The Beltway Deficit Feedback Loop. Or, why we should all commit to reading various news sources

Last week, I was surprised by my students’ apparent belief that debt and deficit spending was high during the first Obama administration and that it was the first thing they thought of when asked about the effects of government spending.

By way of explanation, Greg Sargent of The Plum Line takes on the current Joe Scarborough vs. Krugman (and the world of economists) debate via the Beltway Deficit Feedback Loop.

The relentless bipartisan focus on the deficit convinces voters to be worried about it, which in turn leads lawmakers to spend still more time talking about it and less time talking about the economy, a phenomenon that is self-reinforcing. This is exacerbated by some commentators and news orgs, who continue to treat the deficit scolds with a great deal of deference, while marginalizing the opinion that we should prioritize boosting the economy and job creation as a means of getting the country’s fiscal problems under control over time without savage spending cuts that will hurt a lot of people. Back in 2011 one study actually confirmed that newspapers were spending far more time talking about the deficit than the economy — at a time when the recovery was in serious peril.

h/t @EJDionne


Dramatic changes (or not) in government spending

I’m teaching Methods again this semester, this time two sections with a total of 24 students. They’ll all be blogging again, so if you’re curious, I do recommend you check out their blogs. Links are forthcoming in the sidebar.

We started class this week with a little data work and a statistics refresher using data from the Bureau of Economic Analysis. It’s probably the only macro example I use all semester in great depth, but it serves to help students link their past work to what they are going to do in this class as well as give me the opportunity to show off impart some Excel shortcuts and basic data analysis skills and tips while reviewing statistics.

Since we use the entire set of GDP data from the NIPA tables, I like to take a bit of the class to talk about a few major events in economic history and highlight the idea that an action such as increasing government spending can both increase GDP and decrease it, according to economic theory. Which effect is bigger determines the outcome we see, even when both are happening.

Most students know that federal spending went up as a result of wartime production in the early 1940s and as a result of the New Deal in the mid-1930s, but I was surprised at how students answered my question of what effects does government spending have. Several students in both classes answered “debt” before anything else, and no one came up with “crowding out” (where government spending replaces private consumption and investment or drives up interest rates such that firms don’t invest but save) without significant prompting.

Once I said it, of course, they all recognized what I had been getting at, but I think it’s so indicative of the current political and news climate that students would default to an answer that’s not particularly true as a result of having heard it over and over again. Government spending, as anyone who was alive in the 90s knows, doesn’t have to result in more debt. A balanced budget is not outside the realm of possibility, and while crowding out is not necessarily a foregone conclusion either, it should fit much more nicely into students’ understanding of theory and a review of national income accounting. I know that Prof. Weise or Prof. Hu taught them about crowding out. It’s amazing how hammering on a subject can replace an outcome of an action in one’s mind. I was surely told over and over again that government spending caused crowding out, so it’s always first. These students have clearly been told that government spending causes debt. Weird. (As a side note, the Chronicle has a great article on how students struggle to transfer skills learned in one class to others.)

I’m getting away from the initial trajectory of this post, though. In addition to forgetting about crowding out, my students wanted to tell me that government spending had accelerated over the past few years. I immediately shot down the idea, saying how spending growth had slowed dramatically since we had officially left the recession, even if there had been an initial spike.

I was a little nervous when I said it that I had misspoken, but was grateful to come back to my office to this Krugman post: “the narrative that says that spending has surged under Obama is just wrong – what we’ve actually seen is a slowdown at exactly the time when, for macroeconomic reasons, we should have been spending more.” Ah, sweet vindication and relief.

Sisters and Partisanship

Andres Marroquin highlights a recent paper on his blog regarding the presence of sisters and its effect on political leanings and attitudes toward gender roles. The paper is clear, concise, seems statistically sound, and declares confidently that “having sisters causes young men to be substantially more likely to identify as Republicans and to express conservative viewpoints, particularly with regard to gender roles.”

In some ways, this outcome is counter intuitive. My initial thought was that having sisters should lead to a less rigid adherence to traditional gender roles because caring about one’s siblings means you would like them to be free to live their lives as they pleased, etc.

Oh, folly.

The paper does expand upon this more, but I don’t think it does a really good job of explaining the effect it actually finds. The result is not really that having a sister makes you more conservative, it’s rather likely that when boys have sisters and their parents reinforce typical gender roles by assigning gender-specific chores or other means, men are more conservative. It’s a more nuanced outcome and not as shocking, but it’s the more correct way to view it, I think. The paper is sold as a departure from the “parents influence children” literature and its contribution as “siblings influence each other,” but they don’t provide a clear mechanism for how the siblings actually influence each other outside of how the parents influence the children.

Statistically, having a sister might mean you are more conservative, but that doesn’t mean that boys with sisters will automatically be more conservative. There is still likely significant room for parental influence in establishing (or bucking) gender roles.

Things I actually read over break

As the semester was winding down, I published a list of books and things I wanted to read over the winter break. The best laid plans, of course, blah, blah, blah, but I did get some reading done, and I’m excited to share them with you.

  1. The Beautiful Things That Heaven Bears by Dinaw Mengestu (h/t @brettkeller) Really beautiful DC novel, immigrant novel, American novel. It’s a quick read and just lovely.
  2. A Working Theory of Love by Scott Hutchins (h/t my dear friend and colleague, Ruth) I loved the turns of phrase in this book. The story is a bit odd at times and falters a bit, but beautifully written. Ruth couldn’t get past the May-December romance, but it didn’t bother me like it did her.
  3. The Troubles: Ireland’s Ordeal and the Search for Peace
    I wish I could say I read all of this, but I only started it. It’s an exhaustive history of Ireland’s recent struggle. Astoundingly well researched. I hope to finish it sometime soon.
  4. My own papers, over and over again
  5. My own fellowship applications, over and over again. (Extra thanks to those who helped me with these.)

There’s always the summer, I guess, to get back to the things I said I’d read!

Fundamental division

In a totally not related but very appropriate follow-up to my post last week on the social safety net, Noam Scheiber at The New Republic has an analysis of the President’s inauguration speech up. Reading through the speech this morning, what struck me was just how progressive the rhetoric was, despite a relatively significant track record of not very progressive policies supported by the President over his first term. Scheiber points out that the speech is not unique for its liberal nature, but for its defense of liberalism, which is quite eloquent.

Scheiber also notes the fundamental divide that appears to exist in Americans’ understanding of the role of government that I mused on briefly.

What Obama has learned over the past four years is that we don’t actually agree on that much. A lot of people—a huge chunk of the country, in fact—emphatically disagree him. It turns out that the bloodsport aspect of politics isn’t so much a cause of our dysfunction. It’s largely an effect—an extension of the fact that people have really strong feelings on both sides of these questions. And if you want to win some of them over, it’s not enough to raise the level of political discourse and treat one another with more civility. You’ve got to change how people feel about the underlying questions of policy and values. You’ve got to explain to them why too much income inequality is counterproductive and why the safety net is indispensable.

I wonder if this marks a significant coming policy shift in the Obama administration. We shall see, I guess.

How to email your professor

It’s day one of my fourth semester at Gettysburg. It’s also Martin Luther King, Jr. Day. I hope you all are enjoying a day of remembrance. If you’re looking for something different to read, might I suggest former NC state attorney general Hampton Dellinger in the Atlantic on the MLK memorial? I’ll be reading syllabi and teaching my new students how to blog.

For all the students out there, a little primer on how to email your professors.

Happy first day!

The social safety net: Attitudes and values

The Pew Global Forum highlights a hefty paper by some folks at the New America Foundation (.pdf here) today on Americans’ attitudes towards the social safety net. There are enough facts in it that trying to summarize it here would be futile, but you can probably guess the results. Americans are less supportive of programs for the poor than their European counterparts. One of the most striking revelations is how much Republican support for taking care of those who cannot take care of themselves has declined, since the Reagan administration, but perhaps more interesting, since the end of the George W. Bush administration. Somehow, being in the biggest recession that most of us can remember led those who identify as Republicans to think we should support the poor less.

I won’t say I’m not baffled.

Though the study does not go into it, part of this likely has to do with the increased distaste for the national debt, a war that is raging in Congress right now with little end in sight. I’m not going to enter that fray or even link to the madness because I think it’s ludicrous and irresponsible, but you can google “debt ceiling” and see for yourself, if you like.

Reading the Pew survey reminded me of a conversation I had with my dad about Social Security. He’s eligible to collect benefits and is trying to decide whether to get on the rolls now or wait. He’s afraid that means testing will be implemented and then he will not be eligible, but starting to collect also means that he will not be able to work one or two days a week as he has done since he retired. Means testing turns Social Security into one of the programs for people who cannot take care of themselves, and if Pew is right, support for it will dramatically drop. Many of my father’s generation seem to be of the mindset that “I paid into Social Security; it’s my right to collect,” while many of my generation see a small chance of Social Security existing into the future (rightly or wrongly), and perhaps have tended to write off that portion of our incomes.

There is a lot more in the NAF report about the intersection of value and attitudes. It is worth a read.

Off to San Diego

This space has been pretty quiet lately as I’ve been preparing for interviews and writing applications and trying to get all that work done that I didn’t do during the semester. It’s not likely to pick up again as I’m off to San Diego today for the meetings of the American Economics Association. It’s a conference also known as the Allied Social Sciences Association Meetings, which makes my sociologist and anthropologist friends laugh out loud (because they’re not invited…shhhh!) It’s weird; it’s true. I don’t pretend to understand.

At any rate, if you’re interested in following along, there is a twitter handle for the meetings @ASSAmeeting, and a hashtag #ASSA2013. There’s even an app for that.

Sorry. I had to. But really, the app is super helpful. So much easier trying to put in meetings  and interviews on Pacific Time than subtracting hours from wherever I happened to be when the meeting was scheduled. It also has the full conference schedule.

If you’re around and want to grab coffee or a drink or a meal, drop me a line, tweet me, or call. I’m here all week, folks.