Cell Phones and the End of History

From Stephen Randall, on the demise of landlines and the growth of cell phones:

Bluetooth is ugly and frustrating; no wonder everyone likes it. Bluetooth alone has done more to destroy civil discourse than cable news and talk radio put together.

I'm convinced that the reason so many teens and 20-somethings hate talking on the phone is because they grew up with cell phones. The amount of mental energy it takes to plow through an average cell phone call is deceptively high, and if I'd grown up with cell phones I'd probably hate talking on them too. Doing it more than a couple of times a day is enough to give anyone chronic fatigue syndrome.

But the telephone industry has been conspiring for years to ruin landline phones too. In the old days, phones just worked. Modern phones, however, are dizzyingly variable in delivering simple sound quality.1 I'm not sure why. Do they use 10-cent microphones instead of the high-quality 20-cent microphones that would work better? Do the electronics simply not work well? Is it all down to cordless technology not being able to deliver 64 kbps of bandwidth reliably even at a distance of 20 feet? Or what? Why is the communication industry apparently so intent on making communication so unpleasant?

1And don't get me started on headsets. I've tried at least half a dozen over the years and none of them work well. Is there some reason why AT&T operators in 1940 had headsets that delivered crystal clear voice quality but there's no combination of consumer grade phone and headset in 2010 that doesn't make you sound like you're talking from the bottom of a well deep in one of al-Qaeda's caves in Tora Bora?

The Revenge of the Insurance Industry

The Wall Street Journal reports that health insurers are planning to dramatically raise premiums to pay for extra benefits required by the healthcare reform bill passed earlier this year. Is this legit? Or are insurers just using ACA as a handy excuse to jack up rates? My guess is that a couple of sentences in the Journal piece tell the story:

The rate increases largely apply to policies for individuals and small businesses and don't include people covered by a big employer or Medicare.

....Democrats front-loaded the legislation with early provisions they hoped would boost public support. Those include letting children stay on their parents' insurance policies until age 26, eliminating co-payments for preventive care and barring insurers from denying policies to children with pre-existing conditions, plus the elimination of the coverage caps. Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates.

Hmmm. Don't those provisions apply to all plans, not just individual and small-business policies? So why are insurers boosting rates only on the latter? I'm sure Aetna and Blue Cross have some extremely complicated and plausible sounding reasons for this, but I'd take them with a grain of salt. More likely they're raising rates for the same reason they've been raising rates for the past few years, and it has almost nothing to do with ACA. Caveat emptor.

The Circular Firing Squad

A couple of days ago on This Week, Tony Blair made the fairly unoriginal observation that lefties tend to engage in circular firing squads a lot:

"I love my own politics and progressives and all the rest of it," Blair told ABC's Christiane Amanpour in an unaired portion of his This Week interview from Sunday. "But if we have a weakness as a class, when the right get after us and attack our progressive leaders, instead of defending them we tend to say, 'Yeah, well, really we've got a lot of complaints about them, too.'"

Blair said that the tendency of the left to pile on rather than defend its own leaders can leave their politicians alone to face the right wing attack machine, which Blair says is merciless. "It doesn't matter how well intentioned you think you are," Blair said of the right. "They're going to go for you completely."

"And then the interesting thing is, the progressives say, 'Hey you're not being progressive enough! Why don't you do more for us?'" Blair added. "And so you can end up in quite an isolated position if you're not careful."

Jon Chait comments:

The general political dynamic consists of Republicans decrying socialism, liberals denouncing a sell-out, and moderate deficit hawks clucking that the deficit hawkery doesn't go far enough....As I've stated many times, the overwhelming cause of the Democrats' perils is that they held overstretched majorities while taking control of government at the outset of a massive economic crisis. But the inability of the left to handle majority status is an important contributor to the dilemma. It's not surprising that Democrats would lose independent voters, or that Republicans would be wildly enthusiastic, when they control the government and push agressive reforms during an economic calamity. But the sheer sullenness of the liberal base does seem to be avoidable and puzzling.

I guess I find this less puzzling than Jon since I bounce around on this a lot myself. Yes: a big stimulus, healthcare reform, financial reform, and a drawdown in Iraq are pretty significant accomplishments by any measure, and especially significant accomplishments given the political atmosphere. But: there's also the escalation in Afghanistan, a weak record on civil liberties, the reappointment of Ben Bernanke, aggressively centrist choices for the Supreme Court, and a seeming unwillingness to take on Republican intransigence in a really full-throated way. There's just no way that a committed liberal isn't going to be a little discouraged by all this stuff.

At the same time, contra Blair, it's not as if this is solely a liberal problem. Conservatives were unhappy with Reagan in 1982, unhappy with Bush Sr. in 1990, and unhappy with Bush Jr. in 2006. (And unhappy with a succession of Tory leaders in Britain over the past couple of decades.) Maybe it's just the way things go, and political bases are never happy.

But....I dunno. It sure feels a little different with Obama. Other presidents at least seem to have always paid lip service to their base, and that's better than nothing. Obama seems allergic to the whole concept. My mind tells me why (the liberal base is too small and Democrats have to rely heavily on leaners and centrists to win), but my gut still has a hard time with it. Long story short: I don't think the liberal base is too stupid to understand that liberal politicians have to compromise a lot, it's just that they'd just like to feel more certain that liberal politicians really would like to do more and are compromising because they don't have any choice. It doesn't seem like so much to ask.

Chart of the Day: Follow the Bouncing Ball

Last week's generic congressional poll from Gallup got a lot of attention because it suggested Republicans were ahead by a landslide with only two months until election day. And this week? Suddenly the parties are tied again.

I don't think there's any real lesson here except that these numbers can be pretty volatile. Maybe last week was an outlier. Maybe this week is. Who knows? But it ain't over til the fat lady sings.

The Case For More Tax Brackets

Annie Lowrey continues her campaign for a higher tax bracket or two:

For the past 20 years, the top income tax bracket has started around $370,000, and top marginal tax rate has stayed between 35 and 39.6 percent. But since the mid-1990s, the richest have gotten richer, earning a higher and higher share of all income while paying the same income tax rate as more moderate-income workers.

Indeed they have. I recommend some class warfare here, except that the classes in question will be the well-off, the rich, and the super rich. How about if we reduce the top rate on the well-off (say, those making between $200,000 and $370,000), raise it on the rich (between $370,000 and $1 million), and raise it a bunch on the super rich (over $1 million). If you really want to get ambitious, you could even add yet another bracket that kicks in around, say, $5 million.

Why not? As Annie points out, we used to have more brackets. There's no law that says everyone over $370,000 should pay the exact same rate, and the supply-side theory that the super rich will lose all their ambition if their tax rates go up is based on essentially no evidence at all. What's more, the rich and the super rich (not the merely well off) are the ones who have really done well over the past couple of decades, so higher brackets for them make sense. The winners here would be all the lawyers and doctors and accountants in the well-off bracket. The losers would be hedge fund managers, Fortune 500 CEOs, and Goldman Sachs traders in the rich and super-rich brackets.

Which ones would the Republican Party support? We'll make this all revenue neutral, of course, so they don't have to break the blood oath that Grover Norquist has forced them all to sign. Want to take a guess?

Obama's FDR Moment

President Obama's Labor Day speech in Milwaukee is getting a lot of attention, partly for his claim that "powerful interests" in Washington "talk about me like a dog," which I admit I can't completely parse. Then there's this (starting around 44:00):

These are the folks whose policies helped devastate our middle class. They drove our economy into a ditch. And we got in there and put on our boots and we pushed and we shoved. And we were sweating and these guys were standing, watching us and sipping on a Slurpee. (Laughter.) And they were pointing at us saying, how come you’re not pushing harder, how come you’re not pushing faster? And then when we finally got the car up -- and it’s got a few dings and a few dents, it’s got some mud on it, we’re going to have to do some work on it -- they point to everybody and say, look what these guys did to your car. (Laughter.) After we got it out of the ditch! And then they got the nerve to ask for the keys back! (Laughter and applause.) I don’t want to give them the keys back. They don’t know how to drive. (Applause.)

I mean, I want everything to think about it here. When you want to go forward in your car, what do you do?

AUDIENCE: D!

THE PRESIDENT: You put it in D. They’re going to pop it in reverse. They’d have those special interests riding shotgun, then they’d hit the gas and we’d be right back in the ditch. (Laughter.)

Sure, he's delivered some of these lines before. And they're sort of corny. But I like it anyway. It sounds very FDR-esque to me: a full-throated attack on the opposition party and on corporate interests, but delivered with wit and humor. More like this, please.

Basel III Rumor Mill Update

Really, you just can't blog enough about the Basel Accords on international banking capital standards, can you? As you recall, we're now up to Basel III (numbered like popes and Super Bowls), what with Basel II not looking so healthy after the 2008 financial crisis, and the question is whether Basel III is really going to tighten things up on the bank capital front. The answer, apparently is yes: Die Zeit reports not only that the basic ("Tier 1") capital requirement is going up from 4% to 6%, but a couple of other requirements are being layered on top of that as well. This is good news, but the problem is that defining capital is legendarily tricky, and banks will probably respond to the new rules by including all manner of dodgy-looking assets as part of their Tier 1 capital. Felix Salmon takes it from there:

Ah, you say, but can’t they just be clever with definitions, including all manner of dodgy-looking assets as part of their Tier 1 capital? Well, yes. So there’s a parallel set of requirements for what they’re calling Core Tier 1: essentially, pure equity. That has a minimum of 5%, plus a conservation buffer of 2.5%, plus a countercyclical capital buffer of another 2.5%.

This would be a genuine improvement if it survives the final negotiation process, which will include furious lobbying from the international financial community. And it's almost exactly what I was arguing in favor of a few months ago. So cross your fingers and hope that the gnomes of Basel stick to their guns and make it happen. If we can agree on a simpler definition of capital (and, hopefully, a simpler definition of assets to go along with it), the banking system will be safer than it was before. Not perfect, but better. And right now, better is good news indeed.

China's Old-Fashioned Banking Fraud

David Pierson of the LA Times reports on the bubble-rific city of Hangzhou, which has lately become the leading edge of China's looming property bust:

The median price for a 1,000-square-foot home here in July was $290,366, a steep 18.2% drop from the previous month because so many high-end homes have been taken off the market. By comparison, a national index of median prices rose 1.6% over the same period.

....Experts said up to half of Hangzhou's housing market has been driven by investors rather than homeowners — double the estimated national rate. In this no-holds-barred environment, raising capital was easy if you knew how. In a scheme called "returning the flat," small groups of speculators would sell the same property to each other to drive up the listed value of a home. With each transaction, the next speculator could obtain a larger mortgage, using the excess cash from the lender to invest in other properties. The conspirators would then divide the profits once they unloaded the property outside their circle.

"A flat could be worth 10 times more by the time they were done," said Chen Zhencheng, director of the National Real Estate Management Alliance, who said that the practice broke no laws. "This was happening in 30% to 50% of some building projects. The places were full of speculators."

Roughly speaking, I think this is just the old-fashioned version of what Wall Street did with structured finance during the aughts. It's also a lot easier to understand. If Americans ever figure out that this is what happened, they might actually start to get seriously mad at the banking industry instead of just faux mad as they are now.

The Mind of America

A new Washington Post poll is out. Selected questions are shown below. Summary: Americans trust Democrats more to handle the country's problems, they think Democrats represent their values better, they think Democrats are more concerned with the needs of people like them, and they think Democrats deserve to be reelected at a higher rate than Republicans. They also think (though I didn't show it below) that George Bush is substantially more to blame for our economic woes than Barack Obama.

And the result of all this? They say they plan to vote for Republicans by landslide numbers. It's the economy, stupid.

Working the Refs

Is the GOP paying for ad space on the Washington Post's front page these days? Check out this story today:

Small businesses feel squeezed by Obama policies

Last year, even as he struggled through the worst of the recession, Chris Upham said revenue at his District-based real estate and construction businesses doubled — allowing him to hire two agents.

But Upham said he hasn't increased his staff thus far in 2010 and he doesn't expect to for the remainder of the year. That's because his taxes rose sevenfold.

....The White House appears poised to respond to a growing backlash from businesspeople about the crush of higher taxes. Among the ideas being explored were a temporary payroll-tax holiday and permanent extension of the expired research-and-development tax credit, ways to offset the impending elapse of tax cuts for the top 2 percent of households.

Italics mine. There's nothing intrinsically wrong with running a story about higher taxes or new regulations, but only if there really are higher taxes or new regulations to complain about. However, the story has nothing — literally nothing — about any recent tax increases on businesses. I have no idea why Upham's taxes rose, but I can only guess that perhaps he paid virtually nothing last year and then paid seven times that much this year as his income went up. So maybe his taxes went from $100 to $700, or something like that. But who knows? Post reporter V. Dion Haynes just credulously quoted Upham and apparently didn't bother to ask anything further. So we have no idea where these illusory new taxes are coming from.

As for regulations, that's equally mysterious. Upham himself suggests that his hiring plans are due more to a real estate slowdown caused by the end of the homebuyer's tax credit than anything else. So what else is there? We're told that Obama's small business loan program has been "wildly popular." We're told that hiring mostly depends on boosting consumer spending. We're introduced to Luc Brami, who was delighted with the $9,000 payroll tax break he got from an Obama program to spur hiring of the unemployed. We're told that, "In all, the administration has implemented about a dozen small-business programs, including a health-care tax credit; more opportunities for women business owners to receive government contracts; and cuts in capital gains taxes."

So where's the actual problem? Well, there's a quote from a flack for the right-wing National Federation of Independent Business complaining about future provisions from healthcare reform. There's another quote from a flack complaining about a new regulation regarding 1099 reporting requirements. And there's a guy from a government contracting firm who doesn't plan to take advantage of the payroll tax break because it doesn't offset the entire salary of a new employee.

That's it. The 1099 thing is probably legit, but aside from that there are no new taxes documented in the piece and no evidence of burdensome new regulations. None. So what's going on? Surely if things were as bad as the flacks say they are, it would have been pretty easy to find plenty of good examples? Especially since I'm sure it was the flacks who produced the business owners quoted in the story in the first place.

Ladies and gentlemen, modern American journalism.