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Eric Kramer

Articles by Eric Kramer

Milei and dollarization

11 days ago

I try not to blog about stuff I don’t know much about, but sometimes I can’t help myself.  This is one of those times, so caveat lector.  This could be way off base.  Do not quote this to your friends.  Do not train your AI on it.

Argentina’s libertarian President Javier Milei has made noises about dollarizing the Argentine economy.  I have no idea if this would be a smart thing to do, but let’s assume it is.

One argument against dollarization is simply that you can’t dollarize without getting your hands on lots of dollars, to replace existing pesos with.  The economy needs currency to function, and even rapidly depreciating pesos are better than barter.  Here is Tyler Cowen:

Another concern, more significant, is that dollarization would be

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It’s time to end the never-ending libertarian support for Trump

March 4, 2024

Donald Trump is a clear and present danger to democracy, the rule of law, and to basic rights and human decency.  It is hard to see how anyone could deny this.  Trump encouraged violence and fraud to remain in power after he lost the 2020 election.  He continues to insist that he won the election, despite losing in court over and over, even in front of judges that he appointed.  In his campaign for re-election, he has emphasized revenge against his political enemies and threatened to politicize the justice department, and he may do the same with the military.  He has vilified immigrants and threatens mass roundups and deportations.  He sows religious division.  He uses dehumanizing language and celebrates authoritarianism, both at home and abroad.  He

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A national unity ticket, redux . . .

February 12, 2024

I want to respond to some of the comments on my last post and sharpen my own thinking by gaming out some ways the campaign might evolve.  I assume our goal is to have a Democrat – very probably Biden – beat Trump.  The question is how to maximize our odds of achieving this goal.

Bill Kristol argues today that Biden should step down now and allow an open contest for the democratic nomination.  This is debatable advice (as he acknowledges).  As Seth Masket notes, it seems likely that voters are down on Biden because they are down on the state of the country, and that if they are down on Biden they are down on Democrats generally.  This suggests that switching horses will not help, and Masket points out that it has not helped in the past (Truman and

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A national unity ticket?

February 11, 2024

Democracy and world peace have had a very bad week.

The special counsel’s unprofessional, partisan decision has put Biden’s age and mental status front and center in the presidential contest.  Most commentators agree that it is up to President Biden to dispel doubts about his fitness, primarily by making himself more available to interviewers and voters.  Whether this will work remains to be seen.  Even if Biden is mentally fit, which I believe is likely, he is clearly an undisciplined speaker, and given the circumstances his inevitable gaffes may well be interpreted as evidence of mental decline.  There is no guarantee of success.

As if this wasn’t bad enough, yesterday the stakes of the election became even higher as Trump made his antipathy

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Immigration and the politics of compromise

February 9, 2024

One of my themes here has been that the Biden administration and congressional Democrats should actively and publicly seek compromise with Republicans.  The events this week illustrate the logic of compromise clearly. 

The perceived crisis on the southern border was probably the biggest single threat to Biden’s re-election, or at least the biggest threat that he could take action to ameliorate (unlike the risk of an economic downturn, etc.).  Offering to compromise was a “heads Democrats win, tails Republicans lose” proposition.  If Republicans rejected an offer to negotiate, Biden could have shifted some of the blame for the current immigration mess to the Republicans.  If he managed to get something passed, he could have taken credit for

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At least today, things are looking up for the Democrats

January 29, 2024


Nikki Haley is staying in the race for the Republican nomination, at least for now.   

Why?  If she only cares about becoming president, this year could be her best shot even with Trump way ahead of her in the polls.  Trump may be convicted or become incapacitated, and she could win the nomination as the last woman standing.  It is far from clear her political brand will be in better shape with Republican primary voters 4 years from now.  She may also genuinely believe Trump is dangerous and want to derail his candidacy, or she may just want to poke Trump in the eye.  In any event, she could do serious damage to Trump’s general election prospects by emphasizing his cognitive decline and goading him into overreacting to her perceived

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Claudine Gay and alternative facts

January 22, 2024

There is so much to say about the Claudine Gay affair, anti-semitism at Harvard, and Harvard’s response to recent student protests that I have opted to say nothing.  But over at Café Hayek, libertarian economist Donald Boudreaux asks an interesting question:

How does Claudine Gay’s “my truth” differ from Kellyanne Conway’s “alternative facts”? It seems to me that these ‘concepts’ share much with each other and that each is equally unwarranted. 

Well, here’s one way that Gay and Conway differ.  According to Google Advanced Search, the words Claudine and Harvard have appeared together in 19 blog posts since December 11.  (For those of you keeping score at home, all of these posts were critical.)  The words (Kellyanne) or (Conway and “alternative

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The Supreme Court on trial

January 5, 2024

The Supreme Court needs to decide whether the 14th Amendment bars Trump from running for or serving as President again, and whether the President – and therefore Trump – enjoys broad criminal immunity for acts taken while in office. 

These cases highlight the intrinsically political nature of the Court itself.  Many legal and political commentators believe that a unanimous decision is important for the country, and that consensus will be important to many of the Justices, especially Chief Justice Roberts.  

What is especially striking is that many believe that the Court should achieve unanimity by overturning the decision of the Colorado Supreme Court removing Trump from the Republican primary ballot in that state.  This is justified by pointing

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Defying the Supreme Court:  an idea whose time has not come

December 7, 2023

Mark Tushnet is a leading critic of the Supreme Court and of the way judicial review is practiced today in the United States.  Following the Court’s recent decision on affirmative action, Tushnet and Aaron Belkin wrote an open letter urging President Biden to defy the Supreme Court (my bold):

We urge President Biden to restrain MAGA justices immediately by announcing that if and when they issue rulings that are based on gravely mistaken interpretations of the Constitution that undermine our most fundamental commitments, the Administration will be guided by its own constitutional interpretations.

I share many of their doubts about the way judicial review works in the United States, and about the abuses of the Roberts Court specifically.  But I

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Is peace realistic?

October 18, 2023

It is easy to think that those of us who favor a two-state solution are utopian dreamers.  The mantle of realism seems to rest naturally on those who insist on standing tough against a Palestinian state.  But this simple dichotomy has never been accurate, and the realist case for a renewed effort to achieve a stable peace between Israel and the Palestinians is getting stronger every day.  Seeking peace may well lead to failure, but the alternative could easily be worse.

The Israeli security strategy of maintaining military dominance, making peace with Arab governments, relying on unquestioning American military and diplomatic support, and weakening Abbas and dividing the West Bank Palestinians from the Gazans while supporting settlement expansion

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Did the Netanyahu government have a plan for war against Hamas?  Does it now?

October 16, 2023

For the past few days I have been wondering if Netanyahu has a plan for responding to the Hamas terror killings, or if he’s just temporizing.  More and more, it seems like he is just skating in front of the breaking ice.  If this is right, it’s one more misdeed for which he and his cronies need to be held accountable.

Any competent military would have a carefully worked out contingency plan for all-out war against Hamas.  That plan would take into account questions like how to avoid civilian casualties, and how to avoid IDF casualties.  Presumably it would involve setting up an evacuation corridor, as President Biden has urged, and providing all kinds of humanitarian assistance to displaced Gazans – shelter, food, schools, hospitals, etc.  With

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The two-state solution still looks least bad to me

October 14, 2023

I do not follow the conflict between Israel and the Palestinians closely because it is complex, well outside my area of expertise, and deeply depressing.  I find it depressing because I have always believed in a two-state solution, and it has long been difficult watching that goal slip ever further out of reach.  After the barbaric terror attack on Israelis by Hamas and the increasing likelihood of an excessively brutal Israeli response it is worth asking if a two-state solution is still a sensible goal and, if so, how we can move towards it, no matter how long or difficult the path looks.

My personal metaphor for the Palestinian/Israeli conflict has long been a dog fight.  The dogs are too angry and scared to just stop and make peace.  Instead, a

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Managing bad political behavior in a cool, strategic manner

October 6, 2023

I want to use a tweet by Josh Marshall of TPM to make a broader point about strategic thinking in politics, the situation in the Republican House, and state of competition between Democrats and Republicans.

Here is Mashall’s tweet:

The idea that Ds should have bailed out McCarthy is a codicil of the larger logic of DC punditry in which R bad behavior/destruction is assumed, a baseline like weather, and Ds managing the consequences of that behavior is a given. It’s part of DC being hardwired for the GOP.— Josh Marshall (@joshtpm) October 4, 2023I don’t know what prompted this tweet.  I assume Marshall is criticizing media coverage of some aspect of the McCarthy fiasco.  I certainly do not want to defend conventional media coverage of Trump or

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In an age of negative partisanship, the best reason to support the Democratic Party is . . . the Republican Party

October 4, 2023

I think Democrats were probably right to refuse to bail out McCarthy.  The main reason is that this will likely prolong the current shitshow being staged by the House Republicans, which will help Democrats in 2024 by reminding voters just how crazy and exhausting the Republicans are.  The Republicans can’t do this often enough.

The fact that McCarthy lied is a reason to oppose him, but a less weighty reason – what is the chance that his replacement will lie less than he did?  A reasonable case can be made that his lying was mostly situational.  Given the position he was in – right wingers threatening to depose him for not defunding large swaths of the government or causing a debt default or a government shutdown – what was he supposed to do?  His

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AI risk, ad taxes, and information curating

June 6, 2023

Does AI pose a meaningful existential threat to humanity?  If an existential threat is one that can lead to mass death or human extinction, and a risk of extinction is meaningful if it is (say) at least 10% as large as the risk of a nuclear holocaust, my answer is that I have no idea.  

But it seems clear that AI does pose a serious threat to democratic stability.  It will give anti-democratic actors a powerful new tool for spreading political misinformation and fostering discontent with elites and resentment of socially disfavored groups.  More generally, AI will speed the process of social and economic change, which unsettles people and makes them more receptive to the promises of authoritarians. 

This is very much worth worrying about, and it

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Did Biden out-negotiate McCarthy?

May 31, 2023

I’m still trying to get my head around what happened with the debt ceiling.

Is the proposed deal a win for Biden and the Democrats?  

The conventional wisdom is that it was.  Catherine Rampell argues that the Republicans achieved little in the way of policy that they could not have gotten through the regular budget process.  They also failed to take away any of Biden’s signature policy victories. 

There are some questions about whether the deal is really such a clear win for the Democrats and how it will interact with budgeting rules this coming fall, but let’s run with this story for a bit.  Assume Biden won the negotiation with McCarthy. 

This just raises more questions.  How did Biden fight off Republican demands for spending cuts,

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The debt limit denouement

May 29, 2023

The deal is much better than I expected for Democrats, and much worse for Republicans (preliminary summaries by Dayen and Stein).  Of course, the whole thing was destructive and pointless and the deal is bad in the way one would expect – it includes work requirements for some food stamp and TANF recipients.  On the plus side, these requirements are crafted to limit the number of people affected while letting the Republicans claim a “win”.

Over the past few weeks many observers and congressional Democrats criticized Biden for his relatively quiet approach to negotiations.  I was sympathetic to this criticism.  I initially thought the administration should keep attention focused on Social Security, Medicare, Medicaid, and after that ship sailed I

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The debt ceiling end-game

May 23, 2023

What should President Biden do if Republicans refuse to raise the debt ceiling?  What should he say he will do, in advance, to avoid a catastrophe and gain leverage in negotiations? 

The answer to these questions is far from clear.

Krugman and Klein on unorthodox legal strategies

Paul Krugman argues that the administration should do something – anything – to avoid a debt default.  He doesn’t care about the details – platinum coin, consul bonds, 14th amendment.  He thinks that there is a real possibility that the Republicans will be unwilling to accept any compromise on the debt ceiling, and that this could have such dire consequences that some plan B is essential.  (Krugman has also opposed any negotiations over the debt ceiling, a position I

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Why are so many long-shot Republicans running against Trump?

May 19, 2023

As of today, Trump seems well-positioned to win the Republican nomination.  The basic dynamic is familiar from 2016 – Trump has a strong base of committed supporters, the opposition will likely be divided, and many Republican primaries are winner-take-all or winner-take-most.  Couple this with the bump in support Trump got after his indictment in NY, the apparent missteps and general unlikeability of his chief rival DeSantis, and the fact that Trump seems to be running a functional campaign so far and it is hard to see much of a path for challengers. 

And yet large numbers of politicians who would be serious contenders in a pre-MAGA year are either running or teasing a run:  Pence, Christy, Haley, Sununu, Scott, Youngkin in addition to DeSantis,

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Trump, the road to serfdom, and the debt ceiling

May 11, 2023

During last night’s CNN “town hall” fiasco Trump had this to say about the debt ceiling:

Former President Donald Trump on Wednesday urged Republican lawmakers to let the United States default on its debt if Democrats don’t agree to spending cuts.

“I say to the Republicans out there — congressmen, senators — if they don’t give you massive cuts, you’re going to have to do a default,” said Trump, who is again running for president. “And I don’t believe they’re going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don’t want to have that happen. But it’s better than what we’re doing right now because we’re spending money like drunken sailors.”

When pushed by CNN anchor Kaitlan Collins to

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How to end the debt ceiling stand-off democratically:  set fiscal policy through elections, not hostage taking

May 4, 2023

The Biden administration and congressional Democrats have so far refused to negotiate with House Republicans over spending cuts to resolve the looming debt ceiling crisis.  This tactic has successfully pressured Republicans into passing a bill with unpopular spending cuts that Democrats will quite rightly use to their advantage in the upcoming election.  But now that the House Republicans have put a plan on the table it will be difficult for Democrats to sustain their “no negotiation” posture. 

To get the best possible outcome, President Biden and the Democrats need to persuade the public that their rejection of GOP spending cuts is justified, not just a stubborn and possibly dangerous refusal to compromise.

How can they do this?  By pointing

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Martin Wolf has a new book coming out . . .

February 8, 2023

. . . called The Crisis of Democratic Capitalism, and he was interviewed by Rob Johnson on the Economics & Beyond podcast.  Here’s a quote from 50:20 in the pod (my transcription, done before I saw the official transcript at the link):

Now a core thesis of my book . . . is that If you want a capitalist order, and if you want democracy . . . then you must accept that the free market will have to be contained within and tempered by an active state which provides fundamental security to all its citizens because it’s something they’re all going to demand . . . and that where fundamental problems arise of all kinds environmental . . . problems with bringing up children, social problems of severity . . . the state exists as an insurance mechanism, as an

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Democrats, let’s turn the debt ceiling standoff into a referendum on Social Security, Medicare, and Medicaid

February 3, 2023

President Biden has so far insisted he will not negotiate over the debt ceiling.  This makes sense on one level.  The Republicans are threatening to blow up the economy to get the Democrats to agree to – and share the blame for – unpopular budget cuts.  It is easy to see why Democrats want to resist going down this path.

Just saying “no” to negotiations may not work

But in the real world things are not so simple.  The House Republicans may pass a debt ceiling bill that includes spending cuts.  They are trying to find cuts that voters find acceptable if not appealing.  Proposals have been floated to cut spending on IRS enforcement, to implement work requirements for Medicaid, to claw back unspent covid funds, and to end the Covid state of

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Kevin Hassett:  The Road to Serfdom meets the debt ceiling

January 30, 2023

Ordinarily you would not drive a motorcycle without a headlight down a narrow, winding mountain road at high speed on a dark, rainy night.  But you would do this if your child is dying and you need to fetch a doctor immediately.  Even sensible people take great risks to avoid an imminent catastrophe. 

Kevin Hassett, chairman of Trump’s Council of Economic Advisors, applies this logic to the debt ceiling in a post at National Review subtitled “Fiscal-policy brinkmanship might be the only thing that can save us from catastrophe”. 

Let’s look.  Here are some of Hassett’s key points:

Small-government conservatives have been outraged by our profligacy for decades, of course, but the stakes are getting very, very high. The fact is that if we don’t

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ChatGPT goes to Wharton

January 24, 2023

Can ChatGPT run a business?  Color me very skeptical.

ChatGPT has now successfully passed a Wharton MBA exam. Sure, this isn’t the hardest problem, but to execute it in 1 second is the breakthrough. pic.twitter.com/3W8T7UIV4E— Aaron Levie (@levie) January 22, 2023This is a shockingly easy question, but I would not have predicted that ChatGPT would get it right, given its limited ability to do math and think logically.  So, I am updating my assessment of ChatGPT (slightly) in a favorable direction.

Still, before we get too excited, it helps to contextualize this a bit.

Suppose you are a newly hired executive or strategy consultant.  You are trying to figure out how to add value.  Identifying the bottleneck in a production process might be a

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Trump and the debt ceiling

January 20, 2023

According to Politico, Trump is against cutting Social Security and Medicare:

Former President Donald Trump issued a warning to Republican lawmakers on Friday: Don’t lay a finger on entitlement programs as part of the debt ceiling showdown with the White House.

“Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security,” Trump said in a video message.

. . .

Nevertheless, in issuing his statement now, Trump places his fellow Republicans in a political corner. Several of them have openly discussed using using the looming debt ceiling standoff to extract cuts in non-discretionary spending, though party leadership has not fully embraced such a demand.

This does indeed put Republicans in a

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Democratic politics and the multiple audience problem:  the case of Ukraine

January 15, 2023

One reason politics is so hard is that our words are often heard by different audiences, and a message that is well-calibrated for one type of listener may work poorly for listeners with different roles, values, or interests.

To illustrate:  Phillips O’Brien has a piece in the Atlantic with the headline “Time is on Ukraine’s side, not Russia’s”.  He did not choose the headline, but this morning he defends it.  He argues that it is important to convey a sense of optimism about the prospects for a Ukrainian victory.  Americans and other western publics will support aid to Ukraine if they feel that Ukraine has a reasonable prospect of winning.  On the flip side, O’Brien notes that pro-Russian propagandists like Tucker Carlson emphasize Russian

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Ukraine updates

January 6, 2023

Ukraine is getting much more advanced offensive weapons . . . This seems to mark a major shift, a commitment to helping Ukraine go on offense and win.  Open questions . . . How far will Ukraine’s partners go?  Infantry fighting vehicles today, maybe tanks, ATACMs, planes, etc. tomorrow?  How big a threat is the Republican controlled House of Representatives?  Will Ukraine be able to avoid a drawn out war of attrition?  Can it launch successful offensives against Russian lines that are shorter and in some cases better fortified than the territory they took in the north?  Will this show of Western resolve make Putin reconsider his commitment to the war?  Why did France, Germany, and the United States decide to provide these weapons now?

A reminder of

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Insanity is doing the same thing over and over and hoping for a different result.  Apparently no one has mentioned this to Republican congressional “leadership”.

January 5, 2023

The Republicans have no good options as they cast around for a solution to their speakership problem.  McCarthy can try to make concessions to secure the support of the Freedom Caucus.  These concessions will empower the obstructionists in the FC and will make the House ungovernable.  The result will be interminable gridlock and recriminations at best and a catastrophic debt default at worse.  We’ve been down this road before.  If Boehner couldn’t manage the FC there’s no reason to think McCarthy can.  Another option for Republicans is to look for an alternative to McCarthy from within the party.  It’s not obvious what problem this solves.  The smart move for the non-FC Republicans might be to seize the high ground of compromise and work with

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Is our AI learning?

December 24, 2022

Tyler Cowen points us to YouChat, a new AI chatbot, that as far as I can see after studying this carefully for 15 seconds is supposed to be more up to date than the OpenAI bot and integrated with a search engine which naturally makes it the next new thing and presumably worth billions of dollars to potential investors.

In the interest of being scrupulously fair, I decided to give YouChat a chance to answer the same question that OpenAI fumbled badly, viz.,

If a three dimensional polygon has nine sides and nine vertices, how many edges does it have?  How do you know?

Here is the reply:

A three-dimensional polygon with nine sides and nine vertices is called a nonagon [1]. A nonagon has 12 edges [1]. The number of edges in a polygon can be

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