Kevin Drum - March 2012

Liberals Started the Culture War, and We Should Be Proud of Continuing It

| Mon Mar. 19, 2012 3:12 PM EDT
1965 civil rights march from Selma to Montgomery, Alabama.

Ed Kilgore writes a post today mocking right-wing fear of betrayal by insufficiently dedicated conservative judges, a brand of paranoia that got its start with Eisenhower's appointments of Earl Warren and William Brennan to the Supreme Court:

These disasters (from a conservative point of view) were hardly isolated. Richard Nixon appointed Roe v. Wade author Harry Blackmun; Gerald Ford's brief presidency produced long-time Supreme Court liberal John Paul Stevens, and Poppy Bush put the ultimate Stealth Liberal, David Souter, on the High Court, an act for which the later nomination of Clarence Thomas was a very loud apology. Worse yet, St. Ronald Reagan was responsible for Sandra Day O'Connor, and depending on where Anthony Kennedy lands on a series of big upcoming cases, his appointment, too, could wind up earning a conservative Day of Infamy.

You'd have to say everything about Mitt Romney makes him suspect as the kind of Republican president who might make an insufficiently right-wing Court appointment. And this is precisely why I'd bet the farm (if I had one) that by the time November rolls around the Federalist Society wing of the conservative movement will have extracted so many private and public blood oaths from Romney on the subject that should he even think about a less-than-orthodox nominee, Satan would appear in the West Wing and snatch Mitt right down to hell.

It's actually sort of unfair to ridicule this. The truth is that by 1990 conservatives had very good reason to be tired of "conservative" Supreme Court nominations that turned out to be either moderate or downright liberal. Souter was the last straw, especially since his nomination was viewed as caving in to liberal attacks on a genuine conservative, Robert Bork. If the shoe were on the other foot, liberals would feel the same way. I would, anyway.

In a way, though, that's why I think Ed is wrong in his conclusion. The Bork/Ginsburg/Thomas trifecta, combined with a long history of moderate appointments, came to a head in the early 90s. Since then, there's been no daylight among Republicans on the need to nominate only absolutely reliable conservatives to the Supreme Court. Romney may indeed make both public and private promises on this score, but he won't need any coaxing. Even moderate Republicans are pretty much on board with the movement conservative agenda on Supreme Court nominees.

There is, in a way, a broader unfairness here too. We tend to mock conservatives for endlessly keeping the culture war alive, but the truth is that it was we liberals who started it. We're the ones who, among many, many other things, banned school prayer, legalized abortion, fought for gender equality, and are currently pressing to legalize gay marriage. You'll be unsurprised to learn that I think we were right to do all these things and right to keep fighting for them. But make no mistake: we're the ones demanding change, and we're the ones who keep fighting for it. Every time I hear some liberal complaining about the way that conservatives keep turning everything into a new front in the culture war, I feel a twinge of chagrin. Why are we complaining? We're the ones who really own the culture war, and we should be proud of it. It was a war worth starting and a war worth winning.

Advertise on MotherJones.com

European Econ Blogging is Truly a Dismal Science

| Mon Mar. 19, 2012 1:21 PM EDT

Via Ryan Avent, the European econ blog site Bruegel highlights this rather astonishing fact:

As Ronny Patz noted in a recent post [], European blogs are still very much “unconnected”. That is, they use hyperlinks far less than their American counterparts or do it and in a way that doesn’t create two-way debate. In brief, Europe has bloggers, but no blogosphere: it lacks a living ecosystem to exchange and debate. Of most leading European blogs, only 1 in 5 were linked to other online content. This is a pretty striking number but one that is somewhat consistent with the use that Europeans make of blogs (ie. just another media but not an interactive one).

The Bruegel folks suggest there are both institutional reasons for this (European economists mostly publish in their home country newspapers) and cultural reasons (European economists don't like to argue as much as American economists). And language plays a role. Still, it's very peculiar. Can it really be true that European economists aren't much interested in publishing online even after years of seeing how vibrant the American econ blogging scene is? Do they really shy away from arguing with each other? "European economists seem to prefer spreading knowledge rather than stirring debate," say the Bruegel bloggers.

That's.....admirable, if true, I suppose, but it doesn't quite smell right. I don't know anything about European economists in particular, but it's certainly never been my experience that Europeans in general are more reticent than Americans. They always seemed to me like they had plenty of opinions and just as much love for bar stool arguments as Americans.

I wonder if there's more to this?

Corruption? What Corruption?

| Mon Mar. 19, 2012 11:53 AM EDT

The LA Times reports on the latest front in campaign fundraising:

A "super PAC" that has spent more than $35 million on behalf of Republican presidential hopeful Mitt Romney has accepted donations from federal contractors despite a 36-year-old ban against such companies making federal political expenditures.

....Several contributors — including a Florida aerospace company that has contracts with the Defense Department, and a Boston-based construction company that is helping build a Navy base — are taking advantage of a legal gray area created by the Supreme Court's 2010 ruling in the Citizens United case, which said that independent political expenditures could not be regulated based on who was making them.

In Citizens United, the Supreme Court ruled that corporate donations to campaign Super PACs were legal because there was no reason to think they led to "corruption or the appearance of corruption." This was a remarkably specious argument in the first place, but now we're apparently going to test it to destruction. Romney's Super PAC is essentially arguing that even contributions from federal contractors don't have the slightest taint of corruption to them. Both federal law and common sense have disagreed for more than 70 years, but we live in a brave new world, and common sense is no longer as common as you might think.

Chart of the Day: Employer-Based Health Insurance is Going the Way of the Dodo

| Sun Mar. 18, 2012 2:41 PM EDT

Via Paul Krugman and Reed Abelson, here's a chart from the National Institute for Health Care Reform. Over the past decade, the number of Americans with employer-sponsored health insurance has dropped from about 70% down to nearly 50%. Note that this is for the non-elderly only, so it's not due to the aging of society or the growth of Medicare. This is working-age people only. As Krugman says, our weird employer-based health insurance scheme is "coming apart at the seams."

Most Americans simply have no clue how bizarre it is that we rely on employers to provide health insurance for most people. We've all grown up in this sytem, so it seems completely normal. But it's not. It happened through a weird combination of historical accidents, and it makes no sense. Why should an airplane manufacturer also be in the healthcare business? Why should you lose your health insurance if you get laid off? Why should your choice of doctor be limited by your employer's choice of insurance carrier? (And why should it change whenever your employer decides to change carriers?) Why should your boss be allowed to dock your paycheck if you don't get the medical "counseling" he deems necessary? (Yes, this is real. And it's rapidly making its way to a corporation near you.)

It. Makes. No. Sense. And dozens of countries around the world have shown that there are better, less expensive, more universal ways of providing medical care. It is truly a mystery that we still put up with the archaic, Rube Goldberg mess that passes for health insurance in this country. If the red trendline I added to the NIHCR chart turns out to be accurate, maybe we won't for too much longer.

Our Financial Stockholm Syndrome

| Sun Mar. 18, 2012 1:05 PM EDT

Felix Salmon writes today that the power of the financial industry goes beyond mere lobbying:

One of the themes running through Noam Scheiber’s new book is the idea that professional technocrats have a tendency to take at face value much of what they’re told by Wall Street. Bankers are very good at capturing/flattering mid-level political operatives.

Yep. But this goes beyond mere regulatory capture. Here's a blast from the past: my take on regulatory capture in "Capital City," two years ago:

[The story of the finance lobby is] about the way that lobby—with the eager support of a resurgent conservative movement and a handful of powerful backers—was able to fundamentally change the way we think about the world. Call it a virus. Call it a meme. Call it the power of a big idea. Whatever you call it, for three decades they had us convinced that the success of the financial sector should be measured not by how well it provides financial services to actual consumers and corporations, but by how effectively financial firms make money for themselves. It sounds crazy when you put it that way, but stripped to its bones, that's what they pulled off.

....Their real power lies in the fact that they've so thoroughly changed our collective attitude toward financial regulation that sometimes they barely need to lobby in the traditional sense at all....Unlike most industries, which everyone recognizes are merely lobbying in their own self-interest, the finance industry successfully convinced everyone that deregulating finance was not only safe, but self-evidently good for the entire economy, Wall Street and Main Street alike. It's what Simon Johnson, an MIT economics professor and former chief economist for the IMF, calls "intellectual capture." Considering what's happened over the past couple of years, we might better call it Stockholm syndrome.

More here from me and David Corn at about 5:00 mark. As near as I can tell, not a lot has changed since then.

Quote of the Day: Cupcakes and Class Warfare

| Sat Mar. 17, 2012 1:06 PM EDT

From Jeffrey Henig, a professor of political science at Teachers College in New York City:

It's never just about the cupcake.

This might become my favorite new catchphrase to describe fights ostensibly about X that everyone knows are really about Y. Click the link for context.

Advertise on MotherJones.com

Friday Cat Blogging - 16 March 2012

| Fri Mar. 16, 2012 3:27 PM EDT

On the left, Inkblot is giving us his sad face because the food bowl is empty and it's getting close to dinner time. Don't worry: his hunger was assuaged a few minutes later. On the right, Domino is batting away at a piece of string. You'll have to take my word for it, since the string isn't in the picture. But she's watching it intently.

Have a good St. Patrick's day, all. Feed your cats some green cat food tomorrow.

Will We Ever Close the Output Gap?

| Fri Mar. 16, 2012 3:14 PM EDT

"Potential GDP" is the size of the American economy if it's running at full steam. "Actual GDP" is, as you'd expect, the actual size of the American economy. During the Great Recession, actual GDP fell, and since then it's grown at roughly the same rate as it used to. In other words, it hasn't grown fast enough to make up the ground it lost in 2008-09. So there continues to be a big difference between actual GDP and potential GDP. This is known as the output gap.

So when will GDP start growing fast enough to close the output gap and get us back to our true potential output level? Last month, St. Louis Fed president James Bullard suggested that the answer is never. We lost a chunk of output potential when the housing bubble burst, and that's that. Generally speaking, I think the evidence suggests Bullard is wrong. But not all the evidence points in that direction. It's possible, for example, that potential GDP started slowing down a decade ago, but it was masked by the housing bubble. So instead of seeing a gradual slowdown over the course of several years, we saw the entire slowdown condensed into about 24 months.

There's actually a surprising amount of evidence for this. For example: median income growth slowed in the mid-70s, but it stalled almost completely around 2000. Real-world investment opportunities began stagnating around 2000. Labor markets slackened permanently starting around 2000. The employment-population ratio among women plateaued around 2000 and continued its long-term decline among men. The labor share of income in the nonfinancial sector dropped steeply starting in 2000 and never recovered. The number of jobs created by new businesses peaked around 2000 and has been falling ever since. State and local government output suddenly stagnated around 2000. Globally, the energy intensity of GDP stopped growing around 2000, which means world economic growth became limited by energy growth.

I bring this up because both Grep Ip and Felix Salmon are starting to wonder if Bullard is right. Maybe we aren't ever going to make up the output gap. Maybe we've lost a certain amount of economic output permanently. Are they just becoming overly pessimistic after four years of lousy economic growth? Maybe. But their posts are worth reading. 

Balancing the Budget the Obama Way

| Fri Mar. 16, 2012 2:03 PM EDT

In case you're curious, here's CBO's take on President Obama's proposed budget. The light blue line is their "baseline projection" which assumes that all current laws stay in effect forever and the Bush tax cuts all expire at the end of the year. It shows the federal deficit nearly disappearing by 2017. The dashed line is their "alternative scenario," which assumes extensions of the Bush tax cuts and a few other things as well. It shows the federal deficit improving a bit, but then deteriorating to 6% of GDP by 2022.

The dark blue line is the Obama budget, and it's somewhere in between. But here's an important point that you can't see just from looking at the chart: Obama's budget reaches primary balance in 2018. This means that federal spending is in balance, and the only source of the deficit going forward is interest payments on the national debt. At that point, the debt-to-GDP ratio is stable. That's a big milestone.

The truth is that it's not really that hard to reach long-term balance. If we simply sit back and do nothing, the budget would basically be balanced by 2015. Even if we just allow the Bush tax cuts to expire — all the Bush tax cuts — it would be a huge step forward. Since the economy will probably still be a bit fragile by the end of the year, my preference would be to phase them out over the course of, say, three years. Combine that with spending cuts that Democrats and Republicans have mostly agreed to already and we'd be nearly the whole way there. All that's left then is reining in rising healthcare costs.

But then, that's really all that's ever been left. When it comes to the federal budget, it's all healthcare, baby. It always has been.

Chart of the Day: The Housing Bubble Increased Racial Segregation

| Fri Mar. 16, 2012 12:53 PM EDT

Via Suzy Khimm, here's an interesting bit of research from Amine Ouazad and Romain Rancière. During the housing boom of the aughts, it became easier for low-income families to buy more expensive homes. Since African-American families have lower incomes than average, this suggests that the housing boom, on average, should have allowed them to move into less segregated neighborhoods.

And it did. But it also allowed white and Hispanic families to move, and it turns out that Hispanic families mostly moved into Hispanic neighborhoods:

Hispanic families have used the easier access to credit to buy houses in predominantly Hispanic neighbourhoods with the consequence of enrolling their children in schools with fewer black peers, and more Hispanic and white peers. We estimate that, because of the credit boom, black students in 2006 had 2% fewer Hispanic peers....Credit markets enabled a substantial fraction of Hispanic families to live in neighbourhoods with fewer black families, even though a substantial fraction of black families were moving to more racially integrated areas.

The chart below shows the impact of the housing boom on black household segregation. In 1997, black students in public schools had an "isolation" of 50.5%. That is, 50.5% of their peers were black. By 2007, that had dropped to 49%. But the housing boom actually slowed the rate of decline. The authors conclude that if the housing boom had never happened, black isolation would have dropped to 48%. Their conclusion: "The net effect is that credit markets increased racial segregation."