Kevin Drum - June 2011

China's Potemkin Aircraft Carrier

| Fri Jun. 3, 2011 12:34 PM EDT

Calm down, says David Axe, "China’s First Aircraft Carrier is a Piece of Junk." It's got lousy engines, lousy air support, lousy convoy support, and lousy sub support. Basically, it's just a learning experience for the Chinese. They'll get better eventually, but eventually is still pretty far in the future. Worth a read.

This comes via James Fallows, who wants us all to pay more attention to China, but warns: "Paying attention to China, and taking it seriously, are different from being pie-eyed, gape-mouthed, and otherwise credulous about the overall nature of China's success." Also worth a read.

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Employment Picture Even Grimmer Than You Think

| Fri Jun. 3, 2011 11:49 AM EDT

Every month Steve Benen publishes a handy chart showing job gains and losses since January 2008. Looking at the latest dismal numbers for May, he concludes, "Any sane person should look at these numbers and conclude that the economy desperately needs a boost."

But it's worse than that. As I mentioned yesterday, the U.S. economy needs to add about 150,000 jobs per month just to stay even with population growth. This means that you really need to look at how many jobs we gained above (or below) 150,000, not above or below zero. So here's Steve's chart, modified to show just that. As you can see, the last eight months, when the economy has supposedly been starting to recover, has actually been virtually flat. Relative to population growth, we've been generating no new jobs at all.

So yes: "Any sane person should look at these numbers and conclude that the economy desperately needs a boost." Even the not especially sane ought to have figured that out by now.

Scaring Ourselves Out of Growth?

| Fri Jun. 3, 2011 11:23 AM EDT

Stephen Carter has a column up at Bloomberg about the guy sitting next to him on an airplane flight the other day. He's a small business owner and he refuses to hire more workers even though demand for his products is up. Why is that? asks Carter:

“Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

....My seat-mate seems to think that I’m missing the point. He’s not anti-government. He’s not anti-regulation. He just needs to know as he makes his plans that the rules aren’t going to change radically. Big businesses don’t face the same problem, he says. They have lots of customers to spread costs over. They have “installed base.”

For medium-sized firms like his, however, there is little wiggle room to absorb the costs of regulatory change. Because he possesses neither lobbyists nor clout, he says, Washington doesn’t care whether he hires more workers or closes up shop.

Here's what's remarkable: Carter, a law professor at Yale, apparently never once bothered to ask this guy just what regulations he's talking about. Is he concerned with general stuff like the healthcare law? Or something highly specific to his industry? Or what?

Regardless, I've heard this kind of blowhard conversation too often to take it seriously. Sure, it's possible this guy manufactures canisters for nuclear waste or something, and there's a big regulatory change for nuclear waste storage that's been in the works for years and has been causing everyone in the industry heartburn for as long as they can remember. But the simple fact is that regulatory uncertainty is no greater today than it's ever been. Financial uncertainty is high, but the Obama adminstration just hasn't been overhauling regs that affect the cost of new workers any more than usual. The only substantial exception is the new healthcare law, and if you oppose it that's fine. But it was passed over a year ago and its effects are pretty easy to project.

So I call BS. Even Will Wilkinson, who thinks the regulatory uncertainty theory has some merit, is dubious. He suspects that to the extent any of this is happening at all, it's mostly some kind of Fox effect: Republican business owners have been hearing about the endless socialist evils of the Obama administration for so long that they've actually started believing it now and they're scared to death. There's no real reason for it, but hey — where there's smoke there's fire, right? And if enough different people on Fox and Drudge and Limbaugh, their rantings all passed along via the local Chamber of Commerce or something, keep talking apocalyptically about how Obama is wrecking the country, then there must be something to it. I guess I'd want to see some evidence for this, but it at least sounds plausible. More plausible than the alleged tsunami of new regulations that's preventing people from hiring even when business is booming, anyway.

(Will then goes on to posit that this is a permanent feature of the economy that we ought to take account of, perhaps by electing more Republicans. I think I'd prefer a somewhat different, more reality-based approach to this problem myself.)

Doctor's Dispatch From Iraqi Kurdistan

| Fri Jun. 3, 2011 6:00 AM EDT

Editor's note: This is the third part of a three-part series of dispatches from Jonathan Dworkin, an infectious diseases fellow at Brown who spent several months in Iraqi Kurdistan in 2006 and returned for a followup visit in May. Read Part 1 here and Part 2 here.

In Sulaimania's directorate of health we play a game with paperwork. My friend drafts a letter in Kurdish. The letter receives an "opening" stamp by a secretary, and then the director signs it. Next we move to another office, where the letter is stamped by the legal manager. Following this, we must "bake the papers," as my friend describes it. This involves having a separate secretary type and print the document. The new printed document is signed sequentially by secretaries in three different offices. We next meet a man who is dressed in traditional Kurdish trousers and a broad belt. Ceremoniously he operates the photocopy machine, keeping several copies and handing us two. Feeling bold, we skip the next step, which is an additional stamp from the legal manager. No one notices, and the director's secretary provides the "closing" stamp. Then the director signs the final copy. Now it is official: I am an American, my name is Jonathan, and I am a doctor.

Decades after the American invasion of Iraq, elaborate paperwork completed in Kurdish, Arabic, and English may be the longest lasting consequence of the war. But the comedy of the health directorate has a darker side. My paperwork is the simplest operation, needed only to confirm reality. Doctors with problems involving their salary or faculty appointments face years of hostile inertia. And the ministries are, of course, politicized. A ministry official informed one friend that he could not work in a Sulaimania hospital because of his support for the opposition in the last election. The man told him matter-of-factly, without any apparent sense of embarrassment.

It's important to keep in mind that the Health Ministry is one of the least politicized branches of the Kurdish government. Imagine how the Ministry of Oil functions. Now add to this another peculiarity of Kurdistan, which is that the security forces are still controlled by political parties. In 2006 when I travelled from Erbil to Sulaimania I crossed from one political fiefdom to another. The army checkpoints along the road each carried the flags of their respective parties. Now the checkpoints fly the Kurdish flag, but the change is superficial. The parties remain armed, and there is no professional army independent of the parties. This became apparent in the recent demonstrations, when the two ruling parties, having banded together in an Orwellian merger, used their soldiers to break the opposition.

Since the demonstrations ended, the same parties have used their internal security forces to intimidate protest organizers. As I'm writing this, today's news features images of a rally organizer who was kidnapped last night by masked men in cars with tinted windows. He was beaten with rifle butts and stabbed with knives. The man was lucky to survive, but the message to the opposition couldn't be clearer: Persist and no one can protect you. It is through these actions that Kurdish security is completing its transformation from a force intended to protect Kurds to one intended for internal suppression.

It is difficult for Americans to understand the depth of this system of coercion. The Kurds simply refer to it as "corruption," but the word in English understates the problem. When Americans think of corruption, they often think of bribes, which rarely occur here. In Kurdistan, however, party politics permeate every institution in the country, from police headquarters to the dean's office. A person is forced constantly to choose between their ambition and their independence. Building a promising career means making peace with this system. It means neglecting your own internal sense of justice.

Despite this, in three weeks in Sulaimania I have not met five people willing to defend the government in public. The city has undergone a sea change since 2006 and is simmering in opposition politics. Not everyone agrees on what the future should look like. Many of the people I speak with are secular, but some are observant Muslims. All agree on nonviolence and a constitutional system of some kind, and all point to the ministries and security forces as the prime examples of why change is necessary.

In 2006 I expressed the hope that America would partner with Iraqi Kurds to build stronger and more independent civic institutions. In particular I hoped that the universities could break free of the ministries and allow a space to open for political debate and scientific research. There is no evidence this has happened. Meanwhile American policy has remained fixed on the capital. In the Kurdish government we have a useful counterweight against Iran-backed politicians in Baghdad. Barely a word was uttered by anyone in the White House or State Department during the crackdown here, and in Obama's speech on Middle East reform, he did not mention the words "Kurd" or "Kurdistan."

I'd like to conclude by going back to my last dispatch. The closer you look at the murder of Sardasht Osman, the more monstrous it becomes. That should have been the end of business as usual between our governments. For most people here America's silence during the political repression — particularly when the army entered Sulaimania—has tainted our positive image. I can imagine a future in which anti-Americanism takes root as a popular expression of opposition, or even in which radical Islam finds an audience open to its conspiracies and grievances. This is why it has never been intelligent to focus exclusively on politics in Baghdad and overlook what's happening in Sulaimania and Erbil. Fortunately, most Kurds understand that they must solve their own problems, including the abuses of their government. But American support for that government needs to become a lot more conditional, and soon, or Kurds will conclude for themselves that this is a friendship they'd rather do without.

Winning the (Very Near) Future

| Thu Jun. 2, 2011 8:59 PM EDT

So how do Democrats get back on top in the soundbite wars over the economy? Beats me. But Democracy Corps says they tested a bunch of messages and blaming Republicans for getting us into this mess is a loser. The three big winners are below. Take 'em for what they're worth.1

1But it's worth noting that "Old Politics," which scored about the best, seems to be Barack Obama's chosen message. I guess he must have commissioned a poll just like this one. And China bashing, of course, also scored well. It's the little black dress of campaign demagoguery.

Winners and Losers in the Charter School Lottery

| Thu Jun. 2, 2011 6:14 PM EDT

Adam Ozimek points today to a study of KIPP charter schools that finds good outcomes for KIPP students and concludes that none of it is attributable to "skimming." That is, it's not the case that KIPP schools are getting good scores because poor students are prodded to leave at higher rates than good students.

This is obviously good news, though, as usual, there are reasons to be cautious. For one thing, the sample size of this study is extremely small: one school. For another, although the math results seem to be very good and very robust, the reading scores are much less certain. As the chart on the right shows, the 2005 cohort of kids actually shows a negative reading result at every grade level, and the more recent cohorts show positive but modest results with the exception of a single data point (the 2006 cohort's fourth year). Still, the results overall are generally positive and they confirm other studies that have also found good results from KIPP schools. What's more, KIPP's effectiveness, if anything, seems to be higher for low-income kids than for higher-income kids.

But something has been on my mind for a while about these studies, and this is a good chance to toss it out. This isn't related to my longstanding skepticism that the KIPP model can ever be scaled enough to be a broad-based solution, and it's not really meant to be a criticism of KIPP at all. In fact, all the evidence I've seen suggests that KIPP really does work well.

Rather, it's about the way these studies are done. Basically, you want to compare test results of charter kids to test results of public school kids, but first you want to make sure the kids themselves are similar. If charter kids, on average, are just smarter than public school kids, then good test results don't mean anything. One way of doing this is to control for the kinds of things that we think matter for success in school: income level, gender, race, English proficiency, etc. The problem is that no matter how many variables you control for, you never know for sure if you're really controlling for everything important.

Because of this, the gold standard for charter school research is to study schools that rely on lotteries to decide who gets in and who doesn't. Since selection is random, there's no difference between the kids who get in and the kids who don't. Nor are there systematic differences between the parents: all of them care enough about their children's education to apply to a charter school in the first place. So if the charter kids do better than the public school kids, it's almost certainly due to the schools themselves, not some inherent difference in either the children or their families.

But ever since seeing Waiting for Superman, I've had a nagging question about this. That documentary, if it's accurate, made it clear that parents who apply to charter schools are almost desperately anxious for their kids to get in. In fact, many of them view it as practically their only chance to escape their local schools and get their kids a real education. The ones who lose the lottery are profoundly deflated.

So here's my question: is it possible that the mere act of losing out in a charter school lottery changes some parents' behavior? With their hopes dashed, do they give up? Do they gradually stop taking an interest in their child's education? Do they become fatalistic about the prospect of success and stop prodding their kids to do their homework, behave in class, and get to school on time? And if some substantial fraction of them do, how much overall impact does this have on the aggregate test scores of the lottery-losing children?

I know this is a virtually unanswerable question, and I don't mean to use it as some kind of all-purpose, non-falsifiable objection to charter schools. I'm just curious. It never really occurred to me before I saw Superman, and I understand that the film may have overdramatized things for effect. Still, the losing parents sure did seem crushed. I have no idea how you could study this effectively, but I'd sure like to know whether the mere act of losing a charter school lottery has a negative effect on kids all by itself.

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Quote of the Day: Playing With A-Bombs

| Thu Jun. 2, 2011 2:33 PM EDT

From a "senior GOP lawmaker," explaining why Republicans are OK with touching off financial Armageddon by refusing to raise the debt ceiling:

Who has egg on their face if there is a sovereign debt crisis, House Republicans or the president?

I guess the optimistic take here is that Republicans are just playing the negotiation game really well. The pessimistic take is that they really believe this and think the political benefits outweigh the damage a debt crisis would do to the United States. I'm not really sure which it is anymore. I used to be an optimist, but that attitude is getting a lot harder to sustain these days.

Too Lazy to Write My Own Post About Laziness

| Thu Jun. 2, 2011 1:33 PM EDT

Here's an email exchange with a friend in response to my post last night about zero-tolerance policies in schools:

Friend: “Zero tolerance” is right up there with “everything is on the table” in terms of laziness in terms of making policy.

Me: And "across the board cuts." Hey, this is fun! We should make a list of the top ten lazy policy slogans.

Friend: I’ve always liked “doing nothing is not an option.”

But that's only four, and a top ten list needs ten. Help us fill out our list in comments.

Five Things I'm Tired Of

| Thu Jun. 2, 2011 1:12 PM EDT

There are a few things I'm pretty tired of:

  • The press corps' embarrassing infatuation with Sarah Palin's bus trip. Can't they just leave this stuff up to Access Hollywood and Entertainment Tonight, which are already in the business of following people around no matter what they do and no matter whether they "want" to be followed?
  • Anthony Weiner's Twitter account. He probably did something slightly skeevy and he should own up to it, but really, who cares?
  • Republican hostage taking over the debt ceiling. What's next? Threatening to withdraw funding for the Fed's computers since that's where all the money comes from?
  • The almost extra-galactic chutzpah of Republicans, who spent an entire year screaming about death panels and vilifying actual Medicare cuts in the healthcare reform bill, now complaining that it's demagoguery when Democrats point out — both correctly and mildly — that making Medicare too expensive for many seniors to afford would "end Medicare as we know it." How much more milquetoasty could you possibly get and still be tolerably within the bounds of accuracy?
  • The insane idea that the federal deficit needs to be addressed now now now! Republicans didn't care about the deficit when Reagan was president, they didn't care when Bush Sr. was president, and they didn't care when Bush Jr. was president. They only get religion when a Democrat is president and they need an all-purpose reason to oppose everything Democrats want to do. Is this really too complicated to understand? It's a political tactic — and a good one! — not a genuine reaction to anything in the real world. In the real world, stimulus spending is winding down, Medicare was reformed a mere 14 months ago and is solvent for at least another decade, Social Security is solvent for two or three decades, and the deficit is very plainly not a domestic spending problem. It wasn't a problem at all until 2001, and after that it was caused by two gigantic tax cuts, two unfunded wars, and a finance-industry driven recession. If we just let the tax cuts expire, get out of Iraq and Afghanistan, and get the economy moving, the medium-term deficit will disappear. In the meantime, grinding unemployment in the United States is really a wee bit more important than continuing to humor Republican political posturing.

I guess there's more, but that'll do for now. Unfortunately, these five things, along with the odd tornado and sensational trial-of-the-century are pretty much the only things the media is bothering to report right now. From a blogging point of view, this leaves me high and dry until I think of yet another way to complain about our insane preoccupation with the federal deficit.

Did I mention that this is almost clinically insane? I did? Then I guess I'll have to use some other descriptive phrase next time.

Things That Make Me Go "Hmmm"

| Thu Jun. 2, 2011 11:55 AM EDT

In a post about a spat between the United States and Europe over who's implementing financial reform faster, Felix Salmon says:

In the short term, the biggest winners in any fight between regulatory authorities are always going to be the banks, who will happily arbitrage differing regional regulatory regimes and take advantage of their parents’ squabbles to stay out drinking all night. In the long term, however, even the banks would ultimately prefer a single global regulatory regime with clear ground rules and a level playing field — something which lets them concentrate on their main job, of banking, rather than expending enormous effort on lobbying and loopholes.

Really? In the long term, I'd guess that clear rules and a level playing field are the last thing that big banks want. Lobbying costs are a drop in the bucket to them and produce returns that make Bernie Madoff look like a piker. What's more, over the past couple of decades big banks have made it crystal clear that they have very little interest in their "main job" and are instead intensely obsessed with bending rules and discovering clever innovations that will make them trillions of dollars in trading profits. "Banking" is for suckers.

This is why simple, blunt rules are best in the financial industry. Sure, they'll end up being inefficient in some ways and unfair in others. That's inevitable. But it pales compared to the inefficiency and unfairness of business as usual. Unfortunately, that's largely what we still have in the aftermath of Dodd-Frank and Basel III. They're better than the status quo, but they simply aren't blunt enough to rein in the rocket scientists of Wall Street for long. And that's just the way Wall Street likes it.