“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
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Dean Baker: The Secret of the Weak Recovery: We Had a F***ing Housing Bubble
The problem with economics is not that it’s too complicated; the problem is that it’s too damn simple. This problem is amply demonstrated by all the heroic efforts made by economists to explain the weakness of the current recovery. [..]
If none of these stories, or any of the others that economists develop to stay employed, explain the length of the downturn, what does? Well, it’s pretty damn simple, we had a housing bubble driving the economy before the collapse and there is nothing to fill the gap created. The bubble led residential construction to soar to more than 6.0 percent of GDP at the peak of the boom in 2005. It is now a bit over 2 percent of GDP implying a loss in annual demand of more than $600 billion. The $8 trillion in housing wealth created by the bubble led the saving rate to fall to almost zero due to the housing wealth effect (people increase annual spending by 5-7 cents for each dollar in housing wealth). With the saving rate hovering near 4 percent, we have lost close to $400 billion in annual consumption demand.
Cindy Cohn and Trevor Timm: After the Tragedy in Boston, More Government Surveillance is Not the Answer
Since the tragedy in Boston three weeks ago, there has been much talk in the media and political circles about technology that helped capture the suspects, the role of surveillance, and the critical issue of how privacy should be handled in the digital age. Yet the public facts known so far do not call for new governmental surveillance powers or tools. Instead, the investigation supports the conclusion that the government’s current actions did not cross the Fourth Amendment line, and complying would not harm future terrorism investigations. [..]
First, the familiar attempt to throw privacy out the window: The Mayor of New York City Michael Bloomberg led the way last week, saying that, despite privacy concerns, “our laws and our interpretation of the Constitution, I think, have to change.” NYPD chief Ray Kelly echoed Bloomberg, saying, “I think the privacy issue has really been taken off the table,” in reference to surveillance after the bombings in Boston.
Bloomberg said terrorists “want to take away our freedoms,” yet his solution seems to be the government should take our freedoms away first. This is folly, and the very reduction of privacy and freedom is what could give victory to terrorism.
The US economy is suffering from a nasty case of austerity.
Only 165,000 new jobs were created in April – far fewer than is needed to address existing unemployment and to create positions for the millions of Americans who are entering the workforce. [..]
“This is a classic ‘hold-steady’ report – enough job growth to keep the unemployment rate stable but not much more,” Heidi Shierholz, an economist with the Economic Policy Institute, says of the latest news from the US Department of Labor. “In good times, this would be fine, but at a time like this, it represents an ongoing disaster.”
Why are things so slow?
In a word: austerity.
E. J. Dionne: Obama’s Wake-Up Call
President Obama got roughed up by the pundit class last week. The question is what lessons he draws from the going-over. Here’s one he should take: The nation’s political conversation has grown stale and many Americans have lost the sense of what he is doing to improve their lives.
You can argue that this perception isn’t fair. The Affordable Care Act, if it’s implemented well, will improve a lot of lives. The economy is adding jobs, not shedding them. The deficit is coming down. Two front-burner initiatives, immigration reform and broader background checks-yes, they’ll be voted on again-really do matter.
But the fact is that the talk in Washington has been dominated by the same stuff we obsessed over in 2010, 2011 and 2012: a monotonous, uninspiring, insider clash over budgets. Even in that context, we barely discuss what government can do that would be helpful (except to air travelers).
Eugene Robinson: Burning Questions About Intervention in Syria
For all the armchair generals advocating U.S. military intervention in Syria, I have a few questions: [..]
Isn’t it the case that Syria presents no good options, only bad ones? Isn’t it unclear whether U.S. intervention can even alleviate the Syrian people’s pain, much less advance U.S. interests? And although doing nothing seems like a bad alternative, doesn’t the only other choice presently available-doing something for the sake of doing something-look worse?
Last question: We have been at war in Afghanistan for a dozen years and in Iraq for a decade. Have we learned nothing at all?
Betsey Stevenson & Justin Wolfers: Reinhart-Rogoff’s Lesson for Economists
What lesson can economists draw from the ruckus over a flaw found in an influential study by two Harvard University scholars? Our suggestion: Do a better job of checking one another’s work. [..]
Many observers have concluded that the error went undetected for so long because the research never underwent peer review, a traditional stop on the way to the coveted goal of publication in a prestigious journal. But peer review isn’t a line-by-line error check. It involves a few academics making a holistic judgment as to whether new research increases our understanding of the world.
There’s only one reliable way to verify empirical findings: Try to replicate them. In the narrowest terms, this can mean taking the author’s data and checking their spreadsheets, as economists Thomas Herndon, Michael Ash and Robert Pollin did in their critique of Reinhart and Rogoff. At a broader level, replication can mean collecting new data, assessing their reliability and using them to subject a finding to fresh scrutiny.
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