Kevin Drum - November 2010

The Volt and You

| Fri Nov. 26, 2010 4:54 PM EST

The EPA has released its official mileage ratings for the Chevy Volt, and Dodd is unimpressed:

The woefully limited 35-mile range on battery and mere 37 MPG on gas leaves one wondering what all that hype was really about.

I don't actually care about the Volt all that much, but this is a really common reaction and seems completely misguided to me. No car is designed to appeal to every single person, and the Volt is no exception. It's designed mostly to appeal to a specific kind of driver: someone who does the great bulk of their driving around town, maybe 20 or 30 miles a day at most, but occasionally needs to drive further and doesn't want to buy a second car just for those occasions. There are lots of people like that, and for them the Volt is great. They'll spend 98% of their time running solely on battery power and recharging at night when rates are low, and 2% of their time getting 37 mpg — which is actually pretty damn good. There are a few hybrids that do slightly better and one hybrid (the Prius) that does a lot better, and that's about it.

If you commute a hundred miles a day, the Volt isn't for you. If you're a traveling salesman, it's not for you. If you need to haul around a Boy Scout troop, it's not for you. If you need lots of towing capacity, it's not for you. But that's not a problem. It's not supposed to be for you. It's for people who drive ten miles to work each day, run some errands on the weekend, and drive out to grandma's house once a month. Those folks are going to get pretty awesome fuel efficiency, and they're going to get it with just one car. What's not to like?1

1Answer: the price tag. That's really the car's only serious Achilles' heel. Even after the government rebate, it'll run you around $33,000 for a car that would cost less than $20,000 with a standard engine. Until the price of the car comes down, it's going to be a tough sell for anyone who's not dazzled by its eco-friendliness.

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GOP Symbolism

| Fri Nov. 26, 2010 1:45 PM EST

A few weeks ago I suggested that House Republicans would mostly try to buy off their deficit-hating tea party supporters with a series of meaningless symbolic votes. Little did I know just how literally that would come true. Ripping a page from the Newt Gingrich playbook, it appears that they're all set to end the practice of passing honorific resolutions:

Today's Republicans, imbued with a sense that Washington's priorities have become muddled, contend that most commemorations are a waste of floor time needed for more pressing matters.

"I do not suspect that Jefferson or Madison ever envisioned Congress honoring the 2,560th anniversary of the birth of Confucius or supporting the designation of National Pi Day," said Eric Cantor (R-Va.), the next House majority leader. "I believe people want our time, energy and efforts focused on their priorities."

Apparently they're doing this because voting on resolutions takes up too much floor time and costs the taxpayers too much money. Neither of which happens to be true, but so what? It sounds good. I recommend that Cantor introduce a resolution seeking a sense of the House about banning resolutions. It should impress the yokels, and I imagine that's all he's really after here.

When Democrats took over the House in 2006 they instituted PAYGO and put some teeth back in the ethics process. Now that Republicans have taken over they plan to ditch PAYGO and disband the Office of Congressional Ethics. But they're going to end the practice of honoring National Pi Day! That's change you can believe in.

Black Friday

| Fri Nov. 26, 2010 1:09 PM EST

Michael D'Antonio and John Gerzema take to the LA Times today to propose yet another origin story for the term "Black Friday":

The day was originally nicknamed Black Friday by police officers who dreaded the traffic jams, bumper thumping and misdemeanors that arise when so many people converge on shopping districts and malls.

Eventually the term came to describe the start of the period when retailers see profits for the year and a kind of retail gluttony so divorced from the true spirit of the season that it made all but the most benumbed consumers feel conflicted, if not ashamed, of the excess.

Really? Police officers? I've never heard that one before. Here's what I wrote back in 2005 after a search of the Nexis news database:

The first reference I found to the term "Black Friday" was in a World News Tonight segment by Dan Cordtz from November 26, 1982: "Some merchants label the day after Thanksgiving Black Friday because business today can mean the difference betweeen red ink and black on the ledgers."

The news media then went into silence on the subject until a Washington Post story dated November 20, 1987, which provided the following advice: "Do not shop next weekend (unless you're into S&M or S&Ls). The day after Thanksgiving is traditionally the busiest shopping day of the year — store workers call it 'Black Friday.'"

This suggests that the phrase was invented by retail workers peering apprehensively out their windows at the post-holiday mobs waiting to shop. However, a story in the Post eight days later confirms that it is "the day when the surge of holiday buying — and profit — is supposed to put [retailers] into the black." But this same story also includes the following explanation: "'We call it Black Friday because it's the busiest shopping day of the year,' said Andria Tedesco, 19, who was waiting on customers at Bailey Banks & Biddle jewelry store."

But what about this police officer thing? I no longer have access to Nexis, but a ProQuest search of the New York Times brings up a story about the Army-Navy game in 1975. The gist of the story is that crowds used to flow into Philly on the Friday after Thanksgiving to shop, watch the game on Saturday, and then go home. But with the decline of the Army-Navy game, crowds were down.

The gridiron woes of Army and Navy aside, though, it seems unlikely that this was really a Philly-specific thing. So maybe it really was police officers who invented Black Friday. I have to admit that this makes more sense than the whole "day that retailers go into the black" theory, since Black ___day has, in other contexts, always signified something terrible, like a stock market crash or the start of the Blitz. So unless someone comes up with definitive evidence to the contrary, I think I'm going with the whole police/crowds story, with the retail profit theory tacked on at a later date by some overcaffeinated PR person trying to put some lipstick on a pig that had gotten a little too embarrassing for America's shopkeepers.

UPDATE: In comments, Eric Baumgartner points to a thread at the American Dialect Society that, surprisingly, confirms the Philadelphia origin of the term. From a 1985 story in the Philadelphia Inquirer:

[Irwin] Greenberg, a 30-year veteran of the retail trade, says it is a Philadelphia expression. "It surely can't be a merchant's expression," he said. A spot check of retailers from across the country suggests that Greenberg might be on to something.

"I've never heard it before," laughed Carol Sanger, a spokeswoman for Federated Department Stores in Cincinnati...."I have no idea what it means," said Bill Dombrowski, director of media relations for Carter Hawley Hale Stores Inc. in Los Angeles....From the National Retail Merchants Association, the industry's trade association in New York, came this terse statement: "Black Friday is not an accepted term in the retail industry...."

....Retailers, in general, loathe the term. The Center City Association of Proprietors [Philadelphia], in fact, has been lobbying quietly for years to banish the word from the city's vocabulary.

But the term goes back to at least 1966 — in Philadelphia, at least. An advertisement that year in The American Philatelist from a stamp shop in Philadelphia starts out: "'Black Friday' is the name which the Philadelphia Police Department has given to the Friday following Thanksgiving Day. It is not a term of endearment to them. 'Black Friday' officially opens the Christmas shopping season in center city, and it usually brings massive traffic jams and over-crowded sidewalks as the downtown stores are mobbed from opening to closing."

So: apparently it did originate in Philadelphia, it did originally refer to big crowds and traffic jams, and retailers did hate the term and presumably created their own, more consumer-friendly origin story sometime in the 1980s. So there you go.

Thanksgiving Cat Blogging

| Thu Nov. 25, 2010 1:06 PM EST

For the cats, it's time to start snoozing so they'll have the energy to beg for turkey bits when the time comes. For me, it's time to stop blogging and start the cooking and football watching. Have a nice Thanksgiving, everyone!

Democrats and Liberalism

| Thu Nov. 25, 2010 12:23 PM EST

Matt Yglesias argues that, contrary to the notion that Democrats have some kind of chronic messaging problem, they haven't really done too badly over the past few decades, winning the House, Senate, and popular vote for the presidency about half the time

What’s more, you need some kind of baseline against which to judge this. Over the 60 year lifespan of the Federal Republic of Germany, Social Democrats have run the government for 20 years. Over the 50 year life of the 5th Republic in France, the Socialist Party has held the presidency for 14 years. The basic idea of a center-right party is that it represents a coalition of the business establishment with the socio-cultural mainstream. That tends to give you a dominant position in politics.

True! But here's another lens to look through, one that I've mentioned before. It's liberal-centric rather than Democrat-centric.

Over the past century, American liberalism has mostly progressed in three very short, sharp spurts. The first was the Progressive Era, which saw the bulk of its legislative achievements in the decade between 1911 and 1919. These included the creation of the FTC, the Federal Reserve, the income tax, the Clayton Antitrust Act, the direct election of senators, voting rights for women, the breakup of Standard Oil, and the state-level reforms exemplified by Hiram Johnson in California.

Likewise, the bulk of the New Deal agenda was enacted in the six years between 1933 and 1938: the Glass-Steagall banking act, the Wagner Act, the WPA, Social Security, the Fair Labor Standards Act, deposit insurance, rural electrification, HOLC and the FHA, and a wide range of other smaller initiatives.

The sixties were similar: virtually all of the great legislative achievements we associate with that decade were enacted between 1964 and 1970: the Civil Rights Act, Medicare, the Voting Rights Act, passage of the Clean Air Act, Clean Water Act and the EPA, the creation of OSHA, the Truth in Lending Act, and a wide range of legislation associated with the war on poverty.

Obviously there are exceptions. Among others, the FDA was created in 1906, the GI Bill was passed in 1944, and the ADA was passed in 1990. And judicial progressivism has followed a schedule all its own. Still, the fact remains that the vast majority of significant liberal legislation in America has been enacted in three short spurts totalling about two decades out of the past century.

But the last one of these spurts ended 40 years ago, and the Obama Era, such as it was, lasted a mere 18 months. That's despite the fact that Democrats had big majorities in both the House and Senate, George Bush had seemingly degraded the Republican brand almost beyond salvaging, and conservative policies had produced an epic financial collapse that should have provided a tremendous tailwind for substantial progressive reform. And yet: 18 months. That was it.

So yes: Democrats have done OK over the past few decades. And it's fair to say that conservatism has made only modest strides during that period. Triumphalist right-wing rhetoric to the contrary, America obviously doesn't have any burning desire to turn back the clock to the 1950s. But actual, substantial liberal progress? We haven't seen so much of that, and after 18 months of modest achievements we're obviously not going to get any more for quite a while.

So what happened?

How to Handle a Shortage of Workers

| Thu Nov. 25, 2010 11:27 AM EST

From the LA Times:

After an unwelcome reprieve caused by the global recession, employers in international trade again are growing concerned about whether there will be enough qualified candidates to fill the next generation of cargo and logistics jobs.

A spate of reports over the last two years has conjured up images of ships with too few seafarers to operate them, truck-ready freight with too few drivers to do the hauling and warehouse and distribution centers without enough qualified administrators to run them.

The worldwide shipping industry, which employs more than 1 million people to crew its technologically advanced vessels, is having trouble training enough seafarers, the International Maritime Organization said recently. It forecast a shortfall of 27,000 to 46,000 ships' officers in the near future.

The U.S. trucking industry will need to hire about 200,000 drivers this year and another 200,000 by the end of 2011 to keep up with expected growth as more and more drivers hang up their keys, according to the Council of Supply Chain Management Professionals.

Hey, I have an idea! I know this violates the rules of modern American capitalism, but here it is: they could pay their workers more. I've heard rumors from economists for years of supply curves sloping upwards, and this seems like an ideal chance to test out their theory.

Yes, yes, this is radical advice for non-CEOs. But why not think outside the box?

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Hospitals Still Bad for Your Health

| Wed Nov. 24, 2010 10:52 PM EST

A study set to be published Thursday in the New England Journal of Medicine has found that hospitals are still doing a lousy job of taking care of their patients:

The study, conducted from 2002 to 2007 in 10 North Carolina hospitals, found that harm to patients was common and that the number of incidents did not decrease over time. The most common problems were complications from procedures or drugs and hospital-acquired infections.

....Dr. [Christopher] Landrigan’s team focused on North Carolina because its hospitals, compared with those in most states, have been more involved in programs to improve patient safety.

But instead of improvements, the researchers found a high rate of problems. About 18 percent of patients were harmed by medical care, some more than once, and 63.1 percent of the injuries were judged to be preventable. Most of the problems were temporary and treatable, but some were serious, and a few — 2.4 percent — caused or contributed to a patient’s death, the study found.

The worst part of this is that, as near as I can tell, a large number of these injuries wouldn't happen if hospitals simply got off their asses and put in place some well-known procedures that prevent them. But they don't. Sometimes it's because they cost money, but other times it's because they just can't be bothered. I really have no idea why we put up with this.

Who Loves Inflation?

| Wed Nov. 24, 2010 2:02 PM EST

Karl Smith:

Reihan Salam has written a bunch of stuff I have been meaning to respond to but haven’t. The only point I want to address because its real quick is that inflation does not erode savings. It only erodes cash and the value of long bonds taken out before the inflation set in. However, the Fed is buying long bonds and propping their value. The only thing that is eroded in this scenario is cash.

Back in days of old, poor farmers loved inflation because it allowed them to pay back their loans with cheaper money. Rich Wall Street bankers hated inflation for the same reason. From this came populist demands for free silver at 16:1, crucifying mankind on a cross of gold, etc. etc. But none of this really matters any longer because interest rates all react to inflation: in the long term interest rates generally move up and down with inflation expectations and in the short term they're keyed to LIBOR or the prime rate or some other inflation-sensitive variable.

But there's one exception: fixed-rate loans. In particular, fixed-rate home mortgage loans, of which there are still quite a few. So for existing homeowners with traditional 30-year fixed-rate mortgages, higher inflation would be great. And for the bankers and investors who hold those loans, it would suck. Inflation may not erode savings, but it does erode the value of a fixed-rate mortgage, which means this whole argument isn't quite a dead letter yet — and bankers and the common man are still on opposite sides. Right?

Quote of the Day: The Great Turkey Conspiracy

| Wed Nov. 24, 2010 1:02 PM EST

Peter Suderman tweets:

Oh sure, he'll pardon the turkey now. But what you don't know is that next week Obama will have it secretly assassinated.

You know, I'd really like to see the whole turkey pardoning thing go away. It was never really a very good schtick in the first place, and it's way outlived its sell-by date. But of course that's impossible now. If Barack Hussein Obama decided to end the tradition, it would be yet another sign that he hates everything that makes America great, despises our great Christian traditions, and wants to bring Sharia law to the United States. So thanks to Glenn Beck & Co., we're stuck with this dumb tradition for at least another six years. Thanks, guys.

Who's Making Money?

| Wed Nov. 24, 2010 12:51 PM EST

So what explains the crankiness of American business given the very high corporate profits they're raking in these days? Justin Fox crunches the BEA numbers and says the disconnect is simple: financial corporations are making loads of money but domestic nonfinancial corporations aren't:

So the reason that corporate profits are near their all-time highs would appear to be that financial corporations (mainly big financial corporations) and multinationals are making lots of money and paying less of it out in taxes. Hmmmm.

The corporate profit picture would seem to mirror what's been going on in the income distribution for individuals for the past few decades. The money is increasingly going to a select group at the very top of the economic food chain, who are able to reap the rewards of global growth, play the financial system astutely, and avoid taxes. You can spin this in a moderately positive way: these are very dynamic economic times, and the rewards are going to those companies and individuals who position themselves to take advantage of this dynamism. But there are an awful lot of negative ways you can spin it, too.

Something is odd here. Yesterday the Commerce Department emailed me a few charts about the economy, and one of them is over on the right. It's strictly domestic profits (i.e., it doesn't include overseas profits from multinationals), and although it doesn't say so, I assume it shows pretax profits, so it's not driven by differences in how companies play games with the tax code. And what it shows is a pretty similar trajectory for both financial and nonfinancial profits: they're both up sharply, and they're both just slightly below their 2006 peaks. There's no breakdown in the chart between big and small nonfinancial companies, but there's also no special reason to think the numbers are wildly different.

So....I'm not sure about this. Fox's analysis appeals to me, but I'm not sure the data supports it. More later if I get hold of some more detailed figures.