July 19, 2017
July 10, 2017
by Tevi Troy*
IT is increasingly obvious these days that many of the people who call themselves conservative can’t even agree on what the term means. Despite simultaneous Republican control of the White House and both houses of Congress, the conservative movement seems endlessly at odds.
Senator Mitch McConnell’s recent troubles with the Republican health care bill have presented a window into these continuing disagreements for the world at large to peek through. But health care is hardly the only issue on which the movement is divided: looming debates on tax reform, trade, foreign policy and immigration imperil conservative progress.
Conservatives speak wistfully of an era of conservative unity that brought about policy transformations, especially under President Ronald Reagan in the 1980s. Both the animating ideas and the corresponding policies were in harmony because Reagan believed in a conservative philosophy and used that philosophy to carry out actionable policy.
Crucially, this period was also characterized by a belief that there was a unifying strand to conservatism, and that the Republican Party was the political home for this movement. Even if conservatives disagreed on the details of a specific policy, they agreed on a general direction and on supporting political leaders who would get them there. As for the Republican Party, it was a vehicle for debating policy and ideology, serving as a party of ideas, in contrast to the Democrats’ warring coalition of needy interest groups.
Senate Majority Leader Mitch McConnell (R)
Conservative reveling in this bygone past is a phenomenon that predates the most recent presidential election. As Jonah Goldberg, a fellow at the American Enterprise Institute, told me: “G.O.P. primaries for the last few cycles have been like the nerdiest possible re-creation of the end of ‘Spartacus’: ‘I am Ronald Reagan.’ ‘No, I am Ronald Reagan.’ ”
The halcyon period of the 1980s did not develop out of nowhere. Reaching this degree of unity was hard, with the Reaganite consensus emerging over a lengthy period of debate dating back to conservatism’s modern revival in the 1950s.
Yale- Educated William F. Buckley Jr. of The National Review
Whenever conservatives talk about unity, the unifying figure in this regard is William F. Buckley Jr. Shortly after starting National Review in 1955, Mr. Buckley and his colleagues sought to join together the various elements of the respectable right. Mr. Buckley’s associate, Frank Meyer, an ex-Marxist of libertarian inclinations, found the key to uniting disparate elements under a common rubric. Mr. Meyer called for a defense of both Western civilization and personal freedom that came to be known as “fusionism.”
Fusionism was an explicit recognition of certain shared concerns — about the existential threat of Communism abroad and the growth of government at home. It managed to bring together both government-skeptical libertarians and religiously minded traditionalists by emphasizing the importance of the individual and Western civilization, as well as the Communist threat to both.
When it came to governing, though, fusionism provided somewhat less guidance. Think tanks like the Heritage Foundation and the Hoover Institution stepped in to fill the void, producing policy books called “Mandate for Leadership” and “The United States in the 1980s.” The Reagan administration then carried out their policy recommendations, or at least many of them. Mr. Buckley himself recognized but also gently mocked the importance of the Heritage Foundation’s work, saying, “Sixty percent of the suggestions enjoined on the new president were acted upon (which is why Mr. Reagan’s tenure was 60 percent successful).”
Within these policy manifestoes and Mr. Reagan’s rhetoric, certain overarching ideas emerged to guide politicians: aggressive prosecution of the Cold War against the Soviet Union, lower taxes and a tough stance on crime.
Today, with a larger conservative movement, it’s harder to find areas of agreement. The policies pursued under the fusionist umbrella now have less sway. The cold warriors’ tough stance on Russia is no longer unifying in a post-Soviet era, to say the least. A more contemporary, and more elusive, idea is the concept of a clash of civilizations that President Trump alluded to in his speech in Poland last week: “The fundamental question of our time is whether the West has the will to survive.”
Crime remains an issue, but less so than in the 1980s or the 1990s, in part because many urban politicians, including liberal ones, adopted conservative recommendations on how to combat crime, like the broken windows theory of policing. As for marginal tax rates, conservative policies reduced them, and took so many people off the income tax rolls that 44 percent of Americans pay no federal income taxes. The hidden lesson here is that conservative policy successes had the effect of making core conservative ideas less politically resonant among voters and thus making them ineffective for unity as well.
At a surface level, some issues do appear to unite current conservatives: disdain for anti-conservative and anti-Republican bias in the mainstream media; support for conservative judges like Neil Gorsuch, who joined the Supreme Court in April; and support for Israel. But these issues themselves are insufficient, as well as more limiting.
As Lanhee Chen, a Research Fellow at Hoover, told me, “those three things alone don’t make a governing agenda.” When I asked Sally Satel, a resident scholar at A.E.I., about whether these areas of agreement could form the basis of a real consensus, she said sarcastically, “Talk about a big tent. …”
Another problem is that these issues unify mainly in opposition to forces conservatives dislike: liberal journalists, judicial activists and Israel bashers. Vin Weber, a former Republican Representative, summed it up this way: “We sort of know who we are against.” Mr. Weber believes that conservatives “need to refocus on why we have a G.O.P.”
In the great sorting that is to come, some conservatives who divided over this most recent election will find themselves permanently ensconced in different camps. But there is still hope for a semblance of unity if conservatives build out from the admittedly narrow list of areas of common agreement in the development of a new conservative agenda. If this difficult yet important work of creating a new conservative agenda at all three levels — philosophy, policy and politics — does not happen, then the conservative movement will lose much of its ability to shape the Republican Party going forward.
Getting this recalibration right is not a short-term commitment. The period from the creation of National Review to the election of Ronald Reagan was 25 years. This upcoming period of conservative re-examination will take some time — although hopefully not as much — as well.
To complicate matters, intense disagreement about the sitting president could make it harder to accomplish this work during Mr. Trump’s tenure. As Jonah Goldberg put it to me, “Trump is like a magnet next to a compass,” making it harder for conservatives to find true north as they argue over whether it is the duty of conservatives to support him or the duty of conservatives to oppose him. These arguments divert attention from the question of what a 21st century conservative policy agenda should be, and they are likely do so for the rest of his presidency.
At the same time, some conservatives think Mr. Trump has performed a necessary service in highlighting the existing fault lines. Seth Leibsohn, a pro-Trump radio host who wrote the new book “American Greatness: How Conservatism Inc. Missed the 2016 Election and What the D.C. Establishment Needs to Learn” with his co-host, Chris Buskirk, told me that “it’s even healthier to have these debates as we win elections — for that we owe a lot to the Trump candidacy, presidency and movement.”
Regardless of where one stands on Mr. Trump, conservatives need to identify a new, modern fusionism, with both a unifying concept as well as a corresponding set of shared policy ideas tailored to our current era. This is not the work of politicians, be they Reagans or Trumps. It is the work of conservative thinkers at magazines and think tanks, who need to debate, argue and ultimately agree or disagree on whether it is possible once again to develop a conservative vision for the future and what that vision might look like.
June 28, 2017
How Effective is Economic Theory?
In 1980, following a decade of high inflation and unemployment — a combination that economists had previously thought to be impossible over extended periods — The Public Interest ran a special issue titled “The Crisis in Economic Theory.” Today, there is little talk of a crisis in economic theory. But in the past decade, we have experienced a financial crisis and subsequent decline in employment that also followed a path economists had previously thought to be impossible. Economists seem more confident than they did in 1980, but are they more deserving of confidence? If anything, some of the questions confronting economics should run deeper now than then.
In fact, the basic question of how economics should understand itself now demands urgent attention. Since the American Economic Association was founded in the 1880s, economists in this country have sought special status as scientifically grounded policy experts. Over the past 50 years, in particular, they have largely attained that status. Whether they deserve it is less clear. And what a scientific economics would really look like is not nearly as clear as some economists now imagine, either.
And it’s not just the practice: Even the ideal of economics as a science now demands serious scrutiny. If economic theory is not in crisis, maybe it deserves to be.
Instead of “science,” we might want to think about economics in terms of “effective theory.” As explained by Harvard physicist Lisa Randall,
Effective theory is a valuable concept when we ask how scientific theories advance, and what we mean when we say something is right or wrong. Newton’s laws work extremely well. They are sufficient to devise the path by which we can send a satellite to the far reaches of the Solar System and to construct a bridge that won’t collapse. Yet we know quantum mechanics and relativity are the deeper underlying theories. Newton’s laws are approximations that work at relatively low speeds and for large macroscopic objects. What’s more is that an effective theory tells us precisely its limitations — the conditions and values of parameters for which the theory breaks down. The laws of the effective theory succeed until we reach its limitations when these assumptions are no longer true or our measurements or requirements become increasingly precise.
Whereas the term “science” often is used to connote absolute truth in an almost religious sense, effective theory is provisional. When we are certain that in a particular context a theory will work, then and only then is the theory effective.
Effective theory consists of verifiable knowledge. To be verifiable, a finding must be arrived at by methods that are generally viewed as robust. Any researcher who tries to replicate a finding using appropriate methods should be able to confirm it. The strongest confirmation of the effectiveness of a theory comes from prediction and control. Lisa Randall’s example of sending a spacecraft to the far reaches of the solar system illustrates such confirmation.
This notion of effective theory sets a useful standard for considering economics. Economists are not without knowledge. We know that restrictions on trade tend to help narrow interests at the expense of broader prosperity. We know that market prices are important for coordinating specialization and division of labor in a complex economy. We know that the profit incentive promotes the introduction of improved products and processes, and that our high level of well-being results from the cumulative effect of such improvements. We know that government control over prices and production, as in communist countries, leads to inefficiency and corruption. We know that the laws of supply and demand tend to frustrate efforts to make goods more “affordable” by subsidizing them or to lower “costs” by fixing prices.
But policymakers have goals that go far beyond or run counter to such basic principles. They want to steer the economy using fiscal stimulus. They want to shape complex and important markets, including those of health insurance and home mortgages. It is doubtful that the effectiveness of economic theory is equal to such tasks.
Most scholarly research in economics is ultimately motivated by the unrealistic goal of providing effective theory to implement such technocratic objectives. But the resulting economic theory cannot be applied with the same confidence as Newtonian physics. Even worse is the fact that economists, unlike physicists, are not clear about the limits of the effectiveness of their theories. In short, when it comes to effective theory, economists promise more than they can deliver.
Over the last 50 years, questions about the effectiveness of economic theory have revolved around five interlocking subjects in particular: mathematical modeling, homo economicus, objectivity, testing procedures, and the particular status of the sub-discipline of macroeconomics.
With mathematical modeling, the question concerns the tradeoff between rigor and relevance. Mathematical models are considered more rigorous than verbal arguments, but the process of modeling serves to narrow the scope of economic thinking. Are mathematical economists ignoring important topics and missing insights that a nonmathematical economics might explore?
With homo economicus, the question concerns the advantages and disadvantages of assuming that the individual behaves with economic rationality. This assumption appears to be a very powerful tool for prediction and control of economic behavior. But what are the limits to its applicability?
With objectivity, the question concerns the relationship between facts and values, or between analysis and policy preferences. Physicists and astronomers are almost never accused of letting a partisan political outlook affect their views on the phenomena that they study. Can economists aspire to that same level of objectivity?
With testing procedures, the question concerns the ability of economists to bring persuasive evidence to bear on questions of theory. In the history of the natural sciences, hypotheses have been confirmed or discarded on the basis of decisive experiments. How can economists obtain verifiable knowledge when dealing with phenomena that are not as readily subject to experimental methods?
With macroeconomics, the question is whether economists really can predict and control the overall behavior of unemployment and inflation in a nation’s economy. Economists became optimistic about their prospects for doing this during periods of favorable economic performance, such as the mid-1960s or the two decades that preceded the financial crisis of 2008. But these episodes were rudely interrupted by the unexpected convulsions of the Great Stagflation of the 1970s and the Great Recession that followed the financial crisis. Is macroeconomic theory a success or a failure?
Economists’ views about these questions have shifted over the past five decades. It is interesting to compare what they were saying in 1966 with what they were saying in 1980 and what they have been saying more recently. Such comparisons might help us consider what we should expect of economics in the years to come.
In 1966, several economists took up the five interlocking questions noted above in a book of essays entitled The Structure of Economic Science, edited by Sherman Roy Krupp. In an essay on the subject of mathematical modeling, William Baumol summarized the tradeoff between rigor and relevance.
Strong mathematical results must, therefore, be viewed by the practitioner with somewhat mixed feelings. At best they represent a relevant revelation about his problem; at worst they may cast doubt upon the appropriateness of his assumptions.
As of 1966, there were still economists who opposed mathematical modeling, but they were in retreat and aging out of the profession. As Martin Bronfenbrenner put it in his essay in the Krupp volume,
Until perhaps a generation ago, it might have been necessary to justify the use of mathematics in economics and the other social sciences….The shoe now threatens, indeed, to pass to the other foot, with the non-mathematical practitioner laboring under a darkening suspicion…that nothing he does will be worthwhile unless formulated mathematically and subjected to statistical testing.
On the issue of relevance, Bronfenbrenner wrote that any mathematical model requires what he called an “applicability theorem,” showing that the conditions under which it is true obtain in the real world. “And since it relates to the actual world, an applicability theorem may be highly probable but is never absolutely certain.”
If Lisa Randall is correct, then physicists usually know when Newton’s theories are effective and when they are not. In contrast, economists often do not know when their theories are effective. How many firms must there be for the theory of “perfect competition” to be applicable? What assumptions are required in order for workers’ wages to be tied closely to productivity, and do these assumptions hold in practice?
Nobel Laureate in Economics–James Buchanan
On the topic of homo economicus, James Buchanan wrote in his contribution to the volume that “the central predictive proposition of economics….amounts to saying that individuals, when confronted with effective choice, will choose more rather than less.”
Previously, Milton Friedman had argued in favor of the stronger definition of homo economicus, in which individuals and firms optimize over their choices. In his book Essays in Positive Economics, published in 1953, Friedman argued that this assumption could be justified on the basis of its ability to predict economic outcomes. He developed a famous analogy in which an observer is asked to predict the behavior of a billiard player. Although the billiard player does not employ the laws of physics, Friedman argued that the observer can use the laws of physics to predict how the billiard player will line up his shot. By analogy, Friedman argued that the economist can use mathematical optimization models to predict how consumers and firms will behave.
Nobel Laureate in Economics–Milton Friedman, University of Chicago
As of 1966, the profession had largely defaulted to Friedman’s view. The main alternative was Herbert Simon’s “bounded rationality” or “satisficing,” in which economic agents are assumed to stop short of total optimization. Although many economists were intrigued by Simon’s ideas, which helped him to win a Nobel Prize in 1978, the overwhelming body of economic research ignored them and continued to assume optimization.
Concerning objectivity, many economists believed in a form of positivism, in which facts could be separated from values. The positivist position is that technical expertise is separate from preferences. The public expresses preferences about outcomes, and the technical expert then prescribes policies to achieve those outcomes. Buchanan argued firmly against economists interjecting their own policy preferences into their work:
[The economist] verges dangerously on irresponsible action when he allows his zeal for social progress, as he conceives this, to take precedence over his search for and respect of scientific truth, as determined by the consensus of his peers….If the economist can learn from his colleagues in the physical sciences…that the respect for truth takes precedence above all else and that it is the final value judgment that must pervade all science, he may, yet, rescue the discipline from its currently threatened rush into absurdity, oblivion, and disrepute.
Such an attitude is also essential to distinguishing between technical and political disputes in economics. Bronfenbrenner wrote,
Does not the economists’ notorious failure to agree suggest or prove the “prescientific” character of economics as such? I follow my professional bias (vested interest?) on the negative side of this proposition. Much of the disagreement is inevitable since it centers around economic values and policy recommendations and involves normative rather than positive economics….
This is not to deny the existence of disagreements in positive economics, of which there are plenty….Yet we have faith that most if not all such positive disagreements will eventually be resolved, as parallel disagreements have been resolved in the natural sciences.
Like many other economists at that time, Buchanan and Bronfenbrenner believed that values and scientific investigation could be separate, and that economists are on firmer ground when they stick with scientific investigation.
With regard to testing procedures, there were doubts expressed in 1966 by two heterodox thinkers, Emile Grunberg and Kenneth Boulding. Grunberg wrote that, “In fact, the history of the social sciences shows no clearcut case in which a theory has been disconfirmed by contradictory evidence.”
He went on to suggest that the reason for this is that social scientists work with open systems, in which the number of factors that could affect an outcome is intractably large. In contrast, physical scientists are able to work with closed systems in which every factor can be accounted for. Boulding wrote,
All predictions, even in the physical sciences, are really conditional predictions. They say that if the system remains unchanged and the parameters of the system remain unchanged, then such and such will be the state of the system at certain times in the future. If the system does change, of course the prediction will be falsified, and this is what happens in social systems all the time….What this means is that the failure of prediction in social systems does not lead to the improvement of our knowledge of these systems, simply because there is nothing there to know….[T]he possibility that our knowledge of society is sharply limited by the unknowable is something that must be taken into consideration.
While these comments were prescient, they were ignored at the time they were written. Instead, economists were confident that their statistical techniques were capable of sifting among hypotheses to find reliable ones. In fact, the mid-1960s was when economists were particularly optimistic about econometrics, and especially the technique of multiple regression. Multiple regression was thought to be a way to achieve with non-experimental data the ideal of controlling for extraneous influences.
For example, suppose that you want to examine whether private schools outperform public schools, using student test scores as the metric. However, you know that many factors affect test scores, including each student’s ability and family environment. With multiple regression, the investigator introduces variables representing these other factors into the statistical analysis, and in theory this means that those variables are controlled for.
Multiple regression requires extensive computation, so it was largely impractical before the advent of computers. By the late 1960s, many universities had mainframe computers that could handle these calculations, and multiple regression was rising in popularity. Multiple regression and computers were a particular boon to macroeconomists. As of 1966, many economists were very optimistic that large-scale macroeconometric models of the economy would prove useful in prediction and control.
In fact, as of 1966, the consensus Keynesian view of macroeconomics was so widely accepted that macroeconomics was not controversial. In the Krupp volume, the special topic of macroeconomics only came up in one essay, by Fritz Machlup. He wrote,
Anyone who has done empirical work with national-income statistics or foreign-trade statistics is aware of thousands and thousands of arbitrary decisions that the statisticians had to make in executing the operations dictated or suggested by one of the large variety of definitions accepted for the terms in question. One cannot expect with any confidence that any of the theories connecting the pure constructs of the relevant aggregative magnitudes will be borne out by an examination of their operational counterparts.
Although practically a footnote in the ’60s, this concern was a sign of things to come.
THE CRISIS OF 1980
Economist Daniel Bell
Fourteen years after the Krupp volume, the situation had changed dramatically. In 1980, when The Public Interest put out its special issue on “The Crisis in Economic Theory,” the title hardly needed to be justified. As Daniel Bell put it in his contribution,
Today, there is general agreement that government economic management and policy is in disarray. Many economists argue that prescriptions derived from previous historical situations no longer apply, but there is little consensus as to new prescriptions.
By this time, macroeconomics was the most troubled sub-discipline of economics. Among professional economists as well as laymen, Keynesian economics had been discredited by the Great Stagflation, in which unemployment and inflation both soared to levels far above those seen in the 1960s. This experience suggested that the Keynesians could neither predict nor control the economy.
And yet, in terms of our first methodological question, concerning the role of mathematics, 1980 might have been the high point for the belief that insight would come from greater mathematical sophistication. I call the late 1970s, which is when I did my graduate work, the era of “peak math.”
In the 1970s, two of the most prestigious journals for a young economist were Econometrica and the Journal of Economic Theory, which published the most mathematically difficult articles. In the 1970s, the five recipients of the John Bates Clark Medal, a highly prestigious award given to an American economist under 40, collectively had published 25 articles in Econometrica and nine in the Journal of Economic Theory by the year they received the award (they published more in those journals subsequently).
In the 1980 Public Interest volume, two of the premier mathematical economists of the time, Kenneth Arrow and Frank Hahn, both used their essays to provide a perspective on macroeconomics. They argued that it was possible to reconcile microeconomic reasoning with Keynesian macroeconomic theory. But there was no discussion in the Public Interest volume of the role of math per se.
The idea of homo economicus was questioned by Bell:
Since men act variously by habit and custom, irrationally or zealously, by conscious design to change institutions or redesign social arrangements, there is no intrinsic order, there are no “economic Laws” constituting the “structure” of the economy; there are only different patterns of historical behavior. Thus, economics, and economic theory, cannot be a “closed system.”
However, within the economics profession, the fashion was quite the opposite. Many economists, represented in the Public Interest volume by Mark Willes, thought that the problem with Keynesian economics was that it did not impute enough rationality to economic man. Following Robert Lucas, Jr., these economists argued that macroeconomic models had to assume rationality in the way that individuals formed expectations about the future. Models that employed rational expectations also happened to be mathematically difficult; one of Lucas’s most important papers appeared in the Journal of Economic Theory in 1972.
There was considerable distance between the macroeconomic views of Willes and those of Arrow and Hahn, and even more distance from those of Paul Davidson, who represented the “post-Keynesian” (further to the left) school in the issue. And yet nowhere in the volume is there a discussion of the issue of bias.
Elsewhere, economists were becoming aware of the bias in macroeconomics. Robert Hall coined the term “freshwater economics vs. saltwater economics” to characterize the contrast between the views prevalent at the Universities of Chicago, Minnesota, and Rochester on the one hand, and those prevalent at Harvard, MIT, Yale, Stanford, and Berkeley on the other. The two schools of thought had both different beliefs about how the economy works and different ideological predilections. Freshwater economists believed that attempts to control unemployment and output using monetary and fiscal policy were ineffective, and they also tended to believe in conservative economic policy. Saltwater economists took the opposite view. However, neither would have admitted that their political inclinations had any effect on their beliefs about the effectiveness of discretionary fiscal and monetary policy.
Regarding the question of testing procedures, the economics profession was roiled in that period by the “Lucas critique” as applied to macroeconometric models. In 1976, Lucas argued that, under rational expectations, a model that had a robust statistical fit with the past could nonetheless break down completely going forward.
The Lucas critique grabbed the spotlight in the late 1970s and beyond. However, another critique would prove to have greater significance. In 1983, Edward Leamer published an article titled “Let’s Take the Con Out of Econometrics.” He wrote,
The econometric art as it is practiced at the computer terminal involves fitting many, perhaps thousands, of statistical models. One or several that the researcher finds pleasing are selected for reporting purposes. This searching for a model is often well intentioned, but there can be no doubt that such a specification search invalidates the traditional theories of inference.
When considering, for instance, whether private schools or public schools are more effective, the investigator can choose which factors to control for and how to specify the variables. In practice, each investigator iterates through many plausible choices before selecting the one to report. The economist behaves like an experimenter who is able to tweak the conditions of the experiment to obtain a desired result. This is not conducive to reliability.
All of these were serious challenges. But in 1980, the most significant by far was the apparent failure of macroeconomics to provide a reliable means of predicting and directing the behavior of the economy. This was the essence of the crisis.
AFTER THE CRISIS
As this is being written, a half-century after the Krupp volume, mathematical modeling is still the standard in the major economics journals. But there is nothing like the same faith in higher mathematics that characterized the “peak math” era of the 1970s. The five Clark medalists from 2011-2015 published a total of four papers in Econometrica and none in the Journal of Economic Theory.
Economists no longer insist that homo economicus be modeled as rational. Instead, there is a popular field known as behavioral economics, which studies the biases and heuristics that affect individual decision-making and attempts to trace through the economic implications of these deviations from rationality.
Economist Paul Romer
Economists continue to preach the positivist ideal of scientific objectivity, without questioning whether it is achievable. However, the problems of bias are occasionally aired. In 2015, Paul Romer wrote a provocative essay entitled “Mathiness in the Theory of Economic Growth.” Despite its title, it is by no means a criticism of the use of math in economics. Rather, Romer complained that some economists are producing biased theory in mathematical guise.
The style that I am calling mathiness lets academic politics masquerade as science. Like mathematical theory, mathiness uses a mixture of words and symbols, but instead of making tight links, it leaves ample room for slippage between statements in natural versus formal language and between statements with theoretical as opposed to empirical content.
Recall from the Krupp volume the phrase “applicability theorem,” meaning the manner of connecting the mathematical model to real-world observables. In physics, this process seems to be straightforward. But in economics, there is room for disagreement about the circumstances to which a mathematical model applies. Romer’s view is that certain economists, primarily of the freshwater school, are guilty of abusing assumptions about how their equations connect with reality. They make interpretations that suit their political biases, but otherwise their interpretations are not justified.
Others take Romer’s concern much further. For example, Noah Smith wrote of Romer,
He singles out Lucas, Prescott and a few others for having tenuous or sloppy links between mathematical elements and the real world. But from what I can see, such tenuous and sloppy links are the rule in macro fields.
There are two problems embedded in these mathiness critiques. One problem, emphasized by both Romer and Smith, is that theorists produce papers with what we might term false applicability theorems. That is, because the concepts or assumptions clearly do not relate to the real world, they produce insights that have no practical value. The second problem, emphasized by Romer, is that the insights are not only inapplicable to the real world but are driven by personal biases of the authors, not by an attempt to arrive at scientific truth.
Economists’ testing procedures have changed dramatically in recent decades. Rather than rely on multiple regression, economists often look for “natural experiments.” For example, in assessing the quality of charter schools, some economists have used the fact that in some cases charter-school students are selected by lottery from qualified applicants. This creates a “natural experiment,” in which the students who were chosen in the lottery to attend a charter school can be compared to presumably similar students who participated in the lottery but were not chosen and therefore wound up in public schools.
In addition, some economists now use actual experiments. They put experimental subjects in situations that involve economic decision-making and test how subjects respond under varying experimental conditions. This approach has been particularly helpful in behavioral economics, where it borrows key techniques from experimental psychology. Note, however, that neither actual experiments nor natural experiments are readily applicable to macroeconomics. The problem of arriving at reliable tests of macroeconomic hypotheses is still unsolved.
Unlike in 1980, however, macroeconomists today are fairly well satisfied with their field, in spite of (or perhaps because of) the inability to rigorously test their theories. The “macro wars” of the 1970s gave way to a consensus view that monetary policy could stabilize inflation, and that this in turn would limit the severity of recessions. The Great Moderation that prevailed from the mid-1980s until 2008 appeared to confirm this view.
Although this complacent consensus was clearly falsified by the deep recession and painfully slow recovery that followed the financial crisis, economists migrated fairly easily to a new consensus about this episode. In this view, the loss of wealth due to the collapse of housing prices caused households to sharply curtail spending at the same time that the extreme leverage of some major financial institutions and the tight interconnections among financial firms caused markets to “seize up” when investors lost confidence in mortgage securities, leading to widespread declines in the availability of credit. The fact that short-term interest rates dropped to the “zero bound” in the wake of the crisis then forced policymakers to undertake creative steps to prop up demand, including “quantitative easing” by the Federal Reserve and the stimulus enacted early in the Obama administration. Had these steps not been taken, the crisis would have been far worse, with unemployment perhaps approaching the levels reached in the Great Depression.
We cannot re-run history without the stimulus and without quantitative easing. There is no way to test the claim that there would have been another Great Depression without those policies. But there are serious reasons for disputing this consensus explanation. In my own view, for instance, there is no simple monetary or fiscal solution to unemployment. Instead, I believe that unemployment results from the fragility of the intricate patterns of specialization and trade that emerge in the economy. Sometimes, patterns of specialization that were profitable yesterday are not profitable today, and some people will be without jobs until new patterns can be discovered. In this view, the path that the economy took in 2008 and its aftermath was not decisively affected by fiscal and monetary policy.
But my views are heterodox. In the academic community, macroeconomics is not nearly as contentious or acrimonious as it was when the economy took an unexpected turn in the 1970s — despite the equally unexpected turn it has taken in the last decade.
THINGS TO COME
Although economics is not now in a state of abject crisis, as it was in the late ’70s, it is nonetheless likely to be entering a period of great change on all five of the disciplinary challenges we have been tracing.
First, there is reason to believe that in the coming years economists will reluctantly come to recognize the importance of mental-cultural factors as determinants of economic outcomes, reducing the power of mathematical modeling as an approach. There is really no avoiding some movement in the direction of understanding economics as an interpretive discipline, a little like history. In trying to interpret the decline in labor-force participation of working-age males over the past two decades, or to understand the phenomenon of many retail firms offering special deals on “Black Friday,” there is certainly some room to use mathematical models to aid the analysis. But they are neither necessary for coming up with interpretations nor sufficient to render one interpretation superior to all others. In examining subjects like these, economists could greatly reduce their usage of mathematical expression without losing anything in terms of effective theory.
In the 1980 Public Interest volume, Israel Kirzner wrote,
Economic theory needs to be reconstructed so as to recognize at each stage the manner in which changes in external phenomena modify economic activity strictly through the filter of the human mind. Economic consequences, that is, dare not be linked functionally and mechanically to external changes, as if the consequences emerge independently of the way in which the external changes are perceived, of the way in which these changes affect expectations, and of the way in which these changes are discovered at all. [Emphasis in original.]
Kirzner is a practitioner of “Austrian” economics, which was heterodox then and remains so now. But a number of “Austrian” ideas are likely to gradually penetrate the orthodoxy, particularly the emphasis on the role of non-material factors in affecting economic phenomena.
Social scientists are inclined toward materialistic explanations. They want to explain economic phenomena on the basis of resource endowments and technical capacities. They want to explain voting behavior on the basis of demographic and economic factors. The alternative to this materialistic reductionism is to say that ideas matter. It turns out that one cannot explain the tremendous rise in economic growth in the past two centuries on the basis of capital accumulation alone. The remarkable gains in the standard of living have been mostly due to the development and application of new ideas for products and production methods.
Another non-material factor is cultural norms and social institutions. One cannot explain differences in wealth across countries simply on the basis of resources. It is not that South Korea is resource-rich relative to North Korea, or that Israel is resource-rich relative to its Arab neighbors. South Korea and Israel have political and cultural institutions that are friendlier toward enterprise, and that is what accounts for their relatively strong economic performance.
Economists prefer to examine people as individuals. However, individuals get their ideas mostly from other people. The world of mental phenomena is predominantly a cultural world. And these mental-cultural factors in social behavior make economics less deterministic and less individualistic than many economists would prefer it to be. Like it or not, this reduces the advantage of mathematical modeling relative to verbal reasoning.
Another reason to suppose that mathematical modeling will wane is the shifting media landscape. As of now, academic economists still must publish in journals to be successful, and these require mathematical modeling. However, in the age of the internet, the print journal is a very inefficient forum for disseminating ideas. As economists increasingly make use of other forums, including social media, this may break the lock that print journals currently hold on career prospects. That in turn could facilitate more variety in the means of expression, breaking the monopoly currently held by mathematical modeling.
Second, and very much related to the likely decline in the prominence of modeling, economists are likely also to reluctantly come to recognize that, because cultural factors matter, the simple model of the individual homo economicus has only limited applicability.
Psychologist Daniel Kahneman, Presidential Medal of Freedom Awardee
The biggest threat to the assumption of homo economicus is not alternative theories of individual psychology, such as those in behavioral economics. In fact, behavioral economics has been caught up in what in psychology is known as the “replication crisis.” Rather, the need to go beyond the assumption of homo economicus will mostly arise from a recognition of the importance of culture as a determinant of behavior. Economists will need to see economic decisions as embedded in cultural circumstances. In order to understand economic phenomena, we will have to pay attention to the role of beliefs and social norms.
Because ideas and cultural context matter, there are many potential causal factors in economic phenomena. Those curmudgeons who argued that economics is not a “closed system” were correct. It is up to each economist to choose which causal factors to study and which to ignore. Unfortunately, this means that it is possible for different economists to arrive at — and to stick with — different conclusions based on predilections.
And this points to the third plausible development in economic theory. There is a very real possibility that over the next 20 years academic economics will congeal into a discipline, like sociology today, which is definitively shaped by an ideologically driven point of view. Among highly educated people, ideological polarization is increasing. Economists have always had their biases about which sorts of theories seemed reasonable; some of these biases are idiosyncratic, as when one economist is inclined to believe that labor demand responds very little to a change in wage rates and another is inclined to believe that labor demand responds a great deal. But going forward, biases are likely to increasingly be driven by political viewpoints rather than by other considerations.
This will be evident in beliefs of economists that are politically consistent but analytically contradictory. For example, it is politically consistent for someone on the left to believe that a rise in the minimum wage would not reduce hiring and also that more immigration would not depress wages. Analytically, however, these are opposite views. The minimum-wage increase will not reduce hiring if one treats labor demand as highly inelastic (so that a small change in hiring will be associated with a given change in wages). Increased immigration will not depress wages if one treats labor demand as highly elastic (so that a large change in hiring will be associated with a given change in wages). I think we are already starting to see economists opt for political consistency at the expense of analytical consistency.
This more political profession is very likely to point toward the left. Economists are part of an academic community in which peer pressure and community values push left. It is inevitable that the social life of an academic is going to involve interacting with people from other disciplines who are overwhelmingly on the left. This makes it uncomfortable on campus to espouse the free-market views that one used to hear from conservatives like Milton Friedman.
There are signs that the momentum within the profession is toward the left. For example, of the five major economics journals, the one that has experienced the largest increase in impact in recent decades has been the Quarterly Journal of Economics, associated with Harvard and its interventionist economics. Some of this has come at the expense of the Journal of Political Economy, associated with the University of Chicago and its free-market economics.
The left has a more appealing and more unified narrative of the financial crisis. Economists on the left treat the crisis as a product of individual irrationality on the part of home buyers, recklessness and greed on the part of bankers, and laxity on the part of financial regulators. In contrast, the right is split on its narrative. Peter Wallison blames housing policy and the actions of Freddie Mac and Fannie Mae. Monetarist John Taylor blames loose money in the years leading up to the crisis. Other monetarists, notably Scott Sumner and Robert Hetzel, blame tight money during the crisis.
I myself am inclined toward mental-cultural explanations. All of the participants in the run-up to the crisis, including the regulators, were embedded in a culture that saw housing as a socially desirable, low-risk investment. Regulators thought that banks were safer holding mortgage-backed securities than other assets, and they used capital regulations to steer banks in that direction. Although a few regulators expressed doubts about sub-prime mortgage lending, the general view was that, if anything, the availability of mortgage loans was too restricted. The same investment bankers who now are viewed as reckless were at the time regarded as experts in risk management.
In addition, the election of Donald Trump as President may lead even conservative economists to want to distance themselves from the right, at least as Trump defines it. Economists on the right are likely to be uncomfortable with Trump both in substance, particularly on trade and immigration, and in style. So we are likely to see less outspoken conservatism from academic economists than we would have if someone else, Democrat or Republican, had been elected in 2016. And the result will be an intensification of all the other trends pushing the profession to the left.
Fourth, it seems unavoidable that economists will reluctantly come to recognize that they deal in the realm of patterns and stories, rather than decisive hypothesis testing. It simply isn’t possible for economists and other social scientists to achieve the same rigor as is found in the natural sciences, and economists seem increasingly to be accepting this reality. One favorable sign is the increased focus on replicability of empirical work in economics. Many top journals are imposing requirements for transparency of data. There are also economists who are advocating that studies be “registered” in advance, so that scholars can track the studies that are not published because they fail to find “interesting” results.
While the goal of these sorts of efforts is often to chase the Holy Grail of total reliability, they may well have the interim effect of making it clear that existing studies lack reliability. Eventually, more economists may be willing to acknowledge that the Holy Grail is not attainable.
Edward Leamer titled one of his books Macroeconomic Patterns and Stories. In the introduction, he wrote,
You may want to substitute the more familiar scientific words “theory and evidence” for “patterns and stories.” Do not do that. With the phrase “theory and evidence” come hidden stow-away after-the-fact myths about how we learn and how much we can learn. The words “theory and evidence” suggest an incessant march toward a level of scientific certitude that cannot be attained in the study of the complex self-organizing human system that we call the economy. The words “patterns and stories” much more accurately convey our level of knowledge, now, and in the future as well. It is literature, not science. [Emphasis in the original.]
In 2009, when this book was published, Leamer’s views were contrarian and not widely shared. But as economists come to acknowledge the mental-cultural determinants of economic phenomena, and the complexity that this creates, they may come around to acknowledging the limited applicability of scientific methods in economics.
Finally, we come to the special case of macroeconomists, who were in an acknowledged state of crisis in 1980 but are oddly complacent today. My own view is that the attempt to interpret economic phenomena in aggregative terms, as if all workers were identical and all investment were in machinery, is proving untenable. Workers differ markedly in the nature of their skills and in the market value of those skills. Firms are investing not just in plants and equipment but in new products and processes. They are increasingly hiring people to develop organizational capital rather than to produce output.
As a result, we may come to see diminished interest in looking at the economy in aggregate terms — that is, as possessed of a single price level, unemployment rate, productivity-growth rate, and the like. Instead, there will be much more research done on divergences: among regions, among industries, among demographic groups, and so on.
Already, economists are aware that prices have been rising relatively rapidly in major service sectors, such as education and health care, while prices have been rising slowly or even falling in major goods industries, such as home electronics and computers. We are aware that wage and employment prospects continue to diverge between college graduates and those with less education, and between college graduates with STEM degrees and other degrees. Housing and labor markets in coastal cities look very different from those in Midwestern towns.
A few economists, led by Daron Acemoglu, have started to look at industry linkages. They are finding that various industry clusters respond to events in different ways. This increasing study of divergence could point toward the death of macroeconomic modeling as I learned it in graduate school and as it has until recently been taught. Where the tradition is to speak of the “representative agent,” the trend will increasingly be toward “I contain multitudes.” This ought to lead economists to focus on the processes by which new patterns of specialization and trade are formed and old patterns are rendered unsustainable. This research will offer insights in precisely the areas in which traditional macroeconomics is stale and unreliable.
DIVERSITY GAINED, DIVERSITY LOST
In the end, can we really have effective theory in economics? If by effective theory we mean theory that is verifiable and reliable for prediction and control, the answer is likely no. Instead, economics deals in speculative interpretations and must continue to do so.
This reality is far from new. But economists are still grappling with its implications. They seem to resist one implication in particular: that the claim of economists to scientific expertise is no longer tenable.
Professional economists are increasingly aware of the mental-cultural factors that affect economic behavior. As a result, they are willing to broaden their methods beyond the strict reliance on mathematical derivations and multiple regression that prevailed 40 years ago. But if economics has become less of a monoculture with respect to methods, it is now more uniform in its support for Federal Reserve technocratic efforts and for economic activism in general. In 1980, the critics of Keynesian economic policies enjoyed respect in the leading economics departments and journals. This is much less true today.
Young economists who employ pluralistic methods to study problems are admired rather than marginalized, as they were in 1980. But economists who question the wisdom of interventionist economic policies seem headed toward the fringes of the profession.
In this respect, the barriers to effective theory in economics are different and perhaps more worrisome than was the case in 1980. The contemporary state of economic theory reflects a broader crisis in the social sciences and a deepening cleavage between the college campus and the rest of society.
June 8, 2017
James Comey’s Intellectual History
by Nicholas Schmidle
More than three decades before the F.B.I. began investigating whether members of Donald Trump’s Presidential campaign had colluded with the Russian government, James Comey—the Bureau’s recently fired director—envisioned a Russian conquest of America. He was then a senior at the College of William & Mary, in Virginia, with a column in the school paper, the Flat Hat. His commentaries satirized everything from crooked politicians to classmates who fretted about life after graduation.
On December 4, 1981, he parodied Cold War appeasers. “One must pause and reflect upon nuclear holocaust,” he wrote. “I doubt many students have taken the time to consider the ramifications of nuclear conflict.” The school’s gym would surely close, he warned; intramural basketball would cease, and a campus film series would end. “The stakes are too high: It’s time we folded. We should unilaterally disarm.” President Ronald Reagan, Comey wrote, should send the Soviet leader, Leonid Brezhnev, a note “offering unconditional surrender.”
Liberals, he implied, would be pleased with a Soviet occupation: “The National Rifle Association would be flushed, crime would decrease, the Pentagon would be a shopping mall, Jerry Falwell would be sadistically tortured.”
Comey is now fifty-six. On Thursday, he is scheduled to testify before the Senate about Russian interference in the 2016 election. He will also likely be asked about the several personal interactions that he had with Donald Trump before May 9th, when Trump fired him. Trump’s view of Comey has oscillated wildly over the past year. In July, he disparaged the F.B.I.’s “phony investigation” of Hillary Clinton after it failed to lead to an indictment. In October, Trump praised Comey’s “guts” for reopening the case. This spring, the President became angry, in part, because in a series of awkward encounters Comey refused to pledge loyalty to him.
On February 14th, Trump cornered Comey after a terrorism-related briefing in the Oval Office. Trump’s national-security adviser, Michael Flynn, had resigned the previous day, and Trump urged Comey to drop the case against Flynn. “I hope you can see your way clear to letting Flynn go,” Trump said, according to remarks Comey prepared ahead of tomorrow’s hearing. Comey did not drop the case. Indeed, because Trump kept meeting with him and discussing the Russia investigation, Comey had become not just a representative for the Bureau but also a kind of witness. Following a meeting at Trump Tower in January, Comey said that he went outside and immediately recorded their conversation on a laptop in an F.B.I. vehicle, adding, “Creating written records immediately after one-on-one conversations with Mr. Trump was my practice from that point forward.”
Comey has told associates that he never tried to lure Trump into improprieties. “It wasn’t like Jim was going to the Mob boss, all wired up, trying to secretly extract a confession,” one associate told me. Yet, in Comey’s view, Trump’s behavior toward him repeatedly crossed the line, making him “an obstructor.” Based on Comey’s prepared remarks, his Senate testimony will lay the basis for this legal claim, without explicitly making the charge.
His testimony is likely to be supremely assured. A senior intelligence official said of Comey, “He likes the stage. He takes politicians’ questions apart. He loves the fact that he’s smarter than them.”
In October, 2003, Comey was asked, at his confirmation hearing to become the Deputy Attorney General, how he might handle a politically charged case implicating an Attorney General who refused to recuse himself. “I don’t care about politics,” he insisted. “I care about doing the right thing.” In a profile published that December in New York, Comey further smudged the lines of his political identity. He said that in his twenties he had been both a Communist and a Reaganite. “I’m not even sure how to characterize myself politically,” he went on. “Maybe at some point, I’ll have to figure it out.”
Over the past year, Comey’s detractors have debated his actions and decisions on normative grounds. Was it proper for him to hold a press conference to announce the F.B.I.’s findings on the Hillary Clinton e-mail case? Should he have sent a letter to Congress, days before the election, notifying them that he was reopening the investigation? Why didn’t he inform voters before November 8th that Trump’s campaign was under investigation for possible collusion with a foreign adversary? Meanwhile, there has been little focus on Comey’s moral and intellectual leanings.
Despite Comey’s protestations that he has no interest in politics, he has signalled some abiding concerns over the years. His college thesis, “The Christian in Politics,” is about power and integrity, and is anchored in a comparison of the political philosophies of Reinhold Niebuhr and Jerry Falwell. Comey concluded that Falwell was a huckster who was inclined to “violate the constitutional separation of Church and State as well as the tax-exempt status of his church.” He was repelled by what he saw as Falwell’s false projection of virtue. Comey considered Niebuhr, however, to be an intellectual giant, one of “the world’s greatest moral and political theologians.” He concurred with Niebuhr that Christians were “essential to the political order,” and that a life led in emulation of Jesus was one “guided by the impossible norm of love,” and that such an existence placed “political institutions under greater possibilities.”
At the same time, Comey noted, Niebuhr recognized that it could be dangerous for a politician to see himself as a moral beacon. “The pretensions of virtue are as offensive to God as the pretensions of power,” Niebuhr said. Earlier this year, Comey, speaking at the University of Texas, echoed Niebuhr’s warning, saying, “John Adams once said to Thomas Jefferson, in one of the great letter exchanges, ‘Power always thinks it has a great soul.’ There’s great danger that I will fall in love with my own virtue.”
Upon graduating, Comey continued to voice political opinions. In May, 1982, the Times published a letter in which Comey criticized an editorial for its “condemnation of Right-to-Lifers” and for its suggestion that the federal government should “pay for abortion through Medicaid.” Comey avoided expressing his personal views on abortion, but he emphasized that Roe v. Wade, in upholding bans on late-term abortions, “explicitly stated that government has an interest in abortion and is therefore justified in exercising authority over the actions of pregnant women.” Comey went on:
The Supreme Court’s 1973 decision in Roe v. Wade gives all women the right to abortion but not a guarantee to the fulfillment of that right. Most of the rights Americans possess do not include such entitlement. We have a right to travel. Not all can afford to travel. Why then do you not criticize the Government for discriminating against the poor by not providing plane tickets? The same could be said of many elective medical procedures. And abortion is an elective procedure.
Two years later, after the Wall Street Journal ran a piece equating smokers’ rights with a woman’s right to alleviate morning sickness with medication, Comey objected, writing, “We may tolerate cigarette smoking because the threat is to the user, but the potential danger of the anti-nausea drug goes beyond the pregnant woman.” He submitted another letter to the Times, criticizing a proposal in the Albany legislature that would require New York supermarkets to sell New York wine. Such a law, he argued, would reveal a “naked preference” for state-specific economies. Comey had voted for Jimmy Carter in 1980, but his evolution into a Reagan Republican was evident.
After graduating from the University of Chicago Law School, in 1985, Comey clerked for Judge John Walker, Jr., George H. W. Bush’s cousin, in the Southern District of New York. Comey became a Republican. In public, however, he portrayed himself as nonpartisan. In 1996, he became the managing Assistant U.S. Attorney in the Eastern District of Virginia’s Richmond office. He soon oversaw a successful program to crack down on guns in the city. He made a point of declaring that the initiative was “totally apolitical.”
Comey remained a conservative, but he carried an aura of political independence into the next two Administrations. In March, 2004, he became the acting Attorney General when John Ashcroft went into the hospital. After Comey learned that the N.S.A. had established a warrantless domestic-wiretapping program—and that the legal standing for the program was dubious—he told President George W. Bush that he was being “poorly served” by advisers. Prepared to resign over the matter, he quoted Martin Luther: “Here I stand, I can do no other.” In the end, resignation wasn’t necessary: Bush embraced his counsel. Later that year, Comey scolded Thomas DiBiagio, the U.S. Attorney in Maryland, who had pressed his staff to generate “front-page” indictments of Democrats before Election Day; DiBiagio, Comey said, had allowed politics to “taint” the Justice Department’s work. Before Comey left the Bush Administration, in 2005, he appointed a special prosecutor to lead an investigation of leaks that ultimately resulted in the conviction of Scooter Libby, the chief of staff for Vice-President Dick Cheney.
Four years later, Obama reportedly considered Comey for a Supreme Court vacancy. After Comey became the F.B.I. director, in May, 2013, he publicly contradicted the Administration on several issues. He told Congress that he saw no reason why survivors of the terrorist attack in Benghazi, Libya, couldn’t testify on Capitol Hill. This undermined the position of the Justice Department, which had argued that such public discussions could jeopardize the F.B.I.’s criminal investigation. Senator Lindsey Graham, who was eager to have high-profile hearings on Benghazi, said, “I was very pleased to hear these comments by the F.B.I. director.”
In 2014, at a forum at the University of Chicago Law School, Comey contradicted Obama and Attorney General Eric Holder by endorsing the idea of the “Ferguson effect”—the notion that crime rates in America were rising, in part, because police were being circumscribed by activist groups, such as Black Lives Matter, which used video evidence to document violent abuse of citizens. “Something deeply disturbing is happening in places across America,” Comey said. “Far more people are being killed in many American cities, many of them people of color, and it’s not the cops doing the killing.” He went on, “Part of the explanation is a chill wind that has blown through law enforcement over the last year, and that wind is surely changing behavior. In today’s YouTube world, are officers reluctant to get out of their cars and do the work that controls violent crime?” Amnesty International called Comey’s comments “outrageous.”
It wasn’t the first time that Comey had stumbled when addressing racial politics. In 1980, at William & Mary, he set off a campus-wide controversy when he published a series of articles in the Flat Hat about the school’s struggle to increase minority enrollment. The articles were generally balanced, but, in the opening paragraphs of the series, he noted, “There are those at the College who feel that William & Mary does not need to attract more black students, and is in fact practicing ‘massive reverse discrimination.’ ” Comey then quoted a tenured white supremacist in the sociology department, Vernon Edmonds, describing him as “one of a group of social scientists nationwide who believe in the strong possibility of a genetic intelligence gap between races.” (Edmonds was later exposed as a financial supporter of David Duke.) Edmonds, Comey wrote, believed that “affirmative action is a futile attempt only tolerated because ‘social concerns are dominated by feeling, not science.’ ” The Flat Hat received many letters of protest. Professors in the sociology department disavowed Edmonds’s remarks, saying, “We consider Professor Edmonds’s views to be unfounded, ill-advised and clearly insensitive.” Comey responded by suggesting that his reporting was rigorously impartial: “I do not agree with Professor Edmonds’ views. They are intelligently presented by him, however, and are crucial to the issue of affirmative action. Such opinions, though they are in an extreme minority at the College, do exist and must be presented in any balanced piece.”
Comey’s ambition to seem free of political bias was perhaps most tested by the Hillary Clinton e-mail-server case. When two of Comey’s top advisers first told him that classified material might have been at risk, Comey recognized that the case would place the Bureau in a precarious situation. If agents found evidence to prosecute Clinton, the F.B.I. would infuriate half the country; if they failed to find anything, the Bureau would infuriate the other half.
Comey had been acquainted with some of the scandals that had swirled around the Clintons. In the nineteen-nineties, he worked briefly as a counsel on the Senate Whitewater Committee investigation. And in 2002, while serving as the U.S. Attorney in Manhattan, Comey directed the investigation of President Bill Clinton’s last-minute pardon of Marc Rich, the fugitive businessman whose wife had donated four hundred and fifty thousand dollars to the Clinton Library between 1998 and 2000. Comey took the pardon as a personal affront. In 1992, he had flown to Moscow and Zurich, attempting to lure Rich back to the U.S. to face trial. When he learned that Clinton had pardoned Rich, perhaps as a favor for the campaign donations, he told the Richmond Times-Dispatch, “It takes your breath away.”
A year into the Hillary Clinton server probe, F.B.I. agents on the case concluded that they were unlikely to find evidence to prove criminal intent. Comey held a press conference to announce that the case against Clinton was closed, but—perhaps in a clumsy bid to seem impartial—chastised her for being “extremely careless” with her e-mails. Louis DiGregorio, an F.B.I. agent in the New York office at the time, was stunned by the press conference, feeling that the announcement had put the F.B.I. in an awkward bind. (He recently retired.) “I don’t give two shits about politics in Washington,” he told me. “We rarely announce any status of our investigations in public. We might call a target’s or a subject’s lawyer and say, ‘We’re not working on this anymore,’ but we always leave the door open. If you stray from that road, you can come back, but you’ll pay the consequences.”
After the press conference, Breitbart News went on the attack against Comey, suggesting that he was a liberal in disguise. Before joining the F.B.I., Comey had been the general counsel at Lockheed Martin. One Breitbart report noted that he had earned six million dollars the same year that Lockheed Martin had donated money to the Clinton Foundation. This clearly implicated Comey, Breitbart declared, in Washington’s “big-money cronyism culture.”
During the election cycle, it was apparent that the political divisions in the country at large had permeated the F.B.I.’s New York office. “People there really hated Hillary Clinton,” a federal law-enforcement officer told me. (The F.B.I. is more than eighty per cent white, and predominantly male.) The TVs were often locked on Fox News. DiGregorio considered the office, like the rest of the F.B.I., to be “very conservative,” adding, “You’re not going to get Abbie Hoffman signing up for this kind of work.” James Kallstrom, a former F.B.I. agent in charge of the New York office, went on the radio and derided the Clintons as a “crime family,” and called their foundation “a cesspool.” (Kallstrom is a former marine, and his foundation, the Marine Corps-Law Enforcement Foundation, had received a million-dollar check from Trump.)
In October, Comey learned that agents in the New York office had found thousands of Clinton e-mails on a laptop seized from Anthony Weiner, the former congressman, whose wife, Huma Abedin, was the vice-chairman of Clinton’s campaign. Comey conferred with his aides. Normally, the F.B.I. would conduct such an investigation in silence; secrets were the Bureau’s “lifeblood,” Comey once said. But, according to personal and F.B.I. associates of Comey’s, he was concerned that someone in the New York office might leak this development to the press.
Since Comey had declared the case closed, in July, he felt compelled to announce that it was being reopened. If he did not, he feared, and the news was leaked by Clinton’s many opponents in the Bureau, it could seem as if Comey had been trying to protect her. Comey’s executive assistant for national security, Michael Steinbach, told the Times, “In my mind, at the time, Clinton is likely to win. It’s pretty apparent. So what happens after the election, in November or December? How do we say to the American public: ‘Hey, we found some things that might be problematic. But we didn’t tell you about it before you voted’? The damage to our organization would have been irreparable.” (Comey apparently wasn’t as worried about liberals in the Bureau leaking the news that the Trump campaign was under investigation for possibly colluding with the Russian government.)
On October 28th, Comey sent a letter to Congress revealing that he was reopening the server case. The document almost immediately became public. On Fox News, Rudy Giuliani, the former New York mayor, suggested that the internal threat Comey had felt was real. “Did I hear about it?” Giuliani said about the laptop discovery. “You’re darn right I heard about it.” He added that former agents at the Bureau had told him that “there’s a revolution going on inside the F.B.I., and it’s now at a boiling point.” (The special agent in charge of the Bureau’s criminal division in New York has recently referred to stopping internal leaks as a primary focus of his job, promising to deliver “heads on sticks.”)
Nine days after Comey sent his letter to Congress, the Bureau revealed that the e-mails on Weiner’s laptop amounted to nothing. But during this period the national press fixated on the spectacle, and Clinton’s lead dropped significantly—and, perhaps, decisively—in national polls.
Comey has said that he has no regrets over the server investigation. His testimony on Thursday will no doubt underscore his belief that—no matter what people say about him—he is a figure of impartial justice. In April, USA Network aired the first episode of a six-part documentary titled “Inside the FBI: New York.” Comey, who agreed to let a film crew embed in the New York office for a year, has appeared in several episodes. In a scene deleted from the televised series, he said, “We are never on anyone’s side. Sometimes, in a polarized world, it’s hard for people to even conceive of that.”
June 6, 2017
Malay Self-Blamers and Opposites –Two Peas in a Decadent Pod
by Dr. M Bakri Musa, Morgan-Hill, Calffornia
If at one end we have those Malays who blame “others” for all our travails, at the polar opposite we have the “self-blamers.” Every society has its share of them, and our Malay self-blamers do not lack for ammunition. We are being burdened by the inadequacies of our culture, they remind us ad nauseam; we are too “nice” and not aggressive enough so others like the pendatangs (immigrants) and neo-colonizers take advantage of us.
If only we were a bit kurang jar (uncouth), more kiasu (crude), or be like those pendatangs and colonials, our leaders lament. Now that we are in charge, it is our turn now to take advantage of the “others,” these leaders assert.
They exhort us to have our own revolusi mental (“Mental Revolution”), be a Melayu Baru (New Malay), and to assert if not demand our rights as “natives.” When those slogans lose their flavor with time, as inevitably they would when there are no accompanying effective actions, our leaders concoct new ones. Today Malays are urged to assert with unbounded aggressiveness our Ketuanan Melayu (Malay hegemony) status. Again this, as with all previous exhortations we were assured to no end, would be our salvation.
Malaysia has not yet finished with Vision 2020, the ambitious socio-economic development program initiated by Mahathir over 30 years ago and trumpeted without end by many (including current leaders) that would catapult us into the developed world status, and we are into “Transformasi 50” that would promise to, well, transform the nation. We have yet to access and learn from the successes or failures of Vision 2020. Never mind that when 2050 comes around, all those champions of Transformasi 50 would be long dead or reduced to senility and thus could not be held accountable.
To these “self-blamers,” our culture is not our only burden. We have also strayed far from our faith, they piously chastise us. Hence, more religion, especially for our young! With that comes a hugely expanded religious establishment, with more ulamas to lead the flock along the “straight path,” and even more religious police to snare those tempted to stray or have done so. For added measure, we also concocted a new and presumably improved version of our faith, Islam Hadhari. As for educating our young, well, we have to indoctrinate them even more so they too would appreciate our new pristine “Islamic” ways.
My favorite is the self-blamers’ pseudo-scientific theory of faulting our basic nature, our genes. To them, our fate is sealed the moment we were conceived. There is nothing that we could do to alter that reality; accept it, they advise us. It is the price for our indulging in too much inbreeding, apparently. “We must marry outside our race!” our supposedly scientifically enlightened leaders urge us.
Such a belief in our biologic fatalism is not only cruel and destructive, but it is also wrong, very wrong, as modern science tells us. It would however, make a great practical joke at a multiracial bachelors’ party.
If our ancestors’ psyche was destroyed by the religious determinism of the past (“Our fate is written in the book” – Al Qadar), today our minds, especially those of the young, are being crippled by the biologic determinism propagated by these “modern” pseudo-scientific leaders whose understanding of genetics is gleaned only from reading articles in Readers’ Digest or The Dummies Guide to Human Genetics.
There is yet another variation of this strand of “self-blame,” and that is our leaders’ constant complaining of our supposed lack of unity. If only we are “united,” these leaders soothingly assure us, then there would be no mountains too high for us to scale and no rivers too wide to cross. Those obstacles would magically disappear. With unity, we could take on all comers, including those immigrants, neo-colonialists, and whoever else who would dare cross our path.
Our leaders often remind us that it was our unity that let us prevail over the Malayan Union, and it was our unity that made possible our independence from colonial rule. True, only if you gloss over the facts and reality. As mentioned earlier, our sultans were more than eager to sign that Union treaty. In fact, they had already signed the Agreement, giving away the nation’s sovereignty to the British, all for a lousy pension. As for our subsequent quest for independence, those same sultans were none too eager either. Not surprising considering the fate of sultans in neighboring Indonesia and the Maharajas in India with their countries’ independence.
I am all for unity; to be against it would be like being against motherhood and sambal balacan (shrimp paste). And you cannot be Malay if you are against sambal balacan!
What scares me is not unity per se rather these leaders’ concept of it. Scrutinize it and unity to them means us being reduced to a flock of sheep, meekly and blindly following our shepherd – them. These leaders confuse unity with unanimity; it is the latter that they demand, not the former, and unanimity to their views. Thus, they have no tolerance for divergent and dissenting views. That is the scary part. These leaders’ version of unity would best be illustrated by the Germans under Hitler.
Scrutinize Malay leaders’ utterances when they invoke “unity” of their followers. It is not so much unity towards facing our common challenges as how to increase Malay productivity, improve national schools, curb corruption in our midst, or retard the influences of extremist Islamists, rather unity against those “other” non-Malay Malaysians. A totally unproductive and potentially destructive preoccupation. Worse, it is a strain of Hitler’s unity.
I have nothing against the concept of the united flock being led by a benevolent shepherd as per the biblical metaphor, leading us from one lush meadow to another while protecting us from predators.
The reality is far different. In far too many instances our leaders are not saintly shepherds. They are only too happy to lead the flock over the cliff or to the slaughterhouse to feed their ego and greed, as the sultans did with signing the Malayan Union Treaty. Even if Malay leaders were saintly to begin with, the endless uncritical adulations from their followers would eventually get to their egos and then they would think that they could walk on water or do no wrong. Then be ready for the masses to be led to the slaughterhouse.
I agree that we must be united, but let it be in our vigilance against predators. We must also remember that sometimes this predation could come from within, as from our greedy, corrupt, and incompetent leaders.
June 1, 2017
WEF-ASEAN Open Forum in Phnom Penh, Cambodia (May 10, 2017)