Kevin Drum - September 2013

Microsoft's New Tablet Sounds Great. So Why the Hate?

| Tue Sep. 24, 2013 12:45 PM EDT

Will Oremus is outraged that Microsoft's new, faster Surface tablets can actually be used for work-related activities:

The Surface 2 and Surface Pro 2 are jam-packed with productivity features guaranteed to make you feel guilty for using the devices for anything other than work....faster processor, faster bus, better battery life, more cores on the GPU....full Microsoft Office suite, including Outlook....tweaking the kickstand to make it easier to type away at that Excel spreadsheet while holding the tablet on your lap.

....There’s just one problem with Microsoft pitching its new tablets at people who prefer to use their tablets for work rather than play: Those people barely exist. As the Statista chart below illustrates, a Gartner survey found that tablet owners use their devices overwhelmingly for entertainment, followed by social media, e-mail, and other types of communication. Just 15 percent of tablet screen time is devoted to work. That makes sense when you consider that nearly everyone who owns a tablet also owns a different device that is far-better suited to doing work, whether desktop, laptop, or both. The tablet is where they go to get away from that work.

Let me get this straight. The fact that Microsoft's new tablets are faster, have better battery life, and come with Office apps pre-installed is somehow a bad thing? Wouldn't this be a good thing if any other tablet maker in the world did it? WTF?

As for tablets not being used for work, I don't doubt that. And you know why? Because most current tablets are useless for anything other than entertainment. Take something as simple as writing a post for my blog. I can't do it all on an iPad. Period. And I had to try five different browsers before I could find one that worked on my Android tab. And that's just for a blog post.

Don't get me wrong. I haven't seen the new Surface Pro tablet—the only one that's interesting—and it's possible that it sucks. Maybe it's underpowered, or overpriced, or weighs too much, or just plain doesn't work very well. I don't know. But you know what? I'd love to have a tablet that allowed me to work without hassle and provided me all the entertainment options I currently have. The fact that I have access to a real browser and Office apps doesn't stop me from playing Angry Birds or reading a book on my Kindle app, after all. It just means that I can now leave home with a simple, lightweight tablet and know that I can do whatever I need to do. If that's work, then I'll work. If it's not, then I'll play.

So why the hate?

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Wall Street Tycoons Are Very, Very Hurt by All the Criticism They've Gotten

| Tue Sep. 24, 2013 11:19 AM EDT

AIG CEO Robert Benmosche is in trouble for telling the Wall Street Journal that the fight to cut AIG bonuses after the company was bailed out by the federal government was basically the work of a lynch mob, "sort of like what we did in the Deep South [decades ago]." Ezra Klein reviews other similar statements by Wall Street honchos and then explains where it comes from:

I was in an off-the-record meeting with top Wall Street folks where similar comparisons to Nazi Germany were tossed around. It really was a meme on Wall Street that the singling out of the wealthy for criticism — and, more to the point, taxation — had a direct historical precedent in Nazi Germany, where the Jews were first demonized, then taxed, and then, well, you know. The sense was that the rich in general, and Wall Street in particular, weren't just being criticized, but that they were being turned into a dangerously despised minority.

That's the context of Benmosche's comment. I would bet he's made the same point a number of times in private rooms to appreciative nods. When you say and hear that kind of thing often enough, however, you forget how insane and offensive it is — and then you say it to the Wall Street Journal.

Even Mitt Romney was smart enough to keep this kind of talk private. He was just unlucky that a worker at one of his fundraisers was offended by what he said and decided to release a video of it. Nonetheless, it was pretty obvious that this really was the kind of thing Romney said in private, and the kind of thing that Romney voters ate up.

Likewise here. Wall Street tycoons really do feel put upon. They simply don't feel any collective responsibility for either the housing bubble or the Wall Street fraud and financial manipulation that made it worse. Nor do they feel any responsibility to support government action that helps ordinary workers who were hurt by the massive recession that followed. Nor do they believe that any further regulation of their activities is warranted in any way. They are the engines of the economy, not rent-seeking mooches, and they're just damn tired of all the pipsqueaks who think otherwise.

It is truly mind-boggling.

Why Do Humans Get Motion Sickness?

| Tue Sep. 24, 2013 12:16 AM EDT

The New York Times reports on a researcher who thinks the traditional explanation for motion sickness is all wet:

For decades now, [Thomas] Stoffregen, 56, director of the university’s Affordance Perception-Action Laboratory, has been amassing evidence in support of a surprising theory about the causes of motion sickness. The problem does not arise in the inner ear, he believes, but rather in a disturbance in the body’s system for maintaining posture. The idea, once largely ignored, is beginning to gain grudging recognition.

“Most theories say when you get motion sick, you lose your equilibrium,” said Robert Kennedy, a psychology professor at the University of Central Florida. “Stoffregen says because you lose your equilibrium, you get motion sick.”

That's kind of intriguing. But I can get severe motion sickness while sitting still in a seat on a perfectly calm airplane flight. It happens when I have a cold, or I'm recovering from a cold, and one ear clears but the other one doesn't as the cabin pressure is changing. It happens all the time to me, and the result is that the world starts spinning violently and I get dizzy and nauseous. This happens with no change in posture and no loss of equilibrium.

Maybe this is different from motion sickness, though. Seasickness does prompt some dizziness, but not quite the spinning world effect of one ear staying at a different pressure from the other.

On the other hand, sitting in an IMAX theater and watching a movie that simulates a roller coaster ride can induce motion sickness, even though you're sitting perfectly still. So what's up with that? Maybe you're not sitting quite as still as you think? Questions, questions.

“Ted? Oh yeah, immense a*#hole.”

| Mon Sep. 23, 2013 8:12 PM EDT

Josh Marshall was at Princeton at the same time as Ted Cruz, but doesn't remember anything about him. After Cruz won his Senate election last year, he decided to try to refresh his memory:

So I started getting in touch with a lot of old friends and asking whether they remembered Ted. It was an experience really unlike I've ever had. Everybody I talked to — men and women, cool kids and nerds, conservative and liberal — started the conversation pretty much the same.

"Ted? Oh yeah, immense a*#hole." Sometimes "total raging a#%hole." Sometimes other variations on the theme. But you get the idea. Very common reaction.

In other words, the fact that practically everyone in the Senate already hates his guts is no surprise. "The reaction to Cruz in the senate is simply the reaction Ted's gotten at least at every stage of his life since he arrived at college in 1988."

At least.

Americans Claim to be Equally Divided on Who to Blame for Government Shutdown

| Mon Sep. 23, 2013 6:45 PM EDT

According to Pew, the public will blame Republicans and President Obama about equally if there's a government shutdown. I suppose this is good news for Republicans, though I'd be really interested in seeing the party breakdown on this question, since I'll bet it's basically a proxy for party affiliation and not much else. This seems especially likely since only 25 percent of those polled even say they're following the shutdown fight "very closely." Of the remaining 75 percent, only 7 percent answered "don't know" on the blame question. So what are they basing their answers on?

UPDATE: Michael Dimock passes along the partisan breakdown. No surprise on the D/R front, but it turns out that independents say they'd blame Obama more than Republicans by a margin of 39-33 percent. I'll confess that this startles me. I'm not sure what to make of it.

The Economy Is Pretty Hard to Understand These Days

| Mon Sep. 23, 2013 2:03 PM EDT

Tyler Cowen is perplexed by the size of the market reaction to the Fed's announcement that QE3 will continue along its present path for the foreseeable future instead of being tapered down. After all, the difference between taper and non-taper is only a few tens of billions of dollars of bond purchases. That's peanuts, Cowen says, and it doesn't make sense:

I’ll say it again: none of you understand what is going on here, and neither do I. I am not seeing enough admission of this basic fact.

I'll cop to that. I do think we have a pretty good idea in a general sense of what caused the Great Recession and what kind of government response would have been best: extremely loose monetary policy combined with massive fiscal stimulus. There's a lot of evidence that this would have improved the economy fairly quickly, and we might very well be back to trend growth today if we'd done it. Unfortunately, the initial stimulus was too constrained and the austerity zealots made sure that not only did we have no further stimulus, but we slashed spending massively at the very time we should have been spending more.

But what's done is done. The question now is what kind of impact nonconventional monetary policy has on a slowly recovering economy that still has lots of slack. And there, I'm with Cowen: it's really hard to make sense out of the evidence. Scott Sumner, for example, says the market reacted strongly to the Fed's announcement because it was unexpected and signaled not just a change, but a change to a completely different policy regime. I have to say that I find that strained. It's become almost faddish to believe that all a central bank has to do is set expectations properly and everything else will magically fall into place, but it's not clear that the evidence backs this up. The expectations channel, after all, depends on the market believing that the Fed has an actual operational channel that can produce whatever results it wants. If that's true, there's no point in fighting, and the market will bring about the results the Fed wants with no actual Fed action necessary. That would be pretty cool if it were true. But what if the market becomes skeptical of the Fed's power? It doesn't matter why. It might be skeptical for fundamental economic reasons; or because it thinks the Fed is politically constrained; or because it thinks overseas leakage is important; or because it simply disagrees with the Fed's likely strategy. If that happens, then the expectations channel isn't that powerful after all—and I don't think any of us know to a certainty just how the market judges either the Fed's commitment in the face of pressure or the effectiveness of its nonconventional open market operations if it's forced to show its hand. The financial channels the Fed manipulates are just too murky.

This stuff is all way over my pay grade. I've seen bits and pieces of evidence that make me think the expectations channel is significant, but far from omnipotent. I've also seen bits and pieces of evidence that just seem damn strange. Maybe someone will come along soon and present us with a comprehensive new theory of monetary policy in the context of 21st century financial markets, but I don't think we've seen it yet.

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The Public Is Massively Opposed to Shutting Down the Government Over Obamacare

| Mon Sep. 23, 2013 12:38 PM EDT

The public is generally opposed to defunding Obamacare, but it's a close call. However, when the question is whether it's worth shutting down the government in order to defund Obamacare, it's not a close call at all according to a new CNBC poll:

Opposition to defunding increases sharply when the issue of shutting down the government and defaulting is included. In that case, Americans oppose defunding 59 percent to 19 percent, with 18 percent of respondents unsure.

....When including the issue of a government shutdown and default, [] 48 percent of Republicans oppose defunding Obamacare, while 36 percent support it. However, a 54 percent majority of Republicans who also identify themselves as Tea Party supporters want the new health care law defunded even if it means a government shutdown — the only demographic measured in the poll with such a majority.

....Independents are more troubled by the prospect of defunding Obamacare and shutting down the government than the broader population. In general, they oppose defunding by a slight plurality of 44 percent to 40 percent. However, when the issue of shutting down the government is included, opposition to the measure swells to 65 percent, while support drops to just 14 percent.

Nobody wants to shut down the government over Obamacare except for hard-core tea partiers. Among independents, opposition to hostage taking is an amazing 65-14 percent. Now tell me again about how Republicans are somehow going to convince the public to blame a shutdown on Democrats?

Quote of the Day: Control Over the Internet Is the "Struggle of Our Generation"

| Mon Sep. 23, 2013 11:33 AM EDT

From Glenn Greenwald, in an interview with Noam Sheizaf of Haaretz:

The promise of the Internet was that it would liberate people and bolster democracy, but it has become a tool for suppression and control. In fact, it is one of the most powerful instruments of control ever invented. The most essential challenge we face today is related to the real effect of the Internet. Will it impart power to people and liberate them, or will it impart more strength to the centers of power and help them oversee, control and suppress the population? That is the struggle of our generation, and it has yet to be decided.

In the past, outside of police states, there were practical limits to surveillance simply because people communicated in so many different ways. Today, we're moving toward a world in which virtually all communication is done via a single global digital network. This has obviously empowered individuals in a broad and complex set of ways, but as our lives become more and more dependent on the internet, it has also provided governments with a single point of contact for nearly ubiquitous surveillance. As Glenn says, it's not clear yet which of these forces is more powerful. In China, I'd say the latter. In the United States, probably the former. So far.

Finally, a Problem With Obamacare That's Actually Real

| Mon Sep. 23, 2013 10:49 AM EDT

Conservatives have no end to the horror stories they tell about the launch of Obamacare and the impact it will have on the health care market. Most of them, I think, are fairly modest, and many are downright trivial. But for the record, there's one that I think is going to turn into a sore spot, and today the New York Times picked up on it:

From California to Illinois to New Hampshire, and in many states in between, insurers are driving down premiums by restricting the number of providers who will treat patients in their new health plans.

When insurance marketplaces open on Oct. 1, most of those shopping for coverage will be low- and moderate-income people for whom price is paramount. To hold down costs, insurers say, they have created smaller networks of doctors and hospitals than are typically found in commercial insurance. And those health care providers will, in many cases, be paid less than what they have been receiving from commercial insurers.

It's no surprise that here in California, Kaiser came in as one of the highest bidders on the new state exchange. That's because they're an HMO and they can't easily restrict their network for certain customers. With that eliminated as a way of saving money, their overall cost ended up higher than most of the other bidders.

This is not likely to be a disaster, and it won't prevent the rollout of Obamacare. But unlike so many of the other Chicken Little predictions (21-page form! No more full-time jobs!) I suspect that this one really will be a bit of a festering sore.

How Austerity Wrecked the American Economy

| Mon Sep. 23, 2013 6:45 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.