I’m a bit confused by Tom Friedman’s New York Times column this morning. I don’t like having a “lying, unethical bully at the helm”, either. Here’s what confuses me:

It all depends just how far Trump goes with this. Will it be a mild departure from the approach of every other U.S. president of the postwar era — each of whom understood that we had an overall interest in being the overall steward of a democratizing global order — or a radical departure? I don’t know yet, but if you look around, a lot of people are acting as if the cat’s away so the mice can play.

I have a three part question for Mr. Friedman. How does each of the following:

• President Bush’s invasion of Iraq without clear casus belli and without United Nations Security Council sanction
• President Obama’s bombing of the internationally recognized government of Libya that ultimately led to the overthrow of that government exceeding the UNSEC resolution that permitted the bombing and
• President Obama’s support for anti-government Syrian rebels without UNSEC sanction

comport with a “democratizing global order”? And from 2012 to 2016 did the world become more democratic, less democratic, or stay about the same.

My answers to those questions is that none of those actions is consistent with a democratizing global order or liberal values more generally and none have promoted U. S. interests. I would tell a somewhat different story of the last 20 years.

All of our presidents very nearly without exception are, to varying degrees, liars and bullies. It goes with the job. Lying and bullying with nicely creased pants is still lying and bullying nonetheless. Like it or not promotion of a democratizing global order is facilitated by American military and economic strength and nothing promotes America’s military strength quite so much as its sparing use. When used it must be decisive.

Even more important we cannot maintain American economic strength without an industrial base and a revised relationship between the returns to capital and the returns to labor. Unsightly as industrial production is, we must make and build more of what we consume. The vision that so many of our elites seem to have of a park-like America with themselves in the role of the eloi and the Chinese, South Koreans, and much of the rest of the world cast as Morlocks ignores that in The Time Machine the Morlocks were the masters and the eloi cattle. That is what comes of watching movies rather than reading the books they’re based on.

I think that the world is less democratic than it was in 2012 and any globalization of democracy has declined, a victim of promiscuous use of American military strength and the decline of America’s economy and society. Government-furnished health care and higher education will not correct either of those.

In the very first microeconomics course I ever took (after the Econ 101 series), I recall that the teacher opened the very first class with the observation that we don’t know how to create economic growth but we do know how to create shortages. In a piece at the Wall Street Journal David Henderson takes note of the work of David Romer and William Nordhaus who’ve just been awarded the Nobel Memorial Prize in Economics:

The winners of this year’s Nobel Memorial Prize in Economics are U.S. economists William D. Nordhaus of Yale and Paul M. Romer of New York University. Mr. Nordhaus is acknowledged for “integrating climate change into long-run macroeconomic analysis,” while Mr. Romer is credited with “integrating technological innovations into long-run macroeconomic analysis.”

What is meant by “long-run macroeconomic analysis,” the common element in both awards? Largely, the term refers to projections of economic growth. Growth isn’t the only focus of macroeconomic analysis; short-term ups and downs in the economy, known as the “business cycle,” are considered part of the same field. But growth is by far the more important factor in economic health. Consider that the anguish of the Great Depression was caused by a 30% drop in U.S. gross domestic product, but real GDP today is 14 times its level in 1929. Over periods of a decade or more, the effect of growth dominates the effect of even the most serious recessions.

For that reason, it makes sense for economists to focus on long-run growth, as Messrs. Romer and Nordhaus have done.

In the 1980s, Mr. Romer was the lead developer of endogenous-growth theory, which proposes that growth results from factors that exist within—or are “endogenous” to—a given economy. Before this breakthrough, researchers’ preferred model of growth was one developed in the 1950s by Massachusetts Institute of Technology economist Robert Solow. Though Mr. Solow acknowledged that technological progress was a key driver of economic growth, he had no way to project the pace or impact of such progress: it was “exogenous” to his model. Mr. Romer made technology endogenous. In particular, he noted that there are incentives within an economic system to come up with new ideas, and he urged policy makers to think carefully about how to structure such incentives.

Patents are an old example of an effective economic incentive. Consider the pharmaceutical industry. A 2014 Tufts study estimated that it costs an average of $2.6 billion to develop a new drug and market it successfully. Once the formula is discovered and tested, another company could copy the invention of the firm that did all the work. If that second company were allowed to sell the drug, the first one probably wouldn’t do the work in the first place. A patent gives the inventor a monopoly for a fixed number of years during which it can charge a monopoly price and earn the returns necessary to motivate it to innovate.

In a 2006 article on economic growth, Mr. Romer noted the huge difference in long-run well being that would result from raising the growth rate by a few percentage points. He cites the “rule of 72,” which holds that the length of time over which a magnitude doubles can be found by dividing the growth rate into 72. So, for example, an economy that grows 2% a year will take 36 years to double in size, while one that grows 4% a year will double in 18 years.

Mr. Nordhaus also has made multiple contributions to economic literature on growth. In the citation for his award, the Nobel committee didn’t mention his demonstration that the price of light has fallen by many orders of magnitude over the last 200 years. He showed that the price of light in 1992, adjusted for inflation, was less than 0.1% of its price in 1800. The failure of government analysts to account fully for this and similar price reductions, he argued, led them to underestimate the real growth rate of the economy and wages.

What earned Mr. Nordhaus his Nobel, though, was his work on the economics of global warming. Starting in the 1970s, he constructed increasingly comprehensive models of the interaction between the economy and additions of carbon dioxide to the atmosphere. Economists use these models, along with assumptions about the current and future magnitude of emissions, to compute the “social cost of carbon.” Mr. Nordhaus has subsequently used this cost to recommend taxes on carbon. In 2017 he computed the optimal tax to be $30 for each ton of carbon dioxide. Such a carbon tax would increase the price of gasoline by about 27 cents a gallon.

Mr. Nordhaus recently noted the large degree of uncertainty about the optimal tax. For the $30 tax above, the actual optimal tax could be as little as $6 a ton, or as much as $93.

Robert P. Murphy, an economist at Texas Tech, used Mr. Nordhaus’s work to show that setting too high a carbon tax can be worse than setting no carbon tax at all. Using Mr. Nordhaus’s 2009 calibration, Mr. Murphy calculated the present value of damages caused by carbon dioxide and abatement costs at $22.6 trillion. Mr. Nordhaus’s optimal carbon tax would have reduced damages but increased abatement costs, decreasing the impact of emissions to a total of $19.5 trillion—a relatively minor net improvement of just over $3 trillion.

Meanwhile, the Nordhaus model shows that the cost of a policy to limit the temperature increase to only 2.7 degrees Fahrenheit by 2100 would have been $37.03 trillion—$16.4 trillion more than the cost of doing nothing after accounting for the damage done by carbon emissions. Thus, Mr. Nordhaus’s work doesn’t support the recent announcement by the International Panel on Climate Change about the urgent need to limit warming to 2.7 degrees. Indeed, Paul Krugman castigated Mr. Nordhaus in 2013 for his belief that the optimal temperature increase is 4.1 degrees.

Interestingly, neither Mr. Nordhaus nor anyone else anticipated fracking, which has increased natural-gas usage at the expense of coal. The result is that the U.S. has cut its carbon-dioxide output year after year without the aid of a carbon tax.

It’s refreshing to see the Nobel Prize awarded to economists who study growth. It makes sense to worry about short-term fluctuations in GDP, but it makes even more sense to keep our eyes on what matters much more: long-term growth and the policies that favor it.

I don’t think there’s any more important topic in economics than growth and I’m glad that Drs. Romer and Nordhaus have been recognized.

The editors of the Washington Post jump into the scrum on fossil fuel use:

The new IPCC report advises global leaders that the oft-cited goal of keeping warming below 2 degrees Celsius is riskier than many imagine. A 1.5-degree goal would be far less dangerous, but the world has only about a decade to make the “rapid and far-reaching” changes required to meet that goal.

The difference between 1.5 degrees and 2 degrees would be substantial. Coral reefs would go from mostly gone to almost entirely gone. More sea-level rise would put up to 10 million more people in danger. High heat would kill more people. It would be much hotter on land and in cities. Deadly mosquito-borne illnesses such as malaria and dengue fever would spread farther. Droughts would be more likely. So would deluges. Tropical fisheries would empty further. Staple crop yields, particularly in some of the world’s poorest nations, would decline more. Disastrous loss of the Antarctic ice sheet would be more likely. Feedback loops could push warming further than anticipated, as, for example, thawing permafrost releases gases the frozen ground has trapped for centuries. Up to nearly 1 million additional square miles of permafrost would thaw at 2 degrees of warming.

To their credit they allow nuclear power generation a supporting role:

Radically changing the trajectory would require a combination of strategies. Humans would need to waste far less energy. Forests would have to be preserved and expanded. Emissions-free renewables would have to ramp up — to around three-quarters of global electricity demand by 2050 — with an assist from nuclear and still-nascent carbon-capture technology that sequesters emissions from traditional fossil fuel burning. Extra-dirty coal, which still produces more electricity than any other single source, would have to be finally phased out. The transition would require investment of about 2.5 percent of world GDP through 2035.

To my eye this is proof positive that newspapers need to hire fewer J-school grads and more engineers. At present solar and wind power require fossil fuel backups, backups that must be in continuous operation. More solar and wind inherently mean more waste. And that doesn’t delve into the total lifetime. Reservoir hydroelectricity is by far the most popular form and results in substantial production of methane, a worse problem pound for pound than carbon dioxide. Nuclear will need more than a supporting role.

The graph above illustrates U. S. greenhouse gas emissions since 1990. As you can see the U. S. has actually decreased its production of greenhouse gases and that was without draconian measures. In China and India every additional dollar of GDP requires additional production of greenhouse gases. That’s not the case here.

The U. S. is the largest producer of greenhouse gases and we can do more but we’re moving in the right direction. The editors of the Washington Post need to direct their fire on countries that are going in the wrong direction which includes Germany. Doing otherwise is simply looking for political targets of opportunity.

Be still my beating heart. I hope this op-ed by Lawrence Summers in the Washington Post will be taken to heart:

Economists like me see the world through the prism of models, fit to statistical data and tested against market realities. Economic models provide powerful perspective: I have used them to argue that, had the economy been left to itself and policymakers not heeded the lessons of history and theory, the 2008 financial crisis might have led to another depression.

But there are other ways of gaining understanding about an economy and its workers. This was brought home to me last month when I accompanied my wife on a trip different from any I had ever taken. We drove for two weeks on two-lane roads from Chicago to Portland, Ore., across the Great Plains and Rocky Mountains. The larger cities we passed through included Dubuque, Iowa; Cody, Wyo.; and Bozeman, Mont.

Driving across America, as opposed to looking down from a plane, makes clear how much of this vast country is uninhabited. Again and again, we encountered signs warning us to check our gas because it would be 50 miles to the next station. I’m sure there were moments when we were 250 miles from any place where I could have purchased an iPhone charger. Often there was no cellphone service to be had, either.

Read the whole thing. I can only hope that these experiences are reflected in Dr. Summers’s policy thought.

I’ve written before of trips of that sort. I think they should be compulsory for those seeking higher office or appointments of the sort that Dr. Summers has held. I also think they would be useful foreign policy tools, more useful than treating foreign dignitaries to tours of the fleshpots of New York and Washington, DC. If we’re going to continue to host the United Nations, why not move the location of its meeting place to Topeka?

I also hope that we’re seeing a resurgence of federalism. The United States is an extremely large, extremely diverse country. Policies that make sense in California or New York may not make any sense in Lexington, Kentucky or Tulsa, Oklahoma and simply dismissing those places as unimportant or, worse, deplorable is just an argument for devolution.

The editors of the New York Times are concerned about coal consumption:

If we keep burning coal and petroleum to power our society, we’re cooked — and a lot faster than we thought. The United Nations scientific panel on climate change issued a terrifying new warning on Monday that continued emissions of greenhouse gases from power plants and vehicles will bring dire and irreversible changes by 2040, years earlier than previously forecast. The cost will be measured in trillions of dollars and in sweeping societal and environmental damage, including mass die-off of coral reefs and animal species, flooded coastlines, intensified droughts, food shortages, mass migrations and deeper poverty.

The worst impacts can be avoided only by a “far-reaching and unprecedented” transformation of the global energy system, including virtually eliminating the use of coal as a source of electricity, the panel warned.

Sadly, their zeal appears primarily to be a vehicle for attacking President Trump:

Yet President Trump, who has questioned the accepted scientific consensus on climate change, continues to praise “clean beautiful coal” and has directed his Environmental Protection Agency to reverse major strides undertaken by the Obama administration to reduce greenhouse gas emissions from coal-fired power plants. This is unbelievably reckless. In addition to undermining the fight against climate change, the president’s efforts to prop up the dirtiest of all fuels will also exact a significant toll on public health, on the hearts and lungs of ordinary Americans.

Whether you agree with the findings of the UN’s panel or not, whether you think anthropogenic global warming is real or not, coal is problematic. Those dramatic pictures illustrating the incredibly poor air quality in Shanghai, Beijing, and other Chinese cities are primarily showing us the effects of airborne particulates, primarily from coal-burning power plants. Nitrogen oxides, sulfur dioxide, mercury, and other pollutants are also produced.

Consider the graph at the top of this post. Were the United States to eliminate burning coal as a means of producing electricity entirely it would reduce world consumption of coal by less than 10%. If you concern is environmental, you cannot escape the conclusion that China must reduce its dependence on coal and India and other Asian countries must not increase their use of coal. Chinese pollution does not remain in China as any meteorologist living on the West Coast of the U. S. can tell you.

What should we be doing if we wish to reduce our use of coal?

• We should be seeking alternatives to the economic activity that coal production represents.
• We should promote the development and construction of nuclear power plants, particularly small modular ones based on thorium.
• We should promote the production of natural gas.
• We should discourage our consumption of products manufactured in China.

Due to their variability there is no such thing as pure wind and solar power generation. They all have fossil fuel backups. Nuclear power is the only truly carbon-free way that we have of producing electricity reliably. In its irrational zeal to eliminate its use of nuclear power, Germany is actually increasing its use of coal for power generation, something not reflected in the graph at the top of the page.

That’s what proportionality demands. I wish the New York Times could see issues in terms other than those of partisan politics.

I encourage you to read the excerpt from John Mearsheimer’s latest book, “The Great Delusion: Liberal Dreams and International Realities” at The National Interest. Here’s a snippet:

Liberal hegemony is an ambitious strategy in which a state aims to turn as many countries as possible into liberal democracies like itself while also promoting an open international economy and building international institutions. In essence, the liberal state seeks to spread its own values far and wide. My goal in this book is to describe what happens when a power­ful state pursues this strategy at the expense of balance­-of­-power politics.

Many in the West, especially among foreign policy elites, consider liberal hegemony a wise policy that states should axiomatically adopt. Spreading liberal democracy around the world is said to make eminently good sense from both a moral and a strategic perspective. For starters, it is thought to be an excellent way to protect human rights, which are sometimes seri­ously violated by authoritarian states. And because the policy holds that liberal democracies do not want to go to war with each other, it ultimately provides a formula for transcending realism and fostering international peace. Finally, proponents claim it helps protect liberalism at home by eliminating authoritarian states that otherwise might aid the illiberal forces that are constantly present inside the liberal state.

That’s Wilsonianism in summary. The upshot of the piece is that the U. S. is not a liberal power; it just plays one on TV.

I think the reality is that the U. S. is in turns liberal, promoting democracy and liberal values, and self-interested, promoting its own interests. We are at our best when the two coincide and at our worst when solely promoting our domestic political interests.

The most basic problem with Wilsonianism is that there is a genuine difference of opinion among countries about fundamental values and there is really no such thing as universally accepted values. When, as is the case, that the U. S. is an outlier in areas like freedom of speech and religion, conflating our values with universal values is problematic. Even the United Kingdom from whom we learned about fundamental freedoms isn’t as absolutist as we with respect to freedom of the press.

I am not a Wilsonian; in the past I’ve said I don’t have a Wilsonian bone in my body. Heck, I think that promoting individual liberty within our borders is enough of a challenge for us.

For those who’ve decided that Brett Kavanaugh is guilty of everything of which he’s been accused and/or that he is not legitimately a Supreme Court Justice and that the Supreme Court itself is now illegitimate, the right way to respond is by organizing and voting.

The wrong way is to use violent imagery in doing so. So, for example, “this is war” (Charles Blow in the New York Times), “fighting” (David Leonhardt in the same outlet), “assault” (Dana Milbank in the Washington Post), and “political hit” (now-Justice Kavanaugh in testimony). In contrast E. J. Dionne’s recent writings are a good model of how to express dismay without resorting to violent imagery.

There is danger in violent imagery being a standard part of political discourse. In a country of more than 300 million people there are bound to be a certain number of crazy people who will be moved to actual violence by it. It won’t take a lot of violence to set this tinderbox ablaze.

One more thought. Two wrongs still do not make a right. The notion that the Republicans are solely to blame or the Democrats are solely to blame is just partisan flummery. No one is wholly innocent. No one is wholly guilty. If you need absolutes, look somewhere other than politics.

The truth is that the dollar’s continuing position as the global reserve currency will make it darned tough for the U. S. to “bring manufacturing back” to the United States. At the Wall Street Journal John D. Mueller remarks:

French economist Jacques Rueff described the fatal weakness of foreign-exchange reserves in a 1932 lecture. He explained that when a monetary authority accepts dollar or sterling claims for its official reserves rather than gold, purchasing power “has simply been duplicated,” so that, for example, “the American market is in a position to buy in Europe, and in the United States, at the same time.” In other words, when a foreign nation accepts repayment in U.S. dollars it increases its money supply without diminishing the U.S. money supply, allowing both countries’ central banks to lend in dollars.

This credit “duplication” is not only inflationary in the reserve-currency country and any country whose currency is tied to the reserve currency; it also necessarily causes the average price of goods to rise faster in the reserve-currency country than among its trading partners. This is why Britain’s and America’s manufacturing industries lost their competitiveness as exporters, resulting in deindustrialization.

This so-called Triffin Dilemma, though first described by Rueff, was named around 1960 for the Belgian-American economist Robert Triffin, who described the post-World War II unraveling of the Bretton Woods gold-exchange system. Under the gold standard, the world-wide increase in monetary gold equaled the world’s net exports. The problem of the Triffin Dilemma is that every additional dollar of foreign-exchange “reserves” must be matched by an equal deficit in the reserve-currency country’s net exports—that is, by net imports.

The glut of reserve currencies made the 20th century a period of intense inflation. The average price of British goods increased 72-fold from 1900 to 2000, while U.S. prices rose 18-fold over the same period. These increases far outpaced inflation in other major export countries that did not provide international reserve currencies. The prices of German, Japanese and Chinese goods all have fallen compared with U.S. exports.

Tariffs and other forms of protectionism can’t restore America’s export competitiveness. They invite retaliation, inhibit trade, and raise prices even higher. The uncompetitive U.S. price level is effectively a tariff on American goods. Thinking that another tariff will help American workers makes no more sense than believing one can heal the injuries of a pedestrian hit by a car by backing up over the victim.

The Triffin Dilemma can’t be solved without a monetary reform that ends the dollar’s use as the world’s chief reserve currency. Here’s a deal that could place Mr. Trump in Alexander Hamilton’s league: Persuade America’s sovereign creditors that the U.S. will convert every penny of foreign dollar reserves into long-term government-to-government debt, to be paid off in gold over, say, 30, 40 or 50 years. Hamilton’s plan paid off the debt from the American Revolution by the mid-1830s. The gradual repayment of all outstanding official foreign dollar reserves would reverse America’s industrial decline by restoring the price competitiveness of U.S. manufacturing.

Why hasn’t the euro become the world’s reserve currency (I hear someone ask)? There are many reasons. The Germans don’t want it to be because they’re fully aware of the Triffin Dilemma and want to continue their export-driven growth. The European Central Bank does not allow the amount of liquidity that would be required, probably for that reason. European countries have too much sovereign debt. And there are concerns about the stability of the European Union.

If the yuan were convertible, it might be a better candidate but it isn’t so it’s not. Besides, a currency that’s still under the control of a relative handful of Chinese officials who are committed to a mercantilist approach to economic growth is pretty risky.

Frankly, I doubt that Mr. Mueller notion of an effective return to the gold standard will gain much traction. The present system gives unearned benefits to too many people. It provides benefits to people who deal in dollars, it makes it less expensive for the federal government to borrow, and it allows Americans to consume (particularly to consume oil) at prices lower than would otherwise be the case.

There are some things that could be done short of a return to the gold standard. For example, the World Bank has guidelines for the volume of dollar holdings that countries may maintain. China, Germany, Japan, South Korea, and many other countries that seek to grow via exports maintain holdings in dollars that far exceed those guidelines. The World Bank could start penalizing those countries. Obviously it won’t but it could.

Still, it would be nice if more Americans and particularly American pundits and politicians understood that the dictums of classical economics about international trade presuppose the gold standard.

In a piece at the New York Times Nate Cohn reviews some of the possible outcomes in the midterm elections. I recommend you read the whole thing but here is the kernel of his piece:

The possibility that the Kavanaugh nomination is helping Republicans in Republican-leaning areas is important because the fight for control of both the House and the Senate will be determined largely in Republican-leaning areas. This simple fact has always been the G.O.P.’s biggest advantage. If the electorate is polarized along the lines of recent presidential elections, as it was during the Obama presidency, Republicans could hold down their losses considerably.

Democrats have been considered clear favorites in the fight for House control because polls and special election results have made it seem that the electorate wouldn’t be so polarized, allowing them to compete in many Republican-leaning districts. But if Democrats can’t break through and actually carry the many Republican-leaning districts they’ve put into play, Republicans could stay highly competitive in the fight for House control and even survive a wave election.

A lot of the commentary including mine has focused on the likely outcomes and Mr. Cohn’s is no exception. The greatest likelihoods are either that the Democrats eke out a narrow victory in the House and fail to take the Senate (which I’ve been predicting for some time), the Democrats receive a narrow House majority and an even narrower majority in the Senate, or that Democrats fall short of taking control of either house of Congress.

Let’s consider some of the less likely alternatives.

The Democrats pick up large majorities in both houses of Congress

For Democrats to pick up as large a majority in the House as the Republicans have now they’d need to net 50 seats or more. That has happened twice in midterm elections in the post-war period and in both cases it was the Republicans who accomplished the feat. It’s not beyond the realm of possibility but it’s very unlikely.

The Republicans pick up seats in both houses of Congress

By my reckoning the president’s party picking up seats in both houses has happened exactly once since the end of World War II—in 2002—and again it was the Republicans who did it. Given the present polls and President Trump’s approval rating, I think this is quite unlikely. At the time of the 2002 midterms President Bush’s approval rating was 68%, something hard to imagine now.

The Democrats pick up seats in the House and lose seats in the Senate

The president’s party losing seats in the House and picking them up in the Senate has happened three times in the post-war period: in 1962, 1970, and 1982. This is not an outcome that Democrats should wish for. In each case the House gains were small—not nearly enough for a majority—and Senate gains would strengthen the Republicans’ hand. IMO this particular outcome is nearly as likely as the likely outcomes of the prevailing wisdom.