• Shaking the Federal Money Tree


    Lots of lefty econ bloggers have suggested that the answer to our financial woes is a walloping big second stimulus. But we aren’t getting one. Tyler Cowen thinks that should tell us something:

    Reading the Keynesian bloggers, one gets the feeling that it is only an inexplicable weakness, cowardice, stupidity, whatever, that stops policies to drive a more robust recovery. The Keynesians have no good theory of why their advice isn’t being followed, except perhaps that the Democrats are struck with some kind of “Republican stupidity” virus. […] The thing is, that same virus seems to be sweeping the world, including a lot of parties on the Left.

    Romer, Geithner, Summers, et.al. know all the same economics that Krugman and DeLong and Thoma do. If a bigger [aggregate demand] stimulus would set so many things right, they’d gladly lay tons of political capital on the line to see it through and proclaim triumph at the end of the road.

    Except they expect it would bring only a marginal improvement.

    Now, there are a few things to say about this. First, Tyler’s definition of “marginal” might be different than, say, Krugman’s. Would a two-point drop in unemployment be marginal? Or dramatic? Second, it doesn’t have to be weakness or cowardice driving the Obama team’s actions. If, for whatever reason, they’ve concluded that a second stimulus is simply politically impossible, then they’re going to turn their attention elsewhere no matter what they think about it. That’s just common sense. Third, even if a ton of political persuasion might (barely) push a second stimulus bill through, it might be too late. They might disagree with Krugman et. al. not on fundamental grounds, but simply on timing.

    But despite all this, there’s one pretty good reason to think that Tyler is basically right: tax cuts. Lefty economists might generally believe that increasing spending is a more efficient way of stimulating consumption than reducing taxes, but they’d almost certainly accept a big tax cut as an almost-as-good substitute. And tax cuts have two big advantages over spending. On the substantive side, they work faster. Spending takes time to work its way through the economy, but a tax cut (for example, a payroll tax holiday) boosts the economy almost immediately. And on the political side it’s quite doable. Republicans would be persuadable because they love tax cuts and Democrats would be persuadable because it would help the economy. For Obama, then, it would be the best of all worlds: a fast stimulus that gets bipartisan support, something that boosts the economy while dampening the inevitable criticism he’d get for blowing up the deficit.

    But he’s not pushing for this. Not even quietly. And this suggests that Tyler is right: Obama’s advisors might be in favor of further fiscal stimulus, but not by much. And the best explanation for this is that lefty or not, they’re genuinely afraid, as Tyler says, that it would bring only marginal improvements at the cost of significant problems down the road.

    But would it? I’d like to hear more about this. I feel like the liberal economic community is largely getting a free pass on this because the opposition has been so stupid: if you’re arguing that inflation (or hyperinflation!) is a near-term threat that needs to be vigilantly opposed, it’s pretty easy to explain why this is wrong. But the better argument is that inflation is a long-term threat that has to be contained early, because once the genie pokes its head out of the bottle it’s very, very hard to stuff it back in. And the medicine it takes to do the stuffing is painful indeed.

    Now, that argument might be wrong too. But because conservatives mostly aren’t making it, liberals mostly aren’t taking it on. But they should. Political realities being what they are, reining in the federal deficit will be hard even under the best of circumstances, and if we decide to make it worse now it’s going to become even harder to rein in down the road. That’s not a problem for today or tomorrow, but it might well be a problem in 2015. Right?

  • Griping About Obama


    Matt Steinglass reins in his temper better than me today and writes lucidly about the moronic critiques of Barack Obama’s emotional response to the BP oil spill, culminating in Maureen Dowd’s angst this weekend over Obama’s “inability to encapsulate Americans’ feelings”:

    Ms Dowd’s involvement is fitting, as this may be the sorriest spectacle of content-free public hyperventilation since Al Gore’s earth tones. The difference is that in this case the issue is deadly serious; it’s the public discourse that is puerile. There is plenty of room for substantive critique of the flaws in governance and policy uncovered by the Deepwater Horizon blowout. You could talk about regulatory failure. You could talk about corporate impunity. You could talk about blithely ignoring the tail-end risk of going ahead with deepwater drilling without any capacity to cope with catastrophic blowouts. Precisely none of these subjects are evident in the arguments our pundit class is having. Instead we have empty-headed squawking over what the catastrophe is doing to Barack Obama’s image.

    Look: no one knows how to stop this spill. It’s not a matter of effort, it’s a matter of the current state of human knowledge. As Matt says, the substantive critiques are fine (Obama should shut down all offshore drilling, he should send more workers to clean up the shore, he should use this as an opportunity to talk about clean energy, etc.), but witless griping about Obama’s emotion level or his need to “take charge” is just dumb. Knock it off, everyone.

  • Nonfiction on the iPad


    I asked this once a while back, but now that the iPad has been out for a while I want to ask again: how good is it for reading nonfiction books? Specifically, I have two questions for iPad users who read a fair amount of nonfiction:

    • How good is the selection of nonfiction? (Obviously this will vary from person to person depending on what kind of nonfiction they read.)
    • How well is nonfiction rendered? That is, is the layout of tables, charts, images and so forth similar to a paper book?

    I’ve read a ton of commentary about the iPad, but oddly little about how good it is as a book reader. But in my case, that would be its primary function, with all its computerish functions secondary. So what’s the verdict, nonfiction fans?

  • Citizens and the Census


    In the LA Times today, Richard Greener and George Kenney haul out a familiar conservative hobbyhorse: illegal aliens are counted in the census and this produces an unfair apportionment of congressional districts:

    The reapportionment of today’s static 435 seats according to census results would be a respectable example of representative democracy if each individual included in the count had a vote.  But, just as in 1790, the system remains badly fractured and fundamentally unfair.

    Hmmm. Kids and (in some states) felons can’t vote. But we count them. In the 19th century women couldn’t vote. But we counted them. In 1790 residents without property couldn’t vote. But we counted them. Hell, slaves couldn’t vote either, but the infamous 3/5 compromise shows that the founders deliberately agreed to count them in the census for purposes of congressional representation anyway. So voting status is a pretty poor argument for not counting non-citizens. But even if you agree with Greener and Kenney for other reasons, their solution is deliberately obtuse:

    The good news is that the Constitution leaves the manner of conducting the census, and the apportionment of the House, up to Congress. Passing a census reform law should be a relatively simple fix, if we have the leadership and the will to do so.

    Would this work? Let’s go to the text of the constitution:

    [Article 1 Section 2]: Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.

    [14th Amendment]: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States….Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed.

    The text is pretty clear: citizens is used in some places and persons is used in others. And persons means just what you think it means. So if you want to change the way non-citizens are counted in the census, Congress isn’t enough. You need a constitutional amendment. Because, in this case, both the plain text of the constitution and the intent of the framers is quite clear. From a CRS report written earlier this year: “The Framers adopted without comment or debate the term ‘persons’ in place of the phrase ‘free citizens and inhabitants’ as the basis for the apportionment of the House….During the debate on the Fourteenth Amendment, Congress specifically considered whether the count was to be limited to persons, citizens, or voters. The term ‘persons’ was used instead of ‘citizens’ due, in part, to concern that states with large alien populations would oppose the amendment since it would decrease their representation.”

    If Greener and Kenney want to change the way states are represented because they’re afraid the Mexican government might collapse, “sending hundreds of thousands of refugees across the border,” that’s fine. But pretending this is something Congress can do on its own is just populist demagoguery. They know better.

  • Quote of the Day: Sarah Palin’s Mob


    From author Joe McGinniss, who was besieged by Sarah Palin’s fans after she portrayed him as a wannabe pedophile when he rented the house next door to hers:

    Look, this is a pain in the ass for them. I understand that. If I were her, I’d be upset. I’d be annoyed. But I’d be an adult about it, and I would figure out, okay, how can we resolve this in a way that’s not going to make into something that everybody gets obsessive about? By being here I have learned things, and I’ve gotten an insight into her character, into her ability to incite hatred, that before I only knew about in the abstract.

    Dave Weigel has the rest here.

  • Friday Newsletter: The End of 24


    Here’s my Friday newsletter post from this week. And it reminds me: I have virtually no TV shows left that I watch regularly. Any non-HBO recommendations from the crowd?

    Two of my favorite TV shows ended their lives this week: Lost and 24. Lost has gotten endless coverage for its season finale, its fan base polarized between hating it because it failed to resolve any of the questions they’ve been obsessively hashing over for the past six years, and loving it for the way it mawkishly closed the loop on all the characters they’ve come to love, finally allowing them a well-deserved measure of peace and contentment.

    You can count me among the haters. But though it got less attention, it was the finale of 24 that was a bigger cultural moment: in a way, its ending, not the 2008 election, marked the final close of the George Bush era. For nine years, starting just two months after 9/11, super agent Jack Bauer has been fighting terrorists on American soil, and in many ways the show’s message was a neocon’s wet dream: America was always under relentless attack; the bad guys were from the Middle East as often as not; time bombs really, literally, ticked; and torture not only worked, it was practically a patriotic duty.

    This was, in a lot of ways, a reflection of the American id during the Bush years. But there was always more to 24 than just its anti-terrorist heroics, just as there’s more to the American id than fear of foreign attack. Jack Bauer may have stolen the show when the action was in the field, but it was the White House that stole the show the rest of the time. And there, its message was considerably different. The terrorists, it turned out, were often being bankrolled by American superpatriots. Hawkish foreign policy, it turned out, almost always failed miserably. Hawks themselves, it turned out, were almost always stupid, cowardly, scheming, and blinkered. And the terrorists themselves, far from hating us for our freedoms, were either pawns of powerful interests or else ideologues who hated us for things we actually did.

    So while one of the lessons of 24 was the hawkish one that everyone — including its creators — always talked about, neither the show nor America itself was ever so simple. Even during the height of the war on terror, Americans wanted to be assured that this was all just a temporary frenzy, that there was a better way of engaging with the world than bluster and vengeance. That message was always a part of 24 too, and it was a big part of what made the show so successful. But when Barack Obama entered the White House and brought that better model of global engagement with him — well, we didn’t really need a TV show to remind us that better days and better ways would someday be possible again. We had real life for that, and that spelled the end of 24.

    So will I miss 24? Not really. It filled two needs for a decade, one cathartic and one aspirational. The aspirational message never got the same attention as the heroics, but it was every bit as central to the show’s success. The fact that neither message holds our attention the way they used to is well worth the loss of an hour of Monday night escapism.

  • Friday Cat Blogging – 28 May 2010


    Domino hopped into the TV cabinet the other night and spent most of Jeopardy! staring out at us. The only way to save this moment for posterity was by using a flash, so that means today we get to see mild-mannered Domino rip off her mask and take to the blog as LaserCat, sworn foe of digital clocks and Blu-Ray players. Beware her powers. By the next day, however, she was back to being Domino, and Inkblot was willing to settle down next to her because it was nearly 5 o’clock and he didn’t want to stray too far from the food bowl. Sure enough, his attentiveness paid off and food magically appeared. Assuming you consider a can of Fancy Feast to be magic. Which he does.

    Have a nice three-day weekend everyone. But don’t offer your pets anything in return for a job. That could spell trouble.

  • Dick Durbin Takes On the Debit Card Mafia


    Sen. Dick Durbin successfully passed an amendment two weeks ago that would limit the outrageously high interchange fees that Visa and MasterCard charge merchants for debit card transactions. This was a big win that reins in some pretty indefensible industry practices, but Visa and MasterCard are (unsurprisingly) fighting back. How? Well, they can hardly expect to gain much sympathy for either themselves or the Wall Street giants whose profits might get trimmed by Durbin’s amendment, so instead they’re mounting a coordinated campaign that claims it’s small credit unions who will suffer the most. This is despite the fact that Durbin’s language specifically exempts banks with less than $10 billion in assets and specifically requires merchants to accept all cards in a particular network regardless of which bank issues them. If a small credit union charges a higher fee than Citibank, your local 7-11 would have to take their Visa debit cards anyway.

    So small credit unions are pretty well covered. But that hasn’t stopped Visa and MasterCard from taking to the parapets anyway. Via Annie Lowrey, though, it looks like Durbin is fighting back. Here’s a letter he sent to the CEOs of Visa and MasterCard:

    It appears that, in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules. These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions.

    I ask you each to state unequivocally that you are neither threatening nor planning to take steps that would purposefully disadvantage small institutions, should the amendment become law. Further, I warn you that if your companies coordinate with each other or collude with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.

    Good for Durbin. I hope he follows through with this.

  • Chart of the Day: Median Voters Unite!


    Has the Republican Party lost sight of its roots? Does it need to return to a purer version of conservatism in order to return to power? Alan Abramowitz takes a look at the recent evidence in Senate races and concludes just the opposite: the more conservative a Republican candidate is, the worse they perform:

    The results in Figure 1 show that there was a fairly strong negative relationship between conservatism and electoral performance. The more conservative the voting record, the worse the performance of the incumbent. Republican senators with moderate voting records like Olympia Snowe, Susan Collins, and John Chafee generally ran well ahead of the Republican presidential candidate in their state while those with very conservative voting records like John Ashcroft, James Inhofe and Jim Bunning frequently ran behind the Republican presidential candidate.

    Italics mine. Abramowitz then goes on to rerun the data while controlling for things like the strength of the challenger, the national political climate, and the presence of any major scandals or controversies involving the incumbent. The results are the same: “For every additional one point increase in conservatism, Republican incumbents lost an additional three percentage points in support relative to their party’s presidential candidate.”

    For the time being, none of this matters. Parties that suffer stunning losses — the Democrats in 1980, for example, or Britain’s Labor Party in 1979 — frequently decide that they need to double down and return to the true faith. After losing a few more elections they finally move to the center and start winning again. I imagine the same will happen to Republicans. They’re sure to win seats in this year’s midterm, which will confirm them in their view that hardcore conservatism is what America wants, and they’ll have to lose badly again in 2012 to finally convince themselves otherwise. By 2016 they might be ready for prime time again.

  • GOP Takes Over the Tubes


    Back in the early aughts, liberals took an early lead in the blogosphere and never looked back. Conservatives were apparently too stodgy, too top-down oriented to make effective use of online technology. But Stephanie Mencimer reports that now the worm has turned:

    When it comes to employing Facebook, YouTube, Twitter, and other social-media sites, Republicans are whipping their opponents across the aisle, creating a growing tech gulf that threatens important implications for the 2010 mid-term elections.

    Boehner, for instance, has 42,967 Twitter followers. And Pelosi? Well, she can’t have any followers, because she doesn’t tweet. Patrick Bell, the director of new media for House Republican Conference vice chairwoman Cathy McMorris Rodgers, keeps close tabs on what the Dems are up to. He says that as of January 2010, only 34 percent of Democratic House members were on Facebook and only 20 percent had hit Twitter. Meanwhile, since January 2009, the percentage of House Republicans using Facebook has jumped from 37 percent to 79 percent (as of early April). Sixty-four percent of these GOPers are on Twitter, compared with 28 percent in January last year. And 89 percent now have a YouTube channel, compared with 56 percent last year.

    ….[An] initiative to get more members virtually engaged appears to have succeeded wildly. In April, Rodgers launched a six-week contest organized like a “March Madness” ladder that was designed to nudge members of Congress into the Twittersphere. It seems to have succeeded wildly. This “new media challenge” is about to come to an end this week, as Rep. John Fleming (R-La.) and Rep. Phil Gingrey (R-Ga.) duke it out for championship title as the House member with the most increased social media use. (The winner will be announced after the Memorial Day break — on Twitter, naturally.)

    I’m going to take a guess here: online technology is fundamentally more attractive for insurgents than it is for the party in power. Partly this is because the party in power already has lots of other tools available for fundraising and communications. Partly it’s because the party in power is more invested in leadership keeping control of its message. Partly it’s because the party in power is just flat out busier with the actual work of governing. And partly it’s because online chatter is riskier: if you’re tweeting all day long you’re bound to screw up sometime and say something stupid. That’s more dangerous for the party in power than it is for the party out of power.

    The political internet, at least in its current incarnation, is fundamentally crowd-based. Anyone can jump in, nobody’s in control, and it’s an ideal medium for people who are pissed off at the establishment (including their own establishment) and are looking for a way to break through. In other words: people who are out of power. In the early Bush era, this was liberals, and the blogosphere was the cutting edge of online activism. So liberals took over the blogosphere and made it into a liberal duck pond. Today it’s conservatives, and social media is the cutting edge of online activism. So it’s not surprising that conservatives are doing the same. Nancy Pelosi probably figures she has better things to do.

    That’s my guess, anyway. For what it’s worth, though, I don’t expect this state of affairs to last much longer. The internet is very quickly outgrowing its adolescence, and before long it’s not going to be any more friendly to insurgents than 30-second radio spots or mass fundraising appeals. Enjoy it while you can.

  • The Sestak Quid Pro Quo


    Peter Baker provides some further information about what kind of job was offered to Joe Sestak last year:

    Rahm Emanuel, the White House chief of staff, asked [Bill] Clinton to explore the possibilities last summer, according to the briefed individuals, who insisted on anonymity to discuss the politically charged situation. Mr. Sestak said no and went on to win last week’s Pennsylvania Democratic primary against Senator Arlen Specter.

    The White House did not offer Mr. Sestak a full-time paid position because Mr. Emanuel wanted him to stay in the House rather than risk losing his seat. Among the positions explored by the White House was an appointment to the President’s Intelligence Advisory Board, which provides independent oversight and advice the president. But White House officials discovered it would not work because Mr. Sestak could not serve on the board while still serving in Congress.

    ….The office of Robert F. Bauer, the White House counsel, has concluded that Mr. Emanuel’s proposal did not violate laws prohibiting government employees from promising employment as a reward for political activity because the position being offered was unpaid. The office also found other examples of presidents offering positions to political allies to achieve political aims.

    This explains a lot. The job offer really was a quid pro quo because an unpaid appointment would have been an additional position, not a replacement for his current job, and it was contingent on Sestak dropping out of the primary. And since Bill Clinton was involved, this ends up indirectly involving Hillary Clinton too.

    This still strikes me as big nothingburger: presidents engage in political horsetrading all the time. At the same time, it’s starting to make a little more sense why everyone has been so reticent to talk about it. Regardless, I still think this is a 2-day story once the White House and Sestak produce more details. A week tops. There’s just nothing serious here.

  • Twenty-Somethings on Elena Kagan


    Hey, remember Elena Kagan? Dean of Harvard Law, Solicitor General for Barack Obama, nominated to the Supreme Court a few weeks ago? Yeah, that Elena Kagan. The one who’s been the subject of endless speculation about her wardrobe, sexual identity, and judicial philosophy. Well, Dahlia Lithwick says that nobody under 30 gives a fig about two-thirds of that:

    Young people reading Robin Givhan’s article on Kagan’s scandalously open knees think they’re reading something hilarious from their grandparents’ stack of dating magazines from the 1950s. When they hear us yelping about racial diversity at the court, they think about the fact that their classrooms are already incredibly diverse and their Facebook friendships span continents. When they hear us shrieking over women’s softball, they shake their Title IX heads and figure we’re just idiots for thinking straight women don’t play sports. And when they hear us whispering behind our hands about whether someone is gay, most of them tell me they think we’re just freaking idiots. Just as they embody Barack Obama’s post-racial America, they identify almost completely with Kagan’s post-gender America — in which womanhood simply isn’t defined by skirts, babies, or boyfriends anymore.

    Good job, young people! But we still have that whole judicial philosophy thing to hash out. It would sure be nice if we knew a little more about that.

  • Why BP is the Anti-Katrina

    BP's Deepwater Horizon rig burns. | Department of Energy.


    Yuval Levin today:

    I think it’s actually right to say that the BP oil spill is something like Obama’s Katrina, but not in the sense in which most critics seem to mean it.

    It’s like Katrina in that many people’s attitudes regarding the response to it reveal completely unreasonable expectations of government. The fact is, accidents (not to mention storms) happen. We can work to prepare for them, we can have various preventive rules and measures in place. We can build the capacity for response and recovery in advance. But these things happen, and sometimes they happen on a scale that is just too great to be easily addressed. It is totally unreasonable to expect the government to be able to easily address them — and the kind of government that would be capable of that is not the kind of government that we should want.

    This conflates two very different things. Katrina was an example of the type of disaster that the federal government is specifically tasked with handling. And for most of the 90s, it was very good at handling them. But when George Bush became president and Joe Allbaugh became director of FEMA, everything changed. Allbaugh neither knew nor cared about disaster preparedness. For ideological reasons, FEMA was downsized and much of its work outsourced. When Allbaugh left after less than two years on the job, he was replaced by the hapless Michael Brown and the agency was downgraded and broken up yet again. By the time Katrina hit, the upper levels of FEMA were populated largely with political appointees with no disaster preparedness experience and the agency was simply not up to the job of dealing with a huge storm anymore.

    The Deepwater Horizon explosion is almost the exact opposite. There is no federal expertise in capping oil blowouts. There is no federal agency tasked specifically with repairing broken well pipes. There is no expectation that the federal government should be able to respond instantly to a disaster like this. There never has been. For better or worse, it’s simply not something that’s ever been considered the responsibility of the federal government.1

    In the case of Katrina, you have the kind of disaster that, contra Levin, can be addressed by the federal government. In the case of the BP spill, we’re faced with a technological challenge that can’t be. They could hardly be more different.

    But there is one way in which they’re similar. As Levin says, Katrina would have been an immense disaster no matter what. But it was far worse than it had to be because a conservative administration, one that fundamentally disdained the mechanics of government for ideological reasons, decided that FEMA wasn’t very important. Likewise, the BP blowout was made more likely because that same administration decided that government regulation of private industry wasn’t very important and turned the relevant agency into a joke. If you believe that government is the problem, not the solution, and if you actually run the country that way for eight years, it becomes a self-fulfilling prophecy. But we shouldn’t pretend it’s inevitable.

    1Just to be clear: I’m talking here only about capping the leak itself. As T.R. Donoghue points out, the feds do have an overall plan for responding to and cleaning up spills.

    UPDATE: I was only talking about the post-Katrina response by FEMA in this post, but John McQuaid usefully points out that none of the major damage would have happened in the first place if the federal government had done a decent job building the hurricane levee system in New Orleans. If you believe that this is just another example of why you shouldn’t trust the government to do anything right, then that’s a point in Levin’s favor. If you believe that it’s another example of why we should make sure government works better, then it’s a point in mine.

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  • Oil Spill Kabuki


    I feel like I should say something about the big press conference Obama just held. It’s not like he does a whole lot of them. But it seemed pretty soporific to me. On the one hand, it’s true that when he said he was “angry and frustrated” about the BP oil spill, he sure didn’t seem very angry or frustrated. On the other hand, watching the CNN dimwits after the conference solemnly advising us one after one that Obama really needed to be more emotional because that’s what the American people want — well, screw that. I have no idea what the American people want, and neither do they.

    Honestly, this is just one of those lose-lose situations where Obama’s long view of politics will hopefully serve him well. It’s pretty plain, after all, that there really isn’t much the federal government can do. All the expertise for dealing with stuff like this lies with the big oil companies. And every big oil company is working on it already. The problem isn’t a lack of effort on their part or on the part of the government.

    But Major Garrett wants to know if Obama really has his “boot on BP’s neck,” and everyone else seems to be nodding along. I guess it’s the kabuki of our times. The president has to be In Charge whether he can actually do anything or not.

    Of course, what everyone should be asking is not what the feds are going to do about capping the leak, but what they’re going to do to make sure all the oil is cleaned up afterward. That’s finally starting to get some attention now that oil is onshore, but the story is much bigger than that. There’s 20 million or more gallons of oil sitting in a huge underwater plume off the shore of Louisiana right now, and the big question is what BP is going to do about that. And what we’re going to do to make deepwater platforms safer in the future. If the “top kill” effort to stop the spill works, the dramatic part of this story will finally be over. The real part will just be starting.

    If you appreciate our BP coverage, please consider making a tax-deductible donation.

  • New York Has Country’s Dumbest Drivers


    The results of the GMAC National Drivers Test are out, and this year the most knowledgable drivers in the country come from…..Kansas! Hooray for Kansas. Oregon, South Dakota, and Minnesota get honorable mentions. The least knowledgable come from New York. Boo New York. New Jersey, DC, and California have nothing to brag about either. Click here to see how your state did.

    Thirsting for more? The GMAC test has 20 questions, and nearly 20% of Americans failed by getting a score of less than 14. Older drivers did better than younger ones. Men did better than women. Toughest question: what should you do at a yellow light? 85% of drivers got it wrong.

    (Full disclosure: I got it correct, but only by sussing out the “right” answer. My typical behavior is much more in line with the 85%. I think you can guess what I’m talking about here.)

    Anyway, more details here. You can take the test here. I got 19 out of 20 correct. If you know what a diamond-shaped sign means, you have a chance of beating my score.

  • Does Privacy Have a Future?


    The London Times recently announced that they would be putting their entire paper behind a paywall. Their view is pretty simple: giving away their news for free cuts into subscription revenue but produces almost nothing back in the way of ad revenue because advertisers aren’t willing to pay much for the “useless tourists” who drop by new sites occasionally but aren’t serious about either the news itself or the advertising. Paying customers, conversely, tend to be demographically more desirable and they spend more quality time looking at both the news and the accompanying ads. So charging for access should be a net benefit. Felix Salmon comments:

    The logic here has existed in print publications for years: newspapers with a cover price tend to have higher ad rates than free sheets, because their readership is more affluent and is also more likely to actually read the paper (and see its ads).

    ….But the fact is that online there are much more useful and granular ways for an advertiser to work out who they’re targeting, beyond just saying “we want people who are willing to pay to read this publication”….The fact is that if I sign in to a free site using my Twitter login, I’m actually more valuable to advertisers than if I paid to enter that site. That’s because the list of people I follow on Twitter says a huge amount about me, and a smart media-buying organization can target ads at me which are much more narrowly focused than if all they knew about me was that I was paying to read the Times.

    We’re not quite there yet. But it seems to me that online publications are making a big mistake if they make subscribers go through a dedicated registration and login process, because the demographic information they can get from that will be less useful and less accurate than if they outsource the reader-identification procedure to Twitter or LinkedIn or Facebook. And people will definitely enjoy an automatically personalized reading experience, where they can see what their Facebook friends are reading and what the people they follow on Twitter are reading.

    I have an abiding fear that Felix is right. There’s an analogy here to the world of supermarkets. In the past, supermarkets charged everyone the same price and made a small profit margin doing it. Then came loyalty cards. And they were popular! So once one supermarket started offering them, everyone else did as well. Eventually they were ubiquitous.

    Today, overall supermarket prices are still the same as they’ve always been, they’re just tiered differently: those with cards pay less and those without cards pay more. So on average, consumers haven’t benefited. What’s more, competition is generally fierce in the supermarket biz, which means that overall profit margins are also the same as they’ve always been. So supermarkets haven’t benefited.

    So who has benefited? Well, as near as I can tell, the answer is: marketing firms. Loyalty cards generate mountains of purchasing data that allow third parties to target advertising more effectively. This is great news for marketing companies and their clients. Whether it’s great news for the rest of us is a little harder to determine.

    But this might be the news model of the future. Basically, you’ll be able to get access to the Times two ways: either by paying for a subscription or by registering with your Facebook/Twitter/LinkedIn ID and agreeing to give the Times access to your online life. This is roughly the same trade that we’ve made in the supermarket biz: pay more and maintain your privacy, or pay less in return for giving it up.

    The big difference, of course, is that supermarkets had a perfectly viable business model before loyalty programs started up. Newspapers don’t. This might actually be the only way they can save themselves. But it might also be a sign of much broader things to come. In the future, the poor and middle class will essentially have no privacy in their day-to-day life. They will have sold it away, because in practical terms the poor and the middle class simply can’t afford to give up a 5-10% discount on everything they buy. Only the better off, who can, will have the option of maintaining their privacy.

    Maybe this is OK. I don’t like it, but plenty of people seem fine with the idea. But there’s a reason that all this information is so valuable, and it’s not because marketing firms and consumer goods companies are genuinely interested in your welfare. This is a brave new world we’re stumbling into.

  • The Curious Case of Joe Sestak


    Back in February, Joe Sestak told reporters that the White House had once offered him a federal job as an inducement not to run against Arlen Specter in the Democratic primary race for Pennsylvania’s senate seat. Since then Sestak has refused to talk further about the matter and so has the White House. Republicans have tried to make hay out of this, but Stan Brand, a Washington lawyer who specializes in ethics matters, tells David Corn today that it’s virtually certain that nothing illegal took place:

    Though he dismisses Issa’s pursuit of Sestakgate, Brand says that White House actions are keeping the scandal alive: “Gibbs dissembling doesn’t help them. Don’t be defensive about it. Just say this is what goes on. They’re looking guilty over something that isn’t illegal.” He adds: “That’s not the first time that this has happened.”

    This is surely one of the weirder pseudo-scandals of the year. It’s not weird that Republicans would try to get some mileage out of it. That’s politics. What’s weird is two things: (1) How could Sestak possibly have been stupid enough to mention this in the first place? and (2) Why don’t he and the White House just tell us about it?

    As to #1, I have no idea. But #2 is murkier. Republicans are trying to pretend that the job offer was made “in return” for Sestak not running against Specter, but that’s ridiculous. A job offer is just a job offer. If Sestak accepted, he automatically wouldn’t be running for office. It’s like saying that I offered a cashier some money in return for not having me arrested when I walk out the door with a Blu-Ray player under my arm. It’s implicit in the whole thing.

    So the White House either offered Sestak a job or they didn’t. If they didn’t, they would have said so. So presumably they did. If they and Sestak just fessed up to this, wouldn’t the story go away almost instantly? If the White House announced, say, that Sestak had indeed been under consideration for a position in the Navy Department last summer, but Sestak turned them down, then that’s the end of it. It’s not even good campaign fodder. All Sestak has to do is confess that in the heat of the campaign he got a little carried away and characterized it badly.

    What the hell am I missing here? I just see no downside to this.

  • Healthcare Costs Going Up, Up, Up


    The Los Angeles Times reports today on enormous rate hikes for small businesses in the health insurance market:

    Five major insurers in California’s small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times.

    ….”We don’t have that money,” said Ann Terranova, a San Francisco financial planner who is dropping Blue Shield for herself and two employees after learning that their annual premium would jump to more than $19,000 a year from $11,000. 

    ….California insurers defend their rate hikes as sound and fair, saying they struggle to balance affordable rates with the need to remain competitive and turn a modest profit. Blue Shield, for example, said hospital charges rose nearly 20% last year, while physician costs and pharmaceutical fees increased almost as much. Anthem Blue Cross also cited the cost of medical care in explaining its average rate hikes of 13% this year.

    If conservatives want to avoid the specter of federally funded single-payer healthcare in the United States, this is what they need to come to terms with. Canada provides high quality healthcare for everyone — including small businesses and the elderly — for a cost per person of about $4,000 per year. Ditto for France and the Netherlands. Britain and Japan do it for about $3,000. Ann Terranova is being asked to pay more than $6,000 per person — and that’s for three working-age employees.

    One way or another we have to deal with this. This year’s healthcare reform bill takes some small strides toward reining in costs, but they’re not nearly enough. We need to do far more, and if the private market won’t do it then eventually public opinion will force us to adopt a European-style system. If conservatives really understood this, they’d take the problem more seriously. But they don’t seem to.

  • Gulf Spill Apparently Stopped


    It’s nice to occasionally wake up to some good news:

    Engineers have stopped the flow of oil and gas into the Gulf of Mexico from a gushing BP well, the federal government’s top oil-spill commander, U.S. Coast Guard Adm. Thad Allen, said Thursday morning.

    The “top kill” effort, launched Wednesday afternoon by industry and government engineers, had pumped enough drilling fluid to block oil and gas spewing from the well, Allen said. The pressure from the well was very low, he said, but persisting.

    The well hasn’t been cemented yet, and this whole thing could yet fail. But keep your fingers crossed.

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  • Why Did North Korea Do It? cont’d


    Fred Kaplan, after noting that North Korea has engaged in a number of naval skirmishes with South Korea over the past decade, takes a crack at explaining why they upped the ante and torpedoed a South Korean vessel two months ago:

    Some speculate that Kim Jong-il may have planned the March 2010 attack as a show of strength, both to the Seoul government and to his own military commanders. South Korean president Lee Myung-bak had already — for good reasons — abandoned his predecessors’ “sunshine policy” of outreach toward the North. Kim is also believed to be caught up in succession concerns — he is thought to be ailing and wants his youngest son, Jong Un, to be installed as his successor (just as he succeeded his own father, Kim Il-Sung) — and he may have felt a need to toughen up his image after the humiliation of last November.

    ….Who knows how this latest gamble will play out. Some speculate that Kim made the move, hoping that it would frighten the South Korean people into voting out Seoul’s current anti-détente government in next month’s elections. However, some observers think that Kim has been spoiled by the excess indulgence of the previous two administrations — not realizing that the last few years of northern belligerence have strained the patience of many southerners.

    Maybe. As Kaplan says, though, “You may notice the phrases believed to be, thought to be, and may have in the previous sentence.” Nobody really has anything more than a guess at this point.