• Net Neutrality Is All About the Little Guy

    Richard B. Levine/Levine Roberts/Newscom via ZUMA

    The FCC is getting ready to kill off net neutrality rules, which means that internet providers will be allowed to play favorites with different content from different companies. Tyler Cowen suggests this is really no big deal. He looks at two studies:

    In the past, the FCC went through a process to extend [net neutrality] in response to a court order invalidating its earlier net neutrality policy….Most relevant corporate share prices didn’t much react to these events, which suggests that the net neutrality decisions weren’t so important for the sector.

    ….A second recent study is by José Francisco Tudón Maldonado, a doctoral candidate in economics at the University of Chicago. Tudón Maldonado looked at Amazon.com Inc.’s Twitch.tv, a popular platform for video games, eSports and musical performances, among other services. Twitch itself advocates net neutrality, but applies its own service prioritization rules within the system. Tudón Maldonado found that Twitch users benefit from this prioritization, receiving higher quality programs and suffering less from bandwidth congestion.

    I think this misunderstands the entire net neutrality debate. The first study looks solely at large public companies, but those aren’t the ones likely to lose out if net neutrality goes away. Generally speaking, they’re big enough and rich enough to cut favorable deals with internet providers regardless of the regulatory environment. It’s startups and small companies that are more likely to have problems. If YouTube has to cut a deal with Comcast to keep its videos running smoothly, they’ll do it. But what if a startup competitor wants the same treatment? They might not be offered the same deal, and even if they are they probably can’t afford it anyway. None of this shows up in the stock prices of big content providers.

    The second study looks at the effect of content-neutral congestion policies. It’s easy to go down a rabbit hole here, but in simple terms it’s safe to say that no one objects if internet providers adopt policies designed to manage traffic congestion on their networks as long as those policies don’t discriminate based on the content of the traffic. This is a tricky issue, and the Twitch.tv case isn’t entirely cut and dry. But it’s mostly about favoring content that its customers access most often, which means they aren’t discriminating based on who owns what content.

    In other words, I don’t think either of these studies addresses the real issue of eliminating net neutrality: namely that it allows internet providers to actively discriminate against small companies that can’t afford to pay special fees for good service. It also allows vertically integrated internet providers—like Comcast/NBC and AT&T/Time Warner—to favor their own content at the expense of others.

    If there were real competition in the internet provider space, this would all be moot. If Comcast screwed around with competitive content providers, its customers would get disgusted and switch to someone else. But in practice, most areas don’t have any real competition. You sign up with your local cable company, and that’s pretty much it. If some small sites don’t seem to work very well, you’ll probably shrug and just figure that they aren’t very good. And even if you figure out that Comcast is deliberately screwing with them, there isn’t much you can do about it.

    Of course, the big internet providers all swear they would never do this. Maybe so. But if they’d never do it, why the big objection to rules that say they can never do it?

  • Thousands of Blacks Are Denied Voting Rights Because They’re Poor

    I did not know this:

    Hundreds of thousands of Americans are being denied the right to vote because they are poor. In nine states, Republican legislators have enacted laws that disenfranchise anyone with outstanding legal fees or court fines. For example, in Alabama more than 100,000 people who owe money — roughly 3 percent of the state’s voting-age population — have been struck from voting rolls.

    AL.com adds a bit more detail:

    In Alabama and eight other states from Nevada to Tennessee, anyone who has lost the franchise cannot regain it until they pay off any outstanding court fines, legal fees and victim restitution. In Alabama, that requirement has fostered an underclass of thousands of people who are unable to vote because they do not have enough money.

    In a recent paper, Marc Meredith and Michael Morse calculate that in Alabama, the fees and fines levied on felons amount to an average of about $5,000 per person, and half of the money owed is in the form of legal fees. Here’s how those fees break down:

    This affects blacks much more than whites:

    Many laws that have a disparate impact on the poor also are likely to have a disparate racial impact because of the strong link between race and wealth in America….The right panel of Figure 3 supplies the missing data and demonstrates that black ex-felons are about 9.4 percentage points (p.p.) less likely to be eligible to vote because of an outstanding [legal] debt….[The] fourth panel of Figure 4 reveals that the disparate impact in eligibility is reproduced in the share of applications denied….Black applicants are 26 p.p. more likely to be denied due to an outstanding debt than non-black applicants.

    Here are figures 3 and 4 from the paper. The size of the fees and fines levied on felons is about the same for blacks and whites, but blacks are more likely to have unpaid fees and fines and far more likely to be denied restitution of voting rights due to outstanding fees and fines:

    This is the intersection of class and race. The reason blacks are more likely to have unpaid fees and fines is because they’re poorer than whites. But the reason they’re poorer is inextricably bound up in persistent and systemic racism. No court has ever found that this disparate impact of unpaid fees and fines on voting rights is disallowed by the Constitution, but Meredith and Morse suggest that maybe they should start.

  • Lunchtime Photo

    This is a koi swimming around at the Tucker Wildlife Sanctuary in Modjeska Canyon, one of the few semi-rural places left in Orange County. I was there a few months ago, and was surprised to learn they had a koi pond. I don’t think it was there the last time I visited, which was probably about 50 years ago. I guess I should keep a little more up to date.

  • The Senate Tax Bill Will—Oh, You Know Already, Don’t You?

    I still feel like crap today. On the bright side, I feel slightly less like crap than yesterday. Nevertheless, that probably means I should stick to nice, easy subjects. I think I managed to screw up yesterday’s post about the income of the top 1 percent five or six times before I finally got it right.¹

    The Republican tax bill is always good for an easy post. Let’s try that. Here’s the latest Penn Wharton estimate of the effects of the bill all the way through 2040²:

    There you go. By 2040, more than two decades from now, the Senate bill will create an extra $2 trillion in debt. At the same time, it will increase both GDP and labor income by 0.5 percent. That’s 0.02 percent per year, which is basically noise level. We can’t even come close to measuring GDP that accurately. For all practical purposes, the likely effect of the bill on GDP and labor income is zero.

    No one in the Republican Party seems to care about that, and charts full of numbers don’t have any impact on the average voter. Still, just for the record, I figure it’s worth posting this stuff. Someone ought to.

    ¹It’s now correct, and probably fairly understandable too. Thanks, readers!

    ²The Penn Wharton folks produce both high and low estimates. I’ve averaged them here to get a single number for each category.

  • Is Donald Trump Using the Justice Department to Punish CNN?

    Why is the Justice Department suing to prevent AT&T’s acquisition of Time Warner? Is it for legitimate antitrust reasons? Michael Hiltzik makes that case here. Or is it because Time Warner owns CNN and Donald Trump hates CNN? Is this just a way for Trump to take revenge on his least favorite news channel? James Hohmann provides seven reasons that might be the case:

    1. In every other area, the Trump administration is bending over backward to boost big business.
    2. The head of the antitrust division has changed his view on the issue to match the president’s.
    3. The administration’s denials are full of lawyerly language that leaves wiggle room.
    4. Trump has repeatedly demonstrated that he does not respect the independence of the Justice Department. Why would he prize the autonomy of the antitrust division any more than he did the FBI?
    5. There are no precedents for this kind of lawsuit succeeding.
    6. The president has made no secret of his deep personal disdain for CNN.
    7. White House officials have previously hinted that Trump might wade into the antitrust process.

    I have no particular ax to grind here. I’d like to see antitrust laws prosecuted more vigorously as a general matter, but I also want to see them applied even-handedly. And I don’t care about CNN one way or the other. However, I’d like to add one more point to Hohmann’s seven. I’m just not sure which way it cuts:

    1. Trump would have to be an idiot to have interfered with this. AT&T’s lawyers are going to demand every scrap of evidence about how this decision was made, and given Trump’s public statements about CNN it’s possible that a judge will let them have it. That probably won’t turn out well.

    This is obviously a good reason for Trump not to have interfered. On the other hand, Trump is an idiot. So I don’t know how to score this one.

    In any case, this could be a pretty entertaining case if AT&T’s lawyers decide to go to the mats. I’d be curious to hear from an expert or two about how likely it is that AT&T could do some serious damage to the Trump administration during discovery.

  • Donald Trump’s Response to Disaster Aid for California: Nothing

    Paul Kitagaki Jr/Sacramento Bee via ZUMA

    A few weeks ago, California requested $7.4 billion in disaster aid following the massive series of wildfires in the northern part of the state that killed 43 people and destroyed nearly 9,000 structures. Actually, let’s back up. That’s not quite accurate. California’s Democratic governor, its two Democratic senators, and its 39 Democratic members of Congress asked for $7.4 billion. With only one exception, California’s Republican delegation boycotted a request for disaster funding for their own state.

    Yesterday the Trump administration responded to California’s request:

    While the request includes anemic supplemental funding for states ravaged by hurricanes, it contains no funding whatsoever for rebuilding the communities in California devastated by the recent wildfires…. “For the Administration to not request even a single additional penny to help rebuild the communities devastated by the worst fires in California’s history is mind-boggling,” [said the two congressmen who led the disaster relief effort].

    This brings the toxicity of partisan politics to jaw-dropping levels. California Republicans won’t even stick up for their own state, and a Republican president offers nothing in response to an enormous natural disaster. Why? No reason was given, but Occam’s Razor suggests that the best guess is the most obvious one: California is a Democratic state that didn’t vote for Donald Trump. You don’t mess with the family.

  • Surprise! The Senate Tax Bill Kills the Middle Class, But It’s Great For the Rich

    A few days ago the Joint Committee on Taxation released its analysis of the Senate tax bill, which I wrote about here. My conclusion was that the bill was “batshit crazy,” but Republicans cried foul. The JCT analysis included the effects of eliminating Obamacare’s individual mandate, and while that seems fair to me, it didn’t to them. They want just the taxes, ma’am.

    The Tax Policy Center heard their pleas and did an analysis based solely on the tax provisions in the bill. Here it is:

    In 2027, the very poorest will see a small tax increase and the middle class will see a tiny decrease. The rich, of course, will get a sizeable tax cut.

    But believe it or not, that’s not the worst part of the TPC analysis. The chart above is an average of all the winners and losers in each income category. But if you dig a little deeper, just how many winners and losers are there? This many:

    Among middle-class families, 50-70 percent will see a tax increase by 2027. Among the rich, that number is only 15-30 percent. And among the super-duper rich, almost no one sees a tax increase.

    It’s really hard to think of things to say about these charts. They come out every few days, and they’re from reputable sources. And they all show a massive preference toward the rich. But Republicans like Orrin Hatch pretend to be outraged when anyone points this out. Mitch McConnell and Paul Ryan stay scarce so they don’t have to answer questions. Other Republicans insist that these analyses are totally bogus because they don’t account for supercharged growth, and Fox News eagerly joins in. Donald Trump, who would reap tens of millions of dollars from this tax bill, routinely lies in public about how he’d “get killed”—and then tosses in a real thigh slapper: “The deal is so bad for rich people, I had to throw in the estate tax just to give them something.”

    Yuk yuk. But this is fundamentally why Donald Trump is president: despite everything, rich people backed him because he’d give them a tax cut and Hillary Clinton wouldn’t. The love of money may not be the root of all evil, but it sure is responsible for a lot of it.

  • Lunchtime Photo

    I have no idea what this is. I shot it while I was roaming around the Knockneer estate in Killarney, and I was attracted by the almost fiery red of the backlit leaves. Leaves? I guess they’re leaves. For some reason, I didn’t bother to look more closely after I took the picture. But what else could they be?

    UPDATE: So far, the consensus seems to be that the red stuff is some kind of fungus. Or perhaps just peeling bark. I’m going with the bark thing for now. I sure wish I’d taken a look at it when I had a chance.

  • America Has Richer Rich People Than Most Countries

    I’ve got some kind of nasty stomach bug and I feel lousy. Does that mean I should take the rest of the day off, or that I should use it as an excuse to be meaner than normal to the usual suspects? Decisions, decisions.

    In the meantime, here’s a chart that I already made so it’s ready to go. It shows the change since 1980 in how much wealth the top 1 percent controls in a bunch of rich countries:

    This comes from Jonathan Rothwell, who ultimately places the blame for high US inequality on doctors, lawyers, and bankers. I’m not so sure of that, but I thought the chart was worth putting up just to show that high income inequality isn’t some inevitable feature of modern capitalism. Every other country has lower levels than us, and many of them have way lower levels. This is basically a political decision, and we’ve decided that the rich should be very rich indeed.

    And then we decided they need a tax cut. After all, since they make more money, they pay more taxes. That’s just not fair, amirite?

    Hmmm. I guess I decided on the “meaner” option.

  • Here’s How the Residents of Super-White America Voted in 2016

    I’ve long been a skeptic of the theory that Donald Trump won the presidency because of his appeal to white racial anxiety. He certainly tried to win on that basis, but exit polling is pretty clear that, nationwide, Trump won no more of the white vote than Mitt Romney did. It’s true that he won the majority of the white vote, but that’s because Republicans always win the majority of the white vote.

    But that’s just the 100,000-foot view. What happens when you dig deeper? Thomas Edsall, who consistently writes some of the most thought-provoking analysis around, takes a look at some of the data that’s now starting to trickle out and presents us with this chart that compares the 2012 and 2016 elections:

    In most places, even those that are heavily white, the red trendline is below zero, which means Trump won a smaller share of the vote than Romney did. The only places where he outperformed Romney were in the very whitest suburbs and small towns:

    The very white municipalities that voted so strongly for Trump believe that they have reason to worry about the racial stability of their neighborhoods….It is in these locales, which are experiencing the earliest signs of minority growth, that anxiety over approaching diversity is strongest. Put another way, anger, fear and animosity toward immigrants and minorities was most politically potent in the communities most insulated from these supposed threats.

    ….Will Stancil, a research fellow at the Institute on Metropolitan Opportunity who created the chart, explained….“To the extent Trump really resonated, it was in heavily-white areas — and that includes exurbs at the urban fringe, rural areas, and many heavily white second-ring suburbs,” Stancil wrote in his email. “It was his message resonating in those areas that gave him a fighting chance at all.”

    This fits a lot of the evidence we have. As it turns out, racial anxiety among whites really isn’t widespread. But it is strong among whites in a very small number of ultra-white communities. That’s why Trump didn’t do unusually well in California, Arizona, New Mexico, or Texas, where the immigrant population is highest. People in those states have lived with Mexican immigrants for a long time and learned that the sky isn’t falling. But farther away, in the very white communities of the upper Midwest, this is still brand new stuff. Unlike Californians, who know better from experience, they buy the idea that immigrants are unusually crime prone and take away everyone’s jobs—and that makes them scared. They’re a receptive audience for Trump’s “Build a Wall” message.

    All this said, we’re still left with a question: if the only place Trump did better than Romney was in the very whitest communities, was that enough to push him to victory? After all, he did worse than Romney everywhere else. Well, Edsall has a chart for that too, showing how Trump performed in the upper Midwest, but you’ll have to click the link to see it. (Spoiler alert: the answer is probably yes.)

    Edsall finishes up with this:

    In some respects, the data gathered by Orfield’s team is good news for Democrats. The core of Trump’s support lies in counties and municipalities like Dravosburg and Elk County, many of which are losing population. They are, in effect, the last gasp of white hegemony.

    Still, immense damage has been done….As the public discourse around issues of social welfare, immigration, national security, and a whole host of other issues becomes highly racialized and explicitly hostile, the potential for open racial conflict may rise. Furthermore, as these negative attitudes toward racial outgroups become increasingly tightly tied to parties, polarization increases and gridlock and a lack of legislative compromise ensue.

    When I look back at the 2016 election, what is really striking is how much influence over the course of events was exercised by the relatively small numbers of voters in super-white municipalities and counties and by the politician who ignited them — how the last gasp of a small fraction of the electorate set the nation on such a dangerous and destructive course.

    Amen. And the faster the politicians who have set fire to this movement—or even merely tolerated it—are sent packing, the better off our country will be.