Kevin Drum

Here's Why Sea World in San Diego Can't Breed Killer Whales Any Longer

| Fri Oct. 9, 2015 1:37 PM EDT

You may have seen the news that Sea World in San Diego will no longer be allowed to breed killer whales:

After an all-day meeting that drew hundreds of supporters and critics of the park, the California Coastal Commission moved to ban captive whale breeding and drastically restrict the movement of whales in and out of the park.

The California Coastal Commission? Why do they have any say over Sea World's orca breeding? One of the charmingly idiosyncratic aspects of governance in California is that the Coastal Commission regulates all construction done within about 1000 yards of the coastline. As you can see, Sea World is well within that boundary, and it so happens that they wanted to build a bigger tank for their killer whales. But they could only do this if the Coastal Commission approved it.

Still confused? Well, the initiative that created the Coastal Commission didn't really put any boundaries on the commission's power. They can pretty much cut any deal they want, which is why they're so furiously hated by every gazillionaire who lives near the coast. In this case, their deal was this: you can build the bigger tank, but only if you stop breeding whales and don't bring any new ones in. And that was that.

This has been today's California Explainer for all you poor folks who are forced to live in less desirable parts of the country and don't understand our tribal customs. You're welcome.

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Ben Carson Is Wrong About Hitler and Guns

| Fri Oct. 9, 2015 12:16 PM EDT

More guns, fewer holocausts?

Ben Carson said Thursday that Adolf Hitler’s mass murder of Jews "would have been greatly diminished” if German citizens had not been disarmed by the Nazi regime…"But just clarify, if there had been no gun control laws in Europe at that time, would 6 million Jews have been slaughtered?" Blitzer asked.

"I think the likelihood of Hitler being able to accomplish his goals would have been greatly diminished if the people had been armed," Carson said…"I’m telling you that there is a reason that these dictatorial people take the guns first."

This got me curious: Did Hitler take away everyone's guns? As you can imagine, I know zilch about the history of gun control in Germany, so I surfed over to Wikipedia, the source of all knowledge, for a quick refresher course. Here's what they say:

  • In 1919, the Treaty of Versaille disarmed Germany. "Fearing inability to hold the state together during the depression, the German government adopted a sweeping series of gun confiscation legislation." This was long before Hitler came to power.
  • In 1928 this legislation was relaxed. "Germans could possess firearms, but they were required to have [] permits…Furthermore, the law restricted ownership of firearms to '…persons whose trustworthiness is not in question and who can show a need for a permit.'" Again, this was before Hitler came to power.
  • In 1938, Hitler relaxed the law further. Rifles and shotguns were completely deregulated, permits were extended to three years, and the age at which guns could be purchased was lowered to 18.

Now, Hitler did effectively ban Jews from owning guns in 1938. However, this is highly unlikely to have affected the fate of the Jews even slightly. The Nazis were considerably better armed and organized, and if Jews had taken to shooting them it would have accomplished nothing except giving Joseph Goebbels some terrific propaganda opportunities. The 1943 Warsaw Ghetto Uprising is a good example of this: Jews fought back, and the result was a few dead Germans and 13,000 dead Jews.

The bottom line is familiar to anyone with even a passing knowledge of history: Hitler was popular. He didn't need to take away anyone's guns. Whatever you think about gun control, using Hitler to defend your position is a bad idea.

Hillary Clinton Wants to Cut Mega-Banks Down to Size

| Fri Oct. 9, 2015 11:24 AM EDT

Bring back Glass-Steagall! This is a popular cry among lefty populists, but it's probably not a very good idea on the merits. Glass-Steagall is a New Deal law that split up commercial banks and investment banks, and it was repealed in 1999. Ten years later Wall Street went up in smoke. But commercial banks and investment banks both had problems, and so did combined banks. The repeal of Glass-Steagall really had nothing to do with it.

On the other hand, the repeal of Glass-Steagall did allow banks to get bigger, and that increased size was a problem. When small banks go bust, we just clean up the mess and get on with things. When gigantic banks go bust, Wall Street goes up in smoke.

So rather than turning back the clock and reinstating Glass-Steagall, a better idea is to address bank size directly. The Fed approved one approach to this a couple of months ago by requiring the very biggest banks to hold larger capital reserves than smaller banks:

As well as making the big banks safer, the rules may also persuade them to get smaller. Capital is an economically expensive funding source for a bank. As regulators demand that large banks have more capital, their overall expenses rise. In turn, the banks may decide to pare down their less profitable businesses and shrink over time. Previous regulatory initiatives that increased capital already seem to have had that effect, and the Fed may want to see that continue.

Hillary Clinton wants to go even further by directly taxing big banks, and taxing them even more if their capital structure is relatively risky. Matt Yglesias runs down her plan for us:

Clinton doesn't spell out precise numbers for her fee, perhaps recognizing that in the real world this would all be subject to negotiation in Congress anyway. But the key pillars are:

  • The fee would be assessed on banks with more than $50 billion in assets (34 banks fit the bill as of today, though two of them are very close to the line) as well as on a handful of other institutions that the government has already flagged for extra regulatory scrutiny.
  • The fee rate would be higher on short-term debt than on long-term debt.
  • The fee rate would be higher on banks with more debt in their financing structure.
  • FDIC-insured bank deposits would be exempt from the fee.

The upshot of all this would be to nudge the banking system toward institutions becoming either smaller or else more boring, because risky activity would be more profitable in a smaller institution than in a larger one. The result would be to push risk out of the kinds of institutions whose failure would be catastrophic, without impeding banks' ability to become big per se.

So wonky. So boring. But, as Yglesias says, also a pretty good idea. That's often the case with well-thought-out plans.

In any case, the Fed plan affects the eight biggest banks in the country. Hillary's plan would affect 34 banks. And of course, the eight mega-banks would have to abide by the Fed's higher capital requirements and Hillary's tax.

All of these plans, by the way, are roundabout methods of reducing the amount of leverage that big banks can engage in. As a purist, I'd prefer to just pass rules that directly regulate leverage levels. But that's easier said than done, and higher capital requirements are a close substitute. Hillary's plan is even more indirect, but it also reduces risk by nudging banks to get smaller. Lots of leverage is still bad, but a smaller bank that goes bust is less catastrophic than a bigger one that goes bust.

More details are here, part of the Clinton campaign's rather startling array of detailed policy statements. It's enough to make you think she might be a wee bit more serious than anyone on the Republican side.

All Those Annoying Drug Ads on TV Might Be Paying Off

| Fri Oct. 9, 2015 10:48 AM EDT

Good news! According to a new study, the placebo response is getting stronger, and if this continues perhaps all our pain woes will soon be treatable with sugar pills. But this is happening only in the United States for some reason. Why?

One possible explanation is that direct-to-consumer advertising for drugs — allowed only in the United States and New Zealand — has increased people’s expectations of the benefits of drugs, creating stronger placebo effects. But Mogil’s results hint at another factor. "Our data suggest that the longer a trial is and the bigger a trial is, the bigger the placebo is going to be," he says.

Longer, bigger US trials probably cost more, and the glamour and gloss of their presentation might indirectly enhance patients’ expectations, Mogil speculates. Some larger US trials also use contract research organizations that can employ nurses who are dedicated to the trial patients, he adds — giving patients a very different experience compared to those who take part in a small trial run by an academic lab, for instance, where research nurses may have many other responsibilities.

So good old glamor and gloss—American specialties, for sure—could be making anything in the shape of a pill more effective. On the other hand, the paper itself suggests a more prosaic possibility:

Our study results are of course potentially influenced by trends in study quality and/or publication bias....In the past, small studies were conducted. If they had a large placebo response, they did not show a positive treatment advantage and therefore they were not published. In contemporary U.S. studies, trials are typically large enough to detect positive treatment advantage despite large placebo responses, and therefore reported placebo responses appear to have increased.

So it's possible this is all an artifact of publication bias. In the past, studies with null results for the target drug (i.e., large placebo responses) never saw the light of day. Then pharma companies got smart, and started running larger trials that would show statistically significant results no matter what. So all the studies got published, even those with large placebo responses.

You may decide which to believe. I recommend believing the glitz and glamor explanation, since glitz and glamor are bound to get ever glitzier and more glamorous over time, and are thus likely to improve your pain more. And really, who cares why your pain gets better? If it's better drugs, fine. If it's because pharma companies are spending lots of money on marketing, fine. Just make it go away, please.

Donald Trump's Base Is Pretty Old, But Not All That Conservative

| Fri Oct. 9, 2015 9:25 AM EDT

Someone asked me the other day where Donald Trump's support comes from. I realized I didn't really know, so I figured I should check it out. According to David Brady and Douglas Rivers, a pair of political scientists at Stanford, recent YouGov polls break it down like this:

  • Not particularly ideological....20 percent of Trump's supporters describe themselves as “liberal” or “moderate,” with 65 percent saying they are “conservative” and only 13 percent labeling themselves as “very conservative.”
  • A bit older, less educated, and less affluent than the average Republican.
  • Slightly over half are women.
  • About half are between 45-64 years of age, 34 percent over 65, and less than 2 percent younger than 30.
  • One half of his voters have a high school education or less, compared to 19 percent with a college or post-graduate degree.
  • Slightly over a third of his supporters earn less than $50,000 per year, while 11 percent earn over $100,000 per year.

The only two of these that are noteworthy are the first one, which shows that Trump's appeal spans ideological boundaries, and the fourth one, which shows that his support comes almost exclusively from the middle-aged and the elderly. Aside from that, he appears to be a fairly standard issue Republican.

Don't Do It, Paul!

| Thu Oct. 8, 2015 7:29 PM EDT

REPORT: John Boehner is personally asking Paul Ryan to step up and be Speaker. They have spoken twice today by phone....Boehner told Ryan he is the only person who can unite GOP at this crisis moment. Ryan undecided but listening, per source.

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Oops. Putin's Cruise Missiles Still Need a Little Work.

| Thu Oct. 8, 2015 3:02 PM EDT

I guess Vladimir Putin's cruise missiles aren't quite as awesome as he thought:

Cruise missiles fired by Russia from warships in the Caspian Sea at targets in Syria crashed in a rural area of Iran, senior United States officials said on Thursday.

Bummer, dude. Can we now have at least one day where we don't have to hear about how Russia's crappy military is going to upend everything in the Middle East and send the US scurrying for cover?

Put Frances Perkins on the Ten-Dollar Bill

| Thu Oct. 8, 2015 2:46 PM EDT

Wonkblog informs me that the Treasury Department really, really wants me to vote on which woman should replace Alexander Hamilton on the ten-dollar bill. OK. So how do I do that?

Apparently I can use Facebook, Twitter, or Instagram to submit my vote with the hashtag #TheNew10. So that takes care of all the people who are on social media. What about everyone else? Well, the Treasury still wants to hear from you! That's not immediately obvious, mind you, but it turns out that if you click here, provide your name and your email address, and then answer a question to prove you're a human, you can tell them your thoughts.

FWIW, my choice is Frances Perkins. I feel like it's a good idea to keep up the tradition of having people on our currency who have been in government service (mostly presidents, but also cabinet members like Hamilton or key members of the constitutional convention like Benjamin Franklin). It also, for obvious reasons, ought to be somebody whose fame was gained at least 50 years ago. Perkins fits all those requirements. She was the first woman to serve in the cabinet, and more than that, her fame doesn't come merely from being first. She was also an unusually effective Secretary of Labor during a period when the labor movement was a tremendous and growing power in American politics. Add to that her authorship of the Social Security Act and her key role in a wide variety of other New Deal legislation, and she's not just the most influential Secretary of Labor of all time, but arguably one of the four or five most influential cabinet members ever.

Sadly, the whole New Deal thing will probably make her too politicized to win. She's my choice, but my prediction is Rosa Parks. We'll find out next year.

Kevin McCarthy: "I'm Not the Guy"

| Thu Oct. 8, 2015 1:14 PM EDT


North Carolina Rep. Walter Jones (R) sent a letter to the No. 4 House Republican saying any candidate for leadership who has committed any "misdeeds" since joining Congress should "withdraw" from the contest.


House Majority Leader Kevin McCarthy on Thursday abruptly dropped out of the race to replace John Boehner for speaker, a stunning move that further complicates an already chaotic House leadership contest....Said Rep. John Fleming (R-La.), a member of the conservative Freedom Caucus: “I was shocked just like everyone else…he said something to the effect of I’m not the guy.”

Ummm....WTF? I will put off further comment until I pick up my jaw from the floor.

UPDATE: From no less a conservative icon than Erick Erickson, we get this:

There’s a guy out in America who has emails for a massive number of members of Congress and the email addresses of highly influential conservatives outside Congress.

A few days ago, he emailed out to 91 people, including these members of Congress, an email with a series of links to stories alleging a relationship between Rep. Kevin McCarthy (R-CA) and Rep. Renee Ellmers (R-NC) of North Carolina. It is worth nothing that the two deny a relationship.

But the email began circulating pretty heavily. Conservatives were buzzing about it. The first line pointed to the current scandal about Denny Hastert and concluded suggesting that if the rumor about McCarthy and his personal life were true, he was a national security risk.

Okey dokey.

We Get It: Paul Krugman Has Been Right All Along

| Thu Oct. 8, 2015 11:46 AM EDT

Here is Paul Krugman just in the past month:

  • It’s now seven years since I warned....
  • Who could have predicted such a thing? Well, me....
  • Many of us warned from the beginning that the multiplier was probably much larger....
  • Those of us who took our Hicks seriously calling the big stuff — the effects of monetary and fiscal policy — right, and those who went with their gut getting it all wrong....
  • As I’ve been trying to point out....
  • As I’ve written many times....
  • Attacks on Keynesians in general, and on me in particular....
  • Here’s what I wrote three years ago....

And that's not even counting his print columns, which I didn't have the patience to plow through. I'm a pretty big fan of Krugman, but even for me this stuff has long since gotten old. Maybe it's time to go cold turkey on the whole "I was right" meme and just concentrate on the economics.