Kevin Drum - January 2013

Bobby Jindal Wants to Rob From the Poor to Give to the Rich

| Fri Jan. 11, 2013 10:03 AM PST

Via Ed Kilgore, I see that Louisiana governor Bobby Jindal wants to raise taxes on the poor as a way of funding big tax cuts on the rich. He doesn't put it that way explicitly, of course ("It's time to...foster an environment where businesses want to invest and create good-paying jobs"), but it's hardly buried in the fine print, either. Basically, he wants to increase the sales tax (which hits the poor and middle class heavily) in order to eliminate income and corporate taxes (which are paid largely by the well-off).

Is this because Louisiana's rich folks are being soaked and need relief? Not really. According to data from the Institute on Taxation and Economic Policy, the poor in Louisiana currently pay about 10% of their income in state taxes. The rich pay about 5%.

Too much! Bobby Jindal won't be happy until that ratio is more like the 10:1 that God intended. Welcome to some of that fresh new thinking from the up-and-coming young stars of the Republican Party that you've been hearing so much about lately.

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U.S. Fiscal Policy: Pretty Darn Prudent, Actually

| Fri Jan. 11, 2013 9:31 AM PST

Howard Schneider sums up some recent research from the IMF:

It's official. The United States is a "profligate" nation, according to IMF staff research that examines which countries respond to increases in public debt by trimming their fiscal sails. And that makes the nation surprisingly rare in the developed world....In theory, a "prudent" nation would trim deficits or accumulate surpluses as overall debt grows, while a profligate one would not....By this methodology, the United States is one of only a few profligate countries in the developed world, where even big social-welfare states like Denmark earned a "prudent" label for overall fiscal management. The Danes may spend a lot on social protection. But they collect the taxes to pay for it.

However, there's an asterisk here, and it's a pretty big one. From the paper:

In the case of the United States from 1950-2011, this procedure finds that dropping the years 2008-2011 is sufficient to return to a positive and significant slope coefficient.

In other words, generally speaking the United States is a prudent nation, cutting its spending when its public debt gets large. However, our response to the 2008 financial crisis was large enough to turn a fairly large prudence score into a modestly-sized profligate score. In fact, between 1950-2007, the United States was one of the most prudent countries in the authors' database.

This is actually sort of reassuring. It means that during relatively normal times, the United States tends to manage its finances fairly well. But during a massive recession marked by skyrocketing unemployment and a liquidity trap, we were willing to pull out the stops and spend money regardless of its effect on the debt. We might not have done this as much as we should have, or for as long as we should have, but at least we did it.

Are Big Cities More Dangerous Than Small Ones?

| Fri Jan. 11, 2013 4:01 AM PST

Are big cities more dangerous than small ones? Of course they are. This is so obvious that it's not even a question most people would think of asking.

And yet, if you'll bear with me for a bit, it turns out there's more of a mystery here than you might think. In 1996, for example, Ed Glaeser and Bruce Sacerdote wrote a paper trying to figure out why there's more crime in big cities. They came up with a couple of reasons. First, there's more valuable stuff to steal in big cities, so robbery is more profitable. Second, it's easier to be anonymous. If you mug someone in Mayberry, there's a good chance your victim will recognize you and report the crime. Beyond that they threw up their hands, suggesting that perhaps the rest of the difference might be due to the fact that families are less intact in big cities. But even after running batteries of statistical tests, they were still left scratching their heads. Sure, there are more broken families in big cities, but that "still leaves unanswered the question of why this variable is so important in leading to criminal behavior." What's more, "the results on higher benefit levels and lower arrest rates are intriguing but also not entirely satisfying."

Well, if that's not satisfying—and it isn't—how about an answer out of left field? Maybe the real answer is that big cities aren't much more dangerous than small ones. Let me explain.

One of the hallmarks of a good theory is that it answers questions you didn't even know you had, and it turns out that the answer to this mystery might lie in the association between gasoline lead and violent crime. I mentioned this briefly in "Criminal Element," my magazine piece about the lead-crime connection, but it deserves a little more explanation. So here it is.

In a nutshell, the lead-crime hypothesis is simple: Exposure to gasoline lead in small children produces heightened aggressive tendencies. When an entire generation of children was exposed to lead in the '40s, '50s, and '60s, thanks to the boom in auto sales after World War II, it led to a huge rise in violent crime when the children grew up in the '60s, '70s, and '80s. The more lead they were exposed to, the more crime you got.

So where did we see the most exposure to gasoline lead? Answer: in places with the densest concentration of automobiles. And that's in the inner core of big cities. In the early '60s, big cities had double the ambient air lead levels of midsize cities, which in turn had air lead levels 40 percent higher than small cities. (Nevin, p. 316.) So if lead exposure produces a rise in crime, you'd expect to see a bigger rise in big cities than in small ones. Over time, big cities would become increasingly more dangerous than small ones.

Likewise, when lead was removed from gasoline, and children started to grow up normally, you'd expect to see a bigger crime decrease in big cities. Over time, crime rates would start to converge.

And that's exactly what we see in the data. In the '70s and '80s, when big cities had their highest levels of lead-poisoned teenagers, they really were more dangerous places than small cities. But we began removing lead from gasoline in the early '70s, and right on schedule, crime rates in big cities peaked in 1991 and then started falling. The chart on the right tells the story. The top line is average rate of violent crime for every city in America with a population greater than 1 million. (Only Chicago is missing, because it lacks complete data.) The bottom line is the average rate of violent crime for cities with a population between 100,000 and 250,000.

The convergence between big and small cities is startling, and the biggest cities have shown the biggest drops. Violent-crime rates have declined by more than 75 percent in New York City and Los Angeles since their peaks in the early '90s.

So the surprising truth is that big cities are only a bit more dangerous than small ones. For a few decades it seemed otherwise, but this was mostly an artificial difference driven by higher concentrations of gasoline lead. Take that away, and it turns out that Los Angeles isn't much different from Modesto.

Surely We Have Learned Some Lessons Since 2001?

| Thu Jan. 10, 2013 11:35 PM PST

Fred Hiatt is disturbed by President Obama's apparent desire to disengage in Afghanistan and, more generally, to intervene less often in foreign countries. This inclination toward disengagement has taken hold of American public opinion before, he says:

Traditionally two philosophies have fueled it. One sees the United States as a moral exemplar but believes we aren’t obliged to solve the world’s problems.

The other is skeptical about America’s moral standing to impose its will, believing that more often than not it has used its power to exploit other people on behalf of U.S. corporations or other selfish interests.

Today a third strand entwines those two: a sense, fueled by the deep U.S. recession and China’s rise, that America is a declining and overextended power that can no longer afford to lead as it has in the past.

I'm not especially trying to pick on Hiatt here, but whenever I read things like this I'm just gobsmacked. There is, pretty obviously, a fourth strand that Hiatt is either stubbornly unaware of or else simply chooses to ignore: that there are lots of interventions that the United States simply can't undertake successfully. What's more, the kinds of interventions that crop up most frequently in the modern world are precisely the kind we're least likely to succeed at.

In the last decade we've launched two disastrous foreign wars. They weren't disastrous because of mismanagement—though obviously they were mismanaged—they were disastrous because their ultimate success depended on extensive postwar nation building in an alien society. And despite David Petraeus's best efforts, that's something we simply aren't able to do. It might not even be possible to do in the modern era, when controlling tribal rebellions via periodic salutary massacres is frowned on.

Consider Afghanistan. We've now been there for over a decade. Every two years or so, the administration in charge has conceded that previous efforts were misguided and announced a new, more deeply thought-out strategy. These strategies always sound plausible and the people in charge always seem dedicated and capable. Nevertheless, none of them have worked. Three years ago, Obama implemented the biggest reset of them all, sending in more troops, and then still more, all under the command of a general thought to embody the very best of what we've learned about counterinsurgency and nation building. This new strategy hasn't worked either. It hasn't come close to working. By the only test that matters—what would happen if we left?—it's been an utter failure. If we leave now, within a year Afghanistan will be all but indistinguishable from the Afghanistan of 2001.

This isn't because America is declining or overextended. It's not because the U.S. Army is incompetent. It's because we're trying to do something nobody knows how to do.

Anyone who's been paying attention for the past decade knows this. Anyone who's been paying attention should, by now, be profoundly skeptical of using military force to reshape the culture of the Middle East. If the goal is solely to win a quick military victory and then leave, intervention might occasionally still be worth considering. But the truth is that this is seldom a useful goal in the kinds of conflicts we're most likely to encounter these days.

Hiatt writes as if it's still 2001 and we haven't learned any of these lessons yet. It's inexplicable.

We're Almost Done With Deficit Reduction!

| Thu Jan. 10, 2013 4:21 PM PST

The Center on Budget and Policy Priorities has taken a look at projected future deficits and concludes that we need an additional $1.4 trillion in savings in order to stabilize the debt/GDP ratio at 73 percent by 2022. The chart on the right tells the story.

What's really so striking about this is what they say after diving a little further into the numbers. If we split this equally between spending cuts and tax increases, we need about $600 billion of each. (The rest comes from interest savings.) That's $60 billion per year. Or, if we did things rationally, it would come to zero dollars this year, increasing to perhaps $100 billion in 2022. For all the hue and cry from both sides, this is really not a huge amount of money. And if we did it, it would amount to total deficit reduction of nearly $4 trillion over the past couple of years.

This isn't necessarily what I'd do if I were your benevolent overlord. But it's hardly the end of the world as a baseline plan for now. After all, we can always change it in a few years if we don't like how things are turning out.

Lead and Crime: Baselines vs. Crime Waves

| Thu Jan. 10, 2013 12:07 PM PST

Whenever you write about a complicated subject, you struggle with how best to explain things. In the end, you always hope you got your point across in a way that sinks in, but you're never quite sure. And one of the things I'm not sure I explained well in my piece about the link between lead and violent crime is precisely how important the effect of lead on crime is. After all, the causes of crime are varied and complex. Surely lead isn't the whole answer?

It's not, and I don't want anyone to come away from my article thinking that. If we eliminated every microgram of lead from the planet, we'd still have plenty of crime. So here's a way to think about it. If you take a look at violent crime rates in America, you'd expect to see a sort of baseline level of crime. That level will depend on lots of things: poverty, drugs, guns, race, family structure, etc. But starting in the mid-60s, we saw an enormous rise in crime, well above any sensible sort of baseline. Then, in the 90s, we saw an equally enormous decline. The chart below illustrates this. (The numbers themselves aren't precise, so don't take them too seriously. I'm just trying to illustrate a point.)

The baseline crime rate is the light red portion at the bottom. It goes up and down a bit over time, but also—and I'm guessing here—shows a steady, modest rise since the 60s. Most likely, the reason for this lies with all the usual suspects.

But then, in dark red, there's the huge crime wave that lasted nearly 50 years from start to finish. That's the part the lead hypothesis aims to explain. And the reason we need an explanation is simple: the usual suspects simply don't seem to do a very good job of accounting for a gigantic, temporary rise and fall in violent crime rates. Within the criminology community, literally no one predicted the huge decline in crime that began in the early 90s. Their focus was on all the usual sociological causes, and they had no reason to think those were going to suddenly improve.

And they were right. For the most part, they didn't improve. It's true that the crack epidemic of the 80s burned out, but no one really knows the underlying reason for that. Policing tactics changed in some places, but crime dropped everywhere, so that's not a very compelling explanation either. Aside from that, poverty didn't change much, and neither did race or guns or demographics or the number of broken familes or anything else.

The truth is that there's just not a good conventional explanation for both the huge rise and the huge fall in crime of the past half century. That's one of the reasons the lead hypothesis deserves such serious consideration. Not only does it fit the data well and make sense based on what we know about the neurological effects of lead. It's also just about the only good explanation we've got. Other factors are still important, and they probably explain rises and falls in the baseline rate of crime. But lead is the best explanation we have for the rest of it.

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If You Believe This Post, You're an Idiot

| Thu Jan. 10, 2013 11:16 AM PST

Chris Mooney describes some recent research that involved volunteers reading an article about nanotechnology and then talking about it online. What effect did rude, trollish comments have?

The researchers were trying to find out what effect exposure to such rudeness had on public perceptions of nanotech risks. They found that it wasn't a good one. Rather, it polarized the audience: Those who already thought nanorisks were low tended to become more sure of themselves when exposed to name-calling, while those who thought nanorisks are high were more likely to move in their own favored direction. In other words, it appeared that pushing people's emotional buttons, through derogatory comments, made them double down on their preexisting beliefs.

Chris ties this into the modern media environment, and implies that an explosion of online rudeness may be partly responsible for increasing political polarization. I suppose that makes sense. Certainly the research results themselves are entirely unsurprising: as the old saying goes, you catch more flies with honey than with vinegar. I think everyone understands at a gut level that insulting people is likely to make them dig in, while treating them nicely has at least a modest chance of changing their minds.

That being the case, why do so many of us spend so much time insulting people who disagree with us? Probably because most of us aren't really trying to change their minds. Rather, we're demonstrating our tribal loyalties and having fun in the process. Welcome to the blogosphere.

Chart of the Day: Medicare Not Really in Such Bad Shape After All

| Thu Jan. 10, 2013 10:21 AM PST

Austin Frakt passes along this chart, which made the rounds yesterday, illustrating the projected growth of Medicare over the next 20 years:

Scary! Or is it? As Austin points out, most of the growth is simply due to an aging population. No matter how much of a fiscal hawk you are, you simply can't blame that on out-of-control spending or liberal utopianism. It's just demographics, and it's baked into the cake no matter how much we dislike it. This is money we're going to spend, and the sooner everyone accepts that the better.

Then there's the "excess" cost growth in red. It amounts to a grand total of three-quarters of a percentage point of GDP by 2035. That's really....not so much. And even this projection assumes that Obamacare's IPAB panel, which is designed to rein in cost growth, never gets implemented. [See update below.]

In any case, if this forecast is right, it tells us two things. First, our population is aging and we're going to pay for that. Deal with it. Second, Medicare is going to have some excess growth above that, and we should look for ways to get that under control. But that excess growth is fairly modest; we already have laws on the books to address some of it if we just have the fortitude to follow through; and healthcare wonks on both the left and right have plenty of sensible ideas for reining it in further.

Healthcare is a problem. But it's not an insurmountable one. If we could stop wasting time on fiscal cliffs and debt ceiling hysteria and all the other nonsense that consumes us at the moment, there really are things we could do about this. Our future is not the budgetary nightmare that conservatives keep trying to make it out to be.

UPDATE: Actually, it turns out that this projection does assume that IPAB is implemented. It also assumes some fairly substantial cost savings from increased productivity in the healthcare sector. That may be overly optimistic. Austin Frakt has more here.

Republicans Do Know Jack. Maybe a Little Too Well.

| Thu Jan. 10, 2013 9:15 AM PST

Last year, Republicans managed to sucker Bob Woodward into believing that the reason they had gotten frustrated with OMB director Jack Lew during the debt ceiling negotiations was that the guy just wasn't willing to deal. "Jack Lew said no 999,000 times out of a million," Boehner told Woodward. Then he corrected himself. "999,999. It was unbelievable. At one point I told the president, keep him out of here. I don't need somebody who just knows how to say no."

This self-serving fairy tale has entered Washington DC lore, but it's so at odds with Lew's previous reputation that it hardly bears scrutiny. Matt Yglesias knocks it down:

But it emerged over the course of the negotiations that John Boehner and other Republicans kept trying to kick Lew out of the room to make a deal. That's because what Boehner wanted to do was make a deal in which spending cuts would be balanced by flim-flam, and Lew kept saying that the flim-flam didn't work mathematically. To put a balanced package together, Lew insisted that you needed to have real revenue-increasing tax hikes not just "tax reform" and handwaving. This kept spoiling the party, so Boehner wanted to make deals with Daley—with the political fixer rather than the budget guy. But ultimately you couldn't get a deal done, because you can't just smuggle a deal past the OMB.

Pretty much all the evidence suggests that this is exactly what happened. The sticking point in the debt ceiling talks was never Jack Lew, nor was it Barack Obama's supposed aloofness or poor negotiating skills. It was taxes. Full stop. In the end, the deal breaker was twofold: (a) Boehner wanted nothing more than a smoke-and-mirrors tax increase based on dynamic scoring pixie dust, and (b) he balked when Obama tried to increase his tax ask after the Gang of Six announced a bipartisan deficit plan that included $1.2 trillion in increased taxes.

Deficit negotiations between Obama and Boehner have always foundered on taxes, one way or another. The tea party zealots in the House simply won't support tax increases of even a dime, and Boehner can't make them. It's never been clear to me whether Boehner sincerely wants to make deals and just can't get his caucus to agree, or if he's always known that taxes are off the table but is pretty good at spinning reporters into believing that he really tried his best.

In any case, keep this mind when you read about the inevitable Republican kvetching over Lew's nomination as treasury secretary. It's mostly just invented nonsense. They don't like being embarrassed by a guy who keeps trying to drag them back into reality when the subject is budget numbers. That's what this is really about.

In Hollywood, It's All About Washington

| Thu Jan. 10, 2013 8:42 AM PST

On this surprisingly news-free day, I'd like to congratulate the Washington Post for coming up with a DC-centric perspective on today's announcement of the Academy Award nominations. I have to confess that this particular angle would never have occurred to me.