Kevin Drum

The Healthcare Two-Step

| Mon Jun. 15, 2009 11:05 AM EDT

Ezra Klein says that Tyler Cowen has a point when he argues that we're running the risk of enacting a healthcare bill without effective cost controls:

But it is baffling to watch him blame this on the Obama administration. As he himself says, the White House is firmly behind the most promising proposals on cost....What stands in the White House's way is Congress. And, more often than not, it's the Republicans in Congress. Liberals, after all, will sacrifice almost anything to radically expand coverage. This leaves cost-conscious conservative facing a bit of a dilemma. They can attack the most vulnerable parts of the policy — the cost controls — in the hopes of bringing the whole thing down. The downside to that, of course, is that liberals simply jettison cost-controls to protect the coverage expansion. For a fiscal conservative, this should be considered the worst of all worlds.

I don't know about Tyler specifically, but this is par for the course for conservatives in general, who basically have two critiques of national healthcare plans.  First, they yell and scream that we're busting the budget if cost controls aren't firm enough.  At this rate, healthcare will be 99% of the federal budget by 2050!  But then, if you concede the point, they yell and scream that your cost controls are rationing medical care.  Do you want to stand in line for months just to get a flu shot, the way they do in all those European hellholes!?

Conservatives can bounce back and forth between these mutually hypocritical positions pretty much forever.  Why?  Because they're effective.  The first makes earnest liberals feel guilty because we basically agree as a policy matter.  The second is the greatest public argument against national healthcare ever invented, regardless of whether or not it's actually true.  The combination of the two has won the day for conservatives for decades.  Why give up a winning strategy now?

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Why Steal the Election?

| Mon Jun. 15, 2009 10:20 AM EDT

Here's a quick question I haven't really seen anyone address regarding the Iranian election.  Assuming that the conventional wisdom is correct and it was stolen, why did they do it?  If Ahmadinejad stole it on his own, that's easily explainable as a pure coup/power play.  But if the clerical regime went along — which seems likely — what was it they were afraid of?  Mousavi was hardly the first reformist to run for president, after all, and he wouldn't have been the first to win.  What, precisely, was the threat that Mousavi presented to them?

Obama and Leverage

| Mon Jun. 15, 2009 12:52 AM EDT

The Wall Street Journal describes the financial industry regulatory reform that Barack Obama is expected to unveil this week:

The plan stops short of the complete consolidation of power that some lawmakers have advocated. For example, it will allow several agencies to continue supervising banks. It also won't place specific limits on the size or scope of financial institutions, but it will make it much harder for large companies to be so overleveraged that they threaten the broader economy.

....The plan calls on the Fed to oversee financial institutions, products, or practices that could pose a systemic risk to the economy. It will create a "council" of regulators to monitor this area as well. Government officials believe this arrangement will forestall companies from growing large and overleveraged without substantial federal supervision, as happened, for example, in the case of giant insurer American International Group Inc.

The Fed will likely have the power to set capital and liquidity requirements for the U.S.'s largest financial companies and scour the books of a wide range of firms. It is unclear what enforcement powers the central bank will have; that likely will be a point of contention as lawmakers debate the issue.

I'm OK without complete consolidation.  Box drawing exercises often just ignite turf battles without really accomplishing much.  I'm also OK with not trying to limit the size of financial institutions.  I'm semi-persuaded that it might be a good idea to do this, but I also suspect that it's fanciful to think that it could work.  The limits would have to be draconian, compliance would have to be almost perfect worldwide, counterparty connections would have to be monitored as rigorously as size, and companies would almost certainly be able to figure out ways to evade the regulations.  This seems like a tide that's nearly impossible to hold back.

But leverage — that's critical.  For the past two decades we've not only ignored increasing leverage in every nook and cranny of the financial world, we've made it worse.  LTCM blew up in 1998 because of astronomical leverage and afterward Alan Greenspan produced a report saying we should "encourage" financial institutions to limit their leverage.  Result: nothing.  In fact, things got worse.  Basel II followed Basel I and loosened capital adequacy requirements.  In 2004 the SEC allowed big Wall Street investment banks to increase their leverage ratios.  Off balance sheet leverage skyrocketed with no pushback from anyone.  At the consumer level, zero down mortgages became common.  The shadow banking system went almost entirely unregulated.  All this plus a tsunami of cheap money made disaster almost inevitable.

If Obama's plan truly addresses leverage — everywhere and in all its guises — and if he can persuade the rest of the world to follow suit, he will have really accomplished something.  It's not the only thing we need to do, but it's the most important.  When we get the details of his proposals to regulate leverage, that alone will tell us most of what we need to know about whether he's really serious about taking on Wall Street.

Factlet of the Day

| Sun Jun. 14, 2009 12:14 PM EDT

From a New York Times Magazine article about gigantic data centers and the power it takes to run them:

While it once took 30 to 50 years for electricity costs to match the cost of the server itself, the electricity on a low-end server will now exceed the server cost itself in less than four years — which is why the geography of the cloud has migrated to lower-rate areas.

According to Jonathan Koomey, a scientist at Lawrence Berkeley National Laboratory, the internet consumes 1 to 2 percent of the world’s electricity.

The Vote in Iran – Revisited

| Sun Jun. 14, 2009 11:27 AM EDT

Yesterday I posted a chart showing that as Iran's Interior Ministry announced election results throughout the day, the winning percentage for Mahmoud Ahmadinejad had stayed almost eerily constant.  It seemed likely that in a genuine election there would have been a little more variation, so this looked like a piece of evidence that the vote count had been rigged.

It still seems likely that the vote was rigged, but the steady vote count apparently doesn't prove anything one way or the other.  Nate Silver plotted the 2008 U.S. election results using waves of states in alphabetical order, and he came up with an almost dead straight line, just like the Iranian results.  One of Andrew Sullivan's readers did the same with the results as announced every half hour through the night, and again the line was as straight as a laser.  So this is apparently a null piece of evidence.

But now I'm curious.  The Sullivan graph shows that by 7:30 pm Eastern time, when you have two data points, you could predict the final popular vote in the 2008 election with about 99% accuracy.  Question: would you get the same results if you plotted the last five or six elections?  If so, it means that most years we'll know with almost complete certainty who the winner is by 7:30 pm, exit polls be damned.  Can this really be true?

New York, New York

| Sat Jun. 13, 2009 10:54 PM EDT

In a couple of weeks I'll be taking a few days off and jetting to New York City for a short vacation.  Marian has never been before, and neither has half of the couple we're going with.  So far, the Circle Line tour and the Empire State building are on the agenda, as well as an afternoon at Carnegie Hall, where a friend of ours is singing.  Anybody have other suggestions?  Both obvious and nonobvious ones are OK.  We're staying at a place on 55th Street between 6th and 7th Avenues, so restaurant suggestions in the general area would be great too.

Marian constructed our San Francisco weekend a couple of months ago out of suggestions from commenters, which is why I'm going back to the commentariat for help again.  You guys were great with Bay Area recommendations.

Also, anyone know the best place online to get Broadway show tickets?

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Getting Out the Vote

| Sat Jun. 13, 2009 10:11 PM EDT

Alex Moskalyuk reviews Yes! 50 Scientifically Proven Ways to Be Persuasive and offers up this summary of #15:

Labeling people into a social group tends to increase their participation ratio. A group of people was interviewed regarding their voting patterns. Half of them were told that based on their response criteria, they were very likely to vote, since they were deemed to be more politically active. Later on the election day that specific half did indeed turn up a participation rate that was 15% higher than participation of the control group.

Hmmm.  This sounds pretty handy as sort of the mirror image of a push poll.  (1) Identify people likely to vote for your guy, (2) call them up and ask them to participate in a survey because they're "politically active," (3) watch them show up to the polls at a higher rate than normal.  Result: as long as you've done (1) reasonably well, instant boost for your candidate.  Campaign managers take note.

The Vote in Iran

| Sat Jun. 13, 2009 11:25 AM EDT

The chart on the right comes from Andrew Sullivan, and it shows the size of the announced vote for Mahmoud Ahmadinejad in six different official announcements on Saturday.  As Andrew says, "They didn't even attempt to disguise the fraud."  A real vote count would have shown at least a little bit of variation during the day, not the laser-like precision of this one, which shows Ahmadinejad winning almost exactly two-thirds of the vote against reformist challenger Mir Hussein Mousavi every step of the way.

I was at a book party for Bob Wright's The Evolution of God last night, and even then it was obvious that the Interior Ministry was probably rigging the vote.  One of the topics of conversation was: when autocracies decide to do something like this, why do they do it so clumsily?  Why not give Ahmadinejad 52.7% of the vote, which would be at least within the realm of reason?  Or force a runoff and let Ahmadinejad win a week from now?  Why perpetrate such an obvious fraud?

Hard to say.  Maybe it's just too hard to orchestrate something more believable.  Maybe, against all evidence, they believe that smashing victories are always more convincing than close ones.  Maybe it's just rank panic and stupidity.  It's a mystery — and a counterproductive one, too: there isn't a person on the planet who thinks that Ahmadinejad could have won two-thirds of the vote with a turnout of 85%, and the possibility of inciting an internal revolt is a lot higher with a barefaced fraud like this than it would be with something a little more subtle.

On the other hand, maybe we're looking at this through the wrong lens.  Obviously something about Mousavi started to badly spook the powers-that-be during the past week, and maybe they decided something needed to be done about it.  Maybe they wanted to provoke a round of violence from Mousavi's supporters as an excuse to lead a crackdown on dissidents.  And what better way to do that than to make the election rigging so obvious even a child could see it?

Maybe.  My crystal ball is cloudy, though.  I'm not sure what to make of this.

UPDATE: Juan Cole summarizes the evidence that the vote was rigged and then speculates about what happened:

Just as a first reaction, this post-election situation looks to me like a crime scene. And here is how I would reconstruct the crime.

As the real numbers started coming into the Interior Ministry late on Friday, it became clear that Mousavi was winning....The ministry must have informed Supreme Leader Ali Khamenei, who has had a feud with Mousavi for over 30 years, who found this outcome unsupportable. And, apparently, he and other top leaders had been so confident of an Ahmadinejad win that they had made no contingency plans for what to do if he looked as though he would lose.

They therefore sent blanket instructions to the Electoral Commission to falsify the vote counts. This clumsy cover-up then produced the incredible result of an Ahmadinejad landlside in Tabriz and Isfahan and Tehran.

The reason for which Rezaie and Karoubi had to be assigned such implausibly low totals was to make sure Ahmadinejad got over 51% of the vote and thus avoid a run-off between him and Mousavi next Friday, which would have given the Mousavi camp a chance to attempt to rally the public and forestall further tampering with the election.

This scenario accounts for all known anomalies and is consistent with what we know of the major players.

UPDATE 2: The election still seems likely to have been rigged, but this chart apparently isn't evidence for it one way or the other.   Details here.

Friday Cat Blogging - 12 June 2009

| Fri Jun. 12, 2009 2:11 PM EDT

Everybody is green today.  On the left, the mighty hunter Inkblot is in search of his prey: a blade of grass or two to munch on — which he will eventually barf up.  On the right, the mighty snoozer Domino has burrowed her way under a quilt and is wondering why she's being disturbed in her hidey-hole.

In other feline news, Scientific American examines the evolution of the housecat and concludes that it's all about the food bowl.  They love us because we feed them.  Needless to say, this is not exactly breaking news, especially for those of us who open cans of cat food each night and are exposed to such piteous cries that you'd think we had been keeping our furballs in kitty concentration camps all day until dinner was served.  Luckily, they make up for this mercenary attitude by being really cute, which is clearly their comparative advantage.  Otherwise they'd never have lasted.

Detainee Photo Update

| Fri Jun. 12, 2009 1:20 PM EDT

In a conference committee meeting yesterday, House negotiators held firm on their insistence that an upcoming war spending bill not include a Senate amendment that retroactively exempts detainee abuse photos from disclosure under FOIA.  Senate negotiators then dithered a bit, finally backing down only after Barack Obama promised to "take every legal and administrative remedy available" to ensure the photos are not released.  The photos, Obama said, wouldn't add "any additional benefit to our understanding of what happened in the past and the most direct consequence of releasing them would be to further inflame anti-American opinion and to put our troops in greater danger."

Nick Baumann isn't impressed:

Obama's argument against releasing the photos is total poppycock. It should be totally non-controversial that additional photos will add to our understanding of what happened in the past. There's a reason the CIA destroyed the interrogation video tapes: images convey a different kind of truth than words do. It's one thing to read that Americans abused detainees, not just in Abu Ghraib, but throughout the world, encouraged by the highest levels of government. It's another thing entirely to see the photographic evidence of that abuse. The second part of the White House's argument is equally silly, because it can be extended ad infinitum. Are we supposed to keep secret anything that makes the US look bad? If Obama does decide to pull a Cheney and classify the photos as secret, he better get ready for a long slide down a slippery slope. What happens the next time there's something that embarasses the US and might inflame opinion against Americans? Will he classify that, too?

I agree entirely with Nick's second point, but not with his first.  It's true that images are different from words and videotape is different from images.  But we already have plenty of images of detainee abuse, and what we're fighting over here is more images, not videotape.  It's genuinely not clear that releasing yet more images will really accomplish anything.

That doesn't mean that Obama's position is correct.  Preventing release via legislation or unilateral classification just because you don't like the possible result of a court fight is an appalling precedent to set.  If a court orders the photos released, they should be released even if they do end up causing some harm.  Still, I think it's worth at least acknowleding the fact that releasing the photos is likely to do some damage and isn't likely to tell us anything we don't already know.  It's really not a great combination.