Kevin Drum - September 2013

How Austerity Wrecked the American Economy

| Mon Sep. 23, 2013 5:45 AM EDT

With Washington DC's attention focused on the antics of Ted Cruz and the tea partiers, who are threatening to shut down the government unless Obamacare is defunded, it's easy to lose sight of the bigger picture: Aside from Obamacare, the budget battles of the past three years have been exclusively about the Republican obsession with cutting spending while we're trying to recover from the worst recession since World War II.

This is lunacy, and it's the subject of "Death by a Thousand Cuts," my cover story in the current issue of Mother Jones. The piece is framed around the famous Excel error in the paper by Carmen Reinhart and Ken Rogoff, but my point isn't really to blame them for what happened. Their paper, predicting doom if U.S. debt levels went above 90 percent of GDP, provided important intellectual cover to the austerity zealots who wanted to use the recession as an excuse to hack away at spending on social welfare programs, but the truth is that the zealots would have done it anyway. R&R just made their job easier.

And they're still at it. As I write in the story, conservatives remain obsessed with slashing spending despite the fact that (a) this is unprecedented in recent history and (b) the deficit has already been slashed repeatedly over the past three years:

First came budget deals in 2010 and 2011 that reduced the deficit by $760 billion. Then, in August 2011, Obama struck an agreement with Republicans to resolve the debt ceiling crisis, which produced about $1.1 trillion in spending cuts along with the promise of more from a congressional supercommittee. At the end of 2012, the fiscal-cliff showdown resulted in $850 billion in tax increases and spending cuts. Finally, in March, sequestration cuts (cued up when the supercommittee failed to produce a deal) kicked in, to the tune of another $1.2 trillion. Taken as a whole, these measures have cut the deficit by $3.9 trillion over the next 10 years. And that doesn't even count the expiration of desperately needed stimulus measures like the payroll tax holiday and extended unemployment benefits.

This was unprecedented, as the chart on the right shows. After every other recent recession, government spending has continued rising steadily throughout the recovery, providing a backstop that prevented the economy from sliding backward. It happened under Ronald Reagan after the recession of 1981, under George H.W. Bush after the recession of 1990, and under George W. Bush after the recession of 2001. But this time, even though the 2008 recession was deeper than any of those previous ones, it didn't.

Because most state budgets are required by law to be balanced, it's normally the job of the federal government to keep spending on an upward path during a recovery. But with federal outlays squeezed by all the budget deals, total government spending peaked in the second quarter of 2010 and then started falling, falling, and falling some more. Today, government spending at all levels—state, local, and federal combined—has declined 7 percent since the publication of Reinhart and Rogoff's paper.

Government spending at all levels is far below the level of any other recent recovery. Sixteen quarters after the end of the recession, spending during past recoveries has been 7-15 percent higher than it was at the start. This time it's 7 percent lower, despite the fact that the 2008-09 recession was the deepest of the bunch. Reagan, Clinton, and Bush all benefited from rising spending during the economic recoveries on their watches. Only Obama has been forced to manage a recovery while government spending has plummeted.

And there's no end in sight. Ted Cruz will lose his battle to defund Obamacare. But the tea partiers have already won their battle to cripple the American economy and Obama's presidency with it.

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Ted Cruz Announces That He Will Filibuster House Bill That Defunds Obamacare

| Sun Sep. 22, 2013 8:07 PM EDT

On Friday I mentioned that Sen. Ted Cruz has a problem. He wants to block funding of Obamacare, but he can't just filibuster the budget bill that the House has sent over. After all, that bill does what he wants: it defunds Obamacare. So he has to let the Senate consider the bill. But once he does that, Harry Reid can pass an amendment that strips out the defunding language with a simple majority vote and Cruz loses. It's a knotty little problem, and today Chris Wallace asked him about it. Here's what he said:

WALLACE: Well, I'm confused. Are you going to block consideration of the bill? ....

CRUZ: Well, the first order of business is going to be to ask Harry Reid if he will agree to allow amendments to be subject to a 60-vote threshold....Now, in all likelihood, he's going to say no....If he does that, then Senate Republicans have the tool that we always used when the majority leader is abusing his power, which is we can deny cloture. We can filibuster and say we will not allow you to add the funding back for Obamacare with just 51 votes and it takes —

WALLACE: Sir, if I may, you say this is brute political power. Other times, you said it's a procedural gimmick. It's Senate Rule 22, which has been around for years. It's part of the Senate rules and it says after you allow debate, after you take cloture, that you can pass an amendment by a simple majority. That's the rule.

CRUZ: Chris, what's good for the goose is good for the gander. You're right, that is one rule. But there is another rule that says it takes 60 votes to get cloture. And that's the reason the Senate, generally, on controversial votes, we work out an agreement for it to be subject to a 60 vote threshold....And so, if Harry Reid says, you know what, I'm going to run the Republicans over. I'm going to ignore the bill passed by the House of Representatives, I'm going to ignore the will of the people and I'm going to do this on a 51-vote threshold — then, from my mind, it should be easy decision for Senate Republicans to stand united and to support House Republicans.

Cruz is a good talker, you have to give him that. But this appears to be his answer: Unless Reid agrees beforehand to Cruz's demands, he's going to filibuster the House bill even though it includes language defunding Obamacare.

Can he get most of the Republican caucus in the Senate to go along with this? I doubt it—not in the long run, anyway. Cruz isn't willing to admit that a Republican filibuster against the House Republicans' own bill would strike the American public as ridiculous, but it would. And if he starts droning on about procedural minutiae, everyone outside the Fox News faithful will tune out after a few seconds.

As for trying to blame an ensuing government shutdown on President Obama, he demonstrated once again today why that won't work: He made it crystal clear that he was the one actively working to shut down the government unless his demand to defund Obamacare was met. Again, outside the Fox News faithful, he's just not going to convince anyone that up is down and black is white on this. Everyone knows whose idea this has been all along.

It's possible that Senate Republicans might stand with Cruz for a few days, just to prove their conservative bona fides. Maybe. I guess it depends on how many of them break ranks due to their sheer personal loathing of Cruz.1 But either way, they'll let the bill go through before long. There are just too many of them who understand how this will play out in the real world. They aren't willing to risk a rerun of 1995 for a cause they know is lost.

1Robert Costa tweets: "Emails from House and Sen GOP aides pouring in; furious w/ how Cruz is pressuring McConnell, Boehner to folo his lead....The real fear within GOP right now: Suddenly, if you don't folo Cruz-Palin on defund strategy, you risk RINO tag and g'roots wrath....Sen aide tells me a dozen+ GOP sens are fuming this am over Cruz making a vote to proceed (CR cloture) seem like support for law they hate."

Four Unrelated Thoughts For Sunday Morning

| Sun Sep. 22, 2013 1:21 PM EDT

Health care. I got a bill from Kaiser Permanente on Friday. This is odd, since Kaiser is an HMO and all expenses are normally covered except for copays. So I scanned the bill, and it turned out to be part of the follow-up exam on my sprained ankle. The consulting doctor told me that it would be a good idea to keep the ankle braced a bit while it was recovering, so he sent me home with an ankle gauntlet. This is an item that will set you back about 40 bucks in your local CVS. Kaiser, however, thinks I should pay them $191 because....well, just because. And since we all know how much good it does to argue with large corporations, I assume there's nothing I can do about this. In a nutshell, this is why American health care sucks.

Climate change. Investment guru Jeremy Grantham says the combination of global warming and population growth means that commodity prices are going to stay high for a very long time:

They came down for a hundred years by an average of 70 percent, and then starting around 2002, they shot up and basically everything tripled—and I mean, everything....They've given back a hundred years of price decline and they gave it back between '02 and '08, in six years. The game has changed.

....We went through one by one, and we decided the most important, the most valuable and the most critical was phosphate or phosphorous....We do have a lot, but 85 percent of the low-cost, high-quality phosphorous is in Morocco...and belongs to the King of Morocco. I mean, this is an odd situation. Much, much more constrained than oil in the Middle East ever was—and much more important in the end. And the rest of the world has maybe 50 years of reserve if we don't grow too fast.

....The investment implications are, of course, own stock in the ground, own great resources, reserves of phosphorous, potash, oil, copper, tin, zinc—you name it.

Poverty and education. From Matt Bruenig: "Let’s focus our attention on [the claim] that education is a way to reduce poverty. In fact, we have dramatically ramped up educational attainment in the US in the last forty years or so and poverty has not taken a dive. As a basic logical matter, being more educated doesn’t make you less poor. Having more money makes you less poor. So education, even if you think it is necessary, is not sufficient to end poverty. You need distributive institutions that actually generate a specific distributive result, and education is certainly not sufficient for ensuring that happens. A more educated populace will probably be more productive, but that too — as we have seen for the last four decades — is not sufficient for ensuring the gains of such productivity increases flow to the non-rich. Education is good, but sufficient for solving poverty it is not."

String theory. And since everyone liked Wednesday's post about the amplituhedron, how about a cover of Bohemian Rhapsody that explains string theory? Enjoy.

You Call This Progress? Well, Do You?

| Sat Sep. 21, 2013 12:41 PM EDT

Last night brought yet another reminder that I am ancient. I never record TV shows, but Marian does occasionally, and she uses an old VCR to do it. The old VCR broke a couple of days ago, so she went to Target to get a new one.

But it turns out this is impossible. VCRs no longer have tuners in them, so they only work if they're plugged into a cable box—which we don't have upstairs because Marian only watches basic cable stuff and doesn't need one. This was all news to me since I've never paid any attention to TV-recording technology, but a quick check of the web confirmed that VCRs have been mostly tunerless since at least 2007. Personal DVRs don't appear to be an option either.

So apparently our only choice is to get a cable box upstairs. It might as well be a DVR box, since it doesn't seem to cost any more—though I'm not really sure, since the primary goal of the Cox Cable web designers seems to be making it impossible to figure out how their services actually work or how much they cost.

In any case, my best forensic guess is that an extra box costs $8.50 per month. So now we're going to be forced to pay $100 per year to do something we've been doing for free for decades. I suppose it will be slightly more convenient, but not by much since Marian doesn't actually tape all that many shows. Isn't progress wonderful?

There's no need for this post to be merely a personal whine, though. Feel free to turn it into a general whine in comments. What do you hate about your cable company? Or about entertainment tech in general? Have at it.

Ted Cruz Gets a Lesson in Schoolhouse Rock, Senate Style

| Fri Sep. 20, 2013 8:17 PM EDT

Sen. Ted Cruz has been howling for weeks about a "surrender caucus" in the Republican Party that's insufficiently dedicated to the holy cause of defunding Obamacare. So it's only natural for Drudge to ask the question on the right. If the Senate tries to pass a budget bill that doesn't defund Obamacare, will Cruz mount a filibuster?

Funny you should ask. Sarah Binder, who actually understands all the arcane details of Senate procedure, explains how things are going to work once the House transmits its bill, which includes language defunding Obamacare. It's hard not to laugh once you figure out what it all means for poor old Ted. Here's the process:

  1. Harry Reid offers a motion to proceed and then files cloture. Will Cruz filibuster? How can he? At this point, the bill under consideration is the one the House sent over, which includes the defunding language. He can hardly filibuster that.
  2. Reid then offers an amendment to strike defunding from the bill.
  3. Now Reid files cloture on the bill itself. Will Cruz filibuster? Again, how can he? At this point, this is still the original House bill, complete with the provision to defund Obamacare.
  4. So cloture will succeed, at which point the Senate has 30 hours to debate the bill. Reid's amendment comes up for a vote, and since amendments only require a simple majority, it passes.
  5. At the end of 30 hours, the bill itself gets a vote, and a simple majority is enough to pass it. So the bill, with defunding struck out, passes easily.

In other words, there's no point at which Cruz can filibuster, because he'd be preventing a vote on the very bill he wants to pass. Then, once the defunding clause is struck out, subsequent votes require only a simple majority.

House Republicans are pissed off at Cruz for conceding on Wednesday that Reid "likely" has the votes to strip the defunding language from the House bill. Cruz is surrendering! But my guess is that a little birdie explained the facts of life to Senator Ted, and once the light bulb went off he realized that he was trapped. He had talked a good game, but there was nothing he could do that wouldn't make him look like an idiot. So he begain the painful but inevitable process of backing down. Poor Ted.

Friday Cat Blogging - 20 September 2013

| Fri Sep. 20, 2013 1:49 PM EDT

This is actually an old picture. I was diddling around yesterday with my iPhone after I updated to iOS 7 and happened to come across a series of photos I took with a fisheye attachment that Marian got me for Christmas last year. Here's one of them, with Domino checking out the new tech and the quilter-in-chief keeping Domino's schnoz safely away from the camera.

This week's health news is excellent. I still don't know for sure if all the little pinprick sores were from flea bites, but in any case, they're all completely gone and Domino's fur is regrowing over the bare patches. Also, to my surprise, the low-iodine food seems to be working already. I figured it would take a month or two. But she's eaten her entire bowl of food for five days in a row now, so her appetite is obviously returning.

In other iPhone-related cat news, this is very bad news. Very bad. We are all going to have to be extremely careful in the future.

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There Is a Whole Lot of Bad Blood in the Republican Party These Days

| Fri Sep. 20, 2013 1:15 PM EDT

Lots of conservative-but-not-tea-party Republicans in the House have been pretty irritated at the antics of Sen. Ted Cruz and his merry band of scorched-earth nihilists, who have insisted that House members should FIGHT FIGHT FIGHT and eventually go down with the Obamacare-defunding ship even though they know perfectly well they don't have the votes in the Senate to back them up. But the bad blood goes beyond just that. Rich Lowry prints this email from a House aide:

Yesterday the House passed a major reform to our food stamp program that reinstates the workfare programs that we know are good policy, get people off the welfare rolls and would reduce discretionary spending. But in the months we’ve been working on this conservative proposal, Heritage, Club for Growth, etc. never said one word a support. They didn’t score the bill, they didn’t tweet on it. For a lot of people in the House, it appears that because Republicans were not divided on the issue — or outside groups could not decide to label members a good Republican or a bad Republican — legislation that the Heritage Foundation would have helped craft 5 years ago — wasn’t worth their time. And our Senate conservative friends haven’t led on this issue either. . . .

I don't know how widespread this feeling is, but it sure looks like there's some real bitterness here, and it's getting worse and worse. The next few months are going to be pretty interesting, for a certain definition of "interesting." When Republicans decided to let the tea party take over the GOP, I don't think they quite understood exactly what they were letting themselves in for. They should have asked a few Democrats over the age of 50 for pointers.

Quote of the Day: Repealing Obamacare is Bipartisan, Baby

| Fri Sep. 20, 2013 12:13 PM EDT

From the après-revolución celebration of the House vote defunding Obamacare:

"It wasn't just a group of Republicans," said Majority Whip Kevin McCarthy, "but it was a bipartisan vote. Let me state that again, because I want make sure you write it correctly." His colleagues, who have becomes experts at forcing McCarthy to whip a conservative bill instead of a compromise that can pass, laughed and applauded. "It was a bipartisan vote!"

Roger that. The bill passed with 230 votes. A grand total of two of those votes came from Democrats, both of whom voted against Obamacare in the first place. That's bipartisan, baby!

Chart of the Day: Hands-Free Talking Is as Bad as Talking on a Handset. Maybe Even Worse.

| Fri Sep. 20, 2013 11:50 AM EDT

Michael O'Hare points us this morning to a study of cell phone usage in cars that confirms the obvious: it's dangerous. More dangerous than driving drunk, in fact. What's more, as the chart on the right shows, hands-free talking doesn't help. In fact, for certain tasks it makes things even worse. O'Hare explains what's going on:

To understand the reason, consider driving while (i) listening to the radio as I was (ii) conversing with an adult passenger (iii) transporting a four-year-old (iv) sharing the front seat with a largish dog.

Why are the first two not dangerous, and the last two make you tense up just thinking about them? The radio is not a person, and you subconsciously know that you may miss something if you attend to something in the road ahead, but also that you won’t insult it if you “listen away”, and it won’t suffer, much less indicate unease. The adult passenger can see out the windshield and also catch very subtle changes in your tone of voice or body language. If you stop talking to attend to the car braking up ahead, the passenger knows why instantly, and accommodates, and because you know this, you aren’t anxious about interrupting the conversation. The dog and the child, in contrast, are completely unaware of what’s coming up on the road or what you need to pay attention to; the former is happy to jump in your lap if it seems like a good idea at any moment, and the child demands attention on her own schedule and at her will.

The other side of a cell phone conversation, unlike the passenger, cannot see out the windshield nor see you, and gets none of the subtle cues about why you stopped talking in the middle of a sentence (indeed may not even know you are in a car). You know this, and you know subconsciously that diverting your attention to the road will make your interlocutor anxious, perhaps saying “are you still there? hello?” ... and you’re at the side of the road exchanging papers and feeling like an idiot.

The full study is here. In general, the authors conclude that hands-free talking isn't worse than talking on a handset, but neither is it any better: "Taken together, the data demonstrate that conversing on a cell phone impaired driving performance and that the distracting effects of cell-phone conversations were equivalent for hand-held and hands-free devices. Compared to single-task conditions, cell-phone drivers’ brake reaction times were slower and they took longer to recover the speed that was lost following braking."

The problem with cell phones has never been primarily about taking your eyes off the road to dial, or about the dexterity required to hold a handset to your ear. It's all about cognitive distraction, and the study's authors report that drivers who do a lot of talking on cell phones don't get any better at it: "Real-world experience using a cell phone while driving did not make the so-called experts any better at multitasking than the novices....Neither real-world practice nor simulator training made drivers perform better in novel dual-task conditions. There was no evidence that drivers became experts at the dual-task combination of talking on a cell phone while driving."

Bottom line: When you're in the car, turn on the radio. Listen to a ballgame. Plug in your favorite play list. But don't get drunk and don't talk on your cell phone. You're not superman,1 and you don't have special multitasking powers that make either one safe. They're both really dangerous no matter how you do them.

1Actually, the news on this front is really bad. It turns out that about 2 percent of you do have multitasking superpowers. You are almost certainly not one of them, but the mere fact that a tiny number of these folks exist is probably enough for everyone on the planet to convince themselves that they're one of them.

But you're not. Seriously. You're not.

Republican Farm Policy Makes Perfect Sense

| Fri Sep. 20, 2013 10:58 AM EDT

Observation 1: Farmers tend to be fairly well off. SNAP (food stamp) recipients tend to be poor.

Observation 2: Republicans want to keep federal subsidies in place for farmers, but they want to cut SNAP funding for the poor.

Question: What ideological principle can account for this? Let's try a few:

  • Libertarianism? Nope. They'd want to cut both.
  • Generic small government conservatism? Nope. They'd also cut both.
  • Liberalism? Nope. Liberals would keep SNAP (or expand it) and cut farm subsidies (or leave them alone for narrow political reasons).
  • Pragmatic technocratism? Nope. Farm subsidies aren't especially good for the economy and SNAP is reasonably well targeted at genuine need.
  • Class warfare? That would do it.

There's nothing mystifying about this. Republicans want to cut taxes on the rich and cut spending on the poor. That's been their basic domestic ideology for decades at least. And guess what? Agricultural subsidies are effectively a tax cut for farmers while SNAP reductions cut spending on the poor. As a bonus, farmers tend to vote for Republicans while poor people tend to vote for Democrats. What's hard to understand?