Kevin Drum

Friday Cat Blogging - 20 February 2009

| Fri Feb. 20, 2009 3:52 PM EST | Scheduled to publish Fri Feb. 20, 2009 4:07 PM EST
Today's theme is "Looking Skyward."  On the left, Inkblot is reacting to a bird flying overhead.  On the right, Domino is bonding with a potted plant.

And speaking of birds flying overhead, the Guardian reports that 200 British cats are being outfitted with a device called "catnav" to track their predatory habits.  "Some experts believe Britain's 9m cats could be killing more than 150m birds, mice, rabbits, moles and other creatures every year," they warn us.  "We know what cats do in our homes — they sleep," says one of the researchers, "But we have virtually no idea of what they get up to outdoors, particularly at night. Now we can find out."

Well.  I'd just like to take this opportunity to quantify Inkblot and Domino's contribution to this bird and mole carnage.  That would be zero.  Jasmine once dragged in an already wounded bird and allowed Inkblot to play with it, but neither Inkblot himself, nor our pudgy little Domino, is capable of anything more than dreaming about such things.  Domino, in fact, can barely find her own food bowl at times.  (Inkblot has no such difficulty.)  The Irvine pest population may rest easy.

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Smoke and Mirrors

| Fri Feb. 20, 2009 3:15 PM EST | Scheduled to publish Fri Feb. 20, 2009 3:24 PM EST
No more smoke and mirrors for the Obama administration!

For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.

The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses. But the biggest adjustment will deal with revenues from the alternative minimum tax, a parallel tax system enacted in 1969 to prevent the wealthy from using tax shelters to avoid paying any income tax.

....“The president prefers to tell the truth,” said [Peter R. Orszag, director of the Office of Management and Budget], “rather than make the numbers look better by pretending.”

This is good.  Seriously.  It really is.  The cynical among us, however, might note that highballing the current deficit also makes it a lot easier to show progress in reducing it in the future.  Not that that ever occurred to them, I'm sure.

Inflating Your Troubles Away

| Fri Feb. 20, 2009 2:43 PM EST
Michael Kinsley is understandably skeptical that once we've stimulated our way out of the recession we'll all suddenly see the light and begin saving more and consuming less.  So what will happen instead?

There is another way. If it's not the actual, secret plan, it will be an overwhelming temptation: Don't pay the money back. So far, even as one piggy bank after another astounds us with its emptiness, there have been only the faintest whispers about the possibility of an actual default by the U.S. government. Somewhat louder whispers can be heard, though, about the gradual default known as inflation. Just three or four years of currency erosion at, say, 10 percent a year would slice the real value of our debt — public and private, U.S. bonds and jumbo mortgages — in half.

Inflating away debts is a time honored tradition, but hasn't its time passed in the developed world?  Most domestic debts (adjustable mortgages, credit card rates, etc.) are tied to LIBOR or the prime rate, which generally follow the inflation rate.  So if inflation goes up, so do your payments.  No help there.  As for foreign debt, inflation would weaken the dollar — assuming arguendo that other countries all kept their inflation in check at the same time — but that would cause interest rates to rise in response.  A weaker dollar would help exports and reduce domestic consumption, which is good, but higher interest rates on treasury bonds would make our fiscal situation worse, not better.  So there's no help there either.

Do I have this right?  Or is Kinsley right to be concerned?  Isn't inflation hedging too built in to our current economic system to offer the kind of benefit he suggests?

The Chicago Tea Party

| Fri Feb. 20, 2009 2:01 PM EST
I guess this is the rant of the day: Rick Santelli on CNBC calling for a "Chicago Tea Party" because Barack Obama has the temerity to want to help underwater homeowners.  Ezra Klein comments:

Santelli sells himself as a sort of financial sector Howard Beale: He's mad as hell, and he's not going to take it anymore. The financial industry is tired of having to clean up after someone else's mess!

....But watching the traders bray and cheer as Santelli calls for the streets to run green with the equity of the working class is an astonishing insight in the psychology of the crisis. These guys feel betrayed. America let them down!....They should lose their houses. Wall Street is tired of being ground under the thumb of the lower middle class. This country has coddled those losers long enough, and see where it's gotten us.

It's not fair to say that these folks only get upset when it's homeowners being bailed out.  After all, there's been plenty of righteous fury over the bank bailouts too.  But there's definitely a different sense to this: it's closer, more personal.  Wall Street being bailed out is one thing: it's infuriating, but in the end you just shrug your shoulders and figure this is the way the world works.  But homeowners?  Your neighbors?  The guy who installed fancy granite countertops and a new wet bar and then mocked you for carefully husbanding your money instead of living the good life?  He's going to get bailed out?  WTF?

This has always been the soft underbelly of bailing out homeowners.  It's a good idea both on broad economic grounds and on social justice grounds, but the fact is that there's no way to make it 100% fair.  There are going to be some people who get government help who don't deserve it.  And some of those people aren't going to be bankers a thousand miles away, they're going to be people you personally know and loathe.  And that's hard to take.

In the end, I think Santelli is channeling the reaction of a small minority.  Stabilizing the mortgage market and helping people in trouble is the right thing to do even if there's no way to get the focus laser perfect.  But watch out for the demagogues while you're doing it.

UPDATE: More here.

Chart of the Day - 2.20.2009

| Fri Feb. 20, 2009 1:22 PM EST
John Pfaff had an article in Slate yesterday that takes on "five myths" about prison reform.  I don't have much to say about the article in general, but it did have one very interesting factlet about America's sky-high incarceration rate:

More strikingly, if we look back historically at the lockup rate for mental hospitals as well as prisons, we have only just now returned to the combined rates for both kinds of incarceration in the 1950s. In other words, we're not locking up a greater percentage of the population so much as locking people up in prisons rather than mental hospitals.

This comes from a paper written a couple of years ago by Bernard Harcourt, who says that it's only half true to say that American incarceration rates skyrocketed starting in the 70s.  What really happened, he says, is that we've had high incarceration rates for most of the 20th century, but it was originally split between a small number of people in prisons and a much larger number of people in mental institutions.  In the 60s we suddenly emptied the mental hospitals, crime soared, and then in the 70s we started putting more people in prison.  The end result is an inversion: the incarceration rate today is about the same as it was in the 50s, but we have a small number of people in mental hospitals and much larger number of people in prison.

Harcourt discussed these findings in a series of posts at the Volokh Conspiracy back in 2007, making the point that social science research that focuses strictly on the prison population might be missing the larger picture: "Since practically none of our studies on prisons, guns, abortion, education, unemployment, capital punishment, etc., controls for institutionalization writ large, most of what we claim to know about these effects may be on shaky ground."

If you're interested in this kind of thing, the whole discussion is worth reading.  I don't have the background to endorse Harcourt's findings one way or the other, but the raw data is pretty interesting.  It's worth a look.

UPDATE: Crime and punishment expert Mark Kleiman responds here.  He says there's much less to this than meets the eye, and adds, via email: "The explosion of drive-by shootings 1985-1994 simply can't be blamed on de-institutionalization.  More generally, adult homicide has been falling since the early 1970s; it's youth homicide that surged and receded."

Taxing Drivers

| Fri Feb. 20, 2009 12:48 PM EST
Transportation Secretary Ray LaHood wants to tax the number of miles you drive, not the amount of gasoline you buy:

"We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled," the former Illinois Republican lawmaker said.

...."What I see this administration doing is this — thinking outside the box on how we fund our infrastructure in America," he said.

I'm with Atrios on this: it's a dumb idea.  There's a place for London-style congestion charges in crowded urban cores, but outside of that a gas tax and a VMT tax are practically the same thing.  The only real difference is that a VMT tax isn't remotely feasible, and won't be for years, while we could raise the gas tax right now if we wanted to.  So jabbering about a VMT tax is basically just a good way to avoid taking any serious action to reduce gasoline consumption.

What's more, in some ways a gasoline tax is better than a VMT tax anyway.  A VMT tax motivates you to drive less, which is great, but it doesn't motivate you to go out and buy a fuel-efficient car.  A gas tax does both.  It's true that as cars become more fuel efficient — and as electric cars displace gasoline cars — the revenue from a gas tax will go down, but there's an easy fix for that: raise the tax. That accomplishes the same revenue smoothing as a VMT tax, and does it with no muss and no fuss.

Eventually, electric cars will become widespread enough that we'll need to figure out how to make them pay for using the roads even though they don't pay any gas taxes.  Maybe the answer will be VMT, maybe it will be something else.  But that's years away.  So study away, but in the meantime if you're serious about changing driving habits, raising the gas tax is the only serious alternative.

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NAFTA Posturing

| Fri Feb. 20, 2009 12:01 PM EST
My overall sense is that Barack Obama is better than most politicians at saying what he really believes and avoiding outright pandering to vote-rich interest groups.  But everyone has his limits, and I never for a second believed he was serious when he ripped into NAFTA before union audiences during the Ohio primary.  And he wasn't:

President Obama warned on Thursday against a "strong impulse" toward protectionism while the world suffers a global economic recession and said his election-year promise to renegotiate the North American Free Trade Agreement on behalf of unions and environmentalists will have to wait.

....The president's message served as a reminder of last year's private assessment by Canadian officials that then-candidate Obama's frequent criticism of NAFTA was nothing more than campaign speeches aimed at chasing support among Rust Belt union workers.

"Much of the rhetoric that may be perceived to be protectionist is more reflective of political maneuvering than policy," the Canadians concluded in a memo after meeting with Austan Goolsbee, a senior campaign aide and now a member of Obama's Council of Economic Advisers.

Obama is fundamenally a liberal technocrat.  His biggest sin was never a lack of support for open trade, but simply the fact that faced with a close primary in a big state, he succumbed to demagogery — which just goes to show that even the king of "no drama" has his limits when the presidency of the United States is on the line.

Still, no harm, no foul.  The only person who was hurt by this was Hillary Clinton, who spent the Ohio primary bashing NAFTA just as loudly — and just as insincerely — as Obama.  If there's anyone out there who believes she meant what she said about NAFTA any more than Obama did, let me know.  I've got a bridge I'd like to sell you with some nice option ARM financing......

Nuclear Iran?

| Fri Feb. 20, 2009 3:40 AM EST
The bad news: inspectors have discovered that Iran has more enriched uranium at their facility in Natanz than they thought.  The good news: they haven't enriched it to weapons grade yet, and apparently don't have immediate plans to do so:

In a report issued in Vienna, the International Atomic Energy Agency said it had discovered an additional 460 pounds of low-enriched uranium, a third more than Iran had previously disclosed. The agency made the find during its annual physical inventory of nuclear materials at Iran’s sprawling desert enrichment plant at Natanz.

....“You have enough atoms” to make a nuclear bomb, a senior United Nations official, speaking on the condition of anonymity because of the topic’s diplomatic sensitivity, told reporters on Thursday. His remarks confirmed estimates that private nuclear analysts made late last year. But the official noted that the material would have to undergo further enrichment if it was to be used as fuel for a bomb and that atomic inspectors had found no signs that Iran was making such preparations.

....In Paris earlier this week, the head of the United Nations nuclear agency, Mohammad ElBaradei, said Iran appeared to have made “a political decision” to do less enrichment than it physically could.

David Albright's assessment is bleak: "They have reached a nuclear weapons breakout capability. You can dance about it, but they would have enough to make 20-25 kg of weapons-grade HEU."  And this: "If they break out they will do it at a clandestine facility, not at Natanz, so you can't use Natanz as a measure of how fast they could do it. The Iranians have stopped telling the IAEA about the production of centrifuges...so the agency doesn't know how many they are making."

The foreign policy challenges for the Obama administration just keep barrelling along, don't they?

Google Finds Drones in Pakistan

| Thu Feb. 19, 2009 11:56 PM EST
A few days ago Dianne Feinstein got into a little bit of trouble for admitting in public that the U.S. drones used to attack terrorist bases in Pakistan are launched from within Pakistan itself.  Since the Pakistani government officially opposes the American attacks, they were none too happy about this — and Feinstein later backtracked, saying that she was just repeating something that had been previously reported in the Washington Post.

The News, an English-language newspaper in Pakistan, decided to dig up the truth, so they went to the best source they could find: Google Earth.

Two pictures of an unidentified flying strip in Balochistan — bearing the coordinates 27 degrees 51 minutes North, 65 degrees and 10 minutes East — prove that Pakistani ground was being used, at least until 2006.

Both the pictures are still available on Google Earth, which maps every corner of the world through a satellite and internet users can zoom in to see every detail, even cars parked in front of their drive ways....The first picture of the drones on the Pakistani soil, taken in 2006, has three drones, all Global Hawks.

Later, the London Times got into the act and identified the location as Shamsi airfield.  They also reported that the drones weren't Global Hawk reconnaissance craft at all.  Most likely they're Predators armed with laser-guided Hellfire missiles:

The Google Earth image now suggests that the US began launching Predators from Shamsi — built by Arab sheiks for falconry trips — at least three years ago

....Damian Kemp, an aviation editor with Jane's Defence Weekly, said that the three drones in the image appeared to have wingspans of 48-50ft. “The wingspan of an MQ1 Predator A model is 55ft. On this basis it is possible that these are Predator-As,” he said. “They are certainly not RQ-4A Global Hawks (which have a wingspan of 116ft 2in).”

As you can see, the drones were kept outdoors in 2006, but now appear to be stored inside the newly built hangar shown in the bottom right of the 2009 photo.  So that's that: it turns out that drones are being launched from Pakistan, just like Feinstein said.  And our deepest military secrets?  They're nothing compared to the power of Teh Google.  You have been warned.

Quote of the Day - 02.19.09

| Thu Feb. 19, 2009 10:58 PM EST
From Hillary Clinton, commenting on the stroke suffered last year by North Korea's Kim Jong-il:

If there is a succession, even if it’s a peaceful succession, that creates more uncertainty, and it may also encourage behaviors that are even more provocative, as a way to consolidate power within the society.

This single sentence has spawned endless chatter about whether Clinton has committed a grave diplomatic gaffe by mentioning something that everyone in the world has been talking about for months.  Give me a break.  It's better to at least acknowledge it briefly in public than it is to keep pretending that nothing at all is even happening.