Kevin Drum - November 2013

Artificial ESP Comes to Twitter

| Fri Nov. 15, 2013 1:52 AM EST

Robert Waldmann is feeling creeped out:

An obvious twitter 'bot followed me with tweets consisting only of advertising for, among other things, wasabi flavored ice cream. Now, I think you will agree that wasabi flavored ice cream is rather a niche product. You may not know that it exists (in Rome to which all roads lead). I hope with some (but rapidly declining) confidence that you don't know that I really like wasabi flavored ice cream. HOW does a twitter 'bot know I like wasabi flavored ice cream ??? I feel we have skipped artificial intelligence and gotten straight to artificial ESP.

How indeed? I'll bet the answer is pretty interesting. I'm assuming, of course, that Waldmann hasn't simply blanked out and forgotten that he wrote a tweet a couple of weeks ago about wasabi ice cream.

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McClatchy: CBS Undertaking a "Journalistic Review" of Flawed "60 Minutes" Benghazi Report

| Thu Nov. 14, 2013 6:55 PM EST

Until now, I've mostly avoided tackling some of the broader problems with Lara Logan's now-infamous report on Benghazi for 60 Minutes. It was, as I mentioned in my very first post the day after it aired, written as though the script had come from the Republican National Committee, full of unsourced allegations, questionable interpretations, and wink-wink-nudge-nudge suggestions of scandal. Nearly everything in the segment was old news that had been extensively litigated in the months before, but you'd never know that from watching it because opposing viewpoints were almost entirely absent. Logan's later assertion that "We killed ourselves not to allow politics into this report" is simply laughable.

But all of that paled compared to the revelation that Dylan Davies, the main source for the segment, had flatly lied about his role on the night of the attacks, and that's attracted most of the attention since then. Today, though, McClatchy's Nancy Youssef takes a deep dive through Logan's story and finds problems with nearly everything she reported. In particular, Logan's repeated insistence that the attack was a well-planned Al-Qaeda assault is questionable at best:

The report repeatedly referred to al Qaida as solely responsible for the attack on the compound and made no mention of Ansar al Shariah, the Islamic extremist group that controls and provides much of the security in restive Benghazi and that has long been suspected in the attack....It is an important distinction, experts on those groups said. Additionally, al Qaida’s role, if any, in the attack has not been determined, and Logan’s narration offered no source for her repeated assertion that it had been.

....Logan claimed that “it’s now well established that the Americans were attacked by al Qaida in a well-planned assault.” But al Qaida has never claimed responsibility for the attack, and the FBI, which is leading the U.S. investigation, has never named al Qaida as the sole perpetrator. Rather, it is believed a number of groups were part of the assault, including members and supporters of al Qaida and Ansar al Shariah, as well as attackers angered by a video made by an American that insulted Prophet Muhammad....Moreover, questions remain over how far in advance the attack on the U.S. compound had been planned. Rather than a long-planned attack, investigators have told McClatchy it was likely planned hours, rather than days, in advance.

....Another questionable assertion in the “60 Minutes” report was Logan’s unsourced reference to the Benghazi Medical Center as being “under the control of al Qaida terrorists”....The piece also named three known insurgent operators as top suspects in the attack but did not explain the source of that assertion....According to the piece, “When a member of our team went to the U.S. compound earlier this month, he found remnants of the Americans’ final frantic moments still scattered on the ground”.... McClatchy visited the site in June and saw a pile of debris sitting outside the compound walls, but no documents were discernible among the broken concrete, clothing, furniture and soot.

....Davies had claimed in the “60 Minutes” piece that he had gone to the diplomatic compound site during the attack, climbed a 12-foot-high wall and struck one of the attackers in the head with his rifle butt before discovering Stevens’ body at the hospital. All of the claims contradicted multiple reports that have emerged in the year since the attacks.

Read the whole piece for all the details. The bottom line is that Logan's report was plainly trying to make a case for a long-planned Al-Qaeda attack in a city largely controlled by Al-Qaeda operatives. The evidence for that is dubious at best, and no contrary evidence made it into the finished piece. What's more, there was plenty of reason to be skeptical of Davies' claims, but Logan simply accepted them at face value.

Youssef reports that CBS told her it is undertaking a "journalistic review" of Logan's Benghazi report, "the network’s first acknowledgement that concerns about the report may go deeper than just the discredited interview with security supervisor Dylan Davies." That's good to hear. There was a lot more wrong with that segment than just Davies' tall tales.

Rate Shock Probably Affects Less Than 1 Percent of the Country

| Thu Nov. 14, 2013 4:20 PM EST

How many people are subject to rate shock in the individual insurance market thanks to Obamacare? That's a surprisingly hard figure to get a handle on. But here's a rough cut:

  • There are about 15 million people who currently get individual coverage.
  • Of that, only about 5 million stay in the individual market for more than a year. The rest have individual coverage for only a few months and are minimally impacted by policy cancellations.
  • At a guess, maybe a third of these long-term buyers will end up with higher rates for comparable policies once they've shopped the exchange and applied their subsidies.

So that's a grand total of perhaps 1-2 million people. It's a lot. At the same time, it's less than 1 percent of the population of the country. I don't want to minimize the pain that higher rates are causing this 1 percent, but at the same time, we shouldn't be overreacting either. Given the kludgy nature of our current health care system and the realities of American politics, it would be hard to design any kind of large-scale health care reform that did much better.

Judge OKs Google Project to Scan All the World's Books

| Thu Nov. 14, 2013 3:05 PM EST

Tim Lee reports that Google has won a big victory for its plan to scan the world's books and make them accessible via the web. Judge Denny Chin of the Southern District of New York ruled today that Google's project constituted fair use and therefore wasn't a copyright violation:

Fair use rulings focus on four factors. Of these, the most important is whether the use of the work is "transformative." Chin ruled that Google Books passes this test easily.

"Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books," he wrote. "Google Books does not supersede or supplant books because it is not a tool to be used to read books."

....He rejected authors' arguments that people could use the search engine to assemble copies of entire books out of the short "snippets" Google displays in search results. Chin noted that this was impossible because Google, anticipating this objection, deliberately excludes about 10 percent of the text in each book from being displayed in search results.

This ruling will be appealed, of course, so this isn't the end. But it's a good start.

Is Darrell Issa Becoming an Albatross to the Republican Party?

| Thu Nov. 14, 2013 1:33 PM EST

Let's talk about Darrell Issa. He's a Republican attack dog, and that's fine. Every party has people like that. But Issa is now the chairman of the House Oversight Committee, which means (in practice) that he's the guy charged with harrying and annoying the Obama administration with maximum effectiveness. The problem is that he keeps misfiring. He has a habit of releasing partial transcripts that look incriminating but turn out to be nothingburgers once the full transcript comes out. He continues to press ludicrously overwrought theories that he simply can't prove. Yesterday he got caught out once again when an administration witness flatly contradicted one of his latest wild charges. Steve Benen has the deets.

So here's my question: Is Darrell Issa effective? My instinct is to say no: Republicans would be better off with someone who builds careful, methodical cases and scores some genuinely damaging points. But then, you'd expect me to say that, wouldn't you? I'm the kind of person who appreciates careful and methodical cases.

Alternatively, the answer is that politics ain't beanbag, and keeping up maximum pressure at all times is an opposition party's best bet. If 99 percent of the mud you throw doesn't stick, who cares? Shake it off and throw some more. Eventually you'll find something damaging, and in the meantime all the mud really does have an effect. Low-information voters see a constant drip of spectacular charges and vaguely decide that where there's smoke, there's fire. They may not quite know what's wrong, but it sure feels as if something is wrong.

So which is it? I can't help but think that Issa really is hurting himself here by shredding his credibility on an almost daily basis. On the other hand, he's been doing this stuff for three years now, and the press continues to eagerly lap up everything he says. No matter how many times he does it, they seem to be afraid that this time he might really have something, so they'd better play along.

I dunno. Issa's ego is huge, but he's no dummy. He obviously has reason to believe he can get away with this stuff forever. After all, during his Whitewater attack-dog days, Dan Burton pulled the same partial transcript trick that Issa loves, and it seemed to cause him no more than some momentary embarrassment. Maybe there really is method to his madness.

Watson Not Just for Jeopardy! Anymore

| Thu Nov. 14, 2013 12:50 PM EST

IBM plans to make Watson, the computer that beat the all-time Jeopardy! champs, available on the web to everyone. But why? In addition to the PR value for its cloud computing business, I suspect the answer is at the bottom of this New York Times story:

Besides gaining bragging rights and a much bigger customer base, IBM may be accelerating the growth of Watson’s power by putting it in the cloud. Mr. Gold said that Watson would retain learning from each customer interaction, gaining the ability to do things like interacting in different languages or identifying human preferences. IBM has taken steps to keep these improvements for its own benefit, by retaining rights in user agreements that customers are required to sign.

Once it's publicly available, Watson is going to receive a tidal wave of new interactions that it can learn from. Basically, the public will be doing IBM's beta testing for it. Everybody wins.

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Obama Dares Insurance Companies to Put Up or Shut Up

| Thu Nov. 14, 2013 12:04 PM EST

Here's the latest on Obamacare:

The White House on Thursday will announce a plan for allowing insurance companies to continue offering existing individual insurance policies even if they fall short of the coverage standards set by the 2010 health-care law, a Democratic official briefed on the plan said.

....The plan, which the official said could be implemented without passing legislation, would allow insurance companies to extend "substandard'' plans in 2014 only if they are already in existence. Unlike the House bill, the administration plan wouldn't allow insurance companies to offer such plans to new customers.

Here's my guess: this is primarily a put-up-or-shut-up move from Obama, not a plan designed to really fix the problem of canceled policies. I base this on two things.

First, I think insurance companies are mostly allowed to do this already. Second, I think that most of the canceled policies have been canceled because insurance companies wanted to cancel them. They were designed in the first place to entice buyers away from their old grandfathered policies, and insurance companies did this explicitly so that they would be free to cancel them when 2014 rolled around. This allowed insurers to replace them with more expensive policies without taking any heat for it. They could just blame it on Obamacare.

This is just speculation on my part, so don't take it to the bank. But I think Obama's main goal here is to remove this handy excuse. He's basically daring insurers to go ahead and reissue the old policies. If they don't do it, it means that Obamacare was never really responsible for the cancellations in the first place. And if the insurers see that their bluff is being called and decide they don't want to take the PR hit, then the old policies get reissued and everyone is happy. It's a win-win for Obama.

There are more details to this, including its intersection with state laws and the size of the price increase insurers would attach to re-issued policies. But I suspect this is basically the shape of the river here.

Chris Christie's Failure Shows Just How Popular He Is

| Thu Nov. 14, 2013 11:48 AM EST

Former New Jersey governor Tom Kean is apparently pretty annoyed with Chris Christie, partly for personal reasons and partly because Christie failed to help any other Republicans get elected to the state legislature. Dave Weigel:

The full failure of Christie's "coattails" campaign is only now being known. Christie had wanted to win the state senate, cutting ads and campaigning for key candidates. None of his challengers unseated any Democrats. The total Republican gain in the Assembly appears to be... one. That's better than 2011, when Democrats gained a seat, but even if you factor in the gerrymander that protects Democrats, Kean and other Republicans are amazed that Christie could win by 21 points and carry almost nobody along with him.

OK, but isn't there another way of looking at this? It shows just how popular Christie is personally even in a state that shows no sign whatsoever of warming up to Republicans in general. That's fairly remarkable.

I'll admit this a slatepitchy kind of argument to make, and I don't know if I really even believe it. Weigel is certainly right that this leaves Christie in the unenviable position of having to scrape and compromise with Democrats for the next few years, something that's unlikely to help his presidential ambitions much. If his compromises succeed, he's a sellout. If they fail, he's a guy who can't get anything done. That kind of sucks.

Still! His personal brand is obviously pretty sky high. That has to count for something.

Quote of the Day: The 4th Amendment Takes Another Hit

| Thu Nov. 14, 2013 2:09 AM EST

From Justice Sonia Sotomayor, sighing over a likely ruling in a warrantless search case:

So there's nothing left to Randolph. Police just remove the person.

In Georgia vs. Randolph, the Supreme Court ruled that police were not allowed to search the home of a man who stood in the doorway and objected, even though his wife gave her consent. In a case heard today, Fernandez vs. California, a robbery suspect named Walter Fernandez refused to allow police to search his apartment. They arrested him, and then came back an hour later and got permission from Fernandez's girlfriend to conduct a search. Most of the justices seemed to think this was just fine, which is what prompted Sotomayor's bleak remarks. Randolph really doesn't mean anything if all the police have to do is remove you from your doorway and then come back a few minutes later. So the 4th Amendment takes yet another hit.

Why Does Fiscal Stimulus Work?

| Wed Nov. 13, 2013 11:54 PM EST

I'm curious about something. It's far enough above my pay grade that I'm a little reluctant to even write about it, but here goes anyway.

John Cochrane, an economist at the University of Chicago who's a frequent punching bag for Brad DeLong and Paul Krugman, wrote a post a few days ago that critiqued the Old and New Keynesian views of fiscal stimulus when we're at the zero lower bound (i.e., when interest rates have been reduced to zero and the economy is still sluggish). The mathematical details are over my head, but I still found it kind of interesting and was curious to see what DeLong and Krugman thought of it.

Well, they finally got around to reading it, and unsurprisingly, they're pretty harsh toward Cochrane (DeLong here, Krugman here). But I was a little disappointed in their responses. They have plenty of detailed issues with Cochrane, many of which strike me as well taken. But I didn't feel like they ever addressed Cochrane's core argument. He isn't insisting that stimulus doesn't work.1 Instead, he's taking aim at the stories economists use to explain why they think stimulus works. In his words, here's the Old Keynesian multiplier story:

More government spending, even if on completely useless projects, "puts money in people's pockets." Those people in turn go out and spend, providing more income for others, who go out and spend, and so on. We pull ourselves up by our bootstraps. Saving is the enemy, as it lowers the marginal propensity to consume and reduces this multiplier.

But Cochrane says that New Keynesian models don't support this story at all. When you take a look into their guts, NK models posit an entirely different underlying mechanism for why fiscal stimulus works:

If you want to use new-Keynesian models to defend stimulus, do it forthrightly: "The government should spend money, even if on totally wasted projects, because that will cause inflation, inflation will lower real interest rates, lower real interest rates will induce people to consume today rather than tomorrow, we believe tomorrow's consumption will revert to trend anyway, so this step will increase demand. We disclaim any income-based "multiplier," sorry, our new models have no such effect, and we'll stand up in public and tell any politician who uses this argument that it's wrong."

So....is this right? Or wrong? Do New Keynesians believe that the "putting money in people's pockets" story is a good one? Or do they think the justification for fiscal stimulus is different, and that NK models produce old-style multiplier-like results only by coincidence? Are multipliers just a handy mathematical shortcut? Or is it really a crowding-out story we should be telling, not a multiplier story? (This is how I usually think about it.) Or perhaps Cochrane is unfairly oversimplifying NK models, which take into account more than just consumption and interest rates?

I have an unfortunate feeling that pretty much nobody but me is interested in this, but I guess you never know. Maybe someone will take a crack at explaining it.

1In fact, Cochrane is not much of a fan of fiscal stimulus. But that's not the point of this particular post.

UPDATE: Simon Wren-Lewis suggests that most modern Keynesians assume there are two basic types of consumers. One is living paycheck to paycheck and spends pretty much 100 percent of any additional income they get. These consumers fit the Old Keynesian multiplier model. Other consumers are richer and save all or most of any new income they get. Their behavior fits the New Keynesian model. Put it all together, and a complete model ends up being sort of an OK/NK hybrid.

I've badly oversimplified Wren-Lewis's post, so be sure to read the whole thing if you're interested enough to want the real story.