With the exception of his stint as head of the Multi-National Security Transition Command in Iraq in 2004, throughout his career the general sense has been that General David Petraeus has been performing well. And yet, nowhere along his path from West Point to heading up United States Central Command has he received a multi-million dollar bonus payment. No stock options. Not even a decent salary by Wall Street standards—Generals seem to max out at around $216 grand a year plus what is, admittedly, a pretty solid benefits package. According to prevailing economic wisdom, it should be completely impossible for the United States Army to field a high-quality officer corps or to motivate its personnel to perform at a high level. And yet something seems wrong with this theoretical picture.

That, I think, rather than the now-banal point that Wall Street bonuses create perverse incentives is the most provocative element of Nassim Nicholas Taleb’s latest:

Finally, I was involved in trading for 21 years and I can testify that traders consciously play the free option game. On the other hand, I worked (in my other job as risk adviser) with various military organisations and people watching over our safety. We trust military and homeland security people with our lives, yet they do not get a bonus. They get promotions, the honour of a job well done and the disincentive of shame if they fail. Roman soldiers signed a sacramentum accepting punishment in the event of failure.

Now I don’t particularly know where this leaves you. But I think it’s a provocative reality staring us in the face. And it’s important to observe that even though there are a lot of economics PhD programs in the United States and a lot of business schools in the United States, you wouldn’t exactly say that looking into ways to design incentive schemes that don’t involve windfall financial rewards for organizational leaders has been a huge research priority of these institutions. Not, I think, because anyone would strictly deny that alternative motivational schemes exist. Or really because anyone consciously says to themselves “my job is to produce work that’s pleasing to the sort of monied individuals who finance the existence of the sort of institutions that employ me.” But somehow things work out the way they do, and I don’t think it’s unrelated to the fact that part of the power of money is that it carriers with it the power to call flatterers into existence. If I recall correctly, this is how Marx used the term “ideology” — to describe the process by which a society inevitably managers to create a set of ideas that justify the existing hierarchy. And when the hierarchy’s power starts to crack, then so does the power of its ideas.

Brad DeLong is not, I know, a fan of Marx. But yesterday he was writing about the return of neo-Hooverite economics:

Back in 2000 my teacher Olivier Blanchard wrote an article: “What Do We Know About Macroeconomics that Fisher and Wicksell Did Not?” (PDF). But he wrote the wrong article. The Cato Institute and the Republican Party demonstrate that we economists have forgotten–or at least can no longer reach consensus on–things that Fisher and Wicksell knew very well indeed.

I think you need understand this process of “forgetting” at least in part in these kind of terms. The collapse of the Gilded Age ushered in an era in which we “knew” various things about the virtues of the mixed economy and the non-automatic nature of economic growth. The rise of the New Gilded Age caused those ideas to be “forgotten.” But note that Ed Prescott, who DeLong is complaining about, hasn’t actually forgotten the old ideas, he’s developed some rather ingenious, if somewhat laughable, new theoretical models that just reach the same conclusions as the liquidationists of old.

Near the end of his very interesting book, A Farewell to Alms, Gregory Clark also does a bit of work toward developing the idea that the role of “incentives” in economic growth is overstated. You can get a flavor here where he argues that neoclassical theory predicts that Malawi should be richer than Sweden which, obviously, it isn’t.

Al Kamen takes a look at Barack Obama’s early appointments and concludes “Thirty-eight of the 56 appointees (68 percent) are men, (But white men, representing 46 percent of all picks, fall short of a majority.)” Kay Steiger remarks that “if you were expecting Obama to be a shining beacon of diversity in the upper tiers of the government’s elite, you are bound to be disappointed.”

In racial terms, though, Obama’s team actually is quite diverse. It’s 70 percent non-Hispanic white in a country that’s 68 percent non-Hispanic white. When you consider that whites represent a disproportionately large share of the “middle aged and college educated” sub-cohort that gets consideration for high-level executive branch jobs, Anglo whites are probably somewhat underrepresented, reflecting the extent to which the Democratic Party is largely composed of ethnic minorities. And, obviously, the President himself is African-American. It’s in terms of appointing women that there’s a clearer case to be made that Obama’s falling short. The basic demographics of the Democratic Party point toward an administration that’s mostly women. But of course most Democratic members of congress are men. Same with the senators and the governors and the former Clinton administration officials. So it’s natural to see the cycle re-inscribed in the Obama administration. But structurally, the relative paucity of women in important public positions is both unfair and a substantial drag on the progressive talent pool. The need to recruit people with experience means that it’s not possible to expect a sudden leap to equality, but it is reasonable to hope for steady improvement. At this point I’d say too few people have really been appointed to say how Obama fares on that score, but he ought to be aspiring to have the most equal split ever.

My inbox is ablaze with different people forwarding me information about the President deciding to dispatch a Marine Expeditionary Brigade and an Army Stryler Brigade to Afghanistan. Given that we’re not going to withdraw from Afghanistan—and shouldn’t—I think this is probably a good idea. Or, rather, what I’ll say is this. According to the U.N., there were 2,100 civilians killed in war-related ways in Afghanistan in 2008. About 55 percent of those casualties are attributable to the Taliban-led insurgency, which shows that they’re bad guys. But as Spencer Ackerman points out 45 percent isn’t a low number of civilians being killed by our ordnance. And 65 percent of those casualties are being caused by airstrikes. To remain effective in Afghanistan, we desperately need to reduce the civilian death toll. That means less airstrikes. Which probably means more boots on the ground. And hopefully more boots on the ground can also reduce civilian exposure to death-by-Taliban. That’d be how you get the job done.

And hopefully that’s what’s in store for these additional troops. But success of this venture is contingent not so much on the additional troops as on the adoption of a different strategy—one more focused on population security and less reliant on air power. It would be nice to learn some more details so as to really evaluate what’s happening.

Ezra Klein has an interesting post primarily focused on the disappointing results of trying to subsidize fruit and vegetable consumption:

Diansheng Dong and Biing Hwan-Lin recently conducted a study for the USDA’s economic research service modeling the likely impact of a 10 percent discount on fruits and vegetables for low-income Americans (defined here as incomes below 130 percent of the poverty line). They concluded that the policy, which would cost $580 million, would spur low-income Americans to increase their consumption of fruits by 2.1-to-5.2 percent and vegetables by 2.1-to-4.9 percent. It’s not nothing, but it’s not much. The graph below shows the effects of the policy, the effects of the policy doubled (20 percent off fruits and vegetables), and in the final column, how far even the double-subsidy world is from the USDA’s recommended consumption of fruits and vegetables (which is probably still too low!)

One cautionary note about the graphic here would be that actual behavior is so far off from USDA recommended behavior that putting the USDA goals in the chart winds up making the changes very small. If the goal is a 70 percent increase in vegetable consumption, you shouldn’t be surprised that a 20 percent discount doesn’t achieve the goal.

More broadly, though, when discussing this issue it’s important to recall that vegetables are not expensive. I went to the farmer’s market over the weekend and mixed root vegetables (sweet potatoes, carrots, turnips, various kinds of onions and potatoes, etc.) were available for $1 a pound and all these are, needless to say, for sale for less money at a regular supermarket. Indeed, it’s the relative abundance of vegetables that gets us in trouble. Having evolved in an environment where plants are plentiful but meat and sweets and refined grains are rare, we’re programmed to act as if we’ll be eating plenty of vegetables out of necessity and had better grab the other stuff while we have a chance. So any policy to turn these habits around will run into some difficulties as it’s literally going against human nature.

But the bigger issue than price for most people is almost certainly convenience. We’ve created a society where people work longer hours than they used to, where parenting expectations have gotten higher, and where fewer and fewer families have mom serving as a full-time unpaid housekeeper/cook/nanny. Ezra observes that most people “live closer to a McDonald’s than a grocery store.” And, indeed, looking back on it I’ve been struck by how rapid and dramatic the change in my eating habits has been since I moved from being near many takeout food options but far from a grocery store to living closer to a supermarket than a takeout spot.

On the other hand, Ezra says “taking 10 percent off the price of the rotted bananas at the convenience store won’t do much to encourage their consumption” since they’re still rotten. I’m actually not so sure. Sometimes a store can get into a bad fruit equilibrium, as Sonya’s Market on 11th and Harvard was circa 2003 when I lived nearby. Few people bought the bananas there, so the bananas were rarely fresh, so you didn’t think of Sonya’s as a good place to buy banana’s, so the banana turnover was low and the banana’s were rarely fresh. Conversely, you can achieve a good bodega equilibrium where expectations of high demand lead to fresh produce lead to high levels of consumption which keeps the produce fresh.

Last but by no means least, I don’t think it makes a ton of sense to talk about subsidizing fruits and vegetables without talking first about un-subsidizing corn, soy and the corn ‘n soy derivatives that artificially drive down the price of Fritos and Big Macs. The policy argument for subsidizing healthy eating is convincing enough to me, but obviously is going to fly in the face of widely held anti-paternalist sensibilities. The case against subsidizing unhealthy eating, by contrast, is totally unimpeachable.