Bad Faith, Pathos and G.O.P. Economics

On professionals who sold their integrity, and got nothing in return.

As 2018 draws to an end, we’re seeing many articles about the state of the economy. What I’d like to do, however, is talk about something different — the state of economics, at least as it relates to the political situation. And that state is not good: The bad faith that dominates conservative politics at every level is infecting right-leaning economists, too.

This is sad, but it’s also pathetic. For even as once-respected economists abase themselves in the face of Trumpism, the G.O.P. is making it ever clearer that their services aren’t wanted, that only hacks need apply.

.. Professional conservative economists are something quite different. They’re people who even center-right professionals consider charlatans and cranks; they make a living by pretending to do actual economics — often incompetently — but are actually just propagandists. And no, there isn’t really a corresponding category on the other side, in part because the billionaires who finance such propaganda are much more likely to be on the right than on the left.

.. Even during the Obama years, it was striking how many well-known Republican-leaning economists followed the party line on economic policy, even when that party line was in conflict with the nonpolitical professional consensus.

Thus, when a Democrat was in the White House, G.O.P. politicians opposed anything that might mitigate the costs of the 2008 financial crisis and its aftermath; so did many economists. Most famously, in 2010 a who’s who of Republican economists denounced the efforts of the Federal Reserve to fight unemployment, warning that they risked “currency debasement and inflation.”

Were these economists arguing in good faith? Even at the time, there were good reasons to suspect otherwise. For one thing, those terrible, irresponsible Fed actions were pretty much exactly what Milton Friedman prescribed for depressed economies. For another, some of those Fed critics engaged in Donald Trump-like conspiracy theorizing, accusing the Fed of printing money, not to help the economy, but to “bail out fiscal policy,” i.e., to help Barack Obama.

It was also telling that none of the economists who warned, wrongly, about looming inflation were willing to admit their error after the fact.

But the real test came after 2016. A complete cynic might have expected economists who denounced budget deficits and easy money under a Democrat to suddenly reverse position under a Republican president.

And that total cynic would have been exactly right. After years of hysteria about the evils of debt, establishment Republican economists enthusiastically endorsed a budget-busting tax cut. After denouncing easy-money policies when unemployment was sky-high, some echoed Trump’s demands for low interest rates with unemployment under 4 percent — and the rest remained conspicuously silent.

What explains this epidemic of bad faith? Some of it is clearly ambition on the part of conservative economists still hoping for high-profile appointments. Some of it, I suspect, may be just the desire to stay on the inside with powerful people.

Will the Kerch Blockade Make Putin Great Again?

The narrative that Russia is under attack has long dominated Kremlin propaganda, with Putin positioning himself as the commander of a fortress besieged – militarily, economically, and even in the domain of international sports – by a hostile West. This propaganda, already building in volume in 2012, after Putin won his third presidential term, reached a crescendo in 2014, after the annexation of Crimea.

So far, there has been no diminuendo, and there is unlikely to be one so long as Putin’s siege narrative strategy continues to yield political dividends. Prior to the annexation of Crimea, his approval rating had dropped to record lows; afterwards, it surged to more than 80%.

But, since last summer, Putin’s approval ratings have again dropped precipitously, to 66% in October and November. Beyond “making Russia great again” on the international stage, Putin was supposed to improve Russians’ standard of living. Instead, after four years of falling real incomes, the government announced deeply unpopular pension reforms, which included an increase in the retirement age.

Addressing Russians’ economic grievances will not be easy. Russia’s economy is under severe strain as a result of the sanctions imposed by the West over Crimea. More important, Russia’s state-capitalist model has led to weak competition and declining incentives for private investment and entrepreneurship.

With few options for rallying public opinion, Putin may well have decided that it is time to “remind” Russians that they are under attack. (Ukraine’s president, Petro Poroshenko, may also benefit politically from escalating tensions as he seeks to lift his dismal approval ratings ahead of his reelection bid in March.)

.. To be clear, Ukraine is not attacking Russia. The Ukrainian naval vessels were in full compliance with a 2003 bilateral treaty governing access to the Kerch Strait and the Sea of Azov. But, by asserting that the vessels entered Russian waters illegally, not to mention escalating tensions with the West, Putin may be hoping to breathe new life into the siege narrative, thereby inspiring the kind of primitive patriotism on which he has long relied.
.. But Putin is likely also to draw more public attention to Russia’s military-industrial complex and weapons development, while celebrating past glory, especially the mythologized version of World War II that he has established as a component of his own legitimacy.
.. For example, the veneration of Stalin, with whom Putin shares more than a few traits, has no doubt contributed to many Russians’ greater willingness to accept repression. The grand military parade commemorating the anniversary of the end of the Siege of Leningrad, planned for January 29 in St. Petersburg, may inspire patriotism, but it will in no way reflect the real drama of the city’s starving inhabitants.
.. In the “Great Waltz” of July 1944 – which the Novgorod event will reenact – 57,000 German prisoners of war were marched through the streets of Moscow, Stalin’s goal being to humiliate the Germans and remind Muscovites of their hatred for their enemies. But, in the event, many Russians pitied the prisoners, and some even threw bread to them.
.. When sociologists from the Levada Center recently asked 20-year-old Russians to identify the country they view as a model for others, they chose
  1. Germany, followed by
  2. China and Putin’s favorite villain, the
  3. United States.

While these young people support Russian greatness, they define greatness not only in military terms, but also on the basis of economic prosperity and social progress.

.. It does not help that Putin’s foreign-policy gambits have become increasingly dubious. It is hard for many Russians to see why their leaders have channeled so many resources to Syria when there are such pressing challenges at home. Watching a Russian boat ram a Ukrainian boat is no substitute for economic opportunities.

For a long time, the slogan “we can repeat” – a reference to the Soviet Union’s WWII victory – was popular in Russia. But the truth is that we cannot. We lack not only the resources, but also the will to let our young people die fighting another country’s young people. Indeed, the last thing Russians want is to repeat a war that left 27 million of their countrymen dead.

 

Damage Control at Facebook: 6 Takeaways From The Times’s Investigation

In fall 2016, Mark Zuckerberg, Facebook’s chief executive, was publicly declaring it a “crazy idea” that his company had played a role in deciding the election. But security experts at the company already knew otherwise.

They found signs as early as spring 2016 that Russian hackers were poking around the Facebook accounts of people linked to American presidential campaigns. Months later, they saw Russian-controlled accounts sharing information from hacked Democratic emails with reporters. Facebook accumulated evidence of Russian activity for over a year before executives opted to share what they knew with the public — and even their own board of directors.

In 2015, when the presidential candidate Donald J. Trump called for a ban of Muslim immigrants, Facebook employees and outside critics called on the company to punish Mr. Trump. Mr. Zuckerberg considered it — asking subordinates whether Mr. Trump had violated the company’s rules and whether his account should be suspended or the post removed.

But while Mr. Zuckerberg was personally offended, he deferred to subordinates who warned that penalizing Mr. Trump would set off a damaging backlash among Republicans.

Mr. Trump’s post remained up.

As criticism grew over Facebook’s belated admissions of Russian influence, the company launched a lobbying campaign — overseen by Sheryl Sandberg, the company’s chief operating officer — to combat critics and shift anger toward rival tech firms.

Facebook hired Senator Mark Warner’s former chief of staff to lobby him; Ms. Sandberg personally called Senator Amy Klobuchar to complain about her criticism. The company also deployed a public relations firm to push negative stories about its political critics and cast blame on companies like Google.

Those efforts included depicting the billionaire liberal donor George Soros as the force behind a broad anti-Facebook movement, and publishing stories praising Facebook and criticizing Google and Apple on a conservative news site.

Facebook faced worldwide outrage in March after The Times, The Observer of London and The Guardian published a joint investigation into how user data had been appropriated by Cambridge Analytica to profile American voters. But inside Facebook, executives thought they could contain the damage. The company installed a new chief of American lobbying to help quell the bipartisan anger in Congress, and it quietly shelved an internal communications campaign, called “We Get It,” meant to assure employees that the company was committed to getting back on track in 2018.

Sensing Facebook’s vulnerability, some rival tech firms in Silicon Valley sought to use the outcry to promote their own brands. After Tim Cook, Apple’s chief executive, quipped in an interview that his company did not traffic in personal data, Mr. Zuckerberg ordered his management team to use only Android phones. After all, he reasoned, the operating system had far more users than Apple’s.

Washington’s senior Democrat, Senator Chuck Schumer of New York, raised more money from Facebook employees than any other member of Congress during the 2016 election cycle — and he was there when the company needed him.

This past summer, as Facebook’s troubles mounted, Mr. Schumer confronted Mr. Warner, who by then had emerged as Facebook’s most insistent inquisitor in Congress. Back off, Mr. Schumer told Mr. Warner, and look for ways to work with Facebook, not vilify it. Lobbyists for Facebook — which also employs Mr. Schumer’s daughter — were kept abreast of Mr. Schumer’s efforts.

 

Related:

What Facebook Knew and Tried to Hide (28 min audio)