BRIEFLY NOTED: For 2023-05-30 Tu

WTF happened wiþ the debt ceiling?; NVIDIA CEO; shilling for billionaire grifters rarely works; Rampell on IRS funding, Cavendish on UK industrial policy, Snyder on Ukrainian culture, & Lieven on...

…Nicholas II Romanov,…

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MUST-READ: On Debt Ceiling “Negotiations”:

This seems to me right:

Catherine Rampell: ‘To Biden’s credit, GOP’s worst ransom demands are gone. No sharp safety-net cuts, REINS Act, Medicaid work requirements. Which is…good. But then also, what was the point of all this? We could have gotten here thru the normal appropriations process. That is, this is ~where we likely would have ended up after normal budget negotiations under divided government (flat spending, tweaks to various programs). And we could have gotten here without embarrassing ourselves on the global stage by threatening default…

And this seems to me to be… simply wrong?:

Li Zhou & Dylan Matthews: Biden and McCarthy’s budget deal to lift the debt ceiling, explained: ‘The standoff that led to this deal is only the latest brinksmanship over the debt ceiling… used by both political parties as leverage for policy demands or as a messaging tool. In the last few decades, however, Republicans have become more aggressive…. Many in the GOP saw the 2011 debt ceiling negotiations as successful and as one of the few opportunities the party had to push the spending cuts in a time of divided government. “I think one of the takeaways was that running this play worked, you know, we were able to actually achieve something and use this moment for leverage,” said Brendan Buck, a staffer to House Speaker John Boehner in 2011. This year’s outcome seems to reaffirm that approach. Although Republicans were forced to make their own serious concessions as part of the discussions, they did secure some key wins that further curb access to social programs, and that roll back investments in non-defense spending…

With the high-level takeaway being this:

Noah Smith: The debt ceiling deal: What was the whole point?: ‘A manufactured crisis leads to an ineffectual "solution"…. The debt ceiling deal has a little bit of positive, a little bit of negative, and a whole lot of disappointing “meh”…. I probably wouldn’t even bother with a blog post, even on a slow news week…. The House GOP went through months of dramatic, high-stakes negotiations, forced the administration to consider the Fourteenth Amendment and the trillion dollar coin, got the media talking seriously about the prospect of a U.S. sovereign default, and made America look like a dysfunctional circus… all that for a little bit of discretionary spending restraint, a few added work requirements for food stamps, and a little defunding of the IRS? Seriously?? It’s like if a guy walked into a restaurant with a ticking bomb demanding to blow everyone up if he didn’t get a free peppermint!… I still hold out hope that now that McCarthy has convinced the GOP base that he’s… a tough guy… he can get back to creating the same kind of actually useful bipartisan legislation that we saw in Biden’s first two years…

My take—which may be wrong—on the 2011-era debt-ceiling “negotiations” was that it was very hard for the Democratic Party to come out of it with policy victories when the Obama administration kept on insisting on kicking the ball into the wrong goal.

The Obama administration wanted, more than anything else, a “grand bargain” on Entitlements, even a really lousy “grand bargain”—never you mind that history tells us that such “grand bargains"“, when they deliver cuts in programs, simply enable future tax cuts for the rich when the political balance swings in favor of the Republicans. Since the Obama administration was more worried and scaring Democrats to make them fall into line, they lost the substantive policy negotiation BigTime.

This time I am not sure what happened: The Biden administration disclaimed belief in workarounds that would mean that the Republicans actually were not holding the world economy hostage, and so seemed to give the Republicans valuable leverage, which they then were… somehow unable to use? Could it be that it was all a game of Dingbat Kabuki? Could it be that what the Republican Rite wanted was for Kevin McCarthy to show that he would push things to the deadlined, and they did not care whether he won substantive policy victories? Was it just McCarthy saying “I will give you a quick and easy substantive budget negotiation if in return you spend two months acting like I am powerful and you are scared”?

It is somewhat of a mystery to me…

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ONE VIDEO: NVISDIA CEO Jensen Huang at Computex:

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ONE IMAGE: Shilling for Billionaire Grifters Rarely Goes Well:

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Very Briefly Noted:

1. Alex Carp: The Man Who Invented the Trillion-Dollar Coin: ‘An Atlanta lawyer was just spitballing on a financial blog. He didn’t expect Washington to listen…

2. Matt Yglesias: Seventeen thoughts on the debt ceiling deal: ‘A pretty good deal—but a very bad process…. They forced Biden to agree to flat nominal discretionary spending for one year…. But that’s something Republicans could (and would) have gotten through the normal appropriations process anyway…. The point of debt ceiling hostage-taking was supposed to be to win spending concessions that can’t be won through the normal appropriations process…

3. Cory Doctorow: Ideas Lying Around: ‘Friedman had a tried-and-true answer to these skeptical queries: someday, there will come a crisis. When the crisis comes, people will look for answers. The answers they choose will be those “ideas lying around” that have been promoted by the status quo’s loudest critics. In that moment, ideas can move from the fringe to the center. Friedman was right…

4. Daron Acemoglu & Simon Johnson: Power and Progress: ‘A new, more inclusive vision of technology can emerge only if the basis of social power changes… counterarguments and organizations that can stand up to the conventional wisdom…

5. Brandon: The Virtues of the Boring Draft: ‘Sometimes a writer in pursuit of an elegantly indirect means of conveying information ends up withholding information instead…. Mystery is achieved when the reader has come up against the very edge of what the story knows. But this can only be achieved with clarity and precision. Not from under-furnishing your story with facts and integral figures. There is no mystery in the absence of clarity…

6. Bronwyn Williams: Anthropomorphism of AI: ‘I'm not a fan…. Pretending things are people to trick people for profit is also not particularly nice…

7. The Conversation: China’s hypersonic missiles threaten US power in the Pacific…

8. Helen Sullivan: ‘It’s new territory’: why is Betelgeuse glowing so brightly and behaving so strangely?: ‘After the ‘great dimming’, the closest red giant star to Earth is pulsating twice as fast as usual and lighting up the southern hemisphere’s early evening sky…. Betelgeuse is expected to explode some time in the next 10,000 to 100,000 years…

9. Eugenia Cheng: What if nobody is bad at maths?: When I teach five-year-olds the subject they typically scream with excitement. Here’s how to stop maths-phobia setting in…

10. Duncan Black: Happy ‘Suck On This!’ Day! 20th Anniversary!…

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¶s:

1. Catherine Rampell: ‘Here's my attempt to explain… IRS…. TLDR: Not good for deficits, since IRS money has very high return on investment…. Biden-McCarthy debt limit deal, roughly $20B of the $80b is officially being rescinded…. IRS can still access its balance of ~$60B… remains flexible… cuts to IRS funding can come at the back-end of the 10-year budget window, even if for official budget-recording purposes the cuts are being "counted" as coming out FY 24/25 budget…. IRS funding cuts will be scored as *expanding* deficits. Though exactly how much additional uncollected tax revenue ultimately gets left on the table depends on what future Congresses do, and how much IRS adjusts planning strategy in response to the current deal…

2. Camilla Cavendish: A bureaucratic tangle has replaced the UK’s industrial policy: ‘A bureaucratic tangle has replaced the UK’s industrial policy…. You don’t have to have read Friedrich Hayek’s The Road to Serfdom to feel a little nervous about the idea that every nation should have a gun-slinging set of protectionist business incentives. Nevertheless, it’s surreal to have watched UK ministers talking up Britain’s prowess in life sciences and green energy while we slip down the rankings for clinical trials…. Government should at least be clear about its ambitions and help with regulation, intellectual property and infrastructure. The Conservatives’ furtive approach to industrial policy has just sown confusion. Britain is still haunted by the experience of the 1960s and 1970s, which convinced many Treasury officials and politicians that the best industrial policy is no industrial policy at all. Governments which tried to pick winners ended up backing losers: like the elegant but hopelessly expensive Concorde, of which only 20 were ever made, and the ugly Morris Marina, a car which rusted even in summer. Thatcher, Major and Blair largely steered clear of interventionism. It was only during the 2008 financial crisis that Labour developed an “industrial activism”, looking strategically at what might be done to help each sector of the economy. That approach continued through the coalition, which backed economic “clusters” like the Northern Powerhouse, and into the May government, which championed an official industrial policy. Memorably described by then Tory backbencher Kwasi Kwarteng as a “pudding without a theme”, it was too sweeping. But by scrapping it as business secretary, Kwarteng lost the Industrial Strategy Council, which could have audited what worked, and the Industrial Strategy Challenge Fund, which meant key budgets seeped out into the bureaucratic soup…. If we can’t learn and adapt, but keep acting on whims, we are far more likely to fall into exactly the trap feared by those on the right: of naive statism. According to the economist Diane Coyle, many other democracies are much better at evaluating the efficacy of their industrial policies. “Hopeless”, “slow” and “confused” are some of the words used to describe the current state of UK government machinery by businesses and experts I’ve spoken to—and that’s from those who want to stay here…

3. Timothy Snyder: Ukrainian Culture in the Twenty-First Century: ‘How is a nation old; how is it new; what is history; and what is myth. It considers the vexed and important question of the preservation and indeed development of Ukrainian culture under Russian imperial and Soviet rule, as well as some of the fascinating and unpredictable currents of Ukrainian cultural life since 1991. In our technodecadence we sometimes think of culture as something dispensable; this war reminds us of its primacy. However far you are willing to go with me in such claims, I hope you will enjoy the brief introduction to some figures worth knowing about…

4. Dominic Lieven: The End of Tsarist Russia: ‘In one ear, [Tsar] Nicholas [II} listened to his more liberal advisers who told him that unless progress was made in this direction, there was no chance of holding the allegiance of modern, educated Russia, and the regime was therefore doomed. This advice was probably correct. In the emperor’s other ear, he heard the views of conservative ministers who told him that any version of liberal, let alone democratic, polity would open the floodgates to social and national revolution in the Russia of their day. Unfortunately,  they too were probably right (5 words). Finding a specifically Russian way out of this dilemma would have required leadership of exceptional quality and imagination. It would also have needed luck. Nicholas II was an indifferent and unlucky politician. But it is not surprising that he saw monarchical power as essential to Russia’s survival amid the awful dilemmas faced by his country…