… which makes this video out of date by about 20 minutes, but it’s instructive nonetheless.
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“A Closed ‘Super Congress’? Oh, I Don’t Think So.”
That was my inner conversation when I heard that the “Super Congress”* (or “Super Committee”) created by the debt ceiling deal might operate behind closed doors.
Congress is free to create any committee it wants, of course. Congress determines the rules of its proceedings. But ordinary committees and subcommittees are too opaque. A “Super Committee” should lead—not lag—in transparent operations.
In a forthcoming report on government transparency, we’ll be looking at the kinds of things committees should be publishing in computer-useable formats, and in real time or near-real-time: meeting notices, transcripts, written testimonies, live video, original bills, amendments to bills, motions, and votes. There are ways that many of these documents and records can be optimized for transparency, including by flagging agencies, programs, dollar amounts, and so on in the texts of published documents.
That’s why I’m glad to see transparency stalwart the Sunlight Foundation calling for a transparent Super Committee. “Congress pushed through the ‘Debt Ceiling’ bill with almost no transparency,” they say. “Let’s make sure the new ‘Super Congress’ committee created by this bill operates in the open.”
The things they highlight, reflecting priorities of transparency groups across the ideological spectrum, include: live webcasts of all official meetings and hearings; the committee’s report being posted for 72 hours before a final committee vote; disclosure of every meeting held with lobbyists and other powerful interests; Web disclosure of campaign contributions as they are received; and financial disclosures of committee members and staffers.
The legislation creating the Super Committee calls for some minimal transparency measures: public announcement of meetings seven days in advance; release of agendas 48 hours ahead of meetings, and:
Upon the approval or disapproval of the joint committee report and legislative language pursuant to clause (ii), the joint committee shall promptly make the full report and legislative language, and a record of the vote, available to the public.
By my read, that’s a requirement to release the language the committee is voting upon after the vote has been taken.
I don’t see public access to the language of such an important document as conducive to the public overseeing the committee’s work. Some may argue that the committee will be pressure-cooker enough if it operates in closed sessions. Delicate political balances require important decisions to be made out of the limelight. This is how massed power in Washington fully manifests itself: major decisions about the direction of the country that people cannot even know about until the decisions are finalized. I’m not havin’ it. Kudos, Sunlight Foundation, for pressing an open Super Committee.
*Many are calling the committee “Super Congress.” It’s a joke I … don’t quite get. So I’ll go with “Super Committee.”
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This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this past week:
- Republicans and Democrats have come together on a “historic” budget deal that cuts federal spending by more than $2 trillion over 10 years. However, the budget deal doesn’t cut federal spending at all.
- Even if Congress holds to the debt deal’s spending caps — and even if the “deficit reduction” targets established in the bill are achieved — the federal government’s spending binge will continue.
- Debt deal to slow the economy? Nonsense: biggest stimulus, slowest recovery. Keynesianism isn’t working.
- Centrist and liberal columnists are lamenting the lack of tax increases in the debt deal. But the hollowness of the deal itself provides a good justification for Republicans to oppose all tax increases in such bipartisan deals.
- The FAA’s problems should be solved by privatization.
- What does the debt deal mean for military spending?
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Kudos to Carnevale!
About a month ago, Anthony Carnevale and his associates at the Georgetown University Center on Education and the Workforce released a report that, in my estimation, significantly oversold the value of college degrees. As I wrote, it focused too much on median earnings by educational attainment, and made some considerable leaps of faith about the value of degree-holding people who have jobs that do not require college degrees.
Today, in contrast, I’m grateful to Prof. Carnevale for producing a new report that goes a long way toward correcting the first flaw in his June offering.
The College Payoff: Education, Occupations, Lifetime Earnings, released today, does nice work breaking earnings down by both employment category and educational attainment, and showing the significant overlaps in earnings that result. Overall, for instance, Carnevale and company found that 14 percent of workers with no more than a high school diploma earn at least as much as the median Bachelor’s holder. Especially striking, 1.3 percent of people with less than a high school education rake in more than the median possessor of a professional degree (think doctors and lawyers), the highest-earning educational category.
Looking at specific job categories, The College Payoff identifies some of the major occupations you can go into with lower educational attainment that out-earn job categories with higher ones. For instance, driver/sales workers and truck drivers who maxed out at a high school diploma earn an average of $1,531,000 over their lifetimes. That beats the earnings of secretaries, retail sales managers, accounting and auditing clerks, customers service reps, retails salespersons, and nursing and home health aids with some college under their belt. It also beats secretaries, customer service reps, retail salespersons, and accounting and auditing clerks with Associate’s degrees.
There’s a lot more data than that in the report, of course, and it would reward perusal.
Unfortunately, the report’s concluding section starts with this:
No matter how you cut it, more education pays.
As the report itself reveals, there are in fact lots of ways to “cut it” that enable you to earn more with less formal education. Alas, old habits die hard for Carnevale. But just for providing these data, he and his team are to be thanked.
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The Keynesians Answer Back
Last week’s debate has naturally generated some response from defenders of Keynes who have found fault with my and Jamie Whyte’s characterization of Keynes’s views, or who have simply found fault with our…personalities!
Over at Tax Research UK, for instance, Richard Murphy and some of his friends observe that, besides being humorless, Jamie and I must also lack the basic human ability to “empathize” with others (which is, when you get down to brass tacks, just a tiny step away from coming right out and calling us a couple of sadists), for how could we otherwise be opposed to unbridled government spending and bailouts? Concerning the last, Mr. Murphy takes for granted that in suggesting that insolvent banks ought to have been allowed to fail I meant that they ought to have been left to collapse, leaving depositors out in the cold. Murphy’s implicit view that collapse is the only alternative to bailouts is of course one that insolvent bankers themselves are happy to see promulgated. Nevertheless it is perfectly unfounded, as I indicate in my contributions to the blog in question, where I refer to what some have styled the “Swedish” alternative.
At Social Democracy a post-Keynesian blogger who styles himself “Lord Keynes” similarly misinterpreted my “liquidationist” stand, inviting what became a long exchange with me there that was interesting in part because by engaging in it I learned that trying to argue with a dreaded Post-Keynesian can after all be a lot more rewarding, as well as a lot more pleasant, than trying to argue with many Rothbardians!
Finally, at Prime another post-Keynesian, Victoria Chick (who I reckon one of my favorite “Keynesian” economists, for what it’s worth) accuses Jamie Whyte and me of committing eight serious “fallacies” in our part of the debate. As I only just finished replying to her post, and my answers–one for each of the supposed “fallacies”–still await moderation, I reproduce the latter here (you must consult the original blog for the accusations themselves):
1. Hayek as “an opponent of financial excess”
The suggestion that deregulation was responsible for the sub-prime excess is unfounded. The Glass-Steagall “repeal” of 1999 merely allowed investment banks to have commercial bank subsidiaries; since it was the investment banks themselves rather than their (smallish) commercial bank subsidiaries that got in hot water, the reform made no difference except by making it easier to rescue tottering stand-alone investment banks through bank mergers. As for deregulation in the ’80s, the supposed link to the sub prime boom here is too obviously tenuous to be worthy of comment.
2. Keynesian policy as “promoting the big state”
It’s true that Keynes himself was what today would be considered a (long-run) fiscal conservative. This is a point I myself made in an excised portion of the debate. However it is also true that the Keynesian suggestion that expansionary policies are generally capable (see below) of combating non-trivial levels of unemployment has been seized upon by politicians as justifying government profligacy.
3. The inflation of the 1970s as “the fault of Keynesian policies”
I don’t recall myself blaming “Keynesianism” for the inflation of the 70s. On the contrary: in part of the debate that was edited I specifically observed that Keynes had been a consistent advocate of price-level stabilization. As for the 70s, in the U.S. inflation started creeping up in the 60s, partly because of the Vietnam war but also at the urging of prominent self-styled Keynesians who insisted that higher inflation would bring lower unemployment, as had appeared to be the case earlier in the decade. The so-called stable “Phillips Curve” is not something critics of Keynesianism invented: it was the brainchild of self-styled Keynesians themselves, and it did certainly play its part in the Vietnam-era escalation of U.S. inflation rates.
4. Keynes as “advocate of deficit spending”
and
5. Keynes as “a supporter of wasteful expenditures”
Whether he intended the consequence or not, Keynes’s “pyramid building” rhetoric licensed wasteful government spending. It’s a shame that he isn’t around to assail those who have abused his arguments so. But even a smallish dose of public-choice theory should have sufficed to predict what politicians would make out of the suggestion that any sort of spending is capable of combating depression and, indeed (if Lord Skidelsky is to be taken at his word) capable of promoting long-run economic growth!
6. Roosevelt’s New Deal as “trivial in scale and impact”
Romer wasn’t “compromised” by her earlier writings on the New Deal: she was simply embarrassed by them once she found herself leading the economic team of an administration committed to fiscal stimulus. The evidence and argument contained in her key writings on the 30s remain as solid as ever. Moreover, she is far from alone in having argued that major components of the New Deal, and the NRA especially, were either ineffective or actually counterproductive in ending the depression.
Indeed, Keynes himself believed that the NRA would impede rather than hasten recovery, and said so in a letter to Roosevelt written after the act’s passage. The letter reads in part,
“I am not clear, looking back over the last nine months, that the order of
urgency between measures of Recovery and measures of Reform has been duly
observed, or that the latter has not sometimes been mistaken for the former. In
particular, I cannot detect any material aid to recovery in N.I.R.A., though its
social gains have been large. The driving force which has been put behind the
vast administrative task set by this Act has seemed to represent a wrong choice
in the order of urgencies. The Act is on the Statute Book; a considerable amount
has been done towards implementing it; but it might be better for the present to
allow experience to accumulate before trying to force through all its details. That
is my first reflection–that N.I.R.A., which is essentially Reform and probably
impedes Recovery, has been put across too hastily, in the false guise of being
part of the technique of Recovery.”
(Interested readers can read the whole letter here.)
7. The 2008–9 financial rescue as “‘Keynesian”
Well, here is Keynesian support for bank bailouts. Q.E.D.
By the way, it has been suggested by some (not here) that in opposing such I in effect favored simply letting banks collapse. But the suggestion that collapse is the only alternative to bailouts ignores what some term the “Swedish approach”, which was the alternative I had in mind.
8. The failure of stimulus as “a failure of Keynesian policy”
Sorry, but it’s back to pyramids again: the Keynesian argument is that the problem is solely one of inadequate demand, so that, much as public works and such might be preferred, any sort of fiscal [stimulus] should help; and it was on such grounds that U.S. proponents of fiscal stimulus didn’t trouble themselves over just where stimulus money would go in arriving at their (ultimately very wrong) estimates of the “multiplier” effects we could all look forward to. If more orthodox Keynesians think that all this was a mistake, I am glad to hear it. But they still need to explain how to reconcile their ideal stimulus with the workings of real world (democratic) governments.
Addendum: Soon after this posting Mr. Murphy shut-down comments on his blog entry. Perhaps I’m being too uncharitable in supposing that this had anything to do with the accumulation of negative feedback he was receiving, much of which was evidently from sympathetic, regular readers. Mr. Murphy, in any event, allowed himself the following last words:
“Trouble is – I’ve never known an empathic person who can find a cent of sympathy for Hayek and Hayekians.”
Meaning, I surmise, either (1) that he couldn’t hear all those people shouting “Yo Hayek” in the BBC podcast or (2) that he maintains that every one of them was incapable of empathy.
Methinks the man doth protest too much.
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A Look at the Balanced Budget Amendment
As the Balanced Budget Amendment once again comes to the front of political debates, I wondered what David Primo thought about the return of the BBA to public notice. Primo is the author of Rules and Restraint: Government Spending and the Design of Institutions.
John Samples: David, you have studied the history and politics of budgeting by Congress and the federal government. Your studies led to your book Rules and Restraint which, as I recall, was somewhat skeptical of the constitutional solutions requiring a balanced budget. What did you think of the importance the House Republicans attached to the Balanced Budget Amendment?
David Primo: Supporters of the BBA are certainly correct that constitutional restraints on Congress will help restore fiscal discipline to the federal government. It’s unfortunate, however, that the BBA has become so politicized. Without buy-in from Democrats, the chances of ratification are nil. I understand the fear of compromise here; we don’t want a poorly constructed rule placed into the Constitution, after all. That said, I’d love to see serious reformers like the Gang of Six get together and craft a constitutional budget rule that has a chance of being ratified. Rep. Justin Amash has also introduced an amendment that is a twist on traditional BBA proposals, and it deserves to be part of the debate.