And if the debate looks anything like the campaign so far, we know what that will mean: a news analysis that devotes at least five times as much space to Mr. Trump’s falsehoods as to Mrs. Clinton’s.
If your reaction is, “Oh, they can’t do that — it would look like partisan bias,” you have just demonstrated the huge problem with news coverage during this election. For I am not calling on the news media to take a side; I’m just calling on it to report what is actually happening, without regard for party. In fact, any reporting that doesn’t accurately reflect the huge honesty gap between the candidates amounts to misleading readers, giving them a distorted picture that favors the biggest liar.
.. One all-too-common response to such attacks involves abdicating responsibility for fact-checking entirely, and replacing it with theater criticism: Never mind whether what the candidate said is true or false, how did it play? How did he or she “come across”? What were the “optics”?
.. news reporting should tell the public what really happened, not be devoted to speculation about how other people might react to what happened.
Vote as if It Matters
Does it make sense to vote for Gary Johnson, the Libertarian candidate for president? Sure, as long as you believe two things. First, you have to believe that it makes no difference at all whether Hillary Clinton or Donald Trump moves into the White House — because one of them will. Second, you have to believe that America will be better off in the long run if we eliminate environmental regulation, abolish the income tax, do away with public schools, and dismantle Social Security and Medicare — which is what the Libertarian platform calls for.
.. Why are minor candidates seemingly drawing so much support this year? Very little of it, I suspect, reflects support for their policy positions. How many people have actually read the Libertarian platform? But if you’re thinking of voting Johnson, you really should. It’s a remarkable document.
.. But anyone who calls him a “populist” isn’t looking at the general thrust of his ideas, or at whom he has chosen as economic advisers. Mr. Trump’s brain trust, such as it is, is composed of hard-line, right-wing supply-siders — whom even Republican economists have called “charlatans and cranks” — for whom low taxes on the rich are the overwhelming priority.
.. Remember, George W. Bush lost the popular vote in 2000, but somehow ended up in the White House anyway in part thanks to the Nader vote — and nonetheless proceeded to govern as if he had won a landslide. Can you really imagine a triumphant Mr. Trump showing restraint out of respect for all those libertarian votes?
States of Cruelty
Beyond this is the question of whether states are trying to make health reform succeed. California — where Democrats are firmly in control, thanks to the GOP’s alienation of minority voters — shows how it’s supposed to work: The state established its own health exchange, carefully promoting and regulating competition, and engaged in outreach to inform the public and encourage enrollment. The result has been dramatic success in holding down costs and reducing the number of uninsured.
Needless to say, nothing like this has happened in red states. And while the number of uninsured has declined even in these states, thanks to the federal exchanges, the gap between red and blue states has widened.
.. A large part of the answer, surely, is the usual one: It’s about race. Medicaid expansion disproportionately benefits nonwhite Americans; so does spending on public health more generally. And opposition to these programs is concentrated in states where voters in local elections don’t like the idea of helping neighbors who don’t look like them.
.. The point is that America would become a better place if more of us started paying attention to politics beyond the presidential race.
Money: The Brave New Uncertainty of Mervyn King
It was a big departure for the Federal Reserve—which has historically been run by bankers rather than academics—when Ben Bernanke, a distinguished monetary economist, was appointed as chairman in 2006. But Mervyn King, a former professor at the London School of Economics, was already running the Bank of England. And it was these two professors who guided the English-speaking world’s biggest economies through the recent financial crisis.
.. Now King, like Bernanke, has written a book inspired by his experiences. But it’s not at all the book one might have expected. It’s not a play-by-play of the crisis, or a tell-all, or a personal memoir. In fact, King not-so-subtly mocks the authors of such books, which “share the same invisible subtitle: ‘how I saved the world.’”
.. His assertion that we haven’t done nearly enough to head off the next financial crisis will, I think, receive wide assent; I don’t know anyone who thinks, for example, that the US financial reforms enacted in 2010 were sufficient. But his assertion that the whole intellectual frame we’ve been using is more or less irreparably flawed is a brave position that should produce a lot of soul-searching among both economists and policy officials.
.. The more or less standard account of the 2008 crisis, which King shares, is that the combination of stability-fostered complacency and deregulation led to an accumulation of financial vulnerabilities. Private debt was on a steady upward trend before the crisis, with the ratio of household debt to income rising by about 50 percentage points in both the US and the UK. This debt accumulation arguably made the economy more vulnerable to crisis, because debt-burdened households would find themselves in especially severe distress in the face of a downturn.
.. On the eve of the crisis, however, much of the financial system had enormous leverage—the ratio of debt to equity was 25 to 1 or more—leaving it extremely vulnerable to panic.
.. what almost everyone missed was the rise of “shadow banking”—new financial institutions and arrangements, such as hedge funds and money market funds, that bypassed traditional banking but recreated all the risks of the bad old days.
.. Once everyone noticed the importance of shadow banking, it was straightforward to pull off the shelf an intellectual approach for understanding the crisis. After the fall of Lehman Brothers, economists roamed the streets muttering to themselves “Diamond-Dybvig”—referring to an influential model for analyzing bank runs.
.. His reasoning, however, rests squarely on standard economic analysis—specifically, the concept of an “optimum currency area” defined by the tradeoff between the convenience of a single currency and the flexibility that comes with a country having its own currency.
.. He argues that Europe’s imbalances in production costs and hence in trade are too large to be resolved without either abandoning the euro or moving to full political union, and that given the lack of will for the latter, the former it must eventually be.
.. Still, King calls for what he says is a fundamental rethinking of bank regulation, replacing the lender of last resort with a “pawnbroker for all seasons.” The central bank would be prepared to lend to any financial intermediary, on any occasion, as long as assets were pledged as security—but the required security would depend on the assets. To borrow against low-quality assets, bankers would have to put up extra collateral, known in the trade as a “haircut,” with the size of such haircuts determined in advance.
.. All that talk about the need to ditch conventional economics, to embrace the reality of radical uncertainty—and the punchline is the same as the recommendations of every IMF program for the past sixty years: structural reform and free trade. Really? That’s it?