Wednesday, May 28, 2014

Tyler Cowen Makes Strong Case That Inequality Destroys Wealth

Professor Cowen is a Libertarian nut who, I think -- in his weird "slavery was bad for white people too" post -- has just inadvertently made one of the best cases that income inequality actually destroys wealth. Here's a sampler:
I would suggest that most living white Americans would be wealthier had this nation not enslaved African-Americans... For instance it is generally recognized that freer and fairer polities tend to be wealthier for most of their citizens.

More specifically, many American whites benefited from hiring African-American labor at discrimination-laden discounted market prices, but many others lost out because it was more costly to trade with African-Americans. That meant fewer good customers, fewer eligible employees, fewer possible business partners, fewer innovators, and so on, all because of slavery and subsequent discrimination. The wealth-destroying effects are surely much larger here...
Strangely, as a Libertarian, Dr. Cowen shouldn't believe that unfair wages destroy wealth. In fact, Dr. Cowen has been very anti-Thomas Piketty recently -- and Piketty's new book is all about the hazards of wealth inequality. So which position does Cowen actually hold? That wealth inequality is bad, or that it's good?

Friday, January 13, 2012

Friday, December 2, 2011

Mike Konczal takes a hard look at the Obama administration's handling of the economy and doesn't like what he sees:
With job growth failing to exceed population growth each month, and with no serious increase in the percent of Americans working, 2011 was a lost year for the economy.

Lost years for the economy have major consequences. Beyond the human misery that results, they put the entire project of liberal governance at risk. Choices made early by this administration resulted in no advancement on three fronts... fiscal policy... monetary policy... and dealing with the problems in the housing market....

In the 2010 State of the Union, President Obama stated that he would freeze 2011 discretionary spending even though unemployment was projected to be above 8 percent... This conventional wisdom gave the Republicans the leverage they needed to destroy any pro-active economic agenda.

Thus the Democrats spent 2011 -- which could have been a crucial year for the recovery -- in a futile debate with the Republicans over the budget. From the original government shutdown in April to the debt ceiling fights in July, Republicans showed that they were capable of making even the most trivial changes to the budget costly to the Democrats. As time went on the administration became ever more willing to make huge concessions to get a deal and restart the economy, and each time was left at the table....

Monetary policy is another avenue that spent 2011 in limbo... In the midst of collapsing prices, President Franklin Roosevelt in a fireside chat in 1933 announced that "[i]t is the Government's policy to restore the price level first"-- a signal to the markets that the New Deal was going to take monetary policy very seriously. President Obama has shown less interest in monetary policy, reappointing the moderate Republican Ben Bernanke to office and leaving [Fed board] seats open for years.... Obama's lack of movement on recess appointments has left the Fed tilted to the right. Since the other people that sit on the Federal Reserve are hard conservatives appointed by banks, getting people concerned about unemployment there is even more important.

At the end of 2011, key liberals... started talking about a new way of doing Federal Reserve policy based on "nominal GDP targeting" which would allow for higher inflation in weak economic times. Meanwhile, Chicago Federal Reserve President Charles Evans put out a plan to allow 3 percent inflation while unemployment is above 7 percent. These are good ideas; the administration could put them into practice by filling vacancies with appointees who understand their value.

The third important element of the recovery is restoring the housing sector... Foreclosures are a lose-lose-lose, devastating homeowners and neighborhoods, ravaging municipality budgets and hitting the creditors themselves... The most obvious way to deal with this is to allow courts to write down mortgage debt in bankruptcy, but the Obama administration passed on requiring bankruptcy modifications...

Ever since then, abuses in the mortgage payment "servicing" system-ranging from robo-signing to phantom foreclosure referrals to illegal foreclosures on servicemen overseas-have been reported by both community activists and from financial analysts. In late 2010, the largest banks voluntarily halted foreclosures to investigate before going back to business as normal.

The administration could have pushed hard on investigating the foreclosure market. Instead they pushed for quick settlement with the largest banks...

In 1938, shortly after premature fiscal and monetary tightening triggered a recession, the economist John Manyard Keynes wrote a worried letter to President Roosevelt. He was, he wrote, "terrified lest progressive causes in all the democratic countries should suffer injury, because you have taken too lightly the risk to their prestige which would result from a failure measured in terms of immediate prosperity. There need be no failure. But the maintenance of prosperity in the modern world is extremely difficult; and it is so easy to lose precious time."

Everything progressives have fought for -- from the policy advancements of the Obama administration like healthcare and financial reform to the New Deal and Great Society programs that remain, like Social Security and Medicare -- has been at risk as a result of this Great Recession. A longer period of sustained joblessness will wreck the working class and devastate the budget, leaving our economy even weaker.... There are ways forward; it is just a question of whether the administration is prepared to take them. It is easy to lose precious time, and we've just lost a full year with nothing to show for it.

Thursday, December 1, 2011

Taxing the 1%

Nick Hanauer, a 0.1%-er on taxing the rich... his whole op/ed is worth a look, but here's the best quote, which helps explain why top-heavy societies don't work:
Since 1980, the share of the nation's income for fat cats like me... has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007... In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.

One reason this policy is so wrong-headed is that there can never be enough super-rich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, I go out to eat with friends and family only occasionally.

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

Tuesday, November 22, 2011

The Roots of Police Violence

There have been way too many instances of police violence against peaceful protestors during the OWS movement (see the eleven videos on Garance Franke-Ruta's post at the Atlantic for examples). Glenn Greenwald gets behind the roots of all the recent police violence:

The now-viral video of police officers in their Robocop costumes sadistically pepper-spraying peaceful, sitting protesters at UC-Davis shows a police state in its pure form. It's easy to be outraged by this incident as though it's some sort of shocking aberration, but that is exactly what it is not... 
There are several points to note about this incident and what it reflects:
(1) Despite all the rights... guaranteed by the U.S. Constitution, the reality is that punishing the exercise of those rights with police force and state violence has been the reflexive response in America for quite some time...
The intent and effect of such abuse is that it renders those guaranteed freedoms meaningless. If a population becomes bullied or intimidated out of exercising rights offered on paper, those rights effectively cease to exist. Every time the citizenry watches peaceful protesters getting pepper-sprayed -- or hears that an Occupy protester suffered brain damage and almost died after being shot in the skull with a rubber bullet... they become fearful... of exercising their rights in a way that is... threatening to those in power. That's a natural response, and it's exactly what fear imposed by all abusive police state actions is intended to achieve...
Implanting fear of authorities in the heart of the citizenry is a far more effective means of tyranny than overtly denying rights.... Overzealous prosecution of those who engage in peaceful political protest... are all about deterring meaningful challenges to those in power... Rights are so much more effectively destroyed by bullying a citizenry out of wanting to exercise them than any other means.
(2) Although excessive police force has long been a reflexive response to American political protests, two developments in the post-9/11 world have exacerbated this.
The first is that the U.S. Government -- in the name of Terrorism -- has aggressively para-militarized the nation's domestic police forces...
The second exacerbating development is more subtle but more important: the authoritarian mentality that has been nourished in the name of Terrorism. It's a very small step to go from supporting the abuse of defenseless detainees (including one's fellow citizens) to supporting the pepper-spraying and tasering of non-violent political protesters. 
(3) Beyond the light it is shedding on how power is really exercised... this UC-Davis episode underscores why... the Occupy movement is one of the most exciting, inspiring and important political developments in many years. What's most striking about that UC-Davis video isn't the depraved casualness of the officer's dousing the protesters' faces with a chemical agent; it's how most of the protesters resolutely sat in place and refused to move even when that happened... We've repeatedly seen acts of similar courage spawned by the Occupy movement.
It was the NYPD's abusive pepper-spraying, followed by Mayor Bloomberg's lawless destruction of the Zuccotti Park encampment, that prompted far more people than ever to participate in the next march across the Brooklyn Bridge. A tear gas attack on Occupy Oakland was followed by a general strike of 20,000 people. And this truly extraordinary, blunt and piercing open letter demanding the resignation of the heinous UC-Davis Chancellor Linda P.B. Katehi was written by a young, untenured Assistant Professor -- Nathan Brown -- who obviously decided that his principled beliefs outweigh his careerist ambitions.
This is the most important effect of the Occupy movement: acts of defiance, courage and conscience are contagious.... The protest movement is driving the proliferation of new forms of activism, citizen passion and courage, and -- most important of all -- a sense of possibility...

Monday, November 21, 2011

Where's the Super Committee for Job Creation?

Mark Thoma, in a column in the Fiscal Times, wonders why we don't have a Super Committee for Job Creation:
The bipartisan Super Committee trying to forge a politically acceptable path for deficit reduction ended in a super fail, and one of the big reasons... is disagreement over the extension of the Bush tax cuts for high income households. 
[Democrats]... argue that the present tax structure places too little burden on the wealthy and too much on the middle and lower classes, and therefore the expiration of the Bush tax cuts... would make taxes more progressive and more equitable without endangering the recovery. Allowing the cuts to expire would also provide $800 billion in revenue over the next ten years and this would help preserve important social programs.
The failure... to come to agreement on the Bush tax cuts does not end the battle... If Congress does nothing... the two percent payroll tax cut [will] expire in December, and extended jobless assistance [will] also [expire].
I don't expect Republicans to put the unemployed at the forefront of their policy agenda. It comes as no surprise that they would insist on tax cuts for the wealthy despite their purported concern for the deficit, and then sing a different tune for the working class...
But I do expect Democrats to be the champions of the poor, the underprivileged, and the unemployed. When... did the need for deficit reduction... come to be more important than the needs of households struggling with the recession? Why aren't Democrats talking about the need to help the unemployed at every possible opportunity? Where's the Super Committee for Job Creation?
President Obama and many Democratic members of Congress have endorsed the idea that budget deficits are biggest threat we face... and this has helped to convince the public that the national debt is our biggest concern, and that we simply do not have the resources to.. help with job creation.
The main cause of our present deficit is a combination of the recession, the Bush tax cuts, and wars, and those three items will continue to be the main source of deficits in the near future. But Democrats have allowed Republicans to portray the problem as out of control spending on social programs that require super special commissions to resolve immediately, and it will be difficult to change that perception now....  
But it's important that Democrats at least try since any success at all would make a huge difference to the unemployed... I would like to see Democrats adopt a tougher stance on the need for higher income households to pay more in taxes so that important social programs can be preserved. But right now our main problem is the unemployment crisis. 

Saturday, November 19, 2011

William K. Black on OWS

William K. Black was one of the premier federal litigators during the S&L crisis. He spoke last week at Occupy LA:
In the Savings and Loan crisis, which was 1/70th the size of this crisis, our agency made over 10,000 criminal referrals, and that resulted in the conviction on felony grounds of over 1,000 elites in what were designated as major cases...
... Epidemics of fraud [are] led from the C-Suite, from the CEOs and CFOs... in the Enron era, [there were] always frauds from the very top of the organization, and in this crisis, the frauds came from the top of the organization again. 
But what's different in this crisis? In this crisis, the same agency that I worked with, that made over 10,000 criminal referrals, in a tinier crisis, made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street.
And if they can defraud us with impunity then they will cause crisis after crisis and they will produce maximum inequality. The group that has the audacity to refer to itself as the "productive class" is the largest destroyer of lives, of jobs and of wealth of any group ever produced in this world. 
They wiped out six million existing jobs and five-to-six million jobs that would have been created. As you've heard they've left 26 million Americans wanting full-time work with no ability to find that work... 
And then they had the nerve to say [that] they are "the productive class"... [but] they are mass destroyers of jobs... 
Everybody opposed our re-regulation of the [financial] industry. The big deregulation bill... occurred in 1982, and became effective in 1983... but by November of 1983 we were [trying to re-regulate] the Savings and Loan industry, and we were called re-regulators because that was the greatest swear-word the Reagan Administration believed existed; to call people "re-regulators". But [opposition to re-regulating] was not partisan, a majority of the members of the [Democratically-controlled] House... co-sponsored a resolution saying, "do not... re-regulate"...
The Reagan Administration was so outraged that we were closing insolvent S&L's with great political support, that the OMB threatened to file a criminal referral against the head of our agency on the grounds that he was closing too many insolvent banks. Have we had that problem recently? Do you see Geithner out trying to close the big, powerful banks?
We can prosecute these frauds... the Federal Housing Finance Administration (FHFA) has just filed complaints saying seventeen of the largest banks in America committed massive fraud, endemic fraud, and that there is a paper trail proving that they did so. 
So where is the justice department? Why is it not indicting these clear frauds?
... Remember, it is the lenders who put the "lies" in "liars loans", not the borrowers. We know this empirically. And we stopped that [in 1982] because, [as regulators] that was insane. So guess what happened, the leading folks making liars loans gave up their federal charter; gave up federal deposit insurance and became a mortgage bank, for the sole purpose of escaping regulation. 
And they changed their name... to Ameriquest... the leading predatory lender that, in addition to making liars loans, every day, every day of the week, targeted minorities, to destroy [minorities'] wealth... they targeted latinos, they targeted blacks, and they were caught three times doing this, and the justice department refused to prosecute, instead [Ameriquest] settled for $400 million, [but] guess what happened to the head of Ameriquest? ... we [made] him our ambassador to the Netherlands. 
Why do you think we made him our ambassador to the Netherlands? Because he was the leading political contributor to the President of the United States of America. 
And that's bad, but what comes next is far worse, remember [that Ameriquest] is the most notorious fraud in the nation. [It is a company that] targets minorities, [and] everybody knows it does so, [but] two entities rush to acquire [Ameriquest's] personnel and business, and their names? Citicorp, and Washington Mutual, who become two of the most notorious frauds in [the subprime crisis]...
When we prosecuted [in the S&L crisis] we had a 90% conviction rate, [even] when [the defendants] had the best criminal defense lawyers in the world, and they spent money like water to protect the CEO from going to prison. So when they tell you, "no one can stop this", it is utter nonsense. 
[I] will leave you with these statistics: The FBI warned of this in September of 2004, in open testimony. It warned, expressly, that there was an... epidemic of mortgage fraud, and it predicted it would cause a financial crisis. 
If that's not enough, the [mortgage] industry's own anti-fraud experts, in 2006, in writing, went to every mortgage banker in America... and said three things:
1.) "Stated income loans" are an open invitation to fraudsters
2.) The incidence of fraud in [stated income loans] is 90%
3.) These loans are deserve the phrase... "liars loans" because they are pervasively fraudulent
What did the industry do after it was warned? Did it stop making these loans? No. It massively increased the amount of these loans such that by 2006, one out of every three home loan in America was a "liar's loan" and that's why we have a crisis. And it came from the very top of these organizations, and it went through, as the FHFA said in its complaint, the largest banks in the world, [which] were endemically fraudulent.  
It is not a few rotten apples, it is an orchard of one-percenters who are rotten to the core. 

Friday, November 11, 2011

Taibbi on OWS

Taibbi article from yesterday. It's worth reading in its entirety:
I have a confession to make. At first, I misunderstood Occupy Wall Street.... my initial impression was that it would not be taken very seriously.... [M]odern finance is a giant mechanical parasite that only an expert surgeon can remove. Yell and scream all you want, but [Blankfein] and his fellow financial Frankensteins are the only ones who know how to turn the machine off.
That's what I was thinking during the first few weeks of the protests. But I'm beginning to see another angle. Occupy Wall Street... [is] about providing a forum for people to show how tired they are not just of Wall Street, but everything. This is a visceral, impassioned, deep-seated rejection of the entire direction of our society...
We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire.
There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape... This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it's 10,000 feet down into a vat of razor blades that you can never climb out of.
That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.
And here's one more thing I was wrong about: I originally was very uncomfortable with the way the protesters were focusing on the NYPD as symbols of the system. After all, I thought, these are just working-class guys from the Bronx and Staten Island...
But I was wrong. The police in their own way are symbols of the problem. All over the country, thousands of armed cops have been deployed to stand around and surveil and even assault the polite crowds of Occupy protesters. This deployment of law-enforcement already dwarfs the amount of manpower that the government "committed" to fighting crime and corruption during the financial crisis. One OWS protester steps in the wrong place, and she immediately has police roping her off like wayward cattle. But in the skyscrapers above the protests, anything goes.
This is a profound statement about who law enforcement works for in this country.... There have already been hundreds of [Occupy] arrests, which is hundreds more than we ever saw during the years when Wall Street bankers were stealing billions of dollars from retirees and mutual-fund holders and carpenters unions through the mass sales of fraudulent mortgage-backed securities.
It's not that the cops outside the protests are doing wrong, per se, by patrolling the parks and sidewalks. It's that they should be somewhere else. They should be heading up into those skyscrapers and going through the filing cabinets to figure out who stole what, and from whom. They should be helping people get their money back. Instead, they're out on the street, helping the Blankfeins of the world...
People want out of this fiendish system, rigged to inexorably circumvent every hope we have for a more balanced world. They want major changes. I think I understand now that this is what the Occupy movement is all about.... Eventually it will need to be specific about how it wants to change the world. But for right now, it just needs to grow... It doesn't need to tell the world what it wants. It is succeeding, for now, just by being something different.

Thursday, November 10, 2011

Journamalism - Gregg Easterbrook Edition (Vol. Eleventy Hundred)

Easterbrook's up to his old, stupid tricks again, pretending to be the "middle" while really being as wingnutty as ever. His latest column praises Mitt Romney for being a similar "middle" wingnut and then he does a drive-by on Social Security. 

Easterbrook believes Mitt Romney should be praised for threatening to take away benefits for seniors and poor people. I'll point out everything wrong with Easterbrook's column below, but I would also like to point out that I commented on the article (though it was perhaps a little ranty) and had my comments deleted by Reuters.

I'm not sure they deserved to be. And if Reuters wants to consider itself a reputable news organization it probably ought to think long and hard about letting Easterbrook write the crap he writes, misinforming his readers in the process and deleting comments... that way lies RedState (and no, I will not link to RedState).

Anyway, here's how Easterbrook starts. He opens by praising Romney for what Easterbrook feels is a "gold" statement:
"We cannot with moral conscience borrow trillions of dollars that can only be repaid by our children."
Easterbrook comments:
Reckless borrowing, with the invoice passed to our children – nobody in power in Washington right now will be asked to repay the national debt – is not just numbers, it is a moral issue. Romney recognizes this.
Both Easterbrook and Romney are guilty of throwing out pointless platitudes here, and neither displays the slightest understanding of economics. The federal government can currently borrow billions of dollars for 2% per year for ten years. If the economy improves (without further fiscal policy action, this is unlikely to happen immediately) then the government really should be able to inflate away the interest payments on all those billions (and probably a lot of the principal as well). They should be able to do that long before the ten years is even up. Is it reckless for the government to borrow billions when the market is willing to shove billions at it at such ridiculous low rates? No.

Conversely, is it reckless of the government to let the opportunity to borrow at ridiculously low rates pass without taking advantage of it? Yes, it is. Especially when the government could use those billions to invest in infrastructure and provide jobs that might re-inflate the economy and then provide a much broader and healthier tax base to pay off the debt.

The truly horrifying part of the article is when Easterbrook follows Romney into his baseless attack on Social Security (as is typical of every single wingnut in existence). Easterbrook calls the following line of crap, '24-karat gold':
Romney placed his hand on the third rail of American politics, by proposing Social Security cutbacks. He said, “I believe we can save Social Security with a few commonsense reforms. First, there will be no change for retirees or those near retirement. No change. Second, for the next generation of retirees, we should slowly raise the retirement age. And finally, for the next generation of retirees, we should slow the growth in benefits for those with higher incomes.”
Easterbrook adds to Romney's nonsense by saying (emphasis mine):
The Social Security trustees report that the system can currently pay only about three-quarters of scheduled benefits. In 2010, the report notes, that system wasn’t even self-sustaining, having to draw on the federal debt. If benefits aren’t trimmed, either taxes must rise or the federal deficit must accelerate anew. Neither would be good for the country, and that’s assuming China would keep loaning us additional money, which may not be an accurate assumption.... Many seniors need their Social Security checks, but those who don't should no longer receive them. 
Where to begin with all this lunacy? First of all, you knew that Easterbrook would say that raising taxes is an impossibility didn't you? But raising taxes to the levels of the mid-90s, you know back when Bill Clinton was busy destroying the economy, would completely fix Social Security's funding problems. Of course Easterbrook, being a wingnut, has completely ruled that out. He's also ruled out taxes on Wall Street, financial speculation, cuts to military spending... all of it. We only need to make small changes to fund Social Security for the next eighty years, but Easterbrook says those small changes are too much, instead we should cut benefits!!!

Next Easterbrook simply lies about the Social Security trustees report when he claims that the system can only pay 3/4 or scheduled benefits. Easterbrook's lying because he knows that the report states that Social Security can pay FULL BENEFITS to everyone until 2036 (without making ANY adjustment whatsoever) but that, after 2036, if there have been absolutely no adjustments made to the fund's income, it will only be able to pay 77% of what it should to every retiree. And again, this is without any adjustment (meaning no tax increases on the wealthy, on Wall Street, on financial speculation, on ANYTHING). So is Easterbrook lying about this? Well, by not saying that the fund is fully healthy until 2036 and by not saying that it will only pay 77% of benefits AFTER 2036 (if no changes are made to the fund's income) he's trying to make a wingnut point by deliberately misleading his readers that the fund is not healthy NOW. (which, to me, amounts to an outright lie).

But this is typical, Easterbrook and Romney are doing their conservative duty to hammer a valuable, worthwhile social program by lying about its current funding.

Finally, Easterbrook lauds Romney for proposing that Social Security stop paying well-off retirees their benefits on the one hand, but saying we can't raise taxes on the other.

Well, first of all, not paying benefits to well-off retirees really amounts to a progressive tax, doesn't it? The well-off will be paying taxes for benefits they don't receive, so why not just raise taxes on the wealthy? Wouldn't that be easier? Raise taxes on the well-off and keep paying everyone seems like a much easier solution to me. And while the average person might not understand that 'means-testing' for Social Security benefits (which is what Easterbrook has proposed) amounts to a progressive tax, someone who's a Visiting Fellow at the Brookings Institution, a public intellectual, and has a paid gig writing for Reuters? Well, he really, really, reeeeally oughta understand this.

But very well, he doesn't. What he also doesn't understand about his moronic proposal is that means-testing for Social Security will also force the government to be more invasive of citizens' private lives. To determine if a person should or should not receive Social Security the federal government will now have to determine not just a private person's wealth, but their dependents, their monthly outlays and a whole host of other information. And they'll probably have to do this regularly. Who the fuck wants that? Why not just leave the well-funded program the way it is, so that when you reach eligibility you get Social Security, no questions asked. And why not fund that system by raising taxes on the rich? Um, of course, all that's already been ruled out before even starting.

Just typical.

UPDATE: I forgot that somewhere in Easterbrook's idiocy he mentioned the threat of China not buying our debt anymore. But remember, if China stops buying Treasuries, that would be a good thing. Which once again proves Easterbrook is a complete ignoramus on all matters economic. 

Thursday, November 3, 2011

Taste, Wine, and Not Understanding Permutations

Jonah Lehrer wrote an article on Wired discussing the limited sense of taste and how taste can be easily fooled. But he's wrong on nearly all fronts. Here's his opening:
Let's be blunt: The tongue is really dumb. Unlike the rest of our sensory organs, which are exquisitely sensitive, that lump of exposed muscle sitting in the mouth is a crude perceptual device, able to only detect five different taste sensations... [but], we are convinced that the tongue is remarkably sensitive, able to perceive all sorts of subtle flavors. That's why we rhapsodize about the taste of our favorite foods and drinks... 

Obviously Lehrer doesn't understand the mathematics of permutations. Sure, the tongue is capable of only sensing five separate tastes: salty, sour, bitter, sweet and umami (the brothy, mouthwatery taste of meat is considered umami) but that doesn't mean taste isn't infinitely complex. In fact, proving that taste is infinitely complex is inestimably easy:

Let's mix only two of each of the five basic tastes together in perfect, 50/50 harmony. Doing that gets us up to 20 different tastes right away. To make this point in a visual manner, I've listed the combinations below (and keep in mind that Salty, Salty is definitely different than Salty, Nothing... for instance, if I pour a whole cup of salt into your mouth, it will taste a lot more like Salty, Salty, than if I put one grain of salt on your tongue, which will taste more like Salty, Nothing). Anyway, here are the 20 different tastes:

Salty, Nothing
Salty, Salty
Salty, Sour
Salty, Bitter
Salty, Sweet
Salty, Umami
Sour, Nothing
Sour, Sour
Sour, Bitter
Sour, Sweet
Sour, Umami
Bitter, Nothing
Bitter, Bitter
Bitter, Sweet
Bitter, Umami
Sweet, Nothing
Sweet, Sweet
Sweet, Umami
Umami, Nothing
Umami, Umami

As we can see, just from the "limited" five tastes we have a combination of 20 very distinct tastes the tongue can appreciate. At minimum.

But what if we take this a step further, and mix all five tastes together perfectly so that each 'taste' in any individual piece of food represents EXACTLY 16.67% of the food being eaten? Suddenly we get to 462 different tastes that our "dumb" tongues can sense. Below are four of the possible combinations:

Salty, Salty, Sour, Bitter, Sweet
Salty, Sweet, Sour, Bitter, Nothing
Salty, Sweet, Sweet, Bitter, Nothing
Sweet, Sweet, Bitter, Umami, Umami

You get the idea. But again, these 462 different combinations are still operating on a binary scale of taste (either it's salty or not salty, there is no in-between). But anyone who's eaten anything knows that we don't have a binary sense of taste. There are subtle and not-so-subtle degrees of taste.

As I mentioned before, if I drop one grain of salt in your mouth, it will taste different than if I ask you to swallow a teaspoon of salt. And if I pour an entire salt-shaker into your mouth you'll probably gag and ask for a gallon of water to wash it down and it will certainly taste different than the teaspoon of salt I gave you earlier. But to assume that we only have 462 different tastes means we have to assume only six degrees of possible salt combinations. Which basically means that this particular combination...

Salt, Salt, Salt, Salt, Salt, Salt

... tastes exactly the same to every single person on the planet. Which I'm not sure is true. And that means that the five "tastes" have to have more than six degrees to them, which raises the possibility that our "dumb" tongues can sense nearly infinite possibilities.

However, for the sake of argument, I'll assume that all tastes are all exactly the same and that "Salt, Salt, Salt, Salt, Salt, Salt" tastes exactly the same to every single person on the planet (hey, it might). If that's true then yes, there are only 462 different combinations of taste in any single piece of food. But wait, that still doesn't account for texture does it? No, of course not, how stupid of me!

How many textures should I add in? Um... hard, medium and soft with no further degrees or differences (but is there a difference in texture between the "hardest" and "softest" cheeses and "hardest" and "softest" breads? Of course there is, but for this experiment only one degree of hard, medium and soft will suffice). So if I add hard, medium and soft into the permutation formula suddenly we have 24,310 different possible tastes. And Lehrer's "dumb" tongue statement starts falling apart rather quickly.

But now we need to go further and add spiciness and temperature to the foods we're eating (and, by the way, there is an absolute CERTAINTY that temperature isn't a binary experience). Once we add those two into our formula now we're up to 352,716 different possible tastes that our "dumb" tongues can appreciate (and this number was arrived at using assumptions designed to limit it to the lowest possible integer).

In short, you don't have to be some egg-head scientist to understand all of this, all you need to understand is basic math. And any egghead scientist (or person who wrote a book titled "How We Decide") ought to understand basic math. If they did, then writing about the tongue only being able to sense five different tastes would be either misleading or stupid on their parts.

Are there are million different taste to red wine? No. Can wine reviewers be fooled, and does cheap wine often taste better than expensive wine? Absolutely. But that doesn't mean Lehrer's article makes any sense. No. And for proof, look at the last few paragraphs he offers:
A new study led by Adrian North of Heriot-Watt University adds to the indictment [of the tongue]... [He] has shown that when people drink wine to the accompaniment of music, they perceive the wine to have taste characteristics that reflect the nature of that concurrent music... Some of the participants sampled their glass to the tune of music identified... as powerful and heavy; others drank their wine to music rated earlier as subtle and refined; others to the tune of zingy and refreshing music; and lastly, the remaining participants drank their wine with mellow and soft music in the background....

After they'd savored their wine for five minutes, the participants were asked to rate how much they felt the wine was powerful and heavy; subtle and refined; mellow and soft; and zingy and refreshing. The results showed that the music had a consistent effect on the participants' perception of the wine. They tended to think their wine had the qualities of the music they were listening to.
He's gone off the rails here, because he's now delved into the world of Neuro-Linguistic Programming and doesn't realize it (and neither do the creators of the experiments, apparently). Humans are highly suggestible creatures. In fact, stupid things like not shaking hands with someone can be enough to disrupt their routine and put them into a suggestible trance. If the general atmosphere of a place, its music, or the specific words a waitress (or experimenter) says, are being used to validate something OTHER than NLP, then that study is inherently flawed.

But this is old news. Or, at minimum, this should be old news to someone who, again, wrote a book called "How We Decide". For Lehrer not to understand NLP is dumb, and for him to think that NLP actively negates a person's sense of taste is even dumber (and now I'm wondering if How We Decide is worth reading).

People can be influenced to say and do all sorts of things using NLP. If a test subject eats dog crap wrapped in a burrito and the experimenter uses the right NLP techniques afterward (certain auditory or visual cues), then the subject will probably repeat whatever the tester wants him to (i.e. that the dog crap burrito tasted like powdered sugar). This doesn't prove that the subject's taste buds are "dumb", it only proves that NLP is a much more powerful influencer than taste.

Is it a big surprise that we're more influenced by visual and auditory cues than olfactory or gustatory ones? Again, to someone like Lehrer this shouldn't be a surprise, and certainly shouldn't be something worth writing about. But the last few lines in his column contain a whole concoction of ways NLP affects people when  they're dining out and it's worth reading for that alone (even if Lehrer doesn't know it):
[T]his is why the ambience of a restaurant matters... For instance, when we eat a meal in a fancy place, full of elaborate place settings, fine porcelain and waiters wearing tuxedos, the food is going to taste different than if we ate the same food in a cheap diner.... [T]he music matters, but so does everything else. The tongue is easy to dupe.