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..