Kevin Drum - 2013menu-mediakit-secondary

Quote of the Day: Free Health Care Kills.... Um.... Republicans?

| Mon Dec. 16, 2013 6:43 PM PST

From Rick Santorum, explaining the dangers of relying on the government for health care:

Free health care is just that, free health care, until you get sick. Then, if you get sick and you don’t get health care, you die and you don’t vote. It’s actually a pretty clever system. Take care of the people who can vote and people who can’t vote, get rid of them as quickly as possible by not giving them care so they can’t vote against you. That’s how it works.

WTF? I recognize that sometimes extemporaneous witticisms go astray, and God knows that Santorum is probably more vulnerable to that than most. But even for him this is inscrutable. I wonder if he knows that every American over the age of 65 has been receiving government health care for the past half century?

Anyway, there's video at the link if you think that Santorum's body language and tone of voice might help you decipher what was going through his eccentric little mind when he said this.

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Guess Who Gets the Most Brazen Federal Inflation Adjustment in the Country?

| Mon Dec. 16, 2013 4:04 PM PST

I learned something new today. Apparently the federal government has a cap on the amount it's willing to reimburse contractors for the salaries of their employees. If someone makes $50,000 per year, no problem. You can charge the feds for their entire salary if they're working on government business. But if your company's CEO makes $3 million per year, you can't charge it all back to the feds even if 100 percent of the CEO's time is spent on government contracts. The limit, set in 1998, was $340,000.

This cap was allowed to rise with inflation, so you'd figure that by 2011 it would be around $467,000. But no. It was $763,000. Why? Because ordinary inflation adjustments are for chumps, that's why. For purposes of charging CEO overhead to the federal government, the cap was set at "the median amount of the compensation provided for the five most highly compensated employees of all publicly owned U.S. corporations with annual sales in excess of $50 million for the most recent fiscal year."

Isn't that fabulous? When it comes to the minimum wage, we don't index for inflation at all. But for CEOs earning top-one-percent pay, we not only index for inflation, we index to the rise in CEO salaries. And since CEOs have been relentlessly voting themselves ever more astronomical compensation over the past few decades, we know that number is going to rise a whole lot faster than piddly old CPI. Ka-ching.

This comes via Lydia DePillis, who'd like to talk about raising the compensation floor, not just cutting the CEO cap back down to size. Good luck with that.

Judge Rules NSA Surveillance Unconstitutional

| Mon Dec. 16, 2013 2:32 PM PST

A federal judge ruled today that the NSA's mass collection of telephone records is unconstitutional. Via Glenn Greenwald, Edward Snowden released this statement:

“I acted on my belief that the N.S.A.'s mass surveillance programs would not withstand a constitutional challenge, and that the American public deserved a chance to see these issues determined by open courts,” Mr. Snowden said. “Today, a secret program authorized by a secret court was, when exposed to the light of day, found to violate Americans’ rights. It is the first of many.”

Well, I hope so. But keep in mind that Snowden didn't expose this program to the light of day. We've known about it in fuzzy terms since late 2005, and in very specific terms since 2006, when Leslie Cauley reported it in USA Today. The agency's goal, she wrote then, was to create a database of "every call ever made" within the nation's borders. In the intervening seven years, this revelation has basically produced nothing except a collective yawn.

I'm delighted that Snowden helped this get more attention, and delighted that a judge wants it to stop.  But district court judges make lots of rulings that never go anywhere, and this is most likely one of them. Unfortunately, recent history suggests that neither the American public nor Congress—and apparently not the president either—is inclined to seriously rein in the NSA's phone record surveillance.

New French Book Will Become Important When It's In English

| Mon Dec. 16, 2013 1:50 PM PST

Tyler Cowen says today that "The forthcoming Thomas Piketty book will be very important."

That "will be" is sort of interesting. You see, the name of the book is Le capital au xxie siècle, and it was published three months ago. But no one is talking about it. Presumably, it will become very important—and very talked about—only next March, when Capital in the 21st Century hits the shelves.

I don't have any grand point to make. It's just interesting that fluent French is now so rarely spoken among American academics that an important French book can't even get the time of day until its English translation comes out. It makes sense that widespread conversation would have to wait, since you can't very well have that until lots of people have read the book, but you'd think there would be at least a few reviews out there along with a bit of discussion. But if there has been, I've missed it.

Jimmy Carter Is History's Greatest Monster

| Mon Dec. 16, 2013 11:54 AM PST

I know there are more important things going on in the world, but I really had to stifle a giggle at the latest attempt to blame Jimmy Carter for every conceivable ill of the pre-Reagan world. Here is Gordon Crovitz in the Wall Street Journal today:

Jimmy Carter's Costly Patent Mistake

Today's patent mess can be traced to a miscalculation by Jimmy Carter, who thought granting more patents would help overcome economic stagnation. In 1979, his Domestic Policy Review on Industrial Innovation proposed a new Federal Circuit Court of Appeals, which Congress created in 1982. Its first judge explained: "The court was formed for one need, to recover the value of the patent system as an incentive to industry." The country got more patents—at what has turned out to be a huge cost. The number of patents has quadrupled, to more than 275,000 a year.

Jeebus. Legal scholars spent the entire decade of the 70s arguing about this. Under the old system, different appellate circuits issued different rulings on patents, and it was the business community that was mostly unhappy about this. Several commissions recommended plans for a more uniform and efficient system, including one drafted by Carter's Department of Justice. It never went anywhere, but business leaders kept pressing, and Congress reintroduced court reform legislation in 1981, which was signed by Ronald Reagan a year later. It's absurd to give Carter more than a footnote in this history.

However, Crovitz gets this part right:

[The new] Federal Circuit approved patents for software, which now account for most of the patents granted in the U.S.—and for most of the litigation....Until the court changed the rules, there hadn't been patents for algorithms and software. Ideas alone aren't supposed to be patentable. In a case last year involving medical tests, the U.S. Supreme Court observed that neither Archimedes nor Einstein could have patented their theories.

Actually, to give them their due, the new court held out against software patents for quite a while. Eventually, though, contradictions kept piling up, and in the mid-90s they essentially threw in the towel and approved the granting of pure software patents. This is hardly the whole story, though. The Supreme Court could have overruled them. The patent office could have fought back. The president could have offered new legislation. Congress could have acted.

None of them did. The software industry wanted software patents, and they got them. Big business won the day, as they usually do. But I guess that's not a headline the Journal editorial page is interested in.

Hidden in this story, however, is the key fact that demolishes the argument in favor of software patents: "the mid-90s." Before that, software patents were rare or nonexistent. And guess what: The era from 1950 through 1995 featured one of the most innovative and fruitful tech explosions in history. Billions of lines of software were produced, the world was transformed, and it was all done without patent protection.

So why do we need them now?

American Education: It's Both Better and Worse Than You Think

| Mon Dec. 16, 2013 10:48 AM PST

On Friday I excerpted an interview with M. Night Shyamalan in which he said that America practices "education apartheid." If you look at just white kids, he said, "We beat everyone. Our white kids are getting taught the best public-school education on the planet. Those are the facts."

Bob Somerby calls this "absurdly inaccurate," and he has a point. Shyamalan is exaggerating, and I sloppily let it pass because I wanted to address what I thought was his primary point. So allow me to revise and expand a bit. Not as an excuse for a hurried post, but just to explain how I view this stuff.

For starters, when I look at international test scores, the first thing I usually do is toss out the scores from most Asian countries. Don't worry: I don't expect anyone else to do this, and I'm not claiming that any fair assessment should throw them out. But frankly, I just don't care how well South Korea does, because I know how they do it. They do it by making their kids' lives a living hell, schooling them for a dozen hours a day or more and then ruining their lives based on a single day or two of testing when they're 17. As a result, they get high test scores. But who cares? I think we all know that you can get high test scores by cramming your brains out like that. It tells us nothing, and I very much doubt that it actually produces better-educated adults in the long run. It merely produces kids who can produce eye-popping standardized test scores at age 17.

So I toss out the fabled Asian miracle countries. Then I look at the rest. Do American kids outscore everyone else? Nope. Somerby is right about that. But that's missing the forest for the trees. Let's all agree that Shyamalan is both cherry picking a bit and inflating his claims. Two Pinocchios for Shyamalan! Instead, let's just make the more accurate claim: If you compare America's white kids to those of most other countries—aggregating all the evidence, not just one or two data points—they do pretty well. Not spectacularly well, but pretty well. I think a fair observer would conclude that these kids were getting a pretty good education. Probably as good or better than most other countries in the world.

And that claim, even though it's more modest, is important. It means that American education isn't, either philosophically or foundationally, a disaster area. Nor is it in decline. For most American children, it works fine and it doesn't need radical changes. Rather, there's a small subset of American children who have been badly treated for centuries and continues to suffer from this. We do a lousy job of educating them, but it's not because we don't know how to educate. We've just never been willing to expend the (very substantial) effort it would take to help them catch up.

Anyone who disagrees with this conclusion is welcome to argue about it. But I think it's one of the paramount facts about education in America. If you ignore it, your diagnosis of our educational problems is almost certain to be badly wrong. In the end, the fact that Shyamalan recognizes this so forthrightly strikes me as more important than the fact that he gets a little too far over his skis when he talks about it.

As for Shyamalan's proposed five-point plan to fix things, I'll repeat that I don't think they're silver bullets or that they're unassailable. But as a group, they struck me as pretty reasonable compared to most of the educational reforms that dominate our conversation. For that reason, I welcome his debut into the ed wars.

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How Bolivia Became Obama's No. 1 Foreign Policy Screw-Up of the Year

| Mon Dec. 16, 2013 9:19 AM PST

What was President Obama's biggest foreign policy screw-up of the year? There are several worthy contenders, but Dan Drezner nominates Obama's decision to block the flight home of Bolivian President Evo Morales due to suspicions that NSA leaker Edward Snowden might be on board:

Now, why was this such a big deal? It was a two-fer. First, in going after Snowden so aggressively, the administration put the lie to its claims that Snowden's revelations weren't that big of a deal....Second, and more significantly, the desperate and clumsy attempt to grab Snowden dramatically altered the perception by other governments about their preferences.

....When the U.S. forced Morales' plane to make an emergency landing, [] Washington signaled that it was equally willing to f**k with the sovereignty franchise. At that point, all bets were off for countries predisposed to not helping the United States. Russia kept Snowden, Latin America kept polishing its resentment against the U.S., the rest of the world kept paying attention to Snowden's revelations, and the United States lost significant hypocritical capabilities.

Would Snowden be in custody today if Obama hadn't done this? Drezner figures there's a good chance. I don't happen to agree, since I have a hard time imagining a scenario in which Russia would be willing to turn over an American spy, but it's a plausible guess.

In any case, you can lump this together with the fallout from revelations about spying on foreign leaders and bulk collection of overseas data and documents, and it certainly puts the Snowden leaks in the top two foreign policy events of the year for the United States. I'd still put Iran ahead of it if the current talks produce a breakthrough, but that's it. If the talks fail, or produce only modest progress, then Snowden will be a clear #1.

The Fight Against Income Inequality Has Already Been Half Won

| Sun Dec. 15, 2013 10:32 PM PST

A few days ago President Obama called rising income inequality "the defining challenge of our time." Over the weekend, Ezra Klein kicked off a blogospheric wonkstorm by arguing that Obama is wrong. "Imagine you were given a choice between reducing income inequality by 50 percent and reducing unemployment by 50 percent," he asked. "Which would you choose?" Klein thinks the answer is obviously unemployment, and the solution to high unemployment is faster economic growth. However, there's very little evidence that high income inequality hurts economic growth, which means that liberals should focus less on inequality and more on things that will help economic growth.

This prompted a variety of responses. Jared Bernstein thinks the whole thing is a false choice, since policies that produce tight labor markets will reduce unemployment and lower inequality. Steve Randy Waldman argues that, in fact, there's plenty of evidence that inequality hinders growth, and we shouldn't let the lack of silver bullet proof make us all wobbly in the knees.  Paul Krugman says that regardless of the evidence on growth, high inequality suppresses middle-class wages, produces economic instability, and produces bad political incentives. Kathleen Geier points out that inequality is pernicious in other ways too: it has "the unlovely quality of greatly exacerbating nearly every other social, political, and economic problem that exists."

All good points! But here's what you should really take home from this conversation. For many years, it's been conservative conventional wisdom that inequality is necessary for growth. In fact, the more the better, since the bigger the incentives we offer to successful businesses and entrepreneurs, the more success we'll have.

Today, this argument is all but dead. Think about that. It's remarkable that we're even asking "Does high inequality hurt growth?" Hurt it! This shift in our default assumption represents huge progress. After all, if the answer is yes, it's one more reason to favor policies that reduce inequality. But even if the answer is no, all it means is that growth is independent of inequality. There are really no arguments left that are actively on the side of high inequality aside from simpleminded libertarian fantasies that economic capitalism is neutral by definition, and therefore everyone automatically gets what they deserve.

There are lots and lots of reasons to oppose high and rising income inequality. Maybe its effect on economic growth is one of them. Maybe not. Either way, aside from the simple self-interest of the rich, there are no longer any real arguments for favoring, or even ignoring, rising income inequality. The fact that this is now so widely accepted as to be barely worthy of notice—well, that's kind of amazing, isn't it?

Soon, Obamacare Will Get the Blame for Your Kid's Acne

| Sun Dec. 15, 2013 3:08 PM PST

From the Associated Press:

Americans who already have health insurance are blaming President Barack Obama's health care overhaul for their rising premiums....In the survey, nearly half of those with job-based or other private coverage say their policies will be changing next year — mostly for the worse. Nearly 4 in 5 (77 percent) blame the changes on the Affordable Care Act, even though the trend toward leaner coverage predates the law's passage.

....Employers trying to control their health insurance bills have been shifting costs to workers for years, but now those changes are blamed increasingly on "Obamacare" instead of the economy or insurance companies.

Obamacare has been a boon for employers and insurers who want to cut back their health benefits but don't want to take the blame for it. They just blame Obamacare instead. This will only work for a year or two, but for now it's a godsend. Better to have your employees pissed off at the guy in the White House than pissed off at the guy in the corner office.

Beyoncé Redefines the Word "Quiet"

| Sat Dec. 14, 2013 7:14 PM PST

From the Wall Street Journal:

Beyoncé Releases Latest Album—Quietly

Can we please stop this? This wasn't some kind of stealth release. It was a brilliant use of viral marketing. Beyoncé and a few of her buddies "quietly" advertised the new album to about ten or twenty million of their closest friends, all of whom thought they were being let in on a secret and immediately went out and crashed the iTunes server farm. It was genius. Even if it only works once, it's genius.

But quiet? Only if you have a five-year-old's understanding of human nature. To misquote everyone's favorite America-hating superhero, it was an awfully loud kind of quiet, man.