Kevin Drum - March 2011

The Limits of Libya

| Thu Mar. 10, 2011 5:47 PM EST

From the perspective of a Middle Eastern tyrant, the obvious lesson of Egypt was: don't give in. Keep the army on your side, fight like hell, and eventually you'll come out on top. That's certainly the lesson Muammar Qaddafi learned:

RAS LANUF, Libya — Forces loyal to Col. Muammar el-Qaddafi retook this strategic refinery town after an assault by land, air and sea Thursday, opposition leaders and fighters said, an onslaught that sent scores of rebels fleeing along a coastal road and underlined a decisive shift in momentum in an uprising that has shaken the Libyan leader’s four decades of rule....The apparent government victory capped several days of fighting as the rebels’ bold plans of a westward drive to Tripoli were dashed by the superior Qaddafi forces, which are seeking to retake several eastern oil cities that had slipped from the government’s control in the first days of the uprising.

Under a steadily escalating barrage, rebel fighters in dozens of trucks mounted with heavy weapons retreated east along the coastal road. In a chaotic scene at a checkpoint five miles east of town, fighters shot anti-aircraft guns randomly and ineffectually into the sky while arguing whether to flee or to try to establish a new defensive front.

....The urgency of the issue was underscored in Washington on Thursday where the United States top intelligence officer, James Clapper, said that Colonel Qaddafi “appears to be hunkering down for the duration.” Moreover, Mr. Clapper added, the government’s advantage in military and logistical resources would ensure that, “over longer term, that the regime will prevail."

Would a no-fly zone hamper Qaddafi enough to give the rebels a chance? Maybe, but I wouldn't count on it. And if it didn't work, what would be next? Ground troops?

I'd like to see the end of Qaddafi's rule. Who wouldn't? But Americans really need to get over the idea that we're the ones who control the fate of every hot spot in the world. We're not. If we can agree with NATO or the UN to create a no-fly zone, or if we can safely supply the rebels with arms, I'm all for it. What I'm afraid of, though, is that the John McCains of the world will never be willing to stop there if that's not enough. So before President Obama agrees to do any of this, McCain and his national greatness buddies need to be clear up front just how far they want to go, and they need to be willing to stick to that even if it doesn't work. Being sucked into an ever escalating civil war in Libya isn't something any sane person should wish on us.

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Quote of the Day: One Foot Sea Level Rise by 2050

| Thu Mar. 10, 2011 2:55 PM EST

From a new study published in Geophysical Research Letters:

The Greenland and Antarctic ice sheets are losing mass at an accelerating pace, according to a new NASA-funded satellite study. The findings of the study — the longest to date of changes in polar ice sheet mass — suggest these ice sheets are overtaking ice loss from Earth’s mountain glaciers and ice caps to become the dominant contributor to global sea level rise, much sooner than model forecasts have predicted.

Joe Romm has more. The study estimates total sea level rise by 2050 of just over a foot. That's only 40 years away, and it would make storm damage far worse than it is today, especially in poor, low-lying areas. I'll be dead by then, but the rest of you have been warned.

Chinese Girls and the Great Financial Collapse

| Thu Mar. 10, 2011 1:55 PM EST

One theory of the great financial crash of 2008 holds that it was partly caused by a "savings glut" in countries like China. Those savings found their way to the United States via the trade surplus China runs with us, and that in turn provided a huge pool of cheap, easy capital which fed the housing bubble. Allison Schrager reports today on the views of Columbia professor Shang-Jin Wei, who suggests he knows what's causing that high Chinese savings rate:

China adopted the one child law in the early 1980s. It resulted in a skewed sex ratio because many couples preferred a male baby and aborted female fetuses. In 1980, 106 boys were born were born for every 100 girls. By 1997, it was 122 boys for every 100 girls. This means that today one in nine Chinese men will probably never marry and the situation is expected to get worse as time goes on.

....The lack of a social safety net is often blamed for the high Chinese saving rate. Without welfare and government pensions the Chinese must save to self-insure themselves. But Mr Wei pointed out that even as the government has extended more social welfare programmes, the saving rate has continued to rise. He believes the uneven sex ratio can explain half of the increase in private saving between 1990 and 2005. He explained that the marriage market is becoming very competitive with so few girls. Chinese parents want to accumulate as much wealth as possible to ensure that their son can attract a wife. It is also important to provide sons with the best education possible. A competitive marriage market means that members of the disadvantaged gender must raise their game, which in China means greater wealth and education.

I find this surprisingly plausible. That doesn't mean it's true, it just means that I'm a sucker for demographic explanations of almost anything. But there's a good reason for that: demographics are really important, and although it's not fair to say they're ignored, I don't think they get nearly the attention they deserve. Partly, I suspect, this is because there's not much you can do about demographics, and people resist the idea that there are gigantic forces in the world that drive our destiny but which we don't have a lot of control over.

But there are, and we don't. Still, if you want to feel better about things, keep in mind that raw demographics are one good reason not to worry as much about China as we often do, and it's a great reason not to worry about Russia at all. Conversely, America is pretty well off, demographically speaking. And the bad news? I'll spare you that for now.

A Comment on Comments

| Thu Mar. 10, 2011 12:48 PM EST

As longtime readers know, I've always taken a hands-off approach to comments. I'm well aware of the price I pay for this in out-of-control comment threads, but for a variety of reasons I've always been willing to pay that price.

Lately, though, the quality of comment threads here has plummeted very close to zero. Farhad Manjoo says that anonymity is the problem, and he thinks its days should be over:

Advocates for anonymity argue that fuckwaddery is the price we have to pay to ensure people's privacy. Posting your name on the Web can lead to all kinds of unwanted attention—search engines will index you, advertisers can track you, prospective employers will be able to profile you. That's too high a price to pay, you might argue, for the privilege of telling an author that he completely blows.

Well, shouldn't you have to pay that high a price?.... Posting a comment is a public act. You're responding to an author who made his identity known, and your purpose, in posting the comment, is to inform the world of your point of view. If you want to do something so public, you are naturally ceding some measure of your privacy. If you're not happy with that trade, don't take part—keep your views to yourself.

Until recently this debate was largely academic....Facebook has changed that. Not only does a Facebook account include your real name, but it's also tied to your network of friends and family. This means that anything you post with your Facebook account is viewable by people you know. This introduces to the Web one of the most important offline rules for etiquette: Don't say anything that you'd be ashamed to say in front of your mom.

This seems pretty drastic to me. Every comment you make would also show up on your Facebook news feed? That would pretty much stop me from commenting entirely, even on my own site.

But how about the lesser step of requiring logins from all commenters and no longer allowing guest comments? I've always hated that, and I generally decline to bother commenting at sites that require me to log in. Still, maybe the time has come, whether I like it or not. A registration system is the only way to effectively ban trolls, and trolls have overrun the site. (Also at fault: a commenting community that doesn't have the self-discipline to ignore well-known trolls. What's wrong with you guys?)

Anyway: should I require registration from all commenters? Please leave your opinion in comments.

Power, Baby, Power

| Thu Mar. 10, 2011 12:10 PM EST

This shouldn't come as a big surprise to anyone, but Andy Kroll notes another provision of the anti-union bill that Wisconsin Republicans finally managed to pass last night. It removes the unions' right to collective bargaining, of course:

But there's another explosive provision in the bill that's received little attention: The bill authorizes state officials to fire any state employee who joins a strike, walk-out, sit-in, or coordinated effort to call in sick.

According to an analysis (PDF) of the Senate bill by Wisconsin's Legislative Fiscal Bureau (LFB), the legislation gives state officials the power to fire workers during a "state of emergency" declared by the governor under several conditions. If a state employee misses three working days without an approved leave of absence, that's grounds for being fired. State workers can also be dumped if, according to the LFB's analysis, they participate in a "strike, work stoppage, sit-down, stay-in, slowdown, or other concerted activities to interrupt the operations or services of state government, including mass resignations or sick calls."

A union that loses most of its collective bargaining rights and its right to strike is essentially powerless and useless. Add to that the provision that allows workers to withhold union dues and it basically strikes a death knell for the unions. And just in case you still thought this was really about the state budget, State Senate Majority Leader Scott Fitzgerald set everyone straight last night:

If we win this battle, and the money is not there under the auspices of the unions, certainly what you’re going to find is President Obama is going to have a much difficult, much more difficult time getting elected and winning the state of Wisconsin.

It's all about power, baby, power.

The High Cost of Premature Babies

| Wed Mar. 9, 2011 11:01 PM EST

About 10% of all babies in the United States are born prematurely, a problem that costs $26 billion a year due to the additional health problems that are common among premature babies. A drug called 17P is one way of delaying premature births:

Since 2003, the American Congress of Obstetricians and Gynecologists has recommended that doctors offer the progesterone shots to high-risk women. But because there has not been a commercial product available, women have obtained the drug from so-called compounding pharmacies, which make it to order. The pharmacies have typically charged about $10 to $20 per shot for the drug, which is given weekly.

So a full treatment of 20 shots costs about $300. Until now, that is. In February the FDA granted approval of a branded version of 17P to Hologic Inc. under the agency's "orphan status" rule:

The approval rested largely on a 2003 study financed by the National Institutes of Health, which showed that 17P helped deter pre-term births, and also the fact that doctors had prescribed the drug "off-label" — meaning for a different use than approved by the FDA — to expectant mothers for years.

Note that the drug itself had been around since the 1950s and its approval for use in premature births was based largely on testing performed in 2003 by a publicly funded agency, the NIH. Nonetheless, Hologic was given exclusive marketing rights, which it sold for $200 million to K-V Pharmaceutical, which calls the branded version Makena. As a result:

KV Pharmaceutical Co. on Monday will start selling a newly FDA-approved pre-natal drug — at $1,500 per injection, more than 100 times its current cost....Although 17P has been promoted as a cost saver, KV's pricing for Makena could actually increase the costs associated with pre-term births and reduce women's access to the drug. A full treatment of between 15 and 20 shots would typically run $25,000.

"Wow. That's a lot," said Arleasha Hays, a spokeswoman for the Missouri Department of Social Services, which oversees the state Medicaid program and would have to approve Makena's purchase. "That is very surprising."

The FDA required Hologic to perform some additional studies before Makena was approved, including a follow-up post-approval study that will run through 2018. Maybe this is worth $200 million. I don't know. But I wonder if Medicaid will pony up $25,000 for this shiny new version of 17P? I wonder how many low-income mothers will no longer have access to it? I wonder if our pharmaceutical approval system is completely screwed up?

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14 Mistakes

| Wed Mar. 9, 2011 7:32 PM EST

Tyler Cowen has put together a list of common mistakes made by left wing economists. I'm not an economist, but I'm left wing and I comment on economics, so close enough. So I'm going to go through the list and note where I stand on each of his items. I'm not going to explain things or justify myself, I'm just going to stake out my position in a sentence or two. Here are Tyler's 14 mistakes:

1. Suggesting that money matters in politics far more than the peer-reviewed evidence indicates.

I think the peer-reviewed evidence is wrong. It simply isn't able to capture all the dynamics of money in politics.

2. Evaluating government spending on a program-by-program basis, rather than viewing the budget as a series of integrated accounts. Cross check with the phrase "Social Security," or for use to take many discretionary spending cuts off the table.

I'm not sure I really get this one.

3. A reluctance to incorporate sophisticated "public choice" theories into the analysis of favored programs.

Perhaps so. On the other hand, "sophisticated" public choice theories are often not nearly as sophisticated as their proponents think, and are too often abused in fairly transparent ways as a way to justify preexisting beliefs that government doesn't work.

4. Sins of omission: there are plenty of bad policies, such as occupational licensing, which fail to come under much attack from the left. Sometimes this is because the critique would run counter to the narrative of needing more government or needing more regulation.

Probably true. I'm not persuaded that occupational licensing is really all that big a deal, but sure: we lefties ought to criticize bad policies regardless of whether they help our cause or not. (Ditto for everyone else, by the way.)

5. Significantly overestimating the quality of the political economy of an America with more powerful labor unions and underestimating the history of labor unions as racist, corrupt, protectionist, and obstructions to positive change.

Actually, I think lefties are fairly willing to own up to past problems with labor unions. Hell, we spent the better part of the 60s and 70s rebelling against them. As for the quality of an America with more powerful unions, most left-leaning economists aren't really all that super friendly toward unions, I think. Without overestimating things, however, I do think we'd be better off on net with stronger private sector unions.

6. Overestimating the efficacy of fiscal policy, underestimating the power of monetary policy, and sometimes ignoring or neglecting how the two interact ("the monetary authority moves last").

Hmmm. Most of the lefty economists I read seem to understand this. But especially in a recession like our current one, fiscal policy can be reasonably powerful if monetary authorities (a) don't appear willing to do as much as they should, but (b) also aren't likely to actively oppose fiscal expansion.

7. Citing weak versions of structural unemployment theories and dismissing them with a single sentence or graph, while relying on stronger versions of structural theories in other, non-cyclical contexts.

No opinion on this one.

8. Lack of interest in discussing ethnicity and IQ as relevant for social policy, except in preferred contexts.

This is probably true, though there are obviously some pretty good reasons for it.

9. Overly optimistic views of the fiscal positions of state governments. Since the states don't have the same tax-raising powers that the feds do, and since state government spending is favored, there is a tendency to see these fiscal crises as not so severe, or as caused by mere obstructionists who will not raise taxes to the required levels.

In general, there might be something to this. Right now, however, state problems are largely caused by drops in revenue, not out-of-control spending, and many state problems are indeed caused by obstructionists who will not consider tax increases in any way, shape or form. However, it's possible that I'm biased in my views because I live in California.

10. A willingness to think that one has "done one's best" in the realm of policy, and to blame subsequent policy failures on Republican implementation, rather than admitting that a policy which cannot be implemented by both political parties is perhaps not a good policy in the first place.

This is unfair. Republicans can implement Democratic policies perfectly well. They simply choose not to. Asking liberals never to do anything that Republicans will try to sabotage is tantamount to asking liberals to never do anything.

11. Use of a strong moral argument for universal health care coverage, combined with a fairly practical, hard-headed approach to the scope of the mandate, and not realizing the tension between the two. Failure to indicate where the "bleeding heart" argument actually should stop and at what margins we should (and will) let non-elderly people die, if only stochastically.

Also unfair. This is mostly a marketing issue, not an economic one. In practice, the only way to build support for universal healthcare (or any other policy) is to talk up its good points, not its drawbacks. Insisting on some Diogenic level of honesty from liberals is really just a way of ensuring that liberals will never win public support for anything.

12. Implicitly constructing a two-stage moral theory, which first cordons off the sphere of the nation-state (public goods provision, etc.) and then pushing cosmopolitan questions off the agenda in the interests of expanding a social welfare state. (In fairness, many individuals on the right don't give cosmopolitan considerations even this much consideration, although right-oriented economists tend to be quite cosmopolitan.)

I guess I'd plead guilty to this. For better or worse, I'm more interested in the American welfare state than in other countries' welfare states.

13. What about countries? Classical liberals are increasingly facing up to the enduring successes of the Nordic nations. There is not always a similar reckoning with the successes of Chile and Hong Kong and Singapore; often this is a sin of omission. (Addendum: comment from Matt here.)

This is a good point, but probably a hopeless one. As near as I can tell, virtually no one is willing to take comparative political economy seriously. We all just cherry pick the stuff that helps make our case. (In defense of everyone doing this, however, country comparisons are really, really hard. In many cases, it's virtually impossible to honestly tease out any firm conclusions.)

14. Reluctance to admit how hard the climate change problem will be to solve, for fear of wrecking any emerging political consensus on taking action.

Actually, liberals spend a ton of time talking about how hard climate change is. Still, there's something to this. As hard as we say it is, it's probably even harder than that. (This, by the way, is why I support research into geoengineering. I hope we can do something about climate change, but I suspect that we can't. Geoengineering might turn out to be our only hope sometime in the future.)

Cashing Out

| Wed Mar. 9, 2011 3:11 PM EST

Matt Yglesias, who's a big fan of cashing out welfare benefits and thinks that "folk morality" gets in the way of implementing better policies, points us to a short piece in the Economist about a pilot program to help the homeless in London:

The Square Mile has more rough sleepers than any other London borough except Westminster: 338 were identified by Broadway, a charity, over the past year, most of whom had spent more than a year on the streets....Broadway tried a brave and novel approach: giving each homeless person hundreds of pounds to be spent as they wished....One asked for a new pair of trainers and a television; another for a caravan on a travellers’ site in Suffolk, which was duly bought for him. Of the 13 people who engaged with the scheme, 11 have moved off the streets. The outlay averaged £794 ($1,277) per person (on top of the project’s staff costs). None wanted their money spent on drink, drugs or bets.

Hold on a second. Am I reading this right? Broadway identified 338 long-term homeless, but only 13 actually engaged with them? Something doesn't add up here. It hardly seems credible that if you offered 338 people free money or stuff with no strings attached, only 13 would take you up on it. But if that is what happened, then the big result from the experiment isn't that 11 out of 13 people benefited in some way, it's that only 13 out of 338 were even willing to participate.

I don't know. Maybe Broadway identified 338 homeless people but only approached 13 of them? In any case, it hardly matters: it's one thing to surprise a handful of people with an offer of assistance and receive fairly modest requests. It would be quite another to set this up as a large-scale, ongoing program. Does anyone doubt for a second that once people figured out what was going on, the size of the requests would skyrocket quickly?

There's an enormous literature on the pros and cons of cash welfare vs. in-kind benefits (i.e., housing, food stamps, Medicaid, etc.), and this is hardly going to be settled in a few blog posts. But as with anything else in a democratic society, social welfare programs have to deal not just with the technocratic merits of one approach over another, but with the views of the taxpayers who are funding the programs. And taxpayers, like it or not, are wary about handing out large sums of money to people with no strings attached. For one thing, Broadway's experiment aside, a fair amount of no-strings cash would get spent on booze, drugs, and gambling, and taxpayers are understandably non-thrilled about their money being used that way. It may be that this is a small price to pay for the benefits of cashing out, but that's a case that has to be made, and it can't be made by simply dismissing concerns over morality. Moral concerns have a claim on our attention that's as legitimate as any other kind, after all.

The Conservative Catch-22

| Wed Mar. 9, 2011 1:59 PM EST

Paul Krugman on what blogs he doesn't read:

Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t.

OK, that's sort of extreme. But probably not that uncommon these days: I still read some conservative blogs, but I read a lot fewer than I used to. The problem is sort of a Catch-22: reading the loony tunes blogs isn't worthwhile except for entertainment value, so I mostly don't bother. Conversely, the more moderate types have interesting things to say, but they're so out of touch with mainstream conservatism that they often don't seem worthwhile engaging with either. I mean, what's the point in arguing over some technocratic point that's a million light years away from the views of actual, existing conservatism, which doesn't yet admit that cutting taxes reduces revenues or spewing carbon into the air heats the globe? It all has a very ivory tower feel to it.

I'll go on reading the non-insane conservatives, because (a) it's worth having my views challenged by smart people and (b) you never know: maybe someday the tea party version of conservatism will collapse and the moderates will regain a bit of power. That sure seems like a pipe dream right now, though.

Temper Tantrums From the GOP

| Wed Mar. 9, 2011 12:27 PM EST

There is no excuse for Republicans holding up Peter Diamond's nomination to the Federal Reserve. Likewise, there's no excuse for holding up Donald Berwick's nomination to head up Medicare. Or for turning the federal court system into a third-world travesty because it continues to have so many vacancies that it can barely function.

The whole thing is a disgrace, and Republicans should be ashamed of themselves for acting like small children over this. That is all.