Reihan Salam links today to a post by UCLA sociologist Gabriel Rossman on the future of television if the cable universe moves to a la carte pricing. Long story short, simple economics suggests that we'll all cut back on the number of channels we subscribe to, which in turn means that we'll end up with both (a) fewer channels and (b) channels with lower production values. I've long thought this was pretty obviously true, and it's what's made me sort of a mushy supporter of a la carte pricing. Still, a supporter I am, and Reihan suggests what will happen if/when this comes to pass:

But this could mean that U.S. viewers will consume more entertainment that is peer-produced, produced overseas, or by institutions that otherwise work outside of the WGA and SAG structure. Quality writing is of course very important, but perhaps quality writers will attach themselves to hyper-realistic animation projects, etc. No more actors! Or rather a somewhat smaller cadre of actors who focus primarily on screen-capture work, and who make middle-class wages rather than outsized sums. There are many, many ways this phenomenon could play out.

Italics mine. For what it's worth, this is what I think is going to happen in the medium term. I'm not sure just how distant this is, but I don't think we're too far away from an era where a single person — or perhaps a small team — can create high-quality, 100% CGI shows that are virtually the equal of what you see today on network TV. Think but with supercomputers and a crack creative team. Basically, you'll need some good scriptwriters and a few good designers and that's it. Brave new world, eh?

More political science wonkery! Eric McGhee wants to know if Yes votes on health care reform, the economic stimulus, cap-and-trade, and TARP were bad for vulnerable House Democrats. As I noted yesterday, regressing this on the entire Democratic caucus isn't very interesting, since the results are swamped by lots of members of Congress who voted Yes on all four but are in very safe seats and won reelection easily:

So I modeled Democratic vote share in contested House districts using this count of "yes" votes, plus campaign money in 2010 (from here and here) and each district's House and presidential vote in 2008 as controls (here). The model also estimates whether the effect of roll call votes depended on the partisanship of the district, as captured by the 2008 presidential vote.

....What does this model tell us about roll call votes on these four bills? Simple answer: they mattered. A lot. A Democratic incumbent in the average district represented by Democratic incumbents actually lost about 2/3 of a percentage point for every yes vote. That doesn't sound like a lot, but that's for incumbents in districts that voted 63% for Obama.

....What might have happened if vulnerable Democrats hadn't voted for any of the four bills?....The Democrats gain back 32 seats, enough to retain control of the House.

Now, McGhee isn't saying vulnerable Dems shouldn't have made these votes. In fact, he doesn't even think it cost them their majority, because it turns out there are some other confounding factors. Read the full post for details. "But," he says, "it seems safe to say that they had a big negative effect on Democratic performance, and they certainly didn't help."

Perhaps so. For now, though, treat it as just another data point. It's probably going to take a while for the real answers to emerge from the data.

It's time for my biannual look at the exit polls. This won't explain everything about Tuesday's election. It's not intended to. What it is intended to do is provide a baseline that shows where Democrats did better and where they did worse than they did in the last midterm election.

First things first: In 2006 Democrats won the popular vote for the House of Representatives by about 8 points. In 2010, Republicans won the popular vote by about 6 points. That's a shift of 14 points. There are plenty of broad structural explanations for this—the economy, dislike of health care reform, whatever—but beyond that, we'd also like to know if there were any specific groups that helped power this Republican victory. Was it the youth vote? The evangelicals? What?

To find out, you have to look for groups that swung by substantially more or less than 14 points. So here they are. Based on a comparison of 2006 and 2010 exit polls, here are the demographic groups that showed the biggest swing into the Republican column this year:

  • Nonvoters from 2008 (+56)
  • Independents (+36)
  • Rural voters (+25)
  • Northeast voters (+20)
  • Age 65 and older (+21)
  • Catholics (+21)
  • White voters (+19)
  • Income under $30,000 (+19)
  • Income over $200,000 (+19)
  • High school grads (+19)

The most intriguing result here is the top one: People who didn't vote in the previous presidential election shifted into the Republican camp at a fantastic clip. I have no idea why. Maybe people who suddenly care about voting even though they didn't two years ago are usually motivated by animus toward whoever won. Hard to say. Still, intriguing though this is, the actual number of people in this category is small enough that it's not especially important.

The most important categories are probably white voters and older voters, both of whom shifted Republican far more than the general population. Beyond the raw size of the shift, however, whites are important because their absolute numbers are so big and older voters are important because their big Republican shift was accompanied by higher turnout. Conversely, although rural voters also shifted Republican in big numbers, their importance was diluted because their turnout was down.

And then there are the "independents." The scare quotes are deliberate, because it's hard to know what to make of them. It's a big group and it shifted strongly Republican, which makes them an important factor in the election. But there's more to this. Self-described "moderates" turned out in lower numbers than in 2006 and shifted Republican in lower numbers than average. Put these two things together and they suggest that there's a large number of independent voters who have shifted their self-ID from moderate to conservative. Were they really conservative all along but only started fessing up to it this this year? Or is there a genuine ideological shift in progress? Hard to say. But either way, this year they showed up at the polls in much larger numbers than in 2006. This is the famous "enthusiasm gap," likely driven by tea party fervor and millions of dollars of Medicare demagoguery.

So: White voters and older voters swung big, and conservative leaners turned out in bigger numbers than usual. Add to that Northeasterners and Catholics, and you've accounted for most of the big swings.

But was there anyone out there who showed unusual loyalty to Democrats this cycle? Indeed there were. Here are the groups that showed the smallest swing into the Republican column:

  • Liberals (-6)
  • African-Americans (-2)
  • Mothers (+1)
  • "Other" religion (+2)
  • Age 18-29 (+5)
  • No high school (+7)
  • Union households (+8)
  • Big city voters (+8)

Self-described liberals actually voted for Democrats in bigger numbers than in 2006. They also showed up to vote at the same rate as 2006. Unfortunately, conservatives showed up in bigger numbers, swamping the liberal tide. Likewise, African-Americans stayed loyal to the Democratic Party, but their numbers were too small to make a big difference.

One of the most interesting categories here is mothers. They didn't swing Republican at all, voting for Democrats at virtually the same rate as in 2006. I don't have a good explanation for this. Health care reform, maybe? (Single women swung Republican at the same rate as the general population.)

And finally, the youth vote. According to CIRCLE, turnout among young voters was down compared to 2006 (20 percent vs. 23 percent). And while they swung away from Democrats a bit, it wasn't by much. They remained pretty loyal to the Ds, but they just didn't show up to vote in big numbers.

So that's that. We'll all be arguing for months about what the big narrative is, but at least if someone tells you a story about how it was evangelicals or blue-collar workers or Hispanics that really made the difference, you'll know just how big a difference they really made. In a few cases it's a lot, but in most cases it's not.

The Fed and You

Felix Salmon explains the mechanics of quantitative easing:

The way that QE works is that the Fed will publish a schedule of how many Treasury bonds it intends to buy and when....What that means is that the New York Fed has a direct line to the biggest banks in the world (Goldman Sachs, Morgan Stanley, Deutsche Bank, etc — 18 in all). And it gets all those banks to compete with each other, either directly or on behalf of their clients, for who will sell the Fed the Treasury bonds it wants at the lowest price.

....The people selling Treasury bonds to the Fed, then, are big banks, who are told in advance exactly how many Treasury bonds the Fed wants to buy. As a result, they’re likely to buy Treasuries ahead of the auction, with the intent of selling them to the Fed at a profit....Once the banks have made that profit, it’ll get paid out in bonuses to the people on the bank’s Treasury desk, with the rest going to their shareholders. We’re not exactly helping the unemployed here.

More detail at the link. And for yet more detail, Felix recommends Shahien Nasiripour's long HuffPo piece about Fed policy and how it works.

Folk wisdom suggests that budget deficits cause trade deficits, but in reality this isn't quite true. Dean Baker explains the reality:

However, there is a relevent accounting identity which is always true. The trade surplus is equal to net national savings....The implication of a large trade deficit is that either public savings must be very low or negative (i.e. a large budget deficit) and/or we must have very low private savings. There is no possible way around this accounting identity.

This means that if the U.S. has a large trade deficit, as it currently does, then it must be the case that either households have very low saving or the country has a budget deficit. At the peak of the housing bubble, private saving was very low, since households spent based on their housing bubble wealth. Now that much of this bubble wealth has disappeared with the collapse of house prices, saving has moved back toward more normal levels. This means that to sustain the same level of output, the budget deficit must rise. There is no way around this identity.

To say this slightly differently: with private saving at normal levels, if you want to reduce the budget deficit (as conservatives say they do) then you have to reduce the trade deficit. And how do you do that? The most obvious way is to engineer a weaker dollar, which makes exports cheaper and imports dearer. That means we sell more stuff to foreigners and buy less from them. But as a few minutes listening to Glenn Beck or any other conservative talker will convince you, conservatives are dead set against this. A weak dollar, they believe, is a sign of national decay.

So then what? If you have to reduce the trade deficit in order to reduce the budget deficit, but you want the dollar to remain strong, what are your options? Well, an economic slowdown would do the trick, since that means we'd buy less stuff from overseas. That worked a treat during our most recent recession. But that's pretty much it. In other words, as Dean says, if you want a lower budget deficit and you want to keep the dollar strong, "you must want [] the level of output in the United States to fall and its unemployment rate to rise. That is the only plausible way that the accounting identities can be kept in balance." Will somebody please tell John Boehner?

John Sides asks today for the single factor that best predicts which Democratic House incumbents lost their seats on Tuesday. It's not ideology, he says, or how you voted on TARP, or any of those things:

The best predictor by far is none of those. It is simply how Democratic their district is. In our dataset, Eric McGhee and I measure that with the percentage of the vote that Obama received in 2008....In all 402 contested House elections, the 2008 presidential vote in that district would explain 83% of the variation in the Democratic House candidate's vote share. Nothing else in our dataset comes close.

I'm a big fan of simple structural explanations like this, but I've got a big problem here. Sides's chart is above, and it does indeed seem to show a very clean relationship. But a big reason for that is the large number of districts that are wildly partisan: above 60% is entirely Democratic and below 40% is (almost) entirely Republican.

This is no surprise, and also not very interesting. Of course massively partisan districts are highly likely to return partisan results. For one thing, most of them are hardly even contested.

But what happens if you stay in the general vicinity of the middle? That's the thick black box I added to to chart, and it shows only districts where Obama won 40-60% of the vote in 2008. I've enlarged it on the right. Just by eyeballing it, it looks like there's still a relationship, but it's a much weaker one. Note, for example, that the Republican pickups (bright red) are spread fairly evenly across the entire range. The overall regression line might be just as steep (I can't say just by looking), but it's definitely a lot muddier. It certainly explains way less than 83% of the variation in the 2010 vote.

A model that gets most of its power from its extremes doesn't strike me as very explanatory. Everyone knows there's no action there. What we want is a model that explains what happens in districts that are truly contested. Looking solely at the 2008 presidential votes doesn't seem to get us very far there.

Jonathan Bernstein tells Democrats how they can win back the House in 2012:

The one thing that the political science literature tells us that matters in Congressional elections and is to a large extent within the control of the parties is the quality of candidates....What political scientists have learned is that this is a case in which party prophesies are to a large extent self-fulfilling. Believe that the party is going over a cliff, and you’ll wind up with third-rate candidates, who will then lose — not because of the general environment, but because bad candidates lose Congressional elections. Believe that your party is about to benefit from the wave, and you’ll wind up with excellent candidates who will win regardless of whether such a “wave” actually existed.

It seems to me that the GOP did a great job of selling their own potential candidates that 2010 would be like 1994. That’s behind the data that Brendan Nyhan reported last week about the large spike in quality GOP candidates, especially challengers. I strongly suspect that when all is said and done, that’s going to be the controllable variable that made the most difference, much more than choices about pushing the agenda for the Democrats or opposing it for the Republicans (with the possible exception of economic policy, but it’s always hard to know the effects of any potential changes, there).

He also recommends this post from Ed Kilgore, James Vega, and J.P. Green, begging liberals not to degenerate into a frenzy of finger-pointing and general circular firing squad-ishness. I share Jonathan's "good luck with that" reaction, but it's still worth a read. 2010 was not the end of the world, Republicans are no more competent than they've ever been, and 2012 is only 24 months away. There's no reason John Boehner can't be a one-term Speaker of the House.

The Unhappiest Meal

This is from a couple of days ago:

San Francisco's board of supervisors has voted, by a veto-proof margin, to ban most of McDonald's Happy Meals as they are now served in the restaurants. The measure will make San Francisco the first major city in the country to forbid restaurants from offering a free toy with meals that contain more than set levels of calories, sugar and fat.

....Daniel Conway, spokesman for the California Restaurant Assn., bemoaned the ordinance's passage and contrasted it with San Franciscans' exuberant feelings after the Giants won the world series on Monday night. "One day you're world champions, and the next day, no toys for you," Conway said.

That's mighty sad. But here's what I'm curious about: does McDonald's or the California Restaurant Assn. have any kind of constitutional case to make against this statute based on the commerce clause? The obvious answer is no: the commerce clause merely gives the federal government the right to regulate commercial activity if it wants to. If it doesn't, there's nothing stopping states or local governments from passing any regulation they want. And they do. Every state has different insurance regulations, different environmental regulations, different health and safety regulations, etc.

And yet....something here bothers me. Leave aside the substantive question of whether San Francisco's decision was a righteous blow for our children's future or the first step down the slippery slope of fascism. McDonald's, like every big company, sells standardized merchandise nationwide. This is impractical if every city in America decides to have its own rules. No toys in San Francisco. No trans fats in New York City. No styrofoam containers in Houston. No factory farmed beef in Seattle. No California potatoes in Boise. No artificial sweeteners in Boston. Etc.

I dunno. Does this make sense? What's the proper dividing line between states and cities being allowed to set their own rules as they see fit, and nationwide companies being allowed to effectively sell their products nationwide? I haven't really thought this through, but I imagine plenty of others have. What's the state-of-the-art thinking on this?

Joe Klein:

Normally, I don't have much patience for the whining on the left about the Blue Dog democrats — who were sliced in half on Tuesday, losing at least 28 of their 54 seats. When they lose, the Democrats lose control of the Congress. This year, however, I do feel that there is an argument that, to an extent, the Dogs brought this on themselves by being penny-wise, dogpound-foolish. The argument goes like this: a larger stimulus package might have helped the economy recover at a faster clip, but the Dogs opposed it on fiscal responsibility grounds. A second argument: the public really has had it with Wall Street, but the Dogs helped water down the financial regulatory bill, gutting the too-big-to-fail provisions. There is real merit to both points. If the stimulus had been bigger and the financial reform package clearer and stronger, the public would have had a different — and, I believe, more positive — sense of the President's agenda.

And don't forget cramdown legislation! Blue Dogs helped weaken it in the House (though it eventually passed) and centrist Dems then killed it in the Senate. If it had passed, it would have moderated the foreclosure debacle, and it would have done so via judges, thus insulating Obama from charges that he was personally helping unworthy homeowners avoid paying the price of their granite countertops.

Would these things have made the difference for Democrats? I'd say there's a pretty good case to be made. A stronger economy combined with a bit more populist bashing of Wall Street could have been the difference between underperforming by ten seats and overperforming by ten seats. Too late now, though. Reducing economic misery just isn't on the legislative agenda anymore.

Why Meg Lost

Speaking of California, are you wondering why Meg Whitman and Carly Fiorina lost? Is it because they had corporate baggage? Because people didn't like the millions of dollars they lavished on their own campaign? Nah. It's because they were Republicans.

Here are the winning margins for Democrats in seven out of eight statewide races this Tuesday: 13, 9, 10, 18, 14, 19, 13. California is still two states (coastal and inland, not north and south), but the blue part of the state is just a lot bigger than the red part and it's really hard for Republicans to win statewide offices. Whitman and Fiorina lost by big margins, but no bigger than any of the other Republican candidates.

(The exception here is the attorney general's race, where Democrat Kamala Harris had a hard time fighting off her San Francisco anti-death penalty rep against LA Republican Steve Cooley. At the moment, the race is still neck and neck.)