for support, not illumination: Andrew Lang was a nineteenth-century Scottish writer. His actual saying used “statistics” rather than “economics.” Same idea. The quote may be found in Alan S. Mackay, Scientific Quotations: The Harvest of a Quiet Eye (New York: Crane, Russak, 1977), 91.
“a slogan”: Francis X. Clines, “White House Winces at Economist’s Words,” New York Times, October 28, 1982.
“40 seconds on camera”: As quoted in Newsweek, September 8, 1986, 14.
“his not understanding it”: Upton Sinclair, I, Candidate for Governor: And How I Got Licked (Berkeley: University of California Press, 1994), 109.
“scope of their horizon”: David A. Stockman, The Triumph of Politics: Why the Reagan Revolution Failed (New York: Harper & Row, 1986), 14.
bills Congress ever passed: Jacob Weisberg, “Overnight Statesman: Dan Rostenkowski’s New Look,” New Republic, March 24, 1986, 22.
“booby-trapped with hidden pressures”: David A. Stockman, The Triumph of Politics: Why the Reagan Revolution Failed (New York: Harper & Row, 1986), 80, 105, 123.
the train in its tracks: See Mike DeBonis, “How Health Care for 9/11 Responders Became Just Another Political Football,” Washington Post, December 14, 2015.
reform in 1993 enormously: See Haynes Johnson and David S. Broder, The System: The American Way of Politics at the Breaking Point (Boston: Little, Brown, 1996), 118–127. Ironically, that same budget reconciliation process helped health care reform get passed in 2010.
balance within ten years: US Government, Budget FY 2018: A New Foundation for American Greatness, May 23, 2017.
“not enough for me”: Noam Scheiber, The Escape Artists: How Obama’s Team Fumbled the Recovery (New York: Simon & Schuster, 2012), 147, 15–16.
standard QWERTY keyboard: The story is nicely told by Paul A. David, “Clio and the Economics of QWERTY,” American Economic Review 75, no. 2 (May 1985): 332–337, on which this paragraph is based. Its accuracy has been vigorously disputed, but it illustrates my point.
“the effect is felt”: Executive Office of the President, Council of Economic Advisers, The Economic Case for Health Care Reform: Update, December 14, 2009, obamawhitehouse.archives.gov/sites/default/files/microsites/091213-economic-case-health-care-reform.pdf.
“who gain by the new ones”: Niccolò Machiavelli, The Prince, trans. N. H. Thompson (New York: Dover, 1992).
more than two million jobs: Congressional Budget Office, Appendix C: “Labor Market Effects of the Affordable Care Act: Updated Estimates,” in The Budget and Economic Outlook: 2014 to 2024, February 4, 2014, 117–128, cbo.gov/publication/45010.
trumpeting this conclusion: For a sampling of misleading headlines and quotations, see Glenn Kessler, “No, CBO Did Not Say Obamacare Will Kill 2 Million Jobs,” Washington Post, February 4, 2014.
different from being fired: Jonathan Chait, “Obamacare, Jobs, and ‘What Matters Politically,’” New York Magazine, February 5, 2014.
“Republican ad-maker’s dream”: David Nather and Jason Millman, “Obamacare and Jobs: CBO Fuels Fire,” Politico, February 4, 2014.
“economic theorists and practitioners”: James Carter, “Economists Have a Message: Clinton’s Policies Are Wrong for America,” Hill, September 26, 2016, thehill.com/blogs/pundits-blog/presidential-campaign/297719-economists-have-a-message-clintons-policies-are.
“not really recovered at all”: The particular poll cited was conducted by Fox News: “Syria, Benghazi and the U.S. Economy,” Fox News Poll, October 10–12, 2015, foxnews.com/politics/interactive/2015/10/14/fox-news-poll-syria-benghazi-and-us-economy.
formidable lobbying force: See Haynes Johnson and David S. Broder, The System: The American Way of Politics at the Breaking Point (Boston: Little, Brown, 1996), especially Chapter 10.
“a journalist hears it”: S. Robert Lichter, as quoted in Tatiana S. Boncompagni, “Washington Coverage Is Steady but Public Doesn’t Seem to Care,” Wall Street Journal, August 13, 1997.
“Broken Tax Code”: White House, “Unified Framework for Fixing Our Broken Tax Code,” September 27, 2017, whitehouse.gov/the-press-office/2017/09/27/unified-framework-fixing-our-broken-tax-code.
“what will advance him”: Thomas J. Friedman, “Clinton’s Fibs, and Her Opponents’ Double Whoppers,” New York Times, June 1, 2016.
“Pants on Fire”: The Washington Post kept a similar scale, though with many fewer observations. Their results were quite similar. “Comparing Hillary Clinton, Donald Trump on the Truth-O-Meter,” PolitiFact, politifact.com/truth-o-meter/lists/people/comparing-hillary-clinton-donald-trump-truth-o-met (accessed September 20, 2017); Washington Post Fact Checker, “The 2016 Election Fact Checker,” Washington Post, November 3, 2016, washingtonpost.com/graphics/politics/2016-election/fact-checker/?tid=a_inl.
“good for CBS”: Among the hundreds of sources for this quotation, see Paul Bond, “Leslie Moonves on Donald Trump: ‘It May Not Be Good for America, but It’s Damn Good for CBS,’” Hollywood Reporter, February 29, 2016, hollywoodreporter.com/news/leslie-moonves-donald-trump-may-871464/.
“purchased for that price”: James M. Fallows, Breaking the News: How the Media Undermine American Democracy (New York: Pantheon Books, 1996), 108–109.
the price of its stock: Among the dozens of studies that could be cited, see Ronald Stunda, “The Market Impact of Mergers and Acquisitions on Acquiring Firms in the U.S.,” Journal of Accounting and Taxation 6, no. 2 (September 2014): 30–37.
“reward friends and destroy enemies”: James Bennet, “The On-the-Record Flap About Off the Record,” New York Times, March 8, 1998.
fixates on the Fed: My remarks were subsequently published. See “Overview,” in Proceedings of the Federal Reserve Bank of Kansas City Symposium on Reducing Unemployment: Current Issues and Policy Options, Federal Reserve Bank of Kansas City, August 25–27, 1994, 329–342. Don’t read them; they’re banal.
“inside the [Federal Reserve] system”: Paul Starobin, “Economy: Blindsided,” National Journal, October 8, 1994.
“hold down unemployment”: Keith Bradsher, “Fed Official Disapproves of Rate Policy,” New York Times, August 28, 1994. Notice, by the way, the absurdly misleading headline. The Fed had just raised interest rates, and I had voted with the majority.
“to lead the Fed”: Robert J. Samuelson, “Economic Amnesia,” Washington Post, September 7, 1994.
fee has been imposed: Central London has had a congestion fee since 2003, so we know it is workable in a huge city. Mayor Michael Bloomberg recommended such a fee in 2007, but the idea died in the New York State legislature. See Bruce Schaller, “New York City’s Congestion Pricing Experience and Implications for Road Pricing Acceptance in the United States,” Transport Policy 17, no. 4 (2010): 266–273.
“older and younger scholars”: IGM Economic Experts Panel, “About the IGM Economic Experts Panel,” Chicago Booth Initiative on Global Markets, igmchicago.org/igm-economic-experts-panel (accessed September 20, 2017).
“what he wants to hear”: Paul A. Samuelson, “Economists and the History of Ideas,” American Economic Review 52, no. 1 (March 1962): 1–18.
“this is a spending bill”: Fox News, “In Stimulus Debate, Obama Drifts into Campaign Mode,” Fox News, February 6, 2009, foxnews.com/politics/2009/02/06/stimulus-debate-obama-drifts-campaign-mode.html.
2011, 2012, and 2013: See Alan S. Blinder and Mark Zandi, The Financial Crisis: Lessons for the Next One, Policy Futures Report, Center on Budget and Policy Priorities, October 15, 2015.
“neat, plausible, and wrong”: H. L. (Henry Louis) Mencken, Prejudices: Second Series (New York: Alfred A. Knopf, 1920), 158.
Capitalism and Freedom: Milton Friedman, Capitalism and Freedom (Chicago: University of Chicago Press, 1962).
“more than normal humans do”: Neil Irwin, “How a Quest by Elites Is Driving ‘Brexit’ and Trump,” New York Times, July 1, 2016.
of about 0.23 percent: See US International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, TPA-105-001, 4607, US Government Publishing Office, May 19, 2016, 70, usitc.gov/publications/332/pub4607.pdf.
siding with the minority: This idea is often attributed to Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (New Haven, CT: Yale University Press, 1982).
“be so complicated”: Those stunning words were widely reported at the time. See, for example, Kevin Liptak, “Trump: ‘Nobody Knew Health Care Could Be So Complicated’” (video), CNN, February 27, 2017, cnn.com/2017/02/27/politics/trump-health-care-complicated.
“most of their lives”: As quoted in Arthur Delaney and Michael McAuliff, “Paul Ryan Wants ‘Welfare Reform Round 2,’” Huffington Post, March 20, 2012, huffingtonpost.com/2012/03/20/paul-ryan-welfare-reform_n_1368277.html.
“in reverse—on steroids”: Robert Greenstein, “Statement of Robert Greenstein, President, on Chairman Ryan’s Budget Plan,” Center on Budget and Policy Priorities, March 21, 2012.
“bad trade deals”: Daily News Editorial Board, “Transcript: Bernie Sanders Meets with News Editorial Board,” New York Daily News, April 4, 2016, nydailynews.com/opinion/transcript-bernie-sanders-meets-news-editorial-board-article-1.2588306.
“oppose it as president”: Hillary Clinton, Warren (MI) Rally speech (video), August 11, 2016, youtube.com/watch?v=3rOUYlZV914.
skilled, college-educated workers: See, among others, David H. Autor, David Dorn, and Gordon H. Hanson, “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade,” Annual Review of Economics 8 (October 2016): 205–240.
18 percent higher: Executive Office of the President, Council of Economic Advisers, Table 4: “Summary of Export Wage Premium Literature,” in The Economic Benefits of U.S. Trade, 16, May 2015, obamawhitehouse.archives.gov/sites/default/files/docs/cea_trade_report_final_non-embargoed_v2.pdf.
“in part by the federal government”: Howard Rosen, “Trade Adjustment Assistance: The More We Change the More It Stays the Same,” in C. Fred Bergsten and the World Economy, ed. Michael Mussa (Washington, DC: Peterson Institute for International Economics, 2006), 81.
surge of displaced autoworkers: Office of Technology Assessment, Trade Adjustment Assistance: New Ideas for an Old Program—Special Report, PB87-203741, US Government Publishing Office, June 1987, 23–25, ota.fas.org/reports/8730.pdf.
capped at $450 million: US Department of Labor, Employment and Training Administration, Side-by-Side Comparison of TAA Program Benefits Under the 2002 Program, 2009 Program, 2011 Program, and 2015 Program, Trade Act Program: Trade Adjustment Assistance for Workers Programs, November 9, 2015, doleta.gov/tradeact/pdf/side-by-side.pdf.
pretty slow adjustment: US Department of Labor, Employment and Training Administration, Trade Adjustment Assistance for Workers Program, FY 2015, Annual Report to the Committee on Finance of the Senate and Committee on Ways and Means of the House of Representatives, 10, doleta.gov/tradeact/docs/AnnualReport15.pdf.
a comparative pittance: US Department of Labor, “FY 2017 Congressional Budget Justification, Employment and Training Administration: Federal Unemployment Benefits and Allowances,” 8, dol.gov/sites/default/files/documents/general/budget/CBJ-2017-V1-07.pdf.
“labeled a failure”: Robert J. Shiller, “Donald Trump and the Sense of Power,” Project Syndicate 79, November 21, 2016.
dynamism is already happening: See, for example, Ryan A. Decker, John Haltiwanger, Ron S. Jarmin, and Javier Miranda, “Declining Business Dynamism: What We Know and the Way Forward,” American Economic Review Papers and Proceedings 106, no. 5 (May 2016): 203–207.
“in time of war”: Henry George, Protection or Free Trade: An Examination of the Tariff Question with Especial Regard to the Interests of Labor (New York: Doubleday, 1886), 51.
“wages are too high”: Among many possible sources, see Maggie Haberman, “Donald Trump Insists That Wages Are ‘Too High,’” New York Times, November 11, 2015.
0.07 percent after fifteen years: US International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sector, TPA-105-001, 4607, US Government Publishing Office, May 19, 2016, 21, usitc.gov/publications/332/pub4607.pdf.
bottom tenth would lose 63 percent: Pablo D. Fajgelbaum and Amit K. Khandelwal, “Measuring the Unequal Gains from Trade,” Quarterly Journal of Economics 131, no. 3 (2016): 1113–1180.
pay just 3 percent: The International Trade Commission keeps tariff lists at hts.usitc.gov.
“common sense of mankind”: Adam Smith, The Wealth of Nations, Modern Library Edition (New York: Random House, 1937), 461.
10 percent premium to do so: Consumer Reports, “Special Report: Made in America,” Consumer Reports, May 21, 2015, consumerreports.org/cro/magazine/2015/05/made-in-america/index.htm. A more recent Bloomberg poll posed a similar question and found 82 percent of Americans “willing to pay a little more” for merchandise made in the United States. Bloomberg Politics Poll, “International Trade / Global Economy,” Polling Report, March 19–22, 2016, pollingreport.com/trade.htm.
total market income (36 percent): Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013, June 2016, 14, cbo.gov/publication/51361.
race between education and technology: Claudia Goldin and Lawrence E. Katz, The Race Between Education and Technology (Cambridge, MA: Harvard University Press, 2008).
Spain, Slovenia, and Russia: Data are from the OECD database.
twenty-fourth in reading literacy: Joe Heim, “On the World Stage, U.S. Students Fall Behind,” Washington Post, December 6, 2016.
to 276 times in 2015: Economic Policy Institute, “The Top Charts of 2016: 13 Charts That Show the Difference Between the Economy We Have Now and the Economy We Could Have.” December 22, 2016, epi.org/publication/the-top-charts-of-2016-13-charts-that-show-the-difference-between-the-economy-we-have-now-and-the-economy-we-could-have.
falls under Democrats: See Larry M. Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (Princeton, NJ: Princeton University Press, 2008), especially Chapter 2.
(the final year of their study) as in 1979: That’s about 25 percent based on the Gini measure. See Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013, June 2016, cbo.gov/publication/51361.
evenly divided on this question: The precise question is: “Should the government redistribute wealth by heavy taxes on the rich?” Notice the words “redistribute” and “heavy.” See Kathleen Weldon, “If I Were a Rich Man: Public Attitudes About Wealth and Taxes,” Roper Center for Public Opinion Research, Cornell University, February 4, 2015, ropercenter.cornell.edu/public-attitudes-wealth-taxes.
Table 9.1: The numbers in Table 9.1 are computed from data found at Organisation for Economic Co-operation and Development (OECD) Statistics, stats.oecd.org/. They pertain to 2012, 2013, or 2014, depending on the country.
“control of their economic lives”: Robert J. Shiller, “Donald Trump and the Sense of Power,” Project Syndicate 79, November 21, 2016.
monies are taken away: This is an instance of psychologists Daniel Kahneman and Amos Tversky’s “loss aversion.” A good nontechnical exposition can be found in Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds (New York: Norton, 2017).
modest minimum wage increases: See, for example, David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply,” American Economic Review 90, no. 5 (December 2000): 1397–1420.
Many others do not, however: Joseph R. Blasi, Richard B. Freeman, and Douglas L. Kruse, The Citizen’s Share: Reducing Inequality in the 21st Century (New Haven, CT: Yale University Press, 2013), 112, estimate that 47 percent of full-time private-sector wage and salary workers receive some form of profit sharing.
part or all of their higher labor costs: Ibid., Chapter 5.
offer incentive plans to all their workers: For this and other ways to encourage profit sharing, see ibid., Chapter 6.
3.7 percent in Australia: Harry J. Holzer and Robert I. Lerman, “Work-Based Learning to Expand Opportunities for Youth,” Challenge 57, no. 4 (July–August 2014): 18–31.
risen to almost 29 percent: See Morris M. Kleiner, Reforming Occupational Licensing Policies, Hamilton Project Policy Brief 2015-1, Brookings Institution, January 2015.
higher earnings as adults: Executive Office of the President, Council of Economic Advisers, The Economics of Early Childhood Investments, December 2014, obamawhitehouse.archives.gov/sites/default/files/docs/early_childhood_report_update_final_non-embargo.pdf.
particular policy becomes law: Martin Gilens, Affluence and Influence: Economic Inequality and Political Power in America (Princeton, NJ: Princeton University Press and the Russell Sage Foundation, 2012).
“dysfunctional mess”: James Stewart, “A Rare Moment of Unity on Capitol Hill, Thanks to Trump’s Tactics,” New York Times, November 4, 2016.
“fella behind the tree”: Robert Mann, Legacy to Power: Senator Russell Long of Louisiana (Lincoln, NE: iUniverse, 2003), 333.
“immortal souls were in danger”: Daniel P. Moynihan, “The Diary of a Senator,” Newsweek, August 25, 1986.
“sustainability over the long run”: Executive Office of the President, Executive Order 13531 of February 18, 2010: National Commission on Fiscal Responsibility and Reform, FR 75:35, US Government Publishing Office, 2010, gpo.gov/fdsys/pkg/FR-2010-02-23/pdf/2010-3725.pdf.
“like-kind to other real estate”: See Internal Revenue Service, “Like-Kind Exchanges Under IRC Code Section 1031,” FS-2008-18, February 2008, irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031.
“larger economy in the long run”: William G. Gale and Andrew A. Samwick, “Effects of Income Tax Changes on Economic Growth,” in The Economics of Tax Policy, ed. Alan J. Auerbach and Kent Smetters (Oxford: Oxford University Press, 2017), 13–39, 11.
is about 30 percent: Congressional Budget Office, The Distribution of Household Income and Federal Taxes, 2013, June 2016, https://cbo.gov/publication/51361.
opt out rather than in: Brigitte C. Madrian and Dennis F. Shea, “The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior,” Quarterly Journal of Economics 66, no. 4 (November 2001): 1149–1188.
the default was “out”: James J. Choi, David Laibson, Brigitte C. Madrian, and Andrew Metrick, “For Better or for Worse: Default Effects and 401(k) Savings Behavior,” in Perspectives on the Economics of Aging, ed. David A. Wise (Chicago: University of Chicago Press for NBER, 2004), 81–125.
all the way to zero: See, for example: David Kocieniewski, “G.E.’s Strategies Let It Avoid Taxes Altogether,” New York Times, March 24, 2011; Danny Yadron, Kate Linebaugh, and Jessica E. Lessin, “Apple Avoided Taxes on Overseas Billions, Senate Panel Finds,” Wall Street Journal, May 20, 2013.
this hoard at around $3 trillion: A January 2017 Treasury report contains an estimate of $2.8 trillion. See US Department of the Treasury, Office of Tax Policy, The Case for Responsible Business Tax Reform, January 2017, 41, treasury.gov/resource-center/tax-policy/Documents/Report-Responsible-Business-Tax-Reform-2017.pdf.
($14 billion in back taxes.): Among the many stories written about this case, see Natalia Drozdiak and Sam Schechner, “Apple Ordered by EU to Repay $14.5 Billion in Irish Tax Breaks” (video), Wall Street Journal, August 30, 2016, wsj.com/articles/apple-received-14-5-billion-in-illegal-tax-benefits-from-ireland-1472551598.
Bermuda in 2010: Executive Office of the President, Council of Economic Advisers, Table 5.1: “U.S. Controlled Foreign Corporation Profits Relative to GDP, 2010,” in Economic Report of the President, PR 44.9, US Government Publishing Office, 2015, 214, gpo.gov/fdsys/pkg/ERP-2015/pdf/ERP-2015.pdf.
no net tax increase: Climate Leadership Council, The Conservative Case for Carbon Dividends, February 2017, clcouncil.org/wp-content/uploads/2017/02/TheConservativeCaseforCarbonDividends.pdf.
more than pay for themselves: Glenn Kessler, “Trump Aides Sell Tax Plan with Pinocchio-Laden Claims,” Washington Post, September 29, 2017.
easy questions about financial matters: Annamaria Lusardi and Olivia S. Mitchell, “The Economic Importance of Financial Literacy: Theory and Evidence,” Journal of Economic Literature 52, no. 1 (March 2014): 5–44.
“ruin our country”: Kimberly Schwandt, “Boehner: It’s ‘Armageddon,’ Health Care Bill Will ‘Ruin our Country,’” Fox News, March 20, 2010.
“Everything else is negotiable”: Matt Bai, “Taking the Hill,” New York Times Magazine, June 2, 2009.
“Not once”: Terence Burlij, “Boehner: Obamacare Repeal and Replace ‘Not What’s Going to Happen’” (video), CNN, February 23, 2017, cnn.com/2017/02/23/politics/john-boehner-obamacare.
But consider: The bullet points that follow are adapted from Jonathan Rauch, “How American Politics Went Insane,” Atlantic (July–August 2016).
29 percent of eligible voters: Drew DeSilver, “Turnout Was High in the 2016 Primary Season, but Just Short of 2008 Record,” Pew Research Center Fact Tank, June 10, 2016, pewresearch.org/fact-tank/2016/06/10/turnout-was-high-in-the-2016-primary-season-but-just-short-of-2008-record.
incentives for small donations: See E. J. Dionne Jr., Norman J. Ornstein, and Thomas E. Mann, One Nation After Trump: A Guide for the Perplexed, the Disillusioned, the Desperate and the Not-Yet-Deported (New York: St. Martin’s, 2017), Chapter 9.
“man taking a walk”: Stated on a Tonight Show interview with Jay Leno. Ed O’Keefe, “Boehner Appearing on Leno: GOP Is to Blame for Shutdown,” Washington Post, January 24, 2014.
“a perfect law”: Gary Klott, “How Tax Plan Differs a Year Later,” New York Times, November 25, 1985.
“their own to jump from”: Jeffrey H. Birnbaum, “Reborn Bill: Radical Tax Overhaul Now Seems Probable as Senate Panel Acts,” Wall Street Journal, May 8, 1986.
speaks only on camera: Jeffrey H. Birnbaum and Alan S. Murray, Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely Triumph of Tax Reform (New York: Random House, 1987), 281.
“It’s so damn horrible”: Birnbaum and Murray, Showdown at Gucci Gulch, 278, 260.
“somebody tries to change it”: Michael McQueen, “Hughes, Barnes Aim at Mikulski in Senate Candidates’ Debate,” Washington Post, June 16, 1986.
tax multinational corporations: A recent and accessible version of the idea is Alan J. Auerbach and Douglas Holtz-Eakin, “The Role of Border Adjustments in International Taxation,” American Action Forum, November 30, 2016.
“Is Government Too Political?”: Alan S. Blinder, “Is Government Too Political?” Foreign Affairs 76, no. 6 (November–December 1997): 115–126.
the agreement for thirty years: US International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, TPA-105-001, 4607, US Government Publishing Office, May 19, 2016, usitc.gov/publications/332/pub4607.pdf.
a comparative pittance: Robert Puentes and Jennifer Thompson, Banking on Infrastructure: Enhancing State Revolving Funds for Transportation, Brookings Institution, September 2012.
mistakes over and over again: Michael Lewis, The Undoing Project: A Friendship That Changed Our Minds (New York: Norton, 2017).
“a level with dentists”: John Maynard Keynes, Essays in Persuasion (New York: Norton, 1963), 373. (The original edition was published in 1931.)