Paul Krugman vs. Michael Kinsley

I won't claim to be half as smart about economics as is Paul Krugman, but I'm pleased to see his slap-down of Michael Kinsley.

Read Krugman's blog post below for his economy- and austerity-specific comments. But what really caught my attention was his dead-on remarks about Kinsley and New Republic weaknesses, which I've been saying for years (to nobody who cares, naturally).

Krugman on the attacks on his writings: "... I suspect it has a lot to do with the famed TNR/Slate premium on being 'counterintuitive,' which in practice meant skewering supposed liberal pieties."

And: "[T]his is not a game. We’re having a discussion about policies that affect tens of millions of people. And you have no business participating in this discussion if you’re so busy trying to sound clever that you can’t be bothered to do your homework." Echoes there of Harlan Ellison's famed comment that you're not entitled to your opinion; you're entitled to your informed opinion.

Most of you won't understand how dead-on his criticisms are of Kinsley and TNR, but for those of us who have read a lot of both, we can appreciate having a Nobel laureate in our corner.

Read Krugmans New York Times blog post.

We're No. 2

According to the IMF and the CIA, in 2011 the GDP of the European Union was about $17.5 trillion and the GDP of the United States was about $15.1 trillion.

All for One, and One for One

Once in a while, just a few minutes on the radio encapsulates some very telling features of our culture.

This morning, National Public Radio's Morning Edition carried a report about Germany's ancient tradition of apprenticeships, after first noting that youth (well, people under 25) unemployment in countries like Spain is around 50 percent while Germany has the lowest youth unemployment rate in Europe.

The successful German approach is a partnership between big businesses and labor unions that provides on-the-job and vocational training to a huge portion of the country's population. Something like 60 percent of high school graduates go into this system, rather than higher academia. They receive about a third of the pay of a starting wage for a full-time worker. The reporter interviewed a young aircraft mechanical technician, Robin Dittmar, who was working as an apprentice with Lufthansa. He splits his time between on-the-job training, actual on-the-job work on engines, and off-site vocational training. Ninety percent of apprentices complete their apprenticeships, and 50 percent of those are hired by the companies for which they apprenticed; the remainder presumably finding work with other employers in the same field or switching jobs/careers.

Right after that report, Morning Edition carried a story from Illinois about a young man who was recently named one of four Lego Master Model Builders. Like Robin Dittmar, Andrew Johnson had a long-time passion and obsession with Legos, and like the German aircraft mechanic, he is turning it into a full-time job. Unlike the German aircraft mechanic, there are only three other people who do what he does, and it's not, let's admit it, the most useful work to perform.

Let's not begrudge him his success; he's got a dream job, one that lots of people – Lego enthusiasts, at least – would love to have. But it was an illustration, certainly unintentional, of American attitudes versus at least one other country's attitudes. Americans love to hear about the one person who hit the jackpot, won the lotto, sold her dot-com for billions, won American Idol, earned $100 million in a business deal, and so on.

Germans like their high-achievers, too. There's even a German edition of American Idol. But their system itself isn't an American Idol or casino system; it's set up to try to be as useful for as many people as possible.

Now, America (or other countries) shouldn't just copy the German apprenticeship model. Shouldn't and couldn't. Germany has a situation in which its labor and business groups made lasting (and profitable) peace after World War II by agreeing to a consensus model of decision-making. There's no way that would be widely accepted in the United States, and that's not even taking into account the impending extinction of U.S. labor unions.

However, America and other nations should be considering approaches that address the needs of the majority of its population, not a casino approach with near-impossible odds but a small number of jackpot winners. It might be less razzle-dazzle, and more practical, but that's economics for you.

My Latest in Northside: You Gotta Have Science

My latest Common Knowledge column in Northside San Francisco:

COMMON KNOWLEDGE  

Turns Out, It Is Rocket Science

By John Zipperer 

It was inevitable that American politics would spoil that most pristine, beloved and genuine part of American culture: the annual blitz of Super Bowl commercials. Instead of being able to enjoy debating whether Volkswagen could outdo its Darth Vader commercial from last year (it didn’t), we were left with the news outlets arguing for many days about whether Chrysler’s “It’s halftime in America” commercial was intended to help President Obama’s reelection prospects. 

Such pointless debates always miss the bigger controversy. No it’s not why Clint Eastwood’s voice in the Chrysler ad sounds like Christian Bale’s Batman. The big controversy was around a commercial for U.S. Senate candidate Pete Hoekstra.

Read the entire column...

Time to Blame Helmut Kohl for Europe's Problems?

The German parliament in Berlin.

Recently, former German Chancellor Helmut Kohl took to task current Chancellor Angela Merkel for her handling of the European debt crisis. "She's destroying my Europe," Der Spiegel quotes him as complaining.

 Kohl later disowned some of the comments he'd made and clarified, "It is true that I -- like many people -- am worried about the development in Europe and of the euro. I also see it as urgently necessary that the supposed euro crisis isn't regarded and discussed as a structural crisis of the euro per se, but as what it is: The result of homemade mistakes and challenges for both sides -- Europe and the national states."

The British press in particular likes to display great impatience with the way the fiscally responsible states (led by Germany, but also including smaller northern European nations) have dealt with the – there's no kind way to put it – disastrously fiscally irresponsible states. (One of the more intelligent articles of this type ran in the Financial Times.) The answer seems to be that the responsible states should just take on the burdens created by the irresponsible ones, without forcing the bad apples to rectify the structural problems that led to this disaster in the first place. I think Merkel has been slow and, yes, unimaginative, but she has also been largely correct: She has staked her reputation and political future on saving the eurozone, but she is also dedicated to forcing Greece, Italy, and others to learn to live like adult countries and not like teenagers who've just scored their parents' credit card for the weekend.

But we are still left with the ungenerous conclusion that Kohl himself should shoulder much of the blame. He, with France's then-President Francois Mitterand, cooked up the euro scheme as a way of mollifying European nations (France among them) that were worried about German reunification. It wasn't all a matter of that, because the European Union had been growing and solidifying for years, extending a zone of prosperity and law across a continent that had been destroyed countless times by conflict. So a common currency was a likely development at some point. But it's early introduction was intended to tie Germany closely enough to its neighbors that it theoretically would not go off marauding through the neighborhood again.

As such, it wasn't a bad idea. An unnecessary one, perhaps; there is absolutely zero appetite in Germany for fighting wars. But still, an understandable idea nonetheless.

What is not understandable is how Mitterand and Kohl, two veteran politicians who supposedly learned from the mistakes of the past, could concoct a system that is structurally illogical. Economic union without some sort of political union to enforce it is a recipe for disaster. This disaster, in fact. It could lead to large countries forcing their policies down the throats of smaller countries, which is what Merkel is being accused of doing by trying to get the poor performers to reform their economies and politics to make themselves competitive; or it could lead to poor countries overspending and expecting the rich countries to bail them out, which is the situation that has happened and that Merkel is trying to rectify.

Merkel is trying to clean up the mess that Kohl created.

If the euro was the first price Kohl and Germany paid to get reunification, then Greece, Ireland, and Italy have just presented the official invoice.

Milton Friedman Treasure-Trove

I just wanted to share a project that I put together yesterday, scanning all of the speeches of Milton Friedman from his many visits to The Commonwealth Club of California between 1977 and 1998. They are posted in jpeg format over on The Commonwealth Club's blog in two parts:

Part I

Part II

Good resources for the economics fan, whether or not one subscribes to Friedman's theories.