, almost immediately, for the restoration of the Soviet Union. There is abundant evidence that he has learned a lot, at least about how to manipulate opinion, both in his own country and abroad. More than half the world seems to consider that that war in Ukraine is an internal Russian matter. And how do Russians feel? That is much more complicated, because they are directly involved, as citizens, potential soldiers (and their loved ones), and, recently, as residents. See this dispatch from Christian Science Monitor correspondent Fred Weir about the night the war came to his little village outside Moscow.

Roger Cohen, the widely respected Paris bureau chief of The New York Times, spent a month traveling across Russia this summer, and in August filed a careful report on his journey. Summarizing near the beginning of his dispatch, he wrote:

“As I traveled from Siberia to Belgorod on Russia’s western border with Ukraine, across the vertigo-inducing vastness that informs Russian assertiveness, I found a country uncertain of its direction or meaning, torn between the glorious myths that Mr. Putin has cultivated and everyday struggle.

“Along the way, I encountered fear and fervid bellicosity, as well as stubborn patience to see out a long war. I found that Homo sovieticus, far from dying out, has lived on in modified form, along with habits of subservience. So with the aid of relentless propaganda on state television, the old Putin playbook — money, mythmaking and menace of murder — has just about held.”

There is no telling when the war in Ukraine will end, or how. But the first rule of strategy is to begin by putting yourself in your opponent’s place, imagining what he hopes to accomplish. Putin was clear enough when he published his 6,000-word rationale for the war in the summer of 2021. Although he didn’t mention Vietnam, he sees his assault on Ukraine as analogous to that of North Vietnam on South Vietnam in the Sixties and Seventies – two parties of one people (and, of course, an economy much stronger if unified than were to remain independent parts).

His invasion of the Crimean Peninsula, in 2014, went smoothly; seriously ill-informed in 2022, he expected his “special military operation” against Kyiv to succeed as well. When it didn’t, he pulled back, repositioned his forces, ordered a nationwide draft, and prepared to seek to outlast NATO’s devotion to the cause of Ukrainian independence. Will he succeed? Who knows? But to reincorporate Ukraine in the Russian Federation is what he is trying to do. And though EP objects to the invasion, I don’t dislike Putin’s Russia the way I loathed the the Soviet Union.

Meanwhile, back in Washington. D.C., David Ignatius, an influential foreign affairs columnist for The Washington Post, wrote last week that, even at this late date, President Joe Biden should step aside. He has been a successful and effective president, Ignatius argued, but if he and Vice President Kamala Harris campaign together in 2024, “Biden risks undoing his greatest achievement — which was stopping Trump.”

“Biden has never been good at saying no. He should have resisted the choice of Harris, who was a colleague of his beloved son Beau when they were both state attorneys general. He should have blocked then-House Speaker Nancy Pelosi’s visit to Taiwan, which has done considerable damage to the island’s security. He should have stopped his son Hunter from joining the board of a Ukrainian gas company and representing companies in China — and he certainly should have resisted Hunter’s attempts to impress clients by getting Dad on the phone.

“Biden has another chance to say no — to himself, this time — by withdrawing from the 2024 race. It might not be in character for Biden, but it would be a wise choice for the country.”

EP couldn’t agree more. To think that only Biden can beat Trump is to risk the loss of faith in American democracy. It is not too late for a series of vigorous debates and snap primary elections to produce, from among a handful of serious contenders, a Democratic candidate who would decisively defeat the desperado former president, who is rapidly aging himself. And if a surprise Democratic president didn’t succeed in reducing the current turbulence, the nation would have a chance to choose again in 2028.

Now here’s the funny thing. Next month marks EP’s fortieth anniversary – about half those years as a column in what was then a major American newspaper, the second portion as an online newsletter, with four books to show for it in the process, and one more in the works. That’s a long time in the news business, but it doesn’t seem that way. In fact, EP feels it may be more relevant than ever to its small but elite core readers.

Looking ahead: Get ready for a long five years.

David Warsh — Sat, 09 Sep 2023 12:35:00 +0000

So Joe Biden is sticking with his bid for a second term. Labor Day was the president’s last chance to bow out. Economic Principals expects Biden to win. Get ready for the hardest four years in the White House since Lyndon Johnson lived there, 1965-1969.

That is the implication of a view of American history as a recurring sequence of lengthy political change: breakthroughs, followed by breakups, followed by breakdowns. Over the years, there have been all kinds of cycle theories about US political change. An unusually fully-elaborated version is associated with Yale theorist Stephen Skowronek.

Skowronek distinguishes between what he calls secular time and political time. The latter is time in the system, the medium through which presidents must reckon with commitments their predecessors have made. Secular means the president’s own time in office, for better or worse. Since presidential leadership is what organizers, journalists, and voters care about, secular time is the way our clocks tick.

Thus five major systems, described by their ideological commitments and coalition support, have unfolded in the years since the American Civil War: the presidencies of Abraham Lincoln to Grover Cleveland, 1861- 1897; William McKinley to Herbert Hoover, 1897-1933; Franklin Roosevelt to Lyndon Johnson 1933-1968, Richard Nixon to George H.W. Bush 1969-93; and Bill Clinton to Joe Biden 1993-2025.

Underneath all these incumbencies is the machinery of constitutional democracy, which is manipulated by actors to determine the outcomes: the federal system, with its regional governments; the three branches of national government, with their various checks and balances; the coalitions of interests, old and new, that constantly shift back and forth; and, finally, “presidential definition” in public opinion, a concept more elusive than the rest.

What enables a president to set an agenda that lasts thirty years?

Luck and timing, of course. There may be a sense that “it’s time for a change.” If a candidacy succeeds, gradually choices are made. These may meet with success among voters. If they do, a two-term president’s successors are constrained. Otherwise, a one-term President goes home.

In Clinton’s case, “presidential definition” turned on his decisions to balance the budget, ignore China, and to expand NATO to the borders of Russia. Presidents since then have paid less attention to the budget constraint, continued to cooperate with China in varying degrees, but they have continued to attempt to expand NATO, which has led to the war in Ukraine.

Much of this happened on Barack Obama’s watch, when Hillary Clinton and John Kerry, two failed presidential candidates, served successively as Secretary of State. Donald Trump’s presidency led to four years of vamping, thanks to his conflicts with both Russian and Ukrainian interests. Then Biden, who as vice president oversaw Ukrainian policy for eight years as vice president, as president promoted his team of advisers and pressed ahead. It is his war to win, or, more likely, to lose.

So, after the thirty years that began with the election of Bill Clinton, Biden is probably a breakdown president,. His age is a problem. There is his relationship with his son. “Bidenomics” offers little hope of coming to grips with America’s looming fiscal crisis.

What next? Forget about Trump. EP expects a traditional Republican candidate to emerge from the embers of Biden’s presidency, as Lincoln emerged from the ashes of James Buchanan’s single term in office, to end the Andrew Jackson-Buchanan system, 1832-1861 and found the modern GOP. Virginia Gov. Glenn Youngkin, an up-to-date version of former GOP presidential nominee Mitt Romney, is the most obvious possibility today, but things will shift around a good deal in the next five years.

By 2028, climate change and fiscal crisis probably will be the central issues, replacing the war in Ukraine, threats to Taiwan, and the composition of Trump’s Supreme court. Mitch McConnell, Samuel Alito, and Clarence Thomas will matter less. The rising generations will matter more.

How to follow developments? Continue to read the four great English-language newspapers – The New York Times, The Washington Post, The Wall Street Journal, and the Financial Times. The long swings will continue. America will be all right.

Big Myth Stories: and narrower forms of argument.

David Warsh — Sun, 13 Aug 2023 13:20:00 +0000

Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, by Naomi Oreskes and Erik Conway, was a hard-hitting history in 2010 that catapulted its authors to fame – Oreskes all the way to Harvard University; Conway remained at the Jet Propulsion Laboratory at Caltech.

Their new book – The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market (Bloomsbury, 2023) – the authors describe as a prequel. In identifying the doubters, it exhibits the same strengths as before. It displays greater weaknesses in establishing the various truths of the matter. It is, however, a page-turner, a powerful narrative, especially if you are already feeling a little paranoid and looking for a good long summer read.

It’s all true, at least as far as it goes. Those three powerful intellects – Friedrich Hayek, Milton Friedman, and Ludwig von Mises – started with unpopular arguments and won big. From the National Electric Light Association and the Liberty League in the Twenties and Thirties, the National Association of Manufacturers and the US Chamber of Commerce in the Fifties and Sixties, to the Federalist Society and the Club for Growth of today, business interests have been spending money and working behind the scenes to boost enthusiasm for markets and to undermine faith in government initiative.

To tell their gripping story of ideas and money, Oreskes and Conway rely on much work done before. Pioneers in this literature include Johan Van Overveldt (The Chicago School: How the University of Chicago Assembled the Thinkers who Revolutionized Economics and Business, 2007); Steven Teles (The Rise of the Conservative Legal Movement: The Battle for Control of the Law); 2008); Kim Phillips-Fein, (Invisible Hands: Hayek, Friedman, and the Birth of Neoliberal Politics, 2009); Jennifer Burns (Goddess of the Market: Ayn Rand and the American Right, 2009); Phillip Mirowski and Dieter Plehwe (The Road to Mont Pelerin: The Making of the Neoliberal Thought Collective, 2009); Daniel Rodgers (Age of Fracture, 2011); Nicholas Wapshott (Keynes Hayek: The Clash that Defined Modern Economics, 2011); Angus Burgin (The Great Persuasion: Reinventing Free Markets since the Depression, 2012); Daniel Stedman Jones (Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics, 2012); Robert Van Horn, Phillip Mirowski and Thomas Stapleford, (Building Chicago Economics: New Perspectives on the History of America’s Most Powerful Economics Program, 2011); Avner Offer, and Gabriel Söderberg (The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn, 2016); Lawrence Glickman (Free Enterprise: An American History, 2019); Binyamin Appelbaum (The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society) 2019); Jennifer Delton (The Industrialists: How the National Association of Manufacturers Shaped American Capitalism, 2020); and Kurt Andersen (Evil Geniuses: The Unmaking of America a Recent History, 2020). Biographies of Robert Bartley and Roger Ailes remain to be written.

So about those weaknesses? They boil down to this: in The Big Myth you seldom get the other side of the story. Take a fundamental example. Oreskes and Conway assert that “the claim that America was founded on three basic interdependent principles: representative democracy, political freedom, and free enterprise,” cooked up in the Thirties by the National Association of Manufactures for an advertising campaign. This so-called called “Tripod of Freedom” was “fabricated,” Oreskes and Conway maintain; the words free enterprise appear nowhere in the Declaration of Independence or the Constitution, they declare. That stipulation amounts to a curious “blind spot,” Harvard historian Luke Menand observed in a lengthy review in The New Yorker. There are mentions of property, though, writes Menand, “and almost every challenge to government interference in the economy rests on the concept of property.” See Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism (Princeton, 2022), by Glory Liu, for elaboration.

Similarly, the previous Big Myth with which the market fundamentalists and the business allies were contending received little attention. As the industrial revolution gathered pace in the late nineteenth century, progressives in the United States preached a gospel of government regulation. Germany’s success in nearly winning World War I received widespread attention. Britain emerged from World War II with a much more socialized economy than before. And in the US, government planning was espoused by intellectuals such as James Burnham and Karl Mannheim as the wave of the future.

Finally, The Big Myth largely ignores the experiences of ordinary Americans in the years that it covers. For all the fury that Big Coal mounted against the Tennessee Valley Authority, its dams were built, nevertheless. There is only a single fleeting mention of George Orwell, though his novels Animal Farm (1945) and 1984 (1949 probably influenced far more people than Hayek’s The Road to Serfdom. Paul Samuelson’s textbook explanation of the workings of “the modern mixed economy” dominated Milton Friedman’s Capitalism and Freedom tract for forty years and probably still does.

Yet there can be no doubt that there was a disjunction. Oreskes and Conway mention that in the Seventies conservative historian George Nash considered that nothing that could be described as a conservative movement in the mid-Forties; that libertarians were a “forlorn minority.” President Harry Truman was reelected in 1948, and Dwight Eisenhower, a Republican served for eight years after him. Suddenly in 1964, Republicans nominated libertarian Barry Goldwater. Then came Richard Nixon, Gerald Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and Joe Biden.

What happened? America’s Vietnam War, for one thing. Globalization for another. Massive migrations occurred in the US, Blacks and Hispanics to the North, businesses to the West and the low-cost South. Civil rights of all sorts revolutions unfolded, at all points of the compass. The composition of Congress and the Supreme Court changed all the while.

In Merchants of Doubt, Oreskes and Conway were on sound ground when making claims about tobacco, acid rain, DDT, the hole in the atmosphere’s ozone layer, and greenhouse gas emissions. These were matters of science, an enterprise devoted to the pursuit of questions in which universal agreement among experts can reasonably hope to be obtained. It was sensible to challenge the reasoning of skeptics in these matters, and to probe the outsized backing they received from those with vested interests. The interpretation of a hundred years of American politics is not science; much of it is not even a topic for proper historians yet. Agreement is reached, if at all, through elections, and elections take time.

Again, take a small matter, the interpretation of “the Reagan Revolution.” Jimmy Carter started it, Oreskes and Conway maintain; Bill Clinton finished it via the “marketization” of the Internet, and most persons have suffered as a result. It is equally common to hear it proclaimed that Reagan presided over an agreement to repair the Social Security system for the next fifty years, ended the Cold War on peaceful terms, and, by accelerating industrial deregulation, ensured on American dominance in a new era of globalization.

In arguments of this sort, EP prefers Spencer Weart’s The Discovery of Global Warming to Merchants of Doubt and Jacob Weisberg In Defense of Government: The Fall and Rise of Public Trust to The Big Myth. But EP shares Oreskes’ and Conway’s concerns while searching for opportunities to build more consensus. A century after today’s market fundamentalists began their long argument with Progressive Era enthusiasts for government planning, sunlight remains the best disinfectant.

Wishing Won’t Make It So: But thinking out loud might make a difference.

David Warsh — Sun, 23 Jul 2023 09:37:00 +0000

What are the chances that Joe Biden will take himself out of the 2024 presidential campaign, perhaps with a Labor Day speech? Not good, based on what EP reads in the newspapers. Yet I have begun hoping that Biden just might. Here’s why.

It is not because Biden would fail to win re-election if he chooses to run. He promised to serve as a bridge and he has done that. His takeover of Donald Trump’s Big Talk platform of 2016 seems nearly complete. “Bidemomics,” which boils down to strategic rivalry with China, is the right road for American industrial and trade for many years to come.

The problem is that a second term would almost certainly end in disaster, for both Biden and for the United States. The dismal war in Ukraine; the threat of another in Taiwan; the impending fiscal crises of America’s Social Security and medical insurance programs: these are not problems for a good-hearted 82-year-old man of diminishing mental capacity, much less his fractious team of advisers.

Most of all, there is the challenge of global warming. It seems safe to say that there can no longer be doubt in any quarter that the problem is real. Perhaps this year’s strong demonstration effects were required to galvanize public opinion for action. But what action to take?

With respect to climate change, EP has written many times that the best introduction available is Spencer Weart’s 200-page book, The Discovery of Global Warming (Harvard, 2008.) Weart maintains a much more extensive hypertext version of the book on site of the Center for the History of Physics, which he founded in 1974. The digital edition was most recently updated in May 2023.

A distinguished historian of science, author of several books on other topics, including governance, Weart is a man of balanced and temperate views. Here is what he wrote in his book’s sobering “Conclusions: A Personal Statement:”

Policies put in place in recent decades to reduce emissions have made a real difference, bringing estimates of future temperatures down to a point where the risk of utterly catastrophic heating is now low. If we are lucky, and the planet responds at the lower limit of what seems possible, we might be able to halt the rise with less than another 1°C of warming, putting us a bit under 2°C above 19th-century temperatures. That would be a world with widespread devastation, but survivable as a civilization….

Yet the world’s scientists have explained that we need to get the emissions into a steep decline by the year 2030. Yes, that soon. What if we fail to turn this around? The greenhouse gases lingering in the atmosphere would lock in the warming. The policies we put in place in this decade will determine the state of the climate for the next 10,000 years….

If we do not make big changes in our economy and society, in how we live and how we govern ourselves, global warming will force far more radical changes upon us. In particular, we must restrain the influence of amoral corporations and extremely wealthy people, who have played a despicable role in blocking essential policies. To allow ever worse climate disruption would give those who already hold too much power opportunities to seize even more amid the chaos….

So, what to do about global warming? Negotiate an end to the war in Ukraine. Avoid war in Taiwan. Put the military-industrial complex on pause. Send Biden home to Wilmington, to nurture his family.

Throw open the race. Let other newspapers start writing stories like this one. Trust in the election to produce a young leader. American democracy has done it before. We don’t have four years to wait.

Mentioned in Dispatches, and Photographed Too: A wide-ranging photo essay by Mariana Cook and Robert Solow about what economists study.

David Warsh — Sun, 09 Jul 2023 09:41:00 +0000

It defies credulity to say that Robert M. Solow most recent book is his best book to date, but, at least for certain practical purposes, this is the case. He will turn ninety-nine next month. His four earlier books were written for other economists, beginning with Linear Programming and Economic Analysis, with Paul Samuelson and Robert Dorfman, in 1958; and Growth Theory: An Exposition (1970, expanded second edition, 2006).

Two Three very short books – The Labor Market as a Social Institution (Blackwell, 1990); Learning from “Learning By Doing” (Stanford, 1997) and Monopolistic Competition and Macroeconomic Theory (Cambridge, 1998) – approachable as they are, were also intended to influence professional audiences. There is no volume of collected papers, though many important papers exist to collect. Similarly, Solow has declined all offers to collect his popular reviews and essays, though many are classics of the sort.

Thus, Economists (Yale, 2019) is Solow’s first book written for a broad audience of intelligent citizens, outsiders and insiders, who are genuinely interested in what economics as a professional discipline exists to say and to do. The only barrier to entry is the price, $43 new, though copies can be obtained on second-hand markets for less and borrowed from many good libraries.

Economists is a book of photographic portraits of contemporary economists, designed for coffee tables display. What makes it worth reading, as opposed to slowly leafing through the ingenious photographs, is the introductory essay by Solow, and the answers to the questions he put to each subject, their replies carefully composed and printed on the page facing each subject’s portrait. The result is “A unique and illuminating portrait of economists and their work,” in the words of its editor, Seth Ditchik.

To recap briefly, Solow is the senior statesman of all academic economics. He dropped out of college after Pearl Harbor, returning after the war to study economics at Harvard. He joined the faculty of The Massachusetts Institute of Technology in 1951, where one way or another, he has been ever since. A Nobel laureate himself, in 1987, he taught four others along the way: George Akerlof, Joseph Stiglitz, Peter Diamond, and William Nordhaus. He remains intellectually nimble.

The book has its beginnings at a dinner party on Martha’s Vineyard some years ago. Seated next to him was Mariana Cook, a celebrated fine art photographer, who with her husband also has a summer home on the island. She mentioned she had recently published a book of portraits of contemporary mathematicians. Solow rejoined, “Why not do one of economists?” He quickly found himself involved in more ways than one.

Solow explains in his introduction:

Naturally I had to ask myself: Was making a book of portraits of academic economists a useful or reasonable or even a sane thing to do? I came to the conclusion that it was, and I want to explain why. For a long time it has bothered me, as a teacher of economics, that most Americans – even those who, a long time ago, had wandered through an economics course – had no clear idea of what economics is and what economists do. That is not surprising. The only contact most of us have with economics and economists is through sound bites on television, radio, or in a newspaper These snippets are usually about what the stock market has done or might do, or perhaps about next quarter’s gross domestic product. But only a tiny fraction of academic economists spend their professional time thinking about the stock market or forecasting GDP. So I suspect that the general image of what economists do and what economics is about is way off-base.

Economists is designed to redress that. Ninety superb portraits of ninety economists, young and old, each having been recognized by one or more of the profession’s highest honors, and, taken as a group, representative of the increasingly broad spectrum of concerns to have come under economists’ lenses. I have appended their names at the bottom of this newsletter, since I think it is not possible to find them otherwise outside the book. If you are a kdnowledgeable economist, you will see what I mean about the extent of the spectrum; you will also notice there are few economists teaching in Europe on the roster, because it is a long way for photographer Cook to have traveled.

In my favorite exchange, Solow asks Hal Varian, chief economist at Google and professor emeritus at the University of California, Berkeley:

Thirty years ago, you wrote a very successful microeconomics textbook. If you were to start over today, after your experience with Google, would you do it very differently?

Varian replies:

[T]hat is now in its ninth edition. A colleague once explained to me that by the time the tenth edition comes around “having a successful textbook is like being married to a wealthy person you don’t like much anymore….”

Lucky for me I had two big breaks. The first was bumping into Eric Schmidt in 2001, shortly after he joined “this cute little company called Google.” He invited me to come spend some time there. I thought I would spend a year there and write a book about yet another Silicon Valley start-up. Well, here I am fifteen years later, and I still haven’t gotten around to writing that book.

But I sure learned a lot. Quite a bit…got folded into my textbook. I wrote a couple of new chapters devoted to network effects, auction design, matching mechanisms, and switching costs. The old chapters got updated to illustrate novel applications of work-horse concepts like marginal cost and marginal value….

Then I got lucky again: the Great Recession hit. My book is about microeconomics, not macroeconomics, but even so there were a lot of issues that suddenly showed up in the economy that somehow weren’t discussed in the text. How could I have missed talking about “counter-party risk” or “financial bubbles?”… So I added some discussion about these topics to the text….

Along with theory, businesses need measurement. Today, with all the sensors and system available, collecting data had become more inexpensive than ever before…. Google does about ten thousand experiments a year.; the knowledge gained from these experiments feeds back into design, allowing continual improvement in product offering.

Great stuff! Read the book if you can. See how many of those found there you know. It made me long for the old days, when Economic Principals was a newspaper column, approaching topics like these from slightly different angles, accompanied by caricatures supplied by Pulitzer Prize-winning Boston Globe cartoonist Paul Szep!

Alarms and Excursions: The biggest loser in the “Russia hoax” story is the editorial page of the Wall Street Journal

David Warsh — Sun, 21 May 2023 09:43:00 +0000

This final edition contains two paragraphs (both in bold), because the newsletter’s bulldog (subscriber) edition stopped one sentence short of the point.

The last slow-motion replay of the confusion that accompanied the election of Donald Trump in the long-ago autumn of 2016 was released to the public last week. Special Counsel John Durham’s report joined the 484-page review by Justice Department Inspector Michael Horowitz on the shelf, along with the two-volume report of Special Counsel Robert Mueller’s investigation, all of them supposedly motivated by the FBI’s Operation Hurricane Crossfire investigation of Trump’s connections with Russia.

I couldn’t let the occasion pass without saying something about where the various questions were first broached: on the front pages of leading American newspapers. The disagreement between Horowitz and Durham boiled down to whether the FBI investigation of the Trump campaign was “adequately predicated” by the information received. Horowitz thought yes; Durham thought no. Future historians, however, will look beyond legalistic wrangling to see the story whole.

I leave aside the Senate Intelligence Committee 2020 report on Russian interference in the 2016 election, because I wrote nothing about it. The bipartisan report confirmed the Intelligence Community Assessment of January 2017, that Russia tried to swing the 2016 election to Trump. Here, the story is mainly a reminder of what went on among newspapers behind the scenes.

First, recall the high points of that turbulent summer. The ongoing ruckus over Hillary Clinton’s emails. WikiLeaks release of some of her campaign’s messages. its contents. FBI director James Comey’s exoneration of Clinton for having maintained a private email server. Trump’s call of attention to 30,000 missing emails: “Russia, if you’re listening….” The sudden appointment of pro-Russia Ukraine lobbyist Paul Manafort as Trump campaign chairman. The long history of Trump’s own business dealings with wealthy Russians. Comey’s last-minute announcement of the discovery of Anthony Weiner’s misplaced laptop computer, that contained some unexamined Clinton emails.

Then came the events after November. The 22-day tenure of Michael Flynn as National Security Advisor. Emergent accounts of “the Steele Dossier.” The January briefings of Presidents Obama and Trump by four national security chiefs, describing questions that had been raised. Trump’s firing of Comey. Russian foreign minister Sergei Lavrov’s Oval Office visit the next day. The strong-man handshake with Putin in Helsinki.

Now to the back story. Star reporter Devlin Barrett quit The Wall Street Journal to become The Washington Post’s top man on the FBI beat. Deputy WSJ editorial page editor Bret Stephens quit for a column at The New York Times, and began a weekly conversation with fellow columnist Gail Collins in which the neo-conservative and the liberal traded barbs and compliments in a conspicuously civil manner. WSJ editor in chief Gerard Baker was quietly removed from the news side of the paper, by its Murdoch family owners, and given a column on the op-ed page instead.

In 2008, Peter Baker became the chief White House correspondent at the NYT, after many years covering presidents for The Washington Post; he and his wife, The New Yorker’s Susan Glasser, published The Divider: Trump in the White House, 2017-2021, in 2022. Dan Balz remained the WPost’s principal national political commentator. And star reporter Maggie Haberman emerged as the exemplar-in-chief of a style of independent reporting extolled last week NYT publisher Arthur Gregg Sulzberger, in an over-long but to-the-point essay in the Columbia Journalism Review.

The loser in all this has been the editorial pages of The Wall Street Journal, which have been all in for Trump, from before the beginning of his presidency until nearly the end. It’s up to others to prove this. I depend on a trio of columnists to follow the story where they think it has gone: Holman Jenkins, Jr.; Daniel Henninger; and Kimberly Strassel. Jenkins is the one whom I read regularly; all three have been enthusiastic promoters of Durham’s preposterously narrow police procedural rendition of events.

The WSJ Editorial Board yesterday focused on the long-since discredited Steele dossier to make their case: “Now the Durham report makes clear that the Mueller team failed to investigate how the collusion probe began as a dirty trick by the Clinton campaign and how the FBI went along for the ride.” There’s no free link for this piece; four years exploring a rabbit hole produces a bad case of tunnel vision, nothing more. See yesterday’s column by Peggy Noonan (subscription required), in the same paper, for a much more sensible view.

The other day columnist Gerry Baker did produce an interesting surprise (subscription required): a what-if endorsement of Virginia Governor Glenn Youngkin’s possibilities as a 2024 presidential contender. “If Trump and DeSantis both stumble, don’t rule out a late entry by the Virginia governor.” The 25-year Carlyle Group veteran upset former Democratic governor Terry McAuliffe in 2021, apparently finding a path past Trump. Wrote Baker:

[T]he Virginia governor has established himself as the foremost exponent of what we might term a new Republican fusionism: happy culture warrior, taking on the establishment orthodoxies on critical race theory, transgender rights and the rest of the extremist woke tyranny. But he’s also scored governing successes on the economy, delivering a solid tax cut and focusing efforts on lifting living standards for the poorest Virginians.

WSJ editorial page editor Paul Gigot is approaching retirement, twenty years after replacing the legendary Robert Bartley. I once believed that the Murdochs couldn’t do better than to hire back Bret Stephens, who, until he left for the NYT had been a leading contender for the job. That seems less likely now.

Meanwhile, never mind Fox News and its recently dismissed faux-populist commentator Tucker Carlson. The WSJ’s editorial pages are far more important as a nursery of ideas about America’s conservative tradition. What the Murdoch family needs now is a nimble “Republican fusionist” in the editor’s chair – to nurture whatever that tradition is next to become.

The new editor’s first task will be to put an end to the Editorial Board’s repetitive support of the first of Trump’s two great lies: that there was no legitimate reason for the Justice Department or the Senate’s Intelligence Committee to probe the newly inaugurated president’s Russia connections.

A Pulitzer Prize Mystery: What happened to The Washington Post’s “Road to War” series

David Warsh — Sun, 14 May 2023 09:46:00 +0000

When the Pulitzer Prizes for journalism were announced last week, the marquee Public Service Award went to the Associated Press, for the work of four reporters, three of them Ukrainians, for “courageous reporting from the besieged city of Mariupol that bore witness to the slaughter of civilians in Russia’s invasion of Ukraine.”

The prize for international reporting went to The New York Times. for “their unflinching coverage of Russia’s invasion of Ukraine, including an eight-month investigation into Ukrainian deaths in the town of Bucha and the Russian unit responsible for the killings.”

Two reporters for The Wall Street Journal were nominated finalists for “prescient on-the-ground reporting from the shifting front lines of the war in Ukraine that presaged the Russian assault on Kyiv and chronicled the tenacious resistance of Ukrainian soldiers and civilians amidst so much devastation.”

Among the other journalism awards, my favorites were the unusual dual prizes for local reporting conferred on reporters at two institutions in the deep South: Anna Wolfe, of Mississippi Today, of Ridgeland, Miss. “for reporting that revealed how a former Mississippi governor used his office to steer millions of state welfare dollars to benefit his family and friends, including NFL quarterback Brett Favre;” and to John Archibald, Ashley Remkus, Ramsey Archibald and Challen Stephens, of AL.com, Birmingham. for a series exposing “how the police force in the town of Brookside preyed on residents to inflate revenue, coverage that prompted the resignation of the police chief, four new laws and a state audit.”

Maybe none of the stories had the historic heft of imagination and reporting that led to the dual Public Service Awards in 2018 to Jodi Kantor and Megan Twohey, of the NYTimes; and Ronan Farrow, of The New Yorker, for “explosive, impactful journalism that exposed powerful and wealthy sexual predators, including allegations against one of Hollywood’s most influential producers, bringing them to account for long-suppressed allegations of coercion, brutality and victim silencing, thus spurring a worldwide reckoning about sexual abuse of women.” But 2023 was another good year for American journalism, nonetheless.

Still, at the end of the week, I was bothered by a puzzle. The Washington Post had won three prizes, and been a finalist for a fourth, but what had happened to its landmark “Road to War?” That extraordinary fourteen-part series described the complicated events leading up to the Russian invasion that have become background knowledge for many of us who, at a distance, follow the war. It wasn’t perfect; the event of 2013-14 were omitted. But the stories were news. A summary and that lengthy series can be found on the web.

The WPost story about its three winners noted that its journalism had been recognized in five prize divisions this year, including its opioid epidemic series as a finalist in the Public Service category. Those eight honorees represent the largest total for the newspaper since 2002. representing “the kind of intense reporting and commitment of resources that is frequently achievable by the nation’s largest and best-funded news organizations.” The WPost is owned by Amazon’s Jeff Bezos. NYTimes, the Los Angeles Times, and the AP won two Pulitzers as well.

Greatly diminished by the loss of advertising and circulation revenue to the digital realm is the second tier of American newspapers, its major metropolitan dailies: Chicago Tribune, Boston Globe, Providence Journal, Philadelphia Inquirer, Baltimore Sun, Atlanta Constitution, Miami Herald, Cincinnati Enquirer, Louisville Courier-Journal, St. Louis Post-Dispatch, New Orleans Times-Picayune, Kansas City Star, Houston Chronicle, Dallas Morning News, Denver Post, Arizona Republic, Las Vegas Sun, San Francisco Examiner, San Jose Mercury-News, San Diego Union-Tribune, Portland Oregonian. Seattle Post-Intelligencer, Anchorage Daily News.

All these newsrooms contributed talent and diversity of opinion to the Pulitzer chase and its subsequent judging. Twenty years ago, it would have been relatively easy to put together at least a credible version of why WPost’s “Road to War” didn’t make this year’s cut. Today, the cultures of the newspaper goliaths are much harder to interrogate, except by veterans of one another. It may be decades before we have a satisfying account of English-language newspaper coverage of today’s war in Ukraine.

But then all wars have their durable secrets. See Orders of Disorder: Who Disbanded Iraq’s Army and De-Baathified Its Bureaucracy?, by Garrett M. Graff, in Foreign Affairs, if you doubt it.