Kevin Drum - December 2010

The Stimulus Bill That Failed

| Fri Dec. 17, 2010 1:52 PM EST

New research from the University of Maryland shows that viewers of Fox News were more misinformed about factual questions than any other news audience during the 2010 midterm elections. No surprise there, I guess. But here's the breakdown on one particular piece of misinformation:

Overall, heavy Fox viewers were the most uninformed about this. But only slightly. With the exception of the MSNBC audience, every other audience was almost equally uninformed. The only exception was daily viewers of Keith and Rachel, and even there an astonishing 64% of viewers basically thought the stimulus was worthless.

I don't happen to believe that communication and messaging are as critical as the press sometimes makes them out to be, but something sure went cockeyed here. One way or another, the White House and congressional Democrats utterly failed to make a case that the stimulus bill did the economy any good at all. That's obviously a tough sell in a high-unemployment environment, but still. Complete, utter failure. It's astonishing.

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The Decline of America

| Fri Dec. 17, 2010 1:24 PM EST

Ezra Klein on the tax deal:

Stripped bare, here's what the deal says about the two parties: Republicans care much more about tax cuts for the rich than about any of their specific arguments about what's impeding recovery, while Democrats don't have the votes to really put their preferred policies into place, and so are left settling for policies that they don't think will work that well and, in some cases, don't think will work at all. What we ended up getting was better than I expected, but it's not a deal that anyone with a coherent view of the jobs crisis would've designed.

Roger that. I can't remember when I've been more demoralized about American governance. I have this overwhelming feeling of barnacles building up relentlessly, untouchable because of interest group pressure on both left and right, and a complete inability and/or unwillingness to address any of it. Democrats have some things they want to do, but in addition to satisfying their own interest groups they have to settle for third or fourth best policies because Republicans have simply decided they don't care about anything except tax cuts for the rich, hating gay people, and bennies for favored industries. In the middle of a massive recession they opposed a stimulus bill. In the aftermath of a financial crisis they opposed a financial reform bill. In the face of skyrocketing healthcare costs they demagogued modest cuts in Medicare spending. They spent months negotiating a spending bill — transparently, openly, via the ordinary committee process — and then killed it just because it would annoy Harry Reid. Global warming is a hoax, gay recruits will destroy the military, and creationism is an appropriate topic for high school biology classes. Our infrastructure is crumbling and our schools are mediocre, but the creeping encrustation of government prevents anything serious from being done about either. We're in hock to Middle Eastern theocracies for our oil, and the laughable answer from the right consists entirely of nukes and a bit of marginal extra drilling around the periphery of America. An arms control treaty that could have been negotiated by Ronald Reagan himself is unsure of passage because too many Republican senators deem it unsafe to risk the wrath of Fox News or their tea party constituencies.

Democrats have their pathologies too. Teachers unions really do impede school reform. Public sector unions have bid up government salaries. Environmental and land use rules have made infrastructure development of any kind a grueling, expensive marathon. Both parties subsidize idiocies like corn ethanol, and both sides boast coal state senators who are unwilling to think seriously about pricing carbon.

But at least we all have access to 300 TV channels in glorious high definition! Who says America can't accomplish great things anymore?

Anyway. Just had to get that off my chest. Sorry. Back to work now.

Our Mounting Disaster in Afghanistan

| Fri Dec. 17, 2010 7:00 AM EST

Richard Holbrooke's last words, spoken to his Pakistani surgeon before he was sedated for surgery a week ago, were "You've got to stop this war in Afghanistan." The White House has since taken pains to tell us that he was speaking in jest, and perhaps that's just as well. Because recent news suggests that the war is neither going to end nor come to anything resembling a successful conclusion anytime soon.

Start with Afghanistan's president, Hamid Karzai. His attitude toward the United States, which has been all but clinically bipolar for quite some time, turned even more heated than usual recently when he met with several American officials to discuss the fate of private security firms. The Washington Post reports what happened:

As he spoke, he grew agitated, then enraged. He told them that he now has three "main enemies"—the Taliban, the United States and the international community. "If I had to choose sides today, I'd choose the Taliban," he fumed. After a few more parting shots, he got up and walked out of the wood-paneled room.

It is practically an axiom of counterinsurgency that success depends (among other things) on the active help of an effective and sympathetic government. It's become increasingly clear that we no longer have that in Afghanistan, if we ever did. The Karzai government is almost stunningly corrupt, it has effective control over only a fraction of the territory of Afghanistan, and Karzai himself in recent months has repeatedly gone into rages both public and private against the American occupation. It's no longer possible even for paid optimists to pretend that we have his support in any but the most technical sense.

Then there's the US intelligence community, which recently reported to Congress that the Afghanistan war cannot be won unless Pakistan gets serious about rooting out Taliban militants on its side of the border. But the report goes on to say the Pakistani government and military "are not willing to do that," according to an official quoted by AP. "The document says Pakistan's government pays lip service to cooperating with US efforts against the militants, and still secretly backs the Taliban as a way of hedging its bets in order to influence Afghanistan after a US departure from the region."

Military commanders dispute the intelligence analysis, but their protests are hard to take seriously. Pakistan has been supporting the Taliban for over a decade, they barely even pretend these days to prevent them from crossing the border at will, and they know perfectly well there's no real leverage we can bring to bear to change their behavior. As Andrew Exum put it in an otherwise positive report after a recent visit to Afghanistan, "I do not see a coherent or otherwise effective strategy for dealing with the sanctuaries in Pakistan. I do not see it anywhere in the US government or within NATO, whose writ only extends to the borders of Afghanistan anyway."

Finally, support for the war in the US has fallen off a cliff. ABC News reports: "Public dissatisfaction with the war, now the nation's longest, has spiked by 7 points just since July. Given its costs vs. its benefits, only 34 percent in the latest ABC News/Washington Post poll say the war's been worth fighting, down by 9 points to a new low."

The argument for optimism is that NATO forces have made substantial tactical gains in the past year: intelligence gathering is better, local support is stronger, security is improving, and the Taliban is in retreat. You can read a pretty good version of this case here, from Peter Mansoor and Max Boot. But tactical improvements only get you just so far. Our big long-term problems—lack of central government support, lack of Pakistani support, and lack of American public support—suggest pretty strongly that the war in Afghanistan isn't winnable in any ordinary sense of the word. It's hard to say if this has sunk in at the White House, which released its latest review of Afghanistan on Thursday and apparently plans to stay the course. Sort of. Troop withdrawals might begin next year, but only in token numbers. The new deadline is 2014, and even that's vague.

As Fred Kaplan says in his informative take on both the White House review and the thorny politics of the AfPak region, "Nothing about this war gets any easier." At this point, it's difficult to conclude that further US fighting in Afghanistan can do anything more than delay the inevitable—and possibly make it worse when it finally comes to pass. Without active support from Kabul, Islamabad, and the American taxpayer, tactical gains can never be more than limited and temporary. As bad as an American withdrawal from Afghanistan would be, our continued presence in the face of an impossible situation only makes it worse. A year ago Afghanistan still couldn't fairly be called anyone's Vietnam. Today, it's Obama's.

Google Unveils the Fabulous Ngram Viewer

| Fri Dec. 17, 2010 12:46 AM EST

Google has just put online perhaps the greatest timewaster in the history of the internet. For a certain kind of person, that is. Which I know many of you are.

It's the Ngram Viewer, which lets you graph and compare phrases over time, "showing how their usage has waxed and waned over the years." (Ngram is not a very small weight, it's a techie term for a sequence of letters. A digram is two letters, a trigram is three letters, and an ngram is a sequence of any length. UPDATE: Actually, ngrams can be sequences of letters or words, and word ngrams are more common. Google's reference is probably to word ngrams.) The dataset consists of 500 billion words from 5.2 million books scanned as part of the Google Books project. For example, here's a chart showing usage of data is vs. data are over the past century:

As you can see, data are reached a peak in the early 80s and then began a precipitous nosedive. By the mid-aughts, I'm delighted to report, data is was nearly as widely used and looks to be on course to overtake the obnoxious data are sometime in the next decade. Hooray! (As you've probably guessed, I'm a longtime proponent of data is as the proper modern usage.)

Anyway, I'm sure you can immediately see the potential here for timewasting disguised as scholarly research. Go ahead and give it your best shot.

The President's Priorities

| Thu Dec. 16, 2010 8:32 PM EST

Evan McMorris-Santoro tells us today about President Obama's legislative priorities:

Sources on the Hill are telling me a big reason DADT repeal isn't moving faster comes right from 1600 Pennsylvania Ave. Despite President Obama's public support for repeal, with DADT stacked up against the START nuclear arms reduction treaty that Obama carefully brokered with the Russians earlier this year, the White House is putting its legislative push behind START.

....No one questions that Obama wants to see DADT end, or that he wants to see it end this year. The concern is over the priorities: Obama, it seems, wants START to come first. And with the White House pushing START (in daily phone calls from top White House officials, according to one source on the Hill), Obama could end up standing in the way of DADT getting done.

"The White House has been crystal clear that their number one priority in this lame duck session is START," said one Senior Democratic aide.

If this is true, it's very disappointing. New START can pass next year; DADT can't. It's that simple. Repeal of DADT should come first and New START should follow.

UPDATE: TPM reports that Harry Reid has filed for cloture on DADT, which means the Senate will vote on Saturday. Good news.

How To Get a Job

| Thu Dec. 16, 2010 7:33 PM EST

Over at the League of Ordinary Gentlemen, Will writes about Peter Orszag's decision to take a multi-million dollar job with Citigroup shortly after leaving the Obama administration:

There’s another consequence of the revolving door phenomenon that really bothers me. My brother, who happens to be a recent college graduate, made an off-hand remark the other day about how nobody finds a job without an ‘in’ or a personal connection. At face value, this is faintly ridiculous: a white, upper-middle class kid with a degree shouldn’t be complaining about tough career prospects. But it’s a sentiment I’ve heard from many of my peers in the 20-something, college-educated demographic, and I can’t help thinking that Orszag’s new job is another data point in a line of policies and events that — while perhaps defensible individually — have created a prevailing narrative of influence/personal connections trumping ability/merit/worthiness. Maybe I’m reading too much into a few tossed-off remarks, but I’d venture that an entrepreneurial society depends to some degree on a culture that downplays influence-peddling and emphasizes individual achievement....This is all wildly speculative, of course, but I kind of wonder if a deluge of uncomfortable stories about corporate bailouts and political insiders could eventually sap some of this generation’s entrepreneurial vitality.

I don't have any idea whether this kind of thing saps entrepreneurial vitality — I'd guess not — but I'm curious about this personal connection business. I've heard this relentlessly too, usually with a figure of some kind attached. For example, 80% of successful job applicants heard about the job, or got the job, or something, because they knew somebody somewhere who recommended them (or maybe just told them about it). It's never clear where these numbers come from, or whether they only apply to white collar jobs, or whether it's all BS, or what. But certainly a lot of people believe it.

Anyway, the reason it's always struck me is that I've never gotten a job via personal connections. (Well, once, for a short-term consulting gig.) I've either just applied based on an ad or else been recruited. I'm not a very social person, so maybe that's all there is to it. But then again, I've also hired plenty of people, and interviewed people hired by others, and very few of them came in the door via personal connections.

So: comments are open. Is my experience unusual? Or is this business of needing an "in" just an urban myth, and most people get jobs exactly the way you'd expect: by applying for them blind. Anybody have anything interesting to say about this?

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Debit Cards About to Get Cheaper

| Thu Dec. 16, 2010 4:27 PM EST

If the Wall Street Journal is to be believed, the Fed is about to crack down pretty hard on debit card swipe fees. Apparently they're considering two similar plans:

Both plans involve a cap of 12 cents per transaction and could cost banks billions of dollars in lost revenue but represent a victory for retailers.

Under one plan recommended by Fed staffers, card-issuing banks could use a formula to determine the maximum amount of an interchange fee that it may receive, based on certain costs incurred by the bank to process debit transactions. The Fed would set a "safe harbor" standard at seven cents per transaction. But then, any costs in excess of the safe harbor could be recovered up to the 12-cents-per-transaction cap....The alternative plan doesn't involve a safe harbor plan, just the 12-cents-per transaction cap.

Unless I'm missing something, this is a pretty stiff regulation. Current swipe fees generally amount to 1-2% of the transaction, so the fee on a $100 purchase is upwards of a dollar or two. Under either of the new rules, the maximum fee would be 12 cents.

It's not clear how much of this reduction will be passed on to consumers and how much will end up in retailers' pockets. But considering the monopolistic nature of the debit card market and the heavy-handed contracts it allows card companies to force on merchants, this rule seems eminently reasonable. Dodd-Frank says debit card charges have to be "reasonable and proportional" to the cost of providing the service, and 12 cents sounds about right to me.

Quote of the Day: Christmas on Capitol Hill

| Thu Dec. 16, 2010 2:22 PM EST

From Sen. John Kerry, commenting on Republican complaints about being forced to work through Christmas:

The irony, the hypocrisy of us sitting here with them standing up and saying "Oh my Gosh, it’s the last minute." It’s the last minute because they haven’t let us do anything. The game plan is usually to keep preventing things from happening.

These guys can go home anytime they want. All they have to do is allow two or three things to be voted on. If they win the votes, good for them. If they lose, that's life. But the Grinch in this case is pretty clearly all on the GOP side of the aisle.

On a purely personal note, let me just say that I have a bit of a hard time stomaching the endless complaining from senators being forced to actually work through the end of the year. News flash, guys: out in the real world, we all work through the end of the year. Get over yourselves.

Safety Nets and Entrepreneurs

| Thu Dec. 16, 2010 1:59 PM EST

David Leonhardt on the social safety net:

Guaranteeing people a decent retirement and decent health care does more than smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won’t leave you penniless and won’t prevent your child from receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur.

This contrasts with the conservative view that government coddling corrodes individual initiative and makes people weak. Needless to say, I find the Leonhardt view more congenial. At the same time, the conservative view actually has some resonance too. It does make some intuitive sense, after all, that being bathed in public support since birth might dull one's desire for risk.1

This is why I rarely use the Leonhardt argument to support the cause of universal healthcare, though I suppose I might have slipped once or twice. Rather, I support it on efficiency grounds — national healthcare systems around the world tend to be cheaper than ours — and on basic humanitarian grounds — in a rich country I just don't think it's right for anyone to have to go without decent healthcare.

Still, I remain curious about the Leonhardt argument, which is a common one in the liberal community. Is it true? Does knowing that you have a safety net make you more likely to get up on the trapeze and try something risky and new? The analogy is wonderful, but that doesn't make it true. Surely, though, this is a testable hypothesis? Not a provable one, of course, but one where evidence can be amassed on different fronts based on measurements of social safety nets in different times and places vs. risk-taking behavior in different times and places. Has anyone ever done this? It seems like a pretty obvious thing to try to study.

1My own view, if I had to take a guess, is that neither of these is right. I suspect that risk takers are risk takers, and they pretty much do their thing based on (a) their own temperament and (b) features of society that make it more or less likely they'll make a lot of money. Fear (or lack of fear) of failure doesn't enter into it much because they don't think they're going to fail. That's the difference between risk takers and the rest of us.

The Slippery Slope

| Thu Dec. 16, 2010 12:37 PM EST

David Bernstein, who displays an admirably cynical attitude toward Supreme Court jurisprudence, thinks that when the individual mandate eventually comes before the court, it will stand or fall based largely on things having nothing to do with actual constitutional interpretation. But he also has a warning for liberals:

If the liberals on the Court, like the dissenters in Lopez, are unable to [articulate] a limiting principle that would prevent their decision from giving the federal government an essentially plenary police power to regulate virtually all human activity and inactivity, the individual mandate is doomed. The conservative majority simply will not accept a doctrine that suggests that federal power is not one of limited and enumerated powers.

Sure, I guess. But here's what gets me. The previously most expansive ruling on the commerce clause came in 1942, in Wickard v. Filburn. In that case, the Supreme Court ruled that an Ohio farmer growing wheat for his own personal use was engaged in interstate commerce and was therefore subject to federal regulation. The court's theory was pretty simple: if Filburn grew wheat above his authorized allotment, even if it was for his own personal use, that meant he would have to buy less wheat for other uses. And since wheat is traded across state lines, that meant interstate commerce was affected. Thus, even personal production of a commodity could be said to substantially affect interstate commerce.

Now comes the individual mandate, and the argument against it is that the government isn't regulating an economic activity, it's regulating an inactivity. That is, it's penalizing a decision not to buy health insurance. But if the government can penalize you for not doing something, then what can't it do?

So the argument is, roughly, this: it's one thing for the government to regulate personal economic activity. That's bad enough, but at least it's activity. But regulating economic inactivity is a bridge too far.

But what if the two cases had been swapped? Suppose the Supreme Court had approved the individual mandate in 1942 and Wickard were a 2010 case. Then the argument would be: it's one thing to make people buy health insurance. That's bad enough, but at least you're regulating participation in a highly public and largely publicly funded sector of the economy. But regulating purely private activity is a bridge too far.

In other words, it wouldn't really matter. It's not that the mandate goes further than Wickard, it's just that the mandate is slightly different from Wickard. There's no slippery slope, and the government doesn't really have any powers that it didn't have all along. If the commerce clause can forbid you from growing wheat because that will cause you not to buy wheat for other purposes, or if the commerce clause can force you to offer a room at your motel to African-Americans even though you don't want to, then it can already force you to do things you might otherwise not want to do. I imagine Bernstein is right that the government's lawyers will need to think up some plausible limiting principle, but it seems to me that the actual principle is already in place: does your activity or inactivity have a substantial effect on interstate commerce? In Wickard, in Heart of Atlanta, and now with the individual mandate, the answer is yes. You can invent a slippery slope if you want, but I don't think it really exists anywhere except in the imagination.