2010 - %3, August

Lifetime Social Security Payouts

| Wed Aug. 25, 2010 12:48 PM EDT

Over at the Tax Policy Center, Gene Steuerle and Stephanie Rennane quote from a CBO report about how total lifetime Social Security payouts are increasing:

In today’s dollars, CBO calculates that a single person born in 1960 (assumed to retire at age 65 in 2025) who earns close to median wages over their lifetime is scheduled to receive approximately $250,000 in lifetime Social Security benefits, while a similar earner born in 2000, expected to retire in 2065, would receive around $420,000.

Does this show how generous Social Security payments have gotten? No. Just the opposite. Real per-capita GDP in 1960 was about $15,000. In 2000 it was $39,000. That's a 160% increase. Conversely, the real increase in total Social Security payouts over an average lifetime is going up only 70% for retirees born in those two years.

Social Security as a program will cost us more in the future than it does now. Longer lifespans are a small part of the reason, and the fact that the huge baby boom generation is about to retire is a much bigger reason. But lifetime payouts, far from spiraling out of control, are considerably stingier now than in the past. We're a far richer country than we were in 1960, but average wages haven't kept up with productivity growth for a long time — and since Social Security payouts are tied to average wages, not economic growth, benefits haven't kept up with economic growth either. Reducing them even further by raising the retirement age would merely be compounding one injustice with another.

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Is Inflation Good For the Rich?

| Wed Aug. 25, 2010 12:02 PM EDT

Felix Salmon sez:

Inflation is painful for the poor, but much easier for the rich, whose wealth is tied up in things like stocks and houses which tend to retain their real value.

Hmmm. I haven't thought about this in a long time. Historically, of course, inflation was generally a populist favorite because it reduced the real value of debt. Conversely, "sound money" was preferred by the banking class for exactly the opposite reason. They were the ones making the loans, and they didn't want the value of those loans to be eroded.

Of course, that was back in the day of fixed-rate lending. If you owed the bank a fixed $500 per month on your seed loan and inflation skyrocketed, that $500 became pretty cheap and farmers rejoiced. J. Pierpont Morgan, on the other hand, was not amused.

But what about an industrial era where loan rates are variable and everything is indexed to inflation? Then who benefits (relatively speaking) from inflation? That's an empirical question, and Romer and Romer provided the following answer in 1998:

We find that the short-run and long-run relationships go in opposite directions. The time-series evidence from the United States shows that a cyclical boom created by expansionary monetary policy is associated with improved conditions for the poor in the short run. The cross-section evidence from a large sample of countries, however, shows that low inflation and stable aggregate demand growth are associated with improved well-being of the poor in the long run. Both the short-run and long-run relationships are quantitatively large, statistically significant, and robust. But because the cyclical effects of monetary policy are inherently temporary, we conclude that monetary policy that aims at low inflation and stable aggregate demand is the most likely to permanently improve conditions for the poor.

A couple of years later William Easterly and Stanley Fischer took another look at the data and concluded that inflation had a very mild but negative impact on the poor, and that in polls, "the disadvantaged on a number of dimensions — the poor, the uneducated, the unskilled (blue collar) worker — are relatively more likely to mention inflation as a top concern than the advantaged."

This doesn't tell us anything about moderate levels of inflation — say, the difference between 2% inflation and 5% inflation. It's more geared to general long-term stability. Still, the days of yeoman farmers demanding free silver at 16:1 are just a memory. Today a bout of inflation just jacks up the rate on their credit card balances.

Healthcare For Students

| Wed Aug. 25, 2010 11:24 AM EDT

Megan McArdle reacts to a story from Kaiser Health News suggesting that healthcare reform might prevent universities from offering low-cost student insurance policies:

I imagine that the administration has been blindsided by this one....Had this been written into the law, it probably would have passed unnoticed, but the farther this presses into the spotlight, the harder it's going to be to arrive at a politically acceptable answer.

Chalking this one up to the cost of passing multi-thousand page bills that no one has read.

Hah hah! Stupid Democrats didn't even read their own bill! I imagine we're going to be inundated with stuff like this over the next few years, as critics of reform crow over every story that suggests even the remotest possibility of some negative outcome on one benighted group or another. But here's my prediction: virtually none of these self-serving pity stories will amount to anything.

Take this one. We're not talking about university health centers here, we're talking about actual health insurance policies. And if you read through the rest of the story, you find that most students are insured through their parents' policies. According to the GAO, "only 7 percent bought their own policies or purchased school-based plans." Add to that the fact that so far there's no real evidence that healthcare reform will seriously impact student health policies anyway (colleges are merely "warning" that it might) and that a lot depends on the rules HHS sets, which is all part of how healthcare reform is designed to work. HHS rule setting is a big part of the process and was always intended to be.

So: do I expect vast hordes of angry students descending on Capitol Hill? No. Do I expect HHS to sit around and do nothing about this? No. Do I expect that some reasonable set of rules will be worked out in the end? Yes. Do I expect that critics will take any notice of the fact that yet another scare story about healthcare reform will turn out to be overblown and ridiculous? No indeedy.

Iraq Update

| Wed Aug. 25, 2010 10:28 AM EDT

Anthony Shadid reports on a coordinated wave of insurgent attacks across Iraq yesterday:

For weeks, there had been sense of inevitability to the assaults, which killed at least 51 people, many of them police officers. From the American military to residents here, virtually everyone seemed to expect insurgents to seek to demonstrate their prowess as the United States brings its number of troops below 50,000 here. But the anticipation did little to prepare security forces for the breadth of the assault. Iraqi soldiers and police officers brawled at the site of the biggest bombing in Baghdad, and residents heckled them for their impotence in stopping a blast that cut like a scythe through the neighborhood.

....For weeks, insurgents have carried out a daily campaign of bombings, hit-and-run attacks and assassinations against the security forces and officials, seeking to undermine confidence in their ability to secure the country. They remained the target Wednesday in attacks in Falluja, Ramadi, Tikrit, Kirkuk, Basra, Karbala, Mosul and elsewhere.

....The attacks come amid deep popular frustration with the country’s politicians, who have failed to form a government more than five months after elections in March. Shoddy public services, namely electricity, have only sharpened the resentment.

Violence in Iraq is still far below its 2006-07 levels, but the main goal of the surge, in George Bush's words, was always to provide "breathing space" for political reconciliation that would make its security gains permanent. This has been its Achilles heel ever since it was completed, and the news on this score has continued to get worse for at least the past couple of years. The Florida-like inability to agree on the most recent election results and form a government of any kind is merely the latest act in the play.

And while we're on the subject of military intervention abroad, Fred Kaplan has a good piece in Slate explaining the regional politics that makes progress in Afghanistan so hard. I don't think I'm up for two separate posts on the subject of foreign wars today, so instead I'm just tacking this onto the Iraq news. It's worth reading.

A Tea Party Triumph in Alaska?

| Wed Aug. 25, 2010 9:50 AM EDT

Tea party candidate Joe Miller may upset incumbent Republican Lisa Murkowski in Alaska after all. Miller was an unknown until just the past few days, when polls showed him nipping at Murkowski's heels. As of this morning, the incumbent trailed Miller by 2,555 votes with 84 percent of precincts reporting.

Murkowski has 48.6 percent of the vote to Miller's 51.4 percent. It may take another week for the final tally, however, as the 16,000 absentee ballots won't be counted until Aug. 31.

If Miller does win, it would be quite an upset. He was trailing Murkowski by 32 points a month ago, and the state's senior senator outspent him by 20-to-1. Murkowski has been in the Senate since 2002; her father, Frank, appointed her to fill his seat when he became governor of the state.

Miller got a boost from the endorsements of several high-profile conservatives like former Alaska Gov. Sarah Palin and former Arkansas Gov. Mike Huckabee. The former, of course, has a storied history with the Murkowski family, having unseated Murkowski's father in 2006. An anti-incumbent sentiment may have won out here, even in a state that is known for respecting seniority. Murkowski is currently the ranking minority member of the Energy and Natural Resources Committee and has played a key role in drafting legislation over the past two years.

The winner in the Republican primary will face Sitka Mayor Scott McAdams, who won the Democratic nomination yesterday.

Caption Contest Challenge: Evil Nixon

| Wed Aug. 25, 2010 9:28 AM EDT

Rapid City, South Dakota—See that there? That's our 37th president, Richard Milhous Nixon. And while you can't see it in this photo, he's actually sitting right across from a 24-hour Hardee's just off Main Street in southwest South Dakota's largest metropolitan area. 

Since Rapid City fancies itself as the gateway to the Black Hills, its street corners are decorated with statues of all the presidents who didn't make it up onto the side of the big mountain. Calvin Coolidge is there, holding a saddle for some reason. So are Herbert Hoover and John Quincy Adams. It's Mount Rushmore's Island of Misfit Toys.

So what's even going on in this photo? Why is Nixon smiling like that? Why are his hands clasped? What's up with the menacing lizards just below the arm rests? Why is he flashing so much ankle? Did he just put a hit out on McGovern or something? What is the deal?

I have no idea, but maybe you do. Send us your best caption ideas in the comments, or ping me @timothypmurphy, and I'll post the winner later today.

The winner gets...his/her entry posted. Sorry, guys; we're on a budget here.

Profile shot below the jump, in case this one didn't do it for you.

Update: We have winner: "Release the hounds, Smithers," from commenter Eric Dana. I would also have accepted "Bring me the muggle, Nagini."

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A War Photographer's Journey: Black Passport

| Wed Aug. 25, 2010 5:00 AM EDT

In the run-up to Obama's August 31 policy speech regarding the drawdown of troops in Iraq, wars continue around the globe—and where there are wars, there are photojournalists. Sometimes their reasons for staying in a war zone are opaque. "What I do not understand is why you [would] rather be in a ditch in Chechnya, freezing, cold and shot at instead of being in bed fucking me." That challenge, posed by one of photojournalist Stanley Greene's many exes, cuts to the heart of his deeply personal, brutally honest retrospective, which spans his early days shooting punk bands to his current career as a decorated war photographer. In images and words, Greene bluntly recounts how war shatters lives—including his own.

See more photos by Stanley Greene here, or check out the Mother Jones daily war photo here.

We're Still at War: Photo of the Day for August 25, 2010

Wed Aug. 25, 2010 4:00 AM EDT

 

US and Afghan forces conduct a dismounted patrol near Combat Outpost Mizan, Mizan district, Zabul province, Afghanistan, on Aug. 19, 2010. Photo via the US Army by Senior Airman Nathanael Callon.

Two Memes Enter, One Meme Leaves

| Wed Aug. 25, 2010 12:18 AM EDT

Summing up Tuesday's election results, Newsweek's Andrew Romano says that the anti-Washington press meme is about to change:

On Tuesday, voters in Alaska, Arizona, Vermont, and Florida weighed in on a variety of marquee primary races--and in every case, they preferred (or were seeming at press time to prefer) the incumbent, establishment, and/or Washingtonian candidate to his or her insurgent foe.

....It's no secret that the press tends to shoehorn even the most multifaceted news event into a simple narrative. Expect that process to continue on Wednesday; both Politico and Agence France Presse have already published stories trumpeting the death of the anti-Washington meme. Unfortunately, the whole exercise is just as futile when incumbents are winning as when they were losing; politics just isn't that tidy. Case in point: even as the anti-establishment eulogies were hitting the wires, the Associated Press was reporting that health-care multimillionaire Rick Scott had defeated Washington-backed Bill McCollum in Florida’s Republican gubernatorial primary and Christian youth camp director James Lankford had upset former state Rep. Kevin Calvey, a Club for Growth favorite, in the runoff for Oklahoma’s open 5th District House seat.

Well, look. Isn't there someone who's enough of a political junkie to give us the straight dope on this? How many incumbents have lost this year compared to 2006? Or 2002? Can't we put a number to this? If the number is a lot higher than the average midterm election, then the anti-Washington meme deserves to live. Otherwise it deserves to die. Which is it? Who's ready to tot up the results from the past few elections and tell us?

Rick Scott's Florida Gov Upset

| Tue Aug. 24, 2010 11:01 PM EDT

Rick Scott, the wealthy health care executive and GOP dark-horse candidate, pulled off a surprising upset on Tuesday in Florida's Republican gubernatorial primary race. The tall, bald-headed Scott edged out Florida Attorney General Bill McCollum, a GOP favorite and former long-time US congressman, by a slim margin of 46 percent to 43 percent, with 96 percent of precincts reporting.

The crux of Scott's campaign was his outsider status, his rejection of Washington and career politicians, his appeal to the far right of the GOP. When not bashing McCollum, Scott's campaign fliers and commercials touted his independence and promise to bring a fresh, pro-business, fervently anti-tax perspective to the Florida governor's office. Polls showed Scott with the backing of a majority of conservative Florida voters, including the state's tea party contingent.

Scott may not have the record of a long-time politician, but he does carry a lot of baggage into his general election fight against Democrat Alex Sink, the state's chief financial officer. Scott was at the heart of the country's largest fraud settlement ever, a $1.7 billion Medicare settlement by a hospital corporation he helped to found and led until his ouster. Another health care company Scott started, Solantic, has been accused of allegedly using medical licenses illegally and billing irregularities with Medicare.

That record, which McCollum highlighted time and again during the primary campaign, has tainted voters' view of Scott as he heads into the general election. According to Public Policy Polling, only 46 percent of GOP primary voters had a good impression of Scott. As PPP pollster Tom Jensen put it, "Five months ago we would have said Alex Sink looked like a dead duck. Now with the way this contest has unfolded she looks like the favorite."