Kevin Drum - January 2013

Republicans Vote to Increase Cost of Medicare

| Sat Jan. 5, 2013 9:14 AM PST

Conservative Republicans talk endlessly about reining in the cost of entitlement programs like Medicare, but when it comes to specifics they suddenly become camera shy. Now, though, it's gotten even worse. Not only are they unwilling to propose actual, concrete cost-cutting measures for Medicare, they want to dismantle the ones that Democrats have already put in place. Sam Baker of The Hill reports that House Republicans are set to vote on a package of rules that would effectively hog-tie the Independent Payment Advisory Board, which is charged with recommending cost-cutting measures for Medicare. Ed Kilgore comments acidly:

Having medagogued the IPAB--which Sarah Palin notoriously labeled a "death panel"--and the health care cost savings it was charged with securing not just by Obamacare but by earlier Republican legislation, it figures House Republicans would make this the first step to obstruct implementation of ACA, despite the massive hypocrisy involved.

What's really maddening is that IPAB--following the overall thrust of Obamacare--is designed to secure savings not just for Medicare but for the entire health care system by encouraging better medicine, not reductions in health coverage for seniors. It seems Republicans are only interested in health care cost containment measures or "entitlement reform" if it comes at the expense of beneficiaries.

Ladies and gentlemen, welcome to the modern Republican Party.

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Quote of the Day: We Are Doomed to Financial Bubbles Forever

| Sat Jan. 5, 2013 8:50 AM PST

John Quiggin writes that he believes the study of macroeconomics went off the rails in 1958, when the Phillips curve was invented. He's not even very impressed with the success of the Taylor-rule style interest rate targeting that gave us the Great Moderation between the late 80s and 2008:

Implicit in this view is the idea that the Great Moderation was a policy success and that the subsequent Great Recession was the result of unrelated failures in financial market regulation. My view is that the two can’t be separated. In the absence of tight financial repression, asset price bubbles are regularly and predictably associated with low and stable inflation. Central banks considered and rejected the idea of using interest-rate policies to burst bubbles, and the policy framework of the Great Moderation was inconsistent with financial repression, so the same policies that gave us the moderation caused the recession.

On this view, it sounds like we're just well and truly screwed, since a Bretton-Woods/Regulation Q version of the economy isn't coming back anytime soon. I don't know if John is actually right about this, but it seemed worth tossing out for discussion. If he's right, what's the answer?

Lead and Crime: A Correction

| Fri Jan. 4, 2013 7:08 PM PST

Deborah Blum comments on my story about the link between lead and crime:

In this latest story, [Drum] goes much farther in embracing lead as the primary cause of violent crime, so much farther that that it's worth asking whether leaded gasoline, as he asserts, does explain as much as 90 percent of the rise and fall of violent crime. Does it trump drugs, poverty, urban gang warfare, education, and other such issues to the point that they account for a bare ten percent of the crime statistics. That's a harder case to make, partly because as Drum himself notes correlation is not causation: the fact, for instance, that falling crime follows a pattern of falling lead exposure doesn't rule out many other influences.

This is a legitimate criticism. Blum is referring to the callout on the right, which runs alongside my article, and as a standalone headline I think it goes too far. It's true that one researcher has suggested that lead can explain 90 percent of the rise and fall of crime, but that's very much the high end of the estimates in the field. I'm a lot more comfortable with an estimate of around 50 percent, something I should have made clearer in the text of my piece. In other words, lead probably explains a very big chunk of the rise and fall of postwar crime in America, but it doesn't trump everything else. Drugs, poverty, urban gang warfare, education, policing tactics, and other things also play a role.

I'm mentioning this because a number of people have gotten derailed by the implication of the 90 percent number, namely that virtually nothing else matters when it comes to crime. That's really not the point I wanted to make. Lead is a big factor, but it's not the only factor.

POSTSCRIPT: Another thing to keep in mind: Even if the 90 percent number is correct, it doesn't imply that lead is responsible for 90 percent of all crime. It only implies that it's responsible for 90 percent of the postwar rise of crime above its natural level, which is determined by a variety of other factors. Later, the drop in lead emissions was responsible for 90 percent of the decline of crime back to its natural level.

Friday Cat Blogging - 4 January 2013

| Fri Jan. 4, 2013 12:52 PM PST

It's 2013, and that means the start of our cats and quilts series. But I think this is going to be harder than I thought. It's no problem to toss out a quilt and wait for Domino to curl up on it, but the problem is that this is pretty much all she does. So that means a lot of pictures of a snoozing cat. I have a feeling I need to think through this whole project a little more carefully to see how I can mix things up a bit more.

In any case, here are the deets on the quilt. It's a wedding ring quilt made in 1997 out of reproduction 1930s fabrics. It's machine pieced and hand quilted, and 100% lead free.

How Does Obama Plan to Not Negotiate Over the Debt Ceiling?

| Fri Jan. 4, 2013 12:07 PM PST

I've spent the past couple of months trying not to get fully assimilated by the fiscal cliff Borg. Nor more than one post a day! That's what I told myself. There simply didn't seem to be any point in obsessing over every little back-and-forth and every little Beltway nuance of who was up and who was down. Besides, it bored me.

I think I was mostly successful in that, but now I have a new challenge: not getting fully assimilated by the debt ceiling Borg. Two months to go on this! But I haven't done even one post about this yet today, so let's take on a question that's perplexed me about this whole thing. Greg Sargent notes that President Obama has vowed that he flatly won't negotiate over the debt ceiling. Other stuff, sure, but not the debt ceiling. Congress just needs to raise it, full stop:

But it’s unclear to me how this will work in practical terms. Unless Obama is prepared to go into default — or to pull some other ace out of his back pocket, such as the 14th amendment or “platinum coin” options — he will inevitably be negotiating over the debt ceiling. And he doesn’t appear prepared to do any of those things.

My question is a little different. We already know that Obama will be negotiating over the sequestration cuts. And once that's happening, there's just no way to pretend that he's not also negotiating over the debt ceiling. If Republicans keep saying that they'll only raise the ceiling if the sequester is dealt with, then you're negotiating over the debt ceiling whether you admit it or not.

At a practical level, then, I'm curious about how Obama plans to pull off this "no negotiation" stance. Any ideas?

On a related note, I also recommend Alec MacGillis's take on how hostage-taking over the debt ceiling has gone almost overnight from a reckless new tactic to merely the way things are in Washington DC. I know there's a limit to how much reporters can call out this stuff in straight news accounts, but somehow they need to figure out a way. This isn't just business as usual. It's a willful band of radical Republicans refusing to pay bills they've already run up. It's really inexcusable.

More Pot, Less Booze?

| Fri Jan. 4, 2013 10:46 AM PST

One of the interesting questions about marijuana legalization is the effect it might have on alcohol consumption. On one theory, pot and alcohol are substitutes. That is, there's a certain amount of total demand for psychoactive drugs, so if pot use goes up, alcohol use will go down. That would be a big win, since alcohol use is generally a lot more dangerous than marijuana use.

But if pot and alcohol aren't substitutes, then you don't get this benefit. You get the same amount of drunk driving and, since legal pot would be cheaper and more widely used, more stoned driving too. It's a net negative.

So which is it? No one knows for sure, because marijuana isn't cheap enough to be a genuine substitute for alcohol anywhere in the country. However, that might change in Colorado if the feds don't interfere with their marijuana legalization initiative. John Ingold of the Denver Post alerts us to a couple of new pieces of research:

Two studies out of the University of Colorado Denver provide hints about what might happen. In a paper soon to be published in the Journal of Law and Economics, professor Daniel Rees finds that traffic fatalities drop when states pass medical-marijuana laws. Rees also reports a drop in alcohol consumed by people ages 20-29 in medical-marijuana states.

Professor Benjamin Crost finds a similar relationship in a paper that argues marijuana use decreases and alcohol use increases after young people hit the legal drinking age. "We should expect that the higher availability of marijuana in Colorado will lead to a decrease in alcohol use among young people," Crost wrote in an e-mail.

That's encouraging, but there's nothing like a real-world test to find out for sure. We may get that soon in Colorado and Washington.

Via Mark Kleiman, whose book, Marijuana Legalization: What Everyone Needs to Know, is a must read if you want to understand more about the pros, cons, and fine points of marijuana use and abuse.

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Crime in the Windy City

| Fri Jan. 4, 2013 10:11 AM PST

I've gotten several emails similar to this one in response to my story about lead and crime:

I am curious on your take on the soaring violence in Chicago, which is primarily located in a few small areas. It is all very weird. I live just west of the city and the Downtown is great. Even Hyde Park, where I was only last week is fine. And then we have the West and South Sides that are more akin to Baghdad, then North Michigan Ave.

There are several things to say about this. First, crime can spike up or down in particular regions for a lot of reasons. Lead merely provides a sort of background level. Likewise, a car with a big engine will generally go faster than one with a small engine, but traffic and weather and other factors can change that in particular times and places.

That said, there's no question that lead concentrations are different in different neighborhoods. During the big crime wave of the 60s through the 80s, gasoline lead was generally a bigger problem in places where cars were densest, which was the inner cores of large cities. It was also a bigger problem in housing projects built next to expressways, which a lot of them were. And lead paint, of course, was a scourge in older housing stock. Suburban neighborhoods and newer neighborhoods had lower lead levels and, not coincidentally, lower crime levels than inner cities.

For more on neighborhood densities of lead, take a look at my magazine piece, which includes some lead maps of New Orleans put together by Howard Mielke of Tulane University. Mielke shared his maps with the local police and the association popped right out. "When they overlay them with crime maps," he told me, "they realize they match up." For more on Chicago in particular, Megan Cottrell had a nice piece a few months ago in the Chicago Reader.

However, even with that said, the big picture in Chicago is similar to the big picture in every other big city in America: violent crime is down. A lot. The chart on the right shows rates for various violent crimes tracked in the FBI's Uniform Crime Reporting statistics, and over the past two decades they're down by half or more. Occasional blips aside, Chicago is a lot safer than it was 20 years ago.

Does Lead Paint Produce More Crime Too?

| Fri Jan. 4, 2013 9:26 AM PST

One obvious question about my story on the link between lead poisoning and violent crime is why I focus so heavily on gasoline lead. What about lead paint in old housing stock? Isn't that just as important?

The answer is simple. My focus was on the rise and fall of crime in the era after World War II, and lead paint didn't play a big role in that. During that era, exposure to lead from paint was fairly stable, possibly declining a bit over time as lead paint was phased out, and it probably contributed to a generally elevated level of crime during the entire period. But because it was fairly stable, it didn't contribute to either a dramatic rise or fall in crime.

But what about earlier? Use of lead paint did rise substantially in the early 20th century, so why not look at that? Again, the answer is simple: we don't have reliable crime statistics going back that far, so it's hard to draw any firm conclusions about the effect of lead paint on crime.

But here's one of those interesting tidbits I mentioned yesterday that I didn't have room for in the main article. It turns out that there's one crime we do have good long-term data for: murder. Murder has always been pretty easy to define and it's always been fairly reliably reported. It's only one data point, but does it fit the lead hypothesis?

Here's what we'd expect. Lead paint use rose in the early 20th century, peaking in the teens and then dropping. Then, in the late 40s, gasoline lead started to rise, peaking in the 70s and then dropping. Since lead primarily affects small children, you'd expect that kids exposed to lead paint would grow up and become more violent in the 30s, then taper off, and then become more violent again in the 60s. It should be a double-humped curve.

And guess what? That's exactly what we see in the data:

As usual, I want to caution everyone about trying to infer too much from this. Lead isn't the only cause of crime, and getting rid of it won't necessarily return us to the crime rates of a century ago. Crime is driven by culture, by guns, by poverty, by race, by drug use, by demographics, by policing tactics, by incarceration, and more. Nevertheless, the close match between two unusual curves like this is striking. We don't have much data going back before World War II, but what data we do have offers yet more confirmation of the link between lead and crime.

Needless to say, this also confirms the importance of cleaning up lead paint as well as lead-impregnated soil. Lead paint isn't a big part of the postwar crime wave story, but lead is lead, and higher levels produce more crime, more learning disabilities, lower IQs, and lower lifetime earnings. Wherever it is, we need to clean it up.

Conservative Blather Should Not Be Taken Too Seriously

| Fri Jan. 4, 2013 8:42 AM PST

Andrew Sprung kind of likes the idea that conservatives are so unnerved by Obama's success in the fiscal cliff negotiations:

To his enemies, he now bestrides Capitol Hill like a colossus while the GOP leadership walks under his huge legs and peeps about to find themselves dishonorable graves. I don't think they're right. But I find it refreshing. Bracing. You might almost say exhilarating. Start with Charles Krauthammer....

What follows is a typically hysterical reaction from Krauthammer toward the prospect of millionaires seeing their effective tax rates go up by a few percentage points. But for what it's worth, I wouldn't take this too seriously. Does this mean that Krauthammer really thinks Obama has won a world historical victory? I doubt it. He's simply doing what pundits and politicians always do: portraying events in a way most likely to rally the troops for the next battle. Krauthammer wants to scare conservatives into holding firm in the next round of negotiations, and the best way to do that is by pretending that Round 1 was a loss of brobdingnagian proportions. One more like that and liberals will have routed us completely!

This is just blather. In broad terms, the fiscal cliff deal was peanuts. The sequestration negotiations will probably turn into peanuts too. The plain fact is that although both sides talk a good game, Democrats are afraid to raise taxes very much and Republicans are afraid to cut entitlements very much. That's why Dems won't even consider things like carbon taxes or financial transaction taxes, and why Republicans generally refuse to offer concrete entitlement cuts. Even Paul Ryan's famous budget punts on Social Security completely, doesn't touch Medicare in the medium term, and does its level best to painstakingly obscure the fact that it would cut Medicare in the long term.

The next few years are going to be trench warfare. No one is likely to win or lose in any big way.

Chart of the Day: Net New Jobs in December

| Fri Jan. 4, 2013 8:03 AM PST

The American economy added 155,000 new jobs last month, but about 90,000 of those jobs were needed just to keep up with population growth, so net job growth was closer to 65,000 jobs. This was about the same as November. The headline unemployment number remained steady at 7.8 percent, the same as November's revised estimate.

For reasons that remain obscure—and might just be a coincidence—the American economy is now in its third straight years of growing modestly except during the summer, when it stagnates for a few months. As a result, I'd say we're now living in the worst of all possible worlds: growth isn't high enough to really kick the economy into high gear, but it's not low enough to scare Congress into doing something serious about it. Instead, they just obsess over the deficit. That might be appropriate if we were consistently adding 200,000 net new jobs a month, but it's just plain dumb right now.