Kevin Drum - August 2014

Friday Cat Blogging - 29 August 2014

| Fri Aug. 29, 2014 1:51 PM EDT

It's the return of quilt blogging! Sort of. In any case, there's a quilt in the background because that happens to be where Domino was posing this week. I think she's auditioning to be the model for a new pair of sculptures outside the New York Public Library.

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Chart of the Day: When Women Fail, They Pay a Bigger Price Than Men

| Fri Aug. 29, 2014 1:19 PM EDT

The chart below is not part of a study that examines a statistically random set of data. It's quite informal, and probably suffers from some inherent sampling biases. Nonetheless, it's pretty astonishing:

Here's the background: Kieran Snyder asked men and women working in the tech industry to share their performance reviews with her. Virtually all of them were high performers who got generally strong reviews. But it wasn't all positive:

In the 177 reviews where people receive critical feedback, men and women receive different kinds. The critical feedback men receive is heavily geared towards suggestions for additional skills to develop....The women’s reviews include another, sharper element that is absent from the men’s:

“You can come across as abrasive sometimes. I know you don’t mean to, but you need to pay attention to your tone.”

[Etc.]

This kind of negative personality criticism—watch your tone! step back! stop being so judgmental!—shows up twice in the 83 critical reviews received by men. It shows up in 71 of the 94 critical reviews received by women.

This comes via Shane Ferro, who concludes that there's probably good reason for women to be more cautious than men in their professional lives. It's easy to tell women they shouldn't be afraid to fail. "But we as a society (men and women), need to stop judging women so harshly for their flaws. For them to be equally good, it has to be okay that they are equally bad sometimes."

Has Vladimir Putin Painted Himself Into a Corner?

| Fri Aug. 29, 2014 12:14 PM EDT

Max Fisher writes today that Vladimir Putin probably never wanted to invade Ukraine. So why did he? It all started when he was elected to a third term as president amid continuing economic stagnation:

Putin expected another boisterously positive reception, but that's not what he happened. Instead, he got protests in major cities, opposition candidates, and, even according to the highly suspicious official tally, only 63 percent of the vote.

Putin panicked. He saw his legitimacy slipping and feared a popular revolt. So he changed strategies. Rather than basing his political legitimacy on economic growth, he would base it on reviving Russian nationalism: imperial nostalgia, anti-Western paranoia, and conservative Orthodox Christianity.

....Then the Ukraine crisis began....In March 2014, Putin indulged his own rhetoric about saving Ukraine's ethnic Russians — and seized an opportunity to reclaim a former Soviet strategic port — when he launched a stealth invasion of Crimea....This is when the crisis began to slip beyond Putin's control....The nationalistic rhetoric inside Russia was cranked up to a fever pitch. Putin's propaganda had built a parallel universe for Russians, in which the stakes in eastern Ukraine were dire not just for Russia but for the world....But the violence in eastern Ukraine was spinning out of control, with Ukrainian military forces looking like they were on the verge of overrunning the rebels.

In a rational world, Putin would have cut his losses and withdrawn support for the rebels. But, thanks to months of propagandistic state media, Russians do not live in a rational world. They live in a world where surrendering in eastern Ukraine would mean surrendering to American-backed Ukrainian Nazis, and they believe everything that Putin has told them about being the only person capable of defeating these forces of darkness. To withdraw would be to admit that it was all a lie and to sacrifice the nationalism that is now his only source of real legitimacy. So Putin did the only thing he could to do to keep up the fiction upon which his political survival hinges: he invaded Ukraine outright.

Is this basically correct? It's more or less the way I view events in Russia, so it appeals to me. But I don't know enough about Russia to have a lot of confidence that this is really the best explanation for Putin's actions.

It's also not clear—to me, anyway—that Putin is truly stuck in a situation he never wanted. I agree that this interpretation makes sense. Eastern Ukraine just flatly doesn't seem worth the price he would have to pay for it. But that's easy to say from seven thousand miles away. I wonder if this is really the way Putin sees things?

There Are No Lessons of History

| Fri Aug. 29, 2014 11:37 AM EDT

Adam Gopnik argues that knowing history won't really help you understand the lessons of history. There are just too many of them, and you can always cherry pick whichever lesson supports the thing you wanted to do in the first place. Rather, it should teach us humility:

The best argument for reading history is not that it will show us the right thing to do in one case or the other, but rather that it will show us why even doing the right thing rarely works out.

....The real sin that the absence of a historical sense encourages is presentism, in the sense of exaggerating our present problems out of all proportion to those that have previously existed. It lies in believing that things are much worse than they have ever been—and, thus, than they really are—or are uniquely threatening rather than familiarly difficult. Every episode becomes an epidemic, every image is turned into a permanent injury, and each crisis is a historical crisis in need of urgent aggressive handling—even if all experience shows that aggressive handling of such situations has in the past, quite often made things worse.

Unfortunately, I doubt that Gopnik is right. Outside of academia, I haven't noticed that a knowledge of history is correlated in any way with a calmer perspective on our current problems.

Take President Obama. He's a smart guy. He knows history, and he has an instinctively level-headed attitude toward life in the first place. What's more, he very famously won office partly on the strength of his skepticism toward military intervention and his opposition to "dumb wars."

So what happened after he took office? He almost immediately approved a surge in Afghanistan. Then another surge. That didn't work out especially well, and by 2011, when Libya was going up in flames, Obama was obviously reluctant to get involved. But he did anyway. And that turned into a complete clusterfuck. But even that wasn't quite enough. Two years later he almost got talked into intervening in Syria before turning aside at the last minute. And that brings us to the present day and the threat of ISIS.

As near as I can tell, Obama is now, finally, genuinely, skeptical about military intervention. That's why he's been so reluctant to approve wider air strikes against ISIS even though there's hardly a more deserving target of a bombing campaign anywhere in the world. He understands in his gut that it's not likely to work, and that it definitely won't work without an Iraqi government that can competently provide the ground troops to do the bulk of the fighting. Right now that doesn't exist, so Obama is refusing to be drawn into an unwinnable quagmire. He finally understands.

But this isn't because of his knowledge of history. It's because of Afghanistan. And Libya. And Syria. It took three consecutive slaps in the face to finally convince his gut of what his brain probably believed all along.

In the end, I think this is why I sympathize with Obama's foreign policy choices even though I've been at least moderately opposed to all his interventions. I'd like to think that I would have made different decisions if I'd been in his place, but the truth is I probably wouldn't have. The institutional and political pressures in favor of military action are just too strong. More than likely, I would have caved in too until I eventually learned better from bitter experience.

Is Gopnik's brand of historical fatalism any better than historical blindness? It's hard to say. But it probably doesn't matter. When it comes time to actually do things, we learn from experience, not the past.

BREAKING: Economy Continues to Stagnate

| Fri Aug. 29, 2014 9:32 AM EDT

If, despite my warnings, you allowed yesterday's upward GDP revision to kindle a tiny spark of excitement about the economy, today's news should bring you right back down to earth:

Household spending fell in July, a sign that cautious consumers could hold back economic growth in the second half of the year....Personal income, reflecting income from wages, investment, and government aid, rose 0.2% in July—the smallest monthly increase of the year....Meanwhile, the report showed a key measure of inflation—the personal consumption expenditures price index—rose 1.6% in July from a year earlier. That matched the prior month's annual gain, and is below the Federal Reserve's 2% long-run target for the 27th straight month.

Spending is down, which is no surprise since personal income is pretty much flat. This suggests that perhaps we could tolerate a wee bit higher inflation as a way of getting the economy moving, but of course we can't do that. Sure, inflation has been below its target for 27 months, but you never know. The 28th month might be different! And even the prospect of a single month of moderate inflation runs the risk of turning us into Zimbabwe.

So instead we just sit and stagnate.

Will Democrats Keep Control of the Senate This Year?

| Thu Aug. 28, 2014 11:09 PM EDT

Sam Wang of the Princeton Election Consortium thinks that Democrats currently have a 72 percent chance of retaining control of the Senate this year. Most other forecasting outfits think Republicans have a 60-70 percent chance of winning control. Why the difference?

In most cases, added assumptions (i.e. special sauce) have led the media organizations to different win probabilities — which I currently believe are wrong....The major media organizations (NYT, WaPo, 538)...all use prior conditions like incumbency, candidate experience, funding, and the generic Congressional ballot to influence their win probabilities — and opinion polls.

....Longtime readers of PEC will not be surprised to know that I think the media organizations are making a mistake. It is nearly Labor Day. By now, we have tons of polling data. Even the stalest poll is a more direct measurement of opinion than an indirect fundamentals-based measure. I demonstrated this point in 2012, when I used polls only to forecast the Presidency and all close Senate races. That year I made no errors in Senate seats, including Montana (Jon Tester) and North Dakota (Heidi Heitkamp), which FiveThirtyEight got wrong.

I'd sure like to believe this. PEC is my go-to political polling site, after all. But it sure doesn't feel like Democrats are in the driver's seat right now, does it? All of my political instincts scream that Wang's forecast is wrong.

That's probably because I'm a pessimist by nature. But you either believe in poll aggregation or you don't. I do, and PEC has performed well in every election for the past decade. So just as I wouldn't "deskew" bad poll results I didn't like, I guess I won't try to second-guess good poll results that don't seem quite right. If Wang thinks Democrats are currently favored to keep control of the Senate, then so do I.

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Quote of the Day: "We Don't Have a Strategy Yet."

| Thu Aug. 28, 2014 4:31 PM EDT

From President Obama, asked if he needs congressional approval to go into Syria:

I don't want to put the cart before the horse. We don't have a strategy yet.

That's not going to go over well, is it? Three years after the Syrian civil war started and (at least) half a year after ISIS became a serious threat in Iraq, you'd think the president might be willing to essay a few broad thoughts about how we should respond.

Don't get me wrong. I think I understand what Obama is doing here. He's basically trying to avoid saying that we do have a strategy, and the strategy is to do the absolute minimum possible in service of a few very limited objectives. And generally speaking, I happen to agree that this is probably the least worst option available to us. Still, there's no question that it's not very inspiring. You'd think the brain trust in the White House would have given a little more thought to how this could be presented in a tolerably coherent and decisive way.

In the meantime, "We don't have a strategy yet" is about to become the latest 24/7 cable news loop. Sigh.

Oh, and the tan suit too. It's quite the topic of conversation in the Twittersphere.

In the Restaurant Biz, It Pays To Be a Man

| Thu Aug. 28, 2014 12:22 PM EDT

Via Wonkblog, here's a chart showing the pay gap between men and women in the restaurant industry. It comes from a recently released EPI report, and as you can see, not only are men better paid in virtually every category, but the premium goes up for the highest paying jobs. Bussers and cashiers are paid nearly the same regardless of gender. But when you move up to cooks, bartenders, and managers, the premium ranges from 10-20 percent.

This data isn't conclusive. There are other reasons besides gender for pay gaps, and the EPI report lists several of them. Whites make more than blacks. High school grads make more than dropouts. Older workers make more than younger ones. You'd need to control for all this and more to get a more accurate picture of the gender gap.

But in a way, that misses the point. There are lots of reasons for the gender gap in pay. Some is just plain discrimination. Some is because women take off more time to raise children. Some is because women are encouraged to take different kinds of jobs. But all of these are symptoms of the same thing. In a myriad of ways, women still don't get a fair shake.

Mitch McConnell Doesn't Get to Decide if Republicans Will Threaten Another Government Shutdown

| Thu Aug. 28, 2014 11:15 AM EDT

Are congressional Republicans threatening once again to shut down the government this year unless they get their way on a bunch of pet demands? Over at TNR, Danny Vinik doesn't think so: "There is no excuse for the news media to inflate the quotes of Republican politicians to make it seem that they are threatening to shut down the government again," he says. But Brian Beutler thinks Vinik is being too literal. It's true that no one is explicitly using the word shutdown, but no one ever does. Still, he says, "the threat is clear."

I'm with Beutler, but not because of any particular parsing of recent Republican threats. It's because of this:

The truth is practically irrelevant to the question of whether [recent saber rattling] presages a government shutdown fight. Just as it doesn’t really matter whether Senate Minority Leader Mitch McConnell actually has a government shutdown in mind when he promises to strong-arm Obama next year, or whether he intends to cave.

In either case he’s threatening to use the appropriations process as leverage to extract concessions. That's a government shutdown fight. And no matter how he plays it, he will unleash forces he and other GOP leaders have proven incapable of restraining. They can’t control the plot.

Yep. It's just not clear that McConnell has any real leverage over Ted Cruz or that John Boehner has any leverage over Michele Bachmann. Once they implicitly endorse the rider game, they cede control to the wingnuts. And the wingnuts want to shut down the government. Fasten your seatbelts.

Stock Buybacks Are a Symptom, Not a Disease

| Thu Aug. 28, 2014 10:42 AM EDT

Paul Roberts writes in the LA Times today about stock buybacks:

Here's a depressing statistic: Last year, U.S. companies spent a whopping $598 billion — not to develop new technologies, open new markets or to hire new workers but to buy up their own shares. By removing shares from circulation, companies made remaining shares pricier, thus creating the impression of a healthier business without the risks of actual business activity.

I agree: that statistic is depressing. In fact, back in the days of my foolish youth, when I dabbled a bit in stock picking, one of my rules was never to invest in a company that had done a share buyback. I figured it was a sign of tired management. If they couldn't think of anything better to do with their money than that, what kind of future did they have? Moving on:

Share buybacks aren't illegal, and, to be fair, they make sense when companies truly don't have something better to reinvest their profits in. But U.S. companies do have something better: They could be reinvesting in the U.S. economy in ways that spur growth and generate jobs. The fact that they're not explains a lot about the weakness of the job market and the sliding prospects of the American middle class.

....Without a more socially engaged corporate culture, the U.S. economy will continue to lose the capacity to generate long-term prosperity, compete globally or solve complicated economic challenges, such as climate change. We need to restore a broader sense of the corporation as a social citizen — no less focused on profit but far more cognizant of the fact that, in an interconnected economic world, there is no such thing as narrow self-interest.

I agree with some of what Roberts says about American corporations increasingly being obsessed with short-term stock gains rather than long-term growth. It's also true that stock buybacks are partly driven by CEO pay packages that are pegged to share price. Those have been standard complaints for decades. But it's misleading to suggest that US companies could be spurring the economy if only they'd invest more of their profits in growth. That gets it backwards. Companies will invest if they think they'll get a good return on that investment, and that decision depends on the likely trajectory of the macroeconomy. If it looks like economic growth will be strong, they'll invest more money in new plants and better equipment. If not, they won't.

The macroeconomy doesn't depend on either companies or individuals acting altruistically. You can't pass a law banning stock buybacks and expect that companies will invest in plant expansion and worker training instead. They'll only do it if those investments look likely to pay off. Conversely, forcing them to make investments that will lose money does nothing for the economy except light lots of money on fire.

You want companies to invest in the future? The first step is supporting economic policies that will grow the economy. If we were willing to do that, corporate investment would follow. If we don't, all the laws in the world won't keep the tide from coming in.