Kevin Drum - February 2012

Chart of the Day: Net New Jobs in January

| Fri Feb. 3, 2012 12:10 PM EST

Today is new jobs day, and my usual chart is below. It shows the number of net new jobs created over the past few years; that is, the number of new jobs above the 90,000 per month needed just to keep up with population growth and tread water. In January, that amounted to 153,000 net new jobs, pushing the headline unemployment rate down to 8.3%. That's pretty good news. Brad Plumer has a useful warning about data revisions here. Jared Bernstein provides some context and details here. Matt Yglesias talks about what we need to do to keep the recovery going here.

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Soaking the Poor, State by State

| Fri Feb. 3, 2012 7:00 AM EST

You have heard, perhaps, that rich people in America are egregiously overtaxed. And the poor? They're the lucky duckies! Why, 47 percent of Americans pay no taxes at all!

(This is not true, of course. Many poor and elderly Americans pay no federal income tax, but they pay plenty of other taxes.)

Still and all, it's true that the federal income tax is indeed progressive. Conservatives are right about that—though it's not as progressive as it used to be, back before top marginal rates were lowered and capital gains taxes were slashed in half. But conservatives are a little less excited to talk about other kinds of taxes. Payroll taxes aren't progressive, for example. In fact, they're actively regressive, with the poor and middle classes paying higher rates than the rich.

And then there are state taxes. Those include state income taxes, property taxes, sales taxes, and fees of various kinds. How progressive are state taxes?

Answer: They aren't. The Corporation for Enterprise Development recently released a scorecard for all 50 states, and it has boatloads of useful information. That includes overall tax rates, where data from the Institute on Taxation and Economic Policy shows that in the median state (Mississippi, as it turns out) the poorest 20 percent pay twice the tax rate of the top 1 percent. In the worst states, the poorest 20 percent pay five to six times the rate of the richest 1 percent. Lucky duckies indeed. There's not one single state with a tax system that's progressive. Check the table below to see how your state scores.

Report: Military Warns Israel Against Iran Strike

| Fri Feb. 3, 2012 2:04 AM EST

File this dispatch from Gareth Porter under "interesting if true":

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey told Israeli leaders Jan. 20 that the United States would not participate in a war against Iran begun by Israel without prior agreement from Washington, according to accounts from well-placed senior military officers.

....Dempsey's trip was highly unusual, in that there was neither a press conference by the chairman nor any public statement by either side about the substance of his meetings with Israeli leaders. Even more remarkable, no leak about what he said to the Israelis has appeared in either U.S. or Israeli news media, indicating that both sides have regarded what Dempsey said as extremely sensitive.

The substance of Dempsey's warning to the Israelis has become known, however, to active and retired senior flag officers with connections to the JCS, according to a military source who got it from those officers.

Hmmm. So a "military source" heard this from "active and retired senior flag officers with connections to the JCS" who in turn learned about this from....someone. I'm not going to pretend that this is the most confidence-inspiring sourcing I've ever run into, but that doesn't mean it isn't true. It might be!

Quote of the Day: "Democrats Piss Me Off"

| Thu Feb. 2, 2012 9:21 PM EST

From Kent, a Republican caucusgoer in Nevada, explaining to Dave Weigel why he hates Democrats:

If you're a Democrat, you are my enemy. Democrats piss me off. They've gotten extremely socialistic. Every time they get in, they raise taxes. They screw things up. I've got a jeep I've had for ten years; I pay $100 a year on the license plate. We just got a new Dodge; $600 to license it. You pay your money, they pass it on to the Mexicans, the colored people. Free education, handouts, all of that.

So there you go.

Making Sense Out of the New York Times

| Thu Feb. 2, 2012 7:59 PM EST

Felix Salmon is puzzled. So am I. Here is Ken Doctor reporting on the success of the New York Times paywall, which was put in place last year and has since attracted 390,000 subscribers:

It took about 12 seconds for Times’ readers to figure out the new subscription math, when the company when digital-paid last year. When they did the math and saw they could get the four-pound Sunday paper and “all-digital-access” for $60 less than “all-digital-access” by itself, they took the newsprint. Which stabilized Sunday sales, and the Sunday ad base. Then the Times was able to announce a near-historic fact in October: Sunday home delivery subscriptions had actually increased year-over-year, a positive point in an industry used to parsing negatives. Now, Sunday is emerging a key point of strategic planning.

And here is Felix:

This is great news for the Sunday newspaper, which is highly profitable for the NYT. But it also raises the obvious question: why are 390,000 NYT readers eschewing a Sunday paper they could get for less than nothing? Some are IHT subscribers who don’t have that option; others are naturally peripatetic. And the cheapest digital subscription is actually still cheaper than the Sunday-only delivery.

Huh? Feeling a bit outraged when I read this, I went over to the NYT site to see how much I was paying for my digital-only subscription. The Times doesn't make it especially easy to figure this out, but according to my billing history the answer turns out to be $11.25 every four weeks, or $146 per year. This gets me the Times-online plus their smartphone app. (But not the tablet app, since I don't own a tablet.)

And what's the cost of Sunday home delivery? Well, that's not easy to figure out either. In fact, it's so hard to figure out that I think the Times is about a hair's breadth away from fraudulent advertising. However, in my zip code the answer is $3.90 per week, or $203 per year. So that's quite a bit more than digital-only. What's more, this is an introductory rate, and although it's close to impossible to find out what the rate is once the introductory period is over, after heroic effort I discovered that it would cost me $7.80 per week, or $405 per year. That's way, way more than my digital subscription.

Now, I'm not sure what kind of deal the Times was offering last year when the paywall was first launched, but I also tried this after typing in a New York City zip code, which offered me only a Saturday-Sunday option, not a Sunday-only option. It's a little less expensive than getting the paper out here in Irvine, but it still comes to $343 per year.

Now, having said all that, I still don't know what's going on. According to the NYT website, a digital+smartphone subscription costs $3.75 per week. So why am I getting it for $2.81 per week? It is a mystery.

Another mystery: the NYT digital pricing makes no sense. It's supposedly $15 for digital+smartphone, $20 for digital+tablet, and $35 for digital+smartphone+tablet. Some crude linear algebra demonstrates that the digital portion of these subscriptions costs.....zero. WTF?

Bottom line: New York Times pricing is mysterious. However, Felix's passing mention that "the cheapest digital subscription is actually still cheaper than the Sunday-only delivery" explains everything. Basically, the "cheapest" digital subscription gets you everything except their tablet app. So unless you want that — and I imagine lots of people don't — digital pricing is considerably cheaper than home delivery no matter how you slice it. So the one thing there's no mystery about is why there are 390,000 digital-only subscribers. It's because that's the cheapest way to get unlimited access to the Times.

Super PACs Are Already Yesterday's News

| Thu Feb. 2, 2012 3:46 PM EST

A couple of days ago I linked to Adam Skaggs asking Congress to change the ridiculous campaign fundraising rules that allow Super PACs to coordinate with campaigns even though it's supposedly strictly forbidden. Today, Rick Hasen says that Super PACs are yesterday's news:

Right after Citizens United was decided, there was a great debate within the campaign finance world over whether the case would change campaign finance patterns. Some pointed to the fact that in the 2010 election, we saw barely any independent spending directly by corporations. My view had always been that most (for profit) corporations would not want to stick their necks out and risk alienating customers by putting their names on independent ads. For corporate money to really matter, there would have to be a way to filter it through committees and sometimes to hide the money entirely. Thanks to Super PACs and the transformation of 501c4′s, both of these are now possible and we are witnessing the corporate money coming in....We don’t know how much corporate money is coming in now (and as to 501c4s, because of lack of disclosure we likely will never have the full picture). But it seems a safe bet that there is lot more corporate money coming into the system than was (barely) allowed in the pre-Citizens United world.

....My big concern before yesterday was that we would see a lot of transfers of money from 501c4s to affiliated Super PACs to shield the identity of donors to Super PACs. I’m still trying to get a handle on how much of this took place (apparently less than I thought). But the reason these transfers are not taking place is that it appears the 501c4s are engaging in much more direct election-related activity than they have in the past.  That is, we are seeing some 501c4s becoming pure election vehicles. The relation of 501c4s to super pacs is now like the past relation between 527s and pacs—these are now the vehicles of questionable legality to influence elections. While Adam Skaggs is rightly focused on fixing the coordination rules for Super PACs, this seems to be fighting yesterday’s war already. The key is to stop 501c4s from becoming shadow super PACs. Yes, campaign finance reform community, it has become this bad: I want more super PACs, because the 501c4 alternative is worse!

Well, yes, we could rein in 501c(4) spending by requiring that they disclose their donors, and the DISCLOSE Act would have done just that. Needless to say, it failed even in 2010, when Democrats controlled the House and had a huge majority in the Senate. It received, if I recall correctly, two Republican votes in the House and zero Republican votes in the Senate.

So there's not really much chance that a revived and amended DISCLOSE Act is going to pass now. We are doomed.

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Nation-Building vs. Al-Qaeda-Crushing in Afghanistan

| Thu Feb. 2, 2012 3:12 PM EST

Matt Steinglass on our decade-long nation-building mission in Afghanistan:

Nothing in my life has made me as pessimistic about development aid as the course of the American intervention in Afghanistan…I think I've seen figures showing that foreign aid was actually greater than the country's entire GDP in 2011. That sounds impossible, but I'd imagine it reflects the fact that foreign aid is often spent on salaries for Western consultants and equipment from donor countries, so it never really enters Afghanistan at all.

…The romantic vision of the transformation of Afghanistan involved passionate Westerners with graduate degrees donning local garb and riding on donkeys to dirt-poor villages to educate their girls and extend their agriculture. But Westerners with graduate degrees don't much want to sit around on donkeys in dirt-poor villages, particularly not when the Taliban will kill them for doing so. They want to ride out to the village in an SUV, train some locals to teach the girls (or better yet, train some local trainers), drive back to the city, hit the gym and turn on the laptop. Besides which, they have to turn on the laptop, because the congressional subcommittee has told USAID to mandate that they report monthly on progress in 37 different categories of target indicators in exchange for their NGO getting the grant.

Et cetera. I saw this last night, but couldn't think of anything really worthwhile to add to it. I wanted to link it up to the lessons we supposedly all learned from E. F. Schumacher several decades ago about the appropriate scale of foreign aid projects in Third World countries, but I just don't have the chops for that. I also wanted to link to an article I read a few years ago about the immense delicacy of interfering with local economic patterns, which runs the risk of wrecking key incentives and cultural practices built up over centuries, but I couldn't remember where I'd seen it or what country it was about. Which is too bad, because it was a great piece of eye-opening writing.

So that's a great big fail from me on the foreign aid front. Instead, I'll leave you with this observation from Andrew Sullivan:

Yesterday, I get a text from one of my friends, a former Special Ops guy who was one of the first to learn how to ride a horse, grow a beard and disappear into the mountains of Afghanistan in 2001. It read:

Are we leaving afghanistan. No way we are that is awesome.

The facts have persuaded me that this war needs to come to an end. But the most persuasive arguments I have heard have come from my friends who have served there. Every single one described "nation-building" there to be about as insane as, well, a 51st state on the moon. All of them wanted to find and kill the men who attacked the US a decade ago—and go home. Since Obama took office, they have been granted their wish: almost all the al Qaeda leadership dead, and bin Laden's bones being picked dry by fishes.

Our exit from Afghanistan is going to be messy and bloody. Republicans are going to have a field day no matter what. But our only other option is, almost literally, to stay there forever. The idea that the United States was ever going to remake Afghanistan in a few years or even a few decades was a ridiculous pipe dream, and it still is. We've now accomplished our military mission there about as well as it ever could have been accomplished, and it's time to leave.

It was endless jingoism from the right combined with cravenness from the left that turned our presence in Vietnam into a fiasco of world historical proportions. LBJ was simply unwilling to stand up to insinuations that he was soft on communism, and the end result was 60,000 Americans dead and, eventually, the exact same takeover of South Vietnam that would have happened in 1954 if we had let it. There was simply no way that even a massive military presence was ever going to change Vietnamese nationalism or reform Vietnamese corruption in a few years—or a few decades.

Thankfully, President Obama now seems to understand this. The jingoism from the right may be different this time—today's Democratic president is accused of being soft on terrorism, not communism—but if history isn't exactly repeating itself, it's certainly rhyming. Obama succumbed to this conservative braying a couple of years ago when he doubled down on Afghanistan, but apparently he's smart enough to realize that it's better to weather the inevitable right-wing jeremiads about appeasement than it is to turn into another LBJ.

I don't think that escalating in Afghanistan was ever the right call, and I doubt that an extra few years of war has made a serious dent in the Taliban, in Afghanistan's culture, or in the politico-tribal realities that have always governed the country. But if that was even a little bit unclear a few years ago, it's simply indisputable now. We've done enough damage to Afghanistan. Osama bin Laden is dead, Al Qaeda is all but destroyed, and the Taliban is as weakened as it's ever going to get. It's long past time to come home.

Planned Parenthood and the Culture Wars

| Thu Feb. 2, 2012 12:54 PM EST

The Komen Foundation claims that they cut off their breast cancer screening funding for Planned Parenthood for entirely innocent reasons. They had adopted a new rule that barred grants to organizations under investigation by local, state or federal authorities, and Planned Parenthood is currently the target of a congressional investigation. Sadly, this rule gave them no choice but to end their grants.

This is such transparent BS that it's insulting that they didn't bother coming up with something a wee bit more believable. Today, Jeffrey Goldberg explains what really happened:

Three sources with direct knowledge of the Komen decision-making process told me that the rule was adopted in order to create an excuse to cut-off Planned Parenthood....The decision, made in December, caused an uproar inside Komen. Three sources told me that the organization's top public health official, Mollie Williams, resigned in protest immediately following the Komen board's decision to cut off Planned Parenthood.

....John Hammarley, who until recently served as Komen's senior communications adviser...explained that the Planned Parenthood issue had vexed Komen for some time. "About a year ago, a small group of people got together inside the organization to talk about what the options were, what would be the ramifications of staying the course, or of telling our affiliates they can't fund Planned Parenthood, or something in-between." He went on, "As we looked at the ramifications of ceasing all funding, we felt it would be worse from a practical standpoint, from a public relations standpoint, and from a mission standpoint. The mission standpoint is, 'How could we abandon our commitment to the screening work done by Planned Parenthood?'" But the Komen board made the decision despite the recommendation of the organization's professional staff to keep funding Planned Parenthood.

....Another source directly involved with Komen's management activities told me that when the organization's leaders learned of the Stearns investigation, they saw an opportunity. "The cart came before the horse in this case," said the source, who spoke to me on condition of anonymity. "The rule was created to give the board of directors the excuse to stop the funding of Planned Parenthood. It was completely arbitrary. If they hadn't come up with this particular rule, they would have come up with something else in order to separate themselves from Planned Parenthood."

The right's recent jihad against Planned Parenthood is about as loathsome as anything I've ever seen come out of them. They simply don't care anymore how many people they hurt or how much harm they do to anyone they disapprove of.

Indiana and the Future of Unions

| Thu Feb. 2, 2012 12:05 PM EST

Ed Kilgore reacts to the news that Indiana is set to become the first state in the industrial Northeast or Midwest to enact a right-to-work law that will almost certainly gut union organizing completely:

As someone who grew up in the right-to-work Deep South, I can assure Indianans that from a psychological point of view they are about to enter a brave new world where an ever-neurotic desire to keep corporations happy always seems to trump any consideration of fair play or workers' rights. Welcome to the Old South, Hoosiers! Misery loves company.

Unions are simply too weak these days to stop this from happening, and that trend shows no sign of slowing down. Republicans have always depended on money from corporations and the rich for their survival, and increasingly that's true of Democrats as well. Given this basic dynamic, it's very hard to see how unions survive in the long term.

The Unemployment Rate is Down No Matter How You Measure It

| Wed Feb. 1, 2012 6:50 PM EST

Every day there are several stories that seem to show up in about half the blogs I read. Today, for example, Mitt Romney said he doesn't care about the poor; youth unemployment is sky high in Greece and Spain; and if we just let the Bush tax cuts expire, a big chunk of our deficit problem goes away. And then there's Cardiff Garcia's post over at Alphaville that reproduces a graph showing what the unemployment rate would be if all the discouraged workers who have left the labor force were still in it. Answer: bad. "This alternative measure has remained above 10 per cent since September 2009, and...has mostly just moved sideways."

But wait. There's nothing magical about this. The graph comes from Nomura, but the BLS already tracks this stuff in a variety of unemployment measures that are released every month. U3 is the usual headline measure, but there's also U4, which is U3 plus all discouraged workers, and U5, which is U4 plus marginally attached workers. As the modified FRED chart on the right shows, all three of these measures have been declining in lockstep over the past couple of years. So even if you include all the folks who have just stopped looking for work, you still see a decline of about 1.5 points since the peak in 2009.

So color me confused. Unless the Nomura folks have some reason for thinking their measure is better than any of the BLS's measures, it looks to me like unemployment has gone down no matter how you measure it.

UPDATE: Cardiff Garcia contacted the Nomura folks to ask about this, and they explained that their measure is a modification of U4. In a nutshell, U4 includes the unemployed plus "discouraged" workers — i.e., those who say they want to work but have given up because they believe there are no jobs available. That number has declined over the past two years.

The Nomura measure, by contrast, counts everyone who has exited the labor force for any reason other than retirement. They simply assume that all other labor force exits are for economic reasons of one kind or another.

I suppose either measure could make sense depending on what you're most interested in. There's probably always a small segment of the labor force that's only barely interested in working, and that decides to stay home with the kids or write the great American novel given even the slightest incentive. Those folks are captured in the Nomura calculation but not in U4. I guess it's up to you to decide which you find a more useful measure of the state of the economy.