In the ongoing mythology vs. reality wars…

An entry by several NBER members and Sumit Agarwal on the mythology side, countered by Barry Ritholtz on the reality side:

There are two major, critical questions that show up in the literature surrounding the 1977 Community Reinvestment Act (CRA).

The first question is how much compliance with the CRA changes the portfolio of lending institutions. Do they lend more often and to riskier people, or do they lend the same but put more effort into finding candidates? The second question is how much did the CRA lead to the expansion of subprime lending during the housing bubble. Did the CRA have a significant role in the financial crisis?

There’s a new paper on the CRA, Did the Community Reinvestment Act (CRA) Lead to Risky Lending?, by Agarwal, Benmelech, Bergman and Seru, h/t Tyler Cowen, with smart commentary already from Noah Smith. (This blog post will use the ungated October 2012 paper for quotes and analysis.) This is already being used as the basis for an “I told you so!” by the conservative press, which has tried to argue that the second question is most relevant. However, it is important to understand that this paper answers the first question, while, if anything, providing evidence against the conservative case for the second.

There is a simple step that anyone attempting to make a logical argument about causation should essay before going to an econometric model: does the causal link make any f–king sense? The extinction of the dinosaurs might have caused the Renaissance, but I don’t f–king think so.

I have long been skeptical about the NBER and the involvement of political agendas in its actions. Maybe it’s just that economics has become a more conservative profession in my lifetime, but this paper just adds to my disquiet about NBER in particular.

Why I regret not reading Scoobie Davis more frequently

Via Scoobie Davis, this gem from Rick Perlstein:

And that, at last, may be the explanation for Mitt Romney’s apparently bottomless penchant for lying in public. If the 2012 GOP nominee lied louder than most—and even more astoundingly than he has during his prior campaigns—it’s just because he felt like he had more to prove to his core following. Lying is an initiation into the conservative elite. In this respect, as in so many others, it’s like multilayer marketing: the ones at the top reap the reward—and then they preen, pleased with themselves for mastering the game. Closing the sale, after all, is mainly a question of riding out the lie: showing that you have the skill and the stones to just brazen it out, and the savvy to ratchet up the stakes higher and higher. Sneering at, or ignoring, your earnest high-minded mandarin gatekeepers—“we’re not going to let our campaign be dictated by fact-checkers,” as one Romney aide put it—is another part of closing the deal. For years now, the story in the mainstream political press has been Romney’s difficulty in convincing conservatives, finally, that he is truly one of them. For these elites, his lying—so dismaying to the opinion-makers at the New York Times, who act like this is something new—is how he has pulled it off once and for all. And at the grassroots, his fluidity with their preferred fables helps them forget why they never trusted the guy in the first place.

Don’t miss the part about an oilfield in the placenta.

And if I’d read Scoobie, I would have seen the latest Jack Chick, which ties together Catholicism, Islam, Communism, Nazism, Free Masonry, and Satanism into one neat bundle. Did you know that 1 million Southern Baptists have joined their body to the Whore of Windsor and become Masons?

Multiple choice Mitt gets every option wrong on his tax plan

Romney has proposed a 20% rate cut and limiting deductions to $17,000 or $25,000 or $50,000, depending how generous he’s being with imaginary money that day. So, would such a tax reform be revenue neutral, or even raise revenue?

Tax Policy Center:

Eliminating all itemized deductions would yield about $2 trillion of additional revenue over ten years if we cut all rates by 20 percent and eliminate the AMT. Capping deductions would generate less additional revenue, and the higher the cap, the smaller the gain. Limiting deductions to $17,000 would increase revenues by nearly $1.7 trillion over ten years. A $25,000 cap would yield roughly $1.3 trillion and a $50,000 cap would raise only about $760 billion.
…
Without more specifics, we can’t say how much revenue such limits would actually raise. But these new estimates suggest that Romney will need to do much more than capping itemized deductions to pay for the roughly $5 trillion in rate cuts and other tax benefits he has proposed.

So, even at its best, Romney is talking about cutting revenue by about $300B per year. Like, say, cut Medicare benefits by nearly half. That would do it.

The real Women in the Binder story

Apparently Mitt lied.

What a surprise.

Oh, what a piece of work is Han…del

(image from http://cache.gawkerassets.com/assets/images/39/2012/02/eb8e07101f4f8099a2b6c77418a79b72.png)

(image from https://twitter.com/#!/karenhandel/status/8080771312)

Meet Karen Handel, Senior Vice President of Public Policy FAIL. It’s just malicious gossip that Handel promised to end funding for Planned Parenthood well before the Stearns congressional hearing began. Gossip like this:

“I will be a pro-life governor who will work tirelessly to promote a culture of life in Georgia. … I believe that each and every unborn child has inherent dignity, that every abortion is a tragedy, and that government has a role, along with the faith community, in encouraging women to choose life in even the most difficult of circumstances. …since I am pro-life, I do not support the mission of Planned Parenthood.” [Signed, Karen Handel]

[She] “promised to eliminate funding for breast and cervical cancer screenings provided by” Planned Parenthood, according to Jezebel.

You’re being too kind

(image from http://mariopiperni.com/)

Via Scott Horton, Der Spiegel’s Mark Pitzke:

Africa is a country. In Libya, the Taliban reigns. Muslims are terrorists; most immigrants are criminal; all Occupy protesters are dirty. And women who feel sexually harassed — well, they shouldn’t make such a big deal about it.

Welcome to the wonderful world of the US Republicans. Or rather, to the twisted world of what they call their presidential campaigns.
…
They lie. They cheat. They exaggerate. They bluster. They say one idiotic, ignorant, outrageous thing after another. They’ve shown such stark lack of knowledge — political, economic, geographic, historical — that they make George W. Bush look like Einstein and even cause their fellow Republicans to cringe.
…
And so the farce continues. The more mind-boggling its incarnations, the happier the US media are to cheer first one clown and then the next,
…
Then there’s Newt Gingrich…the US media now reflexively hails him as a “Man of Ideas” (The Washington Post) — even though most of these ideas are lousy if not downright offensive, such as firing unionized school janitors, so poor children could do their jobs.

Pompous and blustering, Gingrich gets away with this humdinger as well as with selling himself as a Washington outsider — despite having made millions of dollars as a lobbyist in Washington. At least the man’s got chutzpah.
..
Americans have a short memory. They forget, too, that Gingrich was driven out of Congress in disgrace, the first speaker of the house to be disciplined for ethical wrongdoing.
…
Rick Perry’s blunders are legendary.
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Meanwhile, Michele Bachmann … [is] still tolerated as if she’s a serious contender. Ron Paul’s fan club gets the more excited, the more puzzling his comments get. Jon Huntsman, the only one who occasionally makes some sort of sense, has been relegated to the poll doldrums ever since he showed sympathy for the Occupy Wall Street demonstrators.

Which leaves Mitt Romney, the eternal flip-flopper and runner-up…
…
What a nice club that is. A club of liars, cheaters, adulterers, exaggerators, hypocrites and ignoramuses.

Pitzke misses the point. These are the sorts of personal characteristics that Republicans admire, at least as long as the person in question has lots of money. How can the party who impeached Bill Clinton for adultery a little over 10 years ago have as its frontrunner a man who was engaging in adultery at the same time that he was impeaching Bill Clinton? It only makes sense if Bill Clinton’s sins were not big enough to gain him a place in the Republican pantheon.

I predict that what will happen in the end is a deadlocked convention, and an exciting, new candidate will materialize. Someone relatively unknown. Someone whose secrets are well enough hidden that they won’t emerge before the election. Probably a military man.

And someone worse than all of the rest of the liars club that is the Republican primary.

Murdoch phone hacking befogged

Parliamentary questioning of Les Hinton demonstrated that he’s one of the most competent corporate executives out there:

The culture committee questioned Les Hinton, the former executive chairman of Rupert Murdoch’s lot. He appeared from New York by video link. Thanks to modern technology, it was possible for a great cloud of ignorance, prevarication, vagueness and amnesia to billow across the Atlantic.

Mr Hinton knew nuffink and remembered less. You could have stopped any passing schoolboy and learned as much.

One of the great talents you must have to be a corporate executive is to be informed about every detail of your subordinates’ lives except when it involves your own personal liability. “Sociopathic” barely begins to describe it.

Guilty, guilty, guilty: Murdoch editors discussed phone hacking regularly

Amy Thomson, Tariq Panja and Jonathan Browning, Bloomberg:

News Corp. (NWSA)’s editors at the News of the World Sunday tabloid discussed the practice of phone hacking in daily meetings, a former reporter said, increasing the pressure on executives to explain why they were not aware of it.

The practice was “widely discussed in the daily editorial conference” until “explicit reference to it was banned by the editor,” former royal reporter Clive Goodman said in a March 2007 letter that was published by U.K. lawmakers today.
…
Murdoch told lawmakers last month that he hadn’t realized until late 2010 that phone hacking was widespread at the News of the World. That’s been contradicted by Tom Crone and Colin Myler, two former executives of the tabloid

You can see the letter here. I don’t know how one could make it any more plain that these people are crooks.

Well, yes I do. Nick Davies, The Guardian, adds this detail, which makes it clear that the conspiracy went higher:

Goodman’s claims also raise serious questions about Rupert Murdoch’s close friend and adviser, Les Hinton, who was sent a copy of the letter but failed to pass it to police and who then led a cast of senior Murdoch personnel in telling parliament that they believed Coulson knew nothing about the interception of the voicemail of public figures and that Goodman was the only journalist involved.

And more lies, these from Murdoch. Erik Larson and Lindsay Fortado, Bloomberg:

Rupert Murdoch was “confused or misinformed” when he gave testimony to British lawmakers probing phone hacking by News Corp. (NWSA)’s News of the World tabloid, the company’s former U.K. law firm said.

The alleged confusion resulted in News Corp.’s chairman giving “inaccurate and misleading” statements about why the company’s U.K. unit hired Harbottle & Lewis LLP in 2007 when it was faced with phone-hacking claims, the firm said in a letter to parliament made public today.

__________
Updated. The Guardian:

The Culture Media and Sport Committee met today Tuesday 16 August 2011 to discuss the evidence it has received in response to its requests to various individuals for further information and clarification, in its work on phone hacking.

Having considered the responses it received as a whole, the Committee has decided to call Tom Crone, Colin Myler, Daniel Cloke and John Chapman to give further evidence on Tuesday 6th September. Depending on their evidence under questioning, the Committee may also have further questions for James Murdoch and others.

Deficits driven by Bush tax cuts, recession

From CBPP via Avedon:

Yeah, the wars are a factor, they should add in Medicare D, but the picture is clear: without ending the Bush tax cuts, there is simply no way to close the budget gap except to outright steal the Social Security and Medicare trust funds.

Read the article. It refutes the Heritage Foundation apologia for the Bush tax cuts, noting:

1. Heritage admits that it understates the cost of the tax cuts by omitting their impact on rising net interest costs.
2. Heritage ignores the fact that the share of deficits accounted for by the Bush-era tax cuts will grow in future years as the impact of the economic downturn on deficits diminishes
3. Heritage assumes that regular discretionary spending (other than war costs and stimulus funds) will grow at the same rate as the GDP over the next 10 years. In contrast, we assume that such appropriations will grow somewhat more slowly in the 10-year budget window because they will grow with inflation; this is the standard, widely accepted baseline assumption.
4. It was not a sudden spurt of growth in Social Security, Medicare, and Medicaid that turned projected budget surpluses into deficits [these were accounted for in baselines developed by CBO].

If you start out from wrong assumptions, which Heritage and therefore the Republicans are doing, you will end up doing things that will simply make the deficits worse.

It’s not blank. It’s made out to G.O.P.

Robert Borosage:

Seldom have we witnessed a more dishonest speech in prime time than that delivered by House Speaker John Boehner last night on the debt ceiling crisis. “The sad truth,” he declared, “is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen.”

The sad truth is that statement is a bald lie, applied to a president who, far from wanting a “blank check,” has endorsed Senate Majority Leader Harry Reid’s plan for an unconscionable $2.7 trillion in over ten years from discretionary spending as ransom to Republican threats to blow up the economy by not raising the debt ceiling.

The largest lies in Boehner’s speech were the unspoken ones, namely the claims that:
* The GOP didn’t create the debt
* The rise in debt is due to spending, rather than the collapse of employment
* The GOP isn’t responsible for creating the debt ceiling crisis

How can a human being stand up and mislead the American people this way? It’s very similar to the story of Raquel Nelson, the woman whose child was killed by a drunk driver being threatened with more jail time than the guy who killed the child (fortunately the sentence was suspended). John Boehner is the drunk, the Democrats are the mother, and the child….