Kevin Drum - January 2011

Glenn Beck's World

| Mon Jan. 31, 2011 7:55 PM PST

Me, a few minutes after 3 pm today: "Beck is really bringing it today. Finally his theory of the world is complete." And just what is that theory of the world? Behold:

Here's Egypt, Libya, Tunisia. What's next to Tunisia? Algeria, also on fire now, the riots are starting here. Morocco is on fire. What's across from Morocco? Spain. Connected to France, and Germany, and Italy, also on fire. And Greece, also on fire. Which brings you right back here to Turkey. The entire Mediterranean is on fire.

Also Russia, Britain, and Ireland. And who's responsible for all this? Muslims, radicals, progressives, Marxists, socialists, and communists. (Seriously.) "This is not just happenstance, this is not just poor people mad at rich people. This. Is. Coordinated." And nobody but Glenn Beck is willing to tell you the truth about it. Plus there was talk of the coming Muslim caliphate, which brought back fond memories of Steven Den Beste-era warblogging. Great stuff, truly the Full Beale today.

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What If Healthcare Reform is Struck Down?

| Mon Jan. 31, 2011 6:00 PM PST

A federal district court judge declared the individual mandate provision of the healthcare reform law unconstitutional today. He also ruled that because Democrats forgot to include a severability clause,1 the entire law is invalid. Ezra Klein thinks that conservatives might come to regret it if the Supreme Court decides he's right:

I think it's vanishingly unlikely that the Supreme Court will side with Judge Vinson and strike down the whole of the law. But in the event that it did somehow undermine the whole of the law and restore the status quo ex ante, Democrats would start organizing around a solution based off of Medicare, Medicaid, and the budget reconciliation process — as that would sidestep both legal attacks and the supermajority requirement.

The resulting policy isn't too hard to imagine. Think something like opening Medicare to all Americans over age 45, raising Medicaid up to 300 percent of the poverty line, opening S-CHIP to all children, and paying for the necessary subsidies and spending with a surtax on the wealthy.

In the long run, I'm sure Ezra is right. But we all remember what Keynes said about the long run, right? And the short run, unfortunately, doesn't look very promising. Democrats aren't likely to control the House anytime soon, and even if they do, they won't have effective liberal control. Ditto for the Senate, where Democrats are defending a lot of swing seats in 2012. And in 2016, it's pretty likely that a Republican will win the presidency. In other words, if PPACA is struck down, the soonest that some kind of single-payerish semi-universal healthcare scheme could pass is probably around 2024.

That's just a guess. Who knows what will happen between now and 2024? But Republicans and conservative Democrats don't seem likely to support anything further to the left of PPACA anytime soon, and they're probably going to control things for the next 14 years at least. So be careful what you wish for.

1Do Democrats need to take a remedial legislation class? They also screwed up the food safety act last year by forgetting to append it to a House bill, as required by the Constitution. What's going on?

Mubarak Watch

| Mon Jan. 31, 2011 5:29 PM PST

Here is my Egypt post for the day:

Q: Is Hosni Mubarak toast?

A: Nobody knows, and anyone who pretends otherwise is just guessing.

There. I've just saved you from hours and hours of cable blather. You can thank me later.

Underwater Mortgages and You

| Mon Jan. 31, 2011 2:41 PM PST

Homeowners who are underwater on their mortgages are a drain on the economy because high mortgage payments reduce their demand for other goods and services. So how do we fix this? Mike Konczal reviews a couple of proposals to help out distressed homeowners and doesn't like them:

These two plans sound like really complicated programs, large-enough in scale to be inefficient. Which is a waste, since we already have this great system for writing down and managing burdensome debt, and it’s this marvelous thing called our bankruptcy laws. Sadly there’s a defect in it that prevents bankruptcy courts from writing down single-family principle residence mortgage....[But] we could easily pass a streamlined, modified version of bankruptcy just for this crisis.

I think bankruptcy "cramdown" is a good idea, but there's a problem with it: lots of homeowners who are stuck with mortgages they can't afford — mortgages that, in aggregate, are a massive drag on the economy — nonetheless aren't in such desperate straits that they can declare bankruptcy. In addition, there are others who could, but don't want to. Bankruptcy is a big deal, after all.

So I'm a little more sympathetic toward those broader plans than Mike is, because they might help a broader swath of homeowners and get the economy moving more quickly. Unfortunately, as much as people hate bailing out banks, they hate bailing out their profligate neighbors even more. I think we can safely expect nothing to happen on this front, and that means the economy will continue to underperform and unemployment will stay high. Thanks, tea partiers!

The Great Stagnation

| Mon Jan. 31, 2011 12:34 PM PST

So far my only comment about Tyler Cowen's e-booklet "The Great Stagnation" has been a whine about the Kindle format it's offered in. I promised a more substantive review for Monday, but now that Monday is here I'm almost reluctant to weigh in because TGS has gotten so much attention already. At this point, I'm not sure I have anything original to say about it.

But perhaps I do. The primary argument of TGS is that the United States has been growing strongly for the past two centuries by relying on lots of low-hanging fruit, but now the days of easy growth are over. In particular, Tyler identifies three sources of easy growth that are no longer open to us:

  • Land. The United States used to have lots of open land and now we don't anymore. I find this argument unpersuasive. Europe ran out of land a long time ago and its economic growth over the past two centuries has been great. Conversely, Brazil has lots of open land, but until recently its growth was poor. So I'm just not convinced that land is a big issue here.
  • Education. Starting a century ago we dramatically increased the number of kids who went to high school. More importantly — much more importantly, I'd say — after World War II we dramatically increased the number of kids who graduated from college. But you can only do that once. We can still make incremental improvements on this score, but we can't double or triple the number of college grads anymore. That avenue of growth is closed to us.
  • Technology. Tyler argues that technological growth was high between 1900-1950, but it's slowed since then. We spent several decades exploiting all the new inventions of the early 20th century, but a few decades ago we ran out of steam and we haven't invented enough truly fundamental new stuff since then to keep growth going. Longtime readers know that I basically agree with this, so I don't need much convincing on this score.

But there's a tension here that Tyler doesn't address. Technology grew like gangbusters in the first half of the 20th century, but it wasn't until the second half that education took off. So apparently it's not higher education that's really responsible for dramatic technological growth. But if that's the case, who cares about education?

The answer, I think, is that having lots of college grads doesn't really help push technological boundaries forward. What it does is produce a population that can effectively manage and direct large organizations that depend on advanced technology. And that helps produce economic growth nearly as much as fundamental new inventions do.

So here's what I think Tyler missed: it's true that we've already made our big improvements in access to education, and we can't do that again. But even if the number of college grads stays about the same as it is now, and even if the quality of their education stays about the same as it is now, the effectiveness of their management skills is multiplied tremendously by the computerization of the workplace. The human beings who are managing our country might be about the same as the ones who managed it 30 years ago, but they're managing it with steadily improving software and networking. They'll keep doing that for a long time, and that will keep GDP growing in the same way that better and better exploitation of electricity did during most of the 20th century.

In other words, computerization isn't just about the internet, and it's not just about whether Facebook generates a lot of utility without generating a lot of traditional GDP. That's the sexy stuff, but for the next 30 years it's continuous improvements in the computerization of industry and the computerization of management that will be the big GDP driver. Providing well-educated humans with better computers is every bit as important as simply churning out more well-educated humans.

(And after that? I'm a true believer in artificial intelligence, and I figure that 30 or 40 years from now computers are literally going to put humans out of business. They'll dig ditches better than us, they'll blog better than us, and they'll make better CEOs than us. This is going to cause massive dislocations and huge social problems while it's happening, but eventually it will produce a world in which today's GDP looks like a tinker toy.)

Tyler makes a bunch of other arguments in "The Great Stagnation" too, some more persuasive than others. Like some other critics, I'm not sure why he uses median wage growth as a proxy for economic growth. It's important, but it's just not the same thing. Besides, median wage growth in the United States slowed very suddenly in 1973, and it's really not plausible that our supply of low hanging fruit just suddenly dropped by half over the space of a few years. I also had a lot of problems with his arguments about whether GDP generated by government, education, and healthcare is as "real" as other GDP. For example, he suggests that as government grows, its consumption is less efficient, but that's as true of the private sector as it is of the public sector. A dollar of GDP spent on an apple is surely more "real" than a dollar spent on a pet rock, but there's simply no way to judge that. So we just call a dollar a dollar, and figure that people are able to decide for themselves whether they're getting the same utility from one dollar as they do from the next.

The healthcare front is harder to judge. I agree with Tyler that we waste a lot of money on healthcare, but at the same time, I think a lot of people seriously underrate the value of modern improvements in healthcare. It's not just vaccines, antibiotics, sterilization and anesthesia. Hip replacements really, truly improve your life quality, far more than a better car does. Ditto for antidepressants, blood pressure meds, cancer treatments, arthritis medication, and much more. The fact that we waste lots of money on useless end-of-life treatments doesn't make this other stuff any less real.

To summarize, then: I agree that the pace of fundamental technological improvements has slowed, and I agree with Tyler's basic point that this is likely to usher in an era of slower economic growth in advanced countries. At the same time, improvements in managerial and organizational efficiency thanks to computerization shouldn't be underestimated. Neither should the fact that other countries still have quantum leaps in education to make, and that's going to help us, not just the countries trying to catch up to us. After all, an invention is an invention, no matter where it comes from. And finally, try to keep an even keel about healthcare. It's easy to point out its inefficiencies, but it's also easy to miss its advances if they happen to be in areas that don't affect you personally.

Big Money

| Mon Jan. 31, 2011 10:58 AM PST

The latest news in the banking world:

Fraud and mismanagement at Afghanistan’s largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.

I don't have any insights to offer about this, but I'll offer up some simple math instead. The GDP of Afghanistan is about $15 billion. That means that this single bank is reporting losses equal to about 6% of GDP. That would be the equivalent of, say, Chase or Bank of America reporting a loss of around $1 trillion or so. That's a big loss.

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Wikipedia's Gender Problem

| Mon Jan. 31, 2011 10:44 AM PST

The New York Times reports today that Wikipedia contributors are overwhelmingly men:

About a year ago, the Wikimedia Foundation, the organization that runs Wikipedia, collaborated on a study of Wikipedia’s contributor base and discovered that it was barely 13 percent women....With so many subjects represented — most everything has an article on Wikipedia — the gender disparity often shows up in terms of emphasis. A topic generally restricted to teenage girls, like friendship bracelets, can seem short at four paragraphs when compared with lengthy articles on something boys might favor, like, toy soldiers or baseball cards, whose voluminous entry includes a detailed chronological history of the subject.

....Is a category with five Mexican feminist writers impressive, or embarrassing when compared with the 45 articles on characters in “The Simpsons”?

....Jane Margolis, co-author of a book on sexism in computer science, “Unlocking the Clubhouse,” argues that Wikipedia is experiencing the same problems of the offline world, where women are less willing to assert their opinions in public. “In almost every space, who are the authorities, the politicians, writers for op-ed pages?” said Ms. Margolis, a senior researcher at the Institute for Democracy, Education and Access at the University of California, Los Angeles.

This is just guesswork on my part, but I think this is a different phenomenon than gender disparity in op-ed writing. For starters, you need to compare apples to apples, and wondering why Mexican feminist writers are underrepresented on Wikipedia compared to The Simpsons is silly. It's because The Simpsons has an audience in the millions while Mexican feminist literature has an audience in the thousands. You don't really need to dig much deeper. There are several comparisons like that in the Times piece, and they mask the problem more than they illuminate it.

Still, even accounting for that, the gender disparity is real. But I suspect the reason has less to do with women having trouble asserting their opinions and more to do with the prevalence of obsessive, Aspergers-ish behavior among men. After all, why would anyone spend endless hours researching, writing and editing a Wikipedia post for free about either The Simpsons or Mexican feminist writers? I think that "having an opinion on the subject" is far too pale a description of why people do or don't do this. You need to be obsessed. You need to really care about the minutia of the subject and whether it's presented in exactly the right way. And you need to care about this in a forum with no professional prestige. You're really, truly doing it just for the sake of the thing itself.

I've long been convinced that this tendency toward obsession is one of the key differences between men and women. I don't know what causes it. I don't know if it helped primitive men kill more mastodons during the late Pleistocene. But it does seem to be real, and it doesn't seem to be something that's either culturally encouraged or discouraged in children of either gender. I just don't know. But I'll bet that an obsessive outlook on life is something that produces a lot of Wikipedia articles.

Covering Egypt

| Mon Jan. 31, 2011 9:30 AM PST

James Joyner — joining a cast of millions — complains that cable news coverage of Egypt has been terrible. If you want to know what's going on, you have to watch al-Jazeera. Then this:

It’s not exactly that private news channels can’t do a fantastic job. ABC, NBC, and CBS did so within my memory. And CNN did so even more recently. But they did so under quasi-monopoly conditions....But, with the proliferation of cable, Americans were increasingly choosing to watch something other than news: game shows, re-runs, SportsCenter, or whathaveyou.

With the incentive gone, news programming began to be viewed as an expense, and the networks largely did away with foreign coverage. Not only is it expensive to produce, but Americans generally don’t care about it unless there’s a crisis. But, since by definition we don’t know where crises will break out ahead of time, it’s cheaper to simply parachute in to cover them. And hard news began to soften, including more human interest stories and politics-as-sports coverage.

I've watched no news coverage of any kind for the past four days and therefore have no idea what network coverage has been like. But I think this deserves a bit of perspective that's independent of what these guys are doing. So here it is: what we're seeing is not the superiority of al-Jazeera in its approach to covering the news. What we're seeing is the fact that we're in the middle of an uprising in the Middle East and that happens to be something that al-Jazeera is very, very well situated to cover. Conversely, if I wanted news about the Super Bowl, I'd turn to ESPN. For news about the repeal of healthcare reform, CNN would probably be pretty good. For news about Jerry Brown's upcoming State of the State address in California, one of my local news stations would be best.

There's no question that American cable nets — along with virtually all of the rest of the American media — suck very badly at covering international news. I'd love to blame them for this state of affairs, but I think that's kind of unfair. The problem is that Americans have voted with their pocketbooks and announced in a loud and sustained voice that they don't really care about international news unless it happens to be either (a) a U.S. war or (b) some kind of disaster story like Haiti or the Chilean miners. Given that, it's hardly reasonable to expect CNN or Fox to run a money-hemorrhaging charity operation for those few of us who care about this stuff.

And I'll add one more thing: maybe, just maybe, up-to-the-nanosecond coverage isn't really all that important? If you're transfixed by this stuff, that's fine. No one begrudges it. But really, is there any compelling reason why a TV network should be broadcasting continuous coverage of something like this? If you don't find out for three or four hours that Hosni Mubarak replaced his cabinet, does it matter? And does following events on Twitter, where the signal-to-noise ratio is about 1%, really improve your understanding of what's happening?

I doubt it. But that still doesn't excuse the atrocious quality of analysis on the cable nets. Since I haven't watched it — except for a few minutes of Fox one morning in which they were obsessed with the Muslim Brotherhood — I can't say anything about it from personal experience. But I trust James when he says it's awful, and there's not much excuse for that. Giving Egypt a couple of hours a day instead of 24/7 treatment seems fine to me, but at the least, those couple of hours ought to be good stuff.

Egypt in Real Time

| Sun Jan. 30, 2011 9:26 PM PST

I've been away all weekend or else I would have mentioned this earlier, but Nick Baumann has been following the events in Egypt for the past several days and posting a continuous stream of updates and links to some of the best posts on the subject. You can see it here. Just start at the top and scroll down, or else go straight to the bottom to get the latest updates.

Friday Cat Blogging - 28 January 2011

| Fri Jan. 28, 2011 12:57 PM PST

On the left, Inkblot is giving himself a good chin smooch after spending a few minutes gazing in rapt concentration at a nearby hummingbird. He had obviously been hoping to sprout wings and fly over for a lunchtime snack, but when that didn't happen he decided to pretend nothing had happened and curl back up in the sunshine. (Current temp here: 71 degrees.) On the right, Domino has performed her post-dinner leap into the bookshelf. I have no idea why, but both cats go crazy for a few minutes after they get fed, and this is where Domino frequently ends up. A few minutes later, though, she was snoozing away.