Kevin Drum

Russian Sanctions Mostly Hitting Russian Consumers

| Thu Aug. 21, 2014 11:52 AM EDT

The BBC reports on how those Russian sanctions against Western food have put the squeeze on European and American suppliers:

Moscow officials say frozen fish prices in the capital's major supermarkets have risen by 6%, milk by 5.3% and an average cheese costs 4.4% more than it did before the 7 August ban took effect. Russia has banned imports of those basic foods, as well as meat and many other products, from Western countries, Australia and Japan. It is retaliation for the West's sanctions on Russia over the revolt by pro-Russian separatists in Ukraine.

And it is not just Moscow. On the island of Sakhalin, in Russia's far east, officials say the price of chicken thighs has soared 60%. Before the sanctions these were among the cheapest and most popular meat products in Russia.

Oops. Sorry about that. It's actually Russian consumers who are paying the price. And for now, that seems to be OK:

Polls show that the vast majority of Russians approve of the sanctions against Western food. They have been told by government officials and state-controlled TV that the embargo will not affect prices, and that it will actually allow Russia's own agriculture to flourish. And that message is being believed.

At a guess, Russian consumers aren't very different from American consumers. Nationalistic pride will work for a while, as people accept higher prices as the cost of victory against whoever they're fighting at the moment. But that won't last any longer in Russia than it does in America. Give it a few months and public opinion is likely to turn decidedly surly. Who really cares about those damn Ukrainians anyway? They're just a bunch of malcontents and always have been, amirite?

This is why Vladimir Putin needs a quick victory. The fact that he's not getting it will eventually prompt him to either (a) quietly give up, or (b) go all in. Unfortunately, there's really no telling which it will be.

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In Ferguson, Cops Hand Out 3 Warrants Per Household Every Year

| Thu Aug. 21, 2014 11:13 AM EDT

Alex Tabarrok comments on the rather remarkable caseload of Ferguson's municipal court:

You don’t get $321 in fines and fees and 3 warrants per household from an about-average crime rate. You get numbers like this from bullshit arrests for jaywalking and constant “low level harassment involving traffic stops, court appearances, high fines, and the threat of jail for failure to pay.”

If you have money, for example, you can easily get a speeding ticket converted to a non-moving violation. But if you don’t have money it’s often the start of a downward spiral that is hard to pull out of....If you are arrested and jailed you will probably lose your job and perhaps also your apartment—all because of a speeding ticket.

We've all seen a number of stories like this recently, and it prompts a question: why are police departments allowed to fund themselves with ticket revenue in the first place? Or red light camera revenue. Or civil asset forfeiture revenue. Or any other kind of revenue that provides them with an incentive to be as hardass as possible. Am I missing something when I think that this makes no sense at all?

This is sort of a genuine question. I know these policies are common, but where did they come from? Are they deliberate, created by politicians who like the idea of giving their local cops an incentive to get tough? Were they mostly the idea of police departments themselves, who figured the revenue from fines would provide a net boost in their annual funding? Or did they just accrete over time, popping up whenever there was a budget crisis and then never going away?

Does anyone know?

Housekeeping Note

| Wed Aug. 20, 2014 3:28 PM EDT

That's it for the day. I'm off to the hospital for yet another test that will undoubtedly show nothing wrong with me. But you don't know until you look, do you? See you tomorrow.

Do Liberals Rely Too Much on Guilt?

| Wed Aug. 20, 2014 2:05 PM EDT

Tim F. makes an observation:

Spend some time following internet conversations about your liberal cause of the day (global warming, racial injustice, etc) and eventually someone will get to the nut of why the issue pisses many people off: they think activists want them to feel guilty and they don’t want to feel guilty. That’s pretty much it. A huge part of our failure to do anything about the climate disaster or racist asshole cops comes from people protecting their delicate ego.

Yep. But I'd take this a little more seriously, because it's probably something that genuinely hurts lefty causes. It's human nature to get defensive when you feel guilty, and it's hard to recruit defensive folks to your cause. If this were only an occasional problem, that would be one thing. But let's be honest: We really do rely on guilt a lot. You should feel guilty about using plastic bags. About liking college football. About driving an SUV. About eating factory-farmed beef. About using the wrong word to refer to a transgender person. About sending your kids to a private school. And on and on and on.

We all contribute to this, even when we don't mean to. And maybe guilt is inevitable when you're trying to change people's behavior. But it adds up, and over time lefties can get to seem a little unbearable. You have to be so damn careful around us!

I don't really have any useful advice about this. Maybe there's nothing much to be done about it. But egos, delicate or otherwise, are just a part of the human condition. We ignore them at our peril.

Let Us Now Psychoanalyze Famous Men (And Their Photographs)

| Wed Aug. 20, 2014 12:12 PM EDT

Bob Somerby calls my attention to the following bit of psychobabble from Peter Baker and Matt Apuzzo of the New York Times. The subject is a photo released by the White House:

Mr. Holder, 63, is the one leaning forward, both in the photograph released by the White House and on the issues underlying the crisis in Ferguson, Mo. A child of the civil rights era, he grew up shaped by the images of violence in Selma, Ala., and joined sit-ins at Columbia University where protesters renamed an office after Malcolm X. Now in high office, he pushes for policy changes and is to fly on Wednesday to Ferguson to personally promise justice in the case of a black teenager who was fatally shot by a white police officer.

Mr. Obama, 53, is the one seemingly holding back in the White House photograph, contemplative, even brooding, as if seeking to understand how events could get so out of hand. He was too young and removed to experience the turmoil of the 1960s, growing up in a multiracial household in Hawaii and Indonesia. As he now seeks balance in an unbalanced time, he wrestles with the ghosts of history that his landmark election, however heady, failed to exorcise.

Seriously? Take a look at other photographs of Obama when he's conferring with someone. Take a look at other photographs of any powerful person when they're conferring with an underling. The boss is the one who's free to lounge back and relax. The underling is the one who has to lean forward and make his case. This is standard body language. Obama uses it so often that in just the August "Photo of the Day" gallery alone, I count it in three out of four photos where Obama is conferring with other people.

Look, I've been there. You want to say something interesting. You need a hook. But come on. If you want to make the case that racial issues are more immediate for Holder than for Obama, go ahead. But don't pretend that a bog ordinary White House photograph tells you anything. That's just embarrassing. Before long you'll be hiring body language "experts" and handwriting "analysts" to help you with your leads. Here be dragons.

Barack Obama Loathes Congress as Much as You Do

| Wed Aug. 20, 2014 10:56 AM EDT

Ezra Klein responds to a New York Times article about President Obama's chilly relationship with his fellow Democrats:

Obama does see socializing with Hill Democrats as a chore. But there's a lot that Obama sees as a chore and commits to anyway. The presidency, for all its power, is full of drudgery; there are ambassadors to swear in and fundraisers to attend and endless briefings on issues that the briefers don't even really care about. The reason Obama doesn't put more effort into stroking congressional Democrats is he sees it as a useless chore.

The Times article...never names a bill that didn't pass or a nominee who wasn't confirmed because Obama's doesn't spend more time on the golf course with members of Congress. The closest it comes is...not very close. "In interviews, nearly two dozen Democratic lawmakers and senior congressional aides suggested that Mr. Obama's approach has left him with few loyalists to effectively manage the issues erupting abroad and at home and could imperil his efforts to leave a legacy in his final stretch in office."

This is ridiculous. There are no issues erupting at home or abroad where the problem is that House or Senate Democrats won't vote with the president. There's no legislation of importance to President Obama's legacy that would pass if only House Democrats had spent more time at the White House. I've listened to a lot of Democratic members of Congress complain about Obama's poor relationships on the Hill. Each time, my follow-up question is the same: "what would have passed if Obama had better relationships on the Hill?" Each time, the answer is the same: a shake of the head, and then, "nothing."

I'd probably give a little more credit to schmoozing than this. But only a very little. At the margins, there are probably times when having a good relationship with a committee chair will speed up action or provide a valuable extra vote or two on a bill or a nominee. And Obama has the perfect vehicle for doing this regularly since he loves to play golf. But for the most part Klein is right. There's very little evidence that congressional schmoozing has more than a tiny effect on things. Members of Congress vote the way they want or need to vote, and if they respond to anyone, it's to party leaders, interest groups, and fellow ideologues. In days gone by, presidents could coerce votes by working to withhold money from a district, or by agreeing to name a crony as the local postmaster, but those days are long gone. There's really very little leverage that presidents have over members of Congress these days, regardless of party.

Obama is an odd duck. It's not just that he doesn't schmooze. As near as I can tell, he has a barely concealed contempt for Congress. He doesn't really enjoy playing the political game, and not just because it's gotten so rancid in recent years. Even if Republicans were acting like a normal political party these days, I still don't think he'd enjoy it much. And yet, he spent years campaigning for the top political job in the United States. It's a little bit of a mystery, frankly.

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What's in a Word: Trophy vs. Ribbon Edition

| Wed Aug. 20, 2014 10:20 AM EDT

A recent poll from Reason magazine investigates the burning question of whether kids on sports teams should all get participation trophies, or whether it should only be the winners. Overall, 57 percent think only the winners should get trophies, but the detailed breakdown is kind of interesting. It turns out that society's winners generally think that only winners should get trophies. Society's also-rans tend to think everyone should be recognized.

I wonder how much of this has to do with the word trophy? For many decades, after all, the US military has awarded ribbons to anyone who participates in surface combat. This is a very egalitarian award. You don't need to have done anything special. You don't need to have won. You just need to have participated. Nobody complains about this, but then again, it's just a ribbon that shows you've been part of an actual combat action. It's not a trophy or even a medal.

So would people react the same way to giving every kid a participation ribbon? I'll bet not. No one would object. But many of them do object to trophies. It's funny how a cheap bit of gold-colored plastic stirs the passions so much, isn't it?

UPDATE: I have no personal experience with either surface combat or kids' sports. Those who do should feel free to school me in comments if I'm wrong about any of this.

UPDATE 2: Several commenters have pointed out that, in fact, participation trophies are mostly limited to very young age groups, like five-year-olds. This makes a kind of sense, since at that age winning and losing is mostly just a matter of chance anyway. Among older kids, though, the whole "participation trophy" thing is just a myth.

Is that true?

Don't Like the War in Iraq? Blame Congress.

| Tue Aug. 19, 2014 9:21 PM EDT

President Obama has no plans to ask Congress for authority under the War Powers Act to take military action in Iraq. But he's hardly the only one to blame here. An even bigger problem is that Congress doesn't really want him to ask in the first place:

“This is not about an imperial presidency, it’s about a Congress that’s reluctant to cast tough votes on U.S. military action,” said [Senator Tim] Kaine....“We should not be putting American men and women’s lives at risk if we are not willing to do the political work to reach a consensus that it’s necessary,” Mr. Kaine said in an interview.

....Senior administration officials note that congressional leaders, who met with Mr. Obama about Iraq in June, have explicitly told them Mr. Obama need not come to Congress to authorize military action.

Representative Nancy Pelosi of California, the House minority leader whose weekly conference calls with Democrats during the congressional break have been dominated by discussions of Iraq, said that Mr. Obama had wide latitude to act without Congress and suggested that Republicans eager to criticize the president would not be as eager to vote.

“We’ll see where the Republicans will be who have been calling for this, that and the other thing, if they had to vote on Iraq,” Ms. Pelosi said in San Francisco last week....Senator Bob Corker of Tennessee, the senior Republican on the Foreign Affairs Committee, who helped draft the resolution to authorize strikes against Syria, has not called for a similar measure for the current operation in Iraq. He said he wanted administration officials to testify at a hearing when Congress returned about their strategy for the airstrikes and what authorities they intended to use in executing them.

It's an election year, after all, and this would be politically difficult for everyone. Democrats probably aren't excited about re-engaging in Iraq, but they'd be reluctant to oppose a president of their own party. Republicans would love to oppose Obama, but if they did they wouldn't be able to complain any more about what a wuss he is. Better for everyone to let sleeping dogs lie. That way they can kibitz from the sidelines and then, when it's all over, pretend that they supported a better policy all along.

It's cowardly, but that's politics. In any case, it's certainly hard to blame Obama for overreach when the branch of Congress that passed the War Powers Act in the first place has all but begged him to ignore it.

Don't Believe the Crocodile Tears Over High Corporate Tax Rates

| Tue Aug. 19, 2014 12:46 PM EDT

The US corporate tax code is inefficient, distortive, and staggeringly complex. Almost no one defends it on those grounds. But US multinational corporations, who have recently been engaged in a wave of tax inversions, have a different complaint: our tax rates are just flatly too high. They make American corporations uncompetitive compared to their foreign peers, and that's why they're being forced to relocate their headquarters to other countries with lower tax rates.

Edward D. Kleinbard, a professor at the Gould School of Law at the University of Southern California and a former chief of staff to the Congressional Joint Committee on Taxation, says this is nonsense. Firms that are entirely (or almost entirely) domestic do indeed pay high corporate taxes. But multinationals don't. Thanks to the "feast of tax planning opportunities laid out before them on the groaning board of corporate tax expenditures," they mostly pay effective tax rates that aren't much different from French or German companies. They are, in fact, perfectly competitive.

So why the recent binge of tax inversions?

The short answer is that the current mania for inversions is driven by U.S. firms’ increasingly desperate need to do something with their $1 trillion in offshore cash, and by a desire to reduce U.S. domestic tax burdens on U.S. domestic operating earnings.

The year 2004 is a good place to start, because that year’s corporate offshore cash tax amnesty (section 965) had a perfectly predictable knock-on effect, which was to convince corporate America that the one-time never to be repeated tax amnesty would inevitably be followed by additional tax amnesties, if only multinationals would opportune their legislators enough. The 2004 law thus created a massive incentive to accumulate as much permanently reinvested earnings in the form of cash as possible.

....The convergence of these two phenomena led to an explosion in stateless income strategies and in the total stockpile of U.S. multinationals’ permanently reinvested earnings. But U.S. multinationals are now hoist by their own petard. The best of the stateless income planners are now drowning in low-taxed overseas cash....It is less than a secret that firms in this position really have no intention at all of “permanently” reinvesting the cash overseas, but instead are counting the days until the money can be used to goose share prices through stock buy backs and dividends.

....The obvious solution from the perspective of the multinationals would have been a second, and then a third and fourth, one-time only repatriation holiday, but there are still hard feelings in Congress surrounding the differences between the representations made to legislators relating to how the cash from the first holiday would be used, and what in fact happened.

Indeed. Back in 2004, multinational corporations swore that if Congress granted them a tax amnesty to repatriate their foreign income into the United States, it would unleash a tsunami of new investment. Needless to say, that never happened. Corporate investment had never been credit-constrained in the first place. Instead, all that lovely cash was used mostly to goose stock prices via buy-backs and increased dividends. It's no wonder that Congress is unwilling to repeat that fiasco.

Kleinbard's paper is an interesting one, with a couple of fascinating case studies demolishing the self-serving ways that corporate CEOs try to blame the tax code for things that have nothing to do with it. Andrew Ross Sorkin has more here.

Rick Perry Indictment Highlights the Hack Gap Once Again

| Tue Aug. 19, 2014 12:02 PM EDT

Simon Maloy finds five pundits arguing that last week's indictment of Rick Perry was flimsy and obviously politically motivated:

Who are these five pundits downplaying the case against Texas’ Republican governor? In order: New York magazine’s Jonathan Chait, MSNBC host Ari Melber, political scientist and American Prospect contributor Scott Lemieux, the Center for American Progress’ Ian Millhiser, and the New Republic’s Alec MacGillis. Five guys who work/write for big-name liberal publications or organizations. This, friends, is the Hack Gap in action.

Ah yes, the hack gap. Where would we be without it? For the most part, it doesn't show up on the policy side, where liberals and conservatives both feature a range of thinkers who bicker internally over lots of things. It mostly shows up on the process side. Is the legal reasoning on subject X sound? Is it appropriate to attack candidate Y in a particular way? Is program Z working well or poorly? How unanimously should we pretend that a mediocre speech/poll/debate performance is really a world-historical victory for our guy?

Both sides have hacks who are willing to take their party's side on these things no matter how ridiculous their arguments are. But Republicans sure have a lot more of them. We've seen this most recently with Obamacare. Obviously liberals have been more positive in their assessments of how it's doing, but they've also been perfectly willing to acknowledge its problems, ranging from the website rollout debacle to the problems of narrow networks to the reality of rate shock for at least some buyers. Conservatives, conversely, have been all but unanimous in their insistence that every single aspect of the program is a flat-out failure. Even as Obamacare's initial problems were fixed and it became clear that, in fact, the program was working reasonably well, conservatives never changed their tune. They barely even acknowledged the good news, and when they did it was only to set up lengthy explanations of why it could be safely ignored. To this day, virtually no conservative pundits have made any concessions to reality. Obamacare is a failure on every possible front, and that's that.

Liberals just don't have quite this level of hackish discipline. Even on a subject as near and dear to the Democratic heart as Social Security, you could find some liberals who supported a version of privatization back when George Bush was hawking the idea in 2005. It's pretty hard to imagine any conservatives doing the opposite.

Is this changing? Are liberals starting to close the gap? Possibly. The liberal narrative on events in Ferguson has stayed pretty firm even as bits and pieces of contradictory evidence have surfaced along the way. The fact that Michael Brown had robbed a convenience store; that he wasn't running away when he was shot; and that a lighter policing touch didn't stop the looting and violence—none of those things have changed the liberal storyline much. And maybe they shouldn't, since they don't really affect the deeper issues. A cop still pumped six rounds into an unarmed teenager; the militarized response to the subsequent protests remains disgraceful; and the obvious fear of Ferguson's black community toward its white police force is palpable. Maybe it's best to keep the focus there, where it belongs.

Still, a bit of honest acknowledgment that the story has taken a few confusing turns wouldn't hurt. Just as having a few liberal voices defending Rick Perry doesn't hurt. Keep it honest, folks.

POSTSCRIPT: And what do I think of the Perry indictment? I'm not sure. When I first saw the headlines on Friday I was shocked, but then I read the stories and realized this was all about something Perry had done very publicly. That seemed like a bit of a yawner, and it was getting late, so I just skipped commenting on it. By Monday, it hardly seemed worth rehashing, especially since I didn't have a very good sense of the law involved.

So....I still don't know. The special prosecutor who brought the indictment seems like a fairly straight shooter, so there might be something there. Overall, though, I guess it mostly seems like a pretty political use of prosecutorial power.