Kevin Drum - March 2012

Bread and Circuses in Modern Rome

| Thu Mar. 1, 2012 12:56 PM EST

Why did Olympia Snowe suddenly decide to quit the Senate? Jonathan Weisman provides this take:

Georgia Chomas, a cousin of the senator who described herself as more like a sister, said social conservatives and Tea Party activists in Maine were hounding her at home, while party leaders in Washington had her hemmed in and steered the legislative agenda away from the matters she cared about. 

“There was a constant, constant struggle to accommodate everyone, and a lot of pressure on her from the extreme right,” Ms. Chomas said from her real estate office in Auburn, Me. “And she just can’t go there.”

It's easy to say that this is suicidal behavior on the part of tea partiers. They've hounded out a senator who's more moderate than they'd like, but her replacement is highly likely to be a Democrat, which just makes things even worse from their point of view.

But it's not just tea partiers. The left base of the Democratic Party is up in arms over the reemergence of Bob Kerrey in Nebraska, and the story there is pretty much the same. Sure, he's infuriating, but if he doesn't run a Republican is almost sure to win the seat. No matter what kind of lefty politics you have, it's hard to see how that's an improvement.

Back in the day — by which I mean five or six years ago — you had guys like Karl Rove defending RINOs like Lincoln Chafee because he knew that Republicans were lucky to have anyone on their side from a blue state like Rhode Island. Further back, William F. Buckley famously urged conservatives to support "the most conservative candidate who is electable." Political pros still think this way, I assume, but they're being overwhelmed by the party bases. This cost Republicans pretty dearly in the 2010 Senate race, where they lost at least three winnable seats because they nominated unelectable crackpots.

I dunno. Maybe we've reached a point where we're all so bored and so fundamentally satisfied with things that we don't really care all that much about winning anymore. What we want out of politics is entertainment, and insisting on gladiator-like duels to the death, egged on by howling mobs, is pretty entertaining. It all beats me.

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The Unintended Consequences of Oprah's Book Club

| Thu Mar. 1, 2012 12:07 PM EST

Via Tyler Cowen, the economics profession has finally answered one of today's most burning questions: did Oprah's book club really get Americans to read more? Answer: No. It got them to buy more books endorsed by Oprah, but fewer of everyone else's books. Craig Garthwaite of the Kellogg School explains:

In the 12 weeks following an endorsement, weekly adult fiction book sales decreased by a statistically significant 2.5 percent....All of the estimates show greater sales decreases, suggesting that a Club endorsement had a business stealing effect....Following an endorsement, the sales of classics rose by 3.5 percent []. In contrast, there were statistically significant decreases for mysteries and action/adventure novels. Romances also saw a sales decline....These estimates demonstrate that while the endorsements had no effect or even decreased overall sales, they caused a substantial shift in the types of books being purchased.

So what happened?

Club selections were longer and more difficult than the bestselling titles in the genres that were popular among consumers likely to respond to the endorsement. Assuming that longer and more difficult books will take more time to read, the difference in estimated grade level combined with the genre-level sales shifts help explain the pattern of aggregate sales declines in the main results....Taken together, these estimates suggest that the difficulty of the endorsed titles contributes to the aggregate sales decline.

Roger that. While millions of Oprah fans were pretending to slog their way through Faulkner and Tolstoy, they were too drained to read their usual light fare. So the beach reading genres suffered. And if my cynical view is correct, the net effect was to reduce the total amount of reading among America's households. We read less crap, but probably didn't make up for it by actually reading the doorstops endorsed by Oprah. Most of us probably plowed our way through a chapter or two, then slowed down to a page here and there, and finally gave up in exhaustion. But I admit that this is a dim view. Perhaps Garthwaite's next paper should tackle the question of whether people who bought Oprah's recommended books actually read them.

Personal Income Revised Upward — Way Upward

| Thu Mar. 1, 2012 1:06 AM EST

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.