2013 - %3, January

The Near-Rich Did Really Well in the Fiscal Cliff Deal

| Thu Jan. 3, 2013 12:44 PM EST

Who were the biggest winners from the fiscal cliff deal? The invaluable Tax Policy Center has a preliminary analysis up, and it shows how much various income groups will save as a result of the deal. (These are savings compared to going over the cliff and letting the Bush tax cuts expire completely.)

A couple of notes. First, this doesn't include the effect of the expiration of the payroll tax holiday or of the stimulus tax cuts, so it probably overstates the gains to the working and middle classes. Second, even with that, the near-rich are the biggest winners here. They'll pay about 4-5 percent less in taxes than they would have if we'd gone over the cliff. The very rich will pay about 2 percent less in taxes, which is nearly as good a deal as the middle class got.

Bottom line: the very rich did slightly worse than the rest of us in this deal. But only slightly.

POSTSCRIPT: On the other hand, the very rich will also start paying Obamacare taxes this year. That wasn't part of the fiscal cliff deal, but if you count that, they're getting clipped more than the poor and the middle class.

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They Hate Each Other, They Really Hate Each Other

| Thu Jan. 3, 2013 11:48 AM EST

Ezra Klein has been reading through all the fiscal cliff tick-tocks—and thank God for that, since I sure didn't want to do it—and extracts the ten juiciest tidbits today. They're pretty good, and you should take a look if you haven't already had your fill of fiscal cliff posturing. Here's #1:

From the National Journal: "The speaker's team fell prey to overconfidence. They just didn't believe that Obama meant what he said about raising tax rates for the wealthy....Yet when Boehner's aides started haggling with their counterparts at the White House in the days before Thanksgiving, they ran into a wall. There would be no deal without higher tax rates on the wealthy and an extension of the debt limit, the president's aides said. Take it or leave it. The president was willing to dive off the cliff."

This is more important than it might seem: If the White House had agreed to raise revenue through tax reform, there'd be no way to raise revenue through tax reform in future negotiations. Because the White House raised its revenue through increasing rates, it can still raise revenue through tax reform in a future negotiation.

Ezra's comment is important, though I imagine it cuts both ways. It's true that if you do tax reform now, you can't use it to raise revenue in the future. At the same time, if you raise rates now, you also can't use that to raise revenue in the future.

Still, I guess the thinking here is that tax reform is coming, and it's going to focus on loophole closing, not rate increases. This means it's best to leave plenty of loopholes to close as bargaining chips.

We'll see. Given the obvious, and very genuine, animosity that Democratic and Republican leaders all have for each other right now, it's not clear that tax reform is very likely. These guys really, really don't like or trust each other. The upcoming negotiations over the sequestration cuts and the debt ceiling should give us some clues about whether they can still deal with each other in any kind of professional way.

Study: Cows Are 25 Percent Snake

| Thu Jan. 3, 2013 11:20 AM EST

You vaguely know how DNA works, right? You get it from your parents. Well, hold onto your britches, because scientists from down under are about to turn your world upside down.

A study by Australia's Adelaide and Flinders Universities and the South Australian Museum has found that in complex organisms, DNA is not only transferred from a parent to its offspring like your science book told you, but can also be "laterally" transferred between species. The research, published in the peer-reviewed Proceedings of the National Academy of Sciences in the US, involved comparing dozens of DNA sequences from different species. It found that cows inherited up to a quarter their genes from reptiles.

Crime Is at its Lowest Level in 50 Years. A Simple Molecule May Be the Reason Why.

| Thu Jan. 3, 2013 7:06 AM EST

I've written several posts recently about the idea that America's great crime epidemic, which started in the 60s and peaked in the early 90s, was caused in large part by lead emissions from automobiles. Long story short, we all bought lots of cars after World War II and filled them up with leaded gasoline. This lead was spewed out of tailpipes and ingested by small children, and when those children grew up they were more prone to committing violent crimes than normal children. Then, starting in the mid-70s, we all began switching to unleaded gasoline. Our kids were no longer made artificially violent by lead poisoning, and when they grew up in the mid-90s they committed fewer violent crimes. This trend continued for two decades, and it's one of the reasons that violent crime rates have dropped by half over the past 20 years and by more than that in our biggest cities. It's one of the great underreported stories of our time: big cities today are as safe as they were 50 years ago.

That's the short version of the story. The long version of the story is on the cover of the current issue of Mother Jones, and today it's available online for the first time. Click here to read it. The chart on the right illustrates the basic data that inspired the lead hypothesis: it shows lead emissions starting in 1935 overlaid with the violent crime rate 23 years later. The two curves match almost perfectly.

Now, I know my readers, and first thing a lot of you are going to do is yell at me: "Correlation is not causation!" And that's true. If this curve were the only bit of evidence we had, the connection between lead and violent crime would be pretty thin. But it's not. You should read the story to understand just how many different studies confirm this relationship. In addition, over the last decade there's been a tsunami of new medical research about just what lead poisoning—even at very low levels—does to children. It lowers IQ, of course, but it does a lot more than that:

Not only does lead promote apoptosis, or cell death, in the brain, but the element is also chemically similar to calcium. When it settles in cerebral tissue, it prevents calcium ions from doing their job, something that causes physical damage to the developing brain that persists into adulthood.

Only in the last few years have we begun to understand exactly what effects this has. A team of researchers at the University of Cincinnati has been following a group of 300 children for more than 30 years and recently performed a series of MRI scans that highlighted the neurological differences between subjects who had high and low exposure to lead during early childhood.

One set of scans found that lead exposure is linked to production of the brain's white matter—primarily a substance called myelin, which forms an insulating sheath around the connections between neurons. Lead exposure degrades both the formation and structure of myelin, and when this happens, says Kim Dietrich, one of the leaders of the imaging studies, "neurons are not communicating effectively." Put simply, the network connections within the brain become both slower and less coordinated.

A second study found that high exposure to lead during childhood was linked to a permanent loss of gray matter in the prefrontal cortex—a part of the brain associated with aggression control as well as what psychologists call "executive functions": emotional regulation, impulse control, attention, verbal reasoning, and mental flexibility. One way to understand this, says Kim Cecil, another member of the Cincinnati team, is that lead affects precisely the areas of the brain "that make us most human."

So lead is a double whammy: It impairs specific parts of the brain responsible for executive functions and it impairs the communication channels between these parts of the brain. For children like the ones in the Cincinnati study, who were mostly inner-city kids with plenty of strikes against them already, lead exposure was, in Cecil's words, an "additional kick in the gut."

We now have a huge amount of evidence linking lead to violent crime. We have evidence not just at the national level, but also at the state level, the city level, and the international level. We have longitudinal studies that track children from birth to adulthood to find out if higher blood lead levels lead to more arrests for violent crimes. And perhaps most important, this is a theory that just makes sense. Everything we now know about the effects of lead on the brain tells us that even moderately high levels of lead exposure are associated with aggressivity, impulsivity, ADHD, and lower IQ. And right there, you've practically defined the profile of a violent young offender.

You probably have a lot of questions about all this. What about other countries that eliminated leaded gasoline? Why haven't I mentioned lead paint in old housing? Don't things like policing tactics and increased incarceration matter too? And since leaded gasoline has been long since banned, why should you care about this? All these questions and more are answered if you read the full article.

I'll have more about this over the next few days, including some interesting tidbits that didn't make it into the magazine piece for one reason or another. It's really pretty fascinating stuff. I hope you have as much fun reading about it as I did writing about it.

Quote of the Day: American Law Allows the Government to Engage in Unconstitutional Behavior Without Explaining Why

| Wed Jan. 2, 2013 11:53 PM EST

From federal judge Colleen McMahon, after acknowledging that disclosure of the government's legal justification for targeting American citizens for assassination might help the public "understand the scope of the ill-defined yet vast and seemingly ever-growing exercise in which we have been engaged for well over a decade, at great cost in lives, treasure, and (at least in the minds of some) personal liberty":

However, this Court is constrained by law, and under the law, I can only conclude that the Government [...] cannot be compelled by this court of law to explain in detail the reasons why its actions do not violate the Constitution and laws of the United States. The Alice-in-Wonderland nature of this pronouncement is not lost on me; but after careful and extensive consideration, I find myself stuck in a paradoxical situation in which I cannot solve a problem because of contradictory constraints and rules — a veritable Catch-22. I can find no way around the thicket of laws and precedents that effectively allow the Executive Branch of our Government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws, while keeping the reasons for their conclusion a secret. But under the law as I understand it to have developed, the Government's motion for summary judgment must be granted, and the cross-motions by the ACLU and the Times denied.

Needless to say, Congress could change this if it wanted to. Apparently it doesn't.
 

World Leaders Flocked To Twitter in 2012

| Wed Jan. 2, 2013 6:44 PM EST
Muhammad Morsi, president of Egypt, is currently ranked as number 14 on the list of most-followed world leaders.

If you are interested in following Mohammed Magariaf, the new president of Libya, he is indeed on Twitter, with a Klout score in the low 50s. And joining him on the world's most gloriously addictive/time-sucking social media site is the majority of world leaders.

A new study (PDF) by The Digital Policy Council, the research arm of the consulting firm Digital Daya, finds that 123 of 164 countries (75 percent) now have a head of state who is tweeting (or perhaps has staff tweeting for them) from either a personal or government account. In 2011 DPC identified 69 actively tweeting heads of state. This 78-percent uptick is visualized in the chart below:

world leaders who tweet chart
Courtesy of DigitalDaya.com

Barack Obama is the most popular world leader on Twitter with 25 million followers—roughly 2.3 million fewer than Barbadian pop singer Rihanna, and 7 million fewer than Democratic Senator Amy Klobuchar's Canadian archrival Justin Bieber.

It only makes sense that more heads of state and national governments are utilizing Twitter for PR and propaganda purposes. "Based on these growth rates, the Digital Policy Council anticipates penetration on Twitter for world leaders to be nearing 100% in 2013," the report states. "This would render Twitter as a de facto communication tool for all heads of state."

For instance, Muhammad Morsi, Egypt's new Islamist president, has been tweeting in Arabic to his now 850,000+ followers since late 2011 (he came in at No. 14 on DPC's list). The government of war-torn Somalia has found time to Tweet some (Somalia was ranked No. 101 with 765 followers, narrowly beating out Iraqi prime minister Nouri al-Maliki, and the governments of Oman and Grenada). Hell, even the totalitarian regime of North Korea started Tweeting its anti-Seoul and anti-American propaganda—from the Pyongyang-based account @uriminzok—in 2010. (Not to be confused with @KimJongNumberUn, just to be clear.) North Korea did not qualify for DPC's study, but currently has close to 11,000 followers and, in case you're curious, follows these three accounts:

Here are the top five world leaders on Twitter, as ranked by DPC in December 2012:

1. Barack obama

President of the United States: 25 million followers

2. Hugo Chávez

President of Venezuela: 3.8 million followers

3. Abdullah Gül

President of Turkey: 2.6 million followers

4. Rania Al Abdullah

Queen of Jordan: 2.5 million followers

5. Dmitry Medvedev

(Former) President of Russia: 2.1 million followers

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Republican Governor Learns Downside of Being Part of Republican Party

| Wed Jan. 2, 2013 6:28 PM EST

New Jersey governor Chris Christie delivered one of his trademark rants today, this time aimed at House Republicans who declined to hold a vote on an aid bill that would give his state lots of money to deal with the aftermath of Hurricane Sandy. The obvious point to make about this is that maybe it serves Christie right. He certainly has no reluctance to mock other people who want money, after all, so all that's happening here is a Republican governor getting a faceful of his own Republican medicine.

But Dave Weigel points out another interesting tidbit. The House Republican leadership apparently tried to pass the bill by engaging in a bit of vote-counting strategery, splitting the aid bill into two parts that they hoped could pass with two different majorities:

But instead of explaining this, Republicans allowed a familiar narrative — oh, the bill's full of pork and waste! — to creep out. Christie mocks the narrative in the single boldest part of this rant. The "pork," he points out, was $600 million in a total $60 billion package — one percent of the total. The Republicans who got angry about that, he says, are dupes. "Those guys should spend a little more time reading the information we send and a little less time reading the talking points sent by their staff."

That's quite an ask. Making fun of waste in an omnibus bill is one of the GOP's most effective tactics. It was key to the strategy against the 2009 stimulus bill, making the "porkiest" parts of the bill famous, then forcing Democrats to denounce them, creating an impression of disarray and shame. And here Christie admits that it's a sort of cheap argument, not worth sinking legislation over.

Republicans rail endlessly about trivial expenditures, mostly as a way of avoiding putting their money where their mouths are. Over the past two weeks, reporters have routinely asked John Boehner for details about what cuts he wanted as part of a fiscal cliff deal, and he just as routinely refused to answer. Mitt Romney did the same thing over an entire campaign. The problem is that real cuts are politically unpopular, and they know it. So instead they ban earmarks, complain about foreign aid, give out silly awards for allegedly silly research projects, and kvetch about "waste, fraud, and abuse." That last item has been abused so often that it's little more than an inside-the-Beltway joke these days.

In any case, Christie is now being hoist by the same tea-party petard that's responsible for making him famous in the first place. Ditto for the House Republican leadership, which tried to figure out a clever way to pass the bill, but ended up a victim to the same kind of anti-pork nonsense that they usually save for Democrats. Live by the sword, die by the sword.

POSTSCRIPT: Speaking of all this, I decided to look up "hoist by his own petard" for the first time today. I had always vaguely assumed that a petard was something like a belt or a pair of suspenders. But no: it's an explosive device. If you are hoist by your own petard, it means your bomb went off in your face and blew you skyward. You learn something new every day.

Big Oil's Billions in Tax Perks Survive Fiscal Cliff Deal

| Wed Jan. 2, 2013 5:43 PM EST

Everything was supposed to be "on the table" in the crafting of deal to avert the so-called fiscal cliff. But in the end, congressional Democrats and Republicans skipped over some of the most glaring tax perks and giveaways. Case in point: Congress didn't touch billions of dollars a year in freebies to the oil and gas industry that pad the profit margins of companies such as ExxonMobil and BP.

The final fiscal cliff deal does not touch oil and gas subsidies, confirms Rory Cooper, a spokesman for House Majority Leader Eric Cantor (R-Va.). Ending the costliest tax breaks for oil and gas companies would have raised tens of billions of dollars in revenue. Trimming just a handful of these breaks for the big five companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—would've raised $24 billion over the next decade. President Obama's 2012 budget proposal called for ending 13 breaks benefiting oil and gas companies of all sizes; it would have saved $46 billion over 10 years.

There was a window of time around the November elections when it looked as if these subsidies might, just might, face even the slightest cuts. At the first presidential debate, Mitt Romney, whose closest allies included the head of the oil lobby, said oil subsidies were on the table if corporate taxes were lowered. Rep. Fred Upton (R-Mich.), chair of the powerful House energy and commerce committee, said in a debate that he'd end all energy subsidies, including those for oil and gas. And a week after the election, House Speaker John Boehner (R-Ohio) refused to rule out trimming oil and gas subsidies as part of a fiscal cliff deal.

But oil and gas giveaways have a knack for surviving even the fiercest fiscal showdowns. (See: Congress' 1986 tax-reform battle.) Because they're baked into the tax code, the industry and its lobbyists only have to defend their billions in perks; the wind and solar industries, by contrast, must fight and claw to extend the breaks they receive, which include expiration dates. The fiscal cliff deal also preserved tens of billions of dollars in tax credits for renewable energy production and research.

"We're certainly not asking for anything on Capitol Hill," a staffer with the American Petroleum Institute, the oil industry's top lobbying shop, told the AP in late November. And he wasn't lying: the industry doesn't necessarily want anything new from Congress. It just wants to keep what it already has.

Which is exactly what happened in the fiscal cliff drama. The oil and gas industry preserved its bountiful status quo so that the billions in breaks continue to flow. Game, set, match, Big Oil.

Why Software Patents Should Be Banned: A Case Study

| Wed Jan. 2, 2013 3:40 PM EST

Joe Mullin provides us with the latest in the patent troll wars. Last year, a guy named Steven Vicinanza, the founder of BlueWave Computing, got a letter from Project Paperless LLC telling him that he needed to pay $1,000 per employee because he uses networked scanners in his business:

Vicinanza soon got in touch with the attorney representing Project Paperless: Steven Hill, a partner at Hill, Kertscher & Wharton, an Atlanta law firm.

"[Hill] was very cordial and very nice," he told Ars. "He said, if you hook up a scanner and e-mail a PDF document—we have a patent that covers that as a process."

It didn’t seem credible that Hill was demanding money for just using basic office equipment exactly the way it was intended to be used. So Vicinanza clarified:

"So you're claiming anyone on a network with a scanner owes you a license?" asked Vicinanza. "He said, 'Yes, that's correct.' And at that point, I just lost it."

This hits home for me in two ways. First, the alleged patents date from 1996, and I was personally involved in a project to put scanners on networks starting around 1994. It was cleverly called NetScan, and it eventually failed for a variety of reasons, but by 1996 we had an actual box on the market that allowed you to connect a scanner and program it to send documents to your internal email account. I have no doubt that the patent trolls in this case would argue that the technology we used was subtly different from theirs (we emailed TIFF files, for example, while their patent covers PDFs), but that's almost certainly legalistic nonsense. You connected a scanner to our box, entered a bunch of data identifying users, and then you could scan documents and have them automatically emailed to your desktop. We didn't even bother patenting it because the idea was pretty obvious.

On a related note, a couple of years ago I got a call from a lawyer working on a patent case. I'll skip the details, but his client was getting sued for allegedly infringing a patent that involved sending scanned documents from one workstation to another. He called me because I had worked on a product that used similar techniques, which he was hoping would demonstrate prior art. At first, I had a hard time taking him seriously: the stuff he was talking about was so simple, and so obvious, that it seemed flatly impossible to me that anyone could even be claiming a patent on it. But someone was. In the end, I don't think I was able to help much, but I offered my time anyway just because the whole thing was so outrageous.

This is a big reason that I'm such a stone foe of software patents. It's not that there's no such thing as a genuinely innovative software technique. Of course there is. The problem is that in real life, nearly all the actual cases seem to be over methods and processes that are obvious to anyone working in the industry once the underlying technology makes them possible. We started work on NetScan in 1994, for example, because that was about the time that internal email was getting popular, personal scanners were getting popular, and businesses were looking for ways to avoid having to buy a scanner for every employee. A networked scanner was an obvious solution, and using email as the delivery mechanism was also obvious. So that's what we did. A bunch of other people did the same thing at about the same time because it was obvious. Once network infrastructure is in place, lots of things suddenly become obvious.

You should read Mullin's whole story if you want to work up a good case of outrage. It's slimier than usual because the patent trolls in question are targeting end users, but really, in concept it's not that different from patent trolling between corporations. It's possible that there are other ways of addressing this other than banning software patents entirely, but the more I see of this stuff, the more I think that an outright ban is really the only way to fix this. It's doing too much damage to settle for half measures.

Someday, Paywalls Are Going to Kill Blogging

| Wed Jan. 2, 2013 1:29 PM EST

Andrew Sullivan is leaving the Daily Beast and striking out on his own. (Or re-striking out, I suppose, since he was on his own originally until he began blogging for magazine employers.) For now, his plan is to eschew advertising and simply charge a yearly fee for access to the blog:

Some people I bump into ask me how we produce 240 posts a week (13,000 separate posts last year alone) or how we read the 90,000 emails we get a year. I have a simple answer: we work our asses off. And my colleagues and I deserve to be paid for it....If this model works, we'll have proof of principle that a small group of writers and editors can be paid directly by readers, and that an independent site, if tended to diligently, can grow an audience large enough to sustain it indefinitely.

No argument there. From a purely selfish point of view, though, this is a trend that's a real problem for blogging. I currently subscribe to three newspapers: the LA Times, the New York Times, and the Wall Street Journal. This costs me over a thousand dollars a year, but I need to have access to all these sites to do my job decently. But as more and more media sites start erecting paywalls, I simply won't be able to afford to keep up all the subscriptions. Andrew's 20 bucks a year is obviously fairly small change compared to subscription fees from big media operations, but as more and more sites go down this path, my choices are going to get harder and harder.

This isn't the biggest deal in the world at the moment. It's just worth a mention. Blogging has always been critically dependent on having free access to a wide variety of media, since you need to trawl through huge amounts of material to find the occasional pieces you want to write about. But as free access gets rarer, blogging is going to get harder. I wonder what it's going to be like a decade from now?