Kevin Drum - July 2010

Let Us Now Praise the USPS

| Sun Jul. 11, 2010 10:36 PM PDT

Over at Jon Cohn's place, Alexander Hart explains why the post office is better run than you think. Go read it. I don't have any big axe to grind in favor of the USPS — in fact, I'm pretty annoyed at how complicated it is to calculate postage these days on supposedly "odd" size envelopes — but the fact is that they're actually pretty efficient and pretty cost effective. I'd welcome private competition for first class mail, but just go ahead breathe the words "universal service" and see how many private sector companies are still eager to compete with the post office for 46 cents an ounce.

Anyway, Hart explains why the post office always seems so perennially broke and why this is mostly a mirage. It's worth a quick read.

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Stoppage Time Bleg

| Sun Jul. 11, 2010 12:25 PM PDT

Can someone please explain the rules and/or cultural conventions governing stoppage time in soccer? Does the referee actually use a stopwatch to keep a cumulative total for each half? Or is it just a rough estimate based on how much non-playing time he thinks has elapsed? And why is stoppage time kept a secret in games with three referees? Can anyone point me to something that explains not the official rules, but the actual normal conventions for how this all works?

How Would You Fix Social Security?

| Sat Jul. 10, 2010 9:32 AM PDT

Responding to yesterday's post showing that high-income men live quite a bit longer than low-income men, an anonymous commenter writes:

The data is a very strong argument for removing the ceiling on Social Security payments — that is, collecting Social Security on 100% of wages, no matter how high (while not adjusting benefits). That's because the Social Security system, now, assumes that life expectancy is the same for low-income and high-income workers, while in fact low-income workers collect benefits for far fewer years. So higher-income workers *should* pay more than they do today.

That's an interesting point, no? Fair is fair. (Though you can adjust that 100% to 90% or 95% or whatever floats your social equity boat.) And while we're on the subject, the Congressional Budget Office recently issued a report (here) that includes a nice table that allows you to play the Social Security game from the comfort of your own home. Basically, CBO estimates that Social Security is out of balance by 0.6% of GDP over the next 75 years, which means you need to come up with a basket of changes from their list that adds up to 0.6%. So choose away and build your own Social Security rescue plan!

And when you're done with that relatively trivial exercise, it'll be time to move on to Medicare. Unfortunately, that's a wee bit harder and no handy little table will provide the answers. Which, of course, is why people prefer spending their time on Social Security. It's mostly grandstanding, but if they ever actually fixed it they'd have no choice but to tackle genuinely difficult problems. And what kind of moron gets elected to Congress to do that?

Friday Cat Blogging - 9 July 2010

| Fri Jul. 9, 2010 11:47 AM PDT

TGIFCB. To celebrate, today we have action cats! I just wanted to prove that Inkblot and Domino do indeed occasionally wake from their slumbers and actually motivate themselves around the homestead.

BTW, over the last few months I've been fiddling around with Photoshop a little more aggressively than before, and today is a testament to what can be done with it. The original picture of Domino was hardly more than a black smudge. But a few minutes of diddling around with the lasso tool and a variety of settings turned it into quite a passable picture. It's pretty amazing. Below the fold I've put both versions of the photo (reduced to identical size) so you can see for yourself.

But enough about boring computer software. How about some more cats instead? Hooray! First, courtesy of my sister, who keeps close tabs on the pet-loving British press, here's an adopted seagull who thinks it's a cat. The cats it now lives with apparently think it's a cat too. And second, courtesy of Rich Lowry (reaching across the aisle to us lefty cat lovers), here's the story of three Marines in Afghanistan who adopted some kittens so adorable there probably ought to be a law against it. Enjoy!

Barack Obama, Scourge of Wall Street?

| Fri Jul. 9, 2010 8:53 AM PDT

Contra Mike Konczal, Tim Fernholz argues that if you actually look at the details, the Obama administration was pretty consistently on the side of firm bank regulation. It's true that they didn't support the Kaufman-Brown amendment to break up the banks, but Tim says they did support a wide range of other good proposals:

The idea that Treasury "always end[s] up leaving their fingerprints on the side of less structural reform and in favor of the status quo on Wall Street" is false. In terms of structural reform, Treasury — and President Obama in particular — were the strongest advocates in government for an independent consumer finance regulator. Other structural reforms that they supported, including merging two bank regulators, the Volcker rule, the (delayed but still real) Franken amendment for ratings-agency reform, serious constraints on the Fed's emergency bailout powers, the new derivatives regime, the new liquidation authority, and higher capital requirements for the largest banks, including new-fangled contingent capital. Treasury had been talking about reducing risk since this project got under way.

Hmmm. I sure don't recall Treasury fighting for higher capital requirements in legislation. I thought they pretty consistently wanted that left to the Basel III negotiations instead. And I guess I'm not as sure as Tim that they were ever really behind Blanche Lincoln's derivatives proposal or Al Franken's ratings agency amendment until passage was all but assured — at which point it didn't matter much.

But....Tim follows this stuff a lot more closely than I do, and he makes a decent case if you read through his full post. I'm not sure I'm convinced, but since I wrote about this yesterday I recommend Tim's post for the other side of the story. It's worth a look.

Raising the Retirement Age

| Fri Jul. 9, 2010 7:01 AM PDT

Via Ezra Klein, Here's a chart from Larry Mishel that's pretty astonishing. It shows that since 1972 the life expectancy of men with low incomes has increased by two years while life expectancy for men with high incomes has increased by more than six years. That fact that the haves are healthier than the have-nots doesn't surprise me, but the magnitude of the difference is pretty stunning.

The context here, unsurprisingly, is Social Security and whether we should raise the retirement age. Obviously, increasing the retirement age to, say, 70, is a much bigger deal for someone likely to live to 79 than it is for someone likely to live to 85. In my book, this is yet another reason not to try to balance Social Security's books by changing the retirement age dramatically.

And we probably don't have to. There are plenty of other ways we could do it instead. And if we do do it, this chart suggests a couple of things: (a) the change should be modest (maybe going from 67 to 68) and (b) it should be accompanied by an explicit acknowledgement that disability retirements will be routinely available at the same age as now to workers who perform body-draining physical labor. If you put these things together it's not clear that this change is even worth pursuing, which I think is the whole point. If we insist on addressing Social Security in the near term, there are better ways of doing it than fiddling with the retirement age.

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Demography is Destiny

| Fri Jul. 9, 2010 3:00 AM PDT

Back in 2002, John Judis and Ruy Teixeira wrote The Emerging Democratic Majority, which argued that demographic trends over the next several decades were set to heavily favor the Democratic Party. Unfortunately, 2002 turned out not to be a great year to make a prediction like that: Republicans gained congressional seats in the midterm elections that year, and two years later George Bush won a second term in the White House in an election that saw Republicans make even further gains in Congress.

But those gains were almost certainly heavily influenced by the increased salience of national security issues following 9/11, and in any case weren't quite as impressive as they seemed at first glance. Bush's reelection, in particular, was a razor thin affair, not the easy victory you'd normally expect for an incumbent running during good economic times. Sure enough, two years later Democrats won back Congress, and then in 2008 took back the presidency and won landslide victories in both the House and Senate.

So how do things look now? Unsurprisingly, Teixeira is pretty bullish on Democratic prospects. In a new report, "Demographic Change and the Future of the Parties," he revisits the trends he first described in 2002 and finds that they're progressing about as he predicted. Minorities have increased their share of the vote by 11 percentage points since 1988 and have become even more strongly pro-Democratic than they were eight years ago. Ditto for white college graduates, professionals, women, and the religiously unaffiliated (the fastest growing "religious" group in the country, he reports).

All of these things bode well for long-term Democratic prospects, but there's one more that might be the most important of all: the Millennial vote. Here's the basic demographic breakdown for young voters in the 2008 election:

This was [] the first year the 18- to 29-year-old age group was drawn exclusively from the Millennial generation, and they gave Obama a whopping 34-point margin, 66 percent to 32 percent....Obama got 60 percent of the youth vote or more in every swing state in the 2008 election with the lone exception of Missouri.

....The 2008 election also saw 18- to 29-year-olds increase their share of voters from 17 percent in 2004 to 18 percent....This figure will steadily rise as more Millennials enter the voting pool....The number of Millennials of voting age will increase by about 4.5 million a year between now and 2018. And in 2020 — the first presidential election in which all Millennials will have reached voting age — this generation will be 103 million strong, of which about 90 million will be eligible voters. Those 90 million Millennial eligible voters will represent just under 40 percent of America’s eligible voters.

But there's more to the story than just this. As Teixeira says, "On social issues, Millennials support gay marriage, take race and gender equality as givens, are tolerant of religious and family diversity, have an open and positive attitude toward immigration, and generally display little interest in fighting over the divisive social issues of the past." That's bad news for the Republican Party, which has shown little willingness to soften its stand on cultural concerns like these — all of which are core hot button issues for its Tea Party base. But the best news is this:

Research suggests that a socialization process occurs that leads young adults to hold onto the party identification and opinions that they developed in their formative years. This is especially true with partisan identification. Party identification is the single strongest predictor of how people vote and tends to stick with individuals once they form an attachment early in their political lives.

Even if the Republican Party eventually softens its views on social issues, it won't make much difference once the Millennials have reached age 30 and their party identification has hardened. If Teixeira is right, by the time this process is over an entire cohort of voters will be heavily pro-Democratic for the rest of their lives.

As it happens, 2010, like 2002, might not be such a great year to make this prediction: a brutal recession and the usual midterm blues are likely to produce big Republican gains this November. In the long term, though, the longer the Republican Party continues to rely on its intolerant, ultraconservative base for support, the more likely they are to write their own obituary for 2020 and beyond.

Unemployment in the Gamma Quadrant

| Thu Jul. 8, 2010 7:11 PM PDT

A "friend" emails to inform me that "you've got to weigh in on Arthur Laffer's op-ed today in the WSJ." Thanks, pal. That's five minutes of my life that I'll never get back.

So why am I caving in to him? Most of Laffer's op-ed is just the usual conservative griping about unemployment insurance: it makes people lazy, it doesn't stimulate demand since "for everyone who is given something there is someone who has that something taken away," and stimulus doesn't work anyway. Plus there's some musing about $150,000 unemployment benefits and two people selling apples to each other. Hardly worth bothering with. But then there's a chart. And that makes the whole thing a must-read. Here's what Laffer says about it:

Common sense and personal experience indicate higher unemployment benefits will make unemployment less unattractive and thereby increase unemployment even in the Great Recession. As the chart nearby clearly shows, since the 1970s there's been a close correlation between increased unemployment benefits and an increase in the unemployment rate. Those who argue that things are different today don't have the data to back up their claims.

Yep: Laffer is seriously suggesting that unemployment benefits, which, according to his own chart, begin rising after unemployment rises, are what cause unemployment to rise. It's groundbreaking stuff, but as an exercise for the reader, can you think of an alternate mechanism to explain why total unemployment benefits paid out might go up when the unemployment rate goes up? Anyone? Take your time. I know it's a chin scratcher.

Even by Laffer/WSJ standards this whole thing is pretty surreal. Are business executives who read the Journal really so gullible that they buy this stuff?

Oscar Grant Killer Found Semi-Guilty

| Thu Jul. 8, 2010 6:00 PM PDT

Here's the latest news on the police shooting front:

A jury found former BART police Officer Johannes Mehserle guilty today of involuntary manslaughter in connection with the New Year's Day 2009 shooting of an unarmed train rider, finding that he had acted with criminal negligence when he fired a single shot into Oscar Grant's back at the Fruitvale Station in Oakland.

Of course, this understates the case a wee bit. Mehserle, along with several others BART cops, had Grant pinned face first on the ground when he very deliberately pulled out his gun and shot Grant in the back. Mehserle's defense is that he meant to pull out his taser but mistakenly pulled out his gun instead. This is, needless to say, pretty hard to accept, and there's little question that there's a jury anywhere in the country that would have bought this story from anyone who wasn't a police officer. You can judge for yourself in the cell phone video taken by a witness (the clearest view starts around the 1:45 mark).

I hardly even know what to say about this. I wasn't in court and I wasn't on the jury, so I didn't hear all the evidence. But for chrissake. Look at the video. Mehserle didn't look confused and modern tasers don't feel much like service revolvers. And it's not as if he was acting under extreme duress. At most there was a brief and perfunctory struggle, after which Mehserle calmly raised himself up while Grant was pinned to the ground, drew his revolver, and shot him. The only thing that even remotely makes Mehserle's story believable is that doing what he did is just flat out insane. It doesn't make sense even if he were a stone racist and half crazy as well.

The jury can say what it wants, but it still looks to me like Mehserle decided on the spur of the moment to shoot Grant. I don't know why, and no explanation really makes sense. But he's a white cop and the jury apparently concluded that Grant was just black riffraff. The whole thing is just appalling.

What Spies Do

| Thu Jul. 8, 2010 5:23 PM PDT

Bruce Bartlett recalls his sole experience with Soviet spying: a fellow named Valery Sorokin who was a "counselor" at the Soviet embassy and wanted to come and chat with him about economic policy in the early 80s:

I remembered all this some years later when I was working at the Treasury Department and was on the distribution for some CIA raw material relating to economic issues. Almost all of it was worthless. It involved conversations some CIA agent had with a prominent foreign businessman or economist relaying information that could easily be gleaned from that day’s Financial Times.

Suddenly, I understood what Sorokin had been up to. He could have written a memo to his bosses just regurgitating what was in the daily papers, news magazines and other public sources, but that wouldn’t have been very spy-like. It undoubtedly sounded so much better if he could relay the same identical information but say that it had been secured from a high-level congressional staffer. That’s what spies do.

Eventually, I took myself off the distribution for the CIA material. It was a pain to handle and almost never offered insights that couldn’t be found in public sources. But I suppose it provided employment for American versions of Dr. Sorokin working in London, Tokyo and elsewhere.

In a slightly off-center way, this sounds an awful lot like Daniel Ellsberg's experience with classified information. It kinda makes you wonder if we even need the CIA, doesn't it?