President Barack Obama speaks at an event at Solyndra in May 2010. The company went belly-up in August.

You've probably heard of Solyndra by now, right? It's the solar power company that got $500 million in Recovery Act loans from the Department of Energy and then went belly up a couple of weeks ago.

Conservatives have been trying to paint this as a big scandal of some kind, despite the fact that: the company had plenty of private investors too; it's the only DOE loan that has failed so far; and there's no real evidence that anyone in the White House did anything worse than push OMB to speed up their decision-making process a bit in 2009. Stephen Lacey has the full timeline here.

But I think Dave Roberts probably has the bigger picture right:

Watching this unfold over the last week, I keep thinking back to "Climategate." When it first broke back in late 2009, lefties and bloggers and Dem lawmakers just ignored it, because it was obviously dumb. This left the field entirely open to a massive attack from the right, coordinated among ideological media, staffers, lobbyists, and pols. When the left finally stirred itself to action, all that emerged were a bunch of long, boring investigations into the details and good-faith efforts to be fair about how both sides a point. By the time five separate investigations had cleared the scientists of all wrongdoing, the damage was done. Now we're seeing the same script play out again.

…The right is going after this whole hog, trying to make the name synonymous with clean energy boondoggle. And the left is flailing around, throwing out this fact and that fact with no coherent message. Lord am I tired of watching this script play out.

Unfortunately, I think that a bit of flailing was inevitable. Conservatives had a clear attack line: anything and everything that makes Solyndra look bad. They didn't care what. Liberals didn't have the same luxury. At the time this story broke, none of us knew enough about Solyndra to really have any idea if the company itself was defensible, so a bit of hesitancy was inevitable. But Dave is right: At this point we do know enough, and there's really no reason to hesitate any longer. Basically, Solyndra was working on a solar technology that promised to be cheaper than silicon, and at the time of the loan it looked really promising both to DOE and to private investors. But then the market turned: Silicon prices dropped, and China started producing super low-cost silicon PV. That spelled doom for Solyndra. They had a good idea, but it didn't work out.

In any case, Solyndra is a tiny fraction of DOE's green-energy loan program, and Solyndra's loan guarantees are dwarfed by those of both fossil fuel and nuclear companies, which range into the multiple billions. There was no scandal in the loan process, and there's nothing unusual about having a certain fraction of speculative programs like this fail. It's all part of the way the free market works.

Want to learn more? Read the timeline here, and then listen to Rep. Ed Markey at Wednesday's hearing. You'll learn the facts from one, and how to talk about Solyndra from the other. No more flailing, okay?

So I was listening to Rachel Maddow's interview with Jimmy Carter earlier tonight, and he mentioned the Panama Canal treaty. That brought back memories. If you're under 50 or so this is just dusty history, but boy howdy was that a big deal to conservatives back in the 70s. Remember "We built it, we paid for it, it's ours, and we are going to keep it"? The wingers just went crazy for that.

Then dinnertime interrupted, but this episode reminded me that as recently as a decade ago, return of the Panama Canal was still a plank in the Texas Republican Party platform. So I wondered if it still was. The 2010 platform is here, and it turns out the answer is no. The gold standard is gone too. That's sad. I kind of miss those planks. But all the rest of the insanity is still there, plus more. In fact, the platform now has about 250 separate items. They're really exercised about a lot of stuff down in Texas.

Long story short, they're in favor of the Electoral College, voter ID laws, a return to the "traditional filibuster" (really?), November elections, the Ten Commandments, the right to life in all its myriad forms, raw milk, corporal punishment, the death penalty, phonics, the Boy Scouts, a national sales tax, Texas sovereignty, resolution of the Kashmir dispute, recognition of Taiwan, and eviction of the UN.

They're opposed to bike paths, the Law of the Sea Treaty, human trafficking, mandatory preschool, Hamas, the Fairness Doctrine, red light cameras, ACORN and the ACLU, homosexuality, Obamacare, "transportation projects which surrender control or ownership to foreign interests," the 16th Amendment, the Federal Reserve, one-world government, RFID chips for either pets or humans, most federal agencies except for NASA, and the Rosebush-Blocker rule, whatever that is.

And then there's this:

Elimination of Executive Orders – We demand elimination of presidential authority to issue executive orders and other mandates lacking congressional approval, as well as repeal of all previous executive orders and mandates.

Wow. I knew that mandates were a cause célèbre among the tea party crowd thanks to Obamacare, but these guys have taken it to the next level. They want to repeal every single executive order on the books. That would really be something.

Anyway, this is the fever swamp from which Rick Perry comes, so it's hardly any surprise that he says the things he does. The only surprising thing is that I'm no longer surprised by this stuff. Eight years ago I thought it was the most deranged shit I'd ever seen. "This is plain and simple madness," I fumed, "and it is very much the future of the Republican Party." But now that it is the Republican Party, I'm used to it. Eliminate the Federal Reserve? Repeal the 16th Amendment? Don't just get out of the UN, but evict the bastards completely? Sure. Whatever. Just another day at the office. It's the bigotry of low expectations, I guess.

Obama Loses Control!

Ron Suskind's new book sounds.....interesting:

The book states [Timothy] Geithner and the Treasury Department ignored a March 2009 order to consider dissolving banking giant Citigroup while continuing stress tests on banks, which were burdened with toxic mortgage assets.

In the book, Obama does not deny Suskind's account, but does not reveal what he told Geithner when he found out. "Agitated may be too strong a word," Suskind quotes Obama as saying....Suskind states that Obama accepts the blame for mismanagement in his administration while noting that restructuring the financial system was complicated and could have resulted in deeper financial harm. One of the major complaints about Obama's administration is that it was too easy on major financial institutions, including Citi.

....Larry Summers, the former White House economic adviser, is quoted as lamenting that he and others felt "home alone" and that mistakes made under Obama would not have happened under President Clinton, for whom Summers also served. Interviewed by Suskind, Summers initially denied making such comments, then acknowledged them, saying he was frustrated at having "five issues" of major importance to deal with at once and not "five times as many" officials to handle them.

Granted, it's not clear what it means to ignore an order to "consider" dissolving Citigroup. Still, considering that "agitated" in Obama would be about like a white hot rage in most people, it suggests that Obama was plenty cheesed off if this is even close to describing his reaction.

As for Summers, WTF? Is he seriously whining about not having a big enough staff? Or not having enough of the president's ear? Or what? I guess I'll have to wait to read the book to find out. But it doesn't sound pretty.

Here's a gloomy chart from a new Brookings paper. It shows the average wages of men under 50 who lose their jobs in a "mass layoff" event.

  • The red line is for men who are laid off during good economic times. On average, these men have steeply rising earnings in the five years before the layoff and then experience a big earnings plunge. They eventually get back to their old earnings level, but that's it. Their earnings never again get above that.
  • The blue line is for men who are laid off during recessions. They also have steeply rising earnings in the five years before the layoff and then experience a big earnings plunge. However, they never even come close to their old earnings level. They max out at about $36,000 compared to peak earnings before the layoff of $45,000.

The steeply rising earnings before the layoff are a little perplexing to me, and I wonder if this is related in any way to the probability of being laid off in the first place. The main takeaway, though, is that if you lose your job during a recession, you are probably screwed for the rest of your life. Even ten years later you'll earn about 20% less than you did before. This price has been paid needlessly by hundreds of thousands of workers because our political leaders have never had the courage to take action strong enough to get our economy moving again.

Until recently, Netflix charged $9.99 for a combined DVD/streaming service. This was officially billed as $7.99 for streaming and $2 for DVDs, but really, it was just a $9.99 package deal for two services that cost $7.99 separately. So when they got rid of the package deal, I immediately canceled my streaming service. It looks like I'm something of an outlier, though:

Fewer customers than expected are opting to take Netflix's DVD-only subscription package. Netflix now expects to have 2.2 million such subscribers, down from the previous forecast of 3 million. The company also cut its forecast for streaming-only subscribers, to 21.8 million from 22 million.

In other words, DVD subscribers went down by 27% while streaming subscribers only went down 1%. Most people who responded to the Netflix price increase did the exact opposite of me.

Along with the much higher raw numbers for streaming subscribers, I guess this demonstrates that my consumption of video is just fundamentally different from most people. Basically, I think of something I want to watch and then go look for it. Usually it turned out that my choice wasn't available on streaming, which made the service pretty worthless to me. Apparently, though, most people don't work that way. They just dive into the streaming library and browse around until they find something that looks good. If that's the way you work, then the streaming service is a pretty good deal.

Anyway, I'm just curious if I have this right. Those of you who subscribe to and like the Netflix streaming service, is this more or less the way you use it? Or am I missing something?

OK, this quote is more than a year old. But here it is anyway. It's Boeing CEO Jim Albaugh telling a reporter why they decided to move the 787 Dreamliner assembly line to South Carolina:

The overriding factor was not the business climate. And it was not the wages we are paying today. It was that we can't afford to have a work stoppage every three years.

This is, basically, prima facie evidence that Boeing's decision was made in retaliation for past strikes at their Washington state facilities. And guess what? Like it or not, that's against the law. You're not allowed to retaliate against workers for exercising their right to strike by taking work away from them.

I don't really have a settled opinion on whether the NLRB should ultimately block Boeing from moving its assembly line to Charleston. Maybe the statements from Albaugh and other Boeing executives don't rise to the level of retaliation or intimidation. Hearings and appeals later this year will decide that. But Republicans have been howling about this case for months, pretending that it's some kind of insane socialist power grab from a bunch of business-hating bureaucrats, and now they're planning to introduce a bill to strip the NLRB of the right to hear cases like this. But the NLRB's case is neither crazy nor unprecedented. The union might not prevail in the end, but they have a perfectly sound basis for a complaint.

Anyway, I just wanted to write a very short post that spelled this out, since it so often gets buried. The real truth here is that Jim Albaugh is an idiot. He knows the law perfectly well, and he deliberately chose to make considered public statements that attributed the South Carolina move to past strikes. He didn't have to do that, and if he hadn't, the union would have been stuck. But for some reason he decided to tell the truth and practically dare the union to do something about it. So they did.

Time magazine has an interview with Rick Perry this week. Is this his first real interview since announcing his candidacy? I'm not sure, but it's the first one I've seen. Here's one tidbit:

What should happen next in Afghanistan?

I think we need to try to move our men and women home as soon as we can. Not just in Afghanistan, but in Iraq as well....Our overall objective has to be to [...] drive out those who would do harm to our country. I think we’ve done that in Iraq and Afghanistan. We have substantial ways to continue to put the pressure on the bad guys, if you will, and I don’t think keeping a large force of United States uniform military in Afghanistan for a long period of time is particularly in the interest of the U.S., or for that matter, in Afghani interest.

That's....interesting. Definitely not something from the neocon wing of Republican thinking. But Perry is certainly attuned to the tea party id, and I'd take this a sign that even there people have mostly lost interest in Afghanistan and Iraq as "central fronts in the war on terror." The fact that Perry is implicitly endorsing Obama's strategy in both places strikes me as pretty meaningful.

But in case you're thinking that maybe this means Perry is surprisingly informed and flexible on foreign affairs, there's also this:

Beside the Bible or other religious texts, which book has influenced you most over the last decade?

I don’t know about influencing me the most — I’m reading a couple of books on China right now that are most interesting. After a trip to Beijing and Shanghai and Taiwan, I realized how important that region of the world is to America and to the world. So Kissinger’s book on China, I’m wading through it, and I’m reading another book by Aaron Friedberg [A Contest for Supremacy] that is a really fine read about China, their very long view of the world and our need to really pay attention to what’s going on in that part of the world.

Seriously? He's just now realizing how important China is? Urk.

There's also some stuff about Social Security, of course. Perry once again congratulates himself for bravely bringing up a subject that, in fact, has been discussed to death for decades, and once again declines to offer any actual proposals. "The idea that we’re going to write a Social Security reform plan today is a bit of a stretch from my perspective." I can't imagine why, since you could probably paper over the Capitol dome with Social Security plans, but that's his stand and he's sticking to it. It's terrible, it's broken, it demands immediate attention, and......one of these days he'll give it some serious thought. Urk again.

The Texas (Urban) Miracle

Ryan Avent says that the "Texas Miracle" is really a Dallas/Austin/Houston miracle. Texas creates most of its new jobs in its cities:

The big secret to success is Texan cities’ willingness to capitalize on their advantages through an extraordinary openness to growth....Houston’s famous willingness to build means that when new residents want to move in, housing supply quickly adjusts and prices stay low.

....That’s not how it works elsewhere. Beginning in the 1990s, rising incomes for skilled workers, especially in technology industries, made California’s cities more attractive. Strict local building rules made it difficult to accommodate new housing demand, however, sending prices soaring. Middle-class households have been only too willing to leave pricey San Francisco for affordable Houston, and that constant flow of people helped support the Texas economy through the recession. While construction employment is falling across most of the country, for instance, Texas added 24,000 construction jobs over the past year. Relocation into a city is good for the local economy, increasing demand for things like housing and consumer goods, which translates into new jobs that are conveniently filled by the newcomers.

It is over the long-term, however, that the impact of openness is most keenly felt. The great migrations to Dallas and Houston represent huge flows of human capital that will support economic growth for decades. During the tech boom of the late 1990s, Silicon Valley struggled to attract skilled workers thanks to soaring housing costs.

This is an abridged version of the argument Ryan makes in The Gated City, his new Kindle Single. I had sort of a mixed reaction to TGC, which I should probably put down in pixels fairly soon before I forget it completely, but that may or may not ever happen. In the meantime, here's the nickel version. Roughly speaking, Ryan makes the case that cities are incubators of innovation and entrepreneurship and are therefore engines of economic growth. I buy this pretty much completely. His next step, however, is a little trickier: by restricting access to existing big cities (via zoning laws, NIMBYism, etc.), he believes we're also reducing our economic growth potential.

My question here is whether correlation means causation. Yes, cities, by their nature, are more productive than rural areas. But does that automatically mean we want our current big cities to become as big as possible? Does productivity stay high no matter how jam-packed a city gets, or do we eventually get a similar (or better?) bang for the buck by keeping New York at its current size and directing urban wannabes to new cities like Houston and Phoenix? International comparisons of urban density vs. economic growth might be helpful here, though I imagine it would be something of an econometric nightmare.

In any case, it's an intriguing argument. At the beginning of TGC Ryan suggests that restrictive urban housing policy reduces measured GDP by a quarter percent or so. I'm persuaded that this might be the case, but his actual hard evidence on this score is a little thin. It's also unfortunate, I think, that his solution to restrictive building policies sounds an awful lot like the libertarian dogma that any kind of property restriction is a "taking" that should be fully compensated by the government. That's pretty tough to swallow. There's more to life than simply letting developers build anything and everything that pops into their minds.

But these are all half-formed thoughts. It's worth reading the argument in full, and it's yet another demonstration that the Kindle Single format has real potential. For two bucks, it's a pretty good deal.

Were Department of Energy loans to green companies like Solyndra just an example of Democratic pork in the stimulus bill? Matt Steinglass says no:

This is not a good description of what happened with Solyndra. In fact, it's sort of backwards. There were elements of the ARRA that did not make for optimal stimulus, and were included largely for political reasons. But those elements weren't the DOE innovative-technology loan guarantee programme, or for that matter the kinds of government spending generally desired by liberal Democrats. They were the kinds of tax breaks for wealthy people and businesses generally desired by conservative Republicans. The DOE loan guarantees were in fact among the programmes that the Congressional Budget Office believed would provide the maximum possible stimulus....There's no mystery as to why Democrats wanted the DOE loan guarantees in the ARRA. These were "shovel-ready" projects; the corporations involved were ready to spend the money quickly.

But was there pressure to speed up the loan process? Indeed yes:

Why? Probably because in early 2009, DOE was widely viewed as a lazy, sluggish organisation, poor at managing money, that was making ridiculous bureaucratic demands on firms before it would approve the loan guarantees, which had been authorised by Congress in 2005 and launched by the Bush administration in 2007....Newly minted energy secretary Steven Chu was labouring mightily to push through the backlog of loan guarantees, telling slowpoke employees: "Tell us what you need to do in order to get them [decided] in four weeks."

....Unfortunately, when the government subsidises investment in an industry, some of the investments will fail; speeding up the process may increase the risk of failure. There are trade-offs here. Rather than loan guarantees, the government could subsidise the industry directly with grants. Then instead of a risk that taxpayers will have to pay, you have a certainty; you may also run afoul of WTO rules. Or the government could restrict its loan guarantees to companies that are already profitable. But then you're just sponsoring lazy national-champion firms, not seeding dynamic startups. Or the government could limit stimulus efforts to buying public end-products (more trains, roads, parks, museums, schools, fighter jets, public housing, etc) and let the private sector compete to supply them. But that's probably not shovel-ready and may not work as stimulus.

That last paragraph is an important one. If you've decided, for partisan political reasons, that stimulus just flatly doesn't work, then you're free to make whatever outrageous charges you want. You can complain that the program is moving too slowly (see the Washington Post today for that version) and then turn right around and complain that it's moving too fast. You can complain that it's Democratic pork and then turn around and insist on diverting the money to nuclear and fossil fuel loan guarantees. You can make up nonsensical numbers about the cost of jobs created, as if that's all the loan money is for, and your adoring fan base will cheer. You can insist that federal programs don't create any jobs and then turn around and brag about all the jobs that some new bridge-building project has brought into your district. You can basically say anything you want.

If you're on the other side, you're a little more bound by reality. And the reality is that some projects succeed and some fail. You can have more successes (maybe) by being more careful, or you can streamline the program, but at the cost of accepting more failures. If you actually decide to do something, instead of standing on the sidelines and carping, those are the risks you take. Obama and congressional Democrats took that risk in 2009, and the result saved millions of jobs and kept us from sliding into a major depression. But failures are inevitable no matter how well the programs are run, and opportunistic politicians are always going to try to take advantage of that. It comes with the territory. That's what's happening here.

A new paper uses a clever design to figure out if women are more willing to compete in teams than as individuals. The answer, in a laboratory test setting, is a resounding yes:

  • Even though men and women performed equally well on the task, 81% of men chose to compete as individuals compared with 28% of women.
  • When participants competed in teams, the gender competition gap shrank by 31 percentage points to 22%, with 67% of men choosing to enter the competition compared with 45% of women.

One of the clever parts of the study design was a series of different competitions that tried to untease the cause of different gender preferences. The result, say the authors, is that it really is a true difference in competitive preference, not just an artifact of risk aversion, feedback aversion, or confidence. Does this make a difference in the real world? Sure it does:

Countries that have party-list proportional representation, in which voters select a slate of candidates put forth by a party, generally have more than twice the female representation rate in their legislatures than countries that have single-member districts. Two countries that elect some members under each system, Germany and New Zealand, illustrate the differences most clearly. In the 1994 German election, 13% of the representatives elected from single-member districts were women, while 39% of the representatives elected from party-list districts were women. In New Zealand in 1996, the corresponding numbers were 15% and 45% for the single-member and party-list districts, respectively. These differences occur primarily because women are more likely to be candidates under proportional representation.

As I recall, we have much the same phenomenon in the United States. Once they decide to run, women generally do as well as men in political campaigns. The problem is that not very many are willing to run.

Our political system isn't likely to change to improve this situation, but this research does suggest there might be slate-oriented ways to get more women to run. Here's an example from my neck of the woods. In my hometown of Irvine, for historical reasons, there are basically two slates of candidates that run as a group for city council every couple of years. (I think of them as gangs, but I guess "slate" is a better word.) This system, accidental though it is, seems to attract a fair number of female candidates. People actually vote for councilmembers individually, and usually we end up with some winners from one slate and some from another. Nonetheless, merely running as part of a team seems to encourage more female participation.

That's just my impression, of course, and it might be wrong. But it might be worth another study to see if slate-like behavior, whether formal or informal, increases the number of women who run for political office in the United States.

Via Tyler Cowen.