Kevin Drum

Hecho in Mexico

| Sat Nov. 6, 2010 7:14 PM EDT

A few years ago I bought Marian a case of Dr. Pepper from a bottler in Texas that uses real sugar instead of high fructose corn syrup. She said it was fantastic. I couldn't tell the difference. I think that might be part of what's going on in Jonah Lehrer's post about his preference for Mexican Coke (sweetened with sugar) to American Coke (sweetened with HFCS):

But here’s the rub: Mexican Coke appears to be a cognitive illusion.

....Consider this clever study of soft drinks led by Samuel McClure and Read Montague. The experiment was a recreation of the Pepsi Challenge, except this time all the tasting was being done in a brain scanner. Each person swallowed sips of cola from a plastic tube while their brain was being scanned. When Coke and Pepsi were offered unlabeled, the subjects showed no measurable preference for either brand. Most of the time, they couldn’t even tell the two colas apart. But Montague’s second observation was more surprising: subjects overwhelmingly preferred drinks that were labeled as Coke, no matter what cola was actually delivered through the tubes. In other words, brand trumped taste. We cared more about the logo than the actual product.

....Mexican Coke has become my Coke. I see that glass bottle and I’m flooded with all sorts of dopaminergic associations, those smug feelings reminding me that I don’t drink that generic high-fructose corn syrup crap. I drink the real stuff, the cola made with old-fashioned sugar. But those associations are almost certainly an illusion — my tongue is too crude a sensory device to parse the difference between Coke and Pepsi, let alone between slightly different formulations of the exact same drink.

It's possible that Lehrer's tongue is indeed too crude a sensory device to taste the difference between Coke and Pepsi. Mine probably is. But there's a sizeable minority who can tell the difference, and I suspect they tend to be proselytizers. Most of us may not be able to distinguish the tastes ourselves,1 but we aspire to be people who can, so we allow the proselytizers to convince us of something that our own senses don't really confirm. That kind of thing happens all the time in other circumstances, after all.

For the most part, this is probably the same phenomenon that McClure and Montague documented. We're both saying that people respond to more than just the taste of the colas, but they're ascribing the difference to packaging and advertising. I'm ascribing it to peer pressure, more or less, which eventually gets associated with the packaging and advertising. More research, please!

POSTSCRIPT: By the way, none of this means that the preference for one cola over another (or any food over any other) is "fake." If you prefer it, you prefer it, regardless of what's triggering the response. So don't be an asshole and go around telling people who like Mexican Coke that there's no difference. There is.

1Hell, in blind wine tastings lots of people can't even distinguish between reds and whites. We think we know a lot more than we really do.

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The Brain Observatory

| Sat Nov. 6, 2010 2:37 PM EDT

A few days ago, after reading yet another story about Bill Clinton's superhuman ability to socialize untiringly with every person he's ever laid eyes on, I said, half jokingly, "I hope his brain is preserved for science when he dies." Well, now I know just the guy to do the preserving, superstar brain cataloger Jacopo Annese, the man entrusted with the last remains of Henry Molaison, "the most important brain of the twentieth century":

People who've read newspaper articles about Annese's work with Henry's brain have already called him up, made direct arrangements to donate their own....Annese knows the publicity will continue, hopes it will continue to inspire donation. He had wanted to get the brain of the guy Rain Man was based on, but that hadn't worked out. Eventually he'd like to get somebody really big, a household name, Bill Clinton, someone like that.

Exactly! Bill Clinton! What better resting spot for our 42nd president than Annese's Brain Observatory, "the world's largest [and] most useful collection of brains"? Quick, somebody start a Facebook page dedicated to this project.

A New Level of Crazy?

| Sat Nov. 6, 2010 12:27 PM EDT

Over the past two years, as the right has gone increasingly conspiracy-minded over Barack Obama, there always remained one slightly optimistic aspect of the whole spectacle: at least it wasn't as bad as the Clinton years. The birth certificate thing aside, the constant stream of mini-eruptions were generally based on some tiny kernel of truth. They were crazy, but not completely made up. It wasn't quite like the Clinton era, with its Mena airfield and its Christmas card list investigation and the pals buried in Arlington cemetery, all things that seized the conservative imagination but were literally invented out of whole cloth.

But now we seem to be entering a new era. Or revisiting an old era. Or something. Earlier this week, the Drudge/Beck/Rush axis declared that Obama's trip to India was costing the American taxpayers $200 million per day, complete with 5-star rooms for his entire entourage and an escort of 34 navy warships. NBC's Chuck Todd tweeted:

Cannot believe reports about bogus cost of president's trip didn't pass smell test with so many folks. Ridiculous that it got any traction

But as Steve Benen noted, "Is it really so hard to believe that this happened? This is just how the right has operated for as long as I can remember, especially during the Clinton years, when it was common for baseless allegations, sometimes placed in obscure foreign outlets, to ricochet from activists to talk radio to partisan media to the White House briefing room to major outlets."

The good news is that the mainstream media didn't bite on this. That's progress, I guess. But I wonder how they're going to do when the wingers come up with something that isn't quite so easy to check out? It's not as if Chuck Todd wasn't around during the 90s, after all, so his surprise over this isn't a good sign.

Anyway, buckle up. If you thought the last two years were mind bending, the next two should send you scuttling straight for the electroshock machine. It's not going to be pretty.

No Policy, No Narrative

| Fri Nov. 5, 2010 7:06 PM EDT

So last night Marian suggested that Obama is doomed. The economy is going to improve, Republicans will take all the credit for it, and they'll win in 2012.

I don't actually believe that — partly because I'm not sure the economy is going to improve substantially, and partly because if it does I think Obama will get credit for it. Presidents always do. Still, it did remind of how self-assured conservatives are compared to liberals. The basis for Obama being doomed, after all, is that Republicans have a great story all primed and ready in the American imagination, which means that when (if) the economy improves they'll easily be able to persuade people that they were responsible. Even Marian, who doesn't pay a ton of attention to politics, knows their story.

So what does the American economy need, according to conservatives? That's easy. Lower taxes. Smaller deficits. Reduced spending. Less uncertainty. It may be nonsense, but it's not an act. They are 100% convinced that this is bedrock truth, and they tell their story with absolute conviction.

And what's the liberal story about what the economy needs? Don't all raise your hands at once. More stimulus? That's a good answer, but every Democrat in an actual position of power is either afraid to say so or doesn't believe it. Hell, most of them weren't even willing to take credit for the positive effects of the 2009 stimulus. A payroll tax holiday? Also not a bad answer, but no one is pushing it. Policies to weaken the dollar? That'll be a cold day in hell. Massive infrastructure investment? A direct government jobs program? Work subsidies? Maybe, kind of, and we're not sure.

In other words, liberals don't have a story at all. A few of them do — call them the Krugmanites for short — but it's a small and uninfluential band. In the halls of power and the corridors of the media, liberals have nothing but a collective clamor of pet ideas and peevish finger pointing. So even if the economy does improve, there won't be any way for them to persuade the public that their policies were responsible. For starters, they themselves probably won't really believe it.

Anyway, nothing new here. Just felt like getting it off my chest. Feel free to fire away in comments.

Friday Cat Blogging - 5 November 2010

| Fri Nov. 5, 2010 2:54 PM EDT

On the left, an action shot of Inkblot! He looks like he's about to thrash some poor defenseless insect or something, but no. He was just arousing himself from his midday nap. He looks far more purposeful than he actually was. On the right, Domino stretches out in the afternoon sun to her full majestic length.

In other adorable mammal news, my sister passes along this story about a sloth sanctuary in Costa Rica. Who knew sloths needed a sanctuary? But before you click, be warned: the sheer cuteness factor is so high you might want to have your insulin shot ready ahead of time.

Quote of the Day: Entitlements

| Fri Nov. 5, 2010 2:31 PM EDT

From Eric Cantor (R–Virginia), in a letter to his fellow Republicans:

Getting our long-term deficit under control will require that we address major entitlement reform. It is a conversation that we must have, but one that is easier said than done. President Obama, congressional Democrats, and their liberal allies have made it abundantly clear that they will attack anyone who puts forward a plan that even tries to begin a conversation about the tough choices that are needed.

Uh huh. Matt Steinglass takes a well-deserved sledgehammer to this particular piece of sophistry. Republicans have just finished up an absolute blizzard of campaign spending demonizing Obama and congressional Dems for daring to rein in Medicare spending earlier this year, and now they're trying to pretend that Obama and congressional Dems are the problem when it comes to reining in Medicare spending? Gumption indeed.

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Obama and the Economy

| Fri Nov. 5, 2010 1:58 PM EDT

Did Barack Obama screw up by not focusing on the economy like a laser right from the beginning of his administration? I think there's a good argument to be made that a bigger, better stimulus would have goosed the economy more strongly, reduced unemployment, and helped eventual Democratic election prospects. But once that was finished up, what else could he have done? Here is the core of Bruce Bartlett's case:

Substantively, I think there was more that could have been done to stimulate growth that might have been doable if Obama had been more engaged in the problem. For example, all economists know that monetary policy is critical to restoring growth. Yet Obama allowed vacancies on the Federal Reserve Board to be unfilled for months and then did nothing to get his appointees confirmed in the Senate.

....If Obama had been out there every day talking about the economy, pressuring Congress and cabinet agencies to be more active, and paying closer attention to the progress of the stimulus, then I think the political dynamics might have been quite different. It’s likely that further stimulus, which has appeared to be politically impossible, might have been achievable. At least Obama could have been more engaged in the extension of expiring tax cuts, which threaten a significant fiscal contraction on January 1 unless Congress acts quickly.

Maybe. But this still strikes me as thin gruel. A better Fed still would have been a Fed with a limited ability to affect the economy. What was needed was fiscal stimulus, and I have my doubts that talking relentlessly about the economy would have improved the prospects of getting Congress to act. Republicans and centrist Dems simply weren't persuadable and, in any case, probably didn't care all that much about unemployment in the first place. Which brings us to this:

It has amazed me since the beginning of the recession that the many millions of those unemployed seem to have accepted their fate so meekly. I don’t know why this is the case. Perhaps it’s because they have been browbeaten into accepting the right-wing idea that they are just lazy and could find a job if they really wanted to, or maybe they have given up hope of ever finding a job and taken early retirement, or perhaps a still-working spouse has kept the family adequately afloat.

I think that a major factor is the decline of labor unions in the U.S., especially those in the private sector, because they tend to be the organizers of political pressure related to jobs. Another factor may be that so many of those that are still union members are now in the public sector, where they have different political priorities, such as protecting their own jobs, pay and benefits from cuts forced by sharply-declining state and local government revenues.

As a structural explanation, this strikes me as much more powerful. Mountains of research suggests that members of Congress don't really care about the desires of the poor and the working class very much, and this goes double when the poor and working class aren't taking to the streets with torches and pitchforks. And it goes triple when there's no longer any institutional power to speak for them, something that the long-term decline of private sector unionization cemented into place many years ago.

So count me as still skeptical. By focusing on other things, Obama passed a historic healthcare bill, a decent financial reform bill, and half a dozen smaller bills. If he had skipped this stuff and instead spent all his time "focused on" the economy, I think the result would have been no healthcare reform, no financial reform, and — maybe — a loss of 55 seats in the House instead of 65. There just flatly wasn't that much he could do. Warts and all, I think he made the right decision.

Why Are Banks Foreclosing?

| Fri Nov. 5, 2010 1:12 PM EDT

Mike Konczal makes a familiar point today about the HAMP program, which was supposed to help reduce home foreclosures but, in fact, has accomplished close to nothing:

Obama's Treasury team took a system that had a terrible design and doubled-down on it. Servicers aren't modifying mortgages. There's an active empirical debate we'll cover next week over whether or not servicers are not modifying mortgages because of information problems or becomes of adverse incentive structure — or if you don't speak economics, whether or not the servicers are dumb or corrupt. What was meant to be a passive, thin, pass-through vehicle with obvious conflicts of interest now has to actively manage a giant portfolio of troubled mortgages. And they are either unwilling or incapable of acting as a fiduciary for investors and getting mortgages back to being current and working.

Well, I for one look forward to next week's discussion of this. As I understand it, the basic problem is that loan servicers can make a lot of money by stringing homeowners along, raking in a lot of fees along the way — for insurance, appraisals, title searches, legal services, etc. — and then eventually allowing them to default anyway. The basic story is here. To some extent, then, what's happening is understandable: the incentives are lousy and companies are simply making money on other people's misery. Nothing new about that.

And yet....somehow this has never quite added up. I don't doubt that loan servicers are in business to make money and don't really care if homeowners suffer or not. That's pretty commonplace corporate behavior. But they are in business to make money, and if there's one thing banks are good at, it's figuring all the angles when it comes to making a buck. If, in the long run, principal reductions really, truly were the most profitable way to deal with underwater homeowners, I'd expect that not only would banks figure this out pretty quickly, they'd be figuring out ways to create securitized bundles of principal reductions to sell to gullible German investors. That well can't be completely dry, can it?

So why hasn't this happened? There are a couple of obvious possibilities here. One is that the complicated nature of mortgage securitization simply makes principal reduction too hard. Once the loans have been securitized, tranched, retranched, and re-retranched, there are so many note holders with a legal stake that it's all but impossible to get unanimous agreement to do a principal reduction. Another possibility is that banks are afraid of knock-on effects: once they start reducing principal in a few cases, their entire customer base will find out what's going on and start withholding payment in hopes of getting the same treatment. Reducing principal for 10% of their customers might make sense, but banks might be afraid that there's no way to hold the line there.

However, this is just uninformed speculation, and I await Mike's more informed take on this. One way or another, though, it's hard to believe that banks are really, truly passing up a win-win opportunity here. There has to be more going on.

TV's Bleak But Bright Future

| Fri Nov. 5, 2010 12:41 PM EDT

Reihan Salam links today to a post by UCLA sociologist Gabriel Rossman on the future of television if the cable universe moves to a la carte pricing. Long story short, simple economics suggests that we'll all cut back on the number of channels we subscribe to, which in turn means that we'll end up with both (a) fewer channels and (b) channels with lower production values. I've long thought this was pretty obviously true, and it's what's made me sort of a mushy supporter of a la carte pricing. Still, a supporter I am, and Reihan suggests what will happen if/when this comes to pass:

But this could mean that U.S. viewers will consume more entertainment that is peer-produced, produced overseas, or by institutions that otherwise work outside of the WGA and SAG structure. Quality writing is of course very important, but perhaps quality writers will attach themselves to hyper-realistic animation projects, etc. No more actors! Or rather a somewhat smaller cadre of actors who focus primarily on screen-capture work, and who make middle-class wages rather than outsized sums. There are many, many ways this phenomenon could play out.

Italics mine. For what it's worth, this is what I think is going to happen in the medium term. I'm not sure just how distant this is, but I don't think we're too far away from an era where a single person — or perhaps a small team — can create high-quality, 100% CGI shows that are virtually the equal of what you see today on network TV. Think xtranormal.com but with supercomputers and a crack creative team. Basically, you'll need some good scriptwriters and a few good designers and that's it. Brave new world, eh?

Taking One For the Team

| Fri Nov. 5, 2010 12:15 PM EDT

More political science wonkery! Eric McGhee wants to know if Yes votes on health care reform, the economic stimulus, cap-and-trade, and TARP were bad for vulnerable House Democrats. As I noted yesterday, regressing this on the entire Democratic caucus isn't very interesting, since the results are swamped by lots of members of Congress who voted Yes on all four but are in very safe seats and won reelection easily:

So I modeled Democratic vote share in contested House districts using this count of "yes" votes, plus campaign money in 2010 (from here and here) and each district's House and presidential vote in 2008 as controls (here). The model also estimates whether the effect of roll call votes depended on the partisanship of the district, as captured by the 2008 presidential vote.

....What does this model tell us about roll call votes on these four bills? Simple answer: they mattered. A lot. A Democratic incumbent in the average district represented by Democratic incumbents actually lost about 2/3 of a percentage point for every yes vote. That doesn't sound like a lot, but that's for incumbents in districts that voted 63% for Obama.

....What might have happened if vulnerable Democrats hadn't voted for any of the four bills?....The Democrats gain back 32 seats, enough to retain control of the House.

Now, McGhee isn't saying vulnerable Dems shouldn't have made these votes. In fact, he doesn't even think it cost them their majority, because it turns out there are some other confounding factors. Read the full post for details. "But," he says, "it seems safe to say that they had a big negative effect on Democratic performance, and they certainly didn't help."

Perhaps so. For now, though, treat it as just another data point. It's probably going to take a while for the real answers to emerge from the data.