Kevin Drum - May 2010

Does the Media Care About Unemployment?

| Wed May 12, 2010 2:20 PM EDT

Brad DeLong writes today about something that I remember mentioning briefly some time ago:

The most astonishing and surprising thing I find about Washington DC today is the contrast in mood between DC today and what DC was thinking a generation ago, in 1983, the last time the unemployment rate was kissing 10%. Back then it was a genuine national emergency that unemployment was so high — real policies like massive monetary ease and the eruption of the Reagan deficits were put in place to reduce unemployment quickly, and everybody whose policies wouldn't have much of an effect on jobs was nevertheless claiming that their projects were the magic unemployment-reducing bullet.

Today.... nobody much in DC seems to care. A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America? The collapse of the union movement and thus of the political voice of America's sellers of labor power? I don't know what the cause is. But it does astonish me.

I think there are two distinct issues here. The first is the government response to high unemployment, and on that score I think we're doing as much as (or more than) we did in 1983. Interest rates are at zero, the Fed has vastly expanded its balance sheet, a $700 billion stimulus bill has been passed, and federal deficits are around 10% of GDP. That's a stronger response than we had in 1983, when real interest rates were around 5% (and rising) and the federal government was running a deficit of around 6% of GDP.

But it's true — or at least, it's my impression that it's true — that the media focused way more on economic hard luck stories in the early 80s than they do now. I have a strong memory of being practically bombarded with this stuff back then. Today, though, not so much. It's not that coverage of unemployment is absent, just that it strikes me as much less urgent than it was in the early 80s.

I don't know why. Maybe Brad's reasons are the right ones. Maybe it's just been crowded out by other financial news like bank bailouts and subprime ghost towns. Maybe the social safety net is more effective now than it was 30 years ago. Maybe it has something to do with the fact that today's stubbornly high numbers are concentrated among the long-term unemployed, as shown in the chart on the right. Maybe the rise of two-earner families has reduced the pain of unemployment somewhat. Maybe nobody really believes any longer that the government can do anything about this, so it's not worth reporting on. I don't know. But like Brad, it strikes me as quite odd.

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Kerry on Climate

| Wed May 12, 2010 1:16 PM EDT

Is it possible to pass a climate bill this year? After recounting the recent history of climate legislation — 38 votes in 2005, 54 votes in 2008 — John Kerry says yes:

I absolutely believe we’re closer than ever to getting across the finish line — but make no mistake, it remains difficult, even with President Obama in the White House, and even with the House of Representatives having passed their bill by the slimmest of margins last summer. But we’re going full steam ahead because, in my judgment, this may be the last and certainly the best chance for the Senate to act, especially with the fact that I think the next Senate — given a 2012 presidential campaign added to the dynamic and a lot of new Senators is going to be less likely than this one to find a path to the 60 votes needed for passage. So we’ve got to get it done this year.

....And here’s what I can tell you, a comprehensive climate bill written purely for you and me — true believers — can’t pass the Senate no matter how hard or passionate I fight on it. No, it’s got to be an effort that makes my colleagues — and that has to include Republicans so we can get to 60 — comfortable about the jobs we’re going to create and the protection for consumers and the national security benefits — and it has to address those pieces on their terms. The good news — I think we got that balance right.

Lots more detail at the link, worth reading if you want to get down in the weeds on this stuff. I hope Kerry is right about this. We should know for sure within a couple of months.

UPDATE: ClimateProgress has a nice chart comparing the Senate and House climate bills here.

Why Does Obama Hate Staten Island?

| Wed May 12, 2010 1:04 PM EDT

The New York Times writes about Elena Kagan and the three sitting Supreme Court justices who are from New York:

The four are a portrait of the city, each carrying distinct New York traits to Washington. “Kagan is so Manhattan, Scalia is so Queens, Ginsburg is so Brooklyn and Sotomayor is so Bronx,” said Joan Biskupic, the author of a biography of Justice Antonin Scalia. “They adopted in their identities the whole New York sensibility.”

Only Staten Island — “the forgotten borough,” as a woman who answered the telephone in the borough president’s office described it on Tuesday — would be without a justice to call its own if the Senate confirms Ms. Kagan.

This is really outrageous, and Obama has made a huge blunder here. I expect Republican attack ads shortly about his obvious lifelong hostility toward Staten Island.

Fannie Mae: Refreshingly Ideology Free!

| Wed May 12, 2010 12:39 PM EDT

Ezra Klein on the problems with government-sponsored housing agencies:

Fannie Mae and Freddie Mac are what happens when ideological compromise goes horribly wrong. On the one hand, they're supposed to make housing more affordable. On the other hand, they're private companies, because you wouldn't want some sclerotic government agency at the center of this. The result? Profit-maximizing corporations that enjoy the government's backing.

This is hardly the most important thing in the world, but this is wrong in an interesting way. Fannie Mae and Freddie Mac were converted into semi-private organizations (GSEs, or government sponsored enterprises) by LBJ in 1968. But it wasn't for ideological reasons. It was because Johnson was spending a lot of money on the Vietnam war, which was running up federal borrowing, so he wanted to get Fannie and Freddie's debt off the government's books. This would, technically, reduce federal debt issuance and make his Vietnam/Great Society deficits less alarming.

In other words, it was purely political and financial legerdemain, entirely ideology free. And ironically, it's almost precisely analogous to what big banks did during the late housing bubble, taking huge amounts of debt nominally off their balance sheets while, in reality, remaining responsible for it. When the shit hit the fan, the bankers had to pay the bills, and as it turns out, so did Uncle Sam for its GSEs.

So what to do about Fannie and Freddie? The conventional wisdom is that the entire housing market would collapse without them, but I'm not so sure about that once we manage to extricate ourselves from our current troubles. As a further little bit of history trivia, FDR's original plan for the FHA was that it would work with private organizations that would guarantee home loans. But after a couple of years it became clear that no private sector organizations were interested in taking on this job, so Fannie Mae was created to do it instead. Whether it's still true that the private sector is uninterested in this business in an era (or so I'm told) of endless financial innovation, I'm not so sure about. And if it turns out that it is? Well, other countries managed to muddle along for years without equivalent agencies. We probably can too.

Marketing the Stimulus

| Wed May 12, 2010 11:36 AM EDT

A friend emails with a question that's nagged at me from time to time too:

As you know, Virginia is a pretty conservative state and as you can imagine there is currently a tremendous amount of complaining and griping about Obama's stimulus package and how it's just a waste of money and is causing the federal deficit to explode.

As I see it, one of the big problems is that there is absolutely no PR campaign that tells people where the stimulus money is going. If you have the time and energy you can find it on the Internet but there is nothing on site or on location that announces it as a stimulus project.

Every day for the past few months, I drive through or by a road project that is being funded by the stimulus package. But there is not a single sign or banner that announces it is an American Recovery and Reinvestment Act project. I'll bet you that 95% of the people who drive by this road project have no idea where the money for it came from. The local papers don't even talk about it.

Is this something unique to Virginia or are the funds being spent invisibly across the country? If that's the case, it's a huge mistake and it ought to be fixed ASAP (i.e. well before November).

I'd say that's true where I live too. Every local road project has plenty of signage telling us who's paying for it, but federal dollars are pretty hard to identify. There are occasional ARRA signs, but not many. How about in your neck of the woods? Are most projects (construction or otherwise) getting federal dollars signed so that people know about it? Or not?

Chart of the Day: Oil Spill Coverage

| Wed May 12, 2010 1:57 AM EDT

The chart below, from Brad Plumer, shows the amount of media coverage that various oil spills have gotten over the past few decades. The Exxon Valdez spill in 1989 is naturally the biggest, but it turns out that the BP blowout off the coast of Louisiana is so far not even in the top five. Why? Not enough dead ducks:

After the Exxon Valdez disaster, you had scores of images of ducks and otters slathered in crude. There were pictures of dead whales washed up against gleaming black rocky beaches. It was lurid — and impossible to ignore. By contrast, Brulle points out, not nearly as much oil from the BP accident has reached the shores of the Gulf Coast yet. Even groups like Greenpeace have only been able to rustle up a few pictures of a handful of ducks covered with oil. That's not the sort of thing that drives TV coverage. And it may mean that the current spill makes far less of a dent in public opinion than past disasters have.

Brad has more over at his place.

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Ignorance is Strength, Opt-In is Opt-Out

| Tue May 11, 2010 8:38 PM EDT

Via Twitter, Jack Schafer directs our attention to a New York Times Q&A with Elliot Schrage, Facebook's vice president for public policy. "Newspeak from Facebook's top flack," he calls it, and perhaps that's a wee bit unfair. Some of Schrage's answers are contrite ("we'll do better, promise") and some are admirably direct ("that's how Facebook works, get used to it"). But this one sure seems like classic Newspeak:

Why not simply set everything up for opt-in rather than opt-out? Facebook seems to assume that users generally want all the details of their private lives made public.

Everything is opt-in on Facebook. Participating in the service is a choice. We want people to continue to choose Facebook every day. Adding information — uploading photos or posting status updates or “like” a Page — are also all opt-in. Please don’t share if you’re not comfortable. That said, we certainly will continue to work to improve the ease and access of controls to make more people more comfortable. Your assumption about our assumption is simply incorrect. We don’t believe that. We’re happy to make the record on that clear.

Perhaps I should be charitable. Maybe Schrage misunderstood the question. Or maybe I'm misunderstanding something. But saying that "participating in the service" or uploading a photo constitutes opting in is sort of Orwellian, no? The issue, of course, is that the vast majority of Facebook users have no idea that the default privacy setting for their photo galleries is "friends of friends" or that the default setting for Likes is "everyone on the planet." They probably assume that only their friends can see this stuff. So why not make that the default, and allow users to affirmatively opt in to wider distribution if they want?

As a bonus, if this stuff were opt in, I'll bet Facebook would miraculously get a whole lot better at making privacy settings easier to use and more visible. It's funny how that works.

What Have Atheists Lost?

| Tue May 11, 2010 7:18 PM EDT

I suppose it's pointless to continue engaging in this argument, but a few weeks ago I wrote a post about atheism that keyed off an essay by David Bentley Hart. Damon Linker responds today:

What’s most disappointing is Drum’s failure to grasp the culminating point of Hart’s essay, which, as I take it, is this: the statements “godlessness is true” and “godlessness is good” are distinct propositions. And yet the new atheists invariably conflate them. But a different kind of atheism is possible, legitimate, and (in Hart’s view) more admirable. Let’s call it catastrophic atheism, in tribute to its first and greatest champion, Friedrich Nietzsche, who wrote in a head-spinning passage of the Genealogy of Morals that “unconditional, honest atheism is ... the awe-inspiring catastrophe of two-thousand years of training in truthfulness that finally forbids itself the lie involved in belief in God.” For the catastrophic atheist, godlessness is both true and terrible.

....Yet the new atheists seem steadfastly opposed even to entertaining the possibility that there might be any trade-offs involved in breaking from a theistic view of the world. Rather than explore the complex and daunting existential challenges involved in attempting to live a life without God, the new atheists rudely insist, usually without argument, that atheism is a glorious, unambiguous benefit to mankind both individually and collectively.

But this is what I said toward the end of my original post:

Later in the essay, [Hart suggests] that the New Atheists haven't truly grappled with what a world without religion would be like. And perhaps they haven't. But interior passions and social mores work both ways. Did Isaac Newton feel a deeper aesthetic connection with the infinite when he was inventing calculus or when he was absorbed in Christian mysticism? Who can say? Not me, surely, and not Hart either. Likewise, the question of whether Christianity has, on balance, been a force for moral good is only slightly more tractable. Does keeping the servants from stealing the silver really outweigh the depredations of the Crusades and the Inquisition?

This is, obviously, just a throwaway paragraph in a blog post, not a long essay in First Things, but I plainly did entertain the possibility of tradeoffs. In fact, my own view is that the net impact of religion on human civilization has probably been zero: we would have developed all the same moral intuitions without it, but on the other hand, we also would have waged all the same wars. If religion hadn't been the excuse, something else would have been. And generally speaking, religious art and secular art have always struck me as about equally powerful.

Now, when Linker says that atheists refuse to entertain the possibility of tradeoffs, he had mostly transitioned to talking about guys like Richard Dawkins and Christopher Hitchens, not me. Still, he started with me, and he ought to at least acknowledge what I said. There are, quite plainly, tradeoffs involved both in religious beliefs and their lack.

But there's probably little chance of discussing this profitably, and not because of any absence of good faith on either side. It's just that the prospect of a Godless world is more salient for some than for others. Nietzche wrote about this in the broader cultural sense above, and Linker talks about it later in the personal sense: "There are no disappointments recorded in the pages of [New Atheist] books, no struggles or sense of loss. Are they absent because the authors inhabit an altogether different spiritual world than the catastrophic atheists?" Speaking for myself: yes. I have never in my life felt the need to believe in God, and that lack simply doesn't inspire any emotional resonance in me. I don't know why this is, but I do know that I don't feel empty inside, I'm perfectly capable of feeling wonder and awe, and there's no sense of loss or anything else involved in any of this. Linker might regard that as unfathomable, finding the tortured brooding of the catastrophic atheist more to his liking, but it's so. And I have no idea how you discuss this. Linker feels the pull of the supernatural and I don't, and all the conversation in the world won't change that or make it any more explicable.

But 2,000 years from now we'll probably still be talking about it anyway.

The Taxman's Bite

| Tue May 11, 2010 2:56 PM EDT

USA Today says that taxes are down:

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010.

Not quite. According to the BEA, personal income in 2009 totalled $12 trillion and personal current taxes totalled $1.1 trillion. Sure enough, that's 9.2%. But, ahem, there's also $967 billion in "contributions for government social insurance." That's taxes to you and me. So that's $2.1 trillion in taxes, or about 17% of personal income.

But according to the OMB, federal tax receipts in 2009 totalled $2.1 trillion. And according to the Census Bureau, state and local tax receipts in 2009 totalled $1.2 trillion. That's $3.3 trillion, not $2.1 trillion. Do we really have $1.2 trillion in taxes not being paid by individuals? State and federal corporate taxes only amounted to about $200 billion. Are they not counting the employer portion of payroll taxes?

In any case, our total tax bite, which is eventually paid by individuals no matter what channel it goes through, was $3.3 trillion in 2009. That's 27.5% of personal income, not 9.2%. Caveat emptor.

Faisal Shahzad and the No-Fly List

| Tue May 11, 2010 2:19 PM EDT

So how did Times Square bomber Faisal Shahzad make it onto an Emirates Airlines flight to Dubai last Monday even though he had already been put on the no-fly list? The latest story, apparently, is that it was semi-deliberate:

Because it sometimes takes hours, or even days, for all airlines to enter new no-fly listings in their reservation computers [...] Homeland Security does maintain procedures for sending out what amounts to an APB about the new listing....However, the officials said, at the FBI's request, some, but not all airlines, were notified of the new listing. The official said the FBI was concerned that giving out Shahzad's name to too many people might fuel news leaks that grew into a torrent during the afternoon of May 3. Among the airlines that were not phoned with the APB about the new no-fly listing for Shahzad: Emirates Airlines, the very carrier Shahzad had chosen to try to evade a massive dragnet by the FBI and various local partners, including New York Police Department, had set up to collar the Times Square attack suspect.

Was this the right call? Beats me. But it sounds like a policy issue, not a screwup.