Kevin Drum - June 2010

Giving Republicans Some Rope

| Thu Jun. 17, 2010 9:52 AM PDT

I'll confess to some lingering unease over the American ritual of forcing CEOs to grovel in front of grandstanding congressional committees whenever their companies have done something wrong, but in the case of BP's Tony Hayward I'll make an exception. And I'll especially make an exception because it gives Republicans a chance to do this:

In his opening remarks, Representative Joe Barton, a Texas Republican, apologized to Mr. Hayward....Mr. Barton called the president's meeting with the oil company "a tragedy" and "a shakedown."

....In his opening remarks, Representative John Sullivan....charged that the Obama administration is "focused on the politics of putting the oil and gas industry out of business."

....In his opening remarks, Representative Parker Griffith, an Alabama Republican said that "if we're going to talk about the environment," he'd "like to remind the committee that the greatest environmental disaster in America has been cigarettes." That means, he said, that the spill is "not going to be the worst thing that's ever happened to America."

And this:

Georgia Republican Representative Tom Price, chairman of the Republican Study Committee, [] said BP's willingness to go along with the White House's new fund suggests that the Obama administration is "hard at work exerting its brand of Chicago-style shakedown politics."

....And former Texas Republican Representative Dick Armey, a leading voice in the conservative Tea Party movement, told a Christian Science Monitor breakfast this week that Obama lacks the constitutional authority to set up such a fund.

....In addition, conservative Republican Representative Michele Bachmann of Minnesota was quoted as telling the Heritage Foundation think tank on Tuesday that the escrow account was a "redistribution-of-wealth fund."

This is great! And I really think the White House should have held off on criticizing Smokey Joe for his "shakedown" statement. All it does is put the GOP on alert. The better strategy is to stay mum, lull Republicans into thinking they can get away with this stuff, and then wait for their remarks to go completely over the top. It'll happen. In fact, if Dems play this right it won't take long before the entire Republican Party is demanding that the government pay BP to replace the Deepwater Horizon platform that failed because of thuggish, business-hating Democratic energy policies. Or something.

So stay cool, folks. All Republicans need is a little nudge. Tea party delirium will take care of the rest.

UPDATE: More great quotes here!

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Getting a Handle on Healthcare

| Thu Jun. 17, 2010 9:21 AM PDT

Ezra Klein notes today that U.S. healthcare costs, which are projected to skyrocket over the next few decades, are by far the biggest driver of long-term deficits:

If you wanted to be optimistic about this, you could say that this represents a sort of opportunity. In sharp contrast to, say, France's health-care sector, our health-care sector is dramatically, joyously, wildly inefficient. We pay so much more than anyone else and get so much less that it's easy to imagine a world in which we have a drastically different health-care system that's both better than the one we have now and that's wiped out our deficit.

Austin Frakt links to a David Cutler paper today that describes just how inefficient our healthcare sector is: at the same time that, for example, the durable goods industry has been increasing its productivity by 7% per year, and retail trade by about 4% per year, healthcare has actually been going backward. It's been getting less efficient:

Cutler’s paper explains why productivity and productivity growth are low in health care and what can be done about it. He hypothesizes why we see so little innovation in health care and suggests ways to promote it. It’s a familiar set of problems (asymmetric information, inability of plans and providers to capture long-term returns on short-term investments, plan turnover, third-party payment, etc.) and solutions (bundling, provider integration, pay-for-performance, etc.).

So: we need to figure out how to make healthcare more productive. "But we don’t know for sure how best to foster it," says Frakt. "So, we first need innovation in health policy." Indeed. But go ahead and read this op-ed too for the other side of the story. Doctors need to change the way they do business, but we patients really need to change the way we do business too.

What is Apple's Secret?

| Thu Jun. 17, 2010 8:49 AM PDT

Nick Gillespie thinks Apple is blowing it with its absurd censorship of iPhone apps. Tim Lee agrees, but says it's even worse than that:

Last year, almost every computer scientist in my group at Princeton had an iPhone. This year, two of my colleagues have bought Android phones, and I'm leaning toward getting one myself when my iPhone contract runs out next month. Nick focuses on a content-related dispute, but what really sticks in the craw of geeks are the technical limitations Apple imposes on app developers.

On the other hand, there's this:

Barely a day after its new iPhone went on sale, Apple Inc. and partner AT&T Inc. said they were so slammed with orders that they were temporarily suspending sales to make sure they didn't sell more units than they could make. Apple said it sold 600,000 phones Tuesday, the day it began taking orders online. That amounted to 10 times more advance orders than it had received for the previous version last year.

Apple's paranoid attitude toward app development on the iPhone and iPad hardly seems sustainable, but so far it sure doesn't seem to have bothered many people outside the geek community. The unwashed masses, apparently, don't really care if they can't get a cartoon version of Ulysses on their iPhone.

Of course, part of this is because Apple's competition is strangely weak — something that puzzles me. Is touchscreen development really that hard? Why is the iPhone (seemingly) so far ahead of Android-based phones? Why, even though tablets have been in development by loads of companies for over a decade, is the iPad essentially a one-of-a-kind device? I don't doubt that Apple has lots of smart developers and good supply chains and all that, but so do a lot of other companies. What's going on?

Quote of the Day: Ease Up on BP!

| Thu Jun. 17, 2010 8:07 AM PDT

Apparently BP is starting to find some defenders:

Representative Joe Barton, a Texas Republican, said a fund BP Plc agreed to establish after meeting with President Barack Obama yesterday amounted to “a $20 billion shakedown.”

“I’m ashamed of what happened in the White House,” Barton said today as a House Energy Committee panel began a hearing on BP’s Gulf of Mexico oil spill. Due process wasn’t followed during negotiations between BP and administration officials, Barton said.

This is an example of how runaway partisanship can help Democrats. Under normal circumstances, everyone would be pounding on BP as hard as they can. And for the most part, that's what's happened so far. But as Dems push ever harder, the natural GOP instinct to (a) protect business and (b) instinctively oppose everything Democrats do, is going to surface. Keep up the BP-bashing a little bit longer and eventually, just out of reflex, Fox News and the Republican Party will be calling for Obama to make payments to them. Should be fun.

Unemployment in 2012

| Wed Jun. 16, 2010 10:10 PM PDT

The UCLA Anderson Forecast is released quarterly. Here's the latest from Forecast director Ed Leamer:

Leamer explains that significant reductions in the unemployment rate require real gross domestic product (GDP) growth in the 5.0 percent to 6.0 percent range....The forecast for GDP growth this year is 3.4 percent, followed by 2.4 percent in 2011 and 2.8 percent in 2012, well below the 5.0 percent growth of previous recoveries and even a bit below the 3.0 percent long-term normal growth. With this weak economic growth comes a weak labor market, and unemployment slowly declines to 8.6 percent by 2012.

So two and a half years from now unemployment will still be at 8.6%, a rate that would normally send everyone screaming for the hills. And what is the United States Congress doing about this? For all practical purposes, absolutely nothing. It must be nice being a congressman.

Chart of the Day: Internal Migration

| Wed Jun. 16, 2010 11:50 AM PDT

Via Andrew Sullivan, here's a Forbes interactive map showing both the inward and outward migration from my home county:

What's interesting is that the outward migration is all over the map, but the inward migration is almost exclusively from the East Coast and bits of the upper Midwest. I'm not sure why. In any case, click the link if you want to see the migration pattern for whatever county you live in.

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Quote of the Day: Comic Sans Fights Back

| Wed Jun. 16, 2010 11:30 AM PDT

It's not often that a font fights back against its critics. But Comic Sans is no ordinary font:

Via James Joyner. If you don't get it, see here and here. Official hate site is here.

Learning to Love Mediocrity

| Wed Jun. 16, 2010 9:54 AM PDT

Let's change the subject a bit. Felix Salmon blogs about wine periodically and writes a wine column for Reuters, and one subject that pops up now and then is how blind tastings are affected by the price of a wine. Long story short, most of us suck at distinguishing cheap wines from expensive ones (I'm especially fond of the blind tastings where people can only barely tell the difference between reds and whites), but we still prefer expensive wines anyway. Today, Felix links to a post from Jonah Lehrer explaining that this isn't just pure snobbery. He describes an experiment showing that regardless of wine quality, a particular part of our brain lights up when we drink a wine we're told is expensive:

What's causing this silly behavior? [Paul] Bloom argues that essentialism plays a big role. We automatically believe that more expensive wine has a tastier essence, and that belief alters our sensory expectations. Those expectations, in turn, alter our perceptual interpretations, so that what we experience conforms to what we expect to experience. The essence of the thing has thus been confirmed: more expensive wine tastes better, even if the expensive wine is really Gallo Hearty Burgundy. This helps explain why so many food advertisements focus on the "essence" of the product, whether it's Coors being brewed from Rocky Mountain spring water, or Evian coming straight from the French Alps. The marketers know that the easiest way to increase our pleasure isn't by telling us how pleasurable the product is: It's by weaving an engaging story about essences.

OK, fine. But as a philistine non-wine drinker, here's my question: If you happen to be among the enlightened few who know about this research and accept it as true, shouldn't that affect how you react? It's sort of like knowing that someone is giving you a placebo. It wouldn't work if you knew it was a sugar pill, would it?

Or would it? In any case, here's a budget tip for tough recessionary times: instead of buying expensive wines, train your brain to understand the effect of price on the wine-drinking experience. I know you can do it. And the rewards are great: a lifetime of wine enjoyment at fifteen bucks a bottle. That's worth a few weeks of on-the-job training, isn't it?

How to Ruin the Economy in One Easy Step

| Wed Jun. 16, 2010 9:13 AM PDT

Different times call for different economic policies. That doesn't seem so hard to understand. But it's politically convenient to pretend otherwise, so we keep getting stuff like this.....

But in this case it's hard to blame Obama. Yeah, he's the president, he could be making a better case for fiscal stimulus etc. etc. But there's not much question which branch of government is doing the most damage here.

Obama's Speech: Did It Even Matter?

| Wed Jun. 16, 2010 8:55 AM PDT

We overeducated types frequently complain that the press spends too much time on horse race political analysis of the president when, really, the only thing that matters is economic conditions. Economy good = popular president. Economy bad = big losses for the party in power. End of story.

And this is, roughly speaking, true. But it's possible to take this political-science-inspired view of the presidency too far, and I think Matt Yglesias does this on another subject today:

The most important thing to keep in mind about the sort of “major” presidential speech we saw last night is that they don’t matter. At all. They don’t move votes in Congress. They don’t move public opinion. The bully pulpit method of governance doesn’t work. And that’s about the best I can say about Obama’s speech — even if it had been much better, it wouldn’t have done much good.

This is tantamount to saying that presidents shouldn't bother communicating to the public at all. But does anyone really believe this? Even the political scientists whose research suggests that presidential speeches don't move the public opinion dial much? I doubt it. A single speech may not have much effect, but let's face it: a single anything doesn't have much effect. Last night's speech was part of a much broader communications strategy from the president, and that broader strategy does make a difference in the long run. Obama had a chance to move the dial a little bit, to shift the topic of elite conversation, and to send a clear signal about what he supports and what he doesn't. Those are useful things, and he should have done a better job with them. 

In a similar vein, political scientist Brendan Nyhan tweeted an old post of his last night:

Over the last few years, I've frequently cited political science research showing that presidential speeches usually fail to change public opinion on domestic policy issues....What's so striking is that reporters and politicos alike still don't understand this point. Why?

I wish reporters knew more about this stuff too, but is it really fair to blame them in this case? Obama could have made the oil spill the subject of his regular Saturday radio speech. He could have held a press conference. He could have given a speech in Baton Rouge. But he didn't. He announced his first ever prime time Oval Office address. Of course everyone expected something a little dramatic. A bold new approach to cleaning up the spill. A call to action of some kind. Something. Instead we got a humdrum update that sounded like something a junior project manager might reel off at a weekly status meeting.

The Senate isn't going to pass a big climate change bill this year. I get that. But it would still be nice to hear Obama at least make the case for one. Not everything has to be lawyered to death in the White House. Sometimes you should speak your mind even if you know Congress isn't likely to listen. That's what Obama should have done.