Llewellyn King: Sanders's economic fantasyland

From The Violet Fairy Book (1906)

It’s hard for me to believe that Donald Trump is president. Really hard. Equally hard for me to believe that Bernie Sanders is the Democratic front-runner, especially after the Las Vegas debate.

I can take Sanders’s passion, although it’s so consuming it gets to be frightening. I can take his calling himself a democratic socialist, although I don’t know to what extent his form of socialism pits him against capitalism. Enough, I fear.

Some of what Sanders had to say in Las Vegas was downright risible, or has been tried and failed, or, worse, would set in place a series of negative dynamics, damaging the country in many ways without bringing about any of the gains he wishes to achieve. Listening to him, I think, “This donkey wants his feedbag.”

In his way, Sanders is as committed to conspiracy theories as is Trump. Sanders sees vast, secretive forces in fossil-fuel companies, lobbyists, bankers and billionaires as being united in a scheme to keep the rest of us poor and ill-served by government.

Here are three of his big fallacies:

1. Companies would be better if they were partly owned by the workers. This is real socialism and it hasn’t worked when it’s been tried.

Sanders would be well-advised to read up on the history of the cooperative movement in Britain. The very first casualty would be innovation because worker governance isn’t risk-taking.

I say this having been very familiar with the British coop movement and having headed a trade union local, the Newspaper Guild, in Washington. Collective decision making is not creative, risk-taking or forward-looking.

2. The technology of fracking to extract oil and natural gas from tight rock formations should be stopped in order to combat global warming. That would deal the economy a body blow while doing nothing for global warming.

Carbon emissions from fossil fuels are coming down, and on the horizon is the technology of carbon capture, utilization and storage and other technological fixes for carbon emissions.

Technology has enabled fracking and technology, not cessation, will clean up emissions.

3. The current health-care mess should be replaced root-and-branch by a national health system. That we need a stabilizing public option in health care is more apparent daily. But health reform needs to be introduced like good medicine, prudently with the dosage corrected in relation to the progress of the patient.

Sanders’s approach to most issues can be summed up by what author H.G. Wells, a socialist, said of playwright G.B. Shaw’s ideas. He said the trouble with Shaw, also a socialist, was that Shaw wanted to cut down the trees to erect metal sunshades. Quite so.

In Las Vegas, Sanders was out to cut down every tree he could see. These included what is part of the American Dream: Anyone with pluck and hard work can improve their situation, and maybe grow rich.

Sanders’s assault on Mike Bloomberg was that Bloomberg didn’t accept some mythical belief that money is inherently bad and that those who’ve made a lot of it are evil and constantly conspiring to keep the rest of us in penury — at least those who earn up to the Senate salary of $174,000 a year.

The long-term evil of money isn’t in the generation that makes it, but in the families that will inherit it down through the generations, creating an oligarchy the likes of which we haven’t seen since the fall of the serf-exploiting Russian nobility.

Someone should take Sanders on one side and tell him about failed experiments in worker ownership, the value of evolution over revolution, and that every American would like to be rich.

Llewellyn King is executive producer and host of White House Chronicle, on PBS. His email is llewellynking1@gmail.com and he’s based in Rhode Island and Washington, D.C.

David Warsh: Presidential race is swan song of the Baby Boomers

Journalist Andrew Sullivan speculated in New York magazine earlier this month that U.S. democracy is ripe for a tyrant, and that the candidacy of Donald Trump is potentially “an extinction-level event.”  Jacob Weisberg, editor-in-chief of the Slate Group, who seems to me (and to the Financial Times) the shrewdest of the current crop of U.S political commentators, thinks Sullivan’s widely-read essay is “one of the most important things written about the phenomenon of Trump.”

I think it is bunk. What about the Sanders phenomenon?

The outcome of the long primary season is best understood as fatigue-turned-protest against the initial promise of a Bush-Clinton race – two families that have loomed large in presidential politics since 1988 and 1992 respectively. The undertone of fascination with the possibilities of authoritarian rule is real enough, at least in some quarters, but it is easily exaggerated.

The second-most salient fact about the 2016 presidential election is the tight grouping of the candidates’ ages:  Donald Trump was born in 1946, Hillary Clinton in 1947, Bernie Sanders in 1941. This is not the beginning of the end of the U.S. democracy.  It is the last hurrah of the post-World War II Baby Boom.

Certainly the election has become much more dangerous since Trump clinched the Republican nomination. It is highly unlikely, but it is no longer inconceivable that the developer-turned-reality-television-star could become president. This in itself is  harmful to the reputation of the United States. I don’t quite see how the Republican Party recovers from its embarrassment, at least over the long term, but likely it will.

For the record, I wish Clinton would win 49 states in November (though it doesn’t seem very plausible that she will) and that Sanders goes back to Vermont.  Whoever wins is likely to be a one-term president. Today’s poisonous politics will continue for a while longer. My hunch is that the presidential candidates who lead the Republican and Democratic Parties in 2020 will have been born after 1964 – the last year of the Baby Boom.

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Yuliy Sannikov, of Princeton University, last week was named winner of the John Bates Clark medal for 2016.  The award is given annually by the American Economic Association to an economist working in the United States judged to have made the most significant contribution before the age of 40. He received the recently-established Fischer Black Prize from the American Finance Association in 2015.

Sannikov, who won three gold medals in International Mathematical Olympiads after graduating from Sevastopol Visual Arts School in 1994, is often thought of chiefly as a tool builder, a master of adapting continuous time methods to dynamic games using the stochastic calculus.

But after learning economics as a Princeton undergraduate, the PhD he received from at Stanford Business School in 2004 (where his advisers were Robert Wilson and Andrzej Skrzypacz) immersed him in all kinds of practical problems – everything from corporate management to monetary policy. As the citation says,

Previous models abstracted from crucial economic forces in the name of tractability, but Sannikov’s methods allow models to include the most important forces and thus deliver results that are much more relevant. He is one of the few theorists in many years to have introduced a truly novel tool that changed the way theory is done.

Meanwhile, Olivier Blanchard, who served a heroic tour as chief economist for the International Monetary Fund from 2008 s until 20015, was slated to be elected AEA president. Before joining the IMF, Blanchard was for 25 years a mainstay of economics department at the Massachusetts Institute of Technology, and an influential architect of policy-relevant macroeconomics.

Named distinguished fellows of the AEA were Richard Freeman, of Harvard University; Glenn Loury, of Brown University; Julio Rotemberg, of Harvard University; and  Isabel Sawhill, of the Brookings Institution.

David Warsh, a longtime financial journalist and economic historian, is proprietor of Somerville, Mass.-based economicprincipals.com

Chris Powell: Don't blame the NRA or Yale

MANCHESTER, Conn.

Connecticut saw four of the five remaining presidential candidates on the eve of its primary election.    

On the Republican side, Donald Trump, having admitted that he doesn’t want to seem "presidential," went to Bridgeport and Waterbury to revel in the buffoonery, mockery and contempt that have made him so appealing to so many. In Glastonbury, Ohio Gov. John Kasich easily contrasted himself as thoughtful and respectful.   

On the Democratic side, Vermont Sen. Bernie Sanders complained to a rally in New Haven that 36 percent of that city's children are not just living in poverty but doing so within sight of Yale University's $26 billion endowment, as if there was some connection.

Hillary Clinton visited Hartford, emphasized the problem of gun violence, and pledged to confront the National Rifle Association and strive to "change the gun culture."  

But repugnant as the NRA may be, it has little to do with gun violence, and the"gun culture" Clinton deplored -- presumably the NRA’s 5 million purported members -- is not the culture doing the most damage with guns.   

Rather, the "gun culture" that does the most damage is the culture of poverty,  unconditional welfare, drug dealing and drug prohibition. Most shootings --  from Hartford to Chicago to Los Angeles -- are not committed by NRA members but by fatherless and uneducated young men, products of the family-destroying welfare system who see drug dealing and crime as their best career options.    Sanders’s silly linking of child poverty in New Haven with Yale’s endowment only emphasizes the difficulty of pushing the political left out of its ideological dead end.   

Since Yale is such an awful influence, the expropriation of its endowment and the resulting smashing of its political influence under the assault of Sanders’s socialism would be positive. But all Yale’s money could be spent in the name of alleviating poverty and, if it was spent as the hundreds of billions of dollars before it have been spent, there would be only more poverty and dependence afterward.   

Amid this half century of policy failure it is hard not to suspect that poverty and dependence are actually the objectives of the political left generally and the Democratic Party particularly. For poverty and dependence fuel the need for government patronage and become not afflictions to be eliminated but profitable businesses and ends in themselves.   

A few decades ago it was possible for a few on the left and a few Democrats to acknowledge this failure of policy, as the sociologist Daniel Patrick Moynihan did before becoming one of Clinton’s predecessors as a Democratic senator from New York.   

Moynihan wrote in 1965: "From the wild Irish slums of the 19th-century Eastern seaboard to the riot-torn suburbs of Los Angeles, there is one unmistakable  lesson in American history: A community that allows a large number of men to grow up in broken families, dominated by women, never acquiring any stable relationship to male authority, never acquiring any set of rational expectations about the future -- that community asks for and gets chaos. Crime, violence,  unrest, disorder -- particularly the furious, unrestrained lashing out at the whole social structure -- that is not only to be expected; it is very near to inevitable. And it is richly deserved."  

In the Senate 20 years later, Moynihan elaborated: "The institution of the family is decisive in determining not only if a person has the capacity to love another individual but in the larger social sense whether he is capable of loving his fellow men collectively. The whole of society rests on this foundation for stability, understanding, and social peace."   

To end poverty and gun violence, government needs first of all to stop manufacturing them. 

Chris Powell is managing editor of the Journal Inquirer, in Manchester, Conn. 

Llewellyn King: The body language of this presidential campaign

WEST WARWICK, R.I.

Whenever I go out to dinner lately, along with the first sip of wine, I’m served a pre-appetizer: a short, dispiriting conversation about the politics of the moment, complete with a special kind of head-shaking and eye-rolling that has been perfected for this election season.

First the diner’s head is lowered slightly and shaken slowly from side to side. Then the eyes are raised, as though in supplication by a puppy that has done something wrong but doesn’t know what: What did we do to deserve this?

Donald Trump elicits the most severe reaction. People quickly agree that he is not only unsuitable for high office but quite possibly bonkers, stark-raving mad, round the twist — whatever you call the unbalanced in colloquial speech.

Next comes the Ted Cruz shudder. After the shaking of the head over Trump comes a nervous, whole-body response to the mention of Cruz. It begins in the shoulders and migrates down to the pelvis while the head is stationary, having been stilled after shaking at the thought of Trump. Nobody suggests that Cruz is bonkers but quite the opposite, the extreme opposite. In whispers, the Cruz shudderers say “he is clever” and, ominously, “he has an agenda.” Cruz, it is intimated, is in touch with forces beyond he grave, and on the wrong side of that.

John Kasich doesn’t make the grade for dinner gyrations. With a little shake of the head and shrug of the shoulder, he is dismissed.

On to the Big Sigh.

The Big Sigh is reserved for discussion of Hillary Clinton. It is preceded by the “don’t make me laugh” expulsion of breath over Bernie Sanders. Devout liberals keep Sanders alive in conversation for a few moments, saying that they like his views on healthcare or taxing the rich. But he is gone with the first full exhalation.

The real sighing is for Hillary, the choice of last resort. People declare that they will vote for her then elaborate her failings. One is told, “she is overly ambitious,” “she is a terrible manager,” “she has baggage,” “she looks worn out,” and “she has to explain Libya.”

Clearly, she has locked up the hold-your-nose vote.

Look, I haven’t just been supping on sushi in Georgetown, although I’m guilty there, or on Dover sole at the Metropolitan Club in Washington, guilty again, but also on mac and cheese at the humble, working-class Harris Grille in Coventry, R.I., and barbecue at Calhoun’s in Knoxville, Tenn.

What amazes is where are the millions who turn out to support Trump so vigorously? Why don’t I run into them, hunt high and low though I may? Are they all sitting at home waiting for a pollster to call so they can give their man further ammo?

Where are the Cruzers? Are they out there testing the fallibility of Obamacare, or demonstrating against world conquest by Planned Parenthood? The rot starts with women’s health and ends with socialized medicine, don’t you understand?

At least one can find the Bernie Sanders legions. They are the young people with the special cellphone posture; who have turned themselves into question marks as they crouch over their devices, looking into the future on their tiny screens.

When they unwind in middle age to look around them, freed of the millennial stoop, will they morph into Republicans? Will there be any Republicans after Trump and Cruz have worked their magic?

What, I wonder, will we be doing at dinner parties after the Republican National Convention in Cleveland? Will we be doing the Trump headshake and confused eye or the Cruz full-body shudder?

After the Democratic National Convention in Philadelphia, the Big Sigh is predictable at dinner tables across the nation.

In November, after electing President Unsuitable, we will all be holding our heads in a kind mute astonishment. 

Llewellyn King (lking@kingpublishing.com) is a longtime publisher, columnist and international business consultant. He is host and executive producer of White House Chronicle, on PBS. Mr. King is based in Rhode Island and Washington, D.C.\Ll

This first ran on InsideSources.