Kevin Drum - March 2013

Some Miscellaneous Monday Morning Poll Results

| Mon Mar. 25, 2013 10:19 AM PDT

Democracy Corps has some new polling figures out, and for the most part they don't really tell us anything very new. But polls are always fun, and a few of their results are either informative or entertaining or both. This one, for example, reinforces a point I made the other day: for all our talk about how Republicans are doomed because their base has driven them straight into Crazytown, the numbers just don't show it—at least, not yet. Democrats and Republicans are just as partisan as ever, and independents remain evenly split:

This next one surprised me: 60 percent of the country claims to be personally worried about the effect of the sequester cuts. I wish there were more detail about this. I'd like to know more about exactly what it is that most people are worried about.

And finally, Democracy Corps pollsters asked people to name their two most important political concerns. Answer: (a) protect entitlements, and (b) cut the deficit. Welcome to America.

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Disability as the Last Refuge of the Unemployable

| Mon Mar. 25, 2013 9:44 AM PDT

Chana Joffe-Walt has a longish, data and anecdote-driven piece on Planet Money about the steady rise of disability payments over the past couple of decades. To a large extent, she says, the federal disability program has become a de facto parking place for lots of people who lose their jobs and simply have no chance of getting another one. Here she is talking to a doctor in a rural county in Alabama:

"We talk about the pain and what it’s like," he says. "I always ask them, 'What grade did you finish?'"

What grade did you finish, of course, is not really a medical question. But Dr. Timberlake believes he needs this information in disability cases because people who have only a high school education aren't going to be able to get a sit-down job.

Dr. Timberlake is making a judgment call that if you have a particular back problem and a college degree, you're not disabled. Without the degree, you are.

And here she is talking to a guy who lost his job in a mill closure:

After I got interested in disability, I followed up with some of the guys to see what happened to them after the mill closed....Scott [Birdsall] tried school for a while, but hated it. So he took the advice of the rogue staffer who told him to suck all the benefits he could out of the system. He had a heart attack after the mill closed and figured, "Since I've had a bypass, maybe I can get on disability, and then I won't have worry to about this stuff anymore." It worked; Scott is now on disability.

Scott's dad had a heart attack and went back to work in the mill. If there'd been a mill for Scott to go back to work in, he says, he'd have done that too. But there wasn't a mill, so he went on disability. It wasn't just Scott. I talked to a bunch of mill guys who took this path — one who shattered the bones in his ankle and leg, one with diabetes, another with a heart attack. When the mill shut down, they all went on disability.

...."That's a kind of ugly secret of the American labor market," David Autor, an economist at MIT, told me. "Part of the reason our unemployment rates have been low, until recently, is that a lot of people who would have trouble finding jobs are on a different program."

....People who leave the workforce and go on disability qualify for Medicare, the government health care program that also covers the elderly. They also get disability payments from the government of about $13,000 a year. This isn't great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.

I have a pretty bearish take on all this. Basically, I suspect it's inevitable. There are a growing number of workers who are all but unemployable, and we can either throw them on the streets or else we can provide them with a small government benefit. Most of us, even the ones who talk the toughest, aren't willing to toss people out on the streets, so by hook or by crook, disability has become our way of providing the unemployable with a small pension. It's obviously a million miles from perfect, but it's better than nothing. And no one has a serious incentive to fix it, because fixing it would mean facing up directly to the problem. That's something that we're pretty universally afraid to do.

Marriage Equality May Be the Biggest Winner of the 2012 Election

| Mon Mar. 25, 2013 8:44 AM PDT

As you probably already know, Sen. Claire McCaskill is the latest politician to evolve on the topic of same-sex marriage:

My views on this subject have changed over time, but as many of my gay and lesbian friends, colleagues and staff embrace long term committed relationships, I find myself unable to look them in the eye without honestly confronting this uncomfortable inequality. Supporting marriage equality for gay and lesbian couples is simply the right thing to do for our country, a country founded on the principals of liberty and equality.

This is good news: if a Missouri politician can do this, anyone can do it. On the other hand, it's worth noting that McCaskill waited to make this announcement until she had 68 months to go before her next election. Apparently McCaskill trusts the goodwill of Missouri's voters only just so far.

Still, it's good news. Put this together with Rob Portman's change of heart and Karl Rove's declaration that he could foresee a Republican presidential candidate supporting gay marriage by 2016, and it's pretty obvious that this train is on a downhill run. And it's a funny thing: this might be the single biggest effect of the Republican loss in 2012. They've made it clear that their "soul searching" won't lead to any serious changes in party policy, but they've also made it clear that they want to change something as a symbolic bone to throw to all those demographic groups who hate them. Gay marriage may be the perfect sacrificial lamb. After all, the party's leaders know that the fight against marriage equality is now hopeless; they know it's killing them with young voters; and let's be honest: a great many of them have never truly cared about this. They talk the talk as a sop to the Christian Right, not because of any deep-rooted beliefs of their own.

This all would have happened eventually anyway. But it's the lucky beneficiary of the Republican Party's need for something to represent their "reinvention" after 2012, and that will speed things up. Who would have guessed?

Cyprus Reaches Banking Deal, Should Be Safe For At Least a Few Hours

| Sun Mar. 24, 2013 9:15 PM PDT

To the surprise of no one, Cyprus reached a deal at the very last second to bail out its banking system. The Financial Times has the basics:

Under the outlines of the deal, depositors with accounts worth less than €100,000 would not be touched. But those above those levels in Laiki Bank, the second largest and most troubled financial institution, would be severely cut, the officials said. The losses on large deposits in Bank of Cyprus, which will survive as a much smaller entity, have yet to be decided, but could be as high as 40 per cent.

....While the deal spares Cyprus of the sweeping levy on all deposits that caused outrage earlier in the week, it could end up being far more painful for large depositors, including Russian account holders, in both banks. Bank of Cyprus is particularly heavily laden with Russian deposits.

Strict capital controls will remain in place to prevent wealthy Russians from withdrawing all the rest of their money the instant that banks reopen, which is pretty much what anyone with any sense would do if they were allowed to. No matter how emphatically the great and good of Europe insist that Cyprus's problems are now solved for all time, the EU's recent history suggests taking their assurances with a great big shaker of salt.

And it turns out that this isn't all. AP reports that even haircuts this colossal will raise only €4.2 billion. The remaining €1.6 billion demanded by the EU will come from "tax increases and privatizations." The Wall Street Journal reports on the likely result:

"The [deposit] haircuts will have a calamitous impact on Cypriot output, leading to a decline in gross domestic product of 10% this year and 8% in 2014," said Gabriel Sterne at Exotix, a hedge-fund advisory. "We think the peak-to-trough decline in annual real GDP will be in the order of 23%, similar to Greece, but we see risks more on the downside than the upside."

As with the rest of Southern Europe, Cyprus faces crippling job losses, rising business bankruptcies and slumping tax collections, said economists.

That could imperil the country's ability to meet budget targets, something that in turn could call forth even harsher measures and once again stoke fears about the island's long-term future inside the euro zone.

As for possible revenge from the Russian government, there's no word on that yet. Stay tuned.

Wage Rules for Foreign Workers -- A Followup

| Sun Mar. 24, 2013 4:02 PM PDT

Yesterday I wrote about a dispute over wage rules for foreign workers that's delaying the Gang of 8 from producing a draft immigration bill. I've now learned a bit more about this, thanks to Daniel Costa of EPI, and wanted to pass along a few further details.

This wasn't clear to me from the original LA Times article I read, but apparently this dispute is over an expansion of the current H-2B visa program for seasonal guest workers. These workers are already required to be paid the local prevailing wage, and one option for calculating this is a four-tier wage structure tied to skill levels. For example, here are the rates for landscapers in Baltimore:

  • Level 1 Wage: $9.01 hour
  • Level 2 Wage: $10.60 hour
  • Level 3 Wage: $12.20 hour
  • Level 4 Wage: $13.79 hour

The AFL-CIO has long wanted to ditch the four-tier structure and move to a single wage based on the local average. Employers have opposed this for just as long. A couple of years ago, in response to a court order, the Department of Labor issued a new rule that eliminated the four-tier structure and instead relied on a single mean wage (usually equivalent to the Level 3 wage), but Congress has blocked it from being implemented.

So the current dispute is really nothing new. Employers are eager for the H2-B program to be expanded to include nonseasonal jobs. However, there's little evidence of a labor shortage in the occupations likely to be most affected, which means an influx of new workers would probably drive down wages. As its price for going along with this, the AFL-CIO wants to set the prevailing wage at the mean level once and for all. The Chamber of Commerce is opposed because most guest workers are currently certified at the Level 1 wage, so the new rule would mean they'd have to start paying higher wages.

When I wrote about this yesterday, I suggested that the AFL-CIO proposal represented a "complicated new set of wage rules for the private sector," and obviously that's not the case. It would actually be simpler than the current rule.

I also suggested that the politics of this was difficult because it requires all guest workers be paid the average prevailing wage. Since some American workers are obviously paid less than average, this would, in effect, mean mandating higher wages for foreign workers than for (some) U.S. citizens. This is still arguably the case, though the political dynamics are obviously a little complicated.

So that's that. This isn't a topic I'm likely to spend a ton of time on, but since I wrote about it yesterday I wanted to follow up today now that I know more about it.

Judge Limits Fair Use, But Only Slightly

| Sun Mar. 24, 2013 2:31 PM PDT

Last week AP won a court case against Meltwater, a company that allows organizations to keep track of where and how they're mentioned in the press. Meltwater provides its clients with the headline and a few snippets from each article that mentions them, and contends that this is fair use. AP argued that it isn't, and asked Meltwater to pay a license fee for using AP's content. James Joyner isn't impressed:

Now, this strikes me as silly. Meltwater is in no ways a rival news service. It’s not a news service at all. It’s a way for an organization to keep track of its coverage in the world press.

The think tank that employs me tried out Meltwater’s service some time back. I don’t know whether we ultimately signed up as a client; the rates were exorbitant. But it was a way, far more efficiently than possible through Google News or even Lexus-Nexis, to keep track of the mentions of the organization, its CEO, and other key stakeholders. In addition to the snippets, which I doubt we used all that much, there were various analytics and graphing packages.

While AP and NYT content was certainly included, this is in no way competitive with what they do....That is, unless the only reason you would read AP content was to find out what AP was saying about you or your business, Meltwater was not competition for AP.

Actually, this isn't as silly as it sounds. What James is describing is a clipping service, and organizations have used clipping services for decades to keep track of who's mentioning them. But here's the thing: clipping services pay a license fee to the news organizations they clip articles from. These days, it's mostly done via a central clearinghouse, but the fees are paid. Meltwater doesn't do this.

On the other hand, unlike a traditional clipping service, Meltwater isn't giving its clients full clips. Just a headline and a few paragraphs.

On the third hand, Meltwater describes itself as a clipping service. In court, Meltwater tried to argue that they're really a search engine that provides a "transformative function" on the clips in question, but the judge didn't buy it:

Just as a news clipping service should do, Meltwater systematically provides its subscribers with what in most instances will be the essence of the AP article relevant to that reader. And again, despite the obvious point of comparison given its characterization of itself as a search engine, Meltwater does not attempt to show that the extent of its taking from the copyrighted articles is no greater than that customarily done by search engines. AP, in contrast, has offered evidence that Google News Alerts do not systematically include an article’s lede and are — on average — half the length of Meltwater’s excerpts.

....Based on the undisputed facts in this record, Meltwater provides the online equivalent to the traditional news clipping service. Indeed, Meltwater has described itself as adding “game-changing technology for the traditional press clipping market.” There is nothing transformative about that function.

If Meltwater is a specialized search engine, it doesn't need to pay licensing fees. If it's a clipping service—even an electronic one—it does, just like clipping services have always done. That's mainly what this case is about. If this ruling stands up, it will indeed narrow the scope of fair use, but it's a pretty small and specialized bit of narrowing, applied solely to a for-profit enterprise in a very specific niche market. It probably doesn't mean much to the rest of us.

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Bonus Sunday Catblogging - 24 March 2013

| Sun Mar. 24, 2013 6:45 AM PDT

On Friday I showed you a picture of my mother's cat, Tillamook. But a funny thing happened while I was snapping his picture: he suddenly got shy and decided to go hide under a car. I followed him, zoomed in, and took a few pictures, not figuring they'd be worth anything. Oddly enough, though, they turned out quite spectacularly. And one of them in particular reminded me of a very famous picture. Enjoy.

Actually, the Iraq War Has Had a Surprisingly Small Effect on American Politics

| Sat Mar. 23, 2013 9:38 PM PDT

Ross Douthat argues that the Iraq War was the undoing of the Republican Party.

The Bush White House’s “compassionate conservatism” was the last major Republican attempt to claim the political center — to balance traditional conservative goals on taxes and entitlement reform with more bipartisan appeals on education, health care, immigration and poverty.

....But once Bush’s foreign policy credibility collapsed, his domestic political capital collapsed as well: moderates stopped working with him, conservatives rebelled, and the White House’s planned second-term agenda — Social Security reform, tax and health care reform, immigration overhaul — never happened.

Boy, I sure don't see this. Social Security reform was never going to happen, period. Democrats were unwaveringly opposed from the start, and would have been under any circumstances. Likewise, although it's true that immigration reform was sabotaged by a conservative rebellion, there's little reason to think it had anything to do with the war. It was a grassroots revolt from a party base that had always hated the idea. As for tax and healthcare reform, I don't remember those even being on the table. There was never any serious push for healthcare reform—or any expression of interest from the Bush administration—and tax reform was more a vague wish than a serious proposal.

The mundane truth is that presidents rarely accomplish big things domestically in their second terms. And to the extent they have, they've done it under worse circumstances than Bush: LBJ had Vietnam, Nixon had Watergate, Reagan had Iran-Contra, and Clinton had Monica Lewinsky. The Iraq War may have played a part in Bush's second-term collapse, but his domestic failures were due far more to scandal, political miscalculation, and garden variety weariness than to the war—and Obama's win in 2008 was due to all those things plus an epic financial collapse. His margin of victory was pretty much exactly what you'd expect given a lousy economy and eight years of his party being out of office.

Douthat's followup is even harder to credit:

This collapse, and the Republican Party’s failure to recover from it, enabled the Democrats to not only seize the center but push it leftward....Nor is it a coincidence that these liberal policy victories have been accompanied by liberal gains in the culture wars. True, there’s no necessary connection between the Bush administration’s Iraq floundering and, say, the right’s setbacks in the gay-marriage debate. But cultural change is a complicated thing, built on narratives and symbols and intuitive leaps.

As The American Conservative’s Dan McCarthy noted in a shrewd essay, the Vietnam War helped entrench a narrative in which liberal social movements were associated with defeat in Indochina — and this association didn’t have to be perfectly fair to be politically and culturally potent.

In a similar way, even though Donald Rumsfeld and Dick Cheney weren’t culture warriors or evangelical Christians, in the popular imagination their legacy of incompetence has become a reason to reject social conservatism as well.

I don't get this at all. Social liberalism proceeded apace all through the 70s, 80s, and 90s. The failure in Vietnam did nothing to slow it down at all. And the aughts were a mixed bag. Abortion and gun rights, for example, stayed stuck in the same rut they'd been in for years. Gay rights advanced, but that was just the continuation of a long-term trend. I'm hard put to give Iraq credit for any of this.

There's no question that the Iraq War debacle was one entry on the bill of particulars against the Republican Party in 2008. But take a look at what's happened since then. Obama has all but adopted Bush's foreign policy as his own: he launched a war against Libya; escalated the war in Afghanistan; enormously expanded the use of drone attacks; and embraced virtually all of the worst aspects of Bush's national security policy. But on the domestic side, he passed a big stimulus bill; repealed DADT; passed financial reform; and enacted a historic healthcare reform bill.

To believe that Iraq was responsible for this, you have to adopt the perverse view that a huge foreign policy failure was responsible for (a) a continuation of that very foreign policy, but (b) a repudiation of Bush's completely unrelated domestic policy. That doesn't strike me as very plausible. Unfortunately the evidence suggests just the opposite: on a wide variety of measures, the effect of the Iraq War has actually been startlingly modest. It played no more than a bit role in ushering us into the Obama Era.

Wage Rules Are Delaying Immigration Reform

| Sat Mar. 23, 2013 12:38 PM PDT

The LA Times summarizes one of the disputes that's delaying the Gang of 8 from producing a draft immigration bill:

One rough patch this week was a disagreement over how much immigrants should be paid under a proposed new visa category for entry-level jobs such as dishwashers, housekeepers and janitors. Negotiators for the AFL-CIO and the U.S. Chamber of Commerce [...] couldn't agree whether foreign workers should be paid the same wages as Americans.

The chamber argued that foreign workers should be subject to federal minimum wage law and that they should not be paid more than Americans. The AFL-CIO wanted the minimum wage for different job categories to be indexed off the median wage, saying that would produce more competitive wages for American workers.

I get why the AFL-CIO is doing this. They're afraid that higher immigration quotas will increase the supply of low-wage workers and therefore reduce overall pay in low-wage industries. So they want a complicated system designed to insure that immigrant workers will be paid as much as existing workers.

But I'm having a hard time taking the union's side of this. First, simpler is better. If you want to create a complicated new set of wage rules for the private sector, you'd better have a really good reason. I'm not sure what it is in this case, since the bulk of the evidence suggests that immigrants don't compete for the same jobs as native workers. Second, the politics of this is just impossible. The AFL-CIO wants members of Congress to vote for a bill that mandates higher wages for immigrants than for U.S. citizens? The attack ads practically write themselves.

If you think that higher immigration quotas will drive down wages in low-paid industries, that's a good reason to oppose immigration reform. But if you're basically in favor of immigration reform, trying to micromanage the wage effects seems (a) impractical and (b) politically toxic. It would encourage massive cheating and game playing, increase paperwork and enforcement, and be wildly unpopular. I just don't see how this works.

But maybe I'm missing something. Comments?