Expanding the House

Bruce Bartlett argues that congressional districts are too big and that we should pare them down by increasing the number of congressmen:

Conservative columnist George Will has argued that increasing the size of the House would obviate the need for campaign finance restrictions. It is the huge size of congressional districts that requires mass communications, such as costly television advertising, which drives the need for vast sums of money requiring congressmen to spend so much time fundraising.

....Some will say that greatly increasing the size of the House will make it into a zoo, as if it isn't already with so many thousands of staff people, constituents and lobbyists wandering around. When one looks at other countries, it's interesting to see that most have lower houses of their legislatures that are larger than our House of Representatives even though their populations are much smaller than ours.

....It's not realistic to even think about going back to congressional districts with 30,000 people — that would require a House of Representatives with more than 10,000 members. But neither is it feasible to continue raising the size of each congressional district infinitely. At some point, an adjustment needs to be made. I think the reapportionment that will follow this year's Census is as good a time as any to do it.

This is a pretty common suggestion, but here's my problem with it. Right now, each member of Congress represents about 700,000 people. That's obviously too many to allow old-fashioned shoe leather campaigning. But what would it take to get back to that? I live in a city of 200,000, and even at that running for mayor or city council is only barely a shoe leather operation. If you want members of Congress who truly represent their neighbors because they actually know them, instead of members who just know how to raise money and schmooze with local power brokers, you'd probably want districts no bigger than 150,000 or so. That would require a Congress of about 2,000 members.

Would that be a good idea? Maybe! But I think that's about what it would take. Once you get above 200,000 people in a district, I think you've hit a tipping point: it doesn't really matter how much bigger they get. Once mass media is the only way to keep in touch with constituents, the only question left is which kind of mass media to use. And who really cares about that?

So: would a Congress with 2,000 members be worth it? On the bright side, it would be harder for lobbyists to influence. On the down side, it would make party discipline even more of a joke than it already is. And we'd have to build a new Capitol building to house this seething mass of pols. Color me unconvinced.

Car Dealers Preying on the Military

It's nice to finally have some heavy firepower on the side of consumer finance protection. Literally:

Car dealers, a well-organized small-business lobby with members in nearly every legislative district, have swarmed the Senate in recent weeks clamoring to be exempt from the legislation's proposed protections against loan scams. But in a letter released Thursday, a top Pentagon official said soldiers need to be protected from "unprincipled auto lending" so they can concentrate on their primary mission: "protecting our great nation."

"Soldiers who are distracted by financial issues at home are not fully focused on fighting the enemy, thereby decreasing mission readiness," Army Secretary John M. McHugh wrote Wednesday to Senate Banking Committee Chairman Christopher Dodd (D-Conn.). Top Pentagon officials don't usually weigh in on non-military legislation. But they have complained that shady car loans have been particularly harmful to military personnel — often young, inexperienced consumers who have other worries when they walk into car lots near military bases.

Stephanie Mencimer wrote a really good piece last year about the way car dealers routinely scam service members. It's worth a read. And maybe give Sen Sam Brownback (R–Kansas), sleaze's biggest defender, a call after you've finished it.

The Future of Advertising

Ezra Klein comments on the ineffectiveness of online advertising:

What always interests me about this observation is the implication that offline advertising is similarly worthless. There are certain types of advertising that get treated as content: People scan the newspaper for department-store sales, for instance. But an ad for Tide? Or Intel? You notice it, but you don't care about it. But everyone placed those ads so everyone kept placing those ads. And hey, having your brand noticed was worth something.

Online, however, that "not caring" has become too undeniable. The tiny handful of click-throughs, most of them accidental, are almost an insult to the advertiser. The right comparison here is old medical techniques that were widely used until information arrived showing them worthless. Advertising worked for everyone so long as the limited supply made it look really high-value to advertisers and the absence of information let them fool themselves into believing it really effective. But at least with online advertising, there's so much supply, and so much proof that it's not very effective, that the prices paid by advertisers are coming into line with the amount of attention people pay to their advertisements. And that's grim news for industries that rely on advertising.

Italics mine. This is a little unfair to the Mad Men of the world and their clients. They've always known perfectly well that advertising doesn't always work. "I know I waste half the money I spend on advertising," said the founder of Wanamaker's department store. "The problem is, I don't know which half." But marketing firms really do have plenty of ways of measuring the effectiveness of advertising, and the fact is that most traditional advertising does have an impact. (In many cases, too big an impact for my taste, in fact.)

But that's largely because it's intrusive. In newspapers and magazines it takes up a lot of space. On TV and radio it interrupts the programs you're watching. Junk mail catches your eye with lots of coupons. The print/TV equivalent of direct clickthroughs might be just as low as it is for web advertising, but in addition these ads make an impression that, over the medium and long term, affects how people shop.

So the web's big problem isn't clickthroughs. Of course they're low. The problem is that clickthroughs are all it has. There's a limit to how intrusive you can make ads on the web. Too big and there's no room for actual content. Too small and they're easily ignorable. Too flashy and people complain. Too annoying and people install ad blockers. "Impressions" is a meaningful concept for most advertising, and that adds to the direct effect it has. On the web, it's close to meaningless.

But someone's going to figure this out. I'm not sure how (which puts me in good company), but I'll bet that it doesn't end up being display ads, which is an attempt to replicate what works in print. It'll be something else. Maybe clever inline hyperlinks. Maybe keyword driven stuff. Maybe something no one's even thought of yet. But something.

The End of the Carried Interest Loophole?

Good news! The carried interest loophole, one of the most egregious gifts to billionaire private equity and hedge fund managers around, might finally be on the chopping block:

Right now, the percentage of a fund’s proceeds that investors pay to the manager — called the “carried interest” — gets taxed as if it’s capital gains (at a 15 percent rate, instead of 35 percent), even though the manager doesn’t have any money at risk. It’s as if we treated movie proceeds given to a film’s lead actor as investment income.

....Congress has a bunch of very popular business tax credits that it would like to extend, but the extensions need to be paid for, so the carried interest break is looking more likely to disappear. Senate Finance Committee Chairman Max Baucus (D-MT) said this week that there’s “a growing sense of inevitability” about the tax hike occurring, despite heavy lobbying from the financial services industry. Office of Management and Budget Director Peter Orszag agreed yesterday, predicting that “you’re going to see a change in the taxation of carried interest pass the Senate within the next few weeks.”

It would be nice to see the carried interest loophole finally meet its maker. It's a small victory, but an important one.

Biggest Oil Spill in History?

Is it going to be possible to ever cap the Deepwater Horizon oil blowout? Maybe not, says National Geographic:

Such recovery operations have never been done before in the extreme deep-sea environment around the wellhead, noted Matthew Simmons, retired chair of the energy-industry investment banking firm Simmons & Company International....Slant drilling — a technique used to relieve pressure near the leak — is difficult at these depths, because the relief well has to tap into the original pipe, a tiny target at about 7 inches (18 centimeters) wide, Simmons noted.

"We don't have any idea how to stop this," Simmons said of the Gulf leak....If the oil can't be stopped, the underground reservoir may continue bleeding until it's dry, Simmons suggested.

And how much oil would that be? Via the New York Times:

BP’s chief executive, Tony Hayward, has estimated that the reservoir tapped by the out-of-control well holds at least 50 million barrels of oil.

That would be about 2 billion gallons of oil. If all of this floods out, it would be the biggest oil spill in history by a huge margin and 20 times bigger than the biggest previous spill in the Gulf of Mexico. From the National Geographic piece: "The 1979 Ixtoc oil spill, also in the Gulf of Mexico, took nine months to cap. During that time the well spewed 140 million gallons (530 million liters) of oil — and the Ixtoc well was only about 160 feet (49 meters) deep, noted retired energy investment banker Simmons."

Even if the well is capped, this is going to be a huge spill. The spill rate, originally estimated at 50,000 gallons a day and then 210,000 gallons a day, might actually be as much as a million gallons a day — or maybe even more. But it's hard to tell because BP is using chemical dispersants to send most of the oil to the bottom of the sea. This keeps it off the shore, but might end up doing more damage in the long run. Nobody seems to know for sure.

More on the Organization Kid

James Joyner pushes back on my suggestion this morning that the whole "Organization Kid" meme is overblown:

It strikes me as highly probable that “Organization Kids” are much more highly represented in elite Washington than in society as a whole. Aside from nepotism, the way to get ahead in this town is to go to the right schools, punch the right tickets, and not piss too many people off.

....Post-Bork at least, every successful Supreme Court nominee has been a cipher who claimed to have no opinion on, well, anything. The less that’s known, the harder it is to mount an attack. That’s not a slam on the nominees but rather on the system.

Well....sure. But aside from nepotism, hasn't going to the right schools, punching the right tickets, and not pissing too many people off always been the way to get ahead in Washington? And in business? And in the military? And just about everywhere else? I'm just not sure that very much has really changed on this front recently.

As for Supreme Court nominees being ciphers, I don't think that's quite right either. Lots of them have past records. What is true is that confirmation hearings have become a joke in the post-Bork era, with nominees unanimously insisting that they can't testify about any case that might ever come before the court, which, since it's the Supreme Court we're talking about here, means pretty much every possible case. This is indeed a problem with the system, but it's not quite the same thing as nominees not usually having deep public records. In fact, most of them do, and Elena Kagan is a little unusual in this regard.

More generally, I think what's going on here is that I've always been a little skeptical of the kinds of cultural memes that David Brooks (and others) traffic in, and I've grown even more skeptical as time goes by. I understand completely where the "Organization Kid" thing comes from, for example, and my gut tells me there's something to it. But my gut tells me lots of things, and further reflection usually gives me pause. I don't think kids of my generation were quite the rebels we'd like to imagine we were, and in any case we've mostly grown up to become an awful lot like our parents and grandparents. Some of us are cautious, some of us are outspoken, and some of both kinds are running the world right now. Same as always. I think that turns out to be the case more often than not whenever kids of any generation are the subject. There are differences, but I've gotten to the point where I really, really want to see some solid evidence before I buy into whatever the latest theory/complaint/whine is.

Climate Change's Secret Weapon

Pretty much everyone agrees that it doesn't make a lot of sense to regulate greenhouse gases using the Clean Air Act. The mechanisms in the CAA just don't fit the problem very well. Still, it's better than nothing, and there's long been an implicit threat from the Obama administration that if Congress doesn't pass a climate bill then the EPA will step in and do the job for them. Today, they ratcheted up the pressure:

The Environmental Protection Agency announced Thursday it is finalizing a rule aimed at curbing greenhouse gas emissions from the largest emitters in the United States....The new rule will cover 67 percent of the greenhouse gas emissions from stationary sources such as power plants and oil refineries, EPA estimates, and in its first year will translate into 900 permits for both new sources and modifications to existing sources of global warming pollution.

The EPA's rule will apply to new sources that emit 100,000 tons of carbon dioxide per year and to existing sources that make changes that would increase their emissions by 75,000 tons per year. Brad Plumer explains what that means:

That standard will apply to only about 5501 big polluters in the entire country....Those plants will have to employ the best available control technology — although no one knows yet what that means. Becoming more efficient? Co-firing biomass? Switching to natural gas?

So a couple of things are happening here. One, it's now going to be very tough for new coal-fired power plants to get built in the United States. Given that those plants are a major source of carbon pollution, that's a significant step. Second, the EPA's clearly pressing ahead with its own regulations — and that might give the Senate the kick it needs to pass a climate bill. But the agency's also being cautious and moving very deliberately on this stuff—indeed, it's backing off from it's previously planned 25,000-ton threshold. No doubt Lisa Jackson's trying to avoid a hostile reception from senators like Lisa Murkowski, who has been insisting that EPA rules would throttle the economy and has threatened to pass a bill stripping the agency of its carbon authority. There's a fine line the EPA has to walk here.

This continues to be the big wild card on the climate front. By any ordinary measure, climate legislation looks to have a bleak future in Congress. It just flat doesn't have the votes. But if the Obama administration demonstrates that it's dead serious about letting the EPA dragon out of its lair — and so far it hasn't backed off — it's entirely possible that John Kerry and Joe Lieberman (and Lindsey Graham if he gets over his huff) might be able to scare a few Republican senators into viewing their climate bill as the lesser of two evils. I'm not sure if it's enough in an election year, but it's at least potentially a game changer.

1Wait a second, you say. Is it 900 new permits or 550 big polluters? Or does that end up being the same thing? Here's what the EPA itself says:

Under the new emissions thresholds for GHGs that begin in July 2011, EPA estimates approximately 900 additional permitting actions covering new sources and modifications to existing sources would be subject to review each year. In addition, 550 sources will need to obtain operating permits for the first time because of their GHG emissions.

I'm not sure exactly what this means. But it sounds to me like the 900 number applies to plants that are already covered by the CAA for other pollutants and will now need carbon dioxide permitting too, while the 450 number applies to plants that emit lots of carbon dioxide but haven't previously been covered by the CAA because they don't emit other pollutants. So the real number is 1,450 new permits for various sources. More later if I learn different.

Who Are the Long-Term Unemployed?

Why is the media paying less attention to unemployment today than it did in 1983? I ran down a bunch of possible reasons yesterday, and one of them was this: "Maybe it has something to do with the fact that today's stubbornly high numbers are concentrated among the long-term unemployed."

I wasn't quite sure what I had in mind when I wrote that, but the chart I included in yesterday's post showed that, in fact, short-term unemployment had peaked about a year ago and come down pretty sharply since then. Long-term unemployment, by contrast, just kept skyrocketing. Today, nearly 4.5% of the population has been unemployed for more than six months, nearly double the previous record set in 1983, and it shows no signs of flattening out. Perhaps, I thought, that segment of the population was somehow less visible, or less sympathetic, or less something that somehow translated into less media attention. Today, Catherine Rampell writes about this in the New York Times:

Unemployment numbers show a notable split in the labor pool, with most unemployed workers finding jobs after a relatively short period of time, but a sizable chunk of the labor force unable to find new work even after months or years of searching. This group — comprising generally older workers — has pulled up the average length of time that a current worker has been unemployed to a record high of 33 weeks as of April. The percentage of unemployed people who have been looking for jobs for more than six months is at 45.9 percent, the highest in at least six decades.

Italics mine. Rampell's story focuses on Cynthia Norton, 52, an administrative assistant in Jacksonville who's been unable to find work for the past two years because companies have been shedding clerical workers during the recession and then finding that they can get along fine without them even when the economy improves. So Norton is working as a Wal-Mart cashier and she's not happy about it:

Because of the Wal-Mart job, she has been ineligible for unemployment benefits, and she says she made too much money to qualify for food stamps or Medicaid last year. “If you’re not a minority, or not handicapped, or not a young parent, or not a veteran, or not in some other certain category, your hope of finding help and any hope of finding work out there is basically nil,” Ms. Norton says. “I know. I’ve looked.”

I'm not quite sure what conclusions to draw from this, but the recession's extreme effect on a small class of long-term unemployed seems like it deserves more attention than it usually gets. What's more, if that class is mostly 50-something workers, not 20-somethings, that's significant too. Politically, it might explain why tea party activism — which skews older — has taken off so strongly, and economically it might explain....what? I need to noodle on that. But there's something there.

David Brooks and the Organization Kids

I mostly like David Brooks just fine, but one of his most annoying habits is plucking individuals out of the news and then turning them into poster children for whatever cultural theory he's peddling at the moment. I suppose it's an occupational hazard for columnists. His latest stab at this was Tuesday's column in which Elena Kagan — smart, friendly, and scholarly, but also careful and pragmatic — became a symbol for the "profusion of Organization Kids at elite college campuses" that he's noticed lately. "They were not intellectual risk-takers," he lamented "They regarded professors as bosses to be pleased rather than authorities to be challenged. As one admissions director told me at the time, they were prudential rather than poetic."

Well, two can play at that game. If Organization Kids are taking over the country, then how do you explain Donald Berwick? He's Obama's choice to head the Centers for Medicare and Medicaid Services, and that puts him at ground zero for the healthcare rationing debate. But as Kate Pickert reports, Berwick has been anything but cautious and prudential on the topic:

Republicans are gearing up for what promises to be a very contentious hearing. Yesterday, Senate Minority Leader Mitch McConnell said on the Senate floor that Berwick is "an expert on rationing."....The reason? Berwick is, by all accounts, a huge fan of the National Health Service, Britain's single-payer health care system.

....As he says in the video above, Berwick believes health care is a human right and systems — like taxation — are a valid means to ensure everyone gets it. He believes the NHS successfully delivers care to the UK, although it could be better....Berwick believes there is a tremendous amount of waste in the U.S. health care system that can be reduced through government policies, beginning with Medicare reform.

....It should also be noted that Berwick, who works at Harvard Medical School, is widely respected in the health policy community. His stance that money can be saved and patients better served by rewarding performance over quantity is shared by most top policy experts consulted by the Administration in the ramp up to the vote on health reform. A community disagrees with Berwick's methods for achieving this — including most Republicans and some health policy conservatives — but he is not a radical outlier. What he is is outspoken.

Berwick is outspoken! And he's an Obama nominee! And honestly, I doubt that it's just because he's older than Kagan. So maybe the Organization Kids aren't taking over Washington DC after all. Maybe, in fact, there are just lots of different kinds of people in the world, and Kagan is one kind while Berwick is another. And maybe that's OK.

The Future of Taiwan

Dan Drezner has finally met a free trade agreement he doesn't like. The treaty in question is one that would liberalize trade between China and Taiwan, and by itself that's fine:

The security ramifications are troubling, however. While China's economic leverage over the United States is limited, this kind of agreement would ratchet up the asymmetric dependence of Taiwan on the Chinese economy. Maybe Taiwan has already crossed the point of no return with regard to interdependence with the mainland — but this agreement would surely guarantee crossing that threshhold.

What would China do with this leverage? I don't know, I really don't. If Beijing plays the long game, they would allow for the build-up of political interest groups in Taiwan with a powerful incentive to appease the People's Republic in order to keep the economic relationship unruffled. The thing is, China has often been clumsy in its initial attempts to translate economic power into political influence, and I could easily see such a misstep occurring a few years from now.

Perhaps I'm being paranoid about this. The one thing I'm certain about, however, is that the most likely flashpoint for a great power confrontation between the United States and China is anything involving Taiwan. So I get veeeeeeerrrrrrry nervous about anything that upsets that particular apple cart.

The future of China and Taiwan is, obviously, impossible to project with even minimal clarity. But I've long thought that the most likely scenario starts with increased economic ties and then moves toward things like artfully worded mutual nonagression treaties, followed by limited formal diplomatic ties and then by a sort of shadow version of what Hong Kong is to mainland China today. Then, eventually, Taiwan and China are reunited. The whole process might take the better part of a century, and I figure that China can probably deal with that.

But a million things could go wrong in the meantime. And of course I might be entirely wrong about how this plays out. But if everyone stays calm, my guess is that things end with a whimper, not a bang.