Kevin Drum - November 2012

Congress About to Get Hit in the Head With the Price of Climate Change

| Thu Nov. 29, 2012 1:21 PM PST

A few weeks ago I linked to a piece Chris Mooney did for us about the effect of climate change on Hurricane Sandy. Chris made the point that although you can argue about whether climate change is responsible for any particular hurricane, there's no question that climate change is responsible for a rise in sea level, which makes the damage from hurricanes much worse than it otherwise would be. And that includes Hurricane Sandy. "There is 100 percent certainty that sea level rise made this worse," sea level expert Ben Strauss said. "Period."

Well, it turns out the news is even worse than that. A new study using satellite data suggests that, if anything, forecasts of sea level rise in the most recent IPCC reports have been too low. Global warming is about where the predictions say it should be, but the amount of warming we're getting is increasing sea level a lot faster than we thought it would. The chart below shows the difference between reality and the two most recent IPCC forecasts.

This unexpected rise isn't due to medium-term variability, and it's not due to a temporary release from Greenland's ice sheets. The most likely explanation is simply that sea level rise is more sensitive to global warming than we thought. Congress—along with all the skeptics who argue that it's cheaper to pay the price of climate change than it is to stop it—should think about this when they're considering the $100 billion in disaster funds that northeastern states are requesting to clean up after Sandy.

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Chart of the Day: Our Economy's Real Problem

| Thu Nov. 29, 2012 11:14 AM PST

Here's some grim news, courtesy of Brad DeLong. We all know that the economy is operating well below its potential, a problem that congressional Republicans, to their eternal dishonor, are flatly unwilling to allow anyone to deal with. But things are worse than that: the economy's potential has been going down too. The chart below shows the evolution of the CBO's estimate of potential GDP between 2007 and now 

Add up both the drop in potential GDP and the fact that we're operating well below even that, and the American economy is running at about $2.5 trillion under its forecast from only a few years ago. Congressional action probably can't fix this entirely, but it could sure fix a lot of it. It's scandalous that we're wasting our time talking about invented nonsense like Benghazi and the fiscal cliff instead.

New York City's Murder Rate Was Zero Last Monday

| Thu Nov. 29, 2012 10:43 AM PST

Matt Steinglass passes along some good news from the Big Apple:

New York City went a day without a murder on Monday, which according to police was the first time anyone could remember that happening. Overall, the city's murder rate this year is down 23%, reaching levels last seen in 1960. This is a milestone in the 20-year-long decline of violent crime in the Big Apple. It's cause for celebration, and Reuters reports that crime expert Tom Repetto attributes the success in part to the city's aggressive policing strategies, the famous "broken windows" tactics that got started in the 1990s under Ray Kelly, the police chief, and have more recently included the controversial stop-and-frisk policy.

Hmmm. Broken windows. Really?

But hold on a minute. Up in Boston, they also had tremendous success in cutting murder rates in the 1990s. But they didn't focus on the broken-windows strategy, stop-and-frisk, or going after petty offenders. Instead they launched a project called "Operation Ceasefire" to cut gang violence.

Gangs? Okey dokey.

But hold on another minute! What's that you say, Eric Tucker of the Associated Press? Washington, DC is likely to see its first year in decades with less than 100 murders? Wow! In the late 1980s and early 1990s Washington had over 500 murders per year. Why the decline? No single factor, says Mr Tucker. A little of this, a little of that, a little of something else you probably never even thought of.

Matt suggests this means we shouldn't look for simple answers:

What's the takeaway message? I'd say there are two of them. First of all, beware of takeaway messages! Lots of things in life, maybe most things, often the most important things, don't have explanations that can be packaged as a simple, coherent thesis. Second, given our inability to explain definitively why the crime rate is falling, we may need some scepticism about the recent push to demand scientifically valid evidence for the effectiveness of social betterment programmes. Random controlled trials might very well have found that the broken-windows strategy doesn't prevent crime, "Project Ceasefire" doesn't prevent crime, reducing rates of single motherhood doesn't prevent crime, family planning doesn't prevent crime, banning lead doesn't prevent crime, and so on and so forth; there might have been no statistically significant difference one could isolate for any of these things. And yet it seems extremely likely to me that most or all of these were good things to do! The drop in violent crime probably has to do with all of them.

I want to be careful here. Crime is a complex problem, and Matt is right that lots of things can affect both its rise and fall. I happen to believe that both "broken windows" and "Operation Ceasefire" programs are effective. And yet, I think he's 180 degrees off here. If you had lots of different cities with lots of different results, you'd be justified in thinking that lots of different things were responsible. But when you have lots of different cities all showing the exact same thing—a huge and completely unexpected drop in violent crime—does it really make sense that it's happening for a different reason in every city? It might! But that would sure be a monumental coincidence. More likely, there's some single factor underlying the decrease that affected the entire country. In fact, since drops in violent crime were also recorded in Canada during the past two decades, and elsewhere around the world during other time periods, it's probably some worldwide factor. And on that score, gasoline lead reigns supreme. There's really nothing else that persuasively explains a global rise and fall in violent crime that happens at different times in different countries. More on this later.

Republicans Getting Cold Feet on Entitlement Reform

| Thu Nov. 29, 2012 9:02 AM PST

This cracks me up. We all know that in the negotiations over the fiscal cliff, Democrats want some tax hikes and Republicans want some entitlement cuts. But what cuts do Republicans want?

A top Democratic official said talks have stalled on this question since Obama and congressional leaders had their friendly-looking post-election session at the White House. “Republicans want the president to own the whole offer upfront, on both the entitlement and the revenue side, and that’s not going to happen because the president is not going to negotiate with himself,” the official said. “There’s a standoff, and the staff hasn’t gotten anywhere. Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s you guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”

Well, of course they want the president to make proposals for both sides. Then they can reluctantly agree, and in 2014 run about a billion dollars worth of ads saying that Democrats raised your taxes and cut your Social Security.

This, of course, is yet more evidence that Republicans know perfectly well that cutting entitlements is unpopular. For some reason, however, they've lashed themselves to this particular mast, and now they have to figure out a way to wriggle out from beneath it. Their cunning plan is to make Democrats responsible for all the unpopular proposals and then paint themselves as the protectors of the middle class. But no matter what you think of Obama's negotiating skills, no one's a big enough idiot to agree to that.

Here in the real world, it's time for Republicans to put their cards on the table. You want to cut granny's Medicare? Let's hear your plans. If you want to cut the deficit in the medium term, that also means cutting benefits in the medium term, and that in turn means cutting benefits for current retirees. You can't use the old wheeze about leaving everything alone for everyone over 55.

The blowhard axis of the GOP has been complaining for weeks that Republicans would have won the election if only they'd stuck to Paul Ryan's guns on this stuff instead of muzzling him. Well, now they have a chance to find out. It's time to step up to the plate.

Et Tu, Susan?

| Wed Nov. 28, 2012 9:35 PM PST

The Washington Post reports on the latest in the Republican jihad against Susan Rice:

Even moderate Republican and onetime Rice supporter Sen. Susan Collins (Maine) declined to offer her backing after their 75-minute private session Wednesday....Collins told reporters she was “troubled” that Rice had “decided to play what was essentially a political role at the height of a contentious presidential election campaign” by appearing on five political talk shows to present the administration’s position.

Et tu, Susan? It's deeply depressing that even Susan Collins is endorsing this idiocy, and doing it with such transparent BS. I mean, her complaint is that Rice's mere appearance on the Sunday talk shows was somehow inappropriate? Seriously? She couldn't be bothered to invent anything more plausible than that?

The Post story suggests that nominating Rice "could cost the White House valuable goodwill with Republicans," but honestly, it's hard to see how. If you actually parse what they're saying about Rice, there's literally nothing there. They're simply rephrasing perfectly ordinary actions to make them sound somehow sinister. If even the moderates have decided to go along with this shabby travesty, it means there's not currently even a shred of goodwill among Republicans on this issue. It's hard to see how nominating Rice could reduce that any further.

Why the Super Rich Have Turned So Bitterly Against Obama

| Wed Nov. 28, 2012 5:45 PM PST

Ezra Klein talks to Chrystia Freeland about why the super rich dislike Obama so bitterly:

Klein: My experience is that the very rich are open to higher taxes in the context of a deficit deal....But they don't like the idea that their money should be redistributed simply because they have too much of it....And so that's part of the tension: They don't like why Obama is raising their taxes. And they certainly don't like the lack of admiration he's showing while trying to do it. They see it as punishing their success.

Freeland: I completely agree. I think Obama and the economists around him have a very sophisticated understanding of both globalization and the technology revolution and the impact they're having on the world economy and the way they're creating these winner-take-all spirals. The positive scenario, which I think is a bit pollyannaish, is all you need to do is improve the education system and change the skill set and all will be well. And even that takes a lot of investment and a lot of time. But there's actually the possibility that in order to have a healthy middle class, you're going to need to have a more redistributive society, at least for awhile. I think that's something the American super-rich don't think about much. One guy who's a liberal Democratic guy, who has worked in Washington for Democrats, who I quote in my book, he said to me, maybe this is how the world is. Maybe the 1950s were an aberration and the way the economy naturally works is this wide difference in distribution.

I'd add something to this. I think it's quite possible for rich individuals to agree, in the abstract, that things have changed over the past 30 years in a way that's benefited the rich tremendously as a class. But that doesn't mean they agree, in concrete terms, that they themselves have benefited from anything in particular. And they don't like being made to pay a price for something they feel they aren't personally responsible for.

A Wall Street lawyer who makes $500,000 per year probably would have made half that much in 1980. The extra pay is solely due to broad economic and political trends, not because the 2012 lawyer works harder or knows more. That's easy to concede in the abstract. But it's quite another thing to suggest that the 2012 lawyer should therefore pay higher taxes to make up for this. That doesn't feel like fairness, it feels like punishment. And that's how they view it.

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Inside the Conservative Bubble

| Wed Nov. 28, 2012 1:18 PM PST

Bruce Bartlett has a piece in The American Conservative that tells the story of his excommunication from the conservative movement, and it's gotten a lot of attention on the left. I'm already familiar with the outlines of what happened, so I only now got around to reading his story. And it turns out that the most interesting passage has nothing to do Bartlett per se. It's what happened after Ron Suskind published a New York Times piece that quoted some of Bartlett's criticism of George Bush and the GOP:

Interestingly, a couple of days after the Suskind article appeared, I happened to be at a reception for some right-wing organization that many of my think tank friends were also attending. I assumed I would get a lot of grief for my comments in the Suskind article and was surprised when there was none at all.

Finally, I started asking people about it. Not one person had read it or cared in the slightest what the New York Times had to say about anything. They all viewed it as having as much credibility as Pravda and a similar political philosophy as well. Some were indignant that I would even suspect them of reading a left-wing rag such as the New York Times.

I was flabbergasted. Until that moment I had not realized how closed the right-wing mind had become. Even assuming that my friends’ view of the Times’ philosophy was correct, which it most certainly was not, why would they not want to know what their enemy was thinking? This was my first exposure to what has been called "epistemic closure" among conservatives—living in their own bubble where nonsensical ideas circulate with no contradiction.

That's remarkable. Even with the low opinion I have of modern movement conservatives, it never occurred to me that they literally thought of the New York Times as simply a left-wing version of Fox News. Yikes.

The Optimal Tax Plan Is Also the Least Likely Tax Plan

| Wed Nov. 28, 2012 12:34 PM PST

What would be the best thing to do with the Bush tax cuts? Letting them expire on December 31 is a bad idea because the economy is still in fragile shape and a big tax increase would probably send the U.S. back into recession. Extending them permanently is a bad idea because we need to raise more revenue in the future and reduce the medium-term deficit. Letting only the high-end tax cuts expire is OK, but it's not optimal either. It doesn't raise enough money in the long term and it feeds the fiction that middle-class taxes will never have to go up.

The best option is to let everything expire, and then pass a new tax cut that phases out over time. The new tax cut might be a reduction in rates equal to the Bush tax cuts, or it might be some other set of reductions. It doesn't matter very much. What does matter is that one-quarter of the cuts should expire in 2014, another quarter in 2015, another in 2016, and another in 2017. This would have a gradual effect on the economy, it would require no further congressional action, it would improve our medium-term deficit problem, it would take effect primarily while the economy is recovering, and it would do no more than eventually return us to the tax levels of the Clinton era. There are more complicated approaches you could think of—tagging the expiration dates to economic benchmarks, for example—but in this case, simpler is better. Just phase out the cut over four years and be done with it. That's easy for people to plan for.

So why won't this happen? Because there's no constituency for it. Republicans won't get behind it because they want permanent tax cuts. Obama won't get behind it because it's effectively a tax increase on the middle class, something he's promised to oppose. Independents might get behind it, but their political influence is approximately zero.

So that's the situation we're in. The best solution is probably the least likely to be enacted. Welcome to Washington.

White House Supports Filibuster Reform

| Wed Nov. 28, 2012 10:19 AM PST

This is not a big surprise, but today the White House announced its support for filibuster reform:

"The President has said many times that the American people are demanding action," White House Communications Director Dan Pfeiffer said in a statement to The Huffington Post. "They want to see progress, not partisan delay games. That hasn't changed, and the President supports Majority Leader Reid's efforts to reform the filibuster process."

This is important for more than PR reasons. Although there's some disagreement about how the filibuster rules can be changed, most observers agree that it requires a ruling from the president of the Senate, aka Joe Biden. And Biden isn't going to support filibuster reform unless his boss supports it too.

So while this is no surprise, it's a necessary piece of the puzzle. Harry Reid still needs to get 51 members of the Democratic Caucus to agree to a plan, but if he does there's nothing standing in the way of implementing it.

Social Security's Problems Are 20 Years Away, Not 75 Years

| Wed Nov. 28, 2012 10:10 AM PST

Matt Yglesias is unimpressed with Dick Durbin's proposal for a new commission to insure the long-term solvency of Social Security:

If people want to waste their time on this, I don't have a huge objection to the idea of somewhat higher taxes and somewhat skimpier benefits, but I think it's pretty silly. Recall that 75 years ago was 1937. Any minute spent in 1937 worrying about actuarial projections about 2012 as opposed to, say, Adolf Hitler or the Great Depression would have been a minute wasted.

....The deal worth trying to make on Social Security would be a deal that found a way to take the program outside the somewhat fantastical realm of trust fund accounting. Assessing the "affordability" of a social insurance scheme in terms of the state of its associated accounting instruments rather than the capacity of the economy to carry the load is very misleading. The actually policy question at any given time is what share of national resources should go to raising the living standards of the elderly.

I don't want to make this blog into Social Security Central, especially since I'm not super committed to finding a deal right this second. Still, this deserves some pushback. First, we aren't talking about a 75-year horizon. The latest projection from the trustees shows the Social Security trust fund running out of money in 2033. That's only 20 years away, considerably closer than Matt's own retirement, which I assume he's already planning for. At that point, Social Security benefits will suddenly drop 25% unless we do something about it.

Now, this projection might be wrong. The Great Recession has done a lot of damage to the trust fund projections, but we won't be in a recession forever. And these projections have been inaccurate before. However, although these are all arguments I've made myself in the past, I no longer believe I was right about them. The truth is that 20 years isn't a long time, and it's unlikely that the projections are off by more than a decade at most. This is a problem that's worth addressing.

Second, getting outside the realm of trust fund accounting is precisely what a deal would be about. Regardless of what you think about the trust fund, it's only going to last another couple of decades. After that, Social Security will have to be properly financed on a cash basis. This means that tax income in any given year needs to match benefit payments in that year. That's what this entire issue is about.

So: a Social Security deal would allow the program to operate without the trust fund, and it would keep the program solvent beyond the current trust fund exhaustion date of 2033. It would also probably make it solvent for the rest of the century, but that's just icing on the cake. This is a problem that's worth spending time on.