Kevin Drum - July 2013

The Way We Live Now

| Tue Jul. 9, 2013 10:59 AM EDT

From Alex Tabarrok:

I send my kids their weekly allowance ($5-$10) to a bank account via PayPal. The bank account links to a debit card which the kids use to make purchases from Amazon and Steam.

I wonder how many non-economist parents do something like this? Let's find out! If you have kids, how do you pay them their allowance? Shares in a gold ETF? Automatic transfers to their PayPal accounts? Old-fashioned coins and folding money?

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Afghanistan's Future Now Belongs to the Afghans

| Mon Jul. 8, 2013 11:30 PM EDT

The New York Times reports today that animosity between the United States and Afghanistan has finally gotten so bad that President Obama is seriously thinking about pulling out completely next year, without leaving behind even a small residual force:

A videoconference between Mr. Obama and Mr. Karzai designed to defuse the tensions ended badly, according to both American and Afghan officials with knowledge of it. Mr. Karzai, according to those sources, accused the United States of trying to negotiate a separate peace with both the Taliban and their backers in Pakistan, leaving Afghanistan’s fragile government exposed to its enemies.

Mr. Karzai had made similar accusations in the past. But those comments were delivered to Afghans — not to Mr. Obama, who responded by pointing out the American lives that have been lost propping up Mr. Karzai’s government, the officials said.

The option of leaving no troops in Afghanistan after 2014 was gaining momentum before the June 27 video conference, according to the officials. But since then, the idea of a complete military exit similar to the American military pullout from Iraq has gone from being considered the worst-case scenario — and a useful negotiating tool with Mr. Karzai — to an alternative under serious consideration in Washington and Kabul.

I won't say I'm thrilled about how or why this is happening, but I like the end result. It's long past time to pull out of Afghanistan completely, and a residual force would serve little purpose except to make itself a target if and when the Afghan state implodes. We've now been in Afghanistan for more than a dozen years, and the plain truth is that if they can't stand on their own now, they never will.

And they might very well not. I can fully sympathize with Karzai's impossible position here, regardless of what I think of him more generally. He's got limited tribal support, no real control of the country much outside Kabul, a woefully undertrained military and police force, and the Taliban ready to restart its civil war at the first opportunity. And on top of this, he gets the blame every time we Americans do something to inflame the population. It's impossible.

But it's no less impossible with us around—unless, of course, Karzai wants us around for the next 50 years, which is probably how long it would take for Afghani politics to stabilize. But he doesn't, and neither do we. So it's time to cut the cord. For good and ill, we've done everything we can. Afghanistan's future is now up to the Afghans.

Most Egyptians Don't Want a Secular Government

| Mon Jul. 8, 2013 4:38 PM EDT

Dave Schuler makes a point about Egyptian politics that's far from new, but perhaps deserves to be repeated a little more often than it is: most of the population of Egypt doesn't want a secular government. It wants an Islamic government, as the election results from two years ago show:

Of the parties listed above, the Democratic Alliance (parties allied with the Muslim Brotherhood—37.5%), the Islamist Bloc (Salafist parties even more radical than the DA—27.8%), and Al Wasat (3.7%) are all Islamist parties with an aggregate total of 69% of the vote....It’s possible that after the unpleasant experience with Morsi that public opinion may change, but in what direction? Most Egyptians are clearly not liberal democrats.

In my view the greatest likelihood is for either a return to the status quo ante, perhaps a kinder, gentler Mubarak or another Islamist government, a Morsi who isn’t Morsi. Societies depend on institutions and the two strongest institutions in Egypt are the military and the Muslim Brotherhood.

In Egypt, you can either have a secular government or you can have a democracy. You probably can't have both.

UPDATE: Elizabeth Nugent summarizes Egyptian polling data, which paints pretty much the same picture:

Recent survey data suggests that the vast majority of Egyptians are Islamists....In April 2013, Pew released a report titled “The World’s Muslims: Religion, Politics, and Society,” which included a nationally representative sample of 1,798 Egyptians....74 percent favored making sharia the official law of their country....Of those who favored making sharia the law of the land, 70 percent wanted sharia to apply to both Muslims as well as non-Muslims....94 percent wanted religious judges (instead of civil courts) to decide family and property matters; 70 percent wanted corporal (hadd) punishments for crimes; 81 percent supported stoning as punishment for adultery; and 86 percent supported punishing those who converted from Islam with death....Arab barometer data collected in June 2011 also found that 80% of a 1200-person nationally representative sample of Egyptians agreed or strongly agreed with the statement, “The government and parliament should enact laws in accordance with Islamic law.”

More at the link.

S&P Admits in Court That Its Ratings Are Ridiculous and No One Should Ever Take Them Seriously

| Mon Jul. 8, 2013 2:59 PM EDT

Today, you should give thanks that you aren't the attorney who has to defend Standard & Poor's from charges that it misled investors about the objectivity of its bond ratings. Here's their defense:

It's true that courts have long allowed sellers to engage in what's called "puffery." If McDonald's says they make the world's best hamburgers, that's OK. It may be a ridiculous claim, but what do you expect them to say? "Our burgers are pretty good if nothing else is available"? Basically, you're allowed to make vague claims about your greatness without inviting lawsuits from folks who don't like your burgers.

So when S&P says they use "market leading software," they're probably on firm ground. That's standard puffery. Unfortunately, "transparent," "independent," and "objective" are a little trickier. Those words have actual meaning, and there's only so far you're allowed to stretch them. When your bond ratings are secretly based on the fact that bond issuers are paying you heaps of money for inflated scores, your claims of mere puffery are a lot less likely to succeed.

But hey! There's no harm in trying. Well, there's no harm aside from the endless mockery this defense is producing. After all, S&P is basically saying, sure, our ratings are completely meaningless because we just produce whatever rating the bond issuer pays us for, but everyone already knows that. Only a fool would ever have believed anything else.

Should be a fun trial.

Republicans Cleverly Unveil Latest Hostage-Taking Plan

| Mon Jul. 8, 2013 12:13 PM EDT

During the last debt ceiling debacle, House Speaker John Boehner came up with the idea of "dollar for dollar": House Republicans would agree to increase the debt ceiling by a dollar for every dollar that President Obama agreed to cut spending. But for Round 2, coming later this year, Rep. Tom Price says this idea is out the window:

"Dollar for dollar is difficult," Price said. "The discretionary spending itself is $1 trillion a year, and if you're running a $1 trillion deficit annually, it's tough to find the savings solely in discretionary spending to match the increase in debt limit."

There are two reasons to laugh at this. The first is Price's suggestion that it would be merely "difficult" to completely eliminate discretionary spending. That's reality-based!

The second reason is that apparently Price doesn't understand his own party's previous position. "Dollar for dollar" always applied to the 10-year budget window, which means it really should have been called "a dollar for a dime." Over the next 10 years, the discretionary budget amounts to more than $10 trillion, which means that a trillion-dollar increase in the debt limit would require only $100 billion per year in discretionary cuts.

In any case, I suppose it's a good sign that Republicans have decided the discretionary budget has been squeezed about as much as it can be. Perhaps the sequester has had an effect on them after all. Still, I wonder what they're thinking with their shiny new "menu-based" approach to hostage taking? Do they really think that Obama is going to happily choose one from Column A and two from Column B in order to get a debt ceiling increase out of Congress? He'd be mad to even hint that he's willing to bargain on these terms. And he'd be madder still to hint that he's willing to privatize Medicare in return for a debt ceiling increase, as Republicans seem to think he might.

The tea partiers have painted themselves into a corner. The economy is slowly recovering, and the deficit is falling, but they've promised ever more hostage taking anyway, and now they have to follow through. But their proposals combine arrogance and amateur-hour theatrics in a way that practically guarantees failure. They sound like a bunch of eight-year-olds who think they've come up with an oh-so-clever way to trap dad into raising their allowance or something. But Obama isn't running for reelection anymore. All he has to do this time around is say no, and stick to it. If Republicans decide to flush the economy down the toilet in a fit of pique anyway, then maybe it really is platinum coin time.

A Tiny Little Peek Inside the FISA Court

| Mon Jul. 8, 2013 10:50 AM EDT

Eric Lichtblau managed to get a few administration officials to open up—slightly—about just what kind of rulings the secret FISA court has handed down over the past decade. Among other things, there's this:

In one of the court’s most important decisions, the judges have expanded the use in terrorism cases of a legal principle known as the “special needs” doctrine and carved out an exception to the Fourth Amendment’s requirement of a warrant for searches and seizures, the officials said.

The special needs doctrine was originally established in 1989 by the Supreme Court in a ruling allowing the drug testing of railway workers, finding that a minimal intrusion on privacy was justified by the government’s need to combat an overriding public danger. Applying that concept more broadly, the FISA judges have ruled that the N.S.A.’s collection and examination of Americans’ communications data to track possible terrorists does not run afoul of the Fourth Amendment, the officials said.

Is this legit? There's no way to know because the FISA court's rulings are secret, and the presiding judge is afraid that the public might be misled if redacted versions of the rulings were released. So for now, anyway, we just have to take their word for it that all their rulings are models of statutory interpretation.

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Friday Cat Blogging - 5 July 2013

| Fri Jul. 5, 2013 1:00 PM EDT

Today is a day off from news and blogging for me, but through the miracle of prescheduled posts, it's never a day off for catblogging. In today's entry, Domino is lounging on Marian's lap, peering suspiciously at Kevin trying to take a picture of her in dim light. Very, very suspiciously, it looks like. But I don't know why. The camera has never done anything to hurt her. It's merely made her an internet star, and in today's media-driven culture what could possibly be better than that?

In France, the Spies Also Spy

| Thu Jul. 4, 2013 6:24 PM EDT

In today's least surprising news, Le Monde reports that France's intelligence agencies also hoover up every possible speck of electronic data they can:

According to Le Monde, data on “all emails, SMSs, telephone calls, Facebook and Twitter posts” are collected and stored in a massive three-floor underground bunker at the DGSE's headquarters in Paris. The paper specified that it is the communications' metadata — such as when a call was made and where a person was when sending an email — that is being archived, not their content

....Le Monde said the French surveillance program relies on spy satellites, listening stations in French overseas territories or former colonies and information harvested from undersea cables.

French lawmaker Patricia Adam played down the report, saying France's surveillance system is not comparable with the NSA's. Adam, who until last year headed Parliament's intelligence committee, said French spies “are line fishing, not trawling” the vast oceans of data thrown up by cellphones, emails and Internet communication.

Vive la difference!

Happy Independence Day!

| Thu Jul. 4, 2013 8:00 AM EDT

Here's Why It Takes So Long to Move From Concept to Commercial Success

| Wed Jul. 3, 2013 4:39 PM EDT

The computer mouse was invented in 1963, demonstrated in 1968, shown off in a lab in 1973, introduced on a personal computer in 1984, and finally widely adopted in the early 90s. That's three decades:

That might seem like a long time, but as computer scientist Bill Buxton has argued, thirty years is actually a typical amount of time for a breakthrough computing invention to go from the first laboratory prototype to commercial ubiquity.

The first packet-switched network, the ARPANET, was launched in 1969. It took about 30 years, until the turn of the millenium, for Internet access to be widely adopted by American consumers.

....Why does it take so long? In all of these cases, it took a decade or longer for the new techniques to spread and mature inside the research community....Once a computing concept has been refined in the laboratory, it can take another decade to turn it into a viable commercial product.

....This 30-year rule of thumb can help to form an educated guess about when future innovations will reach the mass market. For example, the first car capable of driving itself long distances was created in 2005, and the technology has been maturing in academica and corporate labs over the last eight years. If self-driving technology follows the same trajectory as previous computing innovations, commercial self-driving cars will be introduced sometime in the 2020s, and the technology will become widely adopted in the 2030s.

That's Tim Lee, and I'd add one more thing: a lot of these inventions depend on computing power. A mouse isn't very useful without a graphical user interface, and you can't run a useful GUI on a Z80. You can do it—barely—with a small black-and-white display—on a Motorola 68000. And then, finally you can do it at reasonable cost with a decent display on the microprocessors of the late 80s and early 90s.

Driverless cars are following the same arc. Obviously software is a huge issue too, but sufficient computer power at a reasonable price is a bare minimum. We're still a decade or so away from that.