4- The Michigan Daily - Tuesday, February 8, 2005
OPINION
~ij £rhpu a i
JASON Z. PESICK
Editor in Chief
SUHAEL MOMIN
SAM SINGER
Editorial Page Editors
ALISON GO
Managing Editor
EDITED AND MANAGED BY STUDENTS AT
THE UNIVERSITY OF MICHIGAN SINCE 1890
420 MAYNARD STREET
ANN ARBOR, MI 48109
tothedaily@michigandaily.com
NOTABLE
QUOTABLE
If he had come in
10 minutes later, he
would have been
gone:'
- Medical staff at Rome's Gemelli
Polyclinic, reffering to the Pope's
near-death incident last week, as
reported yesterday by Ireland Online.
SAM BUTLER Casic So ;rn3ox,:
)
.
6
Krugman: Back to the bullpen?
SAM SINGER S\A.M'S CLUB
I
y the time New
York Times col-
umnist Paul Krug-
man graced the mound,
his team had been strag-
gling. Undisciplined and
short-fused, privatization
adversaries had been hurl-
ing wild pitches at the
President's Social Secu-
rity plan for months - an alarmist editorial in
"The Nation" here, a Ted Kennedy spasm there
- nothing ever nearing the strike zone.
Having grown pleasantly accustomed to
their opponents' stammering, privatizers and
their cohorts in the media resentfully mobi-
lized at word of Krugman's decision to enter the
debate. A franchise player had finally stepped
to the rubber - a southpaw with 20 books,
over 200 policy papers and a PhD in econom-
ics. Who does the right-wing media call (and
forgive me if this metaphor has dragged on):
The one designated hitter that knows how to
time Krugman's pitches.
Donald Luskin, a free-market apostle with
a sardonic temper and a passion for stock divi-
dends has been haunting the Times columnist
for years. Operating under the "Krugman
Truth Squad" banner, the National Review
contributing editor dedicates the bulk of his
brain activity to finding ways to make left-wing
economists look stupid. But altogether sturdy,
Krugman's writing has never had much trouble
standing on its own two legs, and Luskin's ridi-
cule usually fails to resonate.
Not anymore. Krugman's attempts to debunk
the investor-friendly benefit system have fallen
decidedly short. Each week he throws up drab,
scantily researched softballs, and each week
his opponents hit home runs.
February has been particularly amusing
for Luskin. On the first of the month he made
headlines after accepting Krugman's "6.5 per-
cent challenge" - a trial run for any economist
projecting stock markets to yield six and a half
percent invest returns over the next 75 years
(the earnings rate purportedly necessary to
equalize the program's transition costs). Krug-
man claims current growth forecasts make that
scale of expansion impossible for personal sav-
ings accounts. Luskin begged to differ. Using
Krugman's own data and some simple arithme-
tic, Luskin shows in plain English how steady
growth in profit margins (figures that often
voyage with the pace of the economy) can com-
plement predictably rising stock dividends to
generate a long-term return rate of 6.4 percent
- just shy of Krugman's target, but still worthy
of victory. Why? He explains. ""Even without
the arithmetic," he wrote, "there's nothing so
unusual about thinking that stocks could return
something like 6.5 percent, after inflation, over
the next 75 years. After all, they've returned
exactly that over the last 75 years."
Krugman's most recent piece was worse -
much worse. He spent most of his time strug-
gling to draw equivalence between diverting
payroll taxes into private savings accounts and
borrowing would-be gambling cash from the
federal government. His logic: Earnings in per-
sonal investment accounts cannot outpace the
current system's rates of return unless investors
sidestep the bond market. "The only way to get
ahead," he said, "would be to invest in risky
assets like stocks, and hope for higher yields."
Every penny rerouted into equity markets,
according to Krugman, increases the prospect
of a non-performing "loan." There you have
it, a pearl of wisdom from one of the greatest
economic minds of our time: the stock market,
Krugman concluded, can be a risky venture.
Think I'm oversimplifying? Read Krugman's
column - or better yet -read Luskin's response. If
you never thought you'd live to see a world-class
economist lectured on the concept of opportu-
nity costs - usually Pgs. 1-2 of an Econ.101
textbook - you're in for a laugh. Though his
patronizing tone never fades, Luskin nonetheless
nails the bottom line: Electing to direct payroll
taxes into investment accounts is an opportuni-
ty cost, not a personal loan. Krugman's arcane
analogy rests on the assumption that payroll
taxes are funds that originally belonged to the
government - but they aren't. That's where we
get the name taxpayers.
Now to be fair, Luskin does enjoy the luxury
of rebuttal when constructing his arguments, and
he's never had the burden of speaking first. But
still, Krugman is a New York Times columnist
- writing beneath the same masthead where
William Safire won his Pulitzer for uncloth-
ing corruption in President Carter's Office of
Management and Budget, where Jimmy Reston
spilled his soul after the Watergate leaks, where
Tom Friedman pieced together the puzzle of glo-
balization. The New York Times Op-Ed page is
hallowed ground in the land of political com-
mentary. Host to some of the sharpest thinkers of
our time, its margins have absorbed a brain trust
unmatched in the field. It makes you wonder: If
Krugman can't finish the game, who can?
I
I
Singer can be reached
at singers@umich.edu
LETTERS TO THE EDITOR
Columnist jumps to
conclusions on Iraq
TO THE DAILY:
Despite the fact that I am not conserva-
tive, I think it is a good thing when con-
servatives have a strong presence in the
opinion sections of papers at traditionally-
liberal institutions like the University, as
long as their arguments are rational and
well put together.
That said, Dan Shuster's column (On the
wrong side of history, 02/07/2005) was not
a rational, well put together argument - it
suffered from a number of overgeneraliza-
tions, misattributions and flat-out distor-
tions that should have no place in a column.
The biggest of the considerable number of
flaws in Shuster's argument come from his
idea that "the Left" is some sort of mono-
lithic (and, in his eyes, sinister) institution
whose members all share the same ideas.
Why else would he mention graffiti read-
ing "Attacking Iraq is Terrorism" and then
go on to ask "why has the message of the
Democratic Party become so extreme?"
Did the Democratic Party write the
graffiti? Did Barbara Boxer slip on black
clothes and a face mask and rappel off the
side of that overpass to get her message
out to residents of southeast Michigan? In
a very telling sentence, Shuster goes on to
argue that the Left (whatever that means)
is so anti-Bush "that they have drifted too
far left for the mainstream of the American
people." Anyone who watches Fox News
knows that this talking point has been a
cornerstone of that network's pundits since
long before the election, but there are more
important questions here than whether or
not Shuster is unoriginal. Namely, what
does this mean? Who is too far to the left?
John Kerry? Ward Churchill? The mystery
graffitist?
The reason Shuster's argument is so
childish is that he leaves "the Left" as
an undetermined entity and then plugs in
different people and institutions so that it
serves his needs. There is no such thing as
"the Left" as Shuster sees it. If he wants
to let someone like Ward Churchill repre-
sent the views of all Americans who voted
for Kerry, that's his choice, but in the
meantime there are plenty of people with
a firmer grasp of American politics who
understand the intricacies of the American
populace. Finally, I would like to enlist
Shuster's help. He writes that although
"this war has had its share of failures? it
has not only benefited Iraq, but the Middle
East and the entire world as well." Clearly,
he is omniscient, and I could use his talents;
otherwise, how could anyone make such a
bold, definite claim when speaking about
an area of the world that is so volatile? The
elections in Iraq were a good thing, but for
Shuster to claim that the war as a whole
is therefore a success is to suffer from the
same shortsightedness he attributes to any-
one more liberal than John McCain.
Jesse Singal
LSA junior
VIEWPOINT
A frivolous endeavor
BY DAVID RUSSELL
Recently, the Center for Individual
Rights, the same organization that sued
the University in the affirmative action
cases decided by the U.S. Supreme Court
in 2003, brought a new lawsuit against
the University seeking monetary com-
pensation for 30,000 nonminority appli-
cants rejected by the University between
1995 and 2003. The funds that CIR seeks
to receive from the University include a
nominal fee of $1, as well as a refund of
the application fee for those nonminor-
ity students who applied to the School of
Literature Science and the Arts but were
not granted admission. Additionally, CIR
claims that the University should pay for
the tuition of rejected students that ended
up attending more expensive private or
out-of-state schools.
It is good to see the University fighting
this lawsuit, not only because the case is
fight the rules wifh the aid of CIR, bring-
ing affirmative action to the forefront of
national discussion while their cases were
debated, and in Gratz's case, won against
the University. As a result, the University
has followed the law and changed its poli-
cies while still trying to maintain a diverse
student body. CIR, though, despite its vic-
tory against LSA, is not quitting while its
ahead. Instead, in this frivolous lawsuit it's
trying to turn the University into its own
personal cash register. The first problem
with CIR's case is that there is no proof
that the denied students would have been
admitted to the University if an admis-
sions policy that did not account for the
applicant's race had been in use when they
applied. The second problem with the
case is the lack of evidence suggesting that
being denied admission to the University
forces someone to attend an expensive pri-
vate or out-of-state school.
In defense of the center's actions, the
people for it. If such a thing were true,
take a look at Pell's statement again. First
change "applicants" to "people," and then
change both mentions of "University" to
"slave owners." With this in mind, is the
CIR going to be suing for slave reparations
anytime soon? Doubtful.
Using the slave reparations analogy it is
easy to see how flawed the CIR case is. If
the CIR continues to file lawsuits like this,
it will quickly find itself becoming another
legal pariah. It could end up like the Ameri-
can Civil Liberties Union - another bunch
of lawyers who belong to a group with a name
that sounds good, but now pursue some cases
simply because they have nothing better to
do (i.e. banning Santa Claus).
To avoid being regarded as another gad-
fly legal society, the lawyers for CIR need
to act responsibly when they select and put
together their cases. That means not suing
to punish people, who at the time of the
act, were within their legal rights. Also,
simnnrrea nv nusn..