Kevin Drum - February 2012

Personal Income Revised Upward — Way Upward

| Wed Feb. 29, 2012 10:06 PM PST

The BEA announced today that GDP in the fourth quarter of 2011 went up 3.0%, not 2.8%. That's good news, but nothing super special. It's a pretty small correction, really.

However, the BEA also announced a correction to its estimate of income growth, and it was considerably more spectacular. Over at his official blog, Mark Doms, the chief economist at the Department of Commerce, provides his take on this:

While the upward revision to GDP was welcome news, there was even better news in revisions to the income data....Personal income growth was revised upward, from 0.8% to 3.2% in Q3, and from 2.6% and 3.2% in Q4.

As consumer spending wasn’t revised, this extra income implies that the personal saving rate was also revised upward in both quarters: from 3.9% to 4.6% in Q3, and from 3.7% to 4.5% in Q4.

These revisions to income and savings are significant because of the story they tell about the sustainability of the recent strength of consumer spending. The old story line was that some of the growth we saw in consumer spending in the second half of last year was fueled by a decrease in the saving rate. A challenge we then faced was the sustainability of future growth (since one can only lower the saving rate for so long). Today’s data show that the saving rate didn’t fall much and that the growth was instead fueled by higher incomes. I realize this is getting into the weeds a bit, but it really is quite good and important economic news.

This is good news. If growth is being driven by consumers spending down their savings, that's unsustainable. This is yet another sign that the economy may really be on the mend this time around.

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Chart of the Day: Women and Bylines

| Wed Feb. 29, 2012 3:29 PM PST

VIDA has once again counted up the bylines in a variety of literary and political magazines in order to compare the contributions of men and women, and the news remains pretty bleak. Among the mainstream magazines (as opposed to the purely literary journals), the most and least egalitarian are the New York Times Review of Books, where 45% of the contributors are women, and the New York Review of Books, where a dismal 13% of all articles are written by women:

This comes via E.J. Graff, who asks:

Why is this important? Because the news purports to be objective, to tell it like it is. The media help create our image of the world, our internal picture of what’s normal and true. And when the news is being written by men about men, a significant part of reality is missing from view.

....We've all had plenty of fun mocking [Darrell] Issa's all-male panel on contraception—er, religious freedom. But you know what? That wasn't an outlier. The fact that Issa's panel was about lady business made it particularly egregious. But check out the world around you. All-male and 90-percent male panels convene every day. Sometimes they're called "Congress." Sometimes they're called your newspaper. And they're giving you a false picture of your world. 

More at the link. Here's a complete list of the mainstream magazines covered by the VIDA project, from best to worst. Sadly, Mother Jones wasn't part of the project. Perhaps some enterprising intern can leaf through our 2011 issues and come up with a count.

  • 45% — New York Times Book Review
  • 40% — The Nation
  • 31% — Boston Review
  • 26% — New Yorker
  • 26% — Atlantic
  • 25% — New Republic
  • 17% — Harper's
  • 14% — London Review of Books 
  • 13% — New York Review of Books

UPDATE: Ask and ye shall receive. Samantha Oltman checked through MoJo's 2011 archives and discovered that we ran 41 pieces bylined by men and 41 pieces bylined by women. Not bad! Click the link for more details.

Google Is Dumbing Down Search, and I Don't Like It

| Wed Feb. 29, 2012 1:22 PM PST

Atrios:

I don't care where in the search results a specific Santorum page pops up, but I hate that their algorithms increasingly seem to favor recently updated sites. That's great for news, because it's, you know, news, but it's made Google increasingly useless as a research tool. Once upon a time if, say, Little Ricky said something stupid, I could do a Google search and easily [see] if he said a similar stupid thing a few years ago. Now the first several pages of search results will inevitably be just repeated quotes of the current gaffe.

Agreed. There's already Google News if you want the latest and greatest news. And there's an option (on the Advanced Search page) to limit your results to the past day or week or whatever. So people who want to search for recent stuff already have options. It would be nice if those of us who don't necessarily want just the recent stuff had the option to get that. Increasingly, we don't.

I don't suppose this will ever happen, but it would actually be kind of interesting if the Advanced Search page gave you the choice of various ranking algorithms. That could be really handy. Other than the fact that it might be a pain in the ass for the development team, is there any special reason for Google not to do this?

Defending Empirical Evidence

| Wed Feb. 29, 2012 11:49 AM PST

Matt Yglesias isn't impressed with my post this morning showing that child tax subsidies don't have much impact on fertility:

I buy it, but on another level I don't buy it at all. This is just a chart showing that we've had sweeping waves of social and economic trends over the decades that totally swamp tweaks in the tax code. It's true that you can put together a two-variable chart with appropriately-scaled axes to make it appear silly to say that the tax code is having an influence on fertility rates, but really the chart tells us nothing. We know that some people have children, and that different people have different numbers of children. We know that people exercise some level of conscious choice about this. And we know that having children is costly in both financial and non-financial ways. People also find it rewarding. But the costs are real and extra money to defray those costs should, at the margin, encourage people to have more children.

A few points:

  • In fairness, the study itself is a lot more than a "two-variable chart with appropriately-scaled axes." That just happens to be the only part of the study that I included in my post.
  • In a sense, though, I agree with Matt: economists are endlessly clever at finding ways to prove that nothing ever has any effect. Design your model right and control for enough variables and pretty much anything can wash out if you really put your mind to it. These things should always be taken with a grain of salt until they get confirmed using a bunch of different approaches.
  • On the specific issue of child tax subsidies, of course there's a lot of underlying stuff going on here. And unquestionably, a tax subsidy almost has to have some positive effect on fertility. But the size of the effect is really, really important. Far more important than the mere Econ 101 statement that people react to incentives at the margin. Sure they do. But if the incentive effect is so small that it's swamped by everything else — which is what this study seems to show — then for all practical purposes there's no effect. Alternatively, sometimes there are counteracting incentives that no one has thought about. The only way to find out is to dig into the evidence.

Contra Matt, empirical evidence is not "one of the most overrated things in policy debates." It needs to be treated carefully, and it shouldn't overwhelm common sense. But sometimes common sense is wrong, and sometime incentive effects, no matter how theoretically compelling, are small enough that they don't really matter in the real world. That seems to be the case here.

In a nutshell: size matters. If I have one takeaway that I wish everyone would tattoo on their foreheads, that's it. As usual, then: more evidence, please!

POSTSCRIPT: As always, it's worth being conscious of your own confirmation biases. My intuition, for example, is that tax subsidies are unlikely to have much impact on decisions to have children. The benefits aren't big enough, people don't understand them very well, and other reasons for having (or not having) children are overwhelmingly more important. So naturally when I see a study that confirms this, I'm likely to believe it. Reihan Salam, who supports pro-natal policies in general, and Matt, who has more faith in theoretical constructs than I do, are more likely to be skeptical. Caveat emptor.

"Spending" is Not Our Problem, Healthcare Is

| Wed Feb. 29, 2012 11:12 AM PST

What's the problem with the federal budget? CBPP has the answer: demographics. As the chart on the right shows, over the past 50 years spending on Social Security and Medicare has gone up steadily, while everything else has gone down steadily. Basically, "everything else" is in good shape. We should direct our attention a little bit toward Social Security and a lot toward healthcare costs, and stop obsessing about the rest.

In fairness, I'd break this down a bit further. Assuming I did my sums properly, federal spending on "everything else" — that is, everything except Social Security, Medicare, and interest on the debt — has indeed gone down from 15.2% of GDP in 1962 to a projected 11.3% of GDP in 2017. (That's from Table 3.1 here.) However, the national defense piece of that has declined from 9.2% to 2.9%, while the nondefense piece has increased from 6.0% to 8.4%. There are some arguments to be had about whether the defense piece of the budget is calculated correctly (it doesn't include veterans benefits, for example), and it's worth noting that healthcare costs are part of the nondefense picture too (mostly due to rising Medicaid expenditures). Still, the basic shape of the river doesn't change much. Most of the downward slope in spending is due to lower defense spending. Domestic nondefense spending hasn't gone up a lot, but it has gone up.

This doesn't really change CBPP's point, it just amplifies it a little. Outside of Social Security and Medicare, domestic spending rose during the 70s and then fell, but it's been pretty flat ever since then — until the Great Recession walloped us, anyway. We should, as always, keep an eye on it, but overall it's simply not a major problem, no matter how many times Republicans insist otherwise.

Bottom line: Social Security needs a little bit of tweaking and healthcare needs a huge amount of concentrated attention. Everything else is small beer. When it comes to federal spending, anyone who spends more than 10% of their time rabble-rousing about anything other than healthcare costs really shouldn't be taken seriously.

Gay Marriage: Nothing to Be Afraid of Anymore

| Wed Feb. 29, 2012 9:44 AM PST

Back in 2008, after the passage of Proposition 8 banned gay marriage in California, there was a lot of talk about putting a pro-marriage initiative on the ballot in 2010. That didn't happen, and my read of public opinion at the time suggested we'd be better off waiting a little bit to ensure victory. Time was on our side, after all.

This may all be moot if Prop 8 gets overturned by the Supreme Court, but in any case, it looks like the success of same-sex marriage laws in other states has had a galvanizing effect on California public opinion. According to the Field Poll, about 51 percent of Californians approved of gay marriage in 2008, and that number hadn't budged much by 2010. But their latest poll shows a huge shift: 59 percent of Californians now approve.

What's even better is that this shift crosses virtually every demographic groups. Democrats are already strongly in favor, but approval rose 13 points among Republicans and 15 points among independents. Approval rose among the young, the middle-aged, and even the elderly. It rose among whites, Latinos, and blacks. It rose among Protestants, Catholics, and atheists.

There are no efforts in place to repeal Prop 8 via a ballot measure this year, and we might not need one. But if we do, it looks like it would pass easily this time around. Other states have taken the lead, and guess what? The four horsemen didn't ride. Apparently people are finally getting the message that there's really nothing to be afraid of here.

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Obama's Apology Tour Makes a Stop in Asia

| Wed Feb. 29, 2012 9:16 AM PST

I see that President Obama is kowtowing to America's enemies yet again:

North Korea agreed to suspend nuclear weapons tests and uranium enrichment and to allow international inspectors to verify and monitor activities at its main reactor, the State Department and the North’s official news agency announced on Wednesday, as part of a deal that included an American pledge to ship food aid to the isolated, impoverished nation.

Although the Obama administration called the steps “important, if limited,” they signaled a potential breakthrough in the impasse over North Korea’s nuclear weapons program following the death late last year of the country’s leader, Kim Jong-il....North Korea’s agreement to allow inspectors from the International Atomic Energy Agency to return to the country appeared to be a significant concession. After years of negotiations, North Korea expelled inspectors and went on to test nuclear devices in 2006 and 2009.

No word yet on exactly how Obama worded his apology to the North Koreans, but I'm sure Mitt Romney will be on Fox News soon to tell us.

Can We Bribe People to Have More Kids?

| Wed Feb. 29, 2012 8:48 AM PST

I see, via Andrew Sullivan, that Will Wilkinson and Reihan Salam are arguing about whether it would be a good idea to increase tax incentives for having children. Will opposes it because he doesn't think the government has any business intruding here in the first place, and Reihan favors it because he favors pro-natal policy in general. "On the whole," says Reihan, "I’d rather we subsidize child-rearing than the purchase of large homes in capacity-constrained regions or high-tax jurisdictions at the expense of low-tax jurisdictions."

Put that way, I guess maybe I'd agree. But before this argument goes much further, it might be worth asking whether changes to the tax code have any real impact on childbearing in the first place. Our philosophical predispositions don't matter much if the empirical evidence tells us not to care.

And it seems like that's what it tells us. An influential paper a couple of decades ago suggested that tax policy really did have an effect on fertility rates, but two decades and some big changes in tax policy have gone by since then. A couple of years ago a trio of researchers at NBER recrunched the numbers and found that the original paper relied on a couple of critical assumptions that most likely aren't true. And even if they are true, "there is some evidence that child tax benefits affect the timing of births, but find no evidence of any lasting fertility effects."

Chart below. Do you see any effect from the skyrocketing level of child tax subsidies over the past couple of decades on the general fertility rate? I sure don't. If you want to reward people for having children just because you think it's the right thing to do, that's fine. But if you're actually trying to affect the number of kids we have, the evidence suggests it simply doesn't make any difference.

Romney Can't Win, But He Can't Lose Either

| Tue Feb. 28, 2012 10:32 PM PST

Going into today's primaries, I figured Romney had to win Michigan by five points to demonstrate that his campaign still had its old mojo. In the event, he won by three. So....I guess things are still up in the air. Romney is in sort of a quantum superposition between winning and losing, still waiting for the Republican base to look at him just a little bit harder and collapse him into one or the other.

Or something. In any case, I'll bet no one else uses that particular imagery to describe tonight's results. And Romney is still the luckiest man in the world. (Well, the second luckiest after Barack Obama, anyway.) It's as though he's a modern-day Dr. Faustus. No matter how stilted and awkward and jawdroppingly detached from normal human experiences he remains, somehow every one of his opponents ends up self-destructing under his steely gaze. Bachmann had Gardasil, Perry had "Oops," Cain had Ginger White, Gingrich had Gingrich, and now Santorum is reeling from Snobgate. Ron Paul has come through unscathed, but that's only because he's apparently cut a side deal with Romney and his infernal patron.

So Romney is still the presumptive nominee, the winner by default because everyone else is unthinkable. And after limping through the spring and finally staggering into the convention like a punch-drunk Rocky Balboa, guess what? Not only will he have to face Apollo Creed in the main event, but it looks like the Greek Streak, Olympia Snowe herself, might be pecking away at his kneecaps the entire time. Unfortunately for Romney, being the second luckiest guy in the world in a presidential race is sort of like being the second best team in the Super Bowl. He better check the fine print on his contract.

The Filibuster, Sadly, Will Be Around for a While

| Tue Feb. 28, 2012 4:11 PM PST

Jon Chait thinks Republicans are following an inevitably disastrous long-term electoral strategy because they've given up on their future and just want to win two more years in office — years they can use to move America so far to the right it will take Democrats a generation to move it back. I think that sounds entirely unlikely because (a) there's little reason to believe that Republicans buy the idea of their impending demographic doom in the first place, and (b) Republicans know that Democrats could just use the filibuster to prevent them from moving the needle all that far anyway. So the strategy wouldn't even work. Matt Steinglass displays excellent judgment by agreeing with me:

But I disagree with Mr Drum on one point. If the Republicans retake the Senate next year and have the opportunity to pass major legislation, I think it very likely they'll get rid of the filibuster, or pare it back in some complicated way that pertains to the issues they consider important. There's nothing in the constitution about needing to have 60 votes in the Senate. Democrats would have been better able to accomplish their agenda in 2009 and 2010 if they'd scrapped the filibuster, but they're too fragmented and hesitant to make those kinds of aggressive rule changes. Republicans have tighter party discipline, and the tea-party wing hates complex Washington rules that prevent the people's will from being done. I don't really see what's going to stop the GOP from making the changes they need to pass their agenda with a simple majority, if that's what they need to do.

I decided not to make a long post longer by addressing this yesterday, but long story short, I don't think Republicans will do this. If they really did believe they were demographically doomed, and had only two years to save America from an apocalyptic Euro-secular future of moral decay and economic disintegration, then maybe they'd think about it. But I don't think they believe this. They believe that politics will continue pretty much the way it always has, and they're going to need the filibuster in the future.

Besides, this doesn't even make sense on its own terms. If Republicans really do believe that their party is demographically doomed and 2012 is their last stand, this means they also believe that Democrats will take back control of the government in 2016. And if the filibuster has already been mowed down, the jig is up. We'll have single-payer healthcare, abortion clinics on every corner, and gay marriage at gunpoint by 2017.

Either way, then, the filibuster is safe. If politics continues as normal, Republicans will need the filibuster. If Democrats are going to sweep to power in 2016, Republicans will need the filibuster. It's not going anywhere.