Read Stuff, You Should

Happy Birthday to Stephen Breyer, 75. Yeah, 75.

Some good stuff:

1. Sometimes, a good obliteration is exactly what you're in the mood for. If so, Amanda Hess has one.

2. "[Milton] Friedman hasn't disappeared from policy discourse; he's disappeared from right-wing policy discourse." That's Noah Smith, nailing it.

3. And Tom Nawrocki's appreciation of Jack Germond.

Read Stuff, You Should

Happy Birthday to Phoebe Cates, 50. Hey, Fast Times and Clueless fans -- and if you aren't, what's wrong with you? -- if you haven't see Amy Heckerling's Vamps yet, I highly recommend it. It's not, I'm afraid, as good as Clueless or as iconic as Fast Times, but it's excellent fun.

A little good stuff...

1. Matt Yglesias knows how to dress up a chart.

2. From the Monkey Cage: Corrine McConnaughy on Trayvon Martin.

3. And Ta-Nehisi Coates on Trayvon Martin.

Those Radical Democrats

Proof today that people just don't understand the basic Keynesian ideas about deficits. At Roll Call, Nathan Gonzales claims that Obama-era Democrats are "rallying against two of the highest profile accomplishments" of Bill Clinton's presidency. Timothy Carney:

How extreme have Dems become? GOP adopts 1990s Dem policies, Dems blast them for it

Well, not really.

On one of the two issues Gonzales raises -- DOMA -- is certainly a large flip for most Democrats. I wouldn't call it a Clinton "high profile accomplishment," but no question about it: calling the Democrats "extreme" on LGBT issues in 2013 compared with where they were in the 1990s is a fair call. Of course, that also would require calling over half the nation "extreme," but it's a big change, no question.

But the other one? No way. Gonzales raps Democrats for celebrating a balanced budget in the 1990s while running deficits in the current decade. He's sort of dimly aware of a justification:

Of course, Democrats will point to a difference in the state of the economy from the mid-1990s to today, but that doesn’t completely explain the marked change in philosophy when it comes to a balanced budget.

That's totally wrong; there's no "philosophy" change here at all! Basic Keynesianism says: run deficits during hard times, and then balance the budget (or run surpluses) during good times. Okay, it's a bit more complicated; given the very particular circumstances of 1993-1994, Team Clinton was convinced that medium-term deficit reduction was good for short-term growth (although they also pushed a stimulus package in 1993 that was killed by filibuster). At any rate, while they certainly did and do brag about the Clinton balanced budgets, there was never a "philosophy" of balanced budgets. 

The actual principle? It's even simpler than "deficits during recession, balance during booms." It's: deficits are a tool of economic policy. That's all. There's no inherent correct level for budget deficits, and there's nothing particularly good or bad, in the abstract, about deficits; it's all about how fiscal policy affects the larger economy.

And Democratic have pretty much stuck with that from the 1930s, certainly from the 1940s, to now. They've made mistakes, certainly, along the way, and every once in a while they'll give in to the rhetoric of deficits fetishists, but there's zero change of philosophy that I can see.

Read Stuff, You Should

Happy Birthday to Philip Bailey, 62.

Fortunately, there's good stuff:

1. With the caveat that I haven't read it, I suspect this new paper, "Preventing Youth Violence and Dropout: A Randomized Field Experiment," is something people should know about. Sara Heller, Harold Pollack, Roseanna Ander, Jens Ludwig.

2. Ezra Klein on the Senate.

3. Greg Koger, cranky about third-rate think tank research. Not about the Senate, although Greg is mentioned in the previous linked item.

4. And Noah Smith praises getting a Ph.D. in economics.

Liberal Hack Economists Remain MIA (ACA Edition)

To return to an oldie but goody: it's still striking to me that no one has jumped up to fill what appears to be a market opening for hack economists on the liberal side. This comes to mind this time from the reaction of economists, including liberal economists, to the sudden decrease in health care inflation over the last few years. As Annie Lowrey reports:

Major new studies from researchers at Harvard University, the Henry J. Kaiser Family Foundation and elsewhere have concurred that at least some of the slowdown is unrelated to the recession, and might persist as the economy recovers. 

Not, that is, "Obamacare is slashing health care inflation!" Lowrey does have some relatively optimistic quotes from David Cutler, health care economist, but they're still very tempered.

What we don't have, and haven't anywhere that I've seen it, are liberal economists claiming that the entire slowdown in costs has been ACA-related, or even the bulk of it (the bulk is in fact, economists tell us, recession-related, and of the rest it's not altogether clear where it came from).

Just as we didn't see any liberal economists last year arguing that the economy was in fact way more healthy than people thought. If anything, in the lead-up to an election with a Democrat in the White House, most prominent liberal economists stressed the weaknesses of the economy.

There are plenty of liberal hack pundits; there's nothing about being a liberal that prevents people from embracing convenient arguments, even if they're barely plausible. And there are conservative hack economists, so there's nothing about being an economist that prevents lame spin. But for whatever reason, there aren't any liberal economists who function as party apologists. That doesn't mean that liberal economists are always right about everything; it also doesn't mean that there's no biases involved in their work (more, perhaps, in choice of projects, for example). It just means that, as far as I can see, they tend strongly to call them as they see them, rather than adapting their analysis and talking points to whatever the Democratic Party happens to need at the time.

And I'm not saying that there should be liberal hack economists. I don't think liberals are worse off because of this gap, at all. I just think it's odd that either there's no demand for it, or there's no one willing to fill the demand.

Catch of the Day

Well, some days, you don't have much of a choice, do you? The catch has to go to economists Thomas Herndon, Michael Ash, and Robert Pollin, who have a new paper out demolishing Carmen Reinhart and Kenneth Rogoff on the effect of high government debt on the economy -- with a big assist to Mike Konczal, who wrote a clear and readable blog post explaining the conflict nicely.

The headline here is that Reinhart and Rogoff apparently made a simple computation error, but the Herndon-Ash-Pollin critique goes well beyond that -- as do other critiques previously aired (disclaimer: I haven't read either paper; I'm just relying on what economists and economics-literate bloggers and reporters are saying).

While it's probably a good idea to be cautious of the critique (just as it would have been a good idea to be cautious about the original paper), it certainly isn't good news for preachers of austerity.

I've seen some snark on twitter suggesting that no one who has recommended austerity, including those who specifically cited Reinghart-Rogoff as their reason, will flip as a result of this. That's probably correct! But only because it's extremely unlikely that very many people really relied on economics in the first place.

So my guess is that this debunking will get exactly as much weight now for most people as the original paper had: very little.

A more complicated question is how much should economists count towards economic policy? After all, if the profession is capable of making a mistake this big (apparently), should they be trusted? The answer, I would argue, is that politicians should certainly make use of economists -- and other experts -- but be very wary about hearing only what they want to hear. That's a lot easier said than done, and it doesn't really give policymakers any clear, bright rules, and it doesn't even assure success if you're good at it. All it does is increase your chances of policy success. But that's still worthwhile!

That is, all of this does really point to a key governing skill: being good at sifting through expert advice. And perhaps the first thing about that is that a politician will only be good at it -- only get good at it -- if she realizes that it's important and really tries to do it. As opposed, say, to simply choosing policy and then seeking out supporting expert opinions. Because one can always find expert support, no matter how goofy the policy preference. Again, however, even if you go about it the right way -- even if you are looking for what the experts really do think, and you want to take that into account when choosing policy -- it's still going to be extremely difficult to be good at it. Especially when you realize that policy-makers in general,  and presidents in particular, must do it across an impossibly wide range of policy areas which involve all sorts of different disciplines. Each of which has its own internal debates. Many of which have entirely different forms of credentialing and peer review. Most of which ever have a definitive answer -- but all of which have people who promise that what they have found is the definitive answer.

Also: nice catch!

Catch of the Day

I'll go with a Catch to a wonderful post by Dylan Matthews that goes through all the reasons why government budget deficits are thought to be bad -- and why each of them is either wrong all the time, or wrong some of the time.

It's very, very, good. It doesn't draw any hard-and-fast policy conclusions about what to do right now, but what it does do is explain that some of the anti-deficit rhetoric is pure fantasy that we should ignore, while other arguments are more serious.

I'm not sure that it really does answer the question, however, of why people love balanced budgets so much. I have a piece coming out sooner or later on that...I really don't think we do know the answer. But Matthews definitely captures the rhetorical support for eliminating deficits and why much of it -- but definitely not all -- is pure nonsense.

Nice catch!

Read Stuff, You Should

Happy Birthday to Dick Allen, 71. 19th all time in OPS+. Classic fringe HOFer; could be the answer to "which player makes for the best HOF argument?"

Plenty of good stuff:

1. Greg Koger on the Rand Paul filibuster.

2. Conservative think tanks and the states, from Patrick Caldwell.

3. Abortion, the Jews, and religious freedom, from Sarah Posner.

4. Andrew Sullivan on marriage and democracy.

5. If you believe that the reason the United States shouldn't run budget deficits is because it will turn into Greece, you really should read Matt O'Brien on why that's nonsense.

6. Andrew Sprung on the future grand bargain -- in health care. Plausible? I don't know. Maybe.

7. And I don't actually care very much about Bloomberg and sugary drinks at all, but I do like a great blog post headline, such as this one (apparently written by Suzy Khimm) from a Sarah Kliff post. And anyway, more press attention to implementation is always a very good thing.

Read Stuff, You Should

Happy Birthday -- why not -- to Marc Blucas, 41.

And a bit of the good stuff:

1. E.J. Graff: "Rape is not inevitable."

2. "After Obama was re-elected and Democrats maintained control of the Senate, however, I adjusted my views of what was possible in the next four years. But many of my fellow conservatives have not." That's Philip Klein, on understanding the playing field.

3. The Louie Giglio mess, from Sarah Posner.

4. Paul Krugman pretty much had the same reaction to the coin-backlashers that I had.

5. And Brad DeLong looks back at a letter to the Fed.

Catch of the Day

To Brad DeLong, for debunking some bad budget history:

Why 1970--when nothing happens to derange either the pattern of deficits as a share of GDP or the trajectory of the debt-to-GDP ratio--rather than 1980, when the election of Ronald Reagan does change the pattern of deficits and the trajectory of the debt-to-GDP ratio?

Why speak of the late 1990s only as the era of the dot-com boom (which makes about 1/4 of the difference for the deficit) rather than the era of Clinton tax increases and spending cuts (which make about 3/4 of the difference for the deficit)--both of which were very hard-fought and hard-won, and then casually trashed and reversed by George W. Bush and his Republicans in the early 2000s?

I read this, and I sense--from Thornton and Taylor--a willful denial of a lot of the past generation's American economic history.

Something that I'm amazed at is the success of the idea that the prosperity of the second half of the 1990s simply doesn't count. Yes, of course, some of it was unsustainable. All of it? Nope. And you know what? It existed, regardless. Unless one believes that subsequent policies were ideal -- does anyone? -- then it's very hard to say that it was responsible for the problems of the early 2000s. Let alone the recession beginning in 2007, or the crash in 2008. And if it wasn't responsible for those problems, then whose to say we shouldn't count the good times as, well, good times? I mean, yes, some people thought they were richer than they really were, or would be, because they had paper gains in the stock market that would never be realized (although some people, of course, did realize those gains). But people were also working, producing goods and services and getting paid for them, all of which made them individually and the national as a whole more wealthy. That's real, not phony.

Hmmm...I think I'll sneak something else in here at the bottom. Steve Kornacki had a history of GOP tax monomania the other day which was mostly excellent, but I do have one small quibble (surprising, because he's extremely reliable on this sort of thing). Anyway, it doesn't really matter to the main point he's making, but he conflates old-fashioned Eastern Establishment Republicanism with opposition to post-1978 GOP tax policy, so he winds up saying that of the 1990 budget fight: "At the time, the top Republican in the Senate (Bob Dole) and the top Republican in the House (Bob Michel) were also Eisenhower-types who’d never been comfortable with supply-side." I don't think so. The key here is that the old split was between Taft Republicans and Ike/Dewey Republicans, and it was the Taft side that really cared about budget deficits -- and while they were certainly anti-spending, they were not anti-tax. In other words, they were real deficit hawks (and got made at Ike when he supported deficits). I'd classify Dole, certainly, and probably Michel too as solidly on the Taft side of that divide. The supply-side idea, and the fixation on low taxes in general, should be seen as a movement within the conservative side of the party, not one separating conservatives from Eastern Establishment types.

Anyway, back to economic and budget history: nice catch!

Read Stuff, You Should

Happy Birthday to Barry Andrews, 55. For some reason, I've never much listened to Shriekback. I really should, at some point. I like White Music, but I'm a very big fan of Go 2. Two stars, All Music? No way.

Aw, no one cares, I suppose. So I'll move on to the good stuff:

1. I really liked this John Sides post about the recent jobs report, and the remaining ones.  I've been saying similar things, but he really nails it.

2. Joseph Cera: the "better off" question may have caused the Democratic bounce by framing the economic question in a way that favors Barack Obama.

3. Republican amnesia: wait, they can't remember why there's a scheduled sequester? Suzy Khimm, fortunately, remembers.

4. Molly Ball on Barry Goldwater's granddaughter, Obama supporter. Although it seemed to me that there was a fair amount of feuding involved in addition to policy preferences. But always happy to link an Arizona story.

5. Abby Rapoport is absolutely right: state legislative elections are really, really important. I'm afraid I rarely talk about state politics, mostly because I really don't know enough to say much about it...basically, every few months I'll toss in a reminder about how important state and local politics are, and that's about it. But it's true! Anyway, she's looking at what's at stake this year.

6. Hey, remember the war on terror? Spencer Ackerman has a quick overview of what's going on now. Helpful.

7. And if you didn't see Mike Konczal's brilliant illustration of Bernanke, QE3, NGDP targeting, and the rest of it then you really should click over now and enjoy. And learn something.

Catch of the Day

Two in a row on the same subject? Yup. Today's is to Mike Konczal for ripping apart another part of Team Romney's defense of Romney's economic thingy (plan? show me numbers, or at least some sort of details). Well, actually, Konczal rips apart some of the supporting evidence: the bit about how economic uncertainty has increased under Barack Obama, and is therefore responsible for the mediocre recovery.

The problem? Brad DeLong caught part of this in the post I linked to yesterday, but Konczal discovers that the underlying paper the Romney economists are citing measured economic uncertainty in large part by counting mentions of it in newspapers...which happened to spike up just around the time that Republicans started pushing the idea that economic uncertainty was a big problem. Got it?

Spokespeople for the conservative movement tell reporters that President Obama's policies are causing economic uncertainty. Reporters write it down and publish it. Economic researchers search newspapers for stories about economic uncertainty and policy, and create a policy uncertainty index out of those talking points. The conservative movement then turns around and points to the policy uncertainty index as scientifically justifying their initial talking points about Obama and uncertainty as well as the need to implement their policies. Taa-daa! Magic.

Yikes! That's some real, fine, first-rate hackishness there.

Also nice: Ezra Klein asks the economists cited by Team Romney whether they agree with how their research was used, and they don't.

Putting the two days together:

Essentially, it looks to me as if Romney's campaign decided that it would be useful to have respectable economists supporting their plan, but didn't actually think it would be useful to have a plan, and yet didn't see any real contradiction between those two things -- or at least no contradiction worth worrying about. And there doesn't seem to be any shortage of Republican economists available to perform such services. So there you go.

And: nice catch!

Catch of the Day

An easy choice: Brad DeLong gets the coveted CotD for a thorough fisking of the economists defending Mitt Romney's economic plan. Except, as DeLong says, it's not a plan:

HHMT: The Romney economic program will change the direction of policy to focus on economic growth. Its pro-growth effects will work in two basic ways: It will speed up the recovery in the short run, and it will create stronger sustainable growth in the long run.
WRONG: There is no Romney program—a program is complete, coherent, and scoreable, Romney has repeatedly said that his statements are not scoreable. In order to estimate the economic effect of any program, you have to know what its pieces will do--you need to have it scored. Until Romney presents a complete and coherent program with scoreable pieces, HHMT have no basis for asserting anything about its economic impact.
One of the most annoying things here is the partisan asymmetry: the rules of the game seem to be that Democratic proposals have to be scoreable and coherent, while Republican proposals don't.
It would have been very nice if HHMT had done what we Democratic economists do--told their political masters that they could not estimate economic impacts until they were given a coherent, complete, and scoreable plan.
Why they did not do this I do not claim to know.

That's just a small sample of a comprehensive and epic takedown, but I think that's the real point. Consider, as DeLong does, the effects of the Romney tax reform plan. The problem? There is no Romney tax reform plan. There are a set of mathematically incompatible claims -- what he'll do with tax rates and taxes on certain types of income; that it will be revenue-neutral; and that it will not affect the share of taxes paid by the rich and the middle class. We can't really know which of these promises will be broken by any real Romney plan, but one or more has to be just from the math of the tax code. Romney gets around the reality of this by keeping large chunks of that "plan" unspecified, but it just won't wash.

All of which gets back to my long-standing observation that there does seem to be a shortage of hack economists on the liberal side, which can also be interpreted as noting the presence of a lot of them on the conservative side.

For more on this sophisticated defense of Romney on taxes, see Matt Yglesias; for a nice takedown of a, shall we say, less sophisticated argument, Jonathan Chait has it covered. And: great catch!

It's Not Always About Congressional Dysfunction

Mark Thoma defends economists by bashing Congress:

For fiscal policy the answer is clear and simple. Congress is broken, and it no longer has the ability to work for the common good. Perhaps eliminating the filibuster, removing money from politics, reversing Citizens United, and so on would help – that remains to be seen – but as it stands, Congress is clearly dysfunctional.
And that dysfunction coupled with the influence of big money interests caused Congress to listen to the wrong voices. Instead of paying attention to economists who had been right about the recession all along, Congress listened to the voices that had mostly gotten things wrong. In large part, the people who favored deregulation of the financial sector, assured us there was no housing bubble, and told us problems could be easily contained even if there was a bubble are the very same people who brought us the push for austerity, the fear of inflation, the fear of bond vigilantes, and so on, none of which was helpful.

 I mostly disagree with this. Break it down:

1. In 2009, Congress moved rapidly to pass a large stimulus bill. Was it big enough? Probably not, but it wasn't way off from the consensus of economic thought, as far as I can see. Yes, some economists said it should be have been bigger, even very much bigger, but overall I don't think Congress was far off from what economists were saying.

2. In 2010 you have the best case for Congressional dysfunction as he describes it. The White House was clearly pushing for more stimulus (even if it was, again, rather short of what many economists wanted), and Congress barely acted.

3. In 2011 Congress moves to austerity, strongly contrary to the consensus among economists. However, calling that a case of Congressional dysfunction seems wrong to me. The White House and most Congressional Democrats wanted fiscal expansion in 2011 and 2012, but House Republicans wanted contraction. But unlike 2010, these Republicans weren't a minority blocking action; they had won a landslide election! There is, to be sure, institutional malfunction here, but it's not Congress; it's the Republican Party.

You can't expect, and we generally don't want, Congress to produce results that differ dramatically from election returns. The fault lies elsewhere. One could blame voters, but I generally don't do that; they usually just react to the choices they have. The fault here (if you think that austerity is a terrible mistake) is with a Republican Party which is entirely rejecting the mainstream economic consensus. It's not even limited to the Congressional wing of the GOP; all the presidential candidates were for austerity, as are most Republicans in state government.

For 2011-2012, I see no reason at all to believe that anything about Congress as an institution, from the way they are elected through the way they organize themselves, has anything at all to do with the problem Thoma is concerned about. He can blame the Republican Party, or he can just blame democracy, but to blame it on Congressional dysfunction is a bum rap.

Read Stuff, You Should

Happy Birthday to Aaron McGruder, 38.

And some good stuff:

1. Brad DeLong on core vs. headline inflation. Just in case anyone doesn't believe it.

2. Nice Amy Fried post about whether politicians actually know what their constituents want.

3. "The Awesomeness of Awesome Americans." Eric Rauchway.

4. Avengers blogging: Was Scarlett Johansson wearing a gorilla suit?

5. And a nice piece by the great Christina Kahrl -- no Giants fan she -- on Buster Posey.

Read Stuff, You Should

Happy Birthday to Christina Hendricks, 37. Our Mrs. Reynolds, indeed.

On to the good stuff:

1. Electionate has a nice "ignore the electoral college" post. Well, he or she doesn't say that, but it's the implication. Exactly right: there may be an electoral college bias, but it's too early to know.

2. Brad DeLong (and others) about the Bush deficits.

3. Did torture lead to bin Laden? Adam Serwer lays out the cases for and against.

4. And the story behind rising Social Security Disability costs, by Kathy Ruffing.

Why Blame Congress?

The answer, of course, is that Congress is unpopular. However, just because everyone hates Congress, that doesn't mean that Congress is to blame for everything.

I'm responding here to a post by Matthew O'Brien, who reports that economists blame Congress for failing to do two obvious (to the economists, that is) things: tax reform, and infrastructure spending.

I'm okay with blaming "Congress" for not passing tax reform. The problem with tax reform is that (1) it tends to give generalized benefits and particularized costs, and (2) it's rarely at the top of either party's priority list. I do think that it's possible we'll get tax reform should the elections return divided government, and I'd probably blame democracy in general rather than Congress in particular, but I have no problem with an assertion that the structure of the US Congress tends to make the general democratic preference for avoiding policies with specific, visible costs even worse.

But infrastructure? No way. The infrastructure problem isn't the fault of Congress; it's all about the Republican Party. You get a landslide win for the party that wants to slash government spending, and you're going to have less spending. Especially if that party wants to slash spending but also ran against Medicare cuts, opposes Social Security cuts to current recipients, and supports increasing military spending. So blame the GOP, or even blame voters (although I wouldn't; they didn't have a specific choice about roads and bridges and the rest), but don't blame Congress.

The general rule about all these things is that it's a lot easier to blame either something that everyone hates (Congress) or something high visibility (the president) than it is to actually figure out who is responsible. But if you either just want to understand what's going on or especially if you want to affect public policy, you're far better off if you do the hard work of figuring out exactly who does what and why.

Read Stuff, You Should

Happy Birthday to John Lewis, Member of Congress and American hero, 72.

Straight to the good stuff:

1. David Mayhew on the most important elections in US history.

2. "Harry McPherson and Presidential Decision-Making," from Andrew Rudalevige.

3. Dylan Matthews surveyed "Modern Monetary Theory" in the Washington Post over the weekend. Excellent.

4. As usual, everything Ta-Nehisi Coates says is terrific; here, on writing.

5. And Alyssa Rosenberg on pop culture and contraception.

Catch of the Day

I don't think I've given a CotD to Paul Krugman before, but he very much earns it today by taking down Ezra Klein, of all people. Klein started today's Wonkbook (by the way -- you all do read Wonkbook, right?) with the headline "We know what to do. We just can't seem to do it." Krugman responds:

What Ezra is doing here is a minor version of the all too common sin of presenting what is, in political terms, a moderately left of center position and treating it as the obviously correct policy. There’s a reason for that: objectively, it is in fact the obviously correct policy. But you won’t get anyone on the right admitting that.

Krugman, of course, focuses on the fact that (contra Klein) "most every economist" doesn't actually support any policy consensus on the US deficit or Europe's debt problems. I'd add that whatever economists think, politicians really don't all agree, either. It's harder to know what pols "really" think, but I'd be shocked if Michele Bachmann, for example, really believes that increasing government deficits now and reducing them in the long term is good policy. Yes, Bachmann is an extreme example...but I don't really see any reason to believe that most GOP Members of Congress secretly support Klein's consensus. I mean, it's not exactly the most economically literate bunch, and if you think about partisan information flows -- I don't really see any reason not to think that most Republicans in Congress are sincerely pro-austerity. Then there are those columnists and newspaper editorial types who support austerity, not to mention ordinary citizens who poll pro-austerity (although to be sure they'll also support pro-growth policies).

In some ways, the story that everyone agrees on policy but good policy is thwarted by poor institutional arrangements and incentives is a optimistic one. But it really isn't true, and a very Nice catch! to Krugman for pointing that out.

More Questions For Economists & Other Experts

I did one of these back in August, and I sort of liked it, so here's a follow-up. You'll note that one question here is a repeat, since I never saw an answer. Hey, economists! Someone have an estimate for this?

1. I'm not sure whether this is a question for economists, IR specialists, political economy types, or what, but I've been wondering about it for a while now: what, if anything, should the US (and Barack Obama in particular) have been doing for the last three years about the various problems in Europe? Is the general sense that the Obama administration is handling it well, or badly? Or is there simply nothing for the US to do (which seems highly unlikely to me, but again, I'm not an expert on it). I've seen very, very little reporting about what the US is doing, should be doing, could be doing.

2. Speaking of Europe, here's a more directly economic question...just how important have Europe's problems been for the US economy? I'm definitely not trying to excuse Barack Obama's performance here (see question #1 above), just wondering how much of the failure of the recovery to gain momentum is a result of Italy and Greece and the rest of it.

3. And here's the repeat question: I've seen estimates of how much state budget contraction has hurt the economy. Those seem to be based on direct effects. What about indirect effects? There sure are a lot of teachers, cops, firefighters, and prison guards who must have been very worried about their jobs over the last year and therefore didn't spend a lot of money; do we know what that does to the economy?