Kevin Drum - July 2012

Chart of the Day: Net New Jobs in June

| Fri Jul. 6, 2012 9:51 AM EDT

I'm not trying to ruin your day or anything, but here's our usual monthly jobs chart, adjusted for population growth to show actual net job creation. For the third month in a row, it's slightly negative. Job growth is just about keeping up with population growth, but we're not making any progress. Basically, we're treading water.

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More Data, Please

| Thu Jul. 5, 2012 10:03 PM EDT

The Wall Street Journal is the latest to succumb to the forces of goodness and light:

Most style guides and dictionaries have come to accept the use of the noun data with either singular or plural verbs, and we hereby join the majority.

As usage has evolved from the word’s origin as the Latin plural of datum, singular verbs now are often used to refer to collections of information: Little data is available to support the conclusions.

Otherwise, generally continue to use the plural: Data are still being collected.

(As a singular/plural test, try to substitute statistics for data: It doesn’t work in the first case — little statistics is available — so the singular is fails to pass muster. The substitution does work in the second case — statistics are still being collected – so the plural are passes muster.)

Well, they've halfway succumbed, anyway. But I won't rest until they — and everyone else — accept the plain fact that data should be treated as a singular noun in all circumstances. The worst offenders here are generally in academia, and I've always wondered if they actually talk the same way they write. (I mean in casual speech, not prepared remarks.) I'm not sure I've ever heard anyone say "data are," but lots of diehards with PhDs still use it in print.

Now, I know that lots of people continue to foolishly disagree with me about this, but I'm curious how far they're willing to push things. If you had, say, five bits of information, would you say I only have five data? If you really, truly believe that data is a plural noun, you'd have no problem with this. But does anyone actually do it? Discuss in comments.

Need more data, first? The chart below is from the Google Ngram viewer and displays the frequency of data is vs. data are in books. I wouldn't pay too much attention to the peak around 1980, which might just be an artifact of what Google happens to have in its memory banks,1 but the relative popularity of the two phrases is pretty clear. In 1940, data are was a 4:1 runaway winner. By 1980, its lead was about 2½:1. Today it's barely in the lead at all. It clearly sounds as pretentious to lots of other ears as it does to mine.

1On the other hand, it might be real. If it is, I attribute it to large numbers of people giving up and deciding they don't need grief from either faction in this war. As a result, more and more people are simply recasting their sentences to avoid having to use the phrase at all.

The Conservative Misinformation Campaign About Obamacare Has Worked Really, Really Well

| Thu Jul. 5, 2012 4:26 PM EDT

Andrew Sprung draws my attention to a Kaiser quiz about Obamacare from a few months ago, and you'll be unsurprised to learn that most Americans don't know much about it. I put the responses into graphical form, and what's most interesting, I think, is to look at the right side of the chart: the questions that were most frequently gotten wrong.

All of them are tied together by a single thread: they've been the main targets of the conservative misinformation campaign against the Affordable Care Act. The tea party folks have never spent much time talking about low-income subsidies or tax credits or Medicaid expansion or pre-existing conditions. And guess what? Most people know how the law works in those areas.1

But conservatives do spend a lot of time rabble-rousing about death panels and illegal immigrants and Medicare cuts. And they also spend a lot of time bewailing the "government takeover" of healthcare, which includes things like the public option ("a new government run insurance plan") and a supposed mandate that small businesses will all be required to offer health insurance for their employees. Sure enough, those are the areas where misunderstanding is highest.

That's why I disagree with Andrew that misinformation about small businesses amounts to a "foot fault" by current standards of public discourse. In a way, he's right, of course: it's not a major flash point and it hasn't gotten a lot of news coverage. But there's a reason it's the single most misunderstood issue. The Rush/Fox/Drudge axis has been screaming about the government takeover of healthcare for three years now, and it's sunk in. Most people believe it. That's why, faced with a question most of them really have no idea about, their immediate reaction is to believe that, in fact, government is once again planting its jackboot directly on the necks of America's small businesses. It's a small issue, but it's also a bellwether that the broader conservative misinformation campaign has burrowed very deeply into the American psyche.

1The exception, of course, is the individual mandate, which gets a lot of tea party attention but scores well anyway. That's because there really is an individual mandate in the law, so conservatives have no need to lie about it.

The LIBOR Scandal Might Destroy the Banking Industry

| Thu Jul. 5, 2012 1:39 PM EDT

The recent settlement with Barclays Bank over its LIBOR1 fixing fraud has gotten.... some.... attention. Not a lot of attention, though. Why is that, given that this fraud potentially affected trillions of dollars in assets?

I think the obvious answer is that (a) it's really complicated and (b) everyone's a little vague about just who got ripped off here. On a listserv I subscribe to, a seemingly knowledgeable participant2 said the victims of the scam include investors who owned floating rate notes, LIBOR-linked CDs, or pay-fixed-receive-floating interest rate swaps; or anyone who traded LIBOR contracts on a U.S. futures exchange and lost money. And let's face it: that doesn't sound much like widows and pensioners, does it?

What's more, the LIBOR scam wasn't about pushing LIBOR systematically up or down. Sometimes it was pushed up, sometimes it was pushed down, depending on whatever happened to be good for the Barclays trading desk on any given day. So even if you are a widow or a pensioner with a CD linked to the LIBOR rate, it's not really clear if you were ever hurt.

Nonetheless, it's a big deal, and I think the Economist pretty much nails it here:

The attempts to rig LIBOR [...] not only betray a culture of casual dishonesty; they set the stage for lawsuits and more regulation right the way round the globe. This could well be global finance’s “tobacco moment”....Despite the risks of banker-bashing, a clean-up is in order, for the banking industry’s credibility is shot, and without trust neither the business nor the clients it serves can prosper.

Right now the scandal is limited to Barclays, but that's just because they decided to cooperate with regulators early on and therefore got keelhauled first. (Also, admittedly, because the Barclays board provided MBA courses of the future with an almost textbook case of how not to handle the news of a gigantic price fixing scandal.) UBS is said to be next in line, and other banks that haven't cooperated as willingly will take longer to prosecute. In theory, though, the news is likely to be even worse once those cases finish up.

Roughly speaking, the view from inside Barclays is that they're being treated unfairly. They cooperated, after all, and they say that other banks were way more involved in the LIBOR-fixing scam than they were. If that's true, one of two things will happen. Either this scandal will explode way beyond the financial press, where it's mostly played out so far. Or it will turn out that declining to cooperate makes it really hard to prosecute the other banks and Barclays will look like idiots for doing so. I'm not sure which to put my money on.

1LIBOR is the London Interbank Offered Rate. It's basically the current interest rate banks charge each other to borrow money, and it changes on a daily basis. So if you have an adjustable rate mortgage, for example, your interest rate might be LIBOR + 3, or something like that.

2How's that for a reliable source?

Obama Playing Long Game With Iran

| Thu Jul. 5, 2012 12:41 PM EDT

Last month Robert Wright wrote a few posts trying to draw attention to the Obama administration's Iran strategy. In a nutshell, Wright lays out some persuasive evidence that Obama isn't seriously negotiating with Iran at all. In fact, he's deliberately making proposals he knows will be refused and declining to offer Iran anything at all in return for an agreement to halt production of 20% uranium.

Why? Wright believes it's mostly political cowardice: Obama isn't willing to stray from the AIPAC-Israeli party line even slightly with an election just a few months away. In a followup post, however, he suggests there might be something more substantial at work: Obama is buying time because his goal now is regime change in Iran, not just a halt to its nuclear program. Today, after reading a New York Times piece about the apparent success of the new EU oil embargo (Iran is now pumping its excess crude into tankers and sailing them in circles around the Persian Gulf while it desperately tries to find buyers at "bargain-basement prices"), Dan Drezner places one wary foot on the regime change bandwagon:

I'm somewhat dubious about whether any sanctions against Iran will work in the sense of "change Iran's mind about its nuclear program." Even though there is room for a deal, the expectations of future conflict between the current Iranian regime and the West are so high that getting to that deal is going to involve significant amounts of labor.

These sanctions are sufficiently punishing, however, that they suggest a new status quo, which is to keep them in place as a containment shell while the Iranian economy slowly implodes. Unless the global economy experiences a significant rebound — hah! — there is no reason why all non-Iranian parties can't continue with the status quo for quite some time. Even if the Iranian regime persists, its power and influence in the region will continue to wane.

So is that what's going on? Are negotiations now just for show? Has Obama decided that the Iranian economy is weak enough that serious sanctions can bring it to its knees without a shot being fired? Possibly. Stay tuned.

Tax vs. Penalty is More Than a "Mere" Argument About Semantics

| Thu Jul. 5, 2012 11:37 AM EDT

I've now read about a hundred blog posts claiming that the question of whether the individual mandate is a tax or a penalty is "just a question of semantics." But it's not.

I know this seems obvious, but it is, in fact, also a legal question. And there's all sorts of past precedent that judges can use to guide them on this question. In last week's Obamacare decision, Chief Justice John Roberts basically said that it doesn't matter what Congress calls the mandate; what matters is how it operates. His conclusion, based on a variety of precedent, is that the mandate is a tax because (a) it raises revenue, (b) it's administered through the tax code, and (c) it's fairly modest, meant to nudge rather than punish. And, as Roberts says, "taxes that seek to influence conduct are nothing new."

In the dissent, Scalia1 says this is horseshit. The law itself repeatedly calls it a penalty, it's not primarily designed to raise revenue, and it is plainly designed to punish people who decline to buy insurance. "We cannot rewrite the statute to be what it is not," Scalia says. "We have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power—even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty."

I don't have any big point to make here, and I don't have a strong opinion on the merits of this argument, which is based on legal precedent I'm unfamiliar with. (Though I'm sympathetic to Roberts's view that the court should always bend over backwards to adopt legal readings that allow Congress to work its will if there's any reasonable way to do it.) I just want to point out that there actually is a legal argument about this that was carried out in the pages of the Obamacare decision. This isn't purely a matter of dictionary games.

1Technically, we don't know who wrote the dissent. But the tax section sure sounds like Scalia, doesn't it?

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Blind in Beijing

| Thu Jul. 5, 2012 11:00 AM EDT

Chinese declinism is one of the hot memes going around today. FP's "5 Signs of the Chinese Economic Apocalypse" is typical of the genre, and you probably already know most of the high points: a big property bubble, social unrest, looming demographic apocalypse, competition from even lower-wage countries, etc. Today, though, brings a brand new entry: Chinese kids are studying so damn hard they're going blind:

By the time they complete high school, as many as 90% of urban Chinese youth are afflicted by the condition known as myopia, in which close objects can be seen clearly but things just a few feet or inches away start to blur.

That's about three times the rate among U.S. children. Even more troubling is the severity of the Chinese cases. Between 10% and 20% of nearsighted Chinese children are expected to develop "high myopia," which is largely untreatable and may lead to blindness.

Some of this may be due to genetics, but Ian Morgan, a visiting professor at the Zhongshan Ophthalmic Center at Sun Yat-sen University, doesn't think so:

Myopia has steadily increased in concert with China's urbanization and intensified academic competition. It's not uncommon for children in China to study four hours a day at home on top of a full day of school as well as attend several hours of tutoring on weekends.

"Parents want their kids to get into the best primary school so they can have a better chance at the best high school that can help them get into Beida, Tsinghua and Fudan," Morgan said, referring to China's three elite universities....Despite a 2007 order by Chinese authorities to boost physical education in schools to combat obesity and deteriorating eyesight, many educators — and parents — have resisted.

...."If your prescription at the end of the day is making Chinese care less about education, then it's not going to happen," said Nathan Congdon, a professor at the Zhongshan Ophthalmic Center. "That's like telling Americans to like basketball or football less."

The silver lining is that China is now one of the world's fastest growing markets for glasses and contact lenses and laser surgery. So it's not all bad.

GOP's Weirdly Misguided Obamacare Tax Frenzy Maybe Not So Weirdly Misguided After All

| Thu Jul. 5, 2012 9:47 AM EDT

On Tuesday I questioned the Republican strategy of celebrating the Supreme Court's decision that the individual mandate is a tax. It seemed kind of pointless, since people hate the mandate no matter what it is. Basically, GOP leaders were putting their own presidential candidate in a tight position for no real reason.

But the past couple of days have produced a glimmer of an explanation. Take a look at the tea party email bomb on the right. Ignore the fact that your retirement account can't, in fact be seized and liquidated by the IRS for failing to pay the mandate penalty/tax. That's just the usual puffery. Mostly this is a signpost, suggesting that the emerging conservative strategy is to convince Americans that everyone now has to pay a new Obamacare tax. Democrats can fight back, but only by explaining that the mandate tax will only be paid by about 4 million people, not everyone, and then explaining that the other taxes in Obamacare mostly fall on high earners and corporations. This is, needless to say, a losing strategy. If you're explaining, you're losing; and if you're explaining about taxes, you're digging yourself a big fat grave.

In other words, maybe the tax angle makes more sense than I thought.

Fireworks Over Woodbridge

| Thu Jul. 5, 2012 12:27 AM EDT

Happy 4th of July from the fine folks who run the Woodbridge Village Association! This is my association dues at work.

Independence Day Cat Blogging

| Wed Jul. 4, 2012 10:31 AM EDT