The LA Times reports today that gasoline prices have hit nearly $4 lately but consumers aren't really getting all that exercised about it. They suggest several reasons for this: the increase hasn't been as steep as it was in 2008; prices aren't all that high when you adjust for inflation; and people have more fuel-efficient cars these days, so they're using less gas. Also this:

"I think we all have adjusted," said Lara Clayton of Los Alamitos as she spent nearly $60 recently to fill up her 2008 Lincoln Town Car at a Seal Beach 76 station. "We just don't drive as much and we are careful to combine errands."....Having already seen prices cross the $4 barrier, motorists are less likely to become outraged when they see it happen again, said Michael Sivak, who heads the University of Michigan's Transportation Research Institute.

This rings true to me because it's similar to an observation from economist James Hamilton, your go-to guy for all questions about the effect of oil prices on the economy:

One very well-established observation is that although oil price increases were often associated with economic recessions, oil price decreases did not bring about corresponding economic booms....An oil price increase that just reverses a recent price decrease does not seem to have the same economic effects as a price move that establishes new highs....When oil prices are making new highs, we expect slower growth.

Rising oil prices on their own don't cause huge amounts of economic distress. It's only when they break through a previous high and keep on going that we get a substantial reaction. This suggests that there's a fair amount of psychology going on here, not just a pure macroeconomic response to the higher cost of energy inputs.

So what does this tell us? I think that Hamilton is talking about inflation-adjusted highs here, and our previous high (all grades/all formulations) was $4.16 in July 2008. That's equivalent to a price of $4.35 today. Right now we're at $3.99. This suggests (maybe!) that consumer reaction will continue to be "meh" unless the price of gas hits $4.35 and keeps right on going. Until then, it's just another routine headache.

Today's theme was supposed to be catblogging done entirely from an iPad, a task that seems like it ought to be fairly straightforward but decidedly isn't. And I almost did it! But there were a few minor quality control issues last night related to both Photoshop and MoJo web access, and I didn't quite have time to iron them out this morning. So this is old-school catblogging done on my old-school desktop computer. But next week for sure!

I've studiously ignored the pink slime controversy, but now that the whole thing is pretty much over and the slime industry seems to be close to collective bankruptcy, Brad Plumer brings us news that maybe it was all a big mistake. After all, the pink slime processors recover an extra ten pounds of edible beef from each cow, which means we need fewer cows to feed us all. And fewer cows means less global warming:

If those numbers are correct — and, fair warning, they do come straight from the beef industry — then a ban on pink slime would, potentially, require the slaughter of another 1.5 million cows to meet the nation’s beef needs. And, because cows are a major source of heat-trapping methane, that can have a serious global-warming impact.

How much impact, exactly? The average cow emits the equivalent of about four tons of carbon dioxide per year. To put that in perspective, the average car emits about five tons per year. So, in the worst case, a total ban on pink slime would be the equivalent of adding 1.2 million cars to the road, from a climate perspective.

Wait a second. I don't really have an axe to grind here, since pink slime doesn't disgust me much despite everyone's best efforts to activate my gag reflex over the past few weeks. It's a mere drop in the vast ocean of crap that I shovel into my body daily. Still, pink slime only cuts down on carbon if it would otherwise get thown out. But it doesn't, does it? If it doesn't get added to your Big Mac, it will just go back to being used in pet food and cooking oil. I assume that's less lucrative for the cattle industry — though I'm not sure why since cat food costs about as much per ounce as ground beef — but the effect on global warming is zero. One way or another, the stuff is all going to get used.

Or am I off base on this somehow?

UPDATE: Generally speaking, pink slime probably represents a higher value use of the raw ingredients than, say, oil or cat food. And if the industry can squeeze more value out of its cows, that will probably increase demand for cows. I can buy that. However, it's a second order effect and depends very sensitively on actual industry practices and consumer preferences. More data needed! However, if I had to guess, I'd say that the effect of pink slime on overall cow production is fairly small, not the 1.5 million that the industry estimates via simple arithmetic.

UPDATE 2: I am now going to embarrass myself by playing amateur economist. What follows might be totally off base, so real economists are welcome to scoff and tell me what I've done wrong. Here goes:

  • According to this paper, the price elasticity of beef is -0.61. So a 1% increase in the price of beef produces a .61% decrease in the demand for beef.
  • According to this report, pink slime reduces the price of ground beef by about 3 cents per pound. Roughly speaking, that's a decrease of 1%.
  • An average cow produces about 500 pounds of edible meat.
  • Harvesting pink slime increases that by about 10-12 pounds or so. Let's call it 11 pounds.
  • Total beef consumption in the U.S. amounts to about 34 million cows per year, or 17 billion pounds of beef.

So here's what we get:

  • Banning pink slime raises the price of beef 1% and therefore reduces demand by .61%. So demand goes down by 100 million pounds.
  • With pink slime gone, 34 million cows each produce eleven pounds less of edible beef. That amounts to 370 million pounds.
  • To meet demand, we need to increase production by 270 million pounds. That comes to 540,000 cows.

If this is close to right, it means that banning pink slime really does have an effect, but it's maybe a third of what the industry claims. Feel free to contest this conclusion in comments. As always, there are a bunch of additional second and third-order effects, so modeling this with any real precision is very, very hard.

Paul Waldman makes a point about the value of exposing corporate activism:

You may have heard that in response to a campaign by the progressive group Color of Change, Coca-Cola, Pepsi, and now Kraft Foods have all withdrawn their support for the American Legislative Exchange Council (ALEC), the group that pushes conservative laws at the state level....Coca-Cola's explanation was that "Our involvement with ALEC was focused on efforts to oppose discriminatory food and beverage taxes, not on issues that have no direct bearing on our business."

I somehow doubt that the initial decisions to join were made at the highest level....It was probably some vice-president for policy who decided he was being clever by spreading the corporation's money around to groups who would make sure that the high-fructose corn syrup could continue to flow down the gullets of every true American without the impediment of a nickel of extra taxes. But if you want to play in the arena of public policy, you're going to be subject to scrutiny. And it didn't take a boycott or protests outside the corporate offices. All it took was for Color of Change to point out to everyone that these corporations were supporting ALEC, and they went scurrying. There might be a lesson there.

This, of course, is why dark money is so important to modern political campaigns. Most big companies don't want to get a reputation for political activism. They have Democratic customers and Republican customers, and taking sides is almost always a negative sum game. If their money is publicly donated, and it's donated to a group with a clear and wide-ranging political agenda, it's going to get them trouble.

Transparency would hardly solve all the problems caused by our modern-day conservative-industrial complex. But it would help. We have to start constricting the fire hose somehow.

Matt Steinglass says that all the talk about Barack Obama being a socialist or Mitt Romney being a social Darwinist is a "reverse dog whistle." These aren't words with subtle meanings that your own supporters understand but no one else does, they're words designed simply to piss off your opponents. And it works! When you fight back against this stuff, you lose:

What liberals say: Barack Obama is not a socialist! Socialism is government control over the entire economy, not bailouts of private banks and industries that leave them private, like Obama's (which Bush started anyway)! Obamacare isn't a government takeover of health-care, it's based entirely on private insurers! That's less socialist than Medicare!
What voters hear: Obama...socialist....socialism...bailouts...Obama...Obamacare...government takeover...socialist.

What conservatives say: Mitt Romney is not a social Darwinist! He's a middle-of-the-road Wall Street executive! Just because his business success has made him rich doesn't mean he doesn't care about poor people! Social Darwinists believe poor people are inherently inferior to rich people; Romney doesn't believe that, he thinks deregulation and tax cuts will empower the poor to better themselves! Recognising that we need to cut Medicare spending growth doesn't make you a social Darwinist, Romney's just recognising budgetary reality! 
What voters hear: Romney...social Darwinist...Wall Street...rich...social Darwinist...poor people are inferior...cut Medicare...Romney.

As the old saying goes, If you're explaining, you're losing. Or, more pungently, there's the (possibly true!) story about LBJ spreading a rumor that his opponent was a pig-fucker. Aide: "Lyndon, you know he doesn't do that!" Johnson: "I know. I just want to make him deny it." If you're denying, you're losing.

This is, in general, a fraught question. When should you respond to a slur? In the internet age, it's now taken for granted that the answer is always and instantly. And maybe so. But Matt is suggesting that sometimes you're just letting your opponents mess with your head. The people pissed off by the slur are mostly true believers who aren't going to be affected by it in any case, and by fighting it you're doing nothing but bringing it to the attention of people who would otherwise just brush it off and then check to see if NCIS is in reruns tonight.

I don't expect any change to the "always and instantly" rule, but this is worth a thought anyway. Maybe there are times when it really is better to take a deep breath first.

Here's my usual monthly chart showing net new jobs created in March. Why net? Because the U.S. population increases every month, which means you need a certain number of new jobs just to tread water. This chart subtracts that out to show the true net growth in employment.

Bottom line: the number of net new jobs added in March was about 30,000. That's better than zero, but still pretty crappy. If my previous post about the shadow banking system didn't convince you that the economy is still too weak to be thinking about austerity, this one should.

When we think about the money supply, we typically think about the Fed's measures of actual money (M1, M2, etc.) along with the various things that can affect how this money sloshes around the system (multipliers, fed funds rates, reserve requirements, etc.). But debt matters too. If banks tighten up on the amount they're willing to loan, that affects the money supply as well.

And it's not just traditional banks. The shadow banking system burst into public consciousness after the 2008 financial collapse, and the best estimates suggest that it's now about as big as the entire traditional banking system. So if the shadow banking system slows down its lending, that affects the money supply too, and due to its fundamental nature the shadow banking system is heavily reliant on ultra-safe collateral. The less collateral there is, the less new debt it will create.

Over at FT Alphaville, Cardiff Garcia summarizes a new Credit Suisse report on exactly this issue, which expands on the previous work of Manmohan Singh. When a particular type of debt gets devalued — when creditors are required to take a haircut on, say, Greek bonds or mortgage-backed CDOs — that entire category of debt is worth less as collateral. Think of it this way: If you hold an ultra-safe bond worth $100, that's $100 in cash you don't need since you can instantly use your bond as collateral to raise $100 in the shadow banking system. But if your category of bond takes a haircut of 20%, suddenly you can only use it to raise $80. That means you're going to hoard an extra $20 in cash. And that's cash that's not available to anyone else. Effectively, the money supply has shrunk. The chart below shows what happened during the financial panic of 2007-08:

Private shadow money dropped off a cliff, but this was made up for by a vast expansion of public shadow money: "A sharp fiscal easing [] created a flood of safe collateral that caused the public shadow money (Treasuries, MBS, agencies) to soar, fully offsetting the contraction in private shadow money (corporate bonds, asset-backed securities, and non-agency mortgages)."

So is this just a history lesson? No. We're still living through it, according to Credit Suisse:

We expect [private shadow money] to contract further in 2012, driven by negative net issuance of financial debt of nearly half a trillion dollars....This potential fall in 2012 is tiny compared to 2008, but it comes at a time when fiscal deficits are shrinking.

The moral of the story is that we're unlikley to face significant inflationary pressure until the total supply of money, both public and private, gets back to its pre-crisis trend level. What's more, as Garcia says, "that does lead to an argument against tightening fiscal policy too quickly: fiscal consolidation tightens monetary policy also."

There's much more at the link, all well worth reading. We live in a wildly complex financial world these days, and we're still groping our way toward understanding it fully. But if the shadow banking story is as important as it now seems to be, public policy needs to take it far more seriously. It's not time yet for austerity.

Via Tyler Cowen.

By Chris Mooney

I want to thank Kevin for the opportunity to post here, and to answer some questions that naturally arise in discussions of my new book, The Republican Brain. Kevin poses a number of them, and poses them well—I have a lot of critics who get the argument completely wrong, so this is a breath of fresh air.

At the outset, I want to clear the air about a few things, where confusion seems too often to prevail. I deal with these nuances in depth in the book, but it will help to restate them here more briefly:

Psychological Needs Do Not Have Substantive Content. This is something I discussed earlier this week in a piece at Salon.com, with respect to the role of authoritarianism in conservatives’ distrust in science.

When you talk about the psychological, physiological, or biological underpinnings of political views, you have to understand that such dispositions are inherently content free. They clearly “push” individuals towards accepting certain views and certain arguments that feel right to them—thus, a person highly sensitive to fear threat may be less likely to worry about civil liberties in the wake of 9/11, or to naturally feel support for the death penalty. But the precise views that feel appealing to such a person would also be very different in the U.S. at the present moment than they would be in, say, China. And they would also change over time in the U.S. itself.

This is something that we must always bear in mind; and therefore, when I talk about a political phenomenon like U.S. conservatives denying science or fact, you are inevitably talking about a mélange of underlying psychology—which appears to have some universal human elements to it—and the specifics of our unique political culture and discourse.

Nevertheless, certain psychological traits or needs do match up well with certain ideologies, on average. The research shows this repeatedly.

We Are Pre-Disposed To Have Certain “Political” Traits; But That Doesn’t Make Them Destiny. There is also a confusion about the issue of, essentially, determinism. I’m saying that our political views are partly the product of “nature,” and then showing the role of psychology, physiology, and even some genetic influences. However, none of this stuff is deterministic; and the account is not reductionist. Even when it comes to genes, which do seem to influence our political views, the influence is indirect, statistical, and there is a feedback with the “environment” at every single step of the way.

When Kevin uses the word “innate” in his piece, which he does repeatedly, I worry that he may not be crediting this complex reality. Other people use phrases like “genetically wired” or “hardwired,” which are flatly wrong.

With all that in mind, then, let’s go on to answer Kevin’s questions. He says he has three reasons for being skeptical of my argument. In particular, he isn’t convinced that conservatives naturally tend towards being anti-science.

1. Just a Few Issues? First: Kevin notes that conservatives only really bash science today on two issues, evolution and climate change. I agree that these are the two leading issues of the moment, but doesn’t Kevin remember stem cell research? It was quite prominent up until recently, and in the 2004 election it led the pack of science issues. And doesn’t contraception count as a science issue? In my book I detail numerous cases of conservatives denying science whenever it has something to do with reproductive health, contraception, or abortion.

And for that matter, who said it was just science we’re talking about? I deliberately subtitled the book “The Science of Why They Deny Science—and Reality” so as to include belief that President Obama is a Muslim, or a socialist, or wasn’t born in the United States; the huge array of false claims about health care reform and the economy; falsehoods about American history, and much else.

Precisely because we are talking about something that is partly dispositional about conservatives, there is no reason to think that their denial of reality would begin and end with science issues. Rather, there is every reason to think that this behavior—springing in part, I argue, from psychological traits like more rigidity or fixity of views, less openness to new information, more authoritarianism, and so on—would infect all areas where they had an emotional stake.

So when Kevin says “I really don’t think you need the sledgehammer of innate cognitive traits to explain” conservatives denying science on evolution and climate change—well, the picture is much broader than those two issues. And again, I’m wary of that word “innate.”

2. Too Many Steps? That’s Kevin’s first objection; to answer his second, I need to hearken back to my “Psychological Needs Do Not Have Substantive Content” point.

Kevin asks, “What’s the cognitive trait that makes you anti-science? Not just skeptical of one or two particular results, but skeptical of science in general.” Well, there’s no such trait—because, again, these traits are content free, and Kevin is using the word “science” in a way that denotes content (a body of knowledge, a methodology, and so on).

It’s totally possible that science could be framed in a way that an authoritarian conservative would support. Maybe that was what occurred under Stalin, when the Soviet regime touted the anti-genetic pseudoscience of Lysenko. However, it isn’t very likely that, in a democracy like ours, science and basic conservative traits are going to get along very well, for very long. They are, as I explain in Salon, “just such deeply opposed ways of thinking—and being. You could argue that the clash between science and authoritarianism dates all the way back to the time of Galileo, if not farther.”

The point is that science and liberalism alike are rooted in a style of thinking that is nuanced, complex, tolerant of uncertainty. These characteristics don’t mesh so well with the body of traits—quick-thinking, decisiveness, less openness to experience—that tend to go along with conservatism. So while in certain contexts you might find allegiances, there is a deep seated tension there that, in the long run, would tend to push them apart.

3. Liberals Do It Too. There’s no denying that liberals have their own occasional issues with science. But do they have the same issues, or the same kinds of issues, and do they deal with them in the same way? I don’t think so.

Kevin cites the “science wars,” noting that they emerged from the academic left. Yes, but what a classically liberal way of challenging science, replete with incomprehensible jargon (“deconstruction”), layer upon layer of nuance and complexity, and more than a whiff of “hey, over here” attention seeking.

The “science wars” were liberal in another way, too—faddish. Temporary. Fleeting. They didn’t last, we moved on to other things. Meanwhile, conservatives are going on a century of active anti-evolutionism in the United States, and climate change denial is now also decades old.

Similarly, I don’t think liberals are nearly as opposed to “sociobiology” or “evolutionary psychology” as they once were, because again, liberals change and shift their views more easily. I, as a liberal, find such explanations essential.

Kevin concludes with a series of statements I utterly agree with, at least up to the end:

There's a complex interplay of biology and culture that produces liberals and conservatives in the first place. But once a conservative movement is in place, it's inevitable that it will attack conclusions it doesn't like and institutions that aren't on board with the conservative agenda. That includes the institutions of science to some extent and a few specific scientific results to a very large extent. But that's just common sense. I don't think you need evolutionary psychology to explain it.

I would put it a little differently. It’s not really that you need these factors to give an explanation; people give the sorts of explanations featured here all the time. Rather, it’s that you can’t ignore dispositional or psychological factors any longer if you want to truly understand politics. You have to start to see beneath the surface.

All the studies discussed in my book show that these factors are having a substantial effect on political views and behavior. The burden of proof is really on those who would continue to discount them.

Is a two-state peace settlement between Israel and the Palestinians in the West Bank still possible? Zvika Krieger says it might be, because most of the large Israeli settlements are fairly close to the 1967 green line. In order to create a viable Palestinian state, Israel would have to uproot a fair number of the more distant settlements, but it wouldn't have to uproot a large number of people. Robert Wright pushes back:

OK, fine. But, according to Krieger's numbers, this would still involve uprooting 125,000 settlers! If anyone considers this a readily doable project, I recommend going to Hebron, where fewer than one percent of those 125,000 live, and asking the settlers whether they'd go peacefully. Compounding their assured intransigence is that the Israeli army, which would be doing the extracting, is itself increasingly populated by intensely religious settlement supporters, some of whom say they won't carry out settler-eviction orders.

All of this helps explain why last week at the J-Street Conference, the Israeli scholar Menachem Klein, who was an adviser to the Barak government, opined that a two-state deal could spark a civil war within Israel. "Yitzhak Rabin was assassinated during an interim agreement when he had not evacuated a single settlement," he said. "Israelis will use arms to resist an agreement even if there were a referendum supporting it."

But this is almost beside the point. Warning how hard it would be to uproot the settlements is like warning how hard it would be for the American government to confiscate the TV sets of all citizens. No government is going to try to do it anyway!

But a one-state solution is hardly possible either. Even now, Arabs make up about 30% of the population of a combined Israel and the West Bank. In 50 years that will be up to 40% or so. At the same time, about a third of the Jewish population will be ultra-orthodox. I don't think anyone believes this is a recipe for a peaceful democratic state.

So there is no longer any plausible future except for perpetual occupation. Welcome to hell.

From Time's Belinda Luscombe at the end of an interview with South Carolina governor Nikki Haley, who was born and raised as a Sikh:

In New York City, which you're visiting for a couple of days, a lot of our taxi drivers are Sikhs. If you get one, are you going to give him a slightly bigger tip?

This is outrageous. Why does Luscombe casually accept the gender normative view that all taxi drivers are male?

(By the way, Haley answered that she gives the same tip to everyone. She also quite charitably refrained from slugging Luscombe.)