Kevin Drum - April 2013

Quote of the Day: Let's Go To War In Syria

| Tue Apr. 30, 2013 8:43 PM EDT

From John McCain and Lindsey Graham, beating the drums for yet another military intervention in the Middle East:

There are many options at our disposal, including military options short of boots on the ground in Syria, that can make a positive impact on this crisis, which is destabilizing the region.

I have one question for McCain and Graham about this: what if these "options" don't work? What's next? Have they given this even a moment's thought?

I know this is hardly a novel insight, but the crisis in Syria has really rubbed my nose in just how capriciously conservatives have come to treat war. They no longer even consider it an especially difficult decision to make, let alone a last resort. It's just a routine extension of foreign policy.

The chances that an American intervention could have a positive outcome in Syria strike me as close to zero. Nevertheless, the war crowd is raring to dive in anyway. They have no idea what we should do; no idea what the outcome might be; and most importantly, seemingly no idea of how many ways the entire operation could go wrong. All they know is that there's a bad guy somewhere in the vicinity of Israel, so we ought to go in and kick his ass.

It's astonishing. I'm no isolationist, and I'm no pacifist. But at the very least I think war should be treated as a deadly serious matter. When did it become such a casual thing?

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New Obamacare Application Demonstrates the Power of Framing

| Tue Apr. 30, 2013 4:43 PM EDT

You may have heard that after receiving mountains of criticism for its 21-page first draft, HHS released a new, streamlined application form for Obamacare today. So, hooray, right? Sort of. Here's my take on the original form:

In fairness, there's a single 2-page section you have to fill out, and then there are five more 2-page sections for other members of your family. So sure, it might be long if you have a big family, but a lot of it is repetition. And if you're just a single earner? Then aside from instructions, there's really only about four pages (five if you're an American Indian or Alaska Native): one page of basic contact information, two pages of income information, and one page of current insurance information.

And here is Ezra Klein's description of the new form:

Where the draft form was a hefty 21 pages, the new form is a svelte 5 pages....The new form is short because it's only for a single adult. But if you head to the HHS Web site, you can find the new form for family coverage. It, too, is shorter: A mere 12 pages rather than 21. But it only includes the forms for two people. If your family includes more than two people, the form advises you to "make a copy of Step 2: Person 2 (pages 4 and 5) and complete."

The result is that the new form for a family of six is 20 pages long and includes a substantial amount of time spent in front of a copier.

In other words, the new form is actually about the same as the old form. The fact that it seems shorter is merely an example of the power of framing. The default for the old form was 21 pages, which could be reduced to four if you were a single earner. The default for the new form is five pages, which can be expanded to 20 if you have a big family. Which one sounds better?

More Than Likely, President Obama Isn't an Idiot

| Tue Apr. 30, 2013 2:30 PM EDT

President Obama said today that he believes there are some Republicans in Congress who'd like to compromise with him to enact "common sense" solutions to America's problems:

But they're worried about their politics. It's tough. Their base thinks that compromise with me is somehow a betrayal. They're worried about primaries. And I understand all that. And we're going to try to do everything we can to create a permission structure for them to be able to do what's going to be best for the country. But it's going to take some time.

Ed Kilgore isn't impressed:

Good luck with that, Mr. President. I suppose "permission structure" means assembling enough conservative support, and/or framing legislation so that it addresses the concerns of "the base" (e.g., border enforcement on immigration) in a way that makes bipartisanship possible. But as we saw in the supreme example of the Affordable Care Act, even adopting conservative policy prescriptions right out of the Heritage Foundation playbook, as implemented by the man who would become the next GOP presidential nomination, didn't prevent them from being demonized as representing the imposition of an alien "European-style" "government takeover of health care" aimed at totalitarianism and the slaughter of old people.

I'm sympathetic, because I agree. I don't think that Republicans have declined to make a budget deal because Obama didn't schmooze them enough, or because they didn't understand what he was offering, or because Democrats haven't framed their compromise proposals quite right. Republicans have declined to make a deal because they don't like any of the deals Obama is willing to make. Full stop.

Unfortunately, I think Ed falls into the same trap when he suggests that Obama's dinners with senators have gone quite far enough, thankyouverymuch. Instead, he says, "I'd recommend about four straight speeches about filibuster reform, followed by four straight speeches on what the sabotaging of the Affordable Care Act will actually mean for actual people. At a minimum, a Plan B to deploy if his umpteenth effort at bipartisanship fails is in order."

The problem is that this almost certainly won't work either. Obama made a full-court speechifying press on gun legislation, for example, and it had no effect at all. It wasn't enough to pass even the watered-down Manchin-Toomey amendment, a bill that threw in so many goodies for gun owners that it might actually have been a net negative for gun control.

All of which gets us to the guts of the problem: most likely, nothing is going to work. But if you're the president, you can't say that. You can't even act like it. You have to go out day after day after day insisting that progress is possible and deals can be made. This gets you lots of flak from fellow lefties who think it displays terminal naiveté, but what choice do you have? Obama pretty obviously understands everything that his lefty critics understand—he's not an idiot, and this is hardly rocket science, after all—but he also understands one other thing: he can't admit it. I imagine it's frustrating as hell. But like it or not, presidents have to keep their chin up in public and keep trying to make things happen, even if they know perfectly well that success is unlikely. Welcome to hell.

Renewable Energy is Merely Another Front in the Culture Wars Now

| Tue Apr. 30, 2013 12:55 PM EDT

Over at ClimateProgress, Ryan Koronowski reports on a study that showed liberals and conservatives were about equally likely to buy an energy efficient CFL light bulb if it cost the same as an old-school bulb:

But slap a message on the CFL’s packaging that says “Protect the Environment,” and “we saw a significant drop-off in more politically moderates and conservatives choosing that option,” said study author Dena Gromet, a researcher at the University of Pennsylvania’s Wharton School of Business.

This reminded me of a line in a Jonah Goldberg op-ed this morning about our "infectious pessimism":

The obsession with "peak oil" and the need to embrace "renewables" because we're running out of fossil fuels are other symptoms of our malaise. Fracking and other breakthroughs demonstrate that, at least so far, whatever energy scarcity we've had has been imposed by policy, not nature....Humans are better understood as creators who've consistently solved the problems of scarcity by inventing or discovering new paths to abundance. As the late anti-Malthusian hero Julian Simon said, human imagination is the ultimate resource.

On the right, both climate change and questions about global limits on oil production have exited the realm of empirical debate and become full-blown fronts in the culture wars. You're required to mock them regardless of whether it makes any sense. And it's weird as hell. I mean, why would you disparage development of renewable energy? If humans are the ultimate creators, why not create innovative new sources of renewable energy instead of digging up every last fluid ounce of oil on the planet?

After all, there are plenty of reasons to think this is a great idea. If you're Bill Kristol, you want to do it to reduce the world's dependence on thuggish Middle Eastern dictatorships. If you live in Los Angeles (or Beijing), you want to do it to reduce smog. If you're Al Gore, you want to do it to reduce global warming. If you're James Hamilton, you want to do it because it will produce a more stable economy that doesn't bounce in and out of recession every time oil prices spike.

In other words, there are tons of good reasons to believe that we should be moving at warp speed to develop new sources of energy. You don't even need to believe in peak oil if you don't want to—though why you'd deny something so obvious is a mystery. Peak oil, after all, is only a question of when, not if.

I happen to agree that human ingenuity is, if not limitless, pretty damn close. So why not harness that ingenuity? Digging up ever more oil from ever more difficult and dangerous places is the sign of a plodding mind, not an ingenious one. If you truly believe in pushing the boundaries of human invention and creativity, you should be the world's biggest fan of renewable energy. That's our future.

Chart of the Day: European Unemployment Hits New Record

| Tue Apr. 30, 2013 12:13 PM EDT

Eurostat announced today that unemployment in the euro area reached a record 12.1 percent in April. That's not spread evenly, of course: unemployment was a mere 5.4 percent in Germany and a whopping 27 percent in Spain and Greece. Nor was it spread evenly across generations. Youth unemployment reached a staggering 24 percent overall, and was over 50 percent in Greece and Spain.

Let me repeat that: in Greece and Spain, more than half of those under age 25 didn't have jobs. This is pretty plainly a recipe for disaster.

In other news, Eurostat also announced that inflation in the euro area had dropped from 2.6 percent a year ago to 1.2 percent in April. So I guess austerity is working. It sure has kept inflation from spiraling out of control, anyway.

Democrats Are Starting to Sour on Obamacare

| Tue Apr. 30, 2013 11:05 AM EDT

The Kaiser Health Tracking Poll is always interesting because they ask questions that nobody else does. This month, for example, they ask whether you've mostly been hearing good things or bad things about Obamacare, and far more people say they've been hearing bad things than good.

Aha! It's Fox News at work! But no. If you go to the next question, you find that Republican views of Obamacare have stayed pretty stable: most of them hate it, but they've hated it from the start. It's Democrats who are slowly but steadily souring on the law. Three years ago, around 70 percent had a favorable view of Obamacare. Today that's dropped to under 60 percent.

Why? Hard to say, since there are no questions that delve into that. Nor is there any clue about how this breaks down between middle class workers, who are mostly unaffected by Obamacare, and low-income workers, who are. Stay tuned to see if this turns around over the next 12 months, as Obamacare starts to roll out in earnest and informational campaigns start to swing into high gear.

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We Are All Free Traders Now

| Tue Apr. 30, 2013 1:28 AM EDT

Paul Krugman wonders why the Great Recession hasn't set off a round of tit-for-tat protectionism:

Why aren’t politicians — even conservative politicians — looking at the situation and saying, hmm, a tariff won’t increase the deficit, it won’t involve debasing the currency, but it could clearly help create jobs?

One answer might be the “Smoot-Hawley caused the Depression” thing; this isn’t true at all, but it might be serving the purpose of a noble lie.

Or maybe it’s the structure of trade agreements. The countries that arguably could really, really use some protection right now are inside the European Union, so no go. Countries outside still know that any protection they impose will lead to big problems at the WTO; the United States has to know that a protectionist response would break up the whole world trading system we’ve spent almost 80 years building.

So here’s a thought: maybe the secret of our protectionist non-surge isn’t macroeconomics; it’s institutions.

I agree that institutions play a role here. Inertia is a powerful thing, and there's not much question that free-ish trade is now a well-established status quo in most of the world.

I don't think that really explains things, though. If it were truly just institutional inertia at work here, you'd expect to see lots of politicians calling for protectionism but not getting anywhere. The demagogues would do their demogoguing, but fealty to the status quo would be too powerful for them to have any impact.

But that really isn't what we've seen. Generally speaking, we've barely seen anyone even advocating protectionist measures. It hasn't been complete silence, but it's been pretty close. In the U.S., in particular, the worst you can say is that the forward movement toward signing more trade agreements might have slowed slightly. But enthusiasm for those trade agreements hasn't really ebbed at all.

No, the answer is simpler: the trade economists have won. They've spent decades beating into us that free trade is a net positive for everyone, and by now we're all convinced. In fact, we're so convinced that it barely even occurred to anyone to respond to the Great Recession by calling for us to close our borders. In the world of ideas, this has been one of the 20th century's most complete victories.

I'd also call attention to a point made by Tyler Cowen: over the past two decades, virtually all of the job growth in America has been in the non-tradeable sector. Because of this, the political power of the manufacturing/mining/agriculture industries has been shrinking steadily.

Put these three things together—genuine belief in trade, the declining political influence of the tradeable sector, and the sheer institutional difficulty of limiting trade—and it's no surprise at all that protectionism has had only a minuscule resurgence over the past few years. It's a battle that's largely over and done with.

A Quick Survey on Abortion

| Mon Apr. 29, 2013 3:00 PM EDT

Ed Kilgore has an alternate-world scenario for you to consider:

Suppose it were possible to engineer a permanent national deal (it's not, but just consider it as a thought experiment) wherein in exchange for a strictly enforced ban on post-viability abortions that didn't involve direct threats to the life of the mother, we'd also start treating all forms of contraception and pre-viability abortions not only as legal, but as medical procedures that would be publicly funded just like other medical procedures, under normal (not prohibitive) inspection and regulatory regimes? I suspect a large number of pro-choice folk would go for that kind of deal, which isn't that different from the situation in much of Europe. It would reflect the fact that most late-term abortions happen not because some bad girl has had sex and now finds motherhood inconvenient, but because she hasn't had meaningful access to contraception, Plan B, or early-term abortions.

As Kilgore points out, no one on the pro-life side would ever agree to this, so it's strictly a hypothetical. But I'm curious. How many on the pro-choice side would agree to a deal like this? Basically, the deal is (a) abortions up to, say, 22 weeks or so, would be legal and easily available, (b) late-term abortions would be completely illegal unless the life of the mother were clearly and directly threatened, and (c) this put an end to the whole issue. Everyone agrees to accept this as the status quo going forward.

Obviously this is pie in the sky. But I'm still curious. If it were on the table, how many of my readers would agree to it?

Finally, the End of Austerity?

| Mon Apr. 29, 2013 2:27 PM EDT

Is the world's infatuation with austerity as the answer to the Great Recession finally over? Neil Irwin thinks it might be. The obvious big event that got everyone's attention recently was the dismantling of the influential Reinhart/Rogoff thesis that high debt produces low growth, but Irwin argues that this is just the visible tip of the iceberg. Three other things have been pushing policymakers in the same direction:

No blowback for Japan. ....The Bank of Japan has undertaken open-ended quantitative easing of its own in pursuit of 2 percent annual inflation in a country where deflation has been the norm for two decades....The international community isn't coming down on Japan with anywhere near the ire that the Fed saw three years ago.

Growing awareness that U.S. deficits are already falling. ....There is deepening recognition that—through spending cuts in the debt ceiling deal in 2011 including sequestration, tax increases as part of the fiscal cliff, and a growing economy—U.S. deficits are falling quite quickly. That being the case, Congressional Democrats are increasingly looking to hold the line and say "No Mas" to further near-term deficit reduction.

The slow-moving disaster that is Europe. Europe has been the poster child for aggressive austerity....The result is depression in the European periphery and recession in the core....But the ECB appears set to hop on the easy money train in its meeting on Thursday. And it wouldn't be shocking if, either this week or in a future month, the ECB seeks out some more innovative tool to funnel loans to the smaller businesses that are being frozen out from getting credit. The institution that most eagerly embraced austerity and tight money three years ago, in other words, is inching away from it as well.

In this telling, the paper that took apart the Reinhart/Rogoff thesis was the perfect story at the perfect time. The conventional wisdom was already changing, slowly but steadily, and the implosion of R&R provided just the right catalyst to draw everyone's attention to it.

Of the three things on Irwin's list (and you should probably add Britain's performance in there somewhere), I'd guess that Europe is the most important by far. The political barriers to doing the right thing remain pretty strong, but it's getting to the point that I suspect even Germans are starting to wonder if the game is worth the candle. There might be worse things than higher inflation or big flows of money heading south, and the specter of Europe spiraling apart may just qualify. The evidence on this score is still iffy (remember Cyprus?), and the 11th hour may not quite be upon us, but we're getting there. The austerity experiment has pretty spectacularly failed, and before too much longer even the technocrats of the EU are going to have to face up to this.

Scary Chart of the Day: Chinese Oil Demand Will Rise a Lot Over the Next Decade

| Mon Apr. 29, 2013 12:48 PM EDT

Stuart Staniford extrapolates China's demand for oil and comes up with the chart on the right. His conclusion:

That's another 15mbd in the next thirteen years or so. Just for China. If you compare this to things like the extra 4mbd you might hope for from tar sands in this time frame, or the 2mbd that global crude supply has increased since 2005, you can see that this is going to stress the global oil system a lot. Either the global crude supply is going to grow a lot faster than it has been, or OECD oil consumers are going to have to consume a great deal less than they are now, or China (and other rapidly growing consumers) are going to have to slow down a lot.

Whichever is the case, it's hard to see how any combination of the above happens on the necessary scale without prices a lot higher than the $100-$120 we've been paying in the last few years. The comparative truce in the oil markets during 2009-2013 seems like it cannot last forever.

Shale oil and tar sands are simply nowhere near big enough to keep up with this. From a climate change perspective, that's a good thing. From a global economic perspective, it's not so good. It means that demand for oil is now permanently pushing up against supply, and will be moderated in the future primarily by oil price spikes produced when economic expansions drive oil demand above supply constraints, thus producing global recessions. But you already knew that, right?

POSTSCRIPT: The more optimistic take on this is that sometime soon everyone will figure out that we've reached a point of oil-constrained growth, and this will drive huge new investment in renewable energy. The question is how long this will take. Permanently higher prices would certainly do the trick, but booms and busts have a different effect on investment and on confidence in future growth. So it might take a while.