Kevin Drum

Let Us Sing a Dirge for "Spit and Image"

| Tue Mar. 18, 2014 12:35 PM PDT

We got some quick work from the Times copy desk today: the blurb on the left lasted only a couple of minutes before someone rebelled and fixed it. This reminds me of a Slate column from a couple of years ago in which Juliet Lapidos tried bravely to defend her use of spit and image on the grounds that "it makes more sense to me," but that's hopeless. Idioms aren't supposed to make sense. (On the other hand, her plea to "make absolutely sure that you're right, and the author's wrong" before sending out grammar police nastygrams is good advice.)

It's possible that you're surprised to see this usage at all. But until the mid-50s it was pretty common. However, as a quick glance at the Google Ngram viewer will show you, that was its last hoorah. For more than a decade, spitting image has been more than 20x more common than its original variant. It's time to throw in the towel.

UPDATE: Now it's been changed yet again, to "who also looks nearly identical to Kermit." I guess spitting image didn't pass muster at the Gray Lady either.

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Reince Priebus is Playing Smart Politics. Maybe Democrats Should Try It Too.

| Tue Mar. 18, 2014 12:03 PM PDT

Here's the latest from Republican National Committee Chairman Reince Priebus:

At a Christian Science Monitor Breakfast on Tuesday Priebus said Republicans would see massive gains in the 2014 election, especially in the Senate. "I think we're in for a tsunami election," Priebus said. "Especially at the Senate level."

Ed Kilgore thinks Priebus should cut the crap. If Democrats lose five or six Senate seats, that won't be a tsunami. It will be perfectly normal given the electoral map, the six-year itch, and the usual Democratic turnout problem in midterms.

Maybe so. But that's pretty obviously not the game Priebus is playing. He's not analyzing, he's working the refs. He wants to build momentum and make Republicans look unbeatable. He wants to look like a winner. He wants to get Republicans to turn out in big numbers this November.

Democrats, by contrast, are already acting like whipped curs, moaning about the map and the itch and the turnout. They lose a special election by two percentage points and all is lost. Incumbents start dropping like flies. The press, smelling weakness, piles on. Democratic voters, acting like the normal human beings they are, get discouraged and figure that things are hopeless. So they don't contribute, they don't campaign, and they don't bother voting on Election Day.

Priebus knows this very well. If he could think of a word even bigger than tsunami, he'd use it. He wants his voters to think of themselves as part of a decisive turning of the tide against dissolute liberalism, and if his party wins in November he wants the media to write about it as a historic victory that gives Republicans a conservative mandate. It's just smart politics.

"Hoovering Up Phone Calls" No Longer Just a Turn of Phrase for the NSA

| Tue Mar. 18, 2014 10:41 AM PDT

Barton Gellman and Ashkan Soltani report today that the NSA now has the ability to capture and save the contents of every single telephone conversation in several target countries:

In the initial deployment, collection systems are recording “every single” conversation nationwide, storing billions of them in a 30-day rolling buffer that clears the oldest calls as new ones arrive, according to a classified summary....At the request of U.S. officials, The Washington Post is withholding details that could be used to identify the country where the system is being employed or other countries where its use was envisioned.

....Some of the documents provided by Snowden suggest that high-volume eavesdropping may soon be extended to other countries, if it has not been already. The RETRO tool was built three years ago as a “unique one-off capability,” but last year’s secret intelligence budget named five more countries for which the MYSTIC program provides “comprehensive metadata access and content,” with a sixth expected to be in place by last October.

Remember that opening scene at Waterloo Station in The Bourne Ultimatum? It was great filmmaking, but come on. Pretty far-fetched, no?

As it turns out, no. Not in 2014 anyway.

France Threatens to Cancel Russian Ship Contract Over Crimea Annexation

| Tue Mar. 18, 2014 10:17 AM PDT

So what can Europe do to express its displeasure over Russia's annexation of Crimea? Robert Farley writes that France is currently building a pair of amphibious helicopter carriers for Russia's Pacific fleet:

That sale is now in considerable doubt. Because of Russia’s invasion and presumed annexation of Crimea, the European Union is considering a variety of sanctions against Moscow. The biggest stick, in military terms, may be the Mistrals, a pair of 21,000 ton warships capable of carrying over a dozen helicopters, in addition to a well-deck for amphibious landing craft. That the Russians chose to name the second ship Sevastopol, after a city not in Russian possession until after the recent invasion, only makes the sale so much uglier from the European point of view.

....The purchase of the Mistrals (which was to include a pair of ships built under license in Russian yards) was controversial in Russia, given that it represented a transfer of scarce defense monies to a major foreign contractor. Some Russian analysts also expressed concern about what technologies the ships would include. However, given the inability of Russian yards to turn out large, quality ships since the end of the Cold War, the Mistrals represented the best chance of adding aviation and amphibious capabilities to Russia’s decaying fleets.

That final sentence is crucial. Russia didn't agree to buy French ships because it wanted to. It agreed to buy French ships because it had to. The Russian military may still be able to take on Crimea or South Ossetia—neither one larger than Vermont—but it no longer has the capability to do much more. For all his nationalistic bluster, Vladimir Putin has done nothing to address this shortfall, contenting himself instead with creating a comfortable, oligarchic state that can, for the time being, live off its mineral wealth. Putin may or may not decide to invade Eastern Ukraine, but if he does, he'll only do it if he believes that Ukraine will fall with barely a shot fired. He really can't afford to fight a serious war.

In any case, the French foreign minister said today for the first time that the Mistral deal might well be canceled—but only if other countries pitch in. "We will ask others, and I'm thinking namely the British, to do the same with the assets of the Russian oligarchs in London," he said in a TV interview. "Sanctions have to be shouldered by everyone."

Can Nate Silver Monetize the Wonkosphere?

| Tue Mar. 18, 2014 9:20 AM PDT

Nate Silver says his goal at the new FiveThirtyEight is to be a fox, not a hedgehog. That is, to know lots of little things, not just one big thing. Paul Krugman is not impressed with how that's turned out so far:

You can’t be an effective fox just by letting the data speak for itself — because it never does. You use data to inform your analysis, you let it tell you that your pet hypothesis is wrong, but data are never a substitute for hard thinking. If you think the data are speaking for themselves, what you’re really doing is implicit theorizing, which is a really bad idea (because you can’t test your assumptions if you don’t even know what you’re assuming.)

There are a whole bunch of new media ventures being launched right now: FiveThirtyEight, Ezra Klein's, Glenn Greenwald's Intercept, and several others. That's sparked obsessive chattering among media types, which is entirely understandable. I've mostly stayed quiet because I figure there's really no point in saying anything until these sites have been fully up and running for a few months. Until then, things are just shaking out.

And I hope FiveThirtyEight shakes out. But at the risk of jumping the gun, its first day didn't do much for me, and I think the reason is pretty fundamental. My basic take is that Silver's data-driven approach to journalism works well with subjects that satisfy two criteria:

  1. They lend themselves to analysis via number crunching.
  2. They are currently underserved by serious number crunchers.

Both sports and poll aggregation fit this model, and Silver made a reputation with both of them. But they're the exceptions, not the rule. Economics? It doesn't satisfy #2. Science? Ditto. "Life"? That's a pretty broad category, but I suspect it mostly fails #1. This story about the search for MH370, for example, uses the totem "Bayesian" a lot, but basically just tells me that when the searchers get new information, it affects where they search next. And politics? Aside from poll aggregation, it's hard to say. There are plenty of political scientists who already crunch political numbers, but maybe they do it badly or present their results poorly. Maybe FiveThirtyEight can do better. However, this strained effort at analyzing gubernatorial elections doesn't seem like a promising start. Nor this article making the obvious point that polling in Crimea doesn't mean much these days.

To the extent that FiveThirtyEight is providing a quantitative take on ordinary news, I suspect its audience is small. Most people just don't want lots of numbers in their news. And to the extent that it's providing a quantitative take on quantitative subjects, it's competing with lots of people who are already doing it. So what's its niche?

We'll see. Maybe I'm too blinkered to see it. Or maybe I'm blinkered by the fact that I've been immersed in the semi-quantitative blogging world for over a decade. I already see a ton of this kind of stuff, so it doesn't seem to me like it's in short supply. But the supply is probably a lot shorter in big, highly-publicized mainstream sites like ESPN. So maybe that's what FiveThirtyEight is doing: bringing the wonkosphere to the masses. Maybe it will even work.

Housekeeping Note

| Tue Mar. 18, 2014 8:11 AM PDT

Have you noticed the new widget at the top of the page? If you're reading the main blog page, probably not. But if you click on a specific post, you'll see something that looks like this:

It's a fundraising tool that matches social network sharing with donations. Every time you share one of my blog posts, we get a donation. So share away! Go find old favorite posts that you haven't shared, and share those too! It's a quick and easy way to help out Mother Jones.

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Democrats Are In For a World of Hurt If They Keep Running From Obamacare

| Tue Mar. 18, 2014 7:59 AM PDT

Last month, when the latest Obamacare horror story turned out to be largely invented out of whole cloth, I speculated about what this means. "I'm a diehard defender of Obamacare," I said, "and even I concede that there ought to be at least hundreds of thousands of people who are truly worse off than they were with their old plans. But if that's the case, why is it that every single hard luck story like this falls apart under the barest scrutiny?" Maybe it means that Obamacare isn't actually hurting very many people at all.

But this question can be turned around. There ought to be lots of people who have been helped by Obamacare too. So why haven't the airwaves been blanketed with their stories? Dave Weigel says the answer here is simpler: yes, there are plenty of feel-good Obamacare stories. But Democratic campaigns have neither the money nor, apparently, the desire to use them:

Take Families USA, the decades-old health care awareness organization, which regularly connects journalists to sources. Last October, Families USA received $1 million from the Robert Wood Johnson Foundation to finance more reporting, more vetting, more sharing of stories. That money helped Families USA expand its team of full-time vetters from one to three. It has not, so far, helped any Democrats running terrified from Obamacare.

“We do not pass along stories to political campaigns,” says Ron Pollack, the executive director of Families USA. “When reporters are doing stories, we pass on leads—that’s what we call them—if the individuals consent. But we do not ever send stories to political campaigns.”

....“There simply is no liberal Koch operation,” complains Paul Begala, a former Clintonite and a strategist for Priorities USA in 2012. “Rather than a national ad campaign, which is not realistic, Dems should look to smart 2014 candidates to engage this issue along [these] lines. Once someone does it, and it works, others will replicate in their states/districts. Do I think Dems should respond to the Koch ads? Absolutely. But it is going to be a piecemeal response.”

So Families USA can't or won't help candidates, and the candidates themselves don't have the money to compete. And even if they did, their fear of Obamacare is so palpable that they're probably afraid to campaign positively on it anyway. This is, needless to say, a self-fulfilling prophecy: Republicans make Obamacare toxic with misleading ads; Democrats are afraid to fight back because they don't want to be tainted by Obamacare; and this leaves the field wide open to making Obamacare even more toxic.

Democrats are going to be in a world of hurt this year if they keep this up. There's no running from Obamacare. There just isn't. If they want to win, they'd better emerge from their fetal crouch and start fighting back. Nobody likes candidates who won't stand up and defend their own party's achievements.

Are Corporations Hoarding Cash? It's Complicated.

| Mon Mar. 17, 2014 7:31 PM PDT

Over at the newly launched—or relaunched—, Ben Casselman updates us on the enormous mountains of cash that have been piling up in company treasuries ever since the recession ended:

One of the early narratives of the economic recovery was that companies were “hoarding” cash....The data backed up the story: The Federal Reserve in 2011 reported that American companies had more than $2 trillion stashed away in overflowing vaults.

Then the Fed revised its data. New figures released in early 2012, based on more complete tax filings, showed that American companies actually had close to half a trillion dollars less cash than previously thought....The revision didn’t just change the numbers—it undermined the whole narrative.

....It’s understandable that so many experts bought into the “cash on the sidelines” narrative. What’s less understandable is that they’re still buying into it. Despite the big revision, the corporate-cash narrative remains very much alive.

Hmmm. I think there's a little more to it. It's true that two years ago the Fed revised down its corporate cash estimate for the first quarter of 2012 from $2.2 trillion to $1.7 trillion.1 But even taking that into account, corporations have been increasing their cash holdings about 15 percent per year since 2008. In 2013 corporate cash increased another 12 percent. That's a pretty steep increase.

Beyond that, David Cay Johnston estimates that when you count cash worldwide, not just domestically, American corporations are holding something like $7.9 trillion in liquid assets. He calculates that this number has grown six times faster than corporate revenues since 1994. "When liquid assets grow six times faster than revenues, it tells you that companies are hoarding cash, not investing or spending."

Now, it's true that the huge spike initially reported in 2011-12 was mostly illusory. But it's not clear to me that this undermines the entire "cash hoarding" narrative. Even without that spike, corporate cash holdings have been growing strongly over the past decade. What's more, corporate profits have been booming ever since the recession ended—without a correspondingly dramatic increase in capital expenditures.

There are plenty of other arguments floating around. If you remove the tech sector, the whole phenomenon looks less dramatic. Corporate debt has been increasing too thanks to ultra-low interest rates, which suggests that companies are simply making a rational decision to borrow rather than spend their own cash. Cash overseas is piling up because companies don't want to repatriate it and pay the taxes that would be due. Etc.

In other words, it's complicated. I think Casselman has a point that the Fed's revision wasn't very widely reported or acknowledged, but I'm not sure that's quite as damning as he suggests. The corporate cash pile-up, though less startling than we thought in 2012, is still real. Probably.

1Actually, this is an estimate of "liquid assets." We're just using cash here as shorthand.

The Strange, Suicidal Odyssey of Dave Camp's Tax Reform Plan

| Mon Mar. 17, 2014 2:38 PM PDT

A couple of weeks ago I wrote about Dave Camp's tax reform proposal, and I was predictably dismissive. It was a decent effort, I said, but it was DOA before Camp even officially announced it. Still, "I'll be interested in following the reaction as everyone figures out just whose ox would be gored by his various bullet points. Should be fun."

In reality, I just forgot about it entirely. But it turns out that the biggest ox being gored by Camp's plan was Wall Street, which was very much not amused by his proposal to levy a small tax on large banks. They threatened to cancel all GOP fundraisers as long as the bank tax was on the table, and this was enough to bury Camp's proposal once and for all.

So far, so boring. Camp's proposal never stood a chance, and the fact that Wall Street happened to put the final nail in the coffin is basically just a footnote. Jon Chait, however, gets at something more interesting:

The whole point of the push-back from Wall Street, which has reinforced a wildly unenthusiastic reception within the GOP, is not only to prevent Republicans from striking a deal with Democrats.... It’s to murder his plan in a public way so as to prevent it from becoming the baseline for any future Republican agenda. That effort seems to be meeting with predictable, depressing success.

It leaves unanswered the basic mystery of why Camp thought he could write a plan like this in the first place. Sources I’ve asked believe Camp was playing a kind of double game, an interpretation that closely fits all the public reporting. He promised Republicans he could produce a tax reform that would lower the top rate to 25 percent, a holy grail of GOP policymaking, and which would produce a massive windfall for the rich. He had also given lip service to make sure his reform did not decrease tax revenue or increase the tax burden on the poor and middle class.

Meeting all these goals was arithmetically impossible. But Republican fiscal proposals usually come face-to-face with arithmetic impossibility. It is their oldest and most bitter foe. Usually they step around with some kind of evasion or chicanery. Camp actually gave in and acceded to his other, un-emphasized goals of revenue and distributional neutrality (that is, ensuring his plan raised the same amount of tax dollars and didn’t shift the burden downward). Nobody outside of Camp and a handful of allies seems to have realized this until the plan was already out in the open.

Unfortunately, this still leaves the basic mystery unanswered. It's true, as Chait says, that the usual Republican promise—we can lower top rates to 25 percent and make up for it by closing tax breaks—is plainly impossible and everyone knows it. It's a nice applause line, but it only works as long as the tax breaks are never spelled out, something that requires even more than the usual amount of smoke and mirrors we expect from politicians.

But here's the thing: obviously Camp knew this. Just as obviously, he knew that making the math work out would produce a plan that Republicans and their interest groups would hate. In the end, he could reduce the top rate only to 35 percent, and only at the cost of killing or reducing some very specific tax breaks that rich people didn't want killed or reduced.

Camp has been in Congress for more than two decades. He's hardly an ivory tower naif, and he must have known perfectly well that his plan would do little except to expose Republican hypocrisy on taxes. So why did he do it?

GOP Offers Up a New Health Care Propo....z z z z

| Mon Mar. 17, 2014 10:25 AM PDT

I hear that House Republicans have a shiny new health care plan they plan to introduce sometime soon. Before I read past the headlines, let me take a guess at what's in it:

  • Tort reform
  • Health savings accounts
  • Interstate purchase of health plans
  • High-risk pools

OK, now let's take a look. Here is Robert Costa in the Washington Post:

The plan includes an expansion of high-risk insurance pools, promotion of health savings accounts and inducements for small businesses to purchase coverage together. The tenets of the plan — which could expand to include the ability to buy insurance across state lines, guaranteed renewability of policies and changes to medical-malpractice regulations — are ideas that various conservatives have for a long time backed as part of broader bills.

Hmmm. It looks like I missed a couple of things: "inducements" for small businesses and "guaranteed renewability" of policies. Still, I nailed the main points. That's a pretty amazing feat of crystal ball gazing, isn't it?

No, of course not. It's like predicting that a Republican tax plan will include lower rates on the rich. They might package it in different wrapping paper, but it's always the same old stuff. And it's worth keeping in mind that guaranteed renewability of policies has been the law for a long time, so it's unlikely the GOP plan actually offers anything substantive on that point. Ditto for the small business "inducements," which will probably just turn out to be tax cuts of some kind.

Basically, Republican health care proposals are always, always, always a repackaging of the four tired old points above. Nobody seriously thinks that any of them will expand access to health care in any serious way, but that doesn't matter. These are the only things Republicans can all agree on, so that's what they always propose. Whether it works or not isn't really the point.

If you want more detail about all this, rather than just my exasperated Cliff Notes version, check out Jonathan Cohn here. He has it all covered.