2010 - %3, August

Housing Market Update

| Tue Aug. 24, 2010 12:37 PM EDT

Hey, how about that first-time homebuyer tax credit? It was originally scheduled to expire at the end of 2009, and home sales spiked as people rushed to get their loans approved in time. Then the program was extended, and after a brief lull sales rose again, this time spiking in June as people rushed to get their loans approved before the program went away for good. So what happened in July? The chart below, modified slightly from one created by Daniel Indiviglio, shows the results:

That's a stunning 27% decline in July. There's no telling whether that's a short-term effect or if home sales will stay low for a while. The most optimistic appraisal is that it's a short-term impact because of the intoxicating effect the tax credit seems to have had on people. Megan McArdle, who just bought a house, reports that she and her husband "were astonished by the effect that the tax credit seemed to be having on people. Prices were climbing rapidly, as people got into bidding wars that raised the price by more than 8%. Inventory vanished rapidly; the average days on the market for a new property that wasn't ridiculously overpriced, half-finished, or occupied by tenants who wouldn't let the place be shown, was 1-4 days."

That's been my sense too, which is remarkable since $8,000 shouldn't be that big an incentive to buy something as expensive as a house. But then again, maybe that's the Southern Californian in me talking. $8,000 isn't a huge incentive if you're buying a $500,000 house in Los Angeles or Orange County, but it's probably a much bigger deal if you're buying a $150,000 house in Little Rock.

In any case, we better hope this is just a short-term effect from housing sales getting artificially pulled in a month or two to take advantage of the tax credit. If it's not — if the tax credit really was propping up the market — then we're in for yet more economic pain. Slow housing sales drive lower house prices, and lower house prices have an outsize effect on consumer spending and on economic growth in general. Buckle your seat belts.

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More on Early Childhood Education

| Tue Aug. 24, 2010 12:07 PM EDT

Dylan Matthews interviews Harvard professor Raj Chetty about a subject I blogged on a couple of weeks ago. Better early childhood education, it turns out, might not directly affect scores on standardized tests (or on things like IQ tests), but it apparently does affect other behaviors that are strongly related to higher incomes later in life:

One thing I found interesting about the effect of test scores as relates to earnings is that it seems like some of the gains you find in early childhood, that might not show up on later test scores, later emerge when you're looking at earnings data.

Yes, and that's in fact, I think, the most striking finding....[Test scores] fade out over time. So kids who had better teachers and were in smaller classes in kindergarten aren't doing all that better, really, on tests in middle school and high school. But what's surprising is that those effects reemerge in adulthood. And I can talk about why we think that is.

Why do you think that is?

One explanation for this fadeout and then reemergence of the impact of kindergarten is through non-cognitive channels. [...] For a limited subset of the students we have measures of non-cognitive ability in eighth grade. So what that means is measures like, they ask teachers to evaluate whether the students are being disruptive in class, whether the students are putting in a lot of effort, whether they're motivated and so on. Now, we find persistent effects of your kindergarten class on these non-cognitive measures. There's no fadeout, or very little fadeout on the non-cognitive stuff.

So one potential explanation of all of the findings together is, a good kindergarten teacher teaches you the material that you're tested on in kindergarten, and so you do well on kindergarten tests. That same good teacher also imparts non-cognitive skills, like they teach you how to be a disciplined learner, how to put in a lot of effort, how to be patient....It's quite intuitive that these non-cognitive skills matter when you're an adult. It helps to get a good job and to do well in general if you're a disciplined person, if you're perseverant and so on.

Bottom line: school matters, and the way it matters doesn't get picked up entirely via standardized testing. In modern society, there are lots of behavioral traits that are just as important as IQ and subject matter knowledge. But we only test for subject matter knowledge, and so it gains an outsize importance.

Rick Perry: Not "Man Enough" to Be Governor?

| Tue Aug. 24, 2010 11:57 AM EDT

There's nothing like questioning a candidate's manhood to score political points. A new ad from a Democratic anti-Perry group calls the Republican Texas Governor out for not being man enough to face his opponent in an open debate—despite repeated invitations from the Democratic contender Bill White—or meet with newspaper editorial boards. Paid for by Back to Basics PAC, which has run several anti-Perry ads, the ad features a photo of Perry with the word "coward" in giant letters emblazoned across it. "Tell Rick Perry to stop cowering and face Texans like a man," the ad says at the bottom.

The full-page ad, which ran in Texas newspapers today, is a blatant effort to drain some of the cowboy swagger from a governor who's bragged about carrying a gun on the job. But with Perry currently leading White by 8 points in the latest polls, I'm not sure a machismo contest will really do the trick.

Oh Yeah, That's Why the Climate Bill Failed

| Tue Aug. 24, 2010 11:53 AM EDT

Environmental groups spent a record amount of money on lobbying in 2009, a year everyone thought presented the best hope for signing landmark climate change legislation into law. But for every dollar they dropped, the fossil fuel industry spent almost eight times as much, according to a new report from the Center for Responsive Politics.

Last year, as the House debated and eventually passed cap and trade legislation and the Senate began to draft its own bill, environmental groups spent a record $22.4 million on federal lobbying—about double what green groups had spent annually for the previous eight years. Groups like the Nature Conservancy and Environmental Defense Fund spent an unprecedented $2.2 million each on lobbying.

But all the green's green was no match for the fossil fuel lobby. ExxonMobil alone spent $27.4 million in 2009, more than all the environmental groups combined. Oil and gas interests spent a combined $175 million on lobbying.

The report comes as the Center for Responsive Politics launches a new project oil and gas spending in Congress, "Fueling Washington." The project is great, but this only scratches the surface of the fossil-fuel spending on the issue; the coal industry is also a major player. Electric utilities (much of which are coal-fired here in the US) spent $145 million last year (though there were utilities pushing both for and against cap-and-trade). Coal mining interests spent another $14.8 million. All told, fossil fuel interests spent at least 15 times as much as green groups on lobbying last year.

Playing Fair With Climate Science

| Tue Aug. 24, 2010 11:47 AM EDT

A few weeks ago I wrote about a Nature article that suggested we were in the middle of a long-term decline in the volume of phytoplankton in the world's oceans. I had a bit of email back-and-forth with Stuart Staniford about whether the results in the paper were really robust, but the upshot was unclear and the paper was, after all, in Nature, not some C-list journal. What's more, the decline was pretty substantial. It was probably real.

But now comes another climate-related piece of research, this time in the equally respected Science, and this time Stuart's skepticism is on much firmer ground. For the last decade scientists have been collecting information on terrestrial vegetation coverage using the Moderate Resolution Imaging Spectroradiometer (MODIS) on board NASA’s Terra satellite. Their conclusion: vegetation coverage is down, which means plants are pulling less carbon out of the air, which means we have yet another positive feedback loop causing an increase in atmospheric carbon levels.

The problem is that there are only ten annual data points so far, and they bounce around like a pogo stick. The trend over the past decade is slightly down, but the variance is so large that it's almost imposssible to tell if this is just normal noise or a real decline. It's still worthwhile information to share, except that the writeup in Science appears to go out of its way to avoid acknowledging the problem:

There is a whole long history in science of how to assess this kind of thing — to test whether a particular number or trend is statistically significant, as opposed to the situation where it could well just be a fluke. It's a normal part of doing science that one analyzes the statistical significance of trends, and analyzes the likely range of uncertainty around a particular estimate. However, in this paper, there is no analysis in the paper of whether the reduction in NPP is statistically significant, and, as I noted, no error bar is provided for the "0.55 petagram" reduction.

So Stuart emails the authors, and they concede that their results aren't yet robust ("Some research findings are so important that society really cannot afford to wait another 10+yr for 95% or 99% statistical confidence"). Stuart is unhappy:

Ok. So here we have a statistically non-robust result, that the authors are well aware is not statistically robust, being published because it's of "high policy significance". However, and critically, the authors included no discussion whatsoever of the statistical limitations of the evidence. The "-0.55" in the abstract is not "-0.55 +/- 1.1" or something like that to give the reader a heads up that there is a lot of uncertainty here. There is no calculation of the "p-value" of that trend (how likely it was to occur by chance), even though the rest of the paper is littered with p-values of subsidiary results. They know perfectly well how to calculate this, they know it's not statistically significant, but they chose to put their readers in a position where we have to take the data off the graph and do our own statistical analysis to realize what's really going on.

And the refereeing and editorial process at Science allowed the paper to be published like that.

I think that sucks.

Stuart is no climate skeptic, just someone who thinks data ought to be presented clearly and transparently. I agree. Especially in the current post-Climategate atmosphere, the climate community needs to be purer than Caesar's wife about this kind of thing. There's no reason to withhold this satellite information, but it should be clearly labeled as preliminary, non-significant, and with error bars attached.

Tea Partiers Try K Street Fundraising Tactic

| Tue Aug. 24, 2010 11:13 AM EDT

The Tea Party Patriots, one of the nation's largest tea party umbrella organizations, prides itself on its "leaderless" organizational structure, low overhead, and grassroots integrity. These things have distinguished the group from say, ordinary Republican political machines. But as the group matures, it's looking more and more like those top-heavy, insider and fundraiser-driven political organizations its members claim to despise.

Earlier this month, TPP sent out an appeal to its members offering them a chance to join "The 300," an exclusive group of donors who would help underwrite the group's big rallies planned for DC, Sacramento and St. Louis on Sept. 12. Joining "The 300" confers many benefits on its members—namely front row seats to the events (an enticing offering to aging tea party members who aren't used to being on their feet for hours at a time), a chance to schmooze with celebs and other rally headliners, and of course, their names in big letters on banners at the events. All this can be had for the low, low price of $1,000. The leaders of the leaderless organization emphasize that this won't be a club for the riff-raff; membership will be strictly limited. They write:

There are only 300 slots available for each group. After those spots are filled, we will be grateful to accept your donation, and it will be put to good use, but you will not receive the benefits listed above. So time is of the essence. Join now!

Thousand-dollar donations to join exclusive networking groups sound a lot more K Street than tea party, but then again, tea partying isn't cheap.  There are all those Porta-Potties to rent, first aid tents to staff, security to hire and permits to be procured. Somebody has to pay for it all. TPP isn't the only conservative grassroots group discovering the hard way that exercising free speech isn't always free.

Earlier this month, Unite in Action, the coalition of "patriot groups" behind another big convention and march planned in DC on Sept. 11, sent out a desperate appeal for cash, saying it needed to raise $40,000 in the next few days to underwrite the event. Unlike TPP, though, Unite in Action was only asking for five bucks a person. Organizers Lynn Roberts and Stephani Scruggs wrote:

We come to you now asking for your urgently needed help. We had two major corporations lined up to underwrite our event. At the last moment, they backed out, because they were "AFRAID OF WHAT THE OBAMA ADMINISTRATION WOULD DO TO THEM" if they openly supported this movement! God help us, the USA is now governed by fear. WE MUST STOP THIS!

So, all we are asking is five for freedom, just $5 to help us get tools in the hands of the people. ..."Give freely today, for liberty tomorrow."

The money needed to host all these big demonstrations and rallies doesn't always sit well with tea party activists on the ground, many of whom would rather see the funds go towards electing local conservative candidates. As Butch Porter, chairman of the American Conservative Party and a tea party activist in Northern Virginia, told me recently, "We had 1.7 million people here [in DC] on 9/12 2009, and what did that accomplish?"

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Enviro Links: EPA Admin on NOLA, Another BP Exec Pleads the Fifth, and More

| Tue Aug. 24, 2010 10:57 AM EDT

Today in environmental news:

EPA administrator Lisa Jackson reflects on the five-year anniversary of Hurricane Katrina and the rebirth of her hometown of Pontchartrain Park:

The homeowners and families in Pontchartrain Park were among the first African-Americans to buy their own homes in the New Orleans suburbs. Despite the racial inequality of the time, they shared a belief that the nation's opportunity should be equal for everyone.
In 2010, Pontchartrain Park is being reborn, re-emerging after the destructive power of Katrina and the failure of the New Orleans levee system left the neighborhood devastated. Today's vision is no less bold than it was in the 1950s.
Pontchartrain Park is re-emerging as model of new urbanism, a place where livability, environmental responsibility and economic opportunity come together. My dad, my aunt and uncle, my cousins and the many other Pontchartrain Park pioneers who are no longer with us would be proud.

Renewable energy advocates are making a big push to get the Senate to pass a renewable electricity standard this year.

And in oil-spill news:

BP conducted an internal audit of the Deepwater Horizon rig in September 2009 that found 390 overdue maintenance problems. The audit also found that Transocean, the owner of the rig, structured bonuses for some staff around how much time the rig was in operation—rather than, you know, pausing operations to fix problems.

During a panel probe into the Gulf disaster yesterday, a top official from Transocean couldn't tell investigators who was in charge on the rig the day it exploded.

Meanwhile, another BP executive is expected to plead the Fifth today rather than testify before a panel of investigators probing the spill.

State officials in the Gulf are criticizing BP spill fund czar Kenneth Feinberg over the terms of the $20 billion compensation plan. Critics say the terms are too restrictive, and have accused the Obama-appointed administrator of the fund of being too cozy with BP. Feinberg officially took over administration of the fund yesterday.

Michael Bromwich, the top federal regulator of offshore drilling, indicated yesterday that the moratorium on new drilling is expected to continue for several more months.

Louisiana state biologists are investigating whether the 5,000 to 15,000 dead fish that turned up dead near the mouth of the Mississippi River are the result of all the oil and dispersants in the Gulf. The fish kill included crabs, sting rays, eel, drum, speckled trout, and red fish.

I would venture that this is more than a little extreme, but Brad Pitt thinks the death penalty should be on the table for those responsible for the Gulf disaster. "I was never for the death penalty before," Pitt says in Spike Lee's new documentary on New Orleans. "I am willing to look at it again."

GOP Spanking Caucus Fights UN Treaty

| Tue Aug. 24, 2010 8:24 AM EDT

The UN Convention on the Rights of the Child was first issued in 1989 as a landmark human rights document defining basic rights for children under the age of 18. It's so uncontroversial that every member of the UN has signed it. Every member, that is, but the U.S. and Somalia, and the only reason Somalia never signed it is that it hasn't had a functioning government capable of signing. But even that wretched country last year announced plans to ratify the treaty. So that leaves the U.S. as the only civilized country in the world that won't ratify an international document pledging to create a legal culture that acts in the best interest of the child (rather than, say, treats them like chattel). During the 2008 campaign, President Obama observed, "It's embarrassing to find ourselves in the company of Somalia, a lawless land." His administration has attempted to revive efforts to get the damn thing ratified after more than 20 years of political wrangling.

But it doesn't look like the treaty is going to get anywhere on Obama's watch, either, despite having renowned children's rights lawyer Hillary Clinton running the State Department. Religious conservatives, especially in the homeschooling movement, are raising a stink about the treaty and trying to get Congress to pass a constitutional amendment that would make it virtually impossible for the US to ever ratify it. Their main objections? Under the treaty, "parents would no longer be able to administer reasonable spankings to their children," the government couldn't sentence teenagers to life in prison, kids could get sex-ed and birth control if they wanted it, and--gasp!--children would be able to choose their own religion, according to a fact sheet published by ParentalRights.org, an outfit headed up by Michael Farris, the homeschooling movement's legal mastermind. The group is dedicated to winning passage of the parental rights amendment.

On Sunday, WorldNet Daily reported on the latest fury over the UN treaty and a renewed interest among conservatives in fighting it. WND noted that 31 Republicans in the Senate have expressed opposition to ratification in a move that seems directly related to the rise of the tea party movement. Farris told WND, "The whole notion that government wants to invade our lives in every sphere has awakened the American public, and frankly has aroused a sleeping giant."

Alaska Primary: Don't Forget the Dems

| Tue Aug. 24, 2010 8:00 AM EDT

The Republican Senate primary in Alaska today may turn out to be more competitive than most observers, and incumbent Lisa Murkowski, expected. But even if she escapes unscathed, Murkowski will face yet another challenge in a few months, with Scott McAdams likely to be the Democrat on the ballot come November.

McAdams is the mayor of Sitka, an island off the southeastern leg of Alaska, which at just 8,600 people qualifies as the fifth-largest municipality in the state. Those residents are spread over 600 square miles, with just 14 miles of roads.

Some might be weary of smalltown Alaska mayors at this point, but McAdams says it's also the "most progressive town in Alaska...a blue island in a red sea." Sarah Palin didn't win there in the governor's race, and the McCain-Palin presidential ticket didn't win there, either. McAdams is expected to come out ahead in a three-way race for the Democratic primary tomorrow, in a race that has drawn very little national attention so far. He faces Frank Vondersaar and Jacob Seth Kern in today's primary.

McAdams, a 39-year-old whose day job is director of community schools in Sitka, announced his candidacy in June, after some initial hesitation. What pushed him "over the edge" to running, he said, was Murkowski's objection to a bill to raise the liability cap on oil spills in the wake of the Gulf disaster. "I was outraged," he tells Mother Jones, recalling the Exxon Valdez disaster in his home state, which happened when he was a senior in high school. McAdams chokes up as he talks about the residents of his area "who still have not been made whole" now 21 years later. "To say that $75 million is enough to cover the claims, cover the cost of lives that cannot be valued or monetized is outrageous."

The destruction those two disasters brought to the fishing, tourism, and maritime culture of both regions is something, he says, that didn't seem to phase Murkowski's support for the oil and gas industry. He plans to make energy issues central to his campaign. He points to Murkowski's solid backing by dirty energy interests as evidence that she's no longer working for the people of Alaska.

Of course, Murkowski plays an interesting role in the Senate these days, especially hailing from one of the country's most resource-rich states. She's the top-ranking Republican on the Energy and Natural Resources Committee, and as such has played a major role in energy legislation over the past years. She's also one of the few Republicans who has acknowledged that climate change threatens her state, but has arguably done more than any other Senator to undermine action on the issue since Obama took office. She's so-far shown no sign of stopping her crusade against EPA regulation of greenhouse gases.

Treasury's Blogger Meeting

| Tue Aug. 24, 2010 6:13 AM EDT

Last week, I attended a meeting at the Treasury with senior administration officials.

The ground rules prohibited direct quotes or identifying the senior administration officials in question. But I can tell you who else was there: Politico's Mike Allen, Huffington Post's Shahien Nasiripour and Richard (RJ) Eskow, the American Prospect's Tim Fernholz, the Washington Post's Ezra Klein, Reuters' Felix Salmon, and the Atlantic's Derek Thompson. ThinkProgress' Matt Yglesias was supposed to be there but a Secret Service snafu left him stuck outside for the duration.