FOOD & FUEL FILE
In the 1964 U.S. Supreme Court case Jacobellis v. Ohio, Justice Potter Stewart wrote a concurring opinion he hoped would establish a legal standard that protected every American’s right to free speech, yet guarded “community standards” against “hard core pornography.”
That competing interest, Steward wrote, was difficult to balance because it was difficult to define hard core pornography. In fact, he noted, ” perhaps I could never succeed in intelligibly doing so.
“But,” he added in what soon became the most famous line ever composed by any Supreme Court justice, “I know it when I see it “
What Stewart might have seen 50 years ago is not what he’d see today. Today, anything-everything-goes; the standard is that there is no standard.
It’s the same in big money politics and big money business today: anything goes. A May 7 Washington Post story showcases this no-standards standard.
According to the Post, within hours of a “private call arranged by a (Washington, D.C.) consulting firm called Capitol Street” between a “top aide for Sen. Orrin G. Hatch, R-Utah” and Wall Street “investors,” a “certain form of speculative trading in Humana, the health insurer, jumped.”
More like exploded. Trading was “nearly 10 times as much (in) volume as any day in the previous two weeks.”
But, the story went on, “There is no evidence that the trades were in response to the Capitol Hill phone call “
What would be evidence that this slimy coincidence was nothing more than just your basic, hard core political corruption – a gun?
Maybe pocket-lining lobbyists and back-scratching public servants don’t know everyday corruption when they see it, but I’ll bet you do.
Take Carmen Reinhart and Kenneth Rogarth, two Harvard economists, whose 2010 paper strongly argued that when government spending tops 90 percent of any nation’s Gross Domestic Product, economic growth drops off the table. Their paper contained times, dates and data to prove it.
Trouble is, it didn’t prove it.
In fact, three University of Massachusetts economists, one a mere mortal, a graduate student, examined the paper in detail and discovered the Harvard duo had made come critical math errors.
In fact, the errors were fatal. The Harvard paper had claimed that, from 1945 to 2009, anytime government debt grew to 90 percent or more of national GDP, economic growth dropped to a negative 0.1 percent.
When the UMass economists did the math correctly, however, the negative number grew an astonishing 22 times, from -0.1 to +2.2 percent, a pretty respectable level in today’s stumbling global economy.
A mistake that size isn’t just big; usually it’s career-ending. But the Harvard economists -maybe because they are Harvard economists – couldn’t accept their mistake. Instead of owning up to it, they called the resulting controversy an “academic kerfuffle.”
Kerfuffle or not, it’s not academic. Several European nations bought into the their prescription and made deep cuts to government spending in hopes of boosting economic growth.
Disaster resulted. Spain, for example, followed the advice two years ago and now sports 27 percent unemployment, its worst in history.
This week, the House and the Senate will make public their working farm bills. Each will feature spending cuts inspired by the math-corrupted Harvard debt-to-GDP study.
The House bill holds an estimated $38 billion in spending cuts ($20 billion in domestic food aid programs alone). The Senate’s is $23 billion in cuts.
No member of either committee is expected to ask if the cuts are wise or even necessary. Noone is expected to ask why conservation and domestic food aid programs must be cut in the name of government austerity and economic growth, while funding for crop insurance programs will increase.
Maybe no one in Congress knows bad economic theory and, even worse, bad long-term ag policy when they see it.
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