Kevin Drum

Inflation

| Tue Dec. 16, 2008 12:29 PM EST

INFLATION....The consumer price index fell last month, but this was mostly due to falling oil prices, so it's no big deal. It's a good thing, in fact. Remove oil prices and inflation was up very slightly, perhaps 0.1% or so.

That's worryingly close to zero, and that's a much bigger deal, especially since we're still in the early days of this recession. If prices fall any further, we're in deflation territory, and that would be dismal indeed. So as much as I dislike the auto bailout on its merits, this would not be a good time to let GM go under. Nor is it a good time to cavil about federal stimulus spending or to force state governments to slash expenditures. So tell me again: how many days are there until January 20th? It would be nice to have an actual president again.

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Question of the Day

| Mon Dec. 15, 2008 8:22 PM EST

QUESTION OF THE DAY....From professor Henry Farrell, responding to Robert Samuelson's latest maunderings in the Washington Post:

Should people pretend to take this sort of horseshit seriously?

Well? Should they? Argument for the affirmative: if you don't respond, horseshit takes on a life of its own because no one ever knocked it down. It may be an unwelcome task, but someone has to do it. Argument for the negative: Serious debate merely gives horseshit a stature it doesn't deserve. Laughing at it is much more effective.

Anyway, Samuelson's argument in today's column is that poor people have powerful advocates just like rich people, and he then suggests that the techno-wonks at the CBPP have the same kind of clout as, say, the Club for Growth. This is indeed laughable, but Larry Bartels tells us that it's even more laughable than you think:

I know of two systematic attempts to measure the relative influence of affluent, middle-class, and poor people on government policy. One is in the next-to-last chapter of Unequal Democracy, where senators' roll call votes are moderately strongly affected by the preferences of high-income constituents, less strongly affected by the preferences of middle-income constituents, and totally unaffected by the preferences of low-income constituents. That's the more optimistic view. My Princeton colleague Marty Gilens (in a 2005 article in Public Opinion Quarterly and a book-in-progress) has a parallel analysis focusing on aggregate poilcy shifts over two decades. He also finds no discernible impact of low-income preferences, but argues that middle-class people also get ignored when they happen to disagree with rich people.

Italics mine. So: mockery or wonkery? Which works better? Leave your vote in comments.

Dark Cloud Watch

| Mon Dec. 15, 2008 7:53 PM EST

DARK CLOUD WATCH....AP reports on Barack Obama's timetable for releasing a review of his staff's internal conversations with the comically corrupt Rod Blagojevich:

Spokesman Dan Pfeiffer [] said the office won't release details of its review until the week of Dec. 22 at the request of prosecutors "in order not to impede their investigation of the governor."

That's Christmas week, when few people will be paying attention and when Obama plans to be celebrating the holiday in Hawaii.

Those crafty Obamaites! They somehow got legendary straight arrow Patrick Fitzgerald to request that they release their report when no one would be paying attention.

Now, I don't have any evidence for this, but I'm pretty sure the Obama team must have gotten to Fitzgerald somehow. There's going to be a dark cloud of suspicion over his head until he accounts for this.

No Royalty, Please

| Mon Dec. 15, 2008 7:40 PM EST

NO ROYALTY, PLEASE....From the New York Times today:

Caroline Kennedy, the daughter of an American political dynasty, has decided to pursue the United States Senate seat being vacated by Senator Hillary Rodham Clinton of New York, a person told of her decision said on Monday....Ms. Kennedy will ask Gov. David A. Paterson of New York to consider her for the appointment, according to the person told of her decision.

For what it's worth, I'd like to join the almost unanimous blogosphere consensus that Paterson should choose someone else. Rich and famous people already have a huge leg up when it comes to winning political office, but at least they still have to run and win. Appointing them instead so they can avoid the whole messy business of engaging in a campaign is just a little too Habsburgian for my taste.

Needless to say, I've got nothing against Kennedy. But appointing her to the Senate just isn't the right thing to do.

Always Look Under the Hood

| Mon Dec. 15, 2008 3:17 PM EST

ALWAYS LOOK UNDER THE HOOD....Some good advice from Dean Baker. When a news article tells you that industrial production fell "less than expected," check to see if that's only because the previous month's numbers have been revised downward:

There are often large revisions to prior months' data. A large fall from an upward revision can leave us in a much better place than a small fall from a downward revision. If the new information in the report is that things were much worse last month than we had thought, we have limited grounds to celebrate when we say that they have not worsened too much further in the current month.

The data show that November's manufacturing output is down 1.4 percent from October's level, which was in turn revised down by 0.5 percent from the previously reported level. Over the last three months, manufacturing output has fallen at a 17.8 percent annual rate. That is not good news.

No, it sure doesn't sound like good news to me. On the other hand, if we let GM go under we'll all be pining away for the days of a mere 17.8% decline.

Primary Care

| Mon Dec. 15, 2008 2:15 PM EST

PRIMARY CARE....The LA Times writes today about Tanyech Walford, a primary care doctor who finally gave up her practice because she couldn't make a living at it:

Walford is not alone in her struggle. Relatively low earnings, rising overhead and overwhelming patient loads are sending veteran primary care physicians into early retirement and driving medical students into better-paying specialties, creating what the New England Journal of Medicine recently called a crisis.

....Much of the problem lies in an endangered business model: the one- or two-physician general practice....Small general practices afford doctors autonomy to practice medicine as they see fit and can produce strong doctor-patient bonds. But these physicians have little or no clout to leverage better payments with insurers; they have no economy of scale, which makes overhead more burdensome.

Across the country, Pauline Chen writes in the New York Times about the general scope of the problem in primary care:

The news got worse in September, when The Journal of the American Medical Association published a study showing that just 2 percent of graduating medical students are choosing to enter general internal medicine. The students surveyed were concerned in part by what they perceived to be a more difficult personal and professional lifestyle, compared with other fields. They felt that the paperwork and charting required of primary care physicians were more onerous, and they were not eager to care for the chronically ill in a health care system that focuses on acute care.

....The Physicians' Foundation, a nonprofit organization that supports physicians' work with patients, last month published the results of a survey on current medical practice conditions in the United States. Some 12,000 doctors responded, the vast majority of whom were primary care physicians.

Nearly half of them said they planned in the next three years to reduce the number of patients they see or to stop practicing altogether....Only one-third felt they had the time to fully communicate with and to treat all patients, and 60 percent felt that paperwork demands resulted in less time spent with patients.

Italics mine. This is the result of our current Rube Goldberg medical system. Private insurers pay lip service to primary care physicians, but demand massive amounts of paperwork from them at the same time that they've reduced their payments for office visits so much that GPs can't survive on fewer than 30 patients per day. And with a patient load like that, you simply can't afford to spend more than a few minutes per person. This creates a vicious cycle in which both doctors and patients become increasingly stressed and increasingly less satisfied.

In fairness, it's not as if Medicare pays princely sums for office visits either, so this is hardly a problem that magically goes away just by installing a different funding mechanism. But it might be a start. More GPS, fewer dermatologists, please.

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DC Charters

| Mon Dec. 15, 2008 1:47 PM EST

DC CHARTERS....The Washington Post reports today that DC's charter schools are doing well:

According to a Washington Post analysis of recent national test results for economically disadvantaged students, D.C. middle-school charters scored 19 points higher than the regular public schools in reading and 20 points higher in math.

....The two public systems are, in general, educating students from similar backgrounds. About two-thirds of the students in both systems live in poverty, and more than 90 percent are minorities, according to school records.

I'm basically a fan of charter schools. I hope they are doing well in DC. But before we pat ourselves too hard on the back here, let's read a little more:

Charter schools must accept any student who applies, using a lottery if they have more applicants than spaces. That prevents the schools from cherry-picking applicants. But each school is free to set its own rules on expelling students.

....For each elementary student enrolled, a District charter school receives $11,879 in tax dollars, including $8,770 to match per-pupil academic spending in the regular public schools and a $3,109 facility allotment to help pay for buildings....Charter schools can use the facilities money for any purpose, and that funding stream can provide a crucial advantage over traditional public schools. For schools with 300 or more students, the funding often exceeds building costs, and the surplus has gone to hire additional staff and buy extra computers and books.

....Friendship Public Charter Schools — the city's largest charter network, with five schools and more than 4,000 students — has a surplus of $3.4 million that has funded cutting-edge equipment, including computerized interactive whiteboards that are found even in preschool classrooms.

The extra funding, it turns out, coincides with improved academic performance: The schools with the largest surpluses have ranked at the top on test scores.

....Some charter schools have been especially successful at supplementing taxpayer funding with charitable grants from donors as large as the Bill and Melinda Gates and Walton foundations and as small as their friends and neighbors. Thurgood Marshall charter school, founded by Georgetown University's Street Law Program, expects $1.7 million in contributions this year, accounting for 25 percent of overall spending, according to its budget.

Let's summarize. Charter schools can't "cherry pick," but their students all come from families that have chosen to apply for a place. This means their student bodies are automatically far different from those in standard public schools, since they include only students whose parents care about education in the first place. This is a very, very big difference.

And charters get to expel students who cause problems. "Our success is not from moving kids out," says Susan Schaeffler, who heads the KIPP program in DC, and that might be so in raw numbers. But the ability to get rid of even a small number of serious behavior problems can have a substantial impact.

Finally, it turns out that charters get more money than traditional schools — both from the city and from private sources. And they use that money to buy extra books, hire more staff, and create programs that attract good students. And the schools with the most money seem to perform the best. Amazing!

Look: even your most novice educational researcher knows that comparing test scores is useless unless you control pretty carefully for things like parental involvement and expenditure levels. And most of the studies I've seen suggest that once you do that, charters perform about the same as traditional schools. At most, they perform only slightly better.

Now, I don't know what such a study would show of DC's charters, but neither does the Post. And you can certainly make the case that offering DC parents a choice is a good thing regardless. I certainly think it is. But pretending that charters have improved test scores is journalistic malpractice. The Post simply hasn't presented any credible evidence that this is the case.

All-Seeing Olympians

| Mon Dec. 15, 2008 1:08 PM EST

ALL-SEEING OLYMPIANS....Ezra Klein responds to David Brooks:

Meanwhile, a question for Brooks. He asks, "Why do so many of the plans being offered rely upon a Magic Technocrat — an all-knowing Car Czar who can reorganize Detroit, an all-seeing team of Olympians who decide which medicines doctors will be allowed to prescribe?" Can he — can anyone? — name the sponsored piece of legislation, or even proposed piece of legislation, that would appoint "an all-seeing team of Olympians who decide which medicines doctors will be allowed to prescribe?"

Well, in fairness, here is Ezra himself glossing Tom Daschle's description of his proposed Federal Health Board:

Appoint a politically insulated board of doctors and academics and advocates and stakeholders and let them make decisions informed by expertise and experience, much of it private sector experience. It's an idea that substantially limits congressional authority over the health care system....What Daschle is offering is a decision-making body insulated from political pressures and profit considerations, imbued with the power and funding to gather real evidence, and run by trusted authorities, and thus able to lay claim to real legitimacy.

"All-seeing team of Olympians" is obviously hyperbole, but the fact is that many of us who support national healthcare do indeed support the idea of a technical body that would set standards for treatment, including the kinds of medicines that a national plan would pay for. I happen to think that's a reasonable alternative to the mess we have now, but it's hardly unfair for Brooks to disagree.

(Technically, of course, doctors could still prescribe anything they wanted even if some governing body declined to put it on the federal government's formulary. But for most people covered by a national plan, medicine that's not on the formulary might as well not be available, so this is a fairly thin distinction. What Brooks really ought to be asking himself, though, is whether the all-seeing Olympians who currently work for insurance companies are preferable to all-seeing Olympians who work for the federal government. It's not really clear why they would be.)

One Two Three Four

| Mon Dec. 15, 2008 12:26 PM EST

ONE TWO THREE FOUR....The New York Times reports today on Iraqi reaction to the reporter who threw his shoes at George Bush on Sunday. This is from Najaf:

In the holy Shiite city of Najaf, 100 miles south of Baghdad, demonstrators chanted: "Bush, Bush, is a cow, your farewell was by a shoe," and, "The shoe got its goal straightly, but Maliki turned it away."

I sure hope this sounds better in the original Arabic. Otherwise the odds are low that it will enter the hall of fame of angry chants anytime soon.

Network Neutrality Update

| Mon Dec. 15, 2008 3:05 AM EST

NETWORK NEUTRALITY UPDATE....Slowly but surely, support for network neutrality on the internet is eroding:

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same — nobody is supposed to jump the line.

....Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.

....Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service.

It's not too surprising that big content companies are quietly changing their tune on this: big companies are usually willing to pay for preferential treatment that helps them keep little guys little, and preferential access to the internet is no different from any other competitive advantage. But if even Lessig is starting to give in on this, the jig might truly be up.

If I had to take a (tentative) stand on this, I'd say that preferential treatment might be justified for things like television and video-on-demand services, which require infrastructure buildout and higher service levels just in order to be competitive. (TV subscribers simply won't put up with standard internet quality of service.) But for ordinary content providers merely looking for an edge over possible upstarts? I think that's as corrosive as Standard Oil locking competitors out of the railroads in the 19th century or Ma Bell prohibiting third party equipment on their lines in the 20th century. We shouldn't put up with it.

Unfortunately, I'm not entirely sure how to draw the right distinctions here. Nor, in an environment where network traffic is growing at triple-digit rates but the subscriber base is barely growing at double digit rates, am I sure what incentive the backbone providers have to build additional capacity unless they have some way of charging someone for the additional bandwidth. It's a genuine problem, and I'm not sure what the solution is.

UPDATE: Lessig says the Journal is wrong: his views are the same as they've always been. Long story short, he's OK with network providers offering higher service levels to companies willing to pay for it, but only if they offer the same deal to everyone.

Google responds to the Journal here. They say the only thing they've done is offer to colocate Google-specific caching servers within broadband providers' own facilities. Needless to say, your mileage may vary on whether you think this is a violation of net neutrality.