From Nate Fick's segment on "All Things Considered" on Thursday, arguing that there are only limited opportunities to apply what has been learned in Iraq to new operations in Afghanistan.

Paul Krugman's column today is pretty mild, until his discussion of the likely path of the economy leads him to this prescription for the new president:

But what the economy gives, it can also take away. If the current slump follows the typical modern pattern, the economy will stay depressed well into 2010, if not beyond — plenty of time for the public to start blaming the new incumbent, and punish him in the midterm elections.

To avoid that fate, Mr. Obama — if he is indeed the next president — will have to move quickly and forcefully to address America’s economic discontent. That means another stimulus plan, bigger, better, and more sustained than the one Congress passed earlier this year. It also means passing longer-term measures to reduce economic anxiety — above all, universal health care.

Peter Goodman and David Herszenhorn tell us in today's New York Times that "Democrats See a Need for Further Economic Stimulus."  The discussion is a very good example of what the absence of the last post's budget target can enable--every political faction advocating for a handout today funded by taxpayers in the future.  There should be no need for further spending in 2008 & 2009 that is not combined with lower spending or higher taxes in 2010 & 2011, when the economy has turned around.

In the article, the references to infrastructure spending are what caught my eye.  Consider:

I think we've got an old-fashioned disagreement here at CG&G.  Unlike Stan, I fully expect the federal government to abide by a balanced budget standard, and I reserve the right to be disappointed, cranky, and vocal about it when it doesn't.  By a balanced budget standard, I mean:

1) For the General Fund (i.e., excluding Social Security and Medicare Part A), a target of balancing the budget over a complete business cycle.  Alternatively, I would accept a weaker standard of no upward trend in the ratio of (total) debt to GDP. 

This allows for countercyclical budget policy.  It does not allow for so-called stimulus packages that are enacted with no intention of repaying the additional borrowing at the next turnaround in the business cycle.  It also does not allow for semi-annual budget forecasts that have on-budget deficits during periods of above-average growth.  With this standard in place, it doesn't run afoul of Stan's concern about whether a budget deficit is the short-term policy in 2013.

I agree with Stan -- this post by Brad DeLong about his appearance opposite Grover Norquist on a BBC "news" program is a classic.  If Norquist is the BBC's idea of a right-of-center expert on the challenges facing Fannie Mae and Freddie Mac and the implications of those challenges for federal policy, then the BBC does not qualify as a news organization.  And as a result I care as much for its continued existence as I do any other reality TV program, which is not much at all.

It is textbook civics to assert that the three branches of the U.S. federal government are separate but equal.  While there should be checks and balances, most of the activity of government should be done through the legislature, as the most broadly representative of those branches.  We are far from this ideal and moving in the wrong direction.

Just look at where the manpower is in the federal government--civil servants working in cabinet departments headed by political appointees of the President.  Consider today's news story in which the Office of the Vice President is accused of deleting sections of the Congressional testimony of the head of the CDC on climate change:

In my day job, I'm the director of the Nelson A. Rockefeller Center at Dartmouth College.  Tomorrow marks the 100th anniversary of Rockefeller's birth.  To commemorate the occasion, The New York Times published an op-ed by noted historian Richard Norton Smith, who spoke at our Centennial events back in April.  Smith's conclusion is one with which I wholeheartedly agree:

Three decades later, “Rockefeller Republican” is widely seen as a contradiction in terms. Largely forgotten is the original meaning of the phrase, a counterintuitive coupling of late ’50s fiscal responsibility and early ’60s social justice — the same formula espoused by a majority of today’s electorate, for whom solving problems and forging consensus takes precedence over ideological purity.

The top line numbers in today's Employment Situation news release from the BLS showed net job losses in the establishment survey (-62,000), making for a total of 438,000 net jobs (0.32%) lost since the December peak, and the unemployment rate holding steady at 5.5 percent.

With more bad news, we are likely to hear news reports about the unequal burden of the labor market contraction.  I was curious in particular to see how female heads of household were faring.  The BLS reports their unemployment rate on a seasonally unadjusted basis, so the following chart shows 40 years of annual data, measured in June of each year, for all persons (in the civilian noninstitutionalized population) 16 and over, all women 16 and over, and all female heads of household:

A few features of the chart stand out: 

The New York Times and other media outlets reported today that Rush Limbaugh has signed a contract extension through 2016 worth about $400 million.  Perhaps with an eye toward higher marginal tax rates in the years to come, about $100 million is in the form of a signing bonus.

I think Rush Limbaugh could lay claim to being the original blogger.  The core of his 3-hour weekday show is Limbaugh's commentary on and parody of what newsmakers have said.  Roll an audio clip.  Criticize or find an inconsistency in the speaker's argument.  Lampoon the speaker in the process.  Reaffirm ideological views.  Roll another clip.  He makes no apologies for his conservative ideology and his partisan edge.  You find a lot of this in the blogosphere, except that Limbaugh constructs and distributes his work as audio rather than as text. 

Consider this quote from this Sunday's New York Times Magazine cover story by Zev Chafets.

Stan asks an interesting question:

If consumers are willing to pay higher prices for gasoline, why should we think that energy companies are going to do anything but charge those higher prices?

We should not think anything but that, except that we should acknowledge that producers of any good might be willing to trade off some short term profits for greater profits over the longer term.  With gasoline, we are certainly not in that environment, whether or not we ever were.  (Were low energy prices of past decades "teaser" rates?  Did we get discounts on our first "hits" of petroleum?)

He then asks two other questions that come up in various guises when dealing with economic policy:

In other words, in what's supposed to be a market-driven economy, aren't we complaining about the market working?

[...]

Finally, are we starting to think of gasoline as a public good that the government should provide?

I was wondering over the past few days, particularly with the recent media attention devoted to General Wesley Clark's appearance on Face the Nation and its several day aftermath in the news media, how long it should take people to make up their minds about how to cast their ballots in an election like this year's primaries or general election.  The relevance Clark's interview is that I think it is a good example of a political celebrity saying something that is not well considered (to put it charitably), easy to sensationalize in an excerpt, and of almost no consequence in helping voters decide which candidate to support.

The Washington Post ran an op-ed yesterday with the title, "5 Myths About the Death Of the American Factory," by Gilbert Kaplan, an international trade lawyer.  He opens with a bad premise:

Sure, U.S. banking is in trouble, but the longer-term and possibly more damaging threat to the nation's prosperity is the decline of the manufacturing sector.

As noted by a commenter on Stan's post, the SAFE Commission struck out as an amendment in committee to a financial services appropriations bill.  Here's how CongressDaily reported it.  Stan was certainly on the money, when he anticipated a reaction that the Congress would not want to outsource its duties (presumably to contine the status quo in which they are simply not being done by anyone):

House Appropriations Chairman David Obey blasted the idea because the commission would be able to force appropriators to implement a solution that they would have no hand in creating and might not be workable.

Between now and the November elections, we will likely hear Senator McCain describe his preferences for Supreme Court nominees who will not "legislate from the bench."  I think the liberal wing of the court--including Justice Kennedy writing for the 5-4 majority--gave him a clear example of legislating from the bench in today's Kennedy v. Louisiana decision.  From The New York Times:

WASHINGTON — The death penalty is unconstitutional as a punishment for the rape of a child, a sharply divided Supreme Court ruled Wednesday.

Pete is right to say that deficit hawks should unite, but I don't know if the SAFE Act is enough.  It calls for a commission to address:

1. the unsustainable imbalance between long-term federal spending commitments and projected revenues;
2. increases in net national savings to provide for domestic investment and economic growth;
3. the implications of foreign ownership of federally issued debt instruments; and
4. revision of the budget process to place greater emphasis on long-term fiscal issues.

I agree that within a generation, the cost of our long-term entitlement programs will push our fiscal situation into very dire straits.  Our long-term problems will have become short-term problems because we let our current window of opportunity to resolve them close.  But the language in the bill does not mention, and the SAFE Commission would only tangentially have anything to say about, the fact that we cannot bring ourselves to balance the on-budget (or non-OASDHI) deficit to zero.  And until we do that, or unless the SAFE Commission is explicitly empowered to address that in addition to the long-term entitlements, I think that meaningful reform of long-term entitlements is dead in the water politically.

Gene Steuerle holds forth on the very undemocratic impact of our generation's promises to ourselves on the tax burden of the next:

At its core, democracy is about equal rights to vote—and have your representatives vote—on the nation's current priorities. But many recent laws attempt to deny us—and, even more so, our children—the opportunity to determine those priorities.

The reason is simple, but its effects are profound. Never before in U.S. history have so many promises been made to so many people for so many years into the future. Every additional promise, no matter what its merit, only attempts to tie that fiscal straightjacket tighter around future voters.

If our tax laws merely stay the same from 2006 to 2010, for instance, government revenues would rise by several hundred billion dollars. But guess what? Most of those revenue increases are already committed, mainly to the growing costs of our current health and retirement programs.

It seems like I'm not the only one talking about carbon emissions from air travel.  The New York Times reports today on the challenges of reducing emissions from low-cost airlines even as fuel prices rise.

The growth in emissions from air travel had “far exceeded growth by any other mode,” a European Environment Agency report issued this year said. Between 1990 and 2005, the last full year from which data were available, total carbon dioxide emissions from aviation in the European Union grew by 73 percent.

“This could threaten the ability of the E.U. to meet increasingly ambitious emission reduction targets,” the report’s authors said.

This week, the Rockefeller Center at Dartmouth (where my day job is to be the director) has been hosting a conference, "Going to Extremes: The Fate of the Political Center in American Politics." The papers can be found here. The discussion has been excellent--lots of interesting ideas for an economist to pick up from a group of thoughtful political scientists.

Toward the end of the conference, a discussant brought out a contrast between a centrist's identification with his party and with his constituency.  What does the centrist do if the party's position disagrees with his constituents' preferences?  The answer, spoken from the party leadership to the representative, used to be, "Vote with your constituency, because we want you back."  Now, I'm not so sure.

Roger Lowenstein had a good op-ed in Sunday's Washington Post, "Read My Lips: We Need These Taxes."  I liked the way he started it:

Let's imagine an alternate universe. The U.S. government is running a large and growing deficit. Not far down the road it faces huge increases in Social Security and Medicare costs. Naturally, the candidates for president want to remedy this by raising revenue. They don't want us to bequeath bigger deficits to our children or stake our future on foreigners' willingness to keep lending us money.

But have you heard this speech? "My fellow Americans, I have a plan to raise taxes so that the budget will be closer to balance and future Americans won't have to worry about their retirement security." Neither have I.

That's the speech that should appeal to those on the Left.  He lists five key tax changes he would make to help close the deficit and increase equity:

When it announced its new $15 fee for the first checked bag, I declared American Airlines to be a "Microeconomics Free Zone."  Its transgression, I thought, was not considering the external, but in my view largely non-pecuniary, costs of doing this. Joe Brancatelli's indispensable "Seat 2B" column at Portfolio.com does me one better.  He runs the numbers and wonders if American will net any revenue from this at all.