2012 - %3, September

Female Mega-Donors Emerging This Election Year

| Wed Sep. 26, 2012 3:27 PM EDT

Big spenders are coming out in support of Women Vote!, a reproductive rights Super PAC, the Center for Responsive Politics reports. Women Vote! is affiliated with EMILY's List, the political action committee dedicated to electing pro-choice women.

In August, the super-PAC brought in $1.9 million, including five six-figure donations from individual female donors. As CRP has pointed out before, this is significant, as there is generally a giant gender gap in political donations; 70 percent of donors for the 2012 cycle have been male. But the donations to Women Vote! indicate that some very wealthy women are making major campaign expenditures this year. The super-PAC has also received several big donations from other progressive organizations: the Gay & Lesbian Victory Fund ($325,000) and America Votes ($151,000).

Here are the women donors who made big contributions in August:

But in August, Barbara Stiefel, a Florida philanthropist who had previously donated $1 million to Priorities USA, the super PAC backing President Barack Obama, wrote a $250,000 check to Women Vote! Laura Ricketts, a co-owner of the Chicago Cubs, gave $200,000; if that name sounds familiar, it's because her father, Joe Ricketts, the founder of TD Ameritrade, made headlines earlier this year when it was reported that his own outside spending group, the Ending Spending Fund was considering launching a major campaign against Obama. New York City philanthropist Shelley Rubin also gave $150,000 last month, and two other women—Mitzi Henderson and Barbara Fish Lee—gave $100,000 apiece.

EMILY's List says the big donations are a result of the increasing attention to reproductive rights and other women-centric issues this election year. "Finding out that Republicans want to roll back the clock that far for women has been a shock—and folks are absolutely waking up to the need to have more Democratic women in government at every level," EMILY's List president Stephanie Schriock said in a statement to Mother Jones.

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Pygmy Seahorse Discovered on Google Street View

| Wed Sep. 26, 2012 12:43 PM EDT

Denise's pygmy seahorse: O.J.Brett, Norway, via Wikemedia CommonsDenise's pygmy seahorse: O.J.Brett, Norway, via Wikimedia Commons

In the course of mapping the the world's reefs for Google Street View, divers found the teensy weensy Denise's pygmy seahorse (Hippocampus denise) in Australian waters for the first time, reports New Scientist (subscription). The five-eighths-inch long (1.5 cm) seahorse had previously been found living on coral reefs off Vanuatu, Palau, Malaysia, Solomon Islands, New Caledonia, and southern Japan. The mapping team found it off Heron Island on the Great Barrier Reef at 302 feet (92 meters) deep.

"It's very much a critical time for reefs and we want to cover as much as we can in the next two to three years to create a global record," says project founder and director Richard Vevers.

The announcement marks today's launch of Google underwater street view. In the same way you can virtually walk around the topside world you can now virtually dive through the underwater world of a coral reef off Australia. It's stage one of a six-part underwater series. Next up, the deep and shallow coral reefs of Hawaii, the Philippines, and Bermuda.

The mappers are Catlin Seaview Survey—a partnership between the global insurance company Catlin Group Limited and the nonprofit Underwater Earth (check out the insanely beautiful images at their site). One of the two unique cameras used for the project (each capturing ≤50,000 360-degree panoramic images stitched together to create the underwater street views) was named "Sylvia," for legendary marine biologist Sylvia Earle, founder of Mission Blue.

The lucky mappers probably have the coolest job on Earth. And they've given us another unbelievably addicting way to get no work done.

 

 

My Baroque Argument for Higher Capital Gains Taxes

| Wed Sep. 26, 2012 12:37 PM EDT

Matt Yglesias tweets about my post this morning on capital gains taxes:

Arguments for higher capital taxes grow more baroque, as @kdrum says private investment is economically harmful.

This is just a tweet, and there's not much room for nuance in 140 characters. Still, I don't think I've ever made my capital gains argument directly before, so maybe it's worth doing. In a nutshell, here it is.

The usual rationale for low taxes on capital income is that it encourages capital formation and thus investment. This is self-evidently a good thing, since investment is good for economic growth, and it's one of the reasons why most countries (including most European countries) tax capital lightly. Capital is good! The more the better!

I agree with the first sentiment: capital is good. However, I'm not so sure I agree with the second. There really might be a limit to just how much capital is a good thing. Economies are strongest when there's a sensible balance between capital income and labor income.

The aughts are instructive here. Back in 2005 Ben Bernanke famously warned of a "savings glut," a tsunami of money that was flooding into the United States looking for a home. The problem is that there was too much money and not enough productive uses to put it to. As a result, all that money flowed into housing and an increasingly baffling collection of Wall Street investment vehicles, and eventually it all came crashing down.

The fundamental problem was a mismatch. The flip side of a savings glut is an investment drought, and I've always argued that this was the real problem. If all that capital had flowed into real-world production — factory expansions, new startups, etc. — everything would have been great. But real-world production requires customers, and that in turn requires an expansion of labor income. We weren't getting that in the aughts, though. As capital income increased, labor income necessarily decreased, which reduced the number of good investment opportunities for holders of capital. And it seems to be an iron law that when there's not enough real-world investment for all the capital sloshing around, it piles up and eventually gets stupid. At some point the imbalance becomes too large and then the whole house of cards collapses.

So my question is this: would we have been better off in the aughts with higher capital gains taxes? I think you can make a good case. What we got with lower capital gains taxes was an extra boost to a trend that was already entering dangerous territory. Increasing capital gains taxes wouldn't have prevented the Great Crash, but it might have lightened it a bit.

In any case, my main point about capital formation is that more is not always better. If you want a non-bubble ecoomy, you need a balance: enough capital to drive economic growth, and enough labor income to give that capital something useful to do. When that balance gets out of whack in either direction, you're headed for trouble.

UPDATE: I should add that even if you don't buy my argument about low tax rates on capital gains being potentially harmful, it's still the case that the bulk of the empirical research shows no real relationship between capital gains rates and economic growth rates. The best you can say is that within reasonable limits, raising capital gains rates doesn't seem to hurt much and lowering them doesn't seem to help much.

Carpe Climate: House Dems Seize Extreme Summer to Attack GOP

| Wed Sep. 26, 2012 12:20 PM EDT
Markey: "Romney is an extremist on extreme weather."

In these first days of autumn, temperatures are finally starting to break after the country's third-hottest summer on record. But meanwhile, most of the country is still locked in terrible drought, rebuilding after wildfires, or drying out after Hurricane Issac. And after endless calls from scientists and signs that the public are shifting on climate change in response to extreme weather, climate-minded Democrats are seeing an opportunity to lampoon House Republicans as climate skeptics in the runup to November's general election.

Reps. Ed Markey (D-Mass.) and Henry Waxman (D-Calif.), the legislators behind Congress' first (and failed) big stab at carbon pricing legislation, yesterday released a study that lays out the case for why global warming is a predictor of more severe and frequent weather disasters. A press release for the study slammed Republicans as responding to extreme weather by taking steps to "deny science and block action," indicating that House Democrats have embraced climate change as wedge issue.

"We wanted to show that [Mitt] Romney is an extremist when it comes to extreme weather," Markey told reporters.

"We wanted to show that [Mitt] Romney is an extremist when it comes to extreme weather," Markey told reporters after addressing a Union of Concerned Scientists symposium in Washington on the need to improve public access to government research.

There's little that's groundbreaking in the study, which is built largely around pre-existing data from the National Oceanic and Atmospheric Administration. But after this summer's freakish weather, and with one presidential candidate for whom climate change is a punchline, Markey said he is seeking to gain an acknowledgement in Congress that the weather we now see as extreme is likely to become normal. He's tried to make this case once before, in the short-lived Select Committee on Energy Independence and Global Warming, which was killed by House Republicans in 2010.

Despite the overtly political nature of the study's debut, Markey said his goal is to reprioritize science over politics in the Congressional debate about climate change.

You Hate Me, You Really Hate Me

| Wed Sep. 26, 2012 11:50 AM EDT

A recent paper that was posted online for the first time last week concludes that we just can't stand each other these days. "Using data from a variety of sources," say the authors, "we demonstrate that both Republicans and Democrats increasingly dislike, even loathe, their opponents." And apparently this has little to do with policy positions. It's more about the relentless tsunami of negative attack ads and partisan media that have consumed American politics over the past couple of decades. 

Sadly, the full paper is gated. However, Claude Fischer offers up a few tidbits:

From the late 1970s through the late 2000s, Americans rated their own political party pretty consistently, at about an average of 70 on the scale. However, Americans rated the other party increasingly coolly, from about a 47 average four decades ago down to about a 35 average these days. This trend portrays a growing animosity toward the other side. Notably, the gulf in party temperatures is now wider than that between whites and blacks and that between Catholics and Protestants.

A pair of surveys asked Americans a more concrete question: in 1960, whether they would be “displeased” if their child married someone outside their political party, and, in 2010, would be “upset” if their child married someone of the other party. In 1960, about 5 percent of Americans expressed a negative reaction to party intermarriage; in 2010, about 40 percent did (Republicans about 50 percent, Democrats about 30 percent).

Wow. I'm a pretty partisan hack, but I really can't imagine not wanting my daughter to marry a Republican. But who knows? If I actually had a daughter, maybe I'd feel differently.

Still, it's pretty disturbing. I'd call this the Fox Newsification of America, or perhaps the Limbaugh-ization of America, and increasingly liberals are playing the same game. MSNBC may not be quite the partisan hatefest that Fox is, but it's certainly moving in that direction. If America were a parliamentary democracy, this might be more tolerable, but in our presidential system it basically just leads to uncompromising gridlock. Not a good sign for the future.

Via Balloon Juice.

Employers Are More Tolerant of Long Jobless Spells When the Economy Is Bad

| Wed Sep. 26, 2012 11:10 AM EDT

Tyler Cowen links today to a new paper that, at first glance, comes to an unsurprising conclusion: the longer you've been out of work, the less likely you are to get a job interview. Employers generally figure there's a reason that someone has been out of work for a long time, so resumes and job applications with long jobless spells usually get tossed aside. This is, obviously, especially bad news during a recession, when lots of people have long periods of unemployment through no fault of their own.

But if you look a little closer, the study (here) has a bit of a silver lining. It turns out that when the economy is in good shape, employers do indeed discriminate against job applicants who have been out of work for a while. That's the blue line in the chart below, which shows that applicants initially get callbacks about 10% of the time, dropping sharply to only 4% of the time after they've been unemployed for eight months.

But take a look at the red line. That's the callback rate when the economy is bad. The overall callback rate is lower, as you'd expect, but it also doesn't go down as sharply. It starts out a bit above 5% and then declines to a bit below 4%. That's still a drop, but not a huge drop. Apparently, when the economy is bad employers really do cut some slack for people who have been out of work for a while. I'm actually a little surprised by this, but it certainly makes sense.

On the other hand, if you've been out of work for a year, the state of the economy hardly matters anymore. It's just really hard to get anyone to give you a chance.

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Connecticut Absentee Voters Get Blank Ballots

| Wed Sep. 26, 2012 11:09 AM EDT
Sergej Khakimullin /Shutterstock

If you're overseas and voting by mail in Connecticut this November, grab an aspirin and a pen with lots of ink. The state's Supreme Court hadn't resolved a partisan scuffle over who gets to be listed first on the ballot this year before overseas absentee ballots were dropped in the mail, so those voters will have to write in all the candidates' names themselves, according to Deputy Secretary of State James Spallone. 

The Connecticut Republican Party challenged (PDF) Secretary of State Denise Merrill's decision to list Democratic candidates first on the ballot this year, arguing that it violated a statute mandating that the party whose candidate for governor got the most votes in the last election gets to be listed first in all ballots. (The esoteric law dates back more a century, Spallone says—before suffrage was extended to women and most African-Americans in the state.)

New Polls Show Majority of Americans Don't Like Romney's "47 Percent" Remarks

| Wed Sep. 26, 2012 10:34 AM EDT

Memo to Mitt Romney: The majority of Americans do not agree with you that the 47 percent of Americans who don't pay federal income taxes are Obama-voting government mooches who believe they're "victims" and won't take responsibility for their own lives.

That's a key takeaway from two new national polls from Bloomberg News and the Washington Post-ABC News. The Bloomberg poll asked respondents for their reaction to Romney's 47 percent remark. Fifty-one percent said Romney is "wrong and most Americans work hard and sometimes need some help from the government." Forty-one percent said Romney is "right and more people should be able to make it on their own." (Eight percent said they weren't sure.)

Romney fared worse in the Post-ABC News poll. Fifty-four percent reacted negatively to his 47 percent remarks, while 32 percent reacted positively. The partisan split on the 47 percent line is fairly predictable: More than 75 percent disliked the remarks, and two-thirds of Republicans agreed with Romney. What's most notable, perhaps, is how those coveted independent voters felt about the 47 percent claim: 57 percent of indies felt negatively while just 27 percent saw them favorably.

The Washington Post's Jon Cohen points out that the backlash to Romney's 47 percent statement coincides with an uptick in voters' negative views of Romney and his campaign. Sixty-one percent of those polled hold a negative view of how Romney's running his campaign. "That number," Cillizza writes, "is up significantly from July—the near-certain result of the much-publicized comments by Romney."

In case you missed it, you can watch the full Romney fundraiser video—including the 47 percent comments—here.

The Impending Global Bacon Shortage... and Climate Change

| Wed Sep. 26, 2012 10:33 AM EDT

We are all so very screwed. Here is a CBS News report to ruin your day:

Britain's National Pig Association, "the voice of the British pig industry," warned recently that a global shortage of bacon and pork "is now unavoidable" because of shrinking herds...[A]nnual pig production for Europe's main pig producers fell across the board between 2011 and 2012, a trend that "is being mirrored around the world." The group tied the decline to increased feed costs, an effect of poor harvests for corn and soybeans...

But the projected decline isn't news to the U.S. Department of Agriculture. In its monthly outlook report (PDF) from August, the department linked a reduction next year in the United States to this year's drought in the Midwest.

Higher Capital Gains Taxes Might Be Actively Good For the Economy

| Wed Sep. 26, 2012 10:04 AM EDT

Felix Salmon passes along a new Fed study that contains the chart on the right, tracking labor's share of national income since World War II. He comments:

This chart comes from Margaret Jacobson and Filippo Occhino at the Cleveland Fed, and it’s reasonably terrifying — yet another one of those charts where the trend is down and to the right, and where it’s only gotten worse since the end of the recession.

I don't want to argue too much with this, but maybe I'll argue just a little bit. If you take a closer look at the data, there's a lot of noise but by the year 2000 we're at about the same place we were at in 1947. This is clearest in the NIPA data, which barely shows any secular downward trend at all through 2000, but it's also true of the BLS data, if less dramatically. (The BLS data shows a brief rebound to 1947 levels in the late 90s, but also appears to reach a permanent lower level in the mid-80s.)

In other words, it's not that things have "gotten worse" since the end of the recession, but that things were basically pretty steady all along until the early aughts. Starting around 2000, though, there's been a sharp and massive drop in the labor share of income. Something seems to have happened right around then to change the long-term trend. But what?

As an aside, I'll agree completely with another of Felix's comments:

The more powerful, if less obvious, story, is just how entrenched capital income has become in the US economy. As recently as 2000, it was at levels more or less in line with the historical average. And then, something big happened. During the Great Moderation — when yields fell on all capital asset classes — capital income went up sharply. Then the crisis happened, a classic case of a dog not barking: you’d expect capital income to have fallen enormously, at least for a year or two, but it didn’t, it just stopped rising. Most recently, in the wake of the financial crisis, capital income has been soaring again.

Felix uses this as an argument for taxing capital income at higher rates. After all, if capital income is increasingly where the income is, then we don't have any choice. If you don't tax it, your tax revenues are going to fall sharply.

That's true, but I'd put a different interpretation on this. The usual reason for taxing capital lightly is that this encourages investment, and investment is what drives economic growth. But that presupposes that more capital is always and everywhere a good thing. I think this assumption deserves a closer look. The experience of the 90s, reinforced in spades by the experience of the aughts, suggests that, in fact, you can have too much capital. By taxing it so lightly, we may have encouraged too much capital formation. Without a thriving real-world economy to go along with it, this produced a housing bubble and a global economic crash. A higher capital gains tax might have helped reduce this imbalance and produced a stronger economy in the long run.

Or, if that's too strong for you, the weaker version of this argument is that even if low capital gains taxes didn't actively hurt the economy, they sure didn't do it any good. Theory is one thing, but practice certainly doesn't suggest that low investment taxes have done our economy any favors lately.