Kevin Drum - July 2011

Who Are We Talking To?

| Fri Jul. 8, 2011 9:17 AM PDT

Via Andrew Sullivan, Alex Goldmark directs us to the the MIT Senseable City Lab's Connected States of America mapping project, which sports an interactive map showing who we talk and text to. The map wouldn't show Orange County for some reason, so I tried Los Angeles instead. Two things immediately jumped out at me:

  • Connection volume seems to be a pretty simple combination of geography (we know more people near us) and population density (we know more people in big cities because big cities just have more people).
  • The maps are surprisingly similar for both call and text volume. Should I have expected them to be different? Maybe not, but I did.

Of course, there are also a few weirdnesses. Why so many calls and texts to Codington County, South Dakota, and Tulsa, Oklahoma? Big call centers? What about Fayette, Tennessee?

Advertise on MotherJones.com

Economy Continues to Suck, Congress Continues to Fiddle

| Fri Jul. 8, 2011 8:19 AM PDT

Today's jobs report sucks, as usual. CBPP's chart is below. This is from Chad Stone, their chief economist:

Today’s very disappointing employment report shows that two years after the technical end of the recession and after 16 straight months of private-sector job creation, the jobs deficit remains huge....It makes no sense that in an economic recovery still struggling to gain momentum, policymakers are easing up on the gas and threatening to slam on the brakes. But that is just what is happening. 

Paul Krugman puts it a little more caustically:

Ugh. That was a seriously ugly jobs report. Almost no job creation, with slow private-sector growth offset by falling public-sector employment; a falling employment-population ratio; and (I don’t know how many people have picked this up), an actual decline in wages, albeit a small one.

Let me emphasize that last point. My bottom line on the inflation-deflation issue has always been to look at wages; you can’t have a wage-price spiral if wages ain’t spiraling. And they aren’t, to say the least.

We are ruled by charlatans and cowards. Our economy is in the tank, we know what to do about it, and we're just not going to do it. The charlatans prefer instead to stand by and let people suffer because that's politically useful, while the cowards let them get away with it because it's politically risky to fight back. Ugh indeed.

Climate Change: Still Worse Than You Think

| Fri Jul. 8, 2011 2:55 AM PDT

While I was on vacation last week I took a side trip to New Haven to visit Jeff Park, an old high school friend who's now a geology professor at Yale. We ate some pizza at Frank Pepe, walked around the campus a bit, and then dropped by his office, where he had a stack of reprints of his latest journal article. Take one, he said. Maybe it'll be good fodder for the blog.

The title is a mouthful: "Geologic constraints on the glacial amplification of Phanerozoic climate sensitivity," coauthored with Dana Royer. (The Phanerozoic, in case it's slipped your mind, is the geologic eon spanning approximately the last 500 million years.) Roughly speaking, the article is an updated look at a computer model that estimates how much climate reacts to a doubling of CO2 in the atmosphere.

The model originally concluded that a doubling of CO2 produces a temperature increase just under three degrees Celsius, an estimate that's in pretty good agreement with other models. So far, so good. But 500 million years is a long time, and several researchers have proposed that climate sensitivity might vary over that period depending on whether or not the earth is in an ice age. So in the new paper, the authors modeled glacial and non-glacial eras separately. And the best fit with the data suggests that climate sensitivity does indeed change depending on glaciation. In fact, during an ice age, the most probable climate sensitivity is six to eight degrees Celsius for a doubling of CO2, more than twice the previous estimate.

Why do we care? As the authors drily put it, "Because the human species lives in a glacial interval of Earth history, this modeling result has more than academic interest." You see, the most recent ice age in human history is the one that started about 30 million years ago and continues to the present day. We're living through a glacial interval right now, and that means that a doubling of CO2 in the atmosphere might produce a temperature increase of six to eight degrees Celsius, not the mere three degrees Celsius most commonly estimated.

This is just one model. There are lots of parameters to fit, there are only two glacial intervals to test, and the error bars are fairly large. In other words, it might be wrong. But it's one more data point in an increasing series of data points suggesting that climate change is worse than we thought—though "worse" is something of an understatement. Six degrees isn't just a bit warmer here and there; it's a global catastrophe that would likely produce mass extinctions, dead oceans, large-scale desertification, coastal cities underwater, and billions dead. And unless something changes, we're well on pace for a doubling of CO2 before the end of the century. Buckle your seat belts.

Charts of the Day: Our Coming Housing Boom

| Thu Jul. 7, 2011 5:24 PM PDT

Here are two charts about housing. The first is from Brad DeLong, and it shows how much housing was overbuilt during the boom of the aughts. The blue line is trend growth, and the orange triangle that goes from 2002-07 amounts to about $300 billion dollars in excess housing. Since then, however, we've been massively underbuilding housing. That's the orange block that starts in 2007, and it already amounts to $1.2 trillion. It will probably add up to $2 trillion or more by the time we get back to the trend line. That's a net undersupply of $1.7 trillion.

The second chart comes from Calculated Risk, and it shows the apartment vacancy rate. During the recession it rose to about 8% as people left their apartments and moved in with family or roommates. (This shows up in statistics as a slowdown in the rate of family formation.) However, as the worst of the recession recedes, that number is coming down, and today it's nearly at its normal pre-bubble level of 5.5%. If the economy continues to recover, we'll very soon hit a point at which there are lots of people who want to rent or buy a home but there will be a huge undersupply of both single-family and multi-family housing to absorb them. Karl Smith is unnerved:

There is a huge demand bulge waiting in the wings. There is no supply coming on line on absorb it. Rental vacancies are already falling.

This is setting up to be the story of 2012 and it is setting up to be a doozy. Inflation creeping higher despite the Feds best efforts to tamp it down. A possible explosion in the growth rate if we get a virtuous cycle of more construction job leading to more household formation, leading to more construction jobs.

Maybe! As Brad points out, this all depends on unemployment falling enough to generate lots of new families that want — and can afford — a place of their own. So far, there's not much sign of that happening, and American families continue to have a huge debt overhang that's likely to keep demand sluggish. Still, if housing keeps getting tighter and employment starts to rise even modestly, we might indeed get the virtuous cycle that Karl talks about. We'll see next year.

Quote of the Day: There is No Obama Doctrine

| Thu Jul. 7, 2011 5:09 PM PDT

From Fareed Zakaria, praising the speed of Barack Obama's reaction to events in the Middle East:

It took Ronald Reagan two years to turn on Ferdinand Marcos. It took Obama two weeks to urge Hosni Mubarak to resign.

The rest of the piece is a welcome call to stop looking endlessly for an "Obama Doctrine." It doesn't exist. Obama's temperament is generally multilateral and realist, and his responses to specific events tend to be both pragmatic and considered — and contrary to the carping of his critics, they also tend to be both resolute and relatively speedy. But that's about it. Like it or not, he's just not a doctrinal kind of guy.

Patents Are Broken. But How Do We Fix Them?

| Thu Jul. 7, 2011 11:45 AM PDT

Tim Lee writes today about Microsoft's recent string of demands for royalty payments from companies that produce smart phones built on Google’s Android operating system:

You might think Google could deal with this by just not infringing Microsoft’s patents, but that’s not how software patents work. Android has roughly 10 million lines of code. Auditing 10 million lines of code for compliance with 18,000 patents is an impossible task—especially because the meaning of a patent’s claims are often not clear until after they have been litigated. Most Silicon Valley companies don’t even try to avoid infringing patents. They just ignore them and hope they’ll be able to afford good lawyers when the inevitable lawsuits arrive.

So Android, like every large software product on the planet, infringes numerous Microsoft patents. And Microsoft is taking full advantage. They’re visiting Android licensees and giving the same sales pitch Reback remembers from a quarter century ago. “Do you really want us to go back to Redmond and find patents you infringe? Or do you want to make this easy and just pay us?” Once again, many of the targets are writing checks to make the problem go away.

A couple of days ago, after I wrote about Apple's new patent on multitouch gestures on touchscreen devices, I got an email from a patent attorney. Among other things, he said this:

Another common misunderstanding (as seen in the reaction to the Apple patent) is that the mere grant of a patent can be used to claim ownership of existing technologies. This is incorrect. Specifically, before granting a patent, the patent office looks at the prior art at the time of the invention, and has to determine that the claimed invention is novel and not obvious. While the patent office process is clearly flawed (due to limitations on the patent office, mainly time and money), there are other safeguards available. Other parties can ask the patent office to re-examine an issued patent based on additional evidence. Additionally, a party accused of patent infringement can present evidence in a court to show that the patent is not novel or is obvious, and can thus cause the patent to be completely invalidated.

My reply:

Obviously reasonable people can differ on this, but my sense is that the rule that patents should involve some genuinely novel idea has been watered down to almost nothing. When it comes to gestures on a touchpad, for example, there's just a limited universe of solutions, and they're all fairly obvious once the technology gets to a point that people start thinking about them. But what if some bright lad thinks about them slightly earlier, comes up with all the obvious gestures, and then patents them? Does that make sense? To me, it doesn't.

I realize that it's very, very difficult to quantify just how "novel" something should be in order to be patentable. But for starters, I'd say that the broader the claim the more novel it ought to be. In the case of touchpad gestures, or shopping cart checkout, that means it needs to be pretty damn novel. And I just don't think we're within light years of meeting that standard.

So then, a question for people who think that software patents are out of control: what should the rule be? No patents at all on software or business processes? Probably not. But if patents aren't flatly banned on business processes, is there some kind of rule that would raise the bar in a reasonable way on just how novel something has to be to deserve a patent? I hear a lot of complaints about software and business process patents, and I'm sympathetic to them. But exactly what kind of reform would improve things?

Advertise on MotherJones.com

Mitt Romney's Evangelical Problem

| Thu Jul. 7, 2011 10:02 AM PDT

My mother asked me the other day why Mitt Romney's religion was supposed to be a problem for him. "Because lots of evangelicals view Mormonism as a cult," I answered, and evangelicals are a huge part of the Republican primary base. Unfortunately, my answer lacked emotional punch, and it's not as if I can pretend to be an authority on evangelicals, so there's no telling if she believed me. But Amy Sullivan is an expert, and she explained Romney's evangelical problem six years ago here. Have things changed since then? Maybe, but here, via Paul Waldman, is a "lighthearted" report on a mainstream Memphis TV station about Mormon beliefs. I'm willing to bet there's not another religion in the world they'd be willing to treat this way.

Money Gets Even Tighter in Europe

| Thu Jul. 7, 2011 9:29 AM PDT

The European Central Bank has raised interest rates yet again, despite the persistence of very high unemployment outside the core EU countries. Why? Because continued low interest rates might run the risk of overheating things in Germany, where the economy is fairly strong. Matt Yglesias argues that this would be fine:

If you think about the problem of divergence between the low unemployment German-led “core” block and the high unemployment periphery, it seems to me that persistent labor shortages in the “core” are exactly what’s needed. That should either induce migration from Spain, Portugal, etc. northward to where the jobs are or else induce core-based firms to find ways to shift some production to the periphery. Obviously, that’s not an ideal strategy....

He's right, of course, but "not ideal" is a considerable understatement. The German public, which is already being asked to bail out the Greeks and Irish and the Portuguese, would go berserk if the ECB deliberately followed a policy that encouraged either outsourcing of German business or migration into Germany from countries on the periphery. The ECB knows this perfectly well, despite its supposedly nonpolitical mandate, and it also knows perfectly well that German support is still critical to the success of the euro project going forward. So monetary policy will continue to be made with Europe's core countries in mind, and the rest of the euro area will just have to live with it.

Whether that works out in the long run is a very good question. We'll see.

The Benefits of Medicaid

| Thu Jul. 7, 2011 8:45 AM PDT

When education researchers study charter schools, the gold standard is to compare kids who won a lottery to get in with kids who lost the lottery. That way you can be pretty sure that the kids themselves are pretty similar, and any differences are really, truly due to the school itself.

It would be nice to do the same thing for healthcare, but that's a dicier matter. What are you going to do, hold a lottery and give only the winners medical coverage? Of course not. Unless you're Oregon, which in 2008 decided to expand Medicaid but didn't have enough money to expand it to everyone who wanted it. So they held a lottery, and the lucky winners received Medicaid coverage.

Reearchers have now completed a study comparing the winners to the losers, and Jon Cohn reports on the results: on the positive side, winners got more health care and reported better health outcomes. On the negative side, emergency room use didn't go down and overall spending increased. And then there was this:

But the study demonstrates clearly, and persuasively, a different benefit of Medicaid: It provides beneficiaries with economic security. The Medicaid population was 40 percent less likely to borrow money or avoid paying other bills because of high medical expenses. The likelihood that unpaid medical bills ended up with a collection agency was also 25 percent lower. Not coincidentally, people on Medicaid were 55 percent more likely to report having a doctor they see regularly and 70 percent more likely to report they had an office or clinic for care.

I think both sides sometimes go overboard on Medicaid. Reformers often claim that overall costs will go down if you insure everyone because providing health coverage makes people healthier. Maybe, but I think there's little evidence of this. The fact is that if you add people to the Medicaid rolls, we're going to have to pay for it. Conversely, opponents of Medicaid like to claim that it doesn't actually improve outcomes. But this is true only if you look narrowly at things like life expectancies. You may not live much longer if you have health coverage, but guess what? Your life is going to be a lot better. You're less likely to lose your teeth, less likely to be in pain, less likely to be incapacitated with chronic illness, and more likely to receive treatments that demonstrably improve your quality of life. That's well worth it, even if you still end up dying at age 74.6.

And the economic peace of mind that even a modest program like Medicaid provides? That's yet another bonus. It's the least — literally the least — that a rich country can provide for its poorest residents.

Obama Ready to Go Big on Budget Deal?

| Wed Jul. 6, 2011 11:51 PM PDT

Every major newspaper is reporting tonight that Barack Obama has been holding secret post-golf meetings with John Boehner and is now pushing for a much larger budget deal than anyone has been talking about so far. Here's the Washington Post:

At a meeting with top House and Senate leaders set for Thursday morning, Obama plans to argue that a rare consensus has emerged about the size and scope of the nation’s budget problems and that policymakers should seize the moment to take dramatic action.

As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

....Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

The Wall Street Journal reports that means testing of Medicare is one proposal on the table, while the New York Times reports that Boehner might agree to $1 trillion in revenue increases in return for the bigger deal, possibly including an end to the Bush tax cuts for the wealthy. A few comments:

  • Unlike a lot of liberals, I'm open to deals on Medicare and Social Security. Obviously the details matter, but means testing of Medicare has always been a reasonable policy option, while small changes to Social Security's inflation calculations have a lot of support from both liberal and conservative analysts. This isn't necessarily a disaster.
  • I think it's now finally time to stop pretending that Obama has miscalculated, or blundered, or been out-negotiated, or somehow forced into a bad position. Rather, everything he's done for at least the past six months is consistent with the idea that he considers the long-term deficit a problem, he wants to address it, and he views the debt ceiling talks as an ideal opportunity to do so with bipartisan cover. Obama isn't doing this because he has to. He's doing it because he wants to.
  • Jon Chait argues that Obama would be a fool to allow the Bush tax cuts to be part of this deal. Instead, "If Obama wins election, he needs the ability to use the GOP's opposition to any middle class tax cut extension without an extension for the rich as leverage to let Republicans kill the whole thing for him." But this assumes that Obama secretly wants to kill the whole thing. I don't think he does. He's said all along that he wants to let the high-end tax cuts expire but keep the middle-class cuts, and it's time to take him at his word. That's what he wants to do.

A friend emails a question about all this: "Obama can survive 2012 without my vote and even with my working actively for his GOP opponent, which I will do if he does this, suicidal as it may be. But do you think he can survive, can the Democratic Party survive, if he actually does this?"

Answer: yes I do. This isn't what I want, and it's not what the progressive wing of the party wants. But the plain fact is that deficit cutting is pretty popular across the board, modest reductions in Social Security and Medicare will probably go over fine with independents, and anyway, liberals have nowhere else to go. A few might actually do what my friend threatens to do, but in the end it won't be many — especially after the Republican Party settles on a candidate and we've all had a year or so to get to hate him (or her). And Obama will raise a fantastic amount of money from wealthy donors who are OK with this kind of dealmaking regardless of whether the progressive blogosphere is happy with him. Like it or not, the sad fact is that Obama doesn't need us. We're mostly going to vote for him regardless of what he does, and he's going to get all the money and organization he needs without us. Lefties simply don't have much leverage these days.

So not only can the Democratic Party survive if Obama does this, it will probably flourish, electorally speaking. That's not a happy conclusion, but I think it's likely an accurate one.

But needless to say (again), details matter. So before we get too hot under the collar in either direction, let's wait and see what kind of deal Obama and Boehner really make.