Kevin Drum - July 2012

The Decline of Marriage, Part 2

Yes, women earn more than they used to. But that's only part of the story.

| Tue Jul. 17, 2012 10:37 AM EDT

Matt Yglesias isn't happy with my suggestion that plummeting male incomes are a contributing factor to the decline in marriage among the working class:

For starters, consider the timing. It's true that inflation-adjusted male earnings were lower in 2008 than they had been 25 years earlier in 1973. But at the same time, inflation-adjusted male earnings were much lower in 1948 than they were either 25 or 50 years later. So by this theory we would have expected very low marriage rates in the poor late-1940s—even lower than we see today—which of course isn't the observed pattern. What's more, male earnings experienced a substantial local increase over the course of the 1990s that wasn't matched by any localized turnaround in the marriage trends.

Sure, and male wages were even lower in 1648. But wages that are stable or rising wouldn't be expected to have a negative impact on marriage rates. Steeply dropping wages, however, might, as young men increasingly lose their sense of self-worth, become less attached to the workforce and less attached to traditional bourgeois values, and become less attractive mates to young women. And since this is a four-decade trend, there's no reason to think that a brief upward blip in the 90s would have much effect.

Matt prefers a different explanation:

I continue to think the common sense explanation here is that we're witnessing the consequences of increased labor market opportunities for working class women, rather than diminished labor market opportunities for working class men....As women's labor market opportunities have increased, they've got choosier about entering into marriage. It's true that in pure economic terms even a low-quality husband is a net benefit to the household, but there's more to life than pure economic terms.

Sure, I agree. That's the flip side of declining male earnings, and it's almost certainly part of the picture. But keep something in mind: poor and working class women have always worked outside the home in significant numbers. It's middle-class and upper middle-class women who have been the biggest beneficiaries of increased labor market opportunities, and yet that's precisely the class that's seen the least change in marriage habits. What's more, this increase in labor market opportunties has been true throughout the Western world, but marriage trends nonetheless vary pretty widely among developed countries. So the data here isn't all that clean after all.

Again: this is almost certainly a complicated issue with multiple causes. Lower male earnings and higher female earnings are probably both part of the picture. Changing social mores are probably part of the picture. Increased welfare payments to families with children are probably part of the picture. Overall economic growth is probably part of the picture. I'd be very hesitant to embrace any monocausal explanation — not Charles Murray's and not mine. It's complicated.

Advertise on

The Mystery of Mitt Romney's Lame Defense of His Bain Years

And a theory on what he's really hiding in all those unreleased tax returns.

| Mon Jul. 16, 2012 2:09 PM EDT

Ezra Klein is puzzled:

That Romney wasn’t better prepared for the attacks on Bain and the questions over his taxes is one of the great mysteries of this campaign. An example: In 2008, Romney turned more than 20 years of his tax returns over to the McCain team in order to be vetted for the vice presidency. So he clearly realized that tax returns could matter for political campaigns. And yet he didn’t call his accountants in 2008 and say “make my taxes simple. Now.” Why?

What isn’t a mystery is why he isn’t releasing more of his tax returns now. As John Cassidy writes, “It’s only fair to assume that Mitt is doing what he always does: acting on the basis of a careful cost-benefit analysis. [George] Will’s comments on this were spot on: ‘The cost of not releasing the returns are clear,’ he said. ‘Therefore, [Romney] must have calculated that there are higher costs in releasing them.’”

If anything, this is even more mysterious than Ezra suggests. Romney lost his 1994 Senate bid at least partly because of Ted Kennedy's devastating attacks on Bain. In 2002 he won his race for governor, but he got beat up pretty badly over Bain by Shannon O'Brien in the process. In 2008 he had to defend himself against Bain attacks again. In 2012 Bain haunted him yet again during the Republican primaries. So it's not as if he was unaware that Bain is a problem. Why does he still not have a better defense?

As for the tax returns, I don't know what the deal is. Here's my latest guess, though: there are probably multiple years in which Romney paid no taxes at all. This would very definitively be a Bad Thing, so he really doesn't have any choice but to take the heat instead. A multi-gazillionaire paying no taxes would open up a can of worms way too big not to choke on.

Is Marriage Just for the Middle Class These Days?

Apparently so. But why?

| Mon Jul. 16, 2012 12:28 PM EDT

Jason DeParle had a long piece in the New York Times yesterday about the breakdown of marriage outside the upper middle class. The takeaway sentence is this one: "Less than 10 percent of the births to college-educated women occur outside marriage, while for women with high school degrees or less the figure is nearly 60 percent."

I had all sorts of questions and issues about this piece, and I kept meaning to write something about it. Unfortunately, I couldn't quite get my thoughts into coherent order. My main gripe, I guess, is that out of 4,000 words, more than 3,000 of them were dedicated to a description of two familes, one married, and the other headed by a single mother. This taught me virtually nothing, since the lifestyle differences between a married couple making $90,000 and a single mother making $25,000 are already pretty obvious to everyone. Beyond that, there was virtually no actual data about this phenomenon, and the data that was presented was confusing and, in some cases, seemed almost deliberately obfuscated.

Still, I realize that this is partly just a matter of taste in storytelling. And in the end, I guess none of it was really the heart of my complaint. The heart of it was captured in a single quote from Scott Winship, a researcher who's done a lot of work on income inequality:

Mr. Winship interprets his own results cautiously, warning that other differences (like race, education or parenting styles) may also separate the two groups. And even if marriage helped the people who got married, he warns, it might hurt other families if it tied them to troubled men.  “You get back to the question of how many marriageable men there are,” he said.

Right. There's not much question that raising kids alone is financially crippling, and may be damaging to children in other ways too. I don't think anyone challenges that. The real question is: why are there fewer marriages among families outside the upper middle class? Why are there more divorces? Why are men apparently less willing to make commitments to their children? Or are they? Maybe nothing much has changed among men, but women are no longer as willing as they once were to put up with abusive behavior.

As with any question complicated enough to be interesting, I imagine there are lots of moving parts to this. But surely if you're going to talk about it at all, one great big moving part is shown in the chart on the right: young, marriage-age men make a lot less money than they used to. Adjusted for inflation, men between the age of 25-34 have seen their median incomes plummet from $44,000 in 1973 to $32,000 today. And I imagine that if I dug up historical figures for the bottom third, instead of the median, things might look even worse.

Are men increasingly adrift? Less employable? Less desirable as husbands? It sure looks that way once you get out of the middle class. Income isn't the only story here, but how can you spend 4,000 words on a story like this and not even mention it?

Today's Adventures in Pseudo Profundity

Yes, most voters have already made up their minds. Who cares?

| Mon Jul. 16, 2012 11:48 AM EDT

Will the Obama campaign's attacks on Bain Capital make a difference in November? Jamelle Bouie picks up the phone to ask:

Matthew Dickinson, a professor of political science at Middlebury College, is skeptical that these attacks will have any effect on how voters choose in November....The important thing to remember is the electorate is highly polarized, and most voters have already made their choice. Dickinson explains, “Keep in mind that 70 percent or so of voters have already made up their mind regarding who they will support, and most people, including independents, aren’t paying much attention to this story anyway.”

Why do people say stuff like this? Of course the electorate is highly polarized. Of course 70% of voters have already made up their minds. So what? Campaign ads aren't aimed at these people. They're aimed at the small segment of the population that's persuadable, just like every advertisement for every product in history. That's not even Political Science 101. It's more like junior high school level stuff.

Please, let's all stop spouting this nonsense as if it were something profound. It's not. All mass advertising is mostly wasted because the vast majority of the audience has no interest in the product for one reason or another. But some of the audience does. That's the target. The fact that the target is far, far less than 100% of the viewers is news to no one.

The Public Wants to Spend Less on Defense

And they say this pretty consistently. Why doesn't Washington listen?

| Mon Jul. 16, 2012 11:30 AM EDT

National surveys have long confirmed a stubborn public unwillingness to cut federal spending (aside from foreign aid, which people always think is much larger than it really is). Generally speaking, people support budget cuts in the abstract but oppose them when it comes to cutting specific programs.

But a recent survey pinpoints one area that's exactly the opposite: defense spending. Not only are large numbers of both Democrats and Republicans willing to cut the Pentagon's budget, but it turns out that once you get into the weeds they're even more willing to cut it:

Interestingly, when given the opportunity to specify their exact proposed level, a substantially larger  percentage made cuts than had said they would in the earlier question which offered them three approaches to dealing with the deficit (see above). In the earlier question, 62% had said they thought Congress should reduce defense spending. Among the 38% who did not select the option of cutting defense, when given the option to specify the number, half of them gave a number below 2012 levels and thus a made a cut.

....For the whole sample, the average proposed level of spending was $435 billion — $127 billion below 2012 levels, representing a 23% cut. Among Republicans, the average proposed level was down $83 billion (a 15% cut); among Democrats, it was down $155 billion (a 28% cut); and among independents it was down $147 billion (a 26% cut).

I don't imagine this will make much difference to our elected representatives, especially since I suspect that the strength of the public's budget cutting fervor is low. It's also likely to melt in the face of Pentagon assurances that Iran could launch a missile at New York City just as soon as they can get a ship within 600 miles of New York City. Still, this is how the public feels, and it doesn't get much attention. Maybe it should.

Via Suzy Khimm, who has more details.

Quote of the Day: Affirmative Action for Iranian Missiles

The can reach the Jersey shore, if only someone gets them most of the way there first.

| Mon Jul. 16, 2012 10:40 AM EDT

From CNN Pentagon correspondent Chris Lawrence:

Iran already has a missile that could reach the U.S. if it could put it on a ship and move it to within 600 miles of the American coastline.

Well, yes, I suppose so. And I could run a four-minute mile if you gave me a thousand-yard head start. Jesus.

This comes via Glenn Greenwald, who has more.

Advertise on

The Evolution of Reporters Into Stenographers Is Nearly Complete

The only step left is to simply let the campaigns write stories about themselves.

| Mon Jul. 16, 2012 10:16 AM EDT

It's long been standard for politicians to unilaterally insist that briefings be either "on background" or "off the record" (there are subtle distinctions between the two), and it's long been standard for reporters to agree to this. But apparently that's not enough for modern campaigns:

The quotations come back redacted, stripped of colorful metaphors, colloquial language and anything even mildly provocative. They are sent by e-mail from the Obama headquarters in Chicago to reporters who have interviewed campaign officials under one major condition: the press office has veto power over what statements can be quoted and attributed by name.

Most reporters, desperate to pick the brains of the president’s top strategists, grudgingly agree. 

....Quote approval is standard practice for the Obama campaign, used by many top strategists and almost all midlevel aides in Chicago and at the White House — almost anyone other than spokesmen who are paid to be quoted. (And sometimes it applies even to them.) It is also commonplace throughout Washington and on the campaign trail.

The Romney campaign insists that journalists interviewing any of Mitt Romney’s five sons agree to use only quotations that are approved by the press office. And Romney advisers almost always require that reporters ask them for the green light on anything from a conversation that they would like to include in an article.

I'd really like to blame the campaigns for this, but how can I? Their job is to sell a candidate. If reporters agree to this madness, they really have no one to blame but themselves. Are they really this desperate for interviews with campaign flacks? Why? It's not as if campaign officials ever say anything all that newsworthy in the first place.

What's that, you say? If they refuse, they won't have anything to write about? Please. These kinds of campaign stories almost never produce anything of real interest. If reporters were banned from doing them, virtually nothing would be lost. In fact, the quality of campaign reporting might very well go up.

I Am Now Somewhat Chagrined By the Use of "Somewhat Of"

| Sun Jul. 15, 2012 5:39 PM EDT

A couple of days ago, after seeing it in an LA Times story, I wrote that the use of the phrase "somewhat of" was Just. Plain. Wrong. The head of the Times copy desks saw my post and tweeted, "I share your preference, old friend, but I have four dictionaries that accept 'somewhat of.' No error and not lash-worthy, I say."

Oh yeah? What dictionaries are those? Webster's New World Dictionary, he says. Um, really? That's sort of embarrassing since it's the dictionary I normally use too. In fact, my copy is about two feet from my left hand. And sure enough, there it is: "often followed by of."

Later he added, "When given two valid options, I counsel going with the writer's choice." As a writer, I heartily endorse this attitude from copy editors, and obviously there are indeed two valid options here. I'm going to stick with "something of" myself, but no more lashes for anyone who disagrees.

Mitt Romney Should Stop Running From Bain

He's caused himself a lot of grief by pretending his involvement dropped to nothing the instant he left in 1999.

| Sun Jul. 15, 2012 2:58 PM EDT

Ed Conard, a former Bain partner, was on Chris Hayes' show today, and Sal Gentile gamely leads off a roundup of the interview by writing that Conard "acknowledged" that Mitt Romney remained CEO of Bain all the way through 2002 — thus implying that he was at least partly responsible for decisions made at Bain between 1999 and 2002. And perhaps he was. But honestly, the key quote from Conard is this one:

“He’d created a lot of franchise value, and we were going to pay him for that,” Conard said, adding: “We had a very complicated set of negotiations that took us about two years for us to unwind. During that time a management committee ran the firm, and we could hardly get Mitt to come back to negotiate the terms of his departure because he was working so hard on the Olympics.”

If Conard is right, Romney not only wasn't involved in Bain's business during this period, he was up to his neck in so many alligators that he could barely spare the time to negotiate his own retirement package. I have to say, that doesn't sound like a person who was keeping himself aware of what was happening at Bain, let alone taking even a modest hand in making management decisions.

Politically, I understand why this story has gotten so much oxygen. And it's worth digging into, since Romney has inexplicably opened himself up to it by insisting over and over that he had literally zero involvement with Bain during the 1999-2002 period, something that seems unlikely for a CEO and sole shareholder. But honestly, as Dave Weigel says, there's nothing all that new about this story. Romney took a leave from Bain in 1999, probably had a bit of contact with Bain's management during the next few years, and was involved in both strategic and daily decisionmaking only tangentially. In other words, not very involved, but not quite zero either. Beyond that, the details hardly matter. Here's more from the interview:

Asked if the factory closures and lay-offs that occurred between 1999 and 2002 were characteristic of Bain Capital’s record before 1999, Conard said, “I believe that’s true, yes. I think that Bain Capital does what Bain Capital does, which is try to make companies stronger and grow them faster.”

Conard also said that he did not believe Romney was “ashamed” of any part of Bain Capital’s record. “You say ashamed, I see great pride,” Conard said of Romney's position on Bain Capital's entire record. He added that he believed Romney would embrace Bain Capital’s record rather than try to distance himself from it once the campaign intensifies in the fall. “When the debate really starts, in August, September and October, we’ll see. I think he’ll own it.”

Bain is Bain. Even if Romney wasn't much involved in management after 1999, it was still the company he built. The only problem is that back during the primaries he became so desperate to avoid being tainted by the unpopular aspects of running a ruthless private equity firm that he panicked when the inevitable attacks came and started insisting that he shouldn't be held responsible at all for anything Bain-related after precisely February 1999. This has since been followed by increasingly wobbly towers of nonsense, like Ed Gillespie's claim today that Romney "retired retroactively." This was never really tenable from the start, and all of Romney's problems have flowed from that original miscalculation. He can't run from Bain, and he shouldn't have tried.

Today's Geeky Financial World Excitement

We'll finally get to find out whether credit card swipe fees are too high.

| Sat Jul. 14, 2012 11:39 AM EDT

I'm excited this morning. It's a geeky kind of excitement, but around here we take what we can get. Here's why: yesterday we got a bit of deregulation in the financial world, and it's a bit of deregulation that I've long wanted to see. So now I get to find out what happens.

You probably saw the headlines: Visa and MasterCard finally settled a lawsuit over charges that they colluded to charge high swipe fees on credit cards. As a result, they have to cough up $6 billion to the merchants who sued them. That's good news for merchants, but not for me. Frankly, in a war between Visa and Walmart, I can't get very excited about who wins.

No, you have to read down a bit to get to the exciting news:

Under the credit-card settlement on Friday, worked out over months of negotiations, merchants can charge higher prices to consumers who decide to pay for their purchases with credit cards. A customer, for example, who buys a $100 item with a credit card might be charged an additional $2.50. A judge still needs to approve the settlement.

Until now, credit card companies used their monopoly power to prohibit this. Merchants could discount for cash, but their contracts with Visa and MasterCard flatly prohibited them from charging credit card customers more to cover the swipe fee — and card companies have been adamant about enforcing this prohibition. There's an obvious reason for this: they're afraid that if merchants are allowed to do this, people will use credit cards less. And if people use credit cards less, then banks and credit card companies make less money.

But here's why this is interesting in a geeky kind of way: it's not clear who, if anybody, gets screwed by hidden swipe fees. After all, there's nothing wrong with swipe fees per se: it costs money to run an electronic payment network, and credit card companies need some way to recoup those costs. Swipe fees are a reasonable way of doing this.

What's more, consumers and merchants get a lot of benefits from credit cards: consumers get convenience and merchants get guaranteed payment. No more bounced checks! Maybe a 2.5% fee is a reasonable price for those benefits.

Maybe. But there are two big questions about swipe fees. First: are they abusively high? Second: who really pays them? Do they get passed on entirely to consumers? Do they get split between merchants and consumers? Or do they primarily end up balancing the costs of running a payment network between merchant and purchaser banks?

The empirical evidence on this is hazy. No one knows for sure. So I say: let's find out. Instead of allowing card companies to unilaterally hide the fees by banning surcharges, or allowing regulators to unilaterally cap swipe fees, bring them out in the open and let the market decide. Give merchants the option to pass along swipe fees to consumers and see what happens. If they end up doing it, it's pretty good evidence that fees were too high and were being paid at least partly by unwitting consumers, many of whom prefer the option of switching to cash once they realize the real price of using plastic. If they don't, and things stay pretty much the same as they are today, it's pretty good implicit evidence that everyone was getting a tolerably reasonable deal already. To semi-quote myself on this subject:

Although there's no definitive evidence on this score, there are some reasons for thinking that fees are too high and that consumers do end up paying at least part of them. There's a Boston Fed study showing that the net result of swipe fees is to transfer money from the poor to the rich. There's an ECB report suggesting (unsurprisingly) that in a monopoly environment interchange fees will always be set too high. And there's this New York Times piece about swipe fees in the debit card market, which makes it pretty clear that Visa's fees are simply egregious abuses of its monopoly power. And if they're abusive in the debit card market, they're probably abusive in the credit card market too. Finally, there's the fact that current fees are so high that card issuing banks can afford to rebate a big chunk of them in rewards programs, something that flatly makes no sense in a sane world.

That's all suggestive, but it's not proof. So now we get to see. Some merchants will almost certainly start charging more for credit card purchases, and after a period of experimentation we'll end up in a new equilibrium. What will it be? Perhaps consumers will start avoiding stores that charge for using credit cards, and those stores will lose enough business that they'll give up. Or maybe they'll gain enough cash business that everyone else will follow suit. Maybe merchants will end up charging higher prices for small items but routinely waive the fees for larger purchases. Maybe stores in competitive markets will swallow the fees while other stores don't. Or vice versa. Or maybe it will end up putting pressure on banks and card companies to lower swipe fees and then everything will revert to the status quo, but with no more ridiculous rewards programs. (This is my preferred outcome: keep the convenience of electronic payment, but with swipe fees basically covering the cost of running the network, not acting as a hidden profit center.)

Who knows? But one way or another, the market will figure this out, not the monopoly position of the credit card companies. And in a geeky kind of way, it's going to be very interesting to see what happens.

EXTRA SUPER GEEKY NOTE: I think that credit card surcharges are still banned by law in some states. This won't be affected by the settlement, which means merchants will be allowed to pass along the fees in some states but not in others. This should provide an immense amount of grist for natural experiments along state borders. I expect many doctoral dissertations on this subject in the years to come.