Kevin Drum - August 2013

Here's the Latest Fizzle in the IRS "Scandal"

| Tue Aug. 20, 2013 3:32 PM EDT

Accounting Today reports today on the latest in the IRS scandal. Yes, Accounting Today. Apparently no one else was interested, which I suppose might actually be a good sign.

Anyway, it seems that the tireless Sander Levin has unearthed yet another IRS PowerPoint presentation from around 2010 that tells screeners to watch out for groups asking for tax-exempt status who might actually be primarily engaged in political activities. Here are the relevant slides:

Aside from providing yet more evidence in favor of a federal ban on PowerPoint presentations, the astute observer will note that the first slide features both an elephant and a donkey. (Sorry, Green Party.) The next slide does indeed list Tea Party, and then Patriots and 9/12 Project. But guess what? Next up are Emerge, Progressive, and We the People. This sure doesn't look like an IRS jihad against conservative organizations, does it?

This comes via Steve Benen, who apparently reads Accounting Today as part of his morning routine. OK, probably not. But it wouldn't surprise me. Here's his final comment:

This would a time for at least some accountability. There were countless Republicans and mainstream pundits — left, right, and center, from Limbaugh to Jon Stewart — who were absolutely convinced that this story was legitimate and President Obama bore responsibility for the wrongdoing we now know didn't exist.

And yet, the scandal that evaporated into nothing has led to precious little introspection among those who demanded the public take it seriously. The political world flubbed this one, and instead of acknowledging that, it's simply moved on as if it hadn't made a mistake.

It's a real shame.

So, I guess we'll start hearing more about Benghazi again soon?

Look! Up in the sky! It's Benghazi!

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Hooray for Carbon Taxes!

| Tue Aug. 20, 2013 1:43 PM EDT

Tyler Cowen recommends "Carbon Taxes vs. Cap and Trade: A Critical Review," by Lawrence Goulder and Andrew Schein of Stanford University. This is right up there with "lead abatement" on the yawn scale, but wait! There will be no long, wonky excerpts. Instead, let's get straight to the meat. Here's their list of pros and cons:

It sure looks like a carbon tax is the winner, doesn't it? But that's because Goulder and Schein are economists, and economists almost universally prefer a tax to an emissions trading scheme. One way to come to that conclusion is to ignore the single biggest factor in favor of cap-and-trade: namely that it actually caps emissions with certainty. Goulder and Schein don't ignore this, but they do manage to turn it on its head. In the table above, it's cleverly hidden in the box called "Weitzman issue (price vs. emissions uncertainty)," which makes it into an economically tractable issue and, in an amazing feat of magic, converts it from an advantage of cap-and-trade to an advantage of a carbon tax. How? By assuming that the danger of allowing emissions to get too high is less than the danger of allowing the carbon price to get too high. So that's that. As long as you assume the damage from greenhouse gas emissions isn't that big a deal—not as big a deal as high energy prices, anyway—then cap-and-trade looks like a lousy deal.

Why am I being so snarky here? I don't know. I'm in a bad mood, I guess. It's unfair. There really are good reasons to prefer a carbon tax, even if I think that Goulder and Schein have their thumbs on the scale by assuming low administrative costs and better Weitzman efficiencies. What's more, the truth is that I don't care anymore. I have a modest preference for cap-and-trade precisely because it caps emissions, which is my highest priority. It also provides trading flexibility, which Goulder and Schein acknowledge. But honestly, the differences are small. If we could actually get stronger political support for a carbon tax, that would be fine with me. Any kind of carbon pricing is fine with me at this point.

But that's not very likely. If Republicans are unalterably opposed to cap-and-trade because it's really cap-and-tax, what are the odds that they'd support something that just admits it's a tax up front? Not very good. Even as part of a tax reform package that lowers marginal income tax rates, something that you'd think nobody in either party would oppose, it seems pretty unlikely.

But if this is ever on the table, I'm all for it. It's the most no-brainer form of tax reform I can think of. And even allowing for their thumbs on the scale, Goulder and Schein make a good case for a carbon tax. Too bad about all those Republicans, eh?

Tanning Beds are Very, Very Bad for Teenagers

| Tue Aug. 20, 2013 12:02 PM EDT

Is diet soda bad for you? Who knows. It might be in large quantities, but the evidence is pretty thin. On the list of things to get outraged about, it probably ranks somewhere near the bottom of the Top 100.

Indoor tanning, on the other hand, is just plain horrifically bad. Aaron Carroll provides the basics: indoor tanning before age 25 increases the risk of skin cancer by 50-100 percent, and melanoma risk (the worst kind of skin cancer) increases by 1.8 percent with each additional tanning session per year. Despite this, the chart on the right shows the prevalence of indoor tanning among teenagers. It's high! Aaron is appalled:

This is so, so, so, so, so, so, so bad for you. Why don’t I see rage against this in my inbox like I do for diet soda? Why can’t people differentiate risk appropriately?

And who would fight a tax on this?

Answer: lots of people, including every single member of the Republican Party. Next question?

I Am the Ghost of Barry Eichengreen

| Tue Aug. 20, 2013 11:21 AM EDT

Today's nerd game of the moment is "Which Economist Are You?" This involves answering questions that have previously been posed as part of the IGM Economic Experts Panel and then seeing which economist your answers match best. I got bored after 19 questions, and then skipped around and answered a few more randomly. The machine appears to think I am most like Barry Eichengreen, which is pretty good company, I think, so I'm happy. You can try it out yourself here.

FUN NOTE: If you go down the list and blindly agree ("strongly agree," actually) with the first 20 questions, then you are Hyun Song Shin. If you strongly disagree with the first 20 questions, you are Hyun Song Shin. If you are uncertain about all 20, you are Hyun Song Shin. Apparently Hyun Song Shin is the ideal median economist.

Snowden Wars Episode V: The Surveillance State Strikes Back

| Mon Aug. 19, 2013 7:09 PM EDT

Alan Rusbridger, editor of the Guardian, tells a story about the newspaper's ongoing exposure of Edward Snowden's surveillance files:

A little over two months ago I was contacted by a very senior government official claiming to represent the views of the prime minister. There followed two meetings in which he demanded the return or destruction of all the material we were working on. The tone was steely, if cordial, but there was an implicit threat that others within government and Whitehall favoured a far more draconian approach.

The mood toughened just over a month ago, when I received a phone call from the centre of government telling me: "You've had your fun. Now we want the stuff back." There followed further meetings with shadowy Whitehall figures. The demand was the same: hand the Snowden material back or destroy it. I explained that we could not research and report on this subject if we complied with this request. The man from Whitehall looked mystified. "You've had your debate. There's no need to write any more."

During one of these meetings I asked directly whether the government would move to close down the Guardian's reporting through a legal route — by going to court to force the surrender of the material on which we were working. The official confirmed that, in the absence of handover or destruction, this was indeed the government's intention. Prior restraint, near impossible in the US, was now explicitly and imminently on the table in the UK. But my experience over WikiLeaks — the thumb drive and the first amendment — had already prepared me for this moment. I explained to the man from Whitehall about the nature of international collaborations and the way in which, these days, media organisations could take advantage of the most permissive legal environments. Bluntly, we did not have to do our reporting from London. Already most of the NSA stories were being reported and edited out of New York. And had it occurred to him that Greenwald lived in Brazil?

The man was unmoved. And so one of the more bizarre moments in the Guardian's long history occurred — with two GCHQ security experts overseeing the destruction of hard drives in the Guardian's basement just to make sure there was nothing in the mangled bits of metal which could possibly be of any interest to passing Chinese agents. "We can call off the black helicopters," joked one as we swept up the remains of a MacBook Pro.

Rusbridger's conclusion:

The state that is building such a formidable apparatus of surveillance will do its best to prevent journalists from reporting on it. Most journalists can see that. But I wonder how many have truly understood the absolute threat to journalism implicit in the idea of total surveillance, when or if it comes — and, increasingly, it looks like "when".

We are not there yet, but it may not be long before it will be impossible for journalists to have confidential sources. Most reporting — indeed, most human life in 2013 — leaves too much of a digital fingerprint. Those colleagues who denigrate Snowden or say reporters should trust the state to know best (many of them in the UK, oddly, on the right) may one day have a cruel awakening. One day it will be their reporting, their cause, under attack. But at least reporters now know to stay away from Heathrow transit lounges.

Remember back when the internet was supposed to make the state obsolete? That was always laughable, just as the 90s-era cluetrain nonsense about the internet making traditional marketing obsolete was laughable. In both cases, exactly the opposite has happened. Sure, the internet empowers individuals in certain ways, both in their relation to the market as well as in their relation to the state, but the overall impact has been in exactly the opposite direction. Just as multinational firms almost effortlessly comandeered the internet as a marketing vehicle after only a few years of confusion, governments quickly learned that any sufficiently motivated state can use the capabilities inherent in an omnipresent digital network to exercise far more control over their territory and their citizens than they give up. The only question is how motivated the state is.

Anyone who thinks otherwise is confused about how the virtual world works. Sure, the internet's protocols make top-down control difficult, as does the decentralization of its infrastructure. But those are just speed bumps. As everyone should understand by now, the virtual world is virtual only at a very shallow level. Dig an inch deep and guess what? Your iPhone is a physical object. Routers are physical objects. Fiber optic cables are physical objects. Computers are physical objects. And governments have control over the physical world.

I don't know how this turns out any more than you do. In the end, maybe the centrifugal forces of the internet really will win the day. After all, as Rusbridger pointed out to the GCHQ folks, destroying a few hard drives in London didn't make the slightest difference to the Guardian's ability to report the Snowden story.

On the other hand, Snowden himself is bottled up in Russia. Julian Assange is trapped like a rat in the Ecuadorian embassy in London. WikiLeaks has been crippled by concerted international sanctions. Bradley Manning will spend the rest of his life in jail. And even the thickest-skinned journalists will think twice before tackling sensitive subjects now that they know their spouses, family, and friends are considered fair game for harassment by any sufficiently annoyed security agency. If even the president of Bolivia can't escape harassment, what chance do you have?

Here's Why the Pentagon Is Facing $20 Billion in Extra Cuts Next Year

| Mon Aug. 19, 2013 4:24 PM EDT

Earlier today I passed along the news that the Pentagon is facing some extra big cuts next year under the terms of the sequester. But why? Via Twitter, Matt Glassman explains: "The 2011 BCA sets up different def of 'security spending' for FY12/13 and for FY14+, result is up % DoD cuts."

Aha! The Congressional Research Service explains further:

For FY2012 and FY2013, the spending limits were divided into “security” and “nonsecurity” categories, with security defined broadly to include the Departments of Veterans Affairs (VA), Homeland Security (DHS), and State, in addition to the Department of Defense....However, [after 2013] these terms are redefined, so that “security” consists only of budget function 050 (effectively, the Department of Defense), and “nonsecurity” includes all other government spending (including the VA, DHS, and State). The distinction between security and nonsecurity (as redefined) remains for each of FY2014-FY2021.

So there's your answer. In the 2013 sequester, "security" was trimmed about $55 billion in annual terms, but some of that went to cuts at the VA, DHS, and State. In 2014, the entire $55 billion gets taken from the Pentagon budget. Apparently that adds up to about $20 billion more in pure defense cuts.

Just thought you'd like to know.

UPDATE: It turns out this is wrong. The real story is here.

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Leaked IPCC Report Says Climate Change Is Now More Certain Than Ever

| Mon Aug. 19, 2013 3:16 PM EDT

Here's the latest from the IPCC:

An international team of scientists has found with near certainty that human activity is the cause of most of the temperature increases of recent decades, and warns that sea levels could rise by more than three feet by the end of the century if emissions continue at a runaway pace.

The scientists, whose findings are reported in a summary of the next big United Nations climate report, largely dismiss a recent slowdown in the pace of warming, which is often cited by climate change contrarians, as probably related to short-term factors. The report emphasizes that the basic facts giving rise to global alarm about future climate change are more established than ever, and it reiterates that the consequences of runaway emissions are likely to be profound.

This is no big surprise or anything, but nonetheless nice to see. The "slowdown" of the past decade has always been exaggerated by the climate deniers, and to the extent it exists, it's most likely the product of a natural fluctuation between energy being absorbed by the atmosphere vs. energy being absorbed by the oceans. Right now the oceans are warming at an unusually fast rate, but when the current fluctuation turns around, global warming will continue along its inexorable path. Other possible explanations for the slowdown include volcanic eruptions offsetting some of the greenhouse warming or a lower sensitivity to greenhouse gases than most scientists think, but my money is on the oceans.

(Not that ocean warming is any consolation. Not only does it raise sea level via thermal expansion, but it does tremendous harm to the ocean ecology as well.)

Chris Mooney has a bit more on the leaked report here. And if a three-foot rise in sea level doesn't seem like all that much, think again. Even a small rise in sea level has a huge impact on the floods caused by hurricanes. Tim McDonnell has more on that here.

Pentagon Set for Extra Big Sequester Cuts Next Year

| Mon Aug. 19, 2013 1:31 PM EDT

Rep. Chris Van Hollen tells Greg Sargent today that Democrats might have more leverage than people think in upcoming budget battles. That's because the sequester for next year requires bigger cuts in defense spending than domestic spending:

This hidden leverage, Van Hollen says, flows from a little noticed wrinkle in the design of the sequester that is only being focused on by Capitol Hill aides right now. Because of that wrinkle, defense programs are set to absorb a much bigger spending cut next year than non-defense programs are. If the sequester is not replaced, defense will be cut an additional $20 billion in 2014 below current levels.

…"There's no negotiating over the principle of parity," Van Hollen said. "If Republicans want to relieve the $20 billion cut to defense, we must increase non-defense spending by $20 billion. You can't boost defense at the expense of other investments. That's got to be a very clear principle."

I followed the link and I still don't understand why the Pentagon cuts are going to be bigger than the domestic cuts. I assume it has something to do with next year's sequester running for a full 12 months instead of the 10 months it ran this year. But that's true for the domestic half of the sequester too. Perhaps it has something to do with domestic spending mostly being monthly expenses, which means all the cuts have already been made on an ongoing basis, while lots of Pentagon procurement spending is multi-year. I'm not sure.

But one way or another, apparently everyone agrees that the Pentagon will get nicked extra heavily next year and budget negotiations are proceeding on that basis. Just thought I'd pass it along.

UPDATE: The answer is here. It turns out that it all hinges on a different definition of "security" between 2013 and 2014.

Agenda 21, Death Panels, Shariah Law, and Now . . . . ObamaCore

| Mon Aug. 19, 2013 12:22 PM EDT

A few days ago I was thinking about the Common Core, a bipartisan set of standards for K-12 education that was adopted by most states in 2010 and is now slowly getting rolled out. The reason I was thinking about it is that CC has lately become yet another pet rock for the right, bitterly denounced as a liberal scheme to take over the schools and brainwash our children. How did this happen? What's the history behind this turnabout, which is especially peculiar given that CC grew out of the "accountability movement," which was originally associated more with the right than the left in the first place?

Today, Paul Krugman directs my attention to Bill Keller, who provides this brief potted history:

The backlash began with a few of the usual right-wing suspects. Glenn Beck warned that under "this insidious menace to our children and to our families" students would be "indoctrinated with extreme leftist ideology."

....Beck's soul mate Michelle Malkin warned that the Common Core was "about top-down control engineered through government-administered tests and left-wing textbook monopolies." Before long, FreedomWorks — the love child of Koch brothers cash and Tea Party passion — and the American Principles Project, a religious-right lobby, had joined the cause. Opponents have mobilized Tea Partyers to barnstorm in state capitals and boiled this complex issue down to an obvious slogan, "ObamaCore!"

....In April the Republican National Committee surrendered to the fringe and urged states to renounce Common Core. The presidential aspirant Marco Rubio, trying to appease conservatives angry at his moderate stance on immigration, last month abandoned his support for the standards. And state by red state, the effort to disavow or defund is under way. Indiana has put the Common Core on hold. Michigan's legislature cut off money for implementing the standards and is now contemplating pulling out altogether. Last month, Georgia withdrew from a 22-state consortium, one of two groups designing tests pegged to the new standards, ostensibly because of the costs....The Common Core is imperiled in Oklahoma, Utah, Alabama and Pennsylvania. All of the retreat, you will notice, has been in Republican-controlled states.

That's about how I figured it, but I'll bet there's a more interesting story to be written here by some scholar of the right. I'd really like someone to do it.

NOTE: I should add that I personally have no opinion about the Common Core. I haven't spent any time looking at it or listening to the debates that led up to it. I'm only curious about this on a political basis. How is it that something which was entirely bipartisan up until 2010 managed to morph into a conspiratorial threat to the American way of life in only two years?

How Many Database Queries Do NSA Analysts Perform Each Day?

| Mon Aug. 19, 2013 11:50 AM EDT

Last night, based on a statement from the NSA's director of compliance, I wrote that NSA analysts performed about 600,000 database queries per day. This prompted several suggestions on Twitter that perhaps I was unfamiliar with SQL and had no idea how databases work. For example, this one:

@ggreenwald @kdrum select * from news.articles where technical_literacy < 0 limit 600000

Snark aside, this tweet is pointing out that a single query can return many records from a database, so perhaps the NSA's estimate referred to the total number of records they retrieved, not the actual number of queries they made. Maybe! But according to the New York Times, the NSA guy said "the agency performs about 20 million such queries each month." Is it possible that he misspoke? Or that the reporter misinterpreted him? Sure. But it doesn't sound like it. There's nothing there about the number of records retrieved. He said the agency "performs" 20 million queries per month.

As I mentioned last night, it's possible that many of these are automated queries for one purpose or another. Actual human beings might perform only a fraction of them. Until there's some clarification from NSA, though, there's no particular reason to think that. For now, anyway, it sounds like he's talking about actual queries from NSA analysts.